Killeen sues Spectrum for back fees that could fund another lawsuit

Photo By: Chelsea Edwards
Photo By: Chelsea Edwards(KWTX)
Published: Jun. 14, 2018 at 10:51 PM CDT
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The City of Killeen is suing the communications company, Spectrum, for unpaid franchise fees. The mayor hopes to use winnings from that lawsuit to fund a separate lawsuit against the city.

Mayor Jose Segarra tells News 10 that the city’s major challenge is getting out of the red by generating revenue.

“It doesn't matter whether you support a candidate or whether or not you vote, this affects everybody that lives in Killeen.”

He says that street maintenance is running up a bill for the city that is reaching up to forty million dollars.

He’s hoping to help balance the budget with funds he believes could go to the city’s account.

Killeen has become the 33rd plaintiff in a lawsuit against Spectrum cable. Texas law requires cable companies to pay five percent of gross revenue to the cities where they operate.

According to an auditing firm hired by the attorneys filing the lawsuit, Spectrum had underreported revenue and owes back fees of more than $2.25 million.

“The more cities that join, the less the attorney's expenses would be,” says Segarra.

The findings go back to 2013 before Spectrum’s name was changed from Time-Warner in 2016.

The audit claims more than $151,000 is owed to Killeen, and the mayor is betting that the lawsuit's legal fees will pay off.

“We're going to spend about $25,000 and get about $151,000- that's a pretty good investment,” he says.

He suggests the money can help pay for a suit the city is fighting after officials stopped payments to McLean Construction, Inc.

The company was hired to widen some streets, but cracks developed in the roads. The city held back payment for the work, and the company filed a lawsuit against the city in February.

“The second part is figuring out a better accounting system that all the cities can monitor on a regular basis,” adds the Mayor.

He says the lawsuit also includes a plan to ensure Spectrum is paying the correct amount in the future.

“That's the way it should be- our citizens deserve the best,” he adds.

Attorneys for the plaintiffs are waiting to see if more cities will join in the suit.

News 10 reached out to Spectrum about the case, but they did not have a comment at the time this article was published.