Springfield City Council last week authorized City Manager Gino Grimaldi to execute a settlement agreement with Comcast for payment of additional franchise fees owed, reimbursement for costs associated with the fee review and deferring payment for closure of the Springfield customer service center to later negotiations.
Every 10 years, Comcast and Springfield negotiate a franchise agreement that allows Comcast to provide service to the City for a fee of 5 percent. The last franchise period ended in 2018, and the City must first audit the payment period and settle any underpayment before entering in a new negotiation for the next 10 years, Assistant City Attorney Kristina Kraaz said.
In the proposed settlement agreement from Nov. 5, 2018, Comcast would pay $61,404 on top of a one-time $75,000 payment for closure of the Springfield Service Center.
Comcast is proposing to remove the payment from the settlement agreement to defer it to the franchise renewal negotiations that will take place later this spring; the current franchise agreement expires June 30, 2020.
Ward 6 City Councilor Joe Pishioneri asked Kraaz during the May 6 council meeting if removing the one-time payment strengthens or weakens the City’s position. Kraaz explained that it’s a draw because there are pros and cons with removing it. For example, by removing it in this agreement the service center becomes a bargaining play during later negotiations.
Without the $75,000 in the settlement agreement, Comcast would owe only the $61,404, which is broken down as:
• $25,525 for the agreed upon underpayment
• $22,168 for 50 percent of the disputed underpayment
• $8,421 for the consultant cost to conduct review
• $5,290 for Lane Council of Governments (LCOG) cost to facilitate the review
Kraaz said that in the new franchise agreement, the City and Comcast are going to better define what counts as underpayment and what doesn’t, so there aren’t any disputes going forward.
The decision to defer payment for the center, Kraaz said, is mainly due to Comcast and the City negotiating the closure of the customer service center, as well as not requiring one in the next 10 years.
Pishioneri moved to execute the agreement without the customer service center and Ward 5 City Councilor Marilee Woodrow seconded the motion; the motion passed unanimously.
