From
Megan Mahan
Title
Action rejecting proposed CPI rate increase per telecommunication access line from the Public Utility Commission (PUC)
Presenter
Don Postell and Megan Mahan
Recommended Action
Deny
Analysis
When the State of Texas replaced municipal franchises for telecommunications with a state-wide franchise, the calculation of rent for city right-of-way was changed from a percentage of the franchisee's income to a rate per access line (land line). This was intended to keep cities whole financially. The Public Utility Commission recalculates the access line rate each year based on changes in the Consumer Price Index. It should be noted that the number of land lines statewide are trending downward.
The rate adjustment is implemented unless the City takes an affirmative action to reject the increase. In 2015, Council voted to reject a rate increase. Staff recommends a denial of the rate increase.
Financial Consideration
The proposed rate would increase $0.01 per month for each residential access line, $0.02 per month for each non-residential access line, and $0.04 per month for each point to point access line. Staff has done an analysis based on the 2016 access line data. If the City agrees to this rate increase, it will increase the annual amount the City receives by $6,546.59.