CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Receive the report regarding the history of Naperville Community Television Channel 17 and future funding alternatives
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Finance Director and Linda LaCloche, Communications Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
Staff presented this report to the City Council on June 18, 2024. It has been updated to include additional information requested on that date and will be accompanied by a presentation from Liz Spencer, Executive Director - NCTV17, who will address questions that are beyond the knowledge of City staff.
Under New Business at the May 21, 2024 meeting, the City Council directed staff to bring a report back to the June 18 meeting that outlines current funding sources and future alternatives for Naperville Community Television Channel 17 (NCTV17).
DISCUSSION:
Founded in 1987, NCTV17 is a 501(c)3 nonprofit organization dedicated to being the trusted source of local information that empowers and connects our community.
Financial Support
Annually, the City provides financial support to NCTV17 through three primary sources.
The first funding source is shared cable television revenue. This revenue is collected from cable companies and passed through to NCTV17.
The second is payments for City services. The City began contracting with NCTV17 in 2008 to broadcast City Council meetings and workshops, Planning and Zoning Commission, and Transportation Advisory Board meetings, and maintain, repair, and troubleshoot audio-visual equipment as well as assist with audio-visual projects and upgrades. The contract also includes video production services for City communication projects such as the annual State of the City production. The contract was most recently before the City Council in 2020 with automatic annual renewals unless either party gives notice to terminate.
The third source is funding through the Special Events and Community Arts (SECA) Grant program. NCTV17 is categorized as a City Obligation and has, on occasion, also been awarded discretionary SECA grant funds.
Historical Support
Over the past five years, annual City support for NCTV17 has remained relatively consistent. However, cable television revenue declined by 15% from 2019 to 2023. In response, payments in the City Services line increased beginning in 2019 to offset losses in the Cable TV revenue line. SECA Grant funding has remained consistent. The breakdown of actual payments to NCTV17 from 2019 through 2023 is included in the table below, along with budgeted amounts for 2024.
These funding sources account for slightly more than 50% of NCTV17’s total annual operating revenue.
|
|
City Services Payments |
Cable PEG Fee |
SECA Awards City Obligation |
Total |
|
2019 |
$184,000 |
$476,585 |
$60,000 |
$720,585 |
|
2020 |
$190,000 |
$448,558 |
$60,000 |
$698,558 |
|
2021 |
$230,000 |
$438,086 |
$59,964 |
$728,050 |
|
2022 |
$241,500 |
$424,249 |
$60,000 |
$725,749 |
|
2023 |
$253,000 |
$404,370 |
$60,000 |
$717,370 |
|
2024 |
$270,000 |
$372,000 |
$60,000 |
$702,000 |
In addition to the recurring revenue streams noted above, the City pays NCTV17 for special video production services, such as police department recruitment videos and Naper Settlement advertising. Those amounts are relatively minor, averaging $5,000 annually. NCTV17 has also been awarded several discretionary or competitive SECA grants, including $49,534 for production truck upgrades in 2020 and $21,535 for community event cameras and sound equipment in 2023.
Future Support
In April 2024, staff from the Finance and Communications departments met with representatives from NCTV17. At that meeting, NCTV17 detailed the current financial challenges facing the organization, including the loss of key two sponsorships from North Central College and Edward Hospital totaling $150,000, and increasing costs for personnel and rent due to post-pandemic market adjustments and inflation. NCTV17 indicated that without immediate support from the City, its ability to operate would be in jeopardy. NCTV17 informally requested additional support for 2024 totaling $300,000.
Since that meeting, NCTV17 has received a state grant for $250,000, which alleviates the need for immediate support from the City; however, additional annual support would be needed in future years.
NCTV17 has refined its financial projections over the past three months and is requesting additional funding of $300,000 annually beginning in 2025. This assumes NCTV17 can increase fundraising revenue over the next several years.
Potential Funding Sources
Staff evaluated allowable funding sources for additional NCTV17 support. The City’s General Fund currently supports most of the contributions to NCTV17 through the cable television fee and payment for City services. The General Fund remains an appropriate funding source for the City services component of NCTV17 support as it is a direct payment for services essential to the administration of municipal government.
However, as cable television revenue continue to decline, additional support from the General Fund is not recommended as the dollars do not support core public services (i.e., public safety, public works, transportation, government administration, etc.). It should be noted that the City currently assesses cable television at the maximum amount allowed by state statute and no new revenue can be generated from this source.
The appropriate alternative, should the City Council choose to do so, is to move NCTV17 support to the SECA Grant program, which is funded by the Food and Beverage Fund. The primary purpose of the Food and Beverage Fund is to support programs that are outside the traditional scope of core City services, such as SECA and Social Services Grant programs. NCTV17 is widely accepted as providing benefits to the community and is aligned with the mission of SECA.
Alternatives for City Services
If NCTV17 were to dissolve, the City would need to decide how to replace the current services - the operation of WCNC/government meeting broadcasting and video/event production services.
Option A - Use contracted services
This model was used before the City contracted with NCTV17 in 2008. Based on preliminary research, a rough estimate for the services provided would be in the range of $160,000 to $175,000. As with all contracted services, the City would need to engage in a competitive procurement process. Based on that process, these costs could fluctuate. Since NCTV17 provides two different services, it is anticipated that two contracts will be necessary. One contract would cover the operation of WCNC/meeting transparency services and the other contract would cover video/event production services.
Challenges to this model include the shrinking labor pool in the cable broadcasting profession. As we saw with our rebuild of the City Council Chambers A/V room, there were not many companies who responded to the RFP. We could face that same issue. Another challenge is the loss of ancillary services that the partnership with NCTV17 provides - hundreds of hours of community B-roll and stock video footage that is used in all video productions, immediate service for the A/V room technical equipment and staffing of external meetings hosted in City Council Chambers such as the Illinois Senate Transportation meeting on August 9. All these services would cost additional dollars.
Option B - Hire staff to perform services
This option proposes adding 3.5 full-time equivalent employees (FTEs) to the City’s Communications Department. Staff would handle over 60 televised City meetings annually, along with other agency meetings (for example KidsMatter and D203 events) maintenance of the A/V equipment and video/event production. The Village of Schaumburg employs a similar type of employee with the job title of technician in the Cultural Services Department at a cost of $30 per hour. As with any new full-time position for the City, three of these positions would be eligible for healthcare coverage and IMRF pension benefits. The estimated annual cost of 3.5 FTEs is $350,000.
Option C - Change the broadcasting model
This model proposes the City discontinue broadcasting on WCNC and only use online streaming through the City’s website for City meetings. This would require City staff to perform this job duty and staff all the meetings requiring additional dollars. This new process would use a one camera wide shot for the meetings instead of current three camera shots used currently. Other municipalities including Schaumburg and Rockford only broadcast through their websites, but they also have staff specifically designated for this duty.
FISCAL IMPACT:
There is no immediate fiscal impact associated with this agenda item. Future fiscal impact would be detailed if the City Council directs changes to the current NCTV17 funding model.