Los Gatos Municipal Code Art. VI Franchise Violations

(a) Subject to the procedures hereinafter set forth, if the grantee fails to perform any material obligation under the franchise or fails to do so in a timely manner, the grantor may, at its option, and subject to such moratorium, if any, which may be provided for in the franchise agreement:

(1) Assess against the grantee the following monetary sanctions, or the maximum sanctions allowed by state law, whichever are greater:

a. If the system has less than five thousand (5,000) subscribers, five hundred dollars ($500.00) for each day the violation continues.

b. If the system has more than five thousand (5,000) subscribers, one thousand dollars ($1,000.00) for each day the violation continues.

The assessments shall first be levied against the security fund, hereinabove provided, and collected by grantor immediately upon such assessment. Grantor and grantee agree that the amount of such assessment shall be deemed, without proof, to represent liquidation of damages actually sustained by grantor by reason of grantee's failure to perform. Such assessment shall not constitute a waiver by the grantor of any other right or remedy it may have under the franchise or under applicable law including, without limitation, its right to recover from grantee such additional damages, losses, costs and expenses, including actual attorney fees, as may have been suffered or incurred by grantor by reason of or arising out of such breach of the franchise. This provision for assessment of damages is intended by the parties to be separate and apart from grantor's right to enforce the provisions of the construction and performance bonds provided for in section 7.40.010, and is intended to provide compensation to grantor for actual damages.

(2) In the event such violation shall have materially degraded the 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 the subscribers:

a. Twenty-four (24) consecutive hours: five (5) percent rebate of the monthly fee;

b. Twenty-four (24) to forty-eight (48) consecutive hours: fifteen (15) percent rebate of the monthly fee;

c. Forty-eight (48) to seventy-two (72) consecutive hours: twenty-five (25) percent rebate of the monthly fee;

d. Greater than seventy-two (72) consecutive hours: one hundred (100) percent rebate of the monthly fee.

Notwithstanding the foregoing, in no event shall grantee be required to credit to any one (1) subscriber any more than the equivalent of one hundred (100) percent of the monthly fee in any one (1) calendar year; and, further provided that no such rebate shall 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.

(3) Require grantee to cure all defaults and breaches of its obligations hereunder before grantee is entitled to increase any rate or charge to subscribers hereunder.

(4) Require grantee to forfeit the security fund given pursuant to section 7.40.015 and terminate the franchise, pursuant to the procedures under section 7.20.050.

(b) No penalty shall be imposed by grantor against grantee for any violation of this franchise without grantee being afforded due process of law, as provided for in section 7.60.015.

(c) Grantor may, in its sole judgment and discretion, impose any or all of the above enumerated measures against grantee, which shall be in addition to any and all other legal or equitable remedies it has under this franchise or under any applicable law.

(Code 1968, § 9.70.010)

(a) The Town Manager shall make the initial determination as to whether violation of this chapter or the franchise agreement has occurred, and shall immediately provide grantee with written notice by personal service or certified mail of such determination. The notice shall specify:

(1) The basis for the determination,

(2) The action required of grantee to correct it, and

(3) A reasonable time within which grantee may be allowed to correct it.

(b) In the case of a penalty assessment under section 7.60.010(a), if the Manager determines that a violation has not been satisfactorily corrected within the time allowed in the foregoing notice, the Manager may levy against the security fund immediately. However, grantee shall have the right to appeal the Manager's decision to the Council by filing an appeal within seven (7) days after receipt of the Manager's determination, and upon hearing such appeal, the Council may affirm, reverse, or modify the Manager's decision based on the evidence presented. Once an appeal has been filed, it may not be withdrawn without the consent of the Council.

(c) Prior to imposing any of the other sanctions referred to in section 7.60.010, the Manager shall give grantee notice by certified mail of the Manager's intent to recommend the sanction. The notice shall also contain the basis for the recommendation, the action required of grantee to correct the alleged violation, and notice of a public hearing at which the recommendation will be presented to the Council. At the conclusion of the public hearing, the Council may impose whatever sanctions provided for herein that it deems appropriate under this chapter or the franchise agreement, based upon the evidence presented. The Council shall issue written findings of the basis for their determination.

(Code 1968, § 9.70.015)

In the event grantee's performance of any of the terms, conditions, obligations, or requirements of this chapter, or a franchise granted hereunder, is prevented or impaired due to any cause beyond its reasonable control and which is not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof; provided, that the determination as to whether the conditions described in this section exist or not shall be made by grantor, based on findings supported by substantial evidence. If a determination is made that this section applies, any penalties previously imposed for a violation covered by such determination shall be returned to grantee. Such causes beyond grantee's reasonable control and not reasonably foreseeable shall include, but not necessarily be limited to, acts of God, civil emergencies, labor unrest or strikes, or inability to obtain gratis access to, by right-of-way or other permission, to an individual's property.

(Code 1968, § 9.70.020)