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ORD 100U ORDINANCE NO. 100U AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES PROVIDING TERMS AND CONDITIONS TO BE INCLUDED IN CABLE TELEVISION SYSTEM FRANCHISES HEREINAFTER GRANTED BY THE CITY OF RANCHO PALOS VERDES AND DECLARING THE URGENCY THEREOF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES HEREBY ORDAINS AS FOLLOWS: Section 1. Short Title. This ordinance shall be known and may be cited as the "Cable Television System Franchise Ordinance." Section 2. Definitions. For the purpose of this ordinance, the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number and words in the singular number include the plural number. The word "shall" is always mandatory and not merely directory. A. "Council" means City Council of Rancho Palos Verdes. B. "Cable Television System" or "CATV System". Any facility that, in whole or in part, receives directly or indirectly over the air and amplifies or other wise modifies the signals transmitting programs broadcast by one or more television or radio stations and distributes such signals by wire or cable to subscribing :members of the public who pay for such service, but such term shall not include any such facility that serves only the residents of one or more apartment dwellings under common ownership, control, or management, and commercial establishments located on the premises of such an apartment house. "Cable Television System" also means "Community Antenna Television System" as that term is used in Section 53066 of the Government Code. An exception to the above definition is a state or interstate common carrier over which the City of Rancho Palos Verdes has no jurisdiction. C. "City" means the City of Rancho Palos Verdes, State of California. D. "FCC" means the Federal Communications Commission. E. "Franchise" includes the term "License." F. "Franchisee" is the grantee of rights under the ordinance and shall mean the person granted a franchise and the lawful successor or permitted assignee of said person. G. "Franchise Property" shall mean all real property and all depre- ciable property, including, but not limited to: towers, antennae, coaxial cables, electrical conductors, conduits, electronic equipment, appurtenances and facilities; owned, installed or used within the City by the Grantee in the operation and conduct of a cable television system business under the authority of the Franchise granted pursuant to this division. H. "Head-end" means large master antennae and electronic equipment used to pick up direct signals from broadcasting facilities. I. "Highway" means any public highway, including bridges, freeway (except a state freeway) , street, road, alley, lane, trail or court, or other public property or public easement as hereinafter defined, and above and be- low the same, which now exists or which may hereafter exist in any incorpor- ated territory of the City and in which the City has the authority to grant a franchise. J. "Person" is any person, firm, partnership, association, corpor- ation, company or organization of any kind. K. "Public Easement" includes, but is not limited to, any easement created by dedication to the City for public utility purposes or any other purpose whatsoever. -1- L. "Subscriber" or "User" means any person or entity receiving for any purpose any service of the Franchisee's cable television system, including the ultimate recipient of any distribution of Franchisee's service. M. "Subscriber Revenues" means those revenues derived from the monthly service charges paid by subscribers located within the authorized franchise service area. Subscriber revenues shall include revenues received as installation charges and fee for reconnections, connections, inspection, repairs or modifications of any installations. (1) "Basic Service" means the simultaneous delivery by Franchisee to television receivers (or any other suitable type of audio-video communi- cation receivers) of (a) all signals of over-the-air television broadcasters authorized by the FCC to be carried by a cable television system as defined by the FCC;• (b) local government access channels; and (c) education access channels; (d) public access channels; and (e) additional service at the option of the_com- pany; however, pay or subscription television as defined by the FCC shall not be considered part of the basic service. (2) "Nonbasic Service" means any communications service other than basic service provided over its system by Franchisee directly or as a carrier for its subsidiaries, affiliates or any other person engaged in communications services including, by way of example but not limited to, pay or subscription television, burglar alarm, data or other electronic intelligence transmission, facsimile reproduction, meter reading and home shopping. (3) "Gross Annual Basic Subscriber Receipts" means any and all com- pensation and other consideration received directly or indirectly by the Fran- chisee from subscribers in payment for the basic service of the cable tele- vision system. (4) "Gross Annual Nonbasic Service Receipts" means any and all com- pensation and other consideration received directly or indirectly by the Franchisee from subscribers or user in payment for the receipt of non-basic service. (5) "Gross Annual Advertising Receipts" means any income, compensa- tion and other consideration received by Franchisee derived from any form of advertising. (6) "Gross Annual Lease Receipts" means any fees or income received by Franchisee for the lease or rental and compensation for any service in connection therewith, including but not limited to studio and equipment rental and production costs, of any channel permitted or designated by the FCC to be so leased or rented. Section 3. Legislative Authority. All franchises or licenses for a cable television system shall be granted pursuant to Section 53066 of the Government Code. Section 4: FCC or California Public Utilities Commission Jurisdiction. Whenever the FCC or the Public Utilities Commission (PUC) of the State of Cali- fornia or any other federal or state body or agency shall now or hereafter exer- cise any paramount jurisdiction over any specific provisions of the franchise, such paramount jurisdiction shall preempt or preclude the exercise of like jurisdiction by City. Section 5. Continuing. Responsibility for Signal Quality. Franchisee shall retain full responsiblity for the quality of cable television service to all recipients of redistributed service (i.e. , through microwave, master antennae or satellite redistribution) . Franchisee shall be presumed to have retained such responsibility together with all obligations arising from the franchise, including but not limited to charges to the ultimate recipient for service. Section 6. Equality of Rates. Franchisee shall not grant any pref- erence or advantage to any person or group, nor subject any person or group to prejudice or disadvantage as to rates, services, service facilities, rules and regulations or in any other respect relative to the rights granted under the franchise. Section 7. FCC Compliance. Franchisee shall, at all times, comply with the rules and regulations governing CATV operations promulgated by the FCC specifically but not limited to those set out in Section 76.31 of the FCC Rules and Regulations. This shall include adherence by the Franchisee to FCC rules regarding technical and engineering specifications involved in the construction of the CATV system and signal carriage therein. -2- Ordinance No. 100U Consistent with the requirements of Section 76.3. (a) (6) of the FCC, any modification(s) of Section 76.31 resulting from amendment thereto by the FCC shall to the extent applicable be considered as a part of the franchise as of the effective date of the amendment made by the FCC. Section 8. Application for Franchise. Any person desiring a fran- chise or license for a cable television system shall file an adequate appli- cation with the City. Section 9. Contents of Application. An adequate application for a franchise or license for a cable television system shall contain, where applicable: A. Designation of specific area to be served by Franchisee. B. Resume of prior history of applicant, including the expertise of applicant in the cable television field. • C. List of stockholders of applicant and percentage of stock owned or controlled by each shareholder. D. List of officers of applicant, together with a description of education and business background of each officer. E. A current financial statement of applicant verified by a CPA audit. If statement is unavailable, then the following will be required: (1) Letters of credit. (2) Letters from persons verifying or having knowledge of applicant's business experience, technical expertise and financial. status. (3) Itemized business bank accounts, if any, together with name, and location of banks handling Applicant will be required to authorize release of finan- cial information to City from financial institutions relating to information supplied by applicant in support of the ap- plication. F. Proposed construction schedule, providing for at least 20% con- struction per year for five (5) years. G. A street map of area to be served including the location of proposed or existing head-end site (antenna site) and business office. H. Legal description of area to be served. I. Proposed rates and charges to be charged subscribers. J. Itemized electronic equipment to be used, channels to be provided, pay TV or additional services and type of converter. K. Technical market survey of area and economic analysis including number of homes, population, income bracket and percent of those requesting service, if available. L. The names and addresses of any parent or subsidiary of applicant or any other business entity owning or controlling applicant in whole or in part, or owned or controlled in whole or in part by applicant. M. Any additional requirements that the City shall deem to be applicable. Section 10. Deposit. Upon receipt of an application, the City shall estimate the cost of publication of the notice of hearing and of posting such III notice in three places within the area to be served and notify the applicant of the amount thereof and that they must deposit that amount with the City. Section 11. Setting for Public Hearing. Upon receipt of the required deposit, the City Clerk shall set the application for hearing at a time and date approved by the City Council. Section 12. Notice of Hearing. Not less than 10 days before the hearing, the City Clerk shall give notice in writing of the time, date and place of hearing to the applicant. The City Clerk shall serve such notice upon the_ applicant either by first-class mail, postage prepaid, or by personal de- livery therof to applicant. Section 13. Posting Notice. In those three places within the area to be served which the City Clerk finds will most adequately notify the in- habitants thereof, the City Clerk not less than 10 days prior to the hearing shall post notice of the time, date and place of hearing at each of three locations. Section 14. Contents of Posted Notice. The posted notice of hearing shall state the applicant's statement of prices to be charged and also shall state: -3- Ordinance No.100U "Any person having objections to the granting of the franchise or license for which application is made, or wishing to suggest any other terms and conditions which should be included in such franchise or license, at any time prior to the date above named may file with the City Clerk in writing his/her objections or suggestions, or both, giving his/her reasons therefor, and he may appear at the time and place of the hearing to be heard relative thereto. Section 15. Publication. The City Clerk shall publish in a news- paper of general circulation circulated within the area to be served and pur- suant to Section 6063 of the Government Code the same notice as is required to be posted. Section 16. Payment for Publication and Posting. If the cost of publication and posting of notice of hearing exceeds the amount deposited by the applicant, the City shall bill for the deficiency. The applicant shall pay the whole of such bill within thirty (30) days after receipt thereof. If the amount of the deposit exceeds the cost of publication and posting, the City shall refund the difference to the applicant. Section 17. Protests and Suggestions. Any person interested, at any time after the filing of an application as provided in this article, and prior to the hearing thereon, may file with the City Clerk written protests or suggestions, or both, either against the granting of the franchise or license or to suggest any terms and conditions which should be included in the fran- chise or license. The Council in considering the application shall give con- sideration to all of such protests and suggestions. Section 18. Conduct of Hearing. At the time and place set for the hearing or at the time and place to which the hearing may be continued by the Council, the Council shall hear the applicant, who may present any evidence to show why the franchise or license should be granted, why certain terms or conditions should be imposed or not imposed on such franchise or license if granted, and also shall hear testimony or statements of other persons who may attend the hearing and present reasons why the application should be denied or why, if granted, the franchise or license should or should not be subject to certain conditions. Section 19. Decision after Hearing. Within thirty (30) days after the close of the hearing, and based upon the evidence received at the hearing and other matters which the Council is required to consider, the Council shall make a decision as to whether or not the application should be granted, and, if granted, subject to what conditions. The Council shall send a copy of its decision to the applicant. Section 20. Alienation of Franchise. Franchisee shall not sell, transfer, lease, assign or dispose of, in whole or in part, either by forced or involunatary sale, or by ordinary sale, contract, consolidation or other- wise, the franchise without the prior consent of the Council and then only upon such terms and conditions as may be prescribed by the Council. Any attempt to sell, transfer, lease, assign or otherwise dispose of the fran- chise without the consent of the Council shall be null and void. No such con- sent shall be required for a transfer in trust, mortgage or oth er hypothe- cation, in whole or in part, to secure an indebtedness, except when such hypo- thecation shall exceed fifty percent (50%) of the market value of the property of Franchisee or any part thereof. In the event that Franchisee is a corporation, prior approval of the Council shall be required where ownership or control of more than thirty percent (30%) of the voting stock of Franchisee, is acquired by a person or group of persons acting in concert, none of whom already own or control thirty percent (30%) or more of the voting stock, singularly or collectively. Franchisee shall notify City in writing of any foreclosure or any other judicial sale of all or a substantial part of the property of Franchisee or upon the termination of any lease or interest covering all or a substantial part of said franchise property. Such notification shall be considered by City as notice that a change in control of ownership of the franchise has taken place and the provisions hereunder governing the consent of City to such change in control of ownership shall apply. Section 21. Rights Reserved to City. In addition to any rights specifically reserved to City by this ordinance, City reserved to itself every right and power which is required to be reserved by any provision of any City ordinance or under the franchise, and Franchisee by acceptance of the franchise -4- Ordinance No. 100U agrees to be bound thereby and to comply with any action or requirement of of City in its exercise of any such right or power. City shall have the right to inspect during normal working hours, Franchisee's facilities and records relating to the Franchise. City shall have the right to waive any provision of the franchise, except those required by federal or state regulation, if the City determines (1) that it is in the public interest to do so, or (2) that the enforcement of such provision will impose an undue hardship on the Franchisee or the subscribers. To be effective, such waiver shall be evidenced by a statement in writing signed by a duly authorized representative of City. Waiver of any provision in one instance shall not be deemed a waiver of such provision subsequent to such instance nor be deemed a waiver of any other provision of the franchise unless the statement so recites. Section 22. Establishment and Extension of Service. A. Within thirty (30) days after acceptance of the Franchise, the Franchisee shall proceed with due diligence to obtain all necessary permits, authorization, the FCC Certificate of Compliance and any other authorizations which are required in the conduct of its business. In connection therewith, copies of all petitions, applications and communications submitted by the Franchisee to the FCC, or any federal or state regulatory body having juris- dication in respect to any matter affecting Franchisee's cable television operation, shall also be submitted concurrently to the City Clerk. B. Franchisee shall within eighteen (18) months after acceptance of franchise obtain all necessary permits, certifications and authorizations as indicated in paragraph A, supra. Franchisee shall notify City when all such permits, authorizations and certifications have been obtained, and shall send a copy of the FCC Certificate of Compliance to the City Clerk. Should Franchisee be unable to comply with the requirements of this paragraph within the time specified herein, the franchise herein granted shall become null and void and Franchisee shall have no rights thereunder; provided, however, that City may for good cause shown by Franchisee grant extensions of time to comply with this requirement. C. Within ninety (90) days after obtaining the necessary permits, certifications and authorizations, Franchisee shall commence construction and installation of the cable television system. Franchisee shall notify City in writing, within ten (10) days thereof of the date of commencement of construc- tion and installation work. D. The Franchisee shall extend and complete cable television system throughout the designated service area with reasonalbe diligence. Within one (1) year after complying with the requirements of paragraph B, supra, Fran- chisee shall complete the construction of an operable "head-end" and shall construct energized trunk cable to at least twenty percent of the remaining authorized franchised service area. At the end of five (5) years after com- plying with the requirements of paragraph B, supra, Franchisee shall be cap- able of providing basic service to every residence within the franchise area. E. Upon request of any resident or group of residents of the City for cable television service in an area of the Franchise where there is no near future construction plan, the Grantee shall conduct a survey to determine: (1) The total capital investment required for extension of service to the area; and (2) The number of equivalent full time subscribers which can be expected as a result of the line extension. If the results of such survey indicate there is at least the equivalent of eight (8) full time annual subscribers per one thousand dollars ($1,000.00) of the expected capital investment (excluding installation costs) , who will agree to contract, in writing, for a minimum of five (5) years of cable tele- vision service, the Grantee will construct the extension at no cost to sub- scribers for construction other than normal installation fees. In the event, however, that such survey indicates that there will be less than the equivalent of eight (8) annual subscribers for each $1,000 of capital cost of such extension, Grantee shall construct such extension if the subscribers in the area of such extension agree to: (1) Contract in writing for a minimum of five (5) years of cable television service, and, said contract becomes void should -5- Ordinance No. 100U subscriber move prior to end of five (5) years; and, (2) Contribute to the capital cost of such extensions in accordance with the following table to wit: CAPITAL PARTICIPATION PER $1,000 INVESTED Number of Grantee Total Subscriber Individual Subscriber Subscribers Contributions Contributions Contributions 8 and over $1,000.00 none none 7 847.00 153.00 $ 22.00 6 673.00 327.00 55.00 5 500.00 500.00 100.00 4 327.00 673.00 168.00 3 none 1,000.00 333.00 In the event that service rates are adjusted subsequent to the effective date of this ordinance, the schedule of Grantee Capital Contributions shall be adjusted by a factor determined by the following formula: (R-C) (T) 100 - AG Where: R = Cumulative percentage change in rate. C = Cumulative percentage change in the consumer price index since last adjustment. T = Percentage amount of change in income available after application of Federal and State Income Tax Rates. AG = New Grantee contribution adjusted factor. EXAMPLE 2 years elapsed R = From 7.00 to 8.50 = 21.4% Increase C = C.P.I. = 14% total change (2 years) New Urban T = 47.32% based on Federal = 48% State = 9% Therefore: (R-C) (T) _ AG 100 (21.4 - 14.0) (47.32) 100 = AG 350.168 = AG 100 AG = 3.5 (%) Therefore schedule would be adjusted to: 8 subscribers per $1035.00 from 8 subscribers per $1000.00 of construction capital. It is the intention of the above subscriber capital contribution plan to return subscriber capital contributions to the subscribers as, if and when, additional subscribers connect to the Cable Television System in the area of such extension. There- fore, Grantee agrees that it will, during the term of this agreement, collect subscriber contributions from each new subscriber in the area of such exten- sion and disburse the same equitably to all subscribers in the area either directly to each subscriber or through the area Association. An account of such capital contribution fund will be provided to any sub- scriber in the extension either directly to each subscriber in the extension area or to the area Association upon request. Section 23: Regulation of Rates and Services A. Rates: The Franchisee shall notify the City Clerk in writing of any rate or charge increase (s) . The Council shall have the right to request detailed back-up data supporting the increases and to disapprove or revoke such increases that it deems excessive and/or improper. Such disapproval, or revocation, shall be transmitted in writing to the Franchisee within 90 days following the effective date of the increase. -6- Ordinance No. 100U If the Council does not act on the increase in rates or charges within the allotted time frame, the proposed increase(s) will remain in effect. Resolution of any disapproved rate or charge increase(s) shall be accomplished by negotiations between representatives appointed by the City Council and repre- sentatives of the Franchisee. Subscribers shall be notified of any change in subscriber rates and/or charges and the date of City Council public hearing on the changes in rates and/or charges, in writing, not more than 90 days and not less than 45 days before the changes will become permanent unless disapproved or revoked by the City Council. The Franchisee may not institute rate or charge increases for eighteen (18) calendar months following notification to the City of the previous rate in- crease. The Franchisee, upon demonstration of urgency, may at any time peti- tion the City Council for a waiver of the 18 month time period. The foregoing procedure for the increase of rates and charges shall be exercised in accordance with, and only insofar as permitted by, applicable FCC rules and regulations. B. Minimum Service Standards: (1) Franchisee shall construct a cable television system with the capability of delivering not less than twenty (20) audio-visual channels to residential subscribers. This cable system shall have the technical capacity for nonvoice return communication when the FCC so rules. (2) Franchisee shall distribute in color those television sig- nals which it receives in color. (3) Franchisee shall render such service to subscriber as will meet or exceed FCC technical and performance requirements. (4) Franchisee shall provide as a minimum the local access channel capacity required by the Federal Communications Commission. This shall not be less than one channel for composite use, including use by local government, educational institutions, and the public. (5) Franchisee shall render efficient service, making repairs promptly and interrupting service only for good cause and for the shortest time possible; such interruptions insofar as possible shall be preceded by notice given to subscribers twenty-four (24) hours in advance and shall occur during the periods of minimum use of the system. (6) Franchisee shall maintain and upgrade the system and services to reflect those technical and economic developments occurring during the term of the franchise which will benefit the public in terms of new and more effective and efficient services. (7) Franchisee shall obtain prior authorization from the City to operate under a fictitious name other than that stated in this franchise. Any fictitious name shall be filed with the City Clerk. II/ (8) Franchisee to subscribers unless all shall provide and maintain continuous service owed otherwise by the City. Franchisee may petition the City to authorize the suspension or abandonment of service upon such reasonable terms and conditions as may be prescribed by the City. Section 24. Subscriber Complaints. Investigation and resolution of subscriber complaints shall be effected by the Franchisee not later than three (3) business days after receipt of the complaint. Upon complaint by any subscriber, Franchisee shall have the burden to satisfy City that a signal is being delivered which is of sufficient strength and quality to meet standards contained in the FCC rules and regulations. Franchisee shall maintain a written complaint record containing the following information: - - Date and time of subscriber complaint - - Identification of the complainant by name and address -7- Ordinance No. 100U - - A record of when and what action was taken by Franchisee to resolve the complaint. Said record shall be kept at Franchisee's local office for a period of two (2) years after receipt of any such complaint. A copy of said complaint record shall be submitted by Franchisee to City within ten (10) days following receipt of a written request therefor by City. Franchisee shall provide each subscriber in the authorized franchise area with a notice identifying City as the franchising authority, indicating the local business headquarters office of Franchisee to handle subscriber complaints, and identifying the City of Rancho Palos Verdes as the referral agency if any problem regarding the CATV service or rates is not resolved by the Fran- chisee to the reasonable satisfaction of the subscriber. Franchisee shall maintain a local business headquarters office within ten (10) miles of the City and provide the name, address and phone number of a person who will act as the company's agent to receive complaints regarding quality of service, equipment malfunctions and similar matters. The local office shall be open to receive inquiries or complaints from subscribers during normal, business hours. A toll—free phone number shall be available to all subscribers located within the franchised area for the reporting of service problems on a 24 hours per day, seven days per. week, 365 days per year basis. (1) The Grantee shall credit or refund to the subscriber an amount equal to five percent (5%) of the total monthly service charge for each day's service interrupted whenever service is not provided for a period of twenty-four (24) hours, beginning from the time such outage is reported to the Grantee, except when such outage is caused by circumstances outside the Grantee's control such as fire, earthquake, riot and other similar cir- cumstances. (2) A subscriber bill of rights approved by the City shall be pro- vided to each subscriber by the Franchisee published initially and with each change in rate and/or charge thereafter. Section 25. Service to Public Buildings. Franchisee shall, at cost, provide and maintain one (1) cable television drop to each City facility, Library District, and public school district located within the authorized franchise service area upon request for service. Section 26. Service to private nonprofit schools. Franchisee shall, at cost, provide and maintain one (1) cable television drop to each private, nonprofit school site within the authorized franchise service area. As used in this section, "private, nonprofit schools" means schools that satis- fy the requirements of Section 12154 of the Education Code of the State of California and which are exempt from taxation under Section 214 of the Revenue and Taxation Code of the State of California. Section 27. Interconnection. Upon the effective date of the Fran- chise, the Grantee shall install no CATV System component, whether as part of a new CATV System, as an extension of an existing system, or as a replacement for an existing system, unless such component has a bi-direction interconnect capability. Whenever adjacent systems have full bi-directional interconnect capability, the City reserves the right to require such systems be inter- connected provided that the City has first consulted with the Franchisee and provided that such interconnection is financially and technically feasible. Section 28. Fair Employment Practices. Franchisee shall not make any discrimination, distinction or restriction on account of color, race, re- ligion, ancestry or national origin contrary to the provisions of Section 51 of the Civil Code of the State of California which is incorporated herein by reference. All provisions of Section 1410 through 1432 of the Labor Code of the State of California (California Fair Employment Practice Act) are hereby incorporated herein by reference. Section 29. Franchise Fee. A. In consideration for the granting and exercise of the franchise as herein defined, for the purpose of constructing and operating a cable -8- Ordinance No. 100U television system, Franchisee shall pay annually to the City in lawful money of the United States, and during the life of the franchise, three percent (3%) of its gross subscriber revenues received by the Franchisee for regular monthly cable television services rendered to customers located within the authorized franchise service area. However, the City reserves the right to change its fees at five (5) year intervals after a public hearing determines good cause is found and such action is not in conflict with FCC rules and regulations. (1) For the purpose of this section only, the term "gross subscriber revenues" shall be deemed to be installation fees, disconnect and reconnect fees and fees for regular cable benefits including the transmission of broad- cast signals and access and local origination channels, if any, derived from its operations within the authorized franchise service area. It does not include revenues derived from per-program or per-channel charges, leased channel revenues and advertising revenues or any other incomes derived from the system. The Franchisee shall pay annually to the City an amount equal /to the total of the following derived from its operations within the authorized franchise service area: (a) 3% of its gross annual basic subscriber receipts; (b) 3% of its gross annual nonbasic service receipts; (c) 3% of its gross annual advertising receipts; (d) 3% of its gross annual lease receipts. (2) The franchise payment period for the franchise shall be on a calendar year basis. B. Checks for all such payments shall be made payable to the City of Rancho Palos Verdes and shall be submitted to the Administrative Services Officer within one hundred and five (105) days after the expiration of said period. Franchise fees remitted and actually received by the City on or before the last day of the 105-day period following each payment period shall be deemed timely remitted. Franchise fees remitted by mail shall be deemed timely filed only if the envelope enclosing the franchise fee is addressed to the City and bears a postmark on or prior to the due date. C. Each payment shall be accompanied by statement of the manager, or other Franchisee officer of equal authority, showing in detail the facts material to a determination of the amount due. D. In the event Franchisee fails to make the payments for the fran- chise on or before the dates due as hereinabove provided, Franchisee shall pay interest on the amount due at the rate of 10% per annum from the date due until paid. E. Franchisee shall keep and preserve, for a period of three (3) years subsequent to the date of the most recent franchise fee determination, all the records necessary to determine the amount of such franchisee fee, including but not limited to all business records and bank statements. F. At the granting of the franchise a reserve fund, earmarked for a potential future rate review and other expenses incidental to the admini- stration of the franchise shall be established. At such time when the amount is reached, the franchise fee to the City shall be waived and appropriate reduction to the subscribers shall be effective. Section 30. Reports and Audits. A. Franchisee shall permit examination by any duly authorized repre- sentative of City at all reasonable times of any and all maps and other such records and accounts kept or maintained by Franchisee or under its control concerning the operation, affairs, transactions or property of Franchisee relating to the franchise. B. City shall have the right to require such additional reports as may be reasonably necessary to confirm Franchisee's performance of obli- gations hereunder to City and to Franchisee's subscribers. -9- Ordinance No. 100U Section 31. Construction Requirements. A. All franchise property to be constructed and operated under the franchise shall be built and constructed of first class materials in a good and workmanlike manner and shall be maintained in good working condition. B. Franchisee shall not construct or install any poles, conduits or other system facilities within City highways until Franchisee has secured the necessary permits from the City or obtained any other necessary authorization from City, and obtained permission from the Federal Aviation Authority to erect and maintain antennas suitable to the needs of the system and its sub- scribers. C. Franchisee shall provide for 20-channel capability throughout the underground system. Section 32. Removal or Abandonment of Franchise Property. In the event that (1) the use of any franchise property or a portion thereof is discontinued for a continuous period of twelve (12) months, or (2) franchise property has been installed in any highway, or any portion thereof, without complying with the requirements of the franchise, or without a permit or other authority, as required herein, Franchisee, upon notice to do so from City and at Franchisee's sole cost and expense, shall remove promptly from the highway all such franchise property other than any such property which the City may permit to be abandoned in place. Franchisee shall obtain a permit from City prior to any such removal or abandonment in place. Upon permanent abandonment of any franchise property in place, Franchisee, if required by City, shall submit to City an instrument, satisfactory in form to the City Attorney, transferring to City the ownership of the fran- chise property as abandoned. In addition to the foregoing, the Public Works Director, upon such terms as the City may impose, may give the Franchisee permission to abandon, without removing, any system facility or equipment laid, directed, constructed, oper- ated or maintained under the franchise. The length of any such facility or equipment abandoned with such permission shall not be considered in calcu- lating payments due under the franchise except for the time prior to the effective date of such permission. Nothing contained in the franchise shall be construed to permit the Franchisee any right to omit from its annual re- ports, if such reports are required and from the calculation of its franchise payments, the length of any abandoned facility or equipment of Franchisee except in the manner aforesaid. Unless such permission is granted, the Fran- chisee shall remove all abandoned facilities and equipment within ninety (90) days after such abandonment and shall restore the highway to its former state at the time such facilities and equipment were removed, as near as may be, so as not to impair its usefulness. Section 33. Hold Harmless. Franchisee shall indemnify, defend and hold City, its officers, agents and employees harmless from any liability, claims, damages, costs or expenses, including reasonable attorney's fees, arising from injury to persons or damages to property proximately caused by any conduct undertaken by the Franchisee, its agents or employees, by reason of the franchise; Franchisee shall at his sole cost and expense, upon demand of City, appear in and defend any and all suits, actions or other legal pro- ceedings, whether judicial, quasi-judicial, administrative, legislative or otherwise brought or instituted- or had by third persons or duly constituted authorities, against or affecting the City, its officers, agents or employees, and arising out of or pertaining to the exercise of rights arising under the franchise. Section 34. Insurance. On or before commencement of franchise operations, Franchisee shall obtain policies of liability, worker's compen- sation and property insurance from companies authorized to transact business in California by the Insurance Commissioner of California. The policy of liability insurance shall: A. Be issued to Franchisee and name City, its officers, agents and employees as an additional insured. B. Indemnify for all liability for personal and bodily injury, death and damage to property arising from activities conducted and premises used pursuant to this Ordinance by providing coverage therefor, including but not limited to coverage for: -10- Ordinance No. 100U (1) Negligent acts or omission of Franchisee and the agents, ser- vants and employees thereof, committed in the conduct of franchise operations; and/or (2) Use of motor vehicles. C. Provide a combined single limit for comprehensive general lia- bility and comprehensive authomobile liability insurance in the amount of One Million Dollars ($1,000,000) . D. Be noncancellable without thirty (30) days' written notice there- of directed to City. The policy of worker's compensation insurance shall: A. Have been previously approved as to substance and form by the California Insurance Commissioner. B. Cover all employees of Franchisee who in the course and scope of their employment are to conduct the franchise operations. C. Provide for every benefit and payment presently or hereinafter conferred by Division 4 of the Labor Code of the State of California upon an injured employee, including the vocational rehabilitation and death benefits. The policy of property insurance shall provide fire insurance with extended coverage, as well as burglary and theft insurance, on the inventory, trade fixtures, furnishings and equipment to be used by Franchisee in the conduct of franchise operations in an amount sufficiently adequate to enable Franchisee to resume franchise operations following the occurrence of any of the risks covered by said insurance. Franchisee shall file with the City Clerk prior to commencement of the franchise operations either certified copies of said policies or a certificate of insurance for each of the required policies executed by the company issuing the policy, certifying that the policy is in force and providing the following information with respect to said policy: A. The policy number B. The date upon which the policy will become effective and the date upon which it will expire. C. The names of the named insured and any additional insureds. D. Subject of the insurance. E. The type of coverage provided by the insurance. F. Amount or limit of coverage provided by the insurance. G. A description of all endorsements that form a part of the policy. Conduct of the franchise operations shall not commence until Franchisee has complied with the aforementioned provisions of this section, and shall be suspended during any period that Franchisee fails to maintain said policies in full force and effect. Section 35. Faithful Performance Bond. On or before the effective date of the ordinance granting the-franchise, Franchisee shall file and there- after at all times during the life of the franchise keep on file with the City Clerk a corporate surety bond running to the City, or to its lawful successors in interest by virtue of future incorporations or annexations, in the penal sum of Five Thousand Dollars ($5,000.00) with surety to be approved by the City, conditioned that Franchisee shall well and truly observe, fulfill and perform each condition of the franchise and that in case of any breach of condition of the bond the whole amount of the penal sum shall be deemed to be liquidated damages and shall be recoverable from the principal and sureties of the bond. If said bond is not so filed prior to the effective date of the ordinance granting the franchise, the award of the franchise may be set aside and the ordinance granting the franchise repealed at any time prior to the filing of said bond and any money paid in consideration for said award of franchise shall be deemed forfeited. In the event that said bond, after it has been so filed, shall at any time during the life of the franchise become insufficient, Franchisee agrees to renew said bond, with sureties to be approved by the City, within ten (10) days after written notice to do so from City. -11- Ordinance No. 100U Section 36. Termination of Franchise due to Default. A. Any such franchise granted under this chapter may be terminated prior to its date of expiration by the City Council in the event that the City Council shall have found, after thirty days notice of any proposed termi- nation and public hearing, that: (1) The Grantee has failed to comply with any provision of ordinance, or has, by act of omission, violated any term or condition of any franchise or permit issued; provided, that in the event of such violation the City Manager shall make written demand that Grantee do or comply with any such term or condition within such reasonable amount of time as is deemed by the City Manager to be appropriate under the circumstances, and the Grantee shall have such amount of time thereafter in which to fully comply. B. Upon declaration of termination, all rights and privileges accruing to Franchisee by virtue of the franchise shall be terminated and Franchisee shall cease all construction under said franchise and shall, within thirty (30) days after such declaration of forfeiture, conclude all operation and business under the Franchise. Section 37. Term of Franchise. A. The term of the Franchise shall commence with the effective date thereof, and continue and remain in full force and effect for a term of five (5) years or until such time as Grantee shall surrender or abandon same or said Franchise shall be forfeited for noncompliance by the Grantee with the terms and conditions of this division, or the City shall condemn and take on the power or eminent domain, in accordance with then existing law, all Fran- chise Property of Grantee. B. During the fourth (4) year, but no later than the first day of the fifth (5) year of the term of the Franchise, or of any subsequently re- newed Franchise, the Grantee may make application for a new five (5) year Franchise to begin at the expiration of the Franchise, or of any subsequently renewed Franchise. Such application shall not be construed as an option in favor of Grantee. Renewal shall not be unreasonably denied. Should City, for any reason, be unable to complete the renewal proceeding prior to expira- tion of this franchise, Grantee shall have the right to continue operation of the Cable Television System pursuant to the terms of the franchise until such time as the renewal proceeding is concluded. C. A renewal of an existing Franchise will be granted only after a full Public Proceeding Affording Due Process has been held to review the per- formance of the Grantee, the adequacy of the Franchise and its consistency with applicable rules. D. Failure of the Grantee to apply for a new Franchise pursuant to the provisions hereinabove shall be construed to mean that the Grantee intends to dispose of its Franchise Property at the termination of the Franchise term in accordance with the provisions of this division. Section 38. Nonexclusive Franchise. The granting of the franchise shall not be construed to prevent the City from granting any identical or similar franchise to any person other than the Franchisee. VSection 39. Severability. If any provision of the franchise or the application of the franchise to any person or circumstance is held in- valid by a court of competent jurisdiction or is not in compliance with any requirement of the FCC, the PUC or any other federal or state agency, the remainder of the franchise, or the application of the franchise to persons of circumstances other than those to which it is held invalid or not in such compliance shall not be affected thereby. Section 40. Statement of Urgency. Residents presently receiving Cable television service in the City of Rancho Palos Verdes are facing an increase to become effective July 1, 1978. Cable television is the only method for some residents to receive adequate television service. Some residents may not be able to continue to receive cable service if the pro- posed rate increase does become effective. Such service is necessary for residents to receive prompt notice of current affairs, such as natural dis- asters and other emergencies. This ordinance will allow the City Council to evaluate the effects of such proposed rate increase. Therefore, this ordinance is necessary for the immediate preservation of the public peace, safety, general welfare and shall take effect immediately upon its adoption. _12_ Ordinance No. 100U APPROVED AND ADOPTED THIS 20th day of June, 1978, by the following vote: AYES: RYAN, SHAW, HEIN & MAYOR DYDA NOES: BUERK ABSENT: NONE 1..-- „.."...,- 0 .,-- -,1' MAYO' ATTEST: _,s OP or Igir.�[�. i.4 /r1' TY / LERK # I HEREBY CERTIFY that the foregoing is a true and correct copy of Ordinance No. 100U passed and adopted by the City Council of the City of Rancho Palos Verdes at a meeting thereof held on the 20th day of June, 1978, and that said ordinance was posted pursuant to law. 0 AP"r/ 1 Al . /'ITY CA' III -13- Ordinance No.lOOU STATE OF CALIFORNIA ) ' COUNTY OF LOS ANGELES ) ss AFFIDAVIT OF POSTING CITY OF RANCHO PALOS VERDES ) , The undersigned, being first duly sworn, deposes and says : That at all times herein mentioned, he/she was and now is the duly qualified and acting Deputy City Clerk of the City of Rancho Palos Verdes, California: That on the 5TH day of JULY , 19 78 , he/she caused to be posted in three conspicuous places , as required by law, O CE NO 100U (CABLE TELEVISION FRANCHISE) a copy of which is attached heretoin the followin g public places in the City: 1. City Hall Rancho Palos Verdes California 2. Los Angeles County Fire Department, Miraleste Station 4000 Miraleste Plaza Rancho Palos Verdes California 3. Ridgecrest Intermediate School 28915 Northbay Road . Rancho Palos Verdes California I certify under penalty of perjury that the foregoing is a true and correct affidavit of posting. LEONARD G. WOOD, City C l e rk City of Rancho Palos -Verdes -Timmu:' OF o" BY: !( A Dep ty i . -- '' OF '