Town hires firm to audit cable company
Other towns have recovered cash by checking Cablevision
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Is Riverhead Town getting all the money it should from its franchise fee with Cablevision?
That's what a Buffalo firm hired by the town this week seeks to find out.
The Town Board has hired Troy and Banks Consultants to conduct an audit of the town's franchise agreement with Cablevision.
The franchise agreement, approved in 2002, allows the town to charge Cablevision a franchise fee of up to 5 percent of the company's gross revenues for cable television services each year in exchange for the use of town rights of way for utility poles used by the company.
The Town Board had declined to charge the franchise fee until April of 2006, and that vote was split, 3-2. Prior to that, board members feared the fee would just be passed on to residents in their cable bills.
"This was inspired by the fact that our sister towns have done this with great success," Supervisor Phil Cardinale said this week.
The town budget anticipates receiving $570,000 from the franchise fee in 2009. The contract with Troy and Banks states that the firm will receive 35 percent of all recovered fees up to $100,000, 30 percent of recovered fees between $100,000 and $500,000 and 20 percent of any recovered fees over $500,000.
The company will not be paid if it doesn't recover anything, according to the agreement. "This audit is part of the town's continuing efforts to insure that our residents obtain the best municipal services for the lowest possible cost by assuring receipts of all revenue that the town is entitled to under all town contracts," the supervisor said.
The move is not related to Cablevision's recent decision to require customers to rent set-top boxes and remote control devices in order to view channels formerly available on analog format, he added. The boxes and remote control devices cost an additional $6.50 per month each, but the question of whether that revenue should be included in determining the franchise fee is being decided in an upstate case before the state Public Service Commission. A decision on that question is expected in the next 30 days, Mr. Cardinale said.
The town also has filed a lawsuit against Cablevision on that issue, he added.
tgannon@timesreview.com
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