HomeMy WebLinkAboutORD FOR ADOPTION 02-21-84ORDINANCES FOR ADOPTION
NO. 1
2-21-84
A~NOA ITEM:
ORDINAJ(CE NO. 905 - An Ordinance of the City of Tustin, California,
A~NDING THE FRANCHISE FOR A CABLE TELEVISION SYSTEM GRANTED TO SIX
STAR CABLEVISION OF TUSTIN, INC. AND APPROVING THE TRANSFER OF OWNER-
SHIP FROM SIX STAR CABLEVISION OF TUSTIN, INC. TO UNITED CABLE OF
SOUTHERN CALIFORNIA, LTD.
BACKGROUND:
This Ordinance was introduced at the January 16, 1984, meeting. At
the February 6, 1984, meeting, it was agendized under Ordinances for
Adoption but was recommended to be continued to this meeting.
RECO~NDATIO#:
M. O. - That Ordinance No. 905 have second reading by title only.
M. O. - That Ordinance No. 905 be passed and adopted. (Roll Call Vote)
Roa ke & Wooclr ff
Eebruary 17, 1984
VIA MESSENGER
Laurence K. Gould, Esq.
Scott Adler, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON
333 South Hope Street
48th Floor
Los Angeles, CA 90071
Re: Tustin Cable Franchise
Gentlemen:
I em enclosing herewith the franchise ordinance which has
been distributed to the City Council for an amended first reading
at their meeting on Tuesday, February 21, 1984.
In addition to certain typographical errors and punctuation
changes, the following are the changes made to the ordinance from
the prior draft which was introduced for first reading by the
City Council:
1. In Section 7, we have added language at the end of the
first paragraph providing that the Franchisee, with the
cooperation of the City, will file an application at the cost and
expense of the Franchisee, seeking approval by the FCC of a
franchise fee of five percent (5%). Until the 5% is approved,
however, the Franchisee would be required to pay only 3% of Gross
Revenues. We have also added language indicating that in the
application, approval would be sought for the 5% as of the date
of acceptance of the franchise by the Franchisee and that between
that time and payment of the 5%, interest would be payable at the
prime rate established by the Bank of America.
2. Also in Section 7 we have clarified that the franchise
fees will be paid on a quarterly basis and for each quarter they
will be paid within sixty (60) days thereafter. The payment
which is due for the last quarter of the year shall also be
accompanied by an audited annual statement with respect to the
Gross Revenues. With regard to the other quarterly payments, the
statement need not be audited.
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3. In Section 13 with respect to the Construction Bonds,
although we discussed inserting language pursuant to which half
of t. he $50,000 bond would be returned to the Franchisee, it has
been determined after review that this is not appropriate. The
reports which you have given to us although different to some
extent from the information-of the City Engineer would indicate
that construction is almost complete. Accordingly, it is our
view that you should complete constructin of the system and in
accordance with the terms of this Section you would be entitled
to a complete refund of the funds on deposit.
4. We have added language in Section 16 to reflect that
the Franchisee will be required to keep a service log on a
rolling three (3) year basis.
5. In Section 19, liquidated damages, we have included
language at line 23 1/2, after the word "default" as follows:
"or to agree in writing with the City upon a method and time that
such default shall be cured."
6. At your request we have eliminted the provision with
respect to reduction of term in Section 20. In place of that
section we have inserted a new section entitled "Completion of
Construction". That section provides that the system to be
constructed shall be fully and completely constructed no later
than June 30, 1984 or such later date as the City Council may, by
resolution, approve. In reviewing the material which you
submitted to Us, it appears that is a reasonable date to expect
that the system would be complete. However, we have provided
in the ordinance a mechanism to extend that date if construction
does not appear to be able to be completed by that date.
7. In Section 28 on changes of law, you requested that in
the event of termination pursuant to that section, the City have
an obligation to purchase the cable television system.
Accordingly, we have added language which provides that the City
would, in the event of te~ination under that section, purchase
the system at fair market value. In order, however, to make this
a viable provision, we have also provided that the purchase price
would be paid to you pursuant to an agreement to be entered into
between the City and the Franchisee which provided for a payment
of the purchase price from revenues of the cable television
system over time.
8. We did receive the preliminary draft of the Offering
Memorandum and have reviewed that preliminary draft. This did
not, however, give us any assistance in any type of corporate
guarantee which either UCTC of Southern California,' Inc. or
united Cable Television Corporation was prepared to make with
respect to the obligations of the proposed Franchisee.
Accordingiy, we have added language to Section 32 that provides
that in the event the purchase from Co~unicom is consu~,ated and
united Cable of Southern California, Ltd. does accept the
franchise that at the time of acceptance they shall also provide
the corporate guarantees of UCTC of Southern California, Inc. and
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United Cable Television 'Corporation of the obligations incurred
by United Cable of Southern California, Ltd. under the franchise.
We have reviewed preliminarily the charges, both of this
office, and other City staff in connection with the processing of
the assignment of the franchise from Six Star Nielsen to
Communicom and to United and it appears that those costs will not
exceed $15,000.00.
Very truly yours,
ROURKE & WOODRUFF
ALAN R. WATTS
ARW=cjs:(43)
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ORDINANCE NO. 905
AN ORDINANCE OF THE CITY OF TUSTIN, CALIFORNIA,
AMENDING THE FRANCHISE FOR A CABLE TELEVISION
SYSTEM GRANTED TO SIX STAR CABLEVISION OF TUSTIN,
INC. AND APPROVING THE TRANSFER OF OWNERSHIP FROM
SIX STAR CABLEVISION OF TUSTIN, INC. TO UNITED
CABLE OF SOUTHERN CALIFORNIA, LTD.
The City Council of the City of Tustin, california, hereby
ordains as follows:
WHEREAS, Ordinance No. 792 adopted by the City Council of
the City of Tustin on February 5, 1979, granted a non-exclusive
cable television franchise ("Franchise") to Six Star Cablevision of
Tustin, Inc., a California corporation; and
WHEREAS, Ordinance No. 813 adopted by the City Council
of the City of Tustin on November 5, 1979, amended said Franchise;
and
WHEREAS, Resolution No. 81-10 adopted by the City
Council of the City of Tustin on February 2, 1981, approved the
transfer of certain interests in Six Star Cablevision of Tustin,
Inc., a corporation; and
WHEREAS, the 'Six Star Cablevision of Tustin, Inc. has
15 requested that the City of Tustin approve the changes in ownership
16 set forth below:
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a. The acquisition by CommuniCom of all the interests
of the limited partners of Six Star Cablevision
Associates, Ltd., a New Jersey limited partnership, in
Six Star Nielson Cablevision, a California general
partnership.
b. The dissolution of Six Star Nielson Cablevision, a
California general partnership.
c. The transfer of all of the shares of Six Star
Cablevision of Tustin, Inc., a corporation, to
CommuniCom, a California corporation.
d. The change of name of Six Star Cablevision of
Tustin, Inc., a california corporation, to "CommuniCom
of Tustin", a California corporation.
e. The net result and effect of the aforesaid changes
to be that the Franchisee would be communiCom of Tus-
tin, a California corporation, all of the shares of
which will be solely owned by CommuniCom, a California
corporation, all of the shares of which will be solely
owned by Nielson Enterprises Inc., a Delaware corpora-
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tion; and
WHEREAS, CommuniCom, a California corporation, has entered
or will enter into, an Agreement of Purchase and Sale with United
Cable of Southern California, Ltd., a limited partnership formed
under the laws of the State of Colorado, of which United Cable
Television Corporation, a Delaware corporation, is the General
Partner, and pursuant to such Agreement United Cable of Southern
California, Ltd. will acquire all the stock, properties and assets
of Communicom, including the Franchise; and
WHEREAS, CommuniCom has requested approval by the City of
Tustin to the transfer of ownership of the Franchise to United
Cable of Southern California, Ltd.; and
WHEREAS, representatives of the City of Tustin and
CommuniCom and United Cable of Southern California, Ltd. have
conferred and have concluded that it would be in the mutual best
10 interests of the City of Tustin and Franchisee to amend the Fran-
chise as hereinafter provided; and
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WHEREAS, the city of Tustin is willing to approve the tran-
12 sfer of ownership of the Franchise to CommuniCom and if the stock,
properties and assets of CommuniCom are acquired by United Cable of
13 Southern california, Ltd., the transfer of the Franchise to united
Cable 6f Southern California, Ltd. in accordance with the. terms of
14 this amended Franchise.
15 1. Authority for Franchise. This amendment to the non-
exclusive franchise for a cable television system is enacted
16 pursuant to the authority provided in, and all of the provisions,
terms and conditions, of Article 7, Chapter 4 of the Tustin City
17 Code, Sections 7410 et seq.
18 2. Grant of Franchise. Pursuant to the provisions of
Article 7, Chapter 4 of the Tustin city Code the City Council of
19 the City of Tustin hereby approves the transfer of the non-
exclusive Franchise to construct, operate and maintain a cable
20 television system within those portions of the incorporated limits
of the City of Tustin in which there is no exclusive Franchise in
21 effect, to Communicom of Tustin, a California corporation, and upon
United Cable of Southern California Ltd's acquisition of its
22 stock, properties and assets, and upon compliance with the
provisions of Section 32 of this Ordinance, the transfer to UNITED
23 CABLE OF SOUTHERN CALIFORNIA, LTD., a Colorado limited partnership,
with all the rights and privileges and subject to all of the terms
24 and conditions of (a) said Article 7, Chapter 4, and (b) to the
extent consistent with the terms and conditions of this Ordinance,
25 Franchisee's predecessor's application, dated November 3, 1978, and
all supplements and amendments thereto accepted and approved by the
26 City of Tustin, and (c) the terms and conditions provided herein.
27 Each, every and all of the conditions, requirements,
limitations and obligations upon Franchisee as set forth in the
28 Tustin City Code are hereby made a part of the Franchise granted
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1 herein.
2 3. Term of Franchise. The term of this Franchise shall be
for a period of twelve (12) years, commencing on the effective date
3 of this ordinance as provided in Section 32 hereof, subject to
termination of the Franchise granted by this ordinance as
4 hereinafter provided.
5 4. Assignment or Transfer of Franchise. The Franchise
granted herein shall be a privilege to be held in personal trust by
6 CommuniCom of Tustin, or subject to Section 32 hereof by united
Cable of Southern California, Ltd., a Colorado limited partnership.
7 It cannot in any event be sold, transferred, leased, assigned or
disposed of in whole or in part, either by forced or involuntary
8 sale, or by voluntary sale, merger, consolidation or otherwise,
without prior consent of the City Council of the City of Tustin
9 expressed by resolution, and then only under such conditions as may
therein be prescribed. Any such transfer or assignment shall be
10 made only by an instrument in writing, such as a bill of sale, or
similar document, duly executed copy of which shall be filed in the
11 office of the City Clerk within thirty (30) days after any such
transfer or assignment. Any proposed assignee must show responsi-
12 bility and capability as determined by the City Council and must
agree to comply with all provisions of the Franchise and Tustin
13 City Code, and, provided further, that no such consent shall be
required for transfer in trust, mortgage or other hypothecation, in
14 whole or in part, to secure an indebtedness. Such consent shall
not be withheld unreasonably.
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Further, inasmuch as when the aforedescribed acquisition
16 occurs the Franchisee is a limited partnership whose general
partner is UCTC of Southern california, Inc., prior approval of the
17 City Council, expressed by resolution, shall be required where
there is an actual change in control or where ownership of more
18 than ten percent (10%) of the voting stock of the general partner
is acquired by a person or group of persons acting in concert, none
19 of whom already own fifty percent (50%) or more of the voting
stock, singly or collectively. Any such acquisition occurring
20 without prior approval of the City Council shall constitute a
failure to comply with the provisions of this Franchise. Nothing
21 herein shall restrict the transferability of the interests of
limited partners in united Cable of Southern California,' Ltd.
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5. Rates. Pursuant to Article 7, Chapter 4 the
23 following schedule of rates and charges is hereby approved:
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A. INSTALLATION CHARGES
25 1.
Definition - Standard Installation
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A standard installation shall include
installations of aerial drop cable with
fittings up to 150 feet from the cable
television distribution system directly to
the customer's television set.
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A. Overhead
(1) 1 to 150 feet - $15.00
(2) Over 150 feet -
$15.00 + $1.00
per foot over
150 feet
B._ Underground - A WRITTEN ESTIMATE
FORM MUST BE PROVIDED SUBSCRIBER
(1') All
(2)
If subscriber
provides trench,
repaying, back-
filling and
planting
$15.00 + $2.00
per linear foot
of underground
$15.00 up to
150 feet,
$1.75 per
linear foot
of under-
ground in
excess of'150
feet
Additional Outlets and Channel Selectors
A. Additional outlets or channel
selectors - $15.00
B. If separate structures are
involved, 2.A or 2.B applies
4. Installation of House Amplifier
A. If ordered and installed separately
- $15.00
B. If installed at time of first
outlet or any other work is performed on the
premises for which a charge is authorized -
$7.50
5. Relocation Charge
The charge shall be $15.00 for each
relocated outlet or relocated channel
selector. The charge shall be $7.50 if
relocation is done with other work.
Reconnect Charge - $10.00
The $10.00 charge shall apply only when
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the Franchisee has previously served the
premises and facilities are in place but
service was disconnected, or in the case of
apartments, condominiums or townhouses when
service is in place and an individual unit is
connected to the system non-concurrently with
the installation of the system in the
building. This charge also applies to hookup
of individual units on bulk rate of
agreement.
7. Apartments, Hotels, Motels,
Condominiums, Townhouses and Non-Residences
A. Actual estimated cost with written
agreement.
Schools and City-Owned Facilities
Same as provided in Section 5.A.2. hereof.
9. Subscriber Liability for Loss or Damage
to Equipment or Facilities
A. Subscribers.will be charged for the
loss or damage of any equipment furnished by
Franchisee.
B. Franchisee may collect and hold
without the payment of interest a $25.00
deposit as security for each channel
selector.
SERVICE CHARGES~
The charges in this subsection are for
service on all carried UH-F and VHF channels
including local origination.
1. Monthly Rate - Residence
A. First Outlet $7.50
B. Additional Outlet $1.50 each
C. Channel Selectors $1.50 each
In-house Amplifiers $4.50 each
(five or more outlets)
2. Apartment units, Hotels, Motels,
Condominiums, Townhouses and Non-Residences
on One Billing for All Units Monthly Rate
Reduced rates would be negotiated with
individual Owners or Leaseholders in
proportion to the number of units involved.
Fees for additional and/or special services shall be as
approved from time to time by resolution of the City Council.
Franchisee may charge its subscribers and users less, but not more
than the rates and charges in accordance with the foregoing sched-
ule.
Franchisee may increase such rates and charges as herein-
after provided. Not more often than two times during any calendar
year, Franchisee shall notify the City of Tustin, in writing, of a
7 proposed increase in such rates and charges. The increase shall be
effectiv~ sixty (60) days after the City of Tustin has received
8 written notice of such increase, unless prior to such date the city
council of the City of Tustin shall by resolution set the matter
9 for hearing at a meeting of the city council. If a hearing is set,
the City Council shall act to approve, modify or disapprove such
10 increase within sixty (60) days after the matter is set for hear-
ing. At such hearing, the Franchisee may present evidence with
11 respect to the proposed increase in rates and charges. If the city
council adopts a resolution setting the proposed increase in rates
12 and charges for hearing, no rate, charge, service, contract, prac-
tice or rule shal~ be changed so as to result in an increase in
13 such rates and charges until said hearing is held and the city
council of the City of Tustin has approved such increase in the
14 rates and charges.
15 6. Definition of Gross Revenues. "Gross Revenues" shall
mean all cash, credits, property of any kind or nature or other
16 consideration derived directly or indirectly by the Franchisee, its
affiliates, subsidiaries, and any other person or entity in which
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Franchisee has a financial interest or which has a financial
interest in the Franchisee, arising from or attributable to
operation of the cable television system in the City of Tustin, as
its corporate city limits now and/or hereafter may be constituted,
including, but not limited to:
a. Revenue from the subscriber network and insti-
tutional network (including Leased Access fees).
b. Advertising revenues.
c. Revenue from the use of studio facilities,
production equipment and personnel.
d. Revenue from installation, connection and
reinstatement and the provision of subscriber and other
services.
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e. The sale, exchange or cablecast of any programming
developed for Community Use or institutional users.
f. Interconnection revenues.
1 "Gross Revenues" shall include, valued at retail price
levels, the value of any goods,' services or other remuneration in
2 non-monetary form received by the Franchisee or others described
above in consideration for performance by the Franchisee or others
3 described above of any advertising or other service in connection
with the cable television system.
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"Gross Revenues" shall not include:
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a. Any taxes on services furnished by the Franchisee
which are imposed directly upon any subscriber or user
by the United States, State of California or local
agency and collected by the Franchisee on behalf of the
government.
b. Revenue received directly from the Franchisee by an
affiliate, subsidiary or parent of the Franchisee or
any other person or entity in which the Franchisee has
a financial interest or which has a financial interest
in the Franchisee, when the revenue received has
already been included and reported Gross Revenue as
received by the Franchisee.
7. Franchise Fees. For the use of the City streets and
for the purposes of providing revenue with which to defray the cost
of regulation arising out of issuance of the Franchise and
14 promoting, assisting and financing Community Use Programming and
other cable services of a public character, Franchisee shall pay
15 franchise fees in the amounts prescribed below. The City of Tustin
shall cooperate with the Franchisee in filing with the Federal
16 Communications Commission and fully supporting a request permitting
payment of the amounts prescribed below.
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The streets and other public rights-of-way to be used by
18 Franchisee in the operation of its system within the boundaries of
the City of Tustin are valuable public properties acquired and
19 maintained by the City at great expense to its taxpayers, and the
grant to the Franchisee of consent to use such streets and other
20 public rights-of-way is a valuable property right without which the
Franchisee would be required to invest substantial additional
21 capital. Furthermore, the City will incur costs in administering
the Franchise in the public interest. Thus, in consideration of
22 the granting and e~ercise of a Franchise to use the streets and
other public rights-of-way as herein defined, for the operation of
23 a cable television system, and to reimburse City for costs incurred
in administering this Franchise granted pursuant to this ordinance,
24 the Franchisee shall pay the City the fees provided in this Ordi-
nance.
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During the term of the Franchise, the Franchisee shall pay
26 to City of Tustin an amount equal to five percent (5%) per year of
the Franchisee's annual Gross Revenues.
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said fees shall be paid semi-annually not later than August
28 1 and February 1 for the preceding six (6) month period ending,
respectively, June 30 and December 31. Not later than the date of
each required payment, the Franchisee shall file with the city
Clerk of the City of Tustin an audit report by a Certified Public
Accountant approved by City, of the operations of Franchisee which
identifies in detail the sources and amounts of all Gross Revenues
received by the Franchisee from all sources, both inside and out-
side City, during the period for which payment is made.
It is the intent of the City of Tustin to utilize substan-
tial amounts or all of franchise fees imposed hereunder to defray
the cost of local administration of the Franchise, to support the
development and maximum utilization of all community service and
government access channels and to generally encourage development
and use of the cable system to full utilization of potential.
No acceptance of any payment shall be construed as an accord
9 that the amount paid is, in fact, the correct amount, nor shall
such acceptance of payment be construed as a release of any claim
10 which the City of Tustin may have for further additional-sums
payable under the provisions of the Franchise.
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8. Reimbursement of city Expenses. After the effective
12 date of this Ordinance, the Franchisee shall pay to the City of
Tustin an amount equal to the cost incurred by the City in
13 preparing and enacting this ordinance. Such cost includes legal
expenses, City administrative staff expenses and publication
14 expenses. The City shall prepare a statement aggregating such cost
and send such statement to the Franchisee. The Franchisee shall
15 pay the amount of such statement to the City Within thirty (30)
days after receipt of said statement.
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The purpose of this Section is to reimburse City for the
cost incurred by the City of Tustin in preparing and enacting this
ordinance.
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9. Future Laws. The City of Tustin does not have or
expect in the forseeable future to receive sufficient funds with
which to defray the costs of administering and regulating the cable
television franchise within the City. The ability to finance such
costs through franchise fees pursuant to the provisions of Section
7 above, constitutes a material inducement to initiate a cable
television program within the City of Tustin because the City of
Tustin would not be willing to reduce or eliminate other public
programs in order to make public funds available with which to
defray the cost of administering and regulating the cable
television program.
Therefore, should any future law or regulation limit or
prevent the City of Tustin from imposing a franchise fee in the
amount provided for herein, the Franchisee shall nevertheless pay
the City of Tustin the same amounts at the same times as are
prescribed by Section 7 above. The Franchisee shall make a good
faith effort to obtain any possible waiver or permission to pay the
full amounts provided for herein, and to the extent such future law
or regulation permits the Franchisee discretion to make the limita-
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1 tion or prohibition applicable or inapplicable, the Franchisee
shall elect to make the limitation or prohibition inapplicable.
2 The City of Tustin may, in addition to any other remedies available
to it, treat any reduction of payments as a failure of considera-
3 tion for the Franchise awarded pursuant to this ordinance and may
terminate the Franchise. If, as a result of any acts of the
4 Federal Communications Commission, the United States Congress or
any other entity lawfully asserting jurisdiction for the regulation
5 of cable communication systems, any provision or provisions of this
Franchise as modified, amended, revoked, redeemed, or changed to
6 result in what constitutes, in the view of the City of Tustin,
material changes in the provisions and circumstances of the Fran-
7 chise so granted, the City may elect to (a) amend the Franchise and
all such parts related to such material change, or if said amend-
8 ment is not acceptable to the Franchisee, (b) treat such material
change as a cause for revocation of the Franchise.
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The failure of the City of Tustin to receive the fees
10 prescribed hereinabove shall be deemed to constitute a substantial
and material failure to comply with the Franchise.
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10. Limitation of Uses. The cable television system herein
12 franchised shall be used exclusively for the purposes expressly
authorized by Article 7, Chapter 4 of the Tustin City Code and no
13 other purpose whatsoever.
11. Establishment and Extension of Service:
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a. Upon the effective date of this ordinance,
Franchisee shall diligently proceed or continue to
proceed to obtain all necessary permits and
authorizations necessary to construct and operate cable
television'service and shall forthwith proceed or
continue to proceed with construction and installation
of the cable television system as specified and
described in this ordinance and Article VII, Chapter 4
of the Tustin city Code and approved by City of Tustin
and shall diligently and without delay carry all con-
struction to full completion.
b. Service will commence within 60 days of the effec-
tive date of this ordinance.
12. Acceptance of Franchise. Within thirty (30) days after
23 the effective date of t~-~s ordinance, Franchisee shall file with
the City of Tustin its written, unconditional, non-contingent ac-
24 ceptance of the Franchise granted by this ordinance and its agree-
ment to be bound by and comply with all the requirements hereof.
25 The Acceptance shall be signed by a person duly authorized to act
on behalf of the Franchisee, shall be notarized and shall have
26 attached thereto a certified copy of an order by the Board of
Directors of communiCom of Tustin, authorizing and directing execu-
27 tion and filing of the Acceptance, provided, however, that such
acceptance is subject to Section 32 hereof. An Acceptance which
28 constitutes a qualified acceptance or places other limits or condi-
tions therein shall be deemed to be a nullity. Upon the failure of
the Franchisee to file its unconditional, non-contingent Acceptance
of the Franchise subject to all its terms and conditions within the
time period specified above, the Franchise shall be of no further
force or effect and there will be not issued and outstanding cable
television franchise in the City of Tustin to any of the companies
or entities named in this ordinance. Franchisee shall furnish and
maintain all bonds and insurance policies required to be furnished
pursuant to Tustin City Code and this Franchise.
6 13. Bonds. Upon the adoption of this ordinance and the
Acceptance o~-~ Franchise by Franchisee as hereinabove provided,
7 and in addition to satisfying all other requirements of the Tustin
City Code, Franchisee shall deposit in a bank or savings and loan
8 association in the City of Tustin the sum of Fifty Thousand Dollars
($50,000.00) in a joint account in the names of Franchisee and the
9 City of Tustin, or shall file with the City Clerk and maintain in
full force and bond, approved by the City Attorney, in an
10 equivalent amount. The passbook, certificate of deposit or surety
bond shall be delivered to and held by the City of Tustin. The
11 cash deposit sum, or the corporate surety bond shall be maintained
during the period of construction of the cable television system
12 within the City of Tustin as prescribed in the Franchise granted by
this ordinance. Upon full and final completion of the cable
13 television system as prescribed in the Franchise granted by this
ordinance within the times prescribed in the Franchise, City shall
14 deliver the said passbook, certificate of deposit or surety bond to
Franchisee and execute any appropriate document releasing City's
15 interest and rights therein to Franchisee. This release shall be
contingent upon the full and faithful performance of the Franchisee
16 of its obligations under the Franchise granted by this ordinance.
In the event that Franchisee shall fail to comply with any one or
17 more of the provisions of the Franchise granted by this ordinance
there shall be recoverable from the aforesaid sum or bond any and
18 all damages or loss suffered by City as a result thereof, including
but not limited to the full amount of any compensation, indemnifi-
19 cation, cost of removal of abandoned property, staff costs in
attempting to secure compliance, plus a reasonable allowance for
20 attorneys' fees and costs, up to the full amount of the aforesaid
deposit. Relinquishment of City's interests and rights in the
21 aforesaid deposit shall also be conditioned upon the deposit with
City of a performance bond as provided in the following paragraph.
22
Prior to relinquishment by City of any of its interests and
23 rights in the deposit described in the preceding paragraph,
Franchisee shall file with the City Clerk and shall thereafter,
24 annually, during the entire term of the Franchise, maintain in full
force and effect a corporate surety bond or other adequate surety
25 agreement approved by the City Attorney in the amount of Fifty
Thousand Dollars ($50,000.00). The bond or agreement shall be so
26 conditioned that in the event the Franchisee shall fail to comply
with any one or more of the provisions of the Tustin city Code or
27 of the Franchise granted to Franchisee, then there shall be
recoverable jointly and severally from the principal and surety,
28 any damages or loss, or costs suffered or incurred by the City as a
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1 result thereof, including attorneys' fees and costs of any action
or proceeding, and including the full amount of any compensation,
2 indemnification, costs of removal or abandonment of any property or
other costs which may be in default, up to the full principal
3 amount of such bond. Said 'condition shall be a continuing
obligation during the entire term of the Franchise and thereafter
4 until Franchisee shall have satisfied in full any and all.
obligations to City which shall arise out of or pertain to said
5 Franchise.
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14. Community Use.
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A. The Franchisee shall provide community Use Chan-
8 nels and Community Use Programming in order to permit the community
to design, produce and present programming of local interest and
9 promote the educational, recreational and character-building oppor-
tunities of the viewing public. Community Use, community Use
10 Programming and Community Use Channels shall include use, pro-
gramming and channels for purposes of non-commercial cablecast
11 presented by or on behalf of the Franchisee, the City of Tustin,
individuals and local community non-profit organizations, which
12 consist of topics of special interest to the Tustin community or
elements thereof, including matters of a political, governmental,
13 social, religious, educational, cultural, artistic, health-
oriented, ethnic, economic, recreational, charitable and philan-
thropic nature, significant part of'such programming having been
locally produced. "Non-commercial" means:
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(1) That the content of such programming shall .not be
for the purpose of either directly or indirectly
selling any product or service for private gain; and
(2) That the programming shall not be associated with
or interrupted during presentation by commercia~
advertising or announcements presented for the purpose
of selling products or services for private gain.
B. To meet its obligations under this Section 14, the
Franchisee's obligations shall include the following:
Franchisee shall initially provide one channel for
municipal, educational, and public access purposes to
be utilized on a time-shared basis by the City and the
other entities or individuals served by the cable
television system operated by the Franchisee until such
time as such one channel is used full time during
normal morning, afternoon, and evening viewing hours,
at which time the Franchisee shall provide a second
such channel to be utilized on the same basis, and when
that channel is also used full time, the Franchisee
shall provide a third such channel to be utilized on
the same basis, which three channels shall be the total
maximum number of channels which the Franchisee shall
be required to provide for such municipal, educational,
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and public access purposes. In order that the City and
others may utilize the educational and municipal chan-
nels, the Franchisee will provide video and such other
equipment and personnel as is necessary to broadcast on
said channels, at Franchisee's cost.
15. Level of Service and Local Origination. It is the
intent of the City that the Franchisee shall provide as soon as it
is financially feasible a cable television system which at all
times during the Franchise period is equal to the then current
state of the art.
Franchisee shall provide local origination programming as
soon as it is financially feasible to do so as determined by the
City Council in the reasonable exercise of its discretion.
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16. Bi-Directional Interconnect Capability. The system to
be installed by Franchisee shall have bi-directional interconnect
capabilities and shall be interconnected when technically and
financially feasible to do so as determined by the City Council in
the reasonable exercise of its discretion.
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In all events, at such time as the Franchisee achieves
a penetration rate of forty percent (40%), the Franchisee, at its
expense, shall open a studio in the City for video origination,
which may be located'in the same location as the Franchisee's'
14 local business office. The~Franchisee shall keep open such studio
thereafter for the remaining term of this Franchise. Franchisee
15 shall furnish the studio, at its expense, with such equipment as
the Franchisee determines, but at a minimum one color camera, a
16 video recorder, adequate lighting and playback equipment. The
Franchisee shall provide such reasonable staff and technical ser-
vices as may be necessary for the studio, which shall be available
for programming for the public access, educational access, and
government access channel(s).
The Franchisee shall have a business and service
office in the City to serve the Tustin cable television system.
The Franchisee shall also open a billing collection office in the
City which may be at the same location. The Franchisee will
maintain sufficient service personnel and equipment in such
location(s) for the Franchisee to be able to take action upon
customer service calls in the manner specified herein. The local
office, including the service office, shall be open to receive
inquiries or complaints for subscribers during normal business
hours and in no case less than 9:00 a.m. to 5:00 p.m. Monday to
Friday, excluding legal holidays; provided, however, that such
hours may be lessened upon the prior written consent of the City
Manager provided that local, non-toll telephone service is
available during such times.
281i minimize delay for service installation.
The Franchisee shall maintain a service repair force
sufficient to respond within a reasonable time to any individual
interruption of service and also a sufficient installation force to
Any service complaint
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from subscribers will be invesstigated and acted upon as soon as
possible.
The Franchisee shall provide a telephone answering
system to receive all construction and service complaints. The
telephone number of the local office shall be listed in the
4 telephone directories serving Tustin. The telephone service shall
be operable to accept complaints twenty-four (24) hours a day,
5 seven (7) days a week.
The Franchisee shall keep a maintenance service log
which will indicate the nature of each service complaint, its
location, the date and time it was received, the disposition of
said complaint and the time and date thereof. This lpg shall be
made available for periodic inspection by the City.
9 17. Number of Channels. The cable television system
installed pursuant to the Franchise granted herein shall consist of
10 a one (1) cable subscriber network with a capacity of not less
than fifty-two (52) channels. As soon as it is financially
11 feasible as determined by the City Council in the reasonable exer-
cise of its discretion, the Franchisee shall add an institutional
12 network.
13 18. Remedies. .At the time of issuance of this Franchise,
it is impractical to reasonably ascertain the total extent of
14 damages which may be incurred as a result of the breach by
Franchisee of its obligations under the Franchise. The factors
15 relating to the impracticality of ascertaining damages include, but
are not limited to, the following:
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a. The fact that: (i) the primary damage resulting
17 from breaches by the Franchisee of the schedules for
construction of extension of the cable television
18 system and provision for services will be to members of
the public who are denied services or denied quality or
19 reliable service; (ii) such breaches cause
inconvenience, anxiety, frustration and deprivation of
20 the benefits of the Franchise to individual members of
the general public in subjective ways and in varying
21 degrees of intensity which are incapable of measurement
in precise monetary terms; (iii) that serviCes might be
22 available through the cable television system which are
both necessary and available at substantially lower
23 costs than alternative services, and. the monetary loss
resulting from denial of services or denial of quality
24 or reliable services is impossible to calculate in
precise monetary terms, and (iv) the termination of a
25 Franchise for such breaches, and other remedies are, at
best, means a future correction and not remedies which
26 make the public whole for past breaches;
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b. The fact that the failure of the Franchisee to make
timely reports will make it difficult in ways which are
not measurable for the City of Tustin to administer the
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construction schedule, delay initiation of enforcement
proceedings and impede compliance with the periods
allowed for construction; and
c. The fact of the failure of the Franchisee to file
timely annual reports will deny information necessary
to enable the City of Tustin to expeditiously,
effectively and efficiently administer the Franchise
'and exercise its regulatory powers in relation thereto
for the promotion and protection of the public
convenience, health, safety, and welfare.
Without the provisions of this Section, the actual damages for
which the Franchisee would be liable, could greatly exceed the
specified amount of liquidated damages. Therefore, the provisions
herein for liquidated damages are of benefit to the Franchisee.
19. Lisuidated Damages. If the City believes that the
10 Franchisee is in material default under the terms of the Franchise,
the City shall give written notice of such default to the
11 Franchisee. The Franchisee shall have fourteen (14) days from
receipt of such notice to cure the default. If the default is not
12 cured, the City Council of the City of Tustin may assess the
Franchisee and the Franchisee shall be liable for liquidated
13 damages in the sum of Five Hundred Dollars ($500.00) for each
calendar day on which the Franchisee is in such default. Said
14 'liquidated damage sum shall be severally applicable to each
calendar day of delay in compliance with the provisions of
15 construction and separately applicable for each calendar day of
delay complying with any other provision of the Franchise.
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20. Reduction of Term. In addition to the foregoing
17 liquidated damages, in its sole discretion, the City Council of the
City of Tustin may reduce the term of the Franchise one (1)
18 calendar month for each cumulative thirty (30) calendar days in
excess of the first thirty (30) calendar days the Franchisee is in
19 breach of any of the material provisions of the Franchise.
20 21~ Alternative Remedies. Neither a termination
of the Franchise nor liquidated damages shall be deemed to be the
21 exclusive remedy for breach of the Franchise. Neither the right to
assess liquidated damages nor the assessment of liquidated damages
22 nor the right to reduce or reduction of the term of the Franchise
shall be deemed to bar or otherwise limit the right of the City of
23 Tustin to obtain judicial enforcement of the Franchisee's
obligations by means of specific performance, injunctive relief,
24 mandate or other remedies at law or in equity, other than monetary
damages.
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22. Termination of Franchise. The following material
26~i breaches Of the obligati0~s of the Franchisee under the Franchise
i! shall constitute grounds for termination of the Franchise by the
271 City Council of the City of Tustin:
The willful failure to make any payments required
14
under the Franchise and/or to provide City with
required information in a timely manner as provided in
the Franchise.
3 b. Any other act or omission by the Franchisee which
materially violates the terms, conditions or
4 requirements of the Franchise or any order, directive,
rule or regulation issued thereunder and which is not
5 corrected or remedied within thirty (30) calendar days
following mailing to the Franchise written notice of
6 the violation or within such period beyond the thirty
(30) calendar days as is reasonable.
23. City's Right to Operate System. In the event the
8 Franchisee fails to operate its cable television system for seven
(7) consecutive days without prior approval by the City Council of
9 the City of Tustin and for reasons which are not beyond the
Franchisee's control, the Council through its officers, agents,
10 employees or contractors may, at its option, enter upon the
premises of the Franchisee, occupy such premises and property
11 constituting the cable television system, and operate the system
until such time as the Franchisee presents proof satisfactory to the
12 City Council that it is ready, willing and able to renew operation
of the system. In operating the system, the City or its contractor
13 shall be vested with the powers of a receiver, and shall be
authorized to c6ntract in the name of the Franchisee, incur
14 expenses in the name of the Franchisee, and take any and. all other
actions necessary to enable it to effectuate the purposes of this
15~ Section. The costs incurred by the City in undertaking such
operation shall be a charge against the assets of the Franchisee,
16 and the City or its contractor shall be authorized to reimburse
itself for the costs incurred from revenues received during the
17 period of operation.
18 24. No Recourse Against City. Franchisee shall have no
recourse whatsoever against the City of Tustin or its officers,
19 agents, or employees for any loss, costs, expense or damage arising
out of or resulting from any provision or requirement of the
20 Franchise or any rule, regulation, requirement or directive
promulgated thereunder, or because of the enforcement of any
21 provision of the Franchise or any rule, regulation, requirement or
directive promulgated thereunder, or in the event any provision of
the Franchise or any rule, regulation, requirement or directive
promulgated thereunder is determined to be invalid.
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25. Non-Enforcement. The Franchisee shall not be relieved
24 of any obligation to comply with any of the provisions of the
Franchise or any rule, regulation, requirement or directive
25 promulgated thereunder by reason of any failure of the City of
Tustin or its officers, agents or employees to enforce prompt
26 compliance.
27 26. Franchise as Contract. The Franchise shall be deemed
to constitute a contract between the Franchisee and the City of
28 Tustin. The Franchisee shall be deemed to have contractually
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1 committed itself to comply with the terms, conditions and pro-
visions of the Franchise, and with all rules, orders, regulations
2 and determinations applicable to the Franchise which are issued,
promulgated or made pursuant to the provisions of this Franchise.
3 The Franchise shall not be construed to constitute a contract of
adhesion.
4
All terms, conditions and provisions of the contract shall
5 be deemed to be embodied in the Franchise, and conflicts in terms,
conditions or provisions of the Franchise shall be resolved as
6 follows:
a. The express terms of this Franchise shall prevail
over conflicting or inconsistent provisions in Article
7 Chapter 4 of the Tustin City Code;
b. The express terms of this Franchise shall prevail
over conflicting or inconsistent provisions in either
the application for the Franchise or the certificate of
acceptance of the Franchise.
27. Utility Poles. This Franchise shall not be deemed to
expressly or impliedly authorize the Franchisee to utilize poles
owned by the Southern California Edison Company, Pacific Telephone
Company or any other public or private utility which are located
within the streets, without the express consent of such utility.
28. Changes in Law. Should the State of California or any
agency thereof, the United States or any Federal agency, or any
State or Federal Court require either the City of Tustin or the
Franchisee to act in a manner which is inconsistent with any
provisions of the Franchise, the City Council of the City of Tustin
shall be authorized to determine whether a material provision of
the Franchise is affected in relation to the rights and benefits
conferred by the Franchise upon the City Council of the City of
Tustin or the public. Upon such determination, the Franchise shall
19! be subject to reasonable modification or amendment to such extent
as may be necessary to carry out the full intent and purposes
20 i thereof in relation to the rights and benefits of the City Council,
the City of Tustin or the public. The City Council of the City of
21! Tustin may terminate the Franchise issued pursuant to the
II provisions of this Franchise if it determines that substantial and
221! material compliance with the Franchise in relation to the rights or
.~i benefits of the City Council, the City or the public has been
23i! frustrated by such a State, Federal or judicial requirement and
!~. cannot be corrected by modification or amendment.
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29. Indemnification; Liability Insurance. Franchisee
25 agrees to and shall hold City and its officers, employees, agents
and representatives free, harmless and shall indemnify and defend
26: them against and from any and all claims, demands, costs, liability
' to other kind or nature whatsoever arising out of or from the
27 i Franchise, any extension of any time limits contained in the
Franchise, the failure to extend any time limit in the Franchise,
28ii out of the construction, operating, maintenance, program content,
16
1 royalties or removal or abandoned of the CATV System by Franchisee.
2 Franchisee shall procure and thereafter during the life of
the Franchise shall maintain in full force and effect at
3 Franchisee's sole cost and expense, general comprehensive liability
insurande in an amount not less than One Million Dollars
4 ($1,000,000.00) for injuries, including accidental death, to two
(2) or more persons and in an amount not less than Five Hundred
5 Thousand Dollars ($500,000.00) for injuries, including accidental
death to any person, and property damage liability insurance in an
6 amount not less than Five Hundred Thousand Dollars ($500,000.00)
resulting from any one occurrence, and City shall be named as an
7 additional named insured in said insurance policy, with coverages
to be included in the public liability and property damage policies
8 of broad form contractual and broad form property damage with the
further provision that said policies shall contain a provision that
9 written notice of cancellation or material alteration of said
policies shall be delivered to City sixty (60) days in advance of
10 the effective date of any such cancellation or material alteration.
11 During the period of construction, and at all times
thereafter, Franchisee shall keep all improvements installed by it
12 insured against loss or damage by fire, with extended coverage
endorsement or its equivalent in amounts not less than ninety
13 percent (90%) of the insurable value of the buildings, equipment
and other improvements insured, with loss payable to Franchisee,
14 any lenders of Franchisee which may have a security interest in the
property comprised of the cable television system and City, in
15 accordance with their respective interests therein.
16 30. Severability. The provisions of Section 1115 of the
Tustin City Code shall not be applicable to the provisions of the
17 Franchise.
18 31. Effective Date of Ordinance. This ordinance shall be-
come effective thirty--~) days after its passage.
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32. Permitted Assignment. Subsequent to the effective date
20 of this ordinance the stock, properties and assets of CommuniCom
may be acquired by United Cable of Southern California, Ltd. The
21 City of Tustin hereby consents to transfer of the franchise to
United Cable of Southern california, Ltd. provided that the follow-
22 ing conditions are satisfied. Those conditions are that (i) on or
before June 30, 1984, or such later date as the City Council by
23 resolution may permit, united Cable of Southern California, Ltd.
notify the City of Tustin, in writing, that United has acquired the
24 stock, properties and assets of CommuniCom, and (ii) that within
thirty (30) days after the written notification in (i) above that
25 United, file with the City of Tustin, its written acceptance of the
Franchise in accordance with Section 12 hereof and only upon the
26 occurrence of those conditions is CommuniCom of Tustin released
from liability under the terms of the Franchise, and (iii) the
27 guaranty by United Cable Television Corporation, a Delaware
corporation, of the obligations of the Franchisee in form and
28 substance to be approved by the City Council.
17
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2 of the City of Tustin, california, held on the
, 1983.
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ATTEST:
PASSED AND ADOPTED at a regular meeting of the City Council
day of
CITY CLERK
ARW~JGR:se:R:l/l~/84(12a.cj)
18 I
MAYOR