WEST CARTHAGE An audit of the village cable franchise agreement by Computel Consultants should recoup money for the village and lead to future savings.
However, cable subscribers may end up footing the bill.
In reviewing the franchise agreement with Time Warner Cable, the utility billing analysis firm found that a total of $7,738.82 had been underpaid to the village since 2006.
According to the Computel report, federal law allows municipalities to charge cable franchise fees up to 5 percent of gross revenue.
Gross revenue is a combination of subscriber fees and the income garnered by the cable company through the sale of local advertising and fees derived from sales on home shopping networks. This fee normally is passed on to the subscriber. The fee is not a tax, but is part of the cost of doing business; in essence, it is rent for access to and use of municipal rights of way, the audit says.
The Computel report says the current franchise agreement is in violation of Public Service Commission rules in that it excludes franchise fees collected from subscribers each month from the calculation of gross revenue.
Failure to correct this error will result in additional franchise fee underpayments amounting to approximately $1,500 annually for as long as the current franchise agreement remains in effect, the analysis says.
The agreement is set to expire Feb. 10.
The report says the underpaid amounts, if handled properly originally, would have passed to the subscribers and estimates that if Time Warner does so now, it would result in subscribers paying an additional estimated 97 cents per month for a year. According to Computel figures, the village averaged about 665 subscribers in 2011.
Computel said enforcing the terms of the franchise agreement would not raise cable rates as they are not part of the franchise agreement. Computel said the correspondence it would send to Time Warner would request the cable company waive the pass-through amount to customers.
During the Aug. 13 meeting, the village Board of Trustees agreed to authorize Computel to present a claim to the cable company for reimbursement of the underpayment.
Village Mayor Scott M. Burto suggested the board hire Computel after learning of its services at a New York Conference of Mayors and Municipal Officials gathering in May. He said NYCOM endorses the work Computel does for communities in auditing gross utilities. The company will review other franchise agreements West Carthage has with utilities such as National Grid and Verizon.
I feel it is important to look at every revenue source in order to reduce the burden on taxpayers and keep the tax levy down, Mr. Burto said.