LMCC approves new pricing structure

Cities such as Medina could buy programming

by Amanda Schwarze

The Pioneer

The Lake Minnetonka Communications Commission is preparing to operate differently in the future.

A pricing committee has been working to create a structure through which it can start charging non-member cities for some services. The plan is to create a way to earn some more revenue to make up for some of it that will be lost in 2014 when at least two cities withdraw from the organization.

LMCC commissioners met Oct. 15 to discuss the new pricing structure and other issues. Oct. 15 was also the last date that cities could give notice of their intent to withdraw from the organization. LMCC Executive Director Sally Koenecke said that nine cities gave notice by the deadline. Those cities may rescind their notice by the end of the year to remain a member of the organization.

The cities of Medina and Orono will not be rescinding their notice because they already have their own direct franchise agreements with Mediacom. The other cities that have given notice are Greenwood, Loretto, St. Bonifacius, Maple Plain, Minnetrista, Victoria and Tonka Bay.

The new pricing structure would allow any non-member city to purchase service and program packages from the LMCC. Steve Erickson, a member of the pricing committee, said that the committee’s research results led to a new understanding for many of the members.

“Our analysis revealed what few of us knew – how labor intensive each process is,” Erickson said. “We talk about filming council meetings and getting them online and it appears simple, but the effort involved goes up significantly when you do anything more than video and push to YouTube.”

To do agenda parsing, a feature through which people watching government meetings online can click on an agenda item of interest and have the video start where discussion of that item begins, someone has to watch the entire meeting, he said. That can mean hours of work. The Oct. 15 LMCC meeting, for example, lasted two hours.

The pricing committee decided to set a base package, Erickson said. Any non-member city that wanted to purchase additional services from the LMCC would have to purchase that base package, which includes recording 24 meetings in a year, uploading and linking the meeting recordings to the city’s website for on demand viewing and agenda parsing. To purchase any other packages, a city would have to buy the base package, Erickson said. The price for that package was set at $30,000 per year.

The other packages are priced based on the number of households that are in the city that is purchasing the service. The packages would allow non-member cities to purchase LMCC staff-produced programming, city event coverage, technical consulting and equipment maintenance and coverage of school events. Other services that non-member cities could buy include citizen access to the LMCC studio and recording services at a cost of $5,000 annually and management of city cable channels, including content uploading and program scheduling, at a cost of $10,000 for the first channel and $7,500 for each additional channel.

The pricing committee also updated the LMCC commercial rental rates. The studio and equipment are only available to rent when they are not being used by member cities. Non-member cities that purchase the base package would get a deal on the rental rates. For example, renting the LMCC studio for a full day would cost $1,100, but for those cities with the base package, it would cost $825.

The LMCC commission voted to approve the new rate structure.

Also at the Oct. 15 meeting, Orono Mayor Lili McMillan proposed a resolution that would have the LMCC distribute its accumulated cash reserves to the 17 cities as of Dec. 15. The issue was tabled to have the organization’s attorney Bob Vose look into the matter.

The agreement that the LMCC operates under notes that cities that withdraw from the organization, when that withdrawal does not result in the dissolution of the LMCC, forfeit their claims to assets of the commission. Some commissioners argued that it would still be possible to divvy up the cash reserves. The issue and Vose’s legal opinion are expected to be discussed at the Nov. 19 commission meeting.

Since the Oct. 15 meeting, a majority of cities have approved the proposed 2014 budget.

When crafting the budget, LMCC officials had no firm handle on how many members cities will be around next year. LMCC Vice Chair Joseph Huber of Shorewood said that he was recommending a budget that assumed Orono, Medina, Minnetrista and Victoria all left the organization. The budget assumes that fees from the remaining members as well as a few smaller sources such as interest would leave the LMCC with $446,953 in revenues. Expenses are anticipated to total $410,687. Another $100,000 in contingencies is included in the budget to help the commission pay for any expenses related to laying off employees.

There is also $200,000 included in the budget for non-member cities that might want to purchase services from the LMCC. Huber said that the LMCC commission is not allowed to spend money that is not included in the budget, so he added $200,000 in contingencies in the budget with a note that none of that money could be spent unless additional revenue is received. That move would allow the organization to spend money to sell services to cities such as Orono and Medina as long as those cities paid for the services, he said.

Contact Amanda Schwarze at amanda.schwarze@ecm-inc.com

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