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City of Albany tentatively agrees to accept building in lieu of fee (updated with additional details)

Photo by Carly Farrell

Photo by Carly Farrell

ALBANY, Ga. -- The Albany City Commission tentatively voted Tuesday to move forward with a proposal to allow Mediacom to give its former downtown location to the city in exchange for forgiveness of the cable provider's unpaid franchise fees.

Mediacom currently owes the city $139,000 in franchise fees and penalties. It is proposing to offload its former headquarters at 509 Flint Ave. to the city if commissioners agree to forgive what Mediacom owes.

After much debate, the commission voted 4-2 to move forward in hopes of using the building for a planned future health clinic for city employees or for the city's gang unit, animal control or Americorps program.

The downside is city staffers believe it will cost $60,000 to replace roof, plus additional funds for maintenance which have yet to be fully determined.

Kris Newton, finance director for the city of Albany, told commissioners that at the end of the day the deal should come out to be a wash, with a possibility of realizing savings in the long term given that the city wouldn't have to make lease or mortgage payments and that the clinic program is anticipated to generate savings.

Commissioners Jon Howard and Dorothy Hubbard were skeptical of the deal, given the work needed on the property, and voted against it.

Mayor Willie Adams and Commissioners Christopher Pike, Tommie Postell and Roger Marietta voted in favor. Commissioner Bob Langstaff was absent from the work session. A vote to accept the property in lieu of the money owed the city would have to be finalized at a business meeting of the commission.

An audit conducted last year revealed that Mediacom had miscalculated the amount of franchise fees it owed Albany under an existing agreement.

In a letter dated Dec. 24, 2009, Scott Lewis, a CPA for Lewis & Associates in Cooper, Fla., wrote that after a review of Mediacom's records for the four-year period beginning Jan. 1, 2004 and ending Dec. 31, 2008, his company had determined that Mediacom had underpaid the city $105,287 in franchise fees.

Lewis said his company had further calculated that, according to the franchise agreement, Mediacom was also liable for $46,630 in interest, bringing the total due the city at that time to $151,916.

After sharing the city's findings with Mediacom General Manager Gary Crosby, the two began reviewing the disputed figures, whittling down the amount to $139,922, according to a letter from Lewis to Newton dated Oct. 13.

Under a franchise agreement approved by the Albany City Commission on Nov. 9, 2001, Mediacom is obligated to pay an agreed-upon amount quarterly to the city of Albany. The audit states that Mediacom has made its quarterly payments but has underpaid based on the requirements of the franchise agreement.

The largest single part of the underpayment is actually the interest Lewis claims is owed on the amount of money that was underpaid. Per the franchise agreement, the city can charge 1 percent interest, compounded monthly, on unpaid franchise fees. This amount through Oct. 31, 2010, is $51,220, according to the auditor.

The rest of the underpayments appear to come from Mediacom not including what Lewis contends to be applicable revenue from advertising, miscoding of subscriber services and revenue from a shopping channel.

According to the documents, Mediacom reported $77.4 million in subscriber revenues between 2004 and 2008.

According to the franchise agreement adopted by the commission in 2001, the city is entitled to 5 percent of the annual gross revenues generated by Mediacom.