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HomeMy WebLinkAboutMINUTES - 04191994 - IO.2 TO: BOARD OF SUPERVISORS I .O.-2 - f Contra Costa FROM: INTERNAL OPERATIONS COMMITTEE County DATE: March 28/ 1994 rr= SUBJECT: RECOMMENDATION FOR AN AMENDMENT TO THE CABLE TELEVISION ORDINANCE TO PERMIT BASIC CABLE TELEVISION RATE REGULATION AND AUTHORIZATION FOR AN AUDIT OF TCI 's FRANCHISE FEES AND RATES SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: ; 1 . INTRODUCE, WAIVE reading and FIX April 26 , 1994 for adoption o,f an amendment to the County Cable Television Ordinances No. 82-28 and No. 93-55, implementing the local regulation of cable television rates for the basic service tier and associated equipment, as is provided for in federal law and regulations . 2 . AUTHORIZE the Cable TV Franchise Administrator to join with the cities served by TCI to accept the franchise fee audit proposal from Crow-Chisek; AUTHORIZE payment of the County' s portion of the audit expenses, not to exceed $10,000; and AUTHORIZE the County Administrator to sign the attached Memorandum of Understanding to implement the franchise fee audit. BACKGROUND: The Board of Supervisors has adopted a new Cable TV Ordinance which regulates the Cable TV franchises in the unincorporated area of the County. It is necessary to amend the Cable TV Ordinance, as is outlined in the attached report from Pat Burke, the Cable TV Franchise Administrator, in order to permit the County to regulate cable television rates for the basic service tier and associated equipment. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION F COUNA IMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE TH R SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED _X OTHER i 1994 VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.�J ATTESTED Contact: PHIL BATCH LOR.CLERK OF THE BOARD OF cc. County Administrator SUPERVISORS AND COUNTY ADMINISTRATOR Cable TV' Franchise Administrator County Counsel BY DEPUTY I .O.-2 On November 9, 1993, the Board of Supervisors authorized staff to join with the cities served by TCI to request proposals from firms qualified to audit TCI ' s franchise fees and review their rate proposal . The Cable Coordinators from the County and the cities served by TCI have recommended the proposal submitted by Crow, Chisek. The County' s share of the audit would be $10,000, although it might be a little more if additional services are requested by the County, such as attendance at Board meetings to discuss and explain the findings of the audit. The County's share of these expenses can be paid for from the Community Access Trust Fund. Any additional franchise fees recovered as a result of the audit will be used first to reimburse the Community Access Trust Fund and then divided as previously authorized, with 60% going to the County General Fund and 40% going to the Community Access Trust Fund. On March 28, 1994 our Committee met with our Cable TV Franchise Administrator, Pat Burke and representatives from Concord TV Cable and Viacom. There are two issues regarding the proposed amendment to the Cable TV Ordinance. As submitted to our Committee, the Ordinance would provide that if the County were to rule a basic rate improper and order a roll-back in the rate and the cable company failed to comply with the County' s order and instead appealed the County' s decision to the Federal Communication Commission (FCC) , the County could impose a fine of up to $100 a day. The cable operators asked that the County not be entitled to impose a fine until the FCC rules on an appeal . In this case, the County would recover no money for the period of time the appeal is pending, which could well be months . We have taken a middle ground and directed staff to revise the amendment to the Cable Television Ordinances to provide that the County could impose the fine immediately. If the cable operator appeals the County' s decision, the fine would be suspended until the FCC rules on the appeal . If the County wins the appeal, the fine would then be due retroactive to the time it was imposed. If the cable operator wins the appeal, the fine would be waived by the County. The Ordinance before you, therefore, reflects this middle ground suggested by our Committee. The other issue raised by the cable operators involves the possibility that the federal government may, at some time in the future, allow local governments to regulate more of the cable TV business than just the basic rates and associated equipment. Under the existing Cable TV Ordinance, the County has the right to regulate all charges to the subscriber for programming, equipment, installation, disconnection, reconnection, additional outlets and other programming products or services, except as expressly prohibited by the state or federal government. Under current federal law, the County is expressly prohibited from regulating any of these rates except for the basic service tier. However, if this authority were expanded in the future, the County would acquire the authority to regulate additional rates and services without further action by the Board of Supervisors . The cable operators want the Board to have to specifically take action to provide for that additional regulation. Our Committee is not prepared to recommend that the existing Cable TV Ordinance be amended to provide for this additional review in case of a change in federal law at some time in the future. Page 2 OFFICE OF THE COUNTY ADMINISTRATOR CONTRA COSTA COUNTY Contra Costa Television Division (510) 646-2948 or (510) 313-1180 acetv Administration Building 651 Pine Street, 11th Floor Martinez, California 94553 TO: Internal Operations Committee FROM: Patricia Burke', Franchise Administrator DATE: March 21, 1994 SUBJECT: REPORT OF CABLE TELEVISION RATE REGULATION AMENDMENT AND CONTRA COSTA TELEVISION Rate Regulation Amendment As a result of 1993 Federal Cable Television legislation,local jurisdictions were given the authority to regulate basic tier cable television rates and equipment and installation rates associated with that tier. Contra Costa County applied for and received certification to regulate basic tier cable television rates for all cable systems not subject to "effective competition". However,before rate review can begin,the County must adopt rate regulation procedures consistent with FCC guidelines. The attached amendment to the County's Cable Television Ordinance establishes those procedures. This amendment has been sent to all cable operators for their review and comment. Upon adoption of this amendment,staff will notify all regulated cable operators that we are certified and send them a copy of the adopted amendment. The cable operators'are then required to submit a copy of their FCC 393 form or a cost-of-service showing for their basic tier cable television rates to the County for review. After receipt of the above information, the procedures outlined in the amendment will be followed. TCI Franchise Fee and Rate Review Audit On November 9, 1993, the Board authorized staff to join with cities served by TCI to request proposals from firms qualified to audit TCI's franchise fees and review their rate proposal. The cities involved carefully reviewed the three returned proposals from the twenty requests for proposal sent. Lafayette, Orinda, Martinez and Walnut Creek have asked their councils to authorize funds to conduct both audits. Brentwood,Pleasant Hill and Moraga will be asking their cities for funding in the next two weeks. - 1 - Due to recent revisions of the Rate Regulations by the Federal Communications Commission(FCC), TCI cities have agreed that the rate audit should wait until the rules are published and they have had an opportunity to review them. (There is a workshop sponsored by the FCC to discuss the 1993 Cable Act and changes on April 13, 1994 which staff and other city cable regulators will attend.) However, all cities represented agreed that they wanted to proceed with the franchise fee audit. The County has not done an independent audit of TCI's franchise fees since 1985. At that time, a discrepancy was discovered and back franchise fees were recovered. A recent audit of Concord TV Cable indicated the omission of some revenue that may yield the City five percent more in franchise fees than those paid. This same revenue may not be included in TCI's payment to us. Since TCI's revenue documentation is sketchy, it is difficult to determine if these revenues are included. Cable Ordinance No.82-28 authorizes the County to audit three previous years of franchise fees. The Cable Coordinators selected from Crow, Chisek from the proposals received because of their experience with local government franchise audit and their competitive bid. Contra Costa County's portion of the costs for a franchise fee audit would be approximately$10,000. If the Board requests additional services, such as the consultant's attendance at Board meetings, there may be some additional costs. This cost is less than two percent of the total franchise fees that Contra Costa County receives in one year from TCI. Thus if TCI has under-reported by two percent or more, the audit will pay for itself. Moneys from the Community Access Trust Fund could be used and reimbursed if additional franchise fees are collected. Contra Costa Television In August 1993, the Board of Supervisors adopted the revised Cable Television Ordinance and approved the"Agreement for the Delivery ofAccess Programming in Contra Costa County". As part of that agreement, the cable operators were required to provide the County with a dedicated, interconnect channel and equipment. The dedicated channel will be activated on six cable systems by June 1, 1994. The path from Volmer Peak to Watson Tower needs to be completed to connect Viacom, Pittsburg and Bay Cablevision to the interconnect. County Lease Management staff is talking with Watson Tower owner and East Bay Regional Park District to determine the most cost effective way to incorporate these systems. Viacom,Pinole and Antioch,will need to complete their rebuilds to have a channel available. They should be on line by June 1, 1994. Until they are on line, Viacom has agreed to continue to duplicate, distribute and air the County programming that includes Board meeting excerpts and the "Most Wanted Deadbeat Parents" on their two systems' community television channels at their expense. The cable operators were asked to designate one or two channel numbers for the County channel. They have offered the following: Bay Cablevision,Ch. 18;Century,Ch. 19;Concord TV,Ch. 18;Ponderosa Cable Systems,Ch.27,TCI of Contra Costa,Ch. 19,TCI of Brentwood,Ch. 19, TCI of Walnut Creek,Ch. 19,Viacom-Pittsburg, Ch. 27 and Viacom-Pinole, Ch. 27. - 2 - The three channels suggested for use are Channels 18, 19 and 27. Initially, Channel 18 was the channel most systems had agreed to dedicate. As a result of "most carry provisions" and re- transmission consent, some systems were not able to dedicate this channel. Viacom agreed to move to channel 18 or 19 when one of them becomes available. (Note: Existing contracts expire in three years with program providers currently on those channels.) In accordance with the Agreement with the County, all operators were asked to make "reasonable efforts"to agree to one and no more than two channel assignments. It is my understanding that the operators believe they have done this and as a result of Federal legislation, are still unable to give us fewer than three channels. At this point, the Board has two options: 1) Based on the 10/1/93 date that Viacom signed agreements with the two program providers to use Channels 18 and 19 which were the two channels considered for the interconnect, the Board could decide that Viacom did not make reasonable efforts to agree on one and no more than two channel numbers. In which case, Viacom would be in breach of the contract and appropriate actions could be taken, following the opportunity to cure; or 2) The Board may ask the cable operators to agree to publicize Contra Costa television on their channel line-up cards and in newspaper or TV Guides to which they provide channel information. By assisting us with the promotion of Channel identification, the use of three channels, although not ideal, may not be a significant barrier to CCTV's success. CONCLUSION In conclusion, staff would ask that the Internal Operations Committee: 1) Introduce the amendment to the Cable Television Ordinances No. 82-28 and 93-55 to include provisions for enforcement of federal rate regulations for basic service. Waive reading and Fix adoption for April 19, 1994; 2) Authorize the Franchise Administrator to join with cities served by TCI to accept the franchise fee audit proposal from Crow-Chisek and pay for the County's portion of the audit not to exceed $10,000; 3) Direct the Franchise Administrator to proceed with Option 1 or 2 for the Interconnected County Channel; and 4) Adopt the "Operating Policy and Procedures" for Contra Costa Television (CCTV). - 3 - Lt,1 NLIH k-I I f Uf-t- P- -�56- P02 ATTACHMENT B 4 0) co Ln to to tD to 40(&w 44 so 4& tfi� M co CV>C4 Is 40 t2 C4 0� 9 8 8 ICS 00 2998,00000 Its - - 6csggg - - cm ol TO to t'.V-� S. CM :t corn W) Ch cb'�r C4 A �fQ -I LO Cd ;; CU 69 V>69 Ow -6%fo> Hig 9 8.9 s S s .9.9.9 SS S c; C;cs cs 6 is cs C; .6 ci C5 6 left 03>W V3!W 4&VO to%V!W 6031 ft IL app SR 00 00 T- LO M IW -s a ts —0 1 a 93 a .0 8 g CV i�7jj1F�+ LU a a Q — ISa C6 f,-.' W, LO,0'0om" 0 CO N W LL LL W L4 Iro- I—'- Q4 lCg -- O ta (R 41Z Ct CIL cyt q t IL U, 16 LU 0 OD CU Mv- U3 x lu o :R V- W , ff .0 CD A m w Ln Z5-X, w C2 *C>-D 17D0 - r- -0 � 0, o 72 Q 0 Lo � UtJF V 05 0- E < 10 2 0" C3 FL Mot� a) 00 00 :2 < CROWE CHIZEK 'ry CONTRA'COSTA COUN RECEIVED 7 ­'�! March 18, 1994 MAR 7 3199 . Ms. Patricia Burke OFFICE OF Franchise Administrator COUNTY-ADMINISTRATOR Contra Costa County County Administration Building 651 Pine Street, 11th Floor Martinez,California 94553-1229 Dear Ms. Burke: In response to our phone conversation yesterday,I am writing to clarify our proposal and its prices. We will hold our fees to the amounts stated in our proposal for calendar 1994. Our fees for the franchise fee revenue agreed-upon procedures are as stated on page 15 of our proposal dated December 15, 1993. Our fees for the the agreed-upon procedures to be performed on the FCC Form 393 filings will be as stated on page 16 of the same proposal. As we discussed, these two items are in essence separate tasks and do not need LLI be performed concurrently. If the Consortium would like us to begin work on one project in the near future and defer work on the other project until a later date, this will not increase fees on the!second project. If you have any other questions or need further clarifications, please feel free to contact us. Cordially, C' __, rte_' Louis G. Karrison Partner ONE MID AMERICA PLAZA 11C)STOFFICE BOX 3697 OAK BROOK,ILLINOIS 00522-3697 708.574.7878 FAX 708.57,1.1608 A Mombor of I for,-ath Interne Donal MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY OF CONTRA COSTA AND TCI-FRANCHISE CITIES IN CONTRA COSTA FOR AUDIT OF CABLE TELEVISION This memorandum of understanding("MOU")is made and entered into between the County of Contra Costa, a separate political subdivision of the State of California (hereinafter "County") and the City of Brentwood, Town of Danville, City of Lafayette, City of Martinez, Town of Moraga, City of Orinda, City of Pleasant Hill,and City of Walnut Creek, all separate political subdivisions of the State of California(each city hereinafter referred to as "City")on the day of , 1994. RECITALS A. Both County and City desire to conduct a multi jurisdictional audit of their respective cable television franchises in the area of franchisee fees. B. City desires to utilize the County for the purpose of managing the cable television multi jurisdictional auditing contract(s) and for billing purposes. C. County desires to coordinate, manage, and facilitate billing of the cable television multi jurisdictional auditing contract(s) for the City. D. County and City enter into this MOU to define their respective obligations hereunder. ARTICLE 1: GENERAL PROVISIONS 1.1 Services. County shall provide the services described in Article 2 below and on the terms and conditions hereinafter set forth, and City shall provide the services described in Article 3 below and on the terms and conditions hereinafter set forth. 1.2 City Authority. It is acknowledged and agreed that City presently has the exclusive franchise authority over cable operations within its jurisdiction; however, the City may delegate such authority as it may have for conducting a multi jurisdictional audit of cable television franchise fees to another agency or firm. 1.3 City Delegation of Authority. The City hereby authorizes the County to coordinate a multi jurisdictional audit of the cable television franchisee,and provide direction to the firm contracting with the County for cable television multi jurisdictional auditing purposes. 1.4 Independent Contractor. It is acknowledged and agreed that County's relationship to City pursuant to this MOU is one of an independent contractor and County is not, and shall not be deemed, an employee of City for any purposes, nor shall County employees or consultants be deemed employees of the City. It is acknowledged that the County and City share a unique and mutually beneficial relationship which shall be reflected in the cooperative efforts of involved project staff. MOU: Page 1 of 3 ARTICLE 2: SCOPE OF COUNTY SERVICES 2.1 Contracting with Auditing Firm. County shall contract with an auditing firm to conduct a multi jurisdictional franchise fee audit of City's cable television franchisee. The contract shall be subject to the approval of the City Manager or his/her designee. 2.2 Billin . County shall bill each City for its proportionate share of the total cost of the multi jurisdictional cable television audit, as charged by the auditing firm. Total cost shall not exceed $70,000. City shall make payment no later than thirty days after billing. 2.3 Coordination of Services. In order to ensure that auditing services are coordinated, County staff shall be available to meet and confer jointly with City staff on an as-needed basis. The purpose of the meetings will be to provide opportunity for multi- jurisdictional information sharing and exchanging of technical expertise. ARTICLE 3: SCOPE OF CITY SERVICES 3.1 Proportional Cost. City shall reimburse County for City's proportion of the multi- jurisdictional cable television audit pursuant to the provisions of section 2.2, above. City's proportional cost of said audit shall not exceed the percentage of cable subscribers in the City to all cable subscribers represented by all franchise areas participating in the multi- jurisdictional audit in accordance with the number of TCI subscribers in each participating City and the County as of January 1, 1994. Should any City or Cities and/or the County request additional service beyond the scope of work as contracted per section 2.1, such party shall pay all additional costs associated with such request. 3.2 Provision of Information and Materials. City shall provide County information and materials specific to its jurisdiction relating to the carrying out of this MOU and shall provide such assistance as may be reasonably necessary. 3.3 Coordination of Services. In order to ensure that auditing services are coordinated, City staff shall be available to meet and confer jointly with County staff on an as-needed basis. The purpose of the meetings will be to provide opportunity for multi- jurisdictional information sharing and exchanging of technical expertise. ARTICLE 4: AGREEMENT EFFECTIVE DATE AND TERMINATION 4.1 Effective Date. This MOU shall be deemed effective as to the City upon execution by County and City and shall remain in full force until completion of the auditing contract referenced in section 2.1, above. ARTICLE 5: ALLOCATION OF LIABILITY 5.1 Allocation of Liability. City and County agree that as to any liabilities, each entity shall be responsible for any joint liability on the basis of proportionate fault of each entity which is party hereto. ARTICLE 6: AMENDMENTS MDU: Page 2 of 3 6.1 Written Approval Required. Any amendments to this MOU must be approved in writing by all signature parties hereto. COUNTY OF CONTRA COSTA By Date Phil Batchelor, County Administrator C I TY By Date City Manager, City of Brentwood By Date Town Manager, Town of Danville By Date City Manager, City of Lafayette By Date City Manager, City of Martinez By Date City Manager, City of Moraga By Date City Manager, City of Orinda By Date City Manager, City of Pleasant Hill By Date City Manager, City of Walnut Creek MOU: Page 3 of 3 I ORDINANCE NO. 94- (Enforcement of Federal Cable Rate Regulations) The Contra Costa County Board of Supervisors ordains as follows (omitting the parenthetical footnotes from the official text of the enacted or amended provisions of the County Ordinance Code) : SECTION I. SUMMARY. This ordinance implements the local regulation of cable television rates for the basic service tier and associated equipment, as provided in the Federal Cable Television Consumer Protection and Competition Act of 1992 and the regulations adopted by the Federal Communications Commission (47 CFR, Part 76, Subpart N) . SECTION II. Section 58-8.009 is added to the County Ordinance Code to read: 58-8 . 009 Regulation of Rates for Basic Service Tier and Associated Equipment. (a) Authority. The Cable Television Consumer Protection and Competition Act of 1992 (the Act) and the related regulations adopted by the FCC establish regulations limiting rates .for basic cable television service. Local franchising agencies are authorized to enforce these regulations if the agency is certified by the FCC to enforce the regulations. The effectiveness of this section is subject to the certification of the county by the FCC or any other authority which may be conferred upon the county by the federal government. The county hereby adopts by reference the rate regulations established by the FCC pursuant to the Act together with any amendments which may occur from time to time. The provisions of this section are intended to implement the rate regulations established by the FCC and shall not be deemed to limit the authority of the county in any way. (b) Initial Basic Cable Service Rates. If the county is certified by the FCC to enforce rate regulations, the county administrator or designee shall notify each grantee of the certification. Within thirty days after receipt of the notice, the grantee shall file its schedule of existing rates for the basic service tier and associated equipment with the board together with a completed FCC Form 393 (or such other form for the determination of initial rates as may be issued by the FCC) or cost-of-service study as the case may be, and any other information required by the county administrator or designee consistent with FCC rules or regulations. (c) Rate Increases. Prior to increasing existing rates or establishing new rates for basic service and/or associated equipment at any time, the grantee shall file its proposed rates with the county administrator or designee together with a completed -1- ORDINANCE NO. 94- FCC Form 393 (or such other form for the determination of rate increases or new rates as may be issued by the FCC or the county) or cost-of-service study as the case may be, and any other information required by the county administrator or designee consistent with FCC rules or regulations. (d) Extensions of Time for Action. The existing rates shall remain in effect and proposed rates shall take effect thirty days after submission of the forms and information specified in subsection (b) or (c) above, unless the board disapproves the rate or issues an order extending the 30-day period as follows. The board may issue a written order extending this 30-day period for: (a) an additional ninety days in cases not involving cost-of- service showings if the board is unable to make a determination within the 30-day period; or (b) an additional one hundred fifty days in cases involving cost-of-service showings. (e) Hearing and Decision. If all required materials are not submitted, the proposed rates shall not go into effect. If all required materials are submitted, a hearing on the existing or proposed rates shall be scheduled before the board. The grantee and the general public shall be given an opportunity to be heard at the hearing. The grantee shall have the burden of proof to establish that its existing or proposed rates are within the limits established by the FCC regulations. The board shall issue a written decision if it approves over opposition or disapproves the existing or proposed rates in whole or in part. The board is not required to issue a written decision if it approves an existing or proposed rate which has not been opposed by any person or if it takes no action, in which event the proposed rate shall take effect upon expiration of the time period prescribed in subsection (d) above. If the board determines that the rates are unreasonable and do not comply with FCC regulations, the board may prescribe reasonable rates as authorized by FCC regulations. If the board determines that the grantee's existing rates exceed the amounts permitted by FCC regulations, the board may order the grantee to refund the amounts overcharged to its subscribers to the extent permitted by the FCC regulations, provided that the county shall have given the grantee notice of the refund and the opportunity for comment concerning the proposed refund before any such refund is required. (f) Refunds to Customers. Within ninety days from the board's issuance of a rate decision or refund order, any refunds owing by the grantee to customers shall be returned through direct payment to the customer or a specifically identified credit on the customer's bill, or shall be implemented by means of a prospective rate reduction, as provided in 47 CFR Section 76.942 (d) . -2- ORDINANCE NO. 94- (g) Enforcement. If the grantee fails to comply with a rate decision or refund order made pursuant to this section, the county shall have the right to exercise any of the remedies set forth in Chapter 58-16. However, in the event that the grantee appeals a rate decision or refund order, as provided in 47 CFR Section 76.944 , the collection of any liquidated damages assessed by the county shall be stayed pending the resolution of such appeal. If the rate decision or refund order is reversed on appeal, the liquidated damages shall be waived. Otherwise, the liquidated damages shall be payable for the period from the date of assessment to the date on which the grantee fully complies with the rate decision or refund order. (h) Complaints Concerning Cable Programming Services Rates. The county administrator or designee is authorized to file a complaint with the FCC challenging the reasonableness of a grantee's rate for cable programming services, or for the installation or rental of equipment used for the receipt of such cable service, at any time that the county administrator or designee determines such a complaint may be warranted. (Ord. 94- S 2) . SECTION III. Subsection (a) of Section 58-8.008 is amended to read: (a) Except as expressly prohibited by state or federal statute or regulation, the county shall have the right to regulate all rates charged by the grantee to subscribers for programming, equipment, installation, disconnection, reconnection, additional outlets and other programming products or services. To implement such rate regulation, the following provisions of this section shall govern rates and rate changes under this division, except for rates and rate changes for the basic service tier and associated equipment, which shall be governed by the provisions of Section 58- 8.009. (Ords. 94- S 3, 93-55 S 1) . SECTION IV. The following language is added to Subsection (c) of Section 58-16. 002 : (7) For failure to comply with a rate decision or refund order made pursuant to Section 58-8.009, the grantee shall pay $100. 00 per day or part thereof that such violation continues. (Ords. 94- S 4, 93-55 S 1) . SECTION V. EFFECTIVE DATE. This ordinance becomes effective thirty days after passage, and within fifteen days of passage shall be published once with the names of the Supervisors voting for and against it in the Contra Costa Times, a newspaper published in this county. -3- ORDINANCE NO. 94- PASSED on April , 1994 by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Phil Batchelor, Clerk of the Board of Supervisors and County Administrator By: Chairman of the Board Deputy -4- ORDINANCE NO. 94-