(February 20, 2006) -- With LB City Hall in negotiations with Charter Communications to renew the firm's cable-TV franchise agreement, the office of the City Auditor has released an audit contending Charter underpaid City Hall by nearly half a million dollars for calendar years 2002-2004 and seeks that sum plus over $100,000 for the cost of the audit.
The audit, dated January 31 and subsequently released by the City Auditor's office, contends Charter Communications (the nation's fourth largest cable provider) underpaid LB City Hall by $460,193 in franchise fees, grant payments, interest and late fees for 2002-04 by taking issue with certain amounts due City Hall as re-calculated by the City Auditor's office. The City Auditor's office also seeks $105,000 under a section of LB's cable TV ordinance that lets City Hall recover reasonable audit costs if it finds an underpayment of 2% or more.
Craig Watson, VP of Communications for Charter's Western Division told LBReport.com that the company disagrees with the audit's findings and plans to submit a response by March.
The audit also says that while LB's Cable System Regulatory Ordinance "clearly defines the City’s right to audit its franchisees and obtain their financial and accounting records, Charter was uncooperative in this respect." It says that after the City Auditor's office notified Charter in Feb. 2005 of its intent to audit, "Charter initiated a series of time-consuming obstacles before finally allowing us partial access to its books of account in late October 2005, after intervention by the City Attorney’s Office. Charter’s untimely and incomplete responses to the auditors' requests delayed the audit extensively and resulted in inefficient use of our resources. The City should consider these difficulties when reviewing Charter’s franchise renewal and adjust the proposed franchise agreement accordingly."
Charter VP Watson said company management was "surprised by the report" and had acted in good faith. "Over the last three years, we have paid over $7.5 million in Franchise Fees to the City...We devoted special attention towards the City on this audit which we dealt with as a high priority."