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Audit: Time Warner owes WNY communites big money

Posted at 1:44 PM, Mar 01, 2016
and last updated 2016-03-02 12:23:54-05

At least two local governments are wondering why they had to hire an independent auditor to find that Time Warner Cable owed more than $500,000 in unpaid franchise fees for the period December 2009 to December 2014.

The Town of Cheektowaga conducted an audit of the town's utility and telecommunications franchise fees to find out if they were getting properly paid by Time Warner Cable and other utility providers. Franchise fees are paid to local communities by utility and telecommunications companies so those companies can use utility poles, right-of-ways and other property owned by the local governments.

Cheektowaga's audit found that Time Warner Cable had not been paying the full franchise fees to the town from 2009 to 2014. According to the town, Time Warner Cable has now agreed to pay back $420,956.

In a statement from the company, Time Warner Cable said it did make the repayment but offered no explanation of why the underpayment occurred.

Eyewitness News also checked with the City of Buffalo to see if they had a similar experience with the cable provider. We were told that the City of Buffalo's Comptroller's Office is currently performing a similar audit which shows that Time Warner Cable owes them at least $123,000. The Comptroller's Office has sent a notice of claim to Time Warner.

Time Warner Cable released the following statement Tuesday afternoon concerning the Cheektowaga underpayment: "We resolved this issue five weeks ago and look forward to continuing to serve the local residents and businesses."

As to the claim from Buffalo, Time Warner Cable said it is currently reviewing and preparing a response.

Both municipalities used a local utility auditor and consultant, Troy & Banks, to find the underpayment.

According to company president Thomas Ranallo, the underpayment of franchise fees is not unique to WNY and his company is handling a situation in the Capital Region of NYS where Time Warner Cable could owe over a million dollars in unpaid fees.

Not all franchise agreements allow for the use of a third-party auditor who agrees to get paid only if a problem in found.  In those cases, the local governments have to pay up front for the audit, making it less likely that it will be done, said Ranallo.

"It is very concerning to me.  I have been drafting a letter which I am going to be sending out to municipalities in the State of New York to warn them about this type of tactic on limiting the type of audit that could take place," added Ranallo.

In Cheektowaga, Councilman Jim Rogowski said there was a effort to get language into its franchise agreement to limit independent audits but it was recognized and taken out before the agreement was finalized.

"I hope that by this audit, they (Time Warner Cable) will correct their problems they have and do business in a fair and equitable way for the residents of our great town," said Councilman Rogowski.