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HomeMy WebLinkAboutORD 0905 (1984) 1 ORDINANCE NO. 905 AN ORDINANCE OF THE CITY OF TUSTIN, CALIFORNIA, 2 AMENDING THE FRANCHISE FOR A CABLE TELEVISION SYSTEM GRANTED TO SIX STAR CABLEVISION OF TUSTIN, 3 INC. AND APPROVING THE TRANSFER OF OWNERSHIP FROM SIX STAR CABLEVISION OF TUSTIN, INC. TO UNITED 4 CABLE OF SOUTHERN CALIFORNIA, LTD. 5 The City Council of the City of Tustin, California, hereby 6 ordains as follows: 7 WHEREAS, Ordinance No. 792 adopted by the City Council of the City of Tustin on February 5, 1979, granted a non-exclusive 8 cable television franchise ("Franchise") to Six Star Cablevision of 9 Tustin, Inc., a California corporation; and WHEREAS, Ordinance No. 813 adopted by the City Council 10 of the City of Tustin on November 5, 1979, amended said Franchise; and 11 12 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 S~ar C~ablevision of Tustin, 13 Inc., a corporation;. and 14 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: 17 a. The acquisition by CommuniCom of all the interests of the limited partners of Six Star Cablevision 18 Associates, Ltd., a New Jersey limited partnership, in Six Star Nielson Cablevision, a California general 19 partnership. 20 b. The dissolution of Six Star Nielson Cablevision, a California general partnership. 21 c. The transfer of all of the shares of Six Star 22 Cablevision of Tustin, Inc., a corporation, to CommuniCom, a California corporation. 23 d. The change of name of Six Star Cablevision of 24 Tustin, Inc., a. California corporation, to "CommuniCom of Tustin", a California corporation. 25 e. The net result and effect of the aforesaid changes 26 to be that the Franchisee would be CommuniCom of Tus- tin, a California corporation, all of the shares of 27 which will be solely owned by CommuniCom, a California corporation, all of the shares of which will be solely 28 owned by Nielson Enterprises Inc., a Delaware corpora- 1 tion; and 1 WHEREAS, CommuniCom, a California corporation, has entered 2 or will enter into, an Agreement of Purchase and Sale with United Cable of Southern California, Ltd., a limited partnership formed 3 under the laws of the State of Colorado, of which UCTC of Southern California, Inc., a Delaware corporation, is the General Partner 4 and pursuant to such Agreement United Cable of Southern California, Ltd. will acquire all the stock, properties and assets of Communi- 5 Com, including the Franchise; and 6 WHEREAS, CommuniCom has requested approval by the City of Tustin to the transfer of ownership of the Franchise to United 7 Cable of Southern California, Ltd.; and 8 WHEREAS, representatives of the City of Tustin and CommuniCom and United Cable of Southern California, Ltd. have 9 conferred and have concluded that it would be in the mutual best interests of the City of Tustin and Franchisee to amend the Fran- 10 chise as hereinafter provided; and 11 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 of 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 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 31 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 of which UCTC of Southern California, Inc. is the General Partner. It cannot in any event be sold, transferred, leased, assigned or 8 disposed of in whole or in part, either by forced or involuntary sale, or by voluntary sale, merger, consolidation or otherwise, 9 without prior consent of the City Council of the City of Tustin expressed by resolution, and then only under such conditions as may 10 therein be prescribed. Any such transfer or assignment shall be made only by an instrument in writing, such as a bill of sale, or 11 similar document, duly executed copy of which shall be filed in the office of the City Clerk within thirty (30) days after any such 12 transfer or assignment. Any proposed assignee must show responsi- bility and capability as determined by the City Council and must 13 agree to comply with all provisions of the Franchise and Tustin City Code, and, provided further, that no such consent shall be 14 required for transfer in trust, mortgage or other hypothecation, in whole or in part, to secure an indebtedness. Such consent shall 15 not be withheld unreasonably. 16 Further, inasmuch as when the aforedescribed acquisition occurs the Franchisee is a limited partnership whose general 17 partner is UCTC of Southern California, Inc., a Delaware corporation prior approval of the City Council, expressed by reso- 18 lution, shall be required where there is an actual change in control or where ownership of more than ten percent (10%) of the 19 voting stock of the general partner is acquired by a person or group of persons acting in concert, none of whom already own fifty 20 percent (50%) or more of the voting stock, singly or collectively. Any such acquisition occurring without prior approval of the City 21 Council shall constitute a failure to comply with the provisions of this Franchise. Nothing herein shall restrict the transferability 22 of the interests of limited partners in United Cable of Southern California, Ltd. 23 5. Rates. Pursuant to Article 7, Chapter 4 the 24 following schedule of rates and charges is hereby approved: 25 A. INSTALLATION CHARGES 26 1. Definition - Standard Installation 27 A standard installation shall include installations of aerial drop cable with 28 fittings up to 150 feet from the cable 3 television distribution system directly to 1 the customer's television set. 2 2. 3 A. Overhead 4 (1) 1 to 150 feet - $15.00 5 (2) Over 150 feet - $15.00 + $1.00 6 per foot over 150 feet 7 B. Underground - A WRITTEN ESTIMATE 8 FORM MUST BE PROVIDED SUBSCRIBER 9 (1) All $15.00 + $2.00 per linear foot 10 of underground 11 (2) If subscriber $15.00 up to provides trench, 150 feet, 12 repaving, back- $1.75 per filling and linear foot 13 planting of under- ground in excess of 150 14 feet 15 3. Additional Outlets and Channel Selectors 16 A. Additional outlets or channel 17 selectors - $15.00 18 B. If separate structures are involved, 2.A or 2.B applies 19 4. Installation of House Amplifier 20 A. If ordered and installed separately 21 - $15.00 22 B. If installed at time of first outlet or any other work is performed on the 23 premises for which a charge is authorized - $7.5O 24 5. Relocation Charge 25 The charge shall be $15.00 for each 26 relocated outlet or relocated channel selector. The charge shall be $7.50 if 27 relocation is done with other work. 28 6. Reconnect Charge - $10.00 4 1 The $10.00 charge shall apply only when 2 the Franchisee has previously served the premises and facilities are in place but 3 service was disconnected, or in the case of apartments, condominiums or townhouses when 4 service is in place and an individual unit is connected to the system non-concurrently with 5 the installation of the system in the building. This charge also applies to hookup 6 of individual units on bulk rate of agreement. 7 7. Apartments, Hotels, Motels, 8 Condominiums, Townhouses and Non-Residences 9 A. Actual estimated cost with written agreement. 10 8. Schools and City-Owned Facilities 11 As provided in Chapter 25 of the Tustin City Code. 12 9- Subscriber Liability for Loss or Damage 13 to Equipment or Facilities 14 A. Subscribers will be charged for the loss or damage of any equipment furnished by 15 Franchisee. 16 B. Franchisee may collect and hold without the payment of interest a $25.00 17 deposit as security for each channel selector. 18 B. SERVICE CHARGES: 19 The charges in this subsection are for 20 service on all carried UHF and VHF channels including local origination. 21 1- Monthly Rate - Residence 22 A. First Outlet $7.50 23 B. Additional Outlet $1.50 each 24 C. Channel Selectors $1.50 each 25 D. In-house Amplifiers $4 · 50 each 26 ( five or more outlets ) 27 2. Apartment Units, Hotels, Motels, Condominiums, Townhouses and Non-Residences 28 on One Billing .f.or All Units Monthly Rate 1 Reduced rates would be negotiated with 2 individual Owners or Leaseholders in proportion to the number of units involved. 3 Fees for additional and/or special services shall be as 4 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- 5 ule. 6 Franchisee may increase such rates and charges as herein- 7 after provided. Not more often than two times during any calendar year, Franchisee shall notify the City of Tustin, in writing, of a 8 proposed increase in such rates and charges. The increase shall be effective sixty (60) days after the City of Tustin has received 9 written notice of such increase, unless prior to such date the city council of the City of Tustin shall by resolution set the matter for hearing at a meeting of the city council. If a hearing is set, 10 the City Council shall act to approve, modify or disapprove such 11 increase within sixty (60) days after the matter is set for hear- ing. At such hearing, the Franchisee may present evidence with 12 respect to the proposed increase in rates and charges. If the city council adopts a resolution setting the proposed increase in rates 13 and charges for hearing, no rate, charge, service, contract, prac- tice or rule shall be changed so as to result in an increase in 14 such rates and charges until said hearing is held and the city council of the City of Tustin has approved such increase in the 15 rates and charges. 16 6. Definition of Gross Revenues. "Gross Revenues" shall mean all cash, credits, property of any kind or nature or other 17 consideration derived directly or indirectly by the Franchisee, its affiliates, subsidiaries, and any other person or entity in which 18 Franchisee has a financial interest or which has a financial interest in the Franchisee, arising from or attributable to 19 operation of the cable television system in the City of Tustin, as its corporate city limits now and/or hereafter may be constituted, 20 including, but not limited to: 21 a. Revenue from the subscriber network and insti- tutional network (including Leased Access fees). 22 b. Advertising revenues. 23 c. Revenue from the use of studio facilities, 24 production equipment and personnel. 25 d. Revenue from installation, connection and reinstatement and the provision of subscriber and other 26 services. 27 e. The sale, exchange or cablecast of any programming developed for Community Use or institutional users. 28 6 1 f. Interconnection revenues. 2 "Gross Revenues" shall include, valued at retail price levels, the value of any goods, services or other remuneration in 3 non-monetary form received by the Franchisee or others described above in consideration for performance by the Franchisee or others 4 described above of any advertising or other service in connection with the cable television system. 5 "Gross Revenues" shall not include: 6 a. Any taxes on services furnished by the Franchisee 7 which are imposed directly upon any subscriber or user by the United States, State of California or local 8 agency and collected by the Franchisee on behalf of the government. 9 b. Revenue received directly from the Franchisee by an 10 affiliate, subsidiary or parent of the Franchisee or any other person or entity in which the Franchisee has 11 a financial interest or which has a financial interest in the Franchisee, when the revenue received has 12 already been included and reported Gross Revenue as received by the Franchisee. 13 7. Franchise Fees. For the use of the City streets and 14 for the purposes of providing revenue with which to defray the cost of regulation arising out of issuance of the Franchise and promot- 15 ing, assisting and financing Community Use Programming and other cable services of a public character, Franchisee shall pay fran- 16 chise fees in the amounts prescribed below. The parties shall cooperate with each other in filing with the Federal Communications 17 Commission and fully supporting an application permitting payment of the amounts prescribed below. The City shall file such applica- 18 tion, at the Franchisee's sole cost and expense, with the Federal Communications Commission as soon as practical after Franchisee 19 accepts this Franchise. Such application need not be filed or will be withdrawn if federal legislation is enacted which permits the 20 City to charge a franchise fee of five percent (5%) of Gross Reve- nues without oubtaining Federal Communications Commission approval. 21 The franchise fee shall be paid as hereinafter set forth provided, however, that until federal legislation is adopted or approval of 22 the Federal Communications Commission is received permitting pay- ment of the franchise fees provided for herein the Franchisee shall 23 pay the City of Tustin an amount equal to three percent (3%) of Gross Revenues. The parties will seek approval in said application 24 to pay five percent (5%) of Gross Revenues as of the date of its acceptance of the Franchise and to pay interest on an amount equal 25 to two percent (2%) of Gross Revenues from the date of acceptance to the date of said approval. Interest shall be paid at a rate 26 equal to the prime rate established by the Bank of America National Trust and Savings Association. 27 The streets and other public rights-of-way to be used by 28 Franchisee in the operation of its system within the boundaries of 7 1 the City of Tustin are valuable public properties acquired and maintained by the City at great expense to its taxpayers, and the 2 grant to the Franchisee of consent to use such streets and other public rights-of-way is a valuable property right without which the 3 Franchisee would be required to invest substantial additional capital. Furthermore, the City will incur costs in administering 4 the Franchise in the public interest. Thus, in consideration of the granting and exercise of a Franchise to use the streets and 5 other public rights-of-way as herein defined, for the operation of a cable television system, and to reimburse City for costs incurred 6 in administering this Franchise granted pursuant to this ordinance, the Franchisee shall pay the City the fees provided in this Ordi- 7 nance. 8 Except as provided otherwise in this Section, during the term of the Franchise, the Franchisee shall pay to City of Tustin 9 an amount equal to five percent (5%) per year of the Franchisee's annual Gross Revenues. 10 Said fees shall be paid quarterly not later than June 1, 11 September 1, December 1 and March 1 for the preceding three (3) month period ending, respectively, March 31, June 30, September 30 12 and December 31. Not later than March 1, the Franchisee shall file with the City Clerk of the City of Tustin an annual audit report by 13 a Certified Public Accountant approved by City, of the operations of Franchisee which identifies in detail the sources and amounts of 14 all Gross Revenues received by the Franchisee from all sources, both inside and outside City. On the date of payment other than 15 March 1, Franchisee shall file an unaudited report which identifies all Gross Revenues during the period for which payment is made. 16 It is the intent of the City of Tustin to utilize substan- 17 tial amounts or all of the franchise fees imposed hereunder to defra~ the cost of local administration of the Franchise, to support the 18 development and maximum utilization of all community service and government access channels and to generally encourage development 19 and use of the cable system to full utilization of its potential. 20 No acceptance of any payment shall be construed as an accord that the amount paid is, in fact, the correct amount, nor shall 21 such acceptance of payment be construed as a release of any claim which the City of Tustin may have for further additional sums 22 payable under the provisions of the Franchise. 23 8. Reimbursement of City Expenses. The Franchisee shall pay to the City of Tustin an amount equal to the legal expenses 24 incurred by the City in preparing, revising, negotiating and enacting this ordinance and matters directly related thereto. The 25 City shall prepare a statement aggregating such cost and send such statement to the Franchisee. The Franchisee shall pay the amount 26 of such statement to the City on the earlier of thirty (30) days after the closing date or July 31, 1984. The purpose of this Section is to reimburse City for the 28 expenses incurred by the City of Tustin in preparing and enacting 8 1 this ordinance. 2 9. Future Laws. The City of Tustin does not have or expect in the forseeable future to receive sufficient funds with 3 which to defray the costs of administering and regulating the cable television franchise within the City. The ability to finance such 4 costs through franchise fees pursuant to the provisions of Section 7 above, constitutes a material inducement to initiate a cable 5 television program within the City of Tustin because the City of Tustin would not be willing to reduce or eliminate other public 6 programs in order to make public funds available with which to defray the cost of administering and regulating the cable 7 television program. 8 Therefore, should any future law or regulation limit or prevent the City of Tustin from imposing a franchise fee in the 9 amount provided for herein, the Franchisee shall nevertheless pay the City of Tustin the same amounts at the same times as are 10 prescribed by Section 7 above. The Franchisee shall make a good faith effort to obtain any possible waiver or permission to pay the 11 full amounts provided for herein, and to the extent such future law or regulation permits the Franchisee discretion to make the limita- 12 tion or prohibition applicable or inapplicable, the Franchisee shall elect to make the limitation or prohibition inapplicable. 13 The City of Tustin may, in addition to any other remedies available to it, treat any reduction of payments as a failure of considera- 14 tion for the Franchise awarded pursuant to this ordinance and may terminate the Franchise. If, as a result of any acts of the 15 Federal Communications Commission, the United States Congress or any other entity lawfully asserting jurisdiction for the regulation 16 of cable communication systems, any provision or provisions of this Franchise as modified, amended, revoked, redeemed, or changed to 17 result in what constitutes, in the view of the City of Tustin, material changes in the provisions and circumstances of the Fran- 18 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- 19 ment is not acceptable to the Franchisee, (b) treat such material change as a cause for revocation of the Franchise. 20 The failure of the City of Tustin to receive the fees 21 prescribed hereinabove shall be deemed to constitute a substantial and material failure to comply with the Franchise. 22 10. Limitation of Uses. The cable television system herein 23 franchised shall be used exclusively for the purposes expressly authorized by Article 7, Chapter 4 of the Tustin City Code and no 24 other purpose whatsoever. 25 11. Establishment and Extension of Service: 26 a. Upon the effective date of this ordinance, Franchisee shall diligently proceed or continue to 27 proceed to obtain all necessary permits and authorizations necessary to construct and operate cable 28 television service and shall forthwith proceed or 9 Franchisee shall diligently proceed or continue to 1 proceed to obtain all necessary permits and authorizations necessary to construct and operate cable 2 television service and shall forthwith proceed or continue to proceed with construction and installation 3 of the cable television system as specified and described in this Ordinance and Article VII, Chapter 4 4 of the Tustin City Code and approved by City of Tustin and shall diligently and without delay carry all con- 5 struction to full completion. 6 b. Service will commence within 60 days of the effec- tive date of this Ordinance. 12. Acceptance of Franchise. Within thirty (30) days after 8 the effective date of this ordinance, Franchisee shall file with the City of Tustin its written, unconditional, non-contingent ac- 9 ceptance of the Franchise granted by this Ordinance and its agree- ment to be bound by and comply with all the requirements hereof. 10 The Acceptance shall be signed by a person duly authorized to act on behalf of the Franchisee, shall be notarized and shall have 11 attached thereto a certified copy of an order by the Board of Directors of CommuniCom of Tustin, authorizing and directing execu- 12 tion and filing of the Acceptance, provided, however, that such acceptance is subject to Section 32 hereof. An Acceptance which 13 constitutes a qualified acceptance or places other limits or condi- tions therein shall be deemed to be a nullity. Upon the failure of 14 the Franchisee to file its unconditional, non-contingent Acceptance of the Franchise subject to all its terms and conditions within the 15 time period specified above, the Franchise shall be of no further force or effect and there will be not issued and outstanding cable 16 television franchise in the City of Tustin to any of the companies or entities named in this ordinance. Franchisee shall furnish and 17 maintain all bonds and insurance policies required to be furnished pursuant to Tustin City Code and this Franchise. 18 13. Bonds. Upon the adoption of this ordinance and the 19 Acceptance of the Franchise by Franchisee as hereinabove provided, and in addition to satisfying all other requirements of the Tustin 20 City Code, Franchisee shall deposit in a bank or savings and loan association in the City of Tustin the sum of One Hundred Thousand 21 Dollars ($100,000.00) in a joint account in the names of Franchisee and the City of Tustin, or shall file with the City Clerk and 22 maintain in full force and effect a bond, approved by the City Attorney, in an equivalent amount. The passbook, certificate of 23 deposit or surety bond shall be delivered to and held by the City of Tustin. The cash deposit sum, or the corporate surety bond 24 shall be maintained during the period of construction of the cable television system within the City of Tustin as prescribed by this 25 ordinance. Upon full and final completion of the cable television system as prescribed in this ordinance within the times prescribed 26 in the Franchise, City shall deliver the said passbook, certificate of deposit or surety bond to Franchisee and execute any appropriate 27 document releasing City's interest and rights therein to Franchisee. This release shall be contingent upon the full and 28 10 faithful performance of the Franchisee of its obligations under 1 this ordinance. In the event that Franchisee shall fail to comply with any one or more of the provisions of the Franchise there shall 2 be recoverable from the aforesaid sum or bond any and all damages or loss suffered by City as a result thereof, including but not 3 limited to the full amount of any compensation, indemnification, cost of removal of abandoned property, staff costs in attempting to 4 secure compliance, plus a reasonable allowance for attorneys' fees and costs, up to the full amount of the aforesaid deposit. Relin- 5 quishment of City's interests and rights in the aforesaid deposit shall also be conditioned upon the deposit with City of a perform- 6 ance bond as provided in the following paragraph. 7 Prior to relinquishment by City of any of its interests and rights in the deposit described in the preceding paragraph, 8 Franchisee shall file with the City Clerk and shall thereafter, annually, during the entire term of the Franchise, maintain in full 9 force and effect a corporate surety bond or other adequate surety agreement approved by the City Attorney in the amount of Fifty 10 Thousand Dollars ($50,000.00). The bond or agreement shall be so conditioned that in the event the Franchisee shall fail to comply 11 with any one or more of the provisions of the Tustin City Code or of the Franchise granted to Franchisee, then there shall be 12 recoverable jointly and severally from the principal and surety, any damages or loss, or costs suffered or incurred by the City as a 13 result thereof, including attorneys' fees and costs of any action or proceeding, and including the full amount of any compensation, 14 indemnification, costs of removal or abandonment of any property or other costs which may be in default, up to the full principal 15 amount of such bond. Said condition shall be a continuing obligation during the entire term of the Franchise and thereafter 16 until Franchisee shall have satisfied in full any and all obligations to City which shall arise out of or pertain to said i7 Franchise. 18 14. Community Use. 19 A. The Franchisee shall provide Community Use Chan- 20 nels and Community Use Programming in order to permit the community to design, produce and present programming of local interest and 21 promote the educational, recreational and character-building oppor- tunities of the viewing public. Community Use, Community Use 22 Programming and Community Use Channels shall include use, pro- gramming and channels for purposes of Non-commercial cablecast 23 presented by or on behalf of the Franchisee, the City of Tustin, individuals and local community non-profit organizations, which 24 consist of topics of special interest to the Tustin community or elements thereof, including matters of a political, governmental, 25 social, religious, educational, cultural, artistic, health- oriented, ethnic, economic, recreational, charitable and philan- 26 thropic nature, significant part of such programming having been locally produced. "Non-commercial" means: 27 (1) That the content of such programming shall not be 28 11 1 (2) That the programming shall not be associated with or interrupted during presentation by commercial 2 advertising or announcements presented for the purpose of selling products or services for private gain. 3 B. To meet its obligations under this Section 14, the 4 Franchisee's obligations shall include the following: 5 Franchisee shall initially provide one channel for municipal, educational, and public access purposes to 6 be utilized on a time-shared basis by the City and the other entities or individuals served by the cable 7 television system operated by the Franchisee until such time as such one channel is used full time during 8 normal morning, afternoon, and evening viewing hours, at which time the Franchisee shall provide a second 9 such channel to be utilized on the same basis, and when that channel is also used full time, the Franchisee 10 shall provide a third such channel to be utilized on the same basis, which three channels shall be the total 11 maximum number of channels which the Franchisee shall be required to provide for such municipal, educational, 12 and public access purposes. In order that the City and others may utilize the educational and municipal chan- 13 nels, the Franchisee will provide video and such other equipment and personnel as is necessary to broadcast on 14 said channels, at Franchisee's cost. 15 15. Level of Service and Local Origination. It is the intent of the City that the Franchisee shall provide as soon as it 16 is financially feasible a cable television system which at all times during the Franchise period is equal to the then current 17 state of the art. 18 Franchisee shall provide local origination programming as soon as it is financially feasible to do so as determined by the 19 City Council in the reasonable exercise of its discretion. 20 16. Bi-Directional Interconnect Capability. The system to be installed by Franchisee shall have bi-directional interconnect 21 capabilities and shall be interconnected when technically and financially feasible to do so as determined by the City Council in 22 the reasonable exercise of its discretion. 23 In all events, at such time as the Franchisee achieves a penetration rate of forty percent (40%), the Franchisee, at its 24 expense, shall open a studio in the City for video origination, which may be located in the same location as the Franchisee's 25 local business office. The Franchisee shall keep open such studio thereafter for the remaining term of this Franchise. Franchisee 26 shall furnish the studio, at its expense, with such equipment as the Franchisee determines, but at a minimum one color camera, a 27 video recorder, adequate lighting and playback equipment. The Franchisee shall provide such reasonable staff and technical ser- 28 vices as may be necessary for the studio, which shall be available 12 1 for programming for the public access, educational access, and government access channel(s). 2 The Franchisee shall have a business and service 3 office in the City to serve the Tustin cable television system. The Franchisee shall also open a billing collection office in the 4 City which may be at the same location. The Franchisee will maintain sufficient service personnel and equipment in such 5 location(s) for the Franchisee to be able to take action upon customer service calls in the manner specified herein. The local 6 office, including the service office, shall be open to receive inquiries or complaints for subscribers during normal business 7 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 8 hours may be lessened upon the prior written consent of the City Manager provided that local, non-toll telephone service is 9 available during such times. 10 The Franchisee shall maintain a service repair force sufficient to respond within a reasonable time to any individual 11 interruption of service and also a sufficient installation force to minimize delay for service installation. Any service complaint 12 from subscribers will be invesstigated and acted upon as soon as possible. 13 The Franchisee shall provide a telephone answering 14 system to receive all construction and service complaints. The telephone number of the local office shall be listed in the 15 telephone directories serving Tustin. The telephone service shall be operable to accept complaints twenty-four (24) hours a day, 16 seven (7) days a week. 17 The Franchisee shall keep a maintenance service log a running three year period which will indicate the nature of each 18 service complaint, its location, the date and time it was received, the disposition of said complaint and the time and date thereof. 19 This log shall be made available for periodic inspection by the City. 20 17. Number of Channels. The cable television system 21 installed pursuan~ 't~ the Franchise granted herein shall consist of a one (1) cable subscriber network with a capacity of not less 22 than fifty-two (52) channels. As soon as it is financially feasible as determined by the City Council in the reasonable exer- 23 cise of its discretion, the Franchisee shall add an institutional network. 24 18. Remedies. At the time of issuance of this Franchise, 25 it is impractical to reasonably ascertain the total extent of damages which may be incurred as a result of the breach by 26 Franchisee of its obligations under the Franchise. The factors relating to the impracticality of ascertaining damages include, but 27 are not limited to, the following: 28 a. The fact that: (i) the primary damage resulting 13 1 from breaches by the Franchisee of the schedules for construction of extension of the cable television 2 system and provision for services will be to members of the public who are denied services or denied quality or 3 reliable service; (ii) such breaches cause inconvenience, anxiety, frustration and deprivation of 4 the benefits of the Franchise to individual members of the general public in subjective ways and in varying 5 degrees of intensity which are incapable of measurement in precise monetary terms; (iii) that services might be 6 available through the cable television system which are both necessary and available at substantially lower 7 costs than alternative services, and the monetary loss resulting from denial of services or denial of quality 8 or reliable services is impossible to calculate in precise monetary terms, and (iv) the termination of a 9 Franchise for such breaches, and other remedies are, at best, means a future correction and not remedies which 10 make the public whole for past breaches; 11 b. The fact that the failure of the Franchisee to make timely reports will make it difficult in ways which are 12 not measurable for the City of Tustin to administer the construction schedule, delay initiation of enforcement 13 proceedings and impede compliance with the periods allowed for construction; and 14 c. The fact of the failure of the Franchisee to file 15 timely annual reports will deny information necessary to enable the City of Tustin to expeditiously, 16 effectively and efficiently administer the Franchise and exercise its regulatory powers in relation thereto 17 for the promotion and protection of the public convenience, health, safety, and welfare. 18 Without the provisions of this Section, the actual damages for 19 which the Franchisee would be liable, could greatly exceed the specified amount of liquidated damages. Therefore, the provisions 20 herein for liquidated damages are of benefit to the Franchisee. 21 19. Liquidated Damages. If the City believes that the Franchisee is in material default under the terms of the Franchise, 22 the City shall give written notice of such default to the Franchisee. The Franchisee shall have fourteen (14) days from 23 receipt of such notice to cure the default or to agree in writing with the City upon a method and time that such default shall be 24 cured. If the default is not cured, the City Council of the City of Tustin may assess the Franchisee and the Franchisee shall be 25 liable for liquidated damages in the sum of Five Hundred Dollars ($500.00) for each calendar day on which the Franchisee is in such 26 default. Said liquidated damage sum shall be severally applicable to each calendar day of delay in compliance with the provisions of 27 construction and separately applicable for each calendar day of delay complying with any other provision of the Franchise. 28 14 1 20. .C~.mpletion of Construction. The cable television system constructed pursuant to this ordinance shall be fully and 2 completely constructed no later than June 30, 1984 or such later date as the City Council may by resolution approve. 3 21. Alternative Remedies. Neither a termination 4 of the Franchise nor liquidated damages shall be deemed to be the exclusive remedy for breach of the Franchise. Neither the right to 5 assess liquidated damages nor the assessment of liquidated damages nor the right to reduce or reduction of the term of the Franchise 6 shall be deemed to bar or otherwise limit the right of the City of Tustin to obtain judicial enforcement of the Franchisee's 7 obligations by means of specific performance, injunctive relief, mandate or other remedies at law or in equity, other than monetary 8 damages. 9 22. Termination of Franchise. The following material breaches of the obligations of the Franchisee under the Franchise 10 shall constitute grounds for termination of the Franchise by the City Council of the City of Tustin: 11 a. The willful failure to make any payments required 12 under the Franchise and/or to provide City with required information in a timely manner as provided in 13 the Franchise. 14 b. Any other act or omission by the Franchisee which materially violates the terms, conditions or 15 requirements of the Franchise or any order, directive, rule or regulation issued thereunder and which is not 16 corrected or remedied within thirty (30) calendar days following mailing to the Franchise written notice of 17 the violation or within such period beyond the thirty (30) calendar days as is reasonable. 18 23. City's Right to Operate System. In the event the 19 Franchisee fails to operat'~ its cable television system for seven (7) consecutive days without prior approval by the City Council of 20 the City of Tustin and for reasons which are not beyond the Franchisee's control, the Council through its officers, agents, 21 employees or contractors may, at its option, enter upon the premises of the Franchisee, occupy such premises and property 22 constituting the cable television system, and operate the system until such time as the Franchisee presents proof satisfactory to the 23 City Council that it is ready, willing and able to renew operation of the system. In operating the system, the City or its contractor 24 shall be vested with the powers of a receiver, and shall be authorized to contract in the name of the Franchisee, incur 25 expenses in the name of the Franchisee, and take any and all other actions necessary to enable it to effectuate the purposes of this 26 Section. The costs incurred by the City in undertaking such operation shall be a charge against the assets of the Franchisee, 27 and the City or its contractor shall be authorized to reimburse itself for the costs incurred from revenues received during the 28 period of operation. 15 1 24. No Recourse Against City. Franchisee shall have no 2 recourse whatsoever against the City of Tustin or its officers, agents, or employees for any loss, costs, expense or damage arising 3 out of or resulting from any provision or requirement of the Franchise or any rule, regulation, requirement or directive 4 promulgated thereunder, or because of the enforcement of any provision of the Franchise or any rule, regulation, requirement or 5 directive promulgated thereunder, or in the event any provision of the Franchise or any rule, regulation, requirement or directive 6 promulgated thereunder is determined to be invalid. 7 25. Non-Enforcement. The Franchisee shall not be relieved of any obligation to comply with any of the provisions of the 8 Franchise or any rule, regulation, requirement or directive promulgated thereunder by reason of any failure of the City of 9 Tustin or its officers, agents or employees to enforce prompt compliance. 10 26. Franchise as Contract. The Franchise shall be deemed 11 to constitute a contract between the Franchisee and the City of Tustin. The Franchisee shall be deemed to have contractually 12 committed itself to comply with the terms, conditions and pro- visions of the Franchise, and with all rules, orders, regulations 13 and determinations applicable to the Franchise which are issued, promulgated or made pursuant to the provisions of this Franchise. 14 The Franchise shall not be construed to constitute a contract of adhesion. 15 All terms, conditions and provisions of the contract shall 16 be deemed to be embodied in the Franchise, and conflicts in terms, conditions or provisions of the Franchise shall be resolved as 17 follows: 18 a. The express terms of this Franchise shall prevail over conflicting or inconsistent provisions in Article 19 7 Chapter 4 of the Tustin City Code; 20 b. The express terms of this Franchise shall prevail over conflicting or inconsistent provisions in either 21 the application for the Franchise or the certificate of acceptance of the Franchise. 22 27. Utility Poles. This Franchise shall not be deemed to 23 expressly or impliedly authorize the Franchisee to utilize poles owned by the Southern California Edison Company, Pacific Bell 24 or any other public or private utility which are located within the streets, without the express consent of such utility. 25 28. Changes in Law. Should the State of California or any 26 agency thereof, the United States or any Federal agency, or any State or Federal Court require either the City of Tustin or the 27 Franchisee to act in a manner which is inconsistent with any provisions of the Franchise, the City Council of the City of Tustin 28 shall be authorized to determine whether a material provision of 16 Franchisee to act in a manner which is inconsistent with any 1 provisions of the Franchise, the City Council of the City of Tustin shall be authorized to determine whether a material provision of 2 the Franchise is affected in relation to the rights and benefits conferred by the Franchise upon the City Council of the City of 3 Tustin or the public. Upon such determination, the Franchise shall be subject to reasonable modification or amendment to such extent 4 as may be necessary to carry out the full intent and purposes thereof in relation to the rights and benefits of the City Council, 5 the City of Tustin or the public. The City Council of the City of Tustin may terminate the Franchise issued pursuant to the 6 provisions of this Franchise if it determines that substantial and material compliance with the Franchise in relation to the rights or 7 benefits of the City Council, the City or the public has been frustrated by such a State, Federal or judicial requirement and 8 cannot be corrected by modification or amendment. In the event of termination of the Franchise pursuant to this section, the City of 9 Tustin will purchase the cable television system from Franchisee at its fair market value The purchase price will be paid to Franchisee 10 pursuant to an agreement between the City and the Franchisee which provides for the purchase price to be paid from net revenues of the 11 cable television system over a period of years provided for in said agreement or such other method of payment legally permissible and 12 fiscally sound. 13 29. Indemnification; Liability Insurance. Franchisee agrees to and shall hold City and its officers, employees, agents 14 and representatives free, harmless and shall indemnify and defend them against and from any and all claims, demands, costs, liability 15 to other kind or nature whatsoever arising out of or from the Franchise, any extension of any time limits contained in the 16 Franchise, the failure to extend any time limit in the Franchise, out of the construction, operating, maintenance, program content, 17 royalties or removal or abandoned of the CATV System by Franchisee. 18 Franchisee shall procure and thereafter during the life of the Franchise shall maintain in full force and effect at 19 Franchisee's sole cost and expense, general comprehensive liability insurance in an amount not less than One Million Dollars 20 ($1,000,000.00) for injuries, including accidental death, to two (2) or more persons and in an amount not less than Five Hundred 21 Thousand Dollars ($500,000.00) for injuries, including accidental death to any person, and property damage liability insurance in an 22 amount not less than Five Hundred Thousand Dollars ($500,000.00) resulting from any one occurrence, and City shall be named as an 23 additional named insured in said insurance policy, with coverages to be included in the public liability and property damage policies 24 of broad form contractual and broad form property damage with the further provision that said policies shall contain a provision that 25 written notice of cancellation or material alteration of said policies shall be delivered to City sixty (60) days in advance of 26 the effective date of any such cancellation or material alteration. 27 During the period of construction, and at all times thereafter, Franchisee shall keep all improvements installed by it 28 17 insured against loss or damage by fire, with extended coverage 1 endorsement or its equivalent in amounts not less than ninety percent (90%) of the insurable value of the buildings, equipment 2 and other improvements insured, with loss payable to Franchisee, any lenders of Franchisee which may have a security interest in the 3 property comprised of the cable television system and City, in accordance with their respective interests therein. 4 30. Severability. The provisions of Section 1115 of the 5 Tustin City Code shall not be applicable to the provisions of the Franchise. 6 31. Effective Date of Ordinance. This ordinance shall be- 7 come effective thirty (30) days after its passage. 8 32. Permitted Assignment. Subsequent to the effective date of this ordinance the stock, properties and assets of CommuniCom 9 may be acquired by United Cable of Southern California, Ltd. The City of Tustin hereby consents to transfer of the franchise to 10 United Cable of Southern California, Ltd. provided that the follow- ing conditions are satisfied. Those conditions are that (i) on or 11 before June 30, 1984, or such later date as the City Council by resolution may permit, United Cable of Southern California, Ltd. 12 notify the City of Tustin, in writing, that United has acquired the stock, properties and assets of CommuniCom, (ii) that United Cable 13 of Southern California, Ltd.~ has filed with City a copy of its then-current prospectus together with conformed copies of the duly 14 executed instruments of sale, transfer, assignment, and/or hypothe- cation, (iii) that within thirty (30) days after the written notifi- 15 cation in (i) above that United, file with the City of Tustin, its written acceptance of the Franchise in accordance with Section 12. 16 and only upon the occurrence of those conditions is CommuniCom of Tustin released from liability under the terms of the Franchise. 17 PASSED AND ADOPTED at a regular meeting of the City Council 18 of the City of Tustin, California, held on the 19th day of 19 March , 1984. 21 22 ATT~ST~ 23 ~C~'~ j~CiTy~CL RK JGR:se~ R: 03/06/84 (12b. cj ) 25 JGR|se:R:03/13/84 JGR:se:R:03/14/84 26 JGR:se:R:03/20/84 27 28 18 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN } MARY E. WYNN, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Ordinance No. 905 was duly and regularly introduced and read at an adjourned regular meeting of the City Council held on the 5th day of March, 1984, and was given its second reading and duly passed and adopte"~ at a regular meeting held on the 19th day of March, 1984, by the following vote: AYES : COUNCILPERSONS: Edgar, Greinke, Hoesterey, Kennedy, Saltarelli NOES : COUNCILPERSONS: None ABSENT: COUNCILPERSONS: None MARY SUMMARY PUBLISHED IN TUSTIN NEWS: March 15, 1984 March 29, 1984