HomeMy WebLinkAboutCity Council Resolution 2616 RMSOLUTION NO. 2616
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SARATOGA APPROVING ASSIGNMENT OF THE
FRANCHISE FOR CABLE TELEV~ION SERVICE TO
BRENMOR CABLE PARTNERS
WHEREAS, on August 3, 1977, the City adopted Ordinance No. 38.79
granting a franchise to Video Engineering, Inc. to construct, operate and maintain a
cable television system within the City of Saratoga; and
WHEREAS, Section 4-207(d) of the Saratoga City Code provides that no
assignment of the cable television franchise can be made without the prior consent of
the City Council expressed by resolution, and then only under such conditions as
prescribed by the Council; and
WHEREAS, by Resolution No. 2259 adopted by the City Council on July 17,
1985, the Council approved an assignment of said franchise by Video Engineering, Inc.
to Hearst Cablevision of California, Inc. ("Hearst Cablevision"); and
WHEREAS, Hearst Cablevision now desires to assign and transfer all of its
right, title and interest in and to said franchise to Brenmor Cable Partners, L.P., a
California limited partnership ("Brenmor"); and
WHEREAS, the proposed assignment and transfer by Hearst Cablevision to
Brenmor will be made pursuant to the terms and conditons of a certain "CATV
Franchise Assumption Agreement," a copy of which is attached hereto as Exhibit "A"
and incorporated herein by reference; and
WHEREAS, the City Council finds and determines that it would be in the
best interests of the City and the subscribers to the cable television service that the
proposed transfer of the franchise be approved,
NOW, THEREFORE, be it resolved by the City Council of the City of
Saratoga as follows:
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1. The proposed assignment and transfer of the cable television
franchise by Hearst Cablevision to Brenmor is hereby approved.
2. The form and content of the CATV Franchise Assumption Agreement
attached hereto as Exhibit "A" is hereby approved and the Mayor and City Clerk are
hereby authorized and directed to execute said Agreement on behalf of the City.
Passed and adopted at a regular meeting of the City Council of the City of
Saratoga held on the 20th day of December, 1989, by the following vote:
AYES: Co,nc~s Anderson, Moyles- PeterE. S~mtzman and Mayor Clev~-nger
NOES: Nnne
ABSENT:~on~
Mayor ~/
ATTEST:
.... City d'ierk
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This AGREEMENT, which becomes effective upon execution by the
parties, is made and entered into this 21st day of December,
1989, by and between the CITY OF SARATOGA, a municipal
corporation of the State of California (CITY), HEARST
CABLEVISION OF CALIFORNIA, a Delaware corporation (HEARST), and
BRENMOR CABLE PARTNERS, L.P., a California limited partnership
(BRENMOR) consisting of HERNANDEZ COMMUNICATIONS, INC., a
Colorado corporation, its general partner (HCI, and INTERMEDIA
PARTNERS, a California limited partnership (IM), its limited
partner, collectively referred to herein as GRANTEE.
Pursuant to the provisions of Article 4-25 of the Saratoga
Municipal Code, and Ordinances No. 38.79 and 71.36 and
Resolution No. 2251, CITY, HEARST and GRANTEE do hereby agree
that GRANTEE shall be substituted in the place and stead of
HEARST as the GRANTEE for the purposes of operating, '
constructing, installing and maintaining a cable communications
system [System) within CITY, with the following additional terms
and conditions:
1. A~i~. MEARST does hereby fully transfer and
assign all of its rights, title and interest under said
frafichise to GRANTEE, thereby retaining and reserving no rights,
title and interest against CITY.
2. Waiver and DisChar~_e by Hearst. HEARST does hereby
waive and relinquish any and all claims, demands, actions or
causes of action it may have against CITY arising out of or in
any way connected with said franchise agreement or any other
matter. HEARST represents that there is presently no suit,
action, administrative proceeding, arbitration, or other
proceeding pending with respect to the System or franchise. It
is expressly understood that this Agreement constitutes a waiver
and discharge of all claim arising out of the relationship
between CITY and HEARST. It is expressly agreed that all rights
under Section 1542 of the California Civil Code are expressly
waived.
3. Assummtion by. GRANTEE. GRANTEE does hereby expressly
and unreservedly agree to assume and fully perform all of the
duties and obligations required of GRANTEE under said franchise
agreement, as herein modified.
4. Warranties bv GRANTER. GRANTEE does hereby warrant
and promise that ~it possesses superior experience, character,
and background including, but not limited to, financial, legal,
and technical abilities and resources required to operate,
construct, install, and maintain the System in the CITY.
GRANTEE further warrants that it is duly organized, validly
existing, and in good standing under the laws of California, and
has the power and authority to enter into this Agreement and to
carry out =he transac~cions contemplated hereby.
5. Severability. If any term, covenant, condition, or
provisions of ':this Agreement or the application thereof to any
person or circumstances is, to any extent, invalid or
unenforceable, the remaining terms, covenants, conditions, and
provisions of this Agreement, or the application of such term,
covenant, condition, or provision to persons or circumstances
other than those to which it is held invalid or unenforceable,
shall not be affected ~hereby, and each term, covenant,
condition, and provision of this Agreement shall be valid and
enforced to the fulleat extent permitted by law.
6. Change in EnablinC LaW. The parties agree that if
during the term of this Agreement, any changes in any state or
federal case or statutory law expand the CITY's power to
regulate GRANTEE under said franchise agreement, the partie~
shall in good faith negotiate regarding amendments to ~he
franchise agreement as aut/lorized by any such law.
7. Insurance. DePosits. Bonds. Upon closing of the sale,
GRANTEE shall deliver to CITY proof of compliance with all
insurance, deposit and bonding requirements of Resolution 2259
and Article 4-25 of the Municipal Code. HEARST represents that
it has fully complied wi~h such requirements up to and including
the date of the closing.
8. Franchise Renewal,. Both par=lee to this Agreement
hereby agree to initiate franchise renewal negotiations by
September 1, 1990, in anticipation of the franchise expiration
on September 3, 1992. GRANTEE agrees to submit to CITY a plan
to expand the channel capacity of the system to 60 channels (450
MHz of bendwidth). Both par~ies agree to negotiate for such
system expansion in good faitat.
9. Consumer PTotec~ion.
A. Audit o[ Allseed Inadequate Performance. If at
any time, after a ~lic hearing before'the City Council with at
least thirty (30) days' notice to GRANTEE, GRANTOR determines
that reasonable evidence exists ~hat the System is not operating
in accordance with required technical specifications, it may
require GRANTEE to perform tests and analyses directed toward
such suspected inadequacies. GRANTEE shall fully cooperate with
GRANTOR in performing such testing and shall prepare results and
a report, if requested, within thirty days after notice. Such
report shall include the following information:
(i) The nature of the complaint or problem
which precipitated the special test.
(2) What system component was tested.
(3) The equipment used and procedures employed
in the test.
(4) The method, if any by which such complain~
or problem was resolved.
(5) Any other information pertinent to said
tests and analyses which may be required to ensure compliance
with Section 4-25.210 of the Municipal Code.
(6) GRANTOR may hire a consultant to supervise
the foregoing tests, review their results, and advise GRANTOR of
his findings. If the findings of the independent consultant
establish inadequate system performance, GRANTEE shall reimburse
GRANTOR or the costs of hiring the consultant, including the
costs of verifying compliance with any recommended corrective
measures, up to a maximum of $5,000.
(1) Regular bills for service shall be rendered
monthly, unless changed with at least sixty (60) days notice to
the customer, or unless service is rendered for a period of less
than one (1) month. Bills shall be rendered as promptly as
possible. All bills shall contain a telephone number and a
mailing address for billing inquiries or disputes.
(2) At the time of connection to service,
subscribers will be notified of the procedures used by GRANTEE
to resolve billing disputes.
C. Oualitv of Service. The quality of GRANTEE's
service refers to' the services associated with day-to-day
interruptions of service; disconnection; rebates and credits;
signal quality; and the provision to customers or potential
customers of information on billing or services. In order to
assess the quality of service, GRANTEE shall survey all
subscribers at least once every other calendar year, beginning
May 1, 1990. This shall be accomplished as follows: The
GRANTEE shall also include along with this same bill a statement
that the survey has been sent to each subscriber as part of the
biannual quality of service assessment required to be conducted
by GRANTOR: that quality of service refers to GRANTEE's
response to customer complaints; billing; interruptions of
service; disconnection; rebates and credits; signal quality; the
provision to customers or potential customers of information on
billing or services; that if they provide their name and
telephone number they may be contacted for additional
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information. As an alternative to the summary, actual responses
may be submitted to the GRANTOR a= t/~e GRANTOR's request.
Should GRANTOR make such a request, GRANTOR will be subject to
=he same time considerations as GRANTEE, and will submit a
summary =o the GRANTEE in a form like ~ha= previously produced
by =he GRANTEE.
D. Level of Subscriber Commlainte.
(1) GRANTEE's assumption of this franchise
shall constitute an agreement by GRANTEE to maintain a level of
subscriber complaints not to exceed ~he standards hereinaf=er
described. The total percentage of monthly subscriber
complaints from within the City of Saratoga, out of =he
number of Saratoga subscribers, shall not exceed:
(a) 4.4% during calendar year 1990.
(b) 4.0% during calendar year 1991.
(c) 3.8% during calendar year 1992. .
(d) 3.6% during calendar year 1993.
Complaints will include, but are not limited to, problems'
associated wital quality of reception, service problems and loss
of service. Specifically excluded from complaint calculations
will be those complaints which are ultimately found to be
result of customer-owned and/or installed equipment, acts of
God, and, in addition, other such problems as Bay be determined
by the GRANTOR to be beyond the GRANTEE's control. In the even=
GRANTEE fails to meet the standards as herein above stated for
three (3) consecutive months, GRANTEE may be found to be in
default of this Agreement, and Bay be subject to the penalties
and remedies as hereinafter identified in Section E below.
(2) To determine compliance with this section,
GRANTEE shall provide GRANTOR with a monthly repor~ identifying
the number of subscriber complaints and the percentage they
Constitute out of the total subscriber base within the City of
that month. Said repoz~c will be due to GRANTOR,
attention of the Community Services Director, on the tenth
(10th) day following the preceding month, and shall be done in
the format as identified in Attachment B. Repeated failure
provide said repor~ when required constitutes a separate
violation of this Agreement, and may, at the option of the
GRANTOR, be subject ~ the fines set forth below in Section E.
E. Remedies for Franchise Violations.
(1) GRANTEE shall be subject to the provisions
of =his paragraph for any material breach of the ordinance or
franchise agreement unless said breach is caused by events
beyond the control or GRANTEE. Examples of events beyond the
control of GRANTEE are strikes, acts of God, earthquakes,
hurricanes, tornadoes, lightning, loss of electrical power to
its equipment, electrical interference caused by third party
equipment, and similar such events.
(2) Subject to the procedures hereinafter set
for~ch, if the GRANTEE fails to perform any material obligation
under the franchise or fails to perform a material obligation in
a timely manner, ~he GRANTOR may, at its option:
(a) Assess against the GRANTEE the
following monetary sanctions:
1) If the system has less than five
thousand (5,000) subscribers, two hundred fifty dollars .
($250.00) for each day the violation continues.
2) ~If the system has more than five
thousand (5,000) subscribers, five hundred dollars ($500.00) for
each day the violation continues.
(b) In the even= such violation shall
have materially degraded .~le quality of service to subscribers,
GRANTOR may direct GRANTEE to issue as a credit to any
subscriber whose service has been interrupted as a result of
such violation, in the following percentages of the monthly fee
otherwise charged to Said subscribers:
1) 24 consecutive house: 5% rebate
of the monthly fee~
2) 24 to 48 consecutive hours:
rebate of ~he monthly fee~
3) 48 to 72 consecutive hours: 25%
rebate of t/le mon~Jlly fee~
4) Greater than 72 consecutive
hours: 100% rebate of ~he monthly fee.
Notwithstanding the foregoing, in no event shall GRANTEE be
required to credit to any one subscriber any more than the
equivalent of 100% of the mon~/lly fee in any calendar year~ and,
further provided ~/lat no such rebatedshall be required where the
incident in question has occurred more than sixty (60) days
prior to the violation which is the subject of this Subsection.
(c) Terminate the franchise, as provided
in Article 4-25,060 of the Saratoga Municipal Code.
(3) The sanctions set forth in this paragraph
are subject =o the following procedures.
[a) The City Manager must notify GRANTEE
in writing by Certified Mail, Return Receipt of the exact
specifics of the alleged violation of the ordinance and/or
franchise agreement.
(b) Upon receipt of the notice described
in subparagraph (a) directly above, GRANTEE shall have thirty
(30) days to cure said alleged violation, or state, in writing,
why it believes the allegations of violations are incorrect or,
a combination thereof.
(c) If the alleged violations are not
cured in the reasonable opinion of the City Manager, or, if the
statement submitted by GRANTEE is not dispositive of the
allegations of violations in the reasonable opinion of the City
Manager, then the City Manager may refer the matter to the City
Council for a full hearing on thirty (30) days written notice to
GRANTEE.
(d) After a full hearing, giving due
opportunity to GRANTEE to present its arguments fully and the
City Council shall issue its decision in writing setting forth a
detailed explanation of its findings of fact and the reason for
its conclusions.
10. Transfer of Ownership or Control. In addition to the
change of ownership provisions'set forth in Section 4-25.080(d)
of the City's Municipal Code:
A. The GRANTEE shall promptly notify the GRANTOR of
any change in, or transfer of, or acquisition by any other party
of, control of the GRANTEE. The word "control," as used in this
section, is not limited to major stockholders but includes
actual working control. A rebuttable presumption that a
transfer of control has occurred shall arise upon the
acquisition or ~ransfer by any person or group of persons of ten
percent of the ownership interest of the GRANTEE. Every change,
transfer of, or acquisition of control of the GRANTEE shall make
the franchise subject to cancellation unless and until the
GRANTOR shall have consented thereto, which consent will not be
unreasonably withheld. For the purpose of determining whether
it shall consent to Buch change, in transfer of, or acquisition
of control, the GRANTOR may inquire. into the qualifications of
the prospective transferee party, and the GRANTEE shall assist
the GRANTOR in any such inquiry.
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B. In seeking the GRANTOR's consent to any change in,
transfer of, or acquisition by any other party or control of
GRANTEE, the GRANTEE shall have the responsibility:
(1) To show to the satisfaction of the GRANTOR
whether the proposed purchaser, transferee, or assignee (the
"proposed transferee"), which in the case of a corporation,
shall include all officers, directors, and all persons having a
legal or equitable interest of twenty-five percent or more of
its voting stock. And, in the case of a partnership shall
include all general partners and any Limited Par=hers holding
twenty-five percent or more of the Partnership interest.
(a) Has ever been convicted or held
liable for ac~s involving moral turpitude.
(b) Has ever had a judgment in an action
for fraud, deceit or misrepresentation entered against it, her,
him or them by any court of competent Jurisdiction.
(c) Has pending any legal claim, lawsuit
or administrative proceeding arising out of or involving a cable
system.
(2] To establish, ~o the satisfaction of ~h~
GRANTOR, =he financial solvency of the proposed transferee by
submitting such reasonable financial data for the proposed
transferee as the GRANTOR may request.
(3) To establish to the satisfaction of ~he
GRANTOR =hat the financial and technical capability of the
proposed transferee is such as shall enable it to maintain and
operate ~he cable system for the remaining 'term of =he franchise
under the existing franchise terms.
C. The GRANTOR agrees that any financial institution
having a pledge of the franchise or its assets for the
advancemen~ of money for the construction and/or operation of
the franchise shall have ~he right to notify the GRANTOR that it
or its designee, satisfactory to the GRANTOR, will take control
and operate the cable television system, in the event of a
GRANTEE default in its financial obligations. Further, said
financial institution shall also submit a plan for such
operation ~hat will insure continued service and compliance with
all franchise requirements during the term the financial
institution exercises control over the system. The financial
institution shall not exercise control over the system for a
period exceeding one year unless extended by the GRANTOR at its
discretion and during said period of time it shall have the
right to petition the GRANTOR to transfer franchise to another
GRANTEE. If the GRANTOR finds ~:hat such transfer after
considering ~he legal, financial, character, technical and other
public interest qualities of the applicant are satisfactory, the
GRANTOR will consent to an assignmen~ of the franchise, which
consent shall not be unreasonably withheld.
D. The consent or approval of =he GRANTOR to t_his or
to any other transfer of the GRANTEE shall not constitute a
waiver or release of the rights of =he GRANTOR in and to the
streets, and any transfer shall, by its tens, be expressly
subordinate to the terms and conditions of this franchise.
E. In no event shall a transfer of ownership or
control be approved without the successor in interest becoming a
signatory to the franchise agreement and any amendments thereon
imposed as a condition of such transfer. Furthermore, the City
Council may require increases in a faithful performance bond in
the form prescribed by the city attorney.
11. Community Access Television.
A. Channel Assianment. GRANTEE recognizes that
Saratoga's Community Access channel has historically existed on
Cable Channel 6~ and, in light of this fact, GRANTEE hereby
agrees tha~ Saratoga's Community Access Channel will remain on
Cable Channel 6 throughout the duration of GRANTEE's franchise.
B. Cablin~ of City Council Chambers. In recognition
of the valuable public service which would be realized through
~he televising of City Council Meetings, GRANTEE agrees to make
changes to its distribution system and "hard wire" the Cit~
Council Chambers so that the meetings held therein can be
televised live on the system's community access channel, or on
such other channel as mutually agreed upon between GRANTEE and
'CITY. "Hard wiring" shall include the provision and
installation of cable, audio video wiring, outlets, modulators,
and other such equipment as may be mutually deemed necessary.
Said installation shall allow for the connection of three
cameras to controller/switcher. GRANTEE agrees to provide city
with a plan for the wiring of the City Council chambers which
shall be submitted to City approval. GRANTOR agrees to complete
said project within six (6) months of date GRANTOR approves
GRANTEE's plan for said installation. This project will be a~
GRANTEE's sole expense up to $8,000. GRANTEE f~er agrees to
provide reasonable technical assistance to GRANTOR to ensure the
successful initial activation of the entire system and
televising of the full meeting.
C. Provision of C~mmunitv Access Production
~/~L~l~- GRANT~ agrees to provide to the Saratoga Community
Access Cable TV Foundation, or to GRANTOR in behalf of said
Foundation, $30,000 toward the purchase of the video production
equipment to be paid $15,000 within six months of closing and
$15,000 within ~hir~een months of closing.
12. Service Extension. GRARTEE agrees to make available
cable television service to all residents living on the
following streets, collectively known as the "Burgundy Wine
Area":
A. Burgundy Way
B. Chablis Court
C. Riosling Court
D. Granite Way
E. Zinfandel Court
F. Pinnacle Court
G. Crisp Avenue
H. Andrew Court
I. Haun Court
GRANTEE agrees that said service shall -be operating within
twelve (12) months of the date the transfer of the franchise tQ
GRANTEE is approved by CITY. GRANTEE further agrees to provide
CITY with a feasibility report concerning the provision of cable
.television services to those areas closely adjacent to that area
defined above, namely:
A. Old Oak Way
B. Live Oak Way
C. Versailles'Way
D. Puen=e Way
E. Portions of FaNell Avenue
F. Oriole Road
G. Valley Vista Drive
13. TTanefer Fee: Any request for a transfer of ownership
or control shall be accompanied by a nonrefundable transfer
application fee of five thousand dollars ($5,000).
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14. Franchise FeAr
A. GRANTEE contractually agrees to pay to the GRANTOR
during the life of the cable television franchise, a sum equal
to five percent of the gross annual basic subscriber receipts
and nonbasic subscriber receipts (less cost of product in the
case of pay T.V.), including advertising and channel-leasing
receipts of the GRANTEE. Out of such payment, an amount equal
to three percent of said gross annual receipts shall be retained
by the City, and an amount equal to two percent of said gross
annual receipts shall be utilized by the City exclusively for
funding and support of the community access channel jointly
operated by the City and the West Valley/Mission Community
College District, or by any non-profit corporation, association
or other organization established by the City and said Community
College District for such purposes. Such payment shall be made
by the GRANTEE annually or as may otherwise be provided in the
GRANTEE'S franchise, and such payment by the GRANTEE to the City
shall be in lieu of any occupation tax, license tax or similar
levy.
B. The GRANTEE shall file with the City within thirty
days after the expiration of any fiscal year during which such
franchise is in force, a financial statement prepared by a
certified public accountant showing in detail the total gros~
receipts, as defined herein', of GRANTEE during the preceding
fiscal year and shall pay the franchise fee to the City within
fifteen days from date of filing such statement.
C. The City shall have the right to inspect the
GRANTEE'S records showing the gross receipts from which his
franchise payments are computed and the right of audit and
recomputation of any and all amounts paid under this Agreement.
No acceptance of any payment shall be construed as a release or
as an accord and satisfaction of any claim the City may have for
further or additional sums payable under this Agreement or for
the performance of any other obligation hereunder.
D. In the event of any holding over after expiration
or other termination of any franchise granted or transferred
without the consent of the City, the GRANTEE shall pay to the
City reasonable compensation and damages, of not less than one
hundred percent of GRANTEE'S total gross profits during such
period.
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CITY OF SARATOGA, a California
Municipal Corporation
Mayor
HEARST CABLEVISION OF CALIFORNIA
(dba HEARST LEVISION OF SARATOGA)
BRENMOR CABLE PARTNERS, a California Limited Partnership -
By: HERNANDEZ COMMUNICATIONS, INC., ~:he General Partner
~&y ~-' Herna~de~ ;/~a~siden~
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