The city of Tacoma is ready to spend another $200,000 defending a lawsuit challenging its funding of the Click Cable TV network.
The City Council approved the additional money Tuesday on an 8-0 vote. Mayor Marilyn Strickland was absent.
>> RELATED: Tacoma could spend $200,000 or more fighting for its vision of money-losing Click
The council now has authorized spending $400,000 on outside lawyers to defend the case, which isn’t expected to go to court until June 2018.
City attorney Bill Fosbre said recently a judge could be asked to rule on some preliminary motions before then.
In a memo to the City Council, city legal staff said the additional $200,000 was necessary to allow Seattle-based law firm K&L Gates “to continue representing the city in this matter.”
“Ongoing costs include payment of fees, processing extensive document requests by plaintiffs in the discovery process, and the hire of necessary outside experts,” according to the memo.
The city first signed an agreement with K&L Gates in March.
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The lawsuit, filed in June by a former Tacoma mayor, former city attorney and former Tacoma Public Utilities director, challenges whether the city can continue using revenue generated from Tacoma Power ratepayers to subsidize Click.
The threat of that suit prompted the city to hire K&L Gates earlier this year. After the lawsuit was filed, Tacoma officials said they suspected the initial $200,000 contract would have to be increased as the case made it way through the legal system.
The current council wants Click to move to a new business model in which it would upgrade to gigabit internet speeds, become a municipally owned and operated company and sell retail internet, cable and phone service on the open market. Currently, Click sells retail cable TV to customers and wholesale internet access through two small internet service providers.
In the funding plan for its new business model, Click, which is a subsidiary of Tacoma Power, would be subsidized by electric-rate revenues by up to $10 million per year until it builds up enough market share to operate in the black. The lawsuit argues that using rate revenues to subsidize a telecommunications company is illegal.
The lawsuit’s argument that ratepayers shouldn’t be subsidizing Click comes in part from a memo that former city attorney and now city manager Elizabeth Pauli sent the City Council in 2015.
That memo says: “Electric utility revenues may not be used to pay for costs directly associated with providing commercial telecommunications services (such as cable television and internet service) to the public, because such costs are not sufficiently related to providing electricity to electric utility customers and thus must be paid for from non-utility revenues such as rates or charges to the telecommunication services customers or general government tax dollars.”
City Council members in favor of Click’s transition have said that Click’s wires are integral to the power utility and were built to support it, so it should be funded as part of Tacoma Power, because the utility uses its infrastructure.
Trending headlines:
- Police: 19-year-old tried to kill infant niece by lacing breast milk with Excedrin
- Local doctors address illness linked to chronic marijuana use
- Metro bus drivers to receive $6.4 million in back pay
- Owners say dog saved them from West Seattle fire
- Student struck by car, seriously injured near Mariner High School
Cox Media Group
