Cable television companies in Orange County expect to raise subscriber rates from $1.50 to $2.70 a month to offset what they described as "shocking and unbelievable" increases in their property taxes, company representatives said Monday.
"We have to do a pass-through," said Joe Casasanta, general manager for the Tustin-based Continental Cablevision. "To say it mildly, I was shocked."
Casasanta said his cable company is appealing a 400% increase in the property tax bill received last summer. But in order to make up the additional $170,000, Continental is anticipating a rate increase for its 10,000 subscribers of about $2 a month.
Nearly a dozen other cable companies in Orange County are appealing or prepared to appeal the new assessments and higher property tax bills, according to industry officials. One cable television spokesman said cable companies would be paying an average 300% increase on their property tax bills.
The dispute between the cable companies and County Assessor Bradley L. Jacobs centers on the technique that the assessor's office is using to compute the taxes of the cable companies. The worth of the companies is being increased by adding the value of "intangible assets," said Douglas Mo, a San Francisco attorney representing the cable companies appealing the tax bills before the Assessment Appeals Board.
Mo said some of the intangibles include the company's customer base, good relations among customers, ongoing marketing efforts and the right to operate exclusively within an area.
Jacobs said the matter of the cable company assessments was under appeal and he could not discuss it.
The largest cable company in the county, Dimension Cable, operated by Times Mirror Cable Television, has yet to receive its property tax bill from the county.
"We find ourselves in a strange position of asking for our property tax bill," said Dick Waterman, director of corporate affairs for Times Mirror Cable Television. Waterman said if Dimension's tax bill follows the pattern of others, it is almost certain there would be a rate increase.
Waterman said the property tax increases for the companies could eventually impact 450,000 households in Orange County with cable television. Dimension has more than 100,000 subscribers in South County.
"It is really a consumer issue," Waterman said, adding that the 450,000 households equal about 1.25 million residents.
Under the new assessment method being used, Mo said the assessed values of the dozen cable companies in Orange County have jumped from $200 million to $650 million. Taxes for those same companies increased from $2 million to $6.5 million.
"It is unbelievable," said Navarra Williams, vice president and general manager of Paragon Cable, which serves, among other cities, Garden Grove, Westminster and Huntington Beach. "Apparently, the county is trying to generate tax revenues the best it can."
Williams said that his company's property tax bill increased from $500,000 to $1.25 million and that in one 18-month period ending December, 1990, the company will have paid $2 million more in property taxes than anticipated.
Williams said if the tax increase is divided by the company's 90,000 subscribers, it could come out to a $2.70-a-month increase in cable rates.
Subscribers to Copley/Colony Cable on Monday began receiving notices of a $1 increase in monthly service fees. Officials for Copley/Colony were unavailable for comment late Monday.