In an April 1 press release, the WNC Community Media Center (which operates URTV, among other offerings (see sidebar, “A Public Forum”), announced, "Unless funding is immediately forthcoming," the center "will close its doors on April 30, 2011." The nonprofit later backed off from that deadline, even as it set another one: "This commission is still in a position to release the PEG moneys already owed to WNCCMC/URTV to avoid legal action presently planned on the part of all aggrieved parties by agreement before the close of this session and delivered by 10 a.m. Wednesday [April 20]," Bob Horn, the group’s board vice president, told the Buncombe County commissioners during their April 19 meeting.
That deadline, too, came and went with no notable action by either side. During the Media Center’s regularly scheduled April 20 board meeting, however, Treasurer Joe Scotto reported a $102,000 deficit in the $210,000 budget for this fiscal year (which ends June 30). "We've had a wonderful ship. It's taken us to many places, but without dedicated fuel, we're either going to dry-dock or we're going to be stranded out at sea,” Scotto told the board. "If we received the funding that we're due from the county, then we would be in a balanced position right now."
And five days later, County Attorney Michael Frue raised the bar, asserting in an April 25 memo that the county’s agreement with the nonprofit had expired more than a year before.
At this writing, the Media Center was reportedly planning to remain in operation at least through the first week of May while continuing discussions with officials at the state attorney general’s office and "with lawyers who might work pro bono," according to Horn. "We've got a lot of irons in the fire," he declared. “If we go down, we're going to go down fighting.”
You could look it up
At the heart of the dispute are conflicting interpretations of a 2006 law shifting the authority to issue cable-TV franchises from local governments to the state. A tax is levied on video service providers’ gross receipts, and the N.C. Department of Revenue then doles out shares of the money to cities and counties. A portion of those funds must be used to operate any qualifying PEG (public, educational or government) channels.
That money, however, comes in two streams — regular and supplemental PEG funding — and according to Frue’s memo, the two are treated differently under state law. Cities and counties with more than one PEG channel are free to decide how to divvy up the regular PEG funding among them, the memo asserts, as long as they collectively receive a specified percentage of the money the state provides. Supplemental PEG funding, on the other hand, must be shared equally.
Prepared (and made public) at the request of Board of Commissioners Chair David Gantt, the memo explains that even though the county has continued to certify URTV as a PEG channel, the management agreement expired Feb. 1, 2010, "due to the failure of URTV to request an extension." Since that time, the memo notes, “County government has made the decision to distribute the tax revenue [about $81,500 to date] to its governmental access channel, BCTV.”
The Media Center sees things differently, however — and cites the same state law (which was revised in 2008 in an attempt to clarify PEG fund distribution) in making its case.
Section 2 of the law, the nonprofit notes, requires local governments to "continue the same level of support for the PEG channels and public stations" that existed in 2006.
As for the managing agreement, Horn says the county "never canceled our contract," citing a clause in the document which states: "If a new agreement is not in place at the expiration of this Agreement, it is understood by the County and the Contractor [URTV] that this Agreement will remain in place until such time as a new Agreement is signed or the Contractor is terminated."
Asked about the discrepancy, Frue responded: "You can't read a contract by looking at one sentence in a several-page document, and I think that's the mistake they made. … They teach you in law school to read the four corners of the instrument."
Horn, however, says: "We're going to submit to them a document demanding payment and then take legal recourse to demand back payment. We stand by the law of the N.C. Department of Revenue."
Meanwhile, a draft document obtained by Xpress may shed additional light on the Media Center’s current position. In a draft of a “demand for payment” dated April 28, the nonprofit said it had been underpaid by several hundred thousand dollars between 2007 and the first half of 2011, once again threatening legal action if the money wasn’t received within five days. As this issue went to press, however, the letter was apparently still being revised and hadn’t yet been sent to the commissioners.
Show me the money
Financial concerns are nothing new for the station, which also threatened to shut down last May due to the county’s withholding funds.
At the June 15, 2010 Board of Commissioners meeting, however, John Howell of Telecommunications Consulting Associates, who advises the county on media issues, revealed that the county was about to distribute to the station $48,000 in PEG funds that he said had been lost in a "black hole," enabling URTV to continue operations. Asked about that statement recently, Howell told Xpress that, due to paperwork issues, the county hadn’t realized it was legally required to distribute the money to URTV until that time.
During the fiscal year that ended June 30, 2010, the station received $86,134 in PEG funds from the county, according to an independent audit of the nonprofit by the Asheville-based accounting firm of Corliss & Solomon. During the same period, URTV also received $60,000 in PEG funds from the city of Asheville as well as in-kind support (use of city-owned equipment) valued at $36,932, according to the audit. A mix of registration fees, classes, donations and other moneys rounded out the center's $210,872 total revenue that year.
According to URTV, the PEG moneys it receives from the county have dropped from $132,267 in 2006 to a projected $14,636 for fiscal year 2011.
Don’t get your hopes up
The county largely blames the declining funding on the 2006 state law. And at the June 15, 2010 Board of Commissioners meeting, Howell said, "The state basically threw PEG funding under the bus.”
But at the April 5, 2011 Board of Commissioners meeting, the Media Center’s appeal for additional support fell on deaf ears. The county, asserted Howell, was meeting its legal obligations, and neither party should expect any additional PEG funds from the state beyond what had already been projected.
Two weeks later, as Media Center producers and board members once again pleaded with the commissioners for more funding, their tone shifted somewhat, as Horn, reading from a press release the nonprofit had also distributed among the audience, explained: "WNCCMC will not be closing its doors at this time as originally announced. The Board ... is looking at legal and financial obligations and responsibilities of due process. Due to moneys owed WNCCMC and the fiscal responsibility (culpability) by contract with Buncombe County Board of Commissioners, WNCCMC requests that bills and funds be paid."
And during the nonprofit’s April 20 board meeting, Executive Director Pat Garlinghouse reported that as of April 30, the organization would be "minus and have bills that will not be paid. It's impossible to cut expenses,” she asserted. “We're only spending what we're required to spend under contract."
A bad situation
URTV has an ally in Chad Johnston, the executive director of affiliated public-access stations in Chapel Hill and Durham, who says he "helped write the legislation" governing PEG funds as a member of the N.C. Coalition for Community Media Centers.
"We worked really hard to make sure there was some do-not-harm language in there," Johnston recalls. "It sounds like the county is interpreting the law incorrectly. … They should be speaking with the attorney general and the secretary of state."
And though both Howell and Frue have said that PEG funding dried up when the state assumed control of cable franchises and the resulting tax revenues, Johnston paints a decidedly different picture. "PEG funding hasn't been hurt" at the Chapel Hill station, he says. "As a matter of fact, we're actually a little better off under the state model," adding that the station's annual budget is roughly equivalent to URTV's.
Gantt, meanwhile, says he trusts the opinion of the county's legal and technical advisers, though he concedes that "It's a bad situation. … We just disagree on the interpretation of the law."
Gantt also says he "continues to be a big proponent of URTV," adding, "I think it's extremely important to have a place where anyone can go and get their message and thoughts out to the community as a whole. … I hope the [nonprofit’s] board will come up with some creative way to stay alive."
That doesn't sit well with Jonathon Czarny, the station’s operations manager, however. "You can't reduce funding by 90 percent and say, ‘Good luck: We support you,'" he declares.
— Jake Frankel can be reached at 251-1333, ext. 115, or at firstname.lastname@example.org.