Oakley Municipal Code Art. 3 General Financial and Insurance Requirements

a. The board shall set a license fee for each nonexclusive license granted within any licensed territory. The fee shall not exceed the maximum percent allowed by law of all the grantee’s annual gross receipts from all sources attributable to the operation of the cable system, as defined in Section 5.4.118.

b. The initial percent required shall be established by the license award resolution. During the term of any license granted, after advance, written notification to the grantee, the board may, by resolution adopted at a regularly-scheduled meeting and effective no less than 60 days from its adoption, require the payment of a larger or greater percent of the gross annual receipts of any grantee for the remaining term of such license. In increasing the license fee applicable to existing licenses renewed pursuant to this article or otherwise subject to this article, the county shall adopt a uniform fee so that all such grantees are at all times paying the county the same percentage of gross annual receipts. Before increasing a grantee’s license fee more than 1% e.g., from 5% to 6% of gross annual receipts. within any consecutive two calendar years, the board shall hold at least one public hearing. In no event shall the maximum license fee payable by a grantee exceed 8% of gross annual receipts.

c. The license fee shall be in addition to any other tax, fee or assessment of general applicability, including without limitation any tax, fee or assessment imposed on utilities and cable operators or their services, owed to the county by the grantee. However, gross annual receipts of a grantee shall not be subject to payment of a business license tax or fee, except to the extent such business license tax or fee exceeds the license fee paid under this article, in which case the grantee owes the excess.

d. Once a grantee has paid a license fee to the county on certain gross annual receipts, the grantee’s distribution of all or a portion of such receipts to its affiliates, parent companies or subsidiaries shall not also be subject to payment of a license fee under this article.

e. If a grantee gives a discount of 10% or more to any basic service only subscriber in whose name the account is held, with verifiable financial need, such as receipt of Supplemental Security Income ("SSI"), Aid to Families with Dependant Children ("AFDC"), or General Assistance, then payments received by the grantee from such subscriber may be excluded from gross annual receipts, and consequently, not be subject to a license fee.

f. The license fee shall be payable to the county annually, semiannually or quarterly, as specified in the license award resolution. The license fee shall be paid no later than 60 days following the end of the year, half-year or quarter, as applicable, for which the payment is made. The grantee shall annually submit to the county a complete and accurate statement of all gross annual receipts. The statement shall be in a form and content acceptable to the County Administrator and shall be verified by the controller or financial officer of the company. The annual statement shall be submitted not later than 90 days following the end of each calendar or fiscal year, as applicable.

g. The county shall have the right to inspect the grantee’s income records necessary to determine the grantee’s gross receipts in accordance with the provisions of this article and the grantee’s license award resolution and the right to audit and to re compute any amounts determined to be payable under these rules and regulations provided, however, that such audit shall commence within 48 months following the county’s receipt of the grantee’s statement of gross annual receipts, and provided further that the county shall, to the extent permitted by law, maintain the confidentiality of any trade secrets or other proprietary information in the possession of the grantee. Such income records shall be exempt from inspection pursuant to this section, however, to the extent required by applicable laws regarding subscriber privacy. Any additional amount due to the county as a result of the audit shall be paid within 30 days following written notice to the grantee by the county, which notice shall include a copy of the audit report. Should the additional amount due exceed 2% of the license fee payment which was the subject of the audit, the grantee shall also reimburse the county for all audit costs.

h. In the event that any license fee payment or recomputed amount, cost or penalty, is not made on or before the applicable dates heretofore specified, interest shall be charged daily from such date at the annual rate of 12%. The provision of such interest for late payments does not provide the exclusive remedy for any such breach of a license and the board may also take actions as otherwise provided in this division.

i. The grantee shall have the right to contest, by appropriate proceedings conducted in good faith, any determination by the county that additional license fees are due and owing as the result of any audit or otherwise, but the filing of such proceedings shall not delay or otherwise affect the due date specified in subsection (h) of this section.

a. Within 30 days after approval of the license award resolution by the board, the grantee shall deposit with the county a performance bond issued by a company admitted to transact surety insurance business in the State of California, in a form reasonably acceptable to the county and in an amount to be specified in the license award resolution. The performance bond shall be used to insure faithful performance by the grantee of all provisions of the license and compliance with all orders, permits and directions of any agency, commission, board, department, division or office of the county having jurisdiction over its acts or defaults under this license, and the payment by the grantee of any claims, liens and taxes due the county which arise by reason of the construction, operation or performance of the system.

b. The performance bond shall be maintained at the principal amount identified in the license award resolution during the entire term of this license, even if amounts have to be withdrawn pursuant to the provisions of this section.

c. If the grantee fails to perform any of its obligations under this division within the notice and time to cure set forth in Section 5.4.802, the county may immediately request payment with interest from the grantee’s surety. Such payment shall be due and payable within 30 days. Upon such request for payment, the county shall notify the grantee and/or surety of the amount and date thereof. There shall be a reasonable allowance for attorney’s fees, including the county’s legal staff, and other documented costs up to the full amount of the bond.

d. The rights reserved to the county with respect to the performance bond are in addition to all other rights of the county, whether reserved by this license or authorized by law, and no action, proceeding or exercise of a right with respect to such performance bond shall affect any other right the county may have.

e. The performance bond shall contain the following endorsement or language equivalent in form and content and acceptable to the county: "It is hereby understood and agreed that this performance bond may not be canceled or not renewed by the surety until 30 days after receipt by the county, by registered or certified mail, of a written notice of such intention to cancel or not to renew."

f. The county reserves the right, at any time to increase or decrease the amount of the performance bond required under this section if reasonably related to inflation, construction, subscriber base, PEG requirements, the grantee’s performance or any other factor considered relevant by the board. Such in crease or decrease shall occur no more frequently than once every 24 months, and the amount of increase or decrease during such period shall not exceed 25% or the rate of change in the CPI, whichever is greater. Within 60 days of receipt of a notice requiring increased or decreased bond coverage, the grantee shall obtain such cover age and shall furnish the revised bond with the county.

g. The county, in its discretion, may accept a corporate surety in lieu of the performance bond required under this section. Upon acceptance, the issuer shall be responsible to the same extent as the surety under a performance bond issued pursuant to this section.

a. As applicable, at least 30 days prior to commencement of any major construction affecting the cable system in the unincorporated areas of Contra Costa County, the grantee shall file with the county, a construction bond issued by a company admitted to transact surety insurance business in the State of California, in a form reasonably acceptable to the county, in such amount as is set forth in the license award resolution, in favor of the county. The construction bond shall be maintained throughout the construction period and until such time as the construction work is completed in accordance with all requirements of this article and other applicable codes, laws arid regulations, whether State, Federal or Local in origin. For purposes of this section, "major construction" shall be defined as any system rebuild or upgrade, or any other construction costing in excess of $1,000.

b. In the event the grantee fails to complete the construction work on schedule except for causes or events beyond the grantee’s control, as defined in Section 5.4.1004, fails to perform the construction work in a workmanlike manner, or fails to comply with any other construction-related requirement of this article or the license award resolution, there shall be recoverable, jointly and severally, from the principal and surety on the bond, any damages or loss suffered by the county as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of any property of the grantee plus a reasonable allowance for attorney’s fees, including the county’s legal staff, and other documented costs, up to the full amount of the bond.

c. The construction bond shall contain the following endorsement or language equivalent in form and content and acceptable to the county: "It is hereby understood and agreed that this construction bond may not be canceled or not renewed by the surety until 30 days after receipt by the county, by registered or certified mail, of a written notice of such intention to cancel or not to renew."

a. Throughout the entire term of the license, including any renewal, the grantee shall, at its own sole expense, maintain in effect the following policies of insurance:

1. Worker’s compensation insurance as required by State Law; and

2. Comprehensive general liability insurance, including blanket contractual or contractual liability coverage, broad form property damage coverage, and coverage for owned and non-owned automobiles, with a minimum combined single limit cover age of $1,000,000 or such greater amount as may be required in the license award resolution. for all damages due to bodily injury, sickness or disease, or death to any person, and damage to property, including loss of use, arising out of each accident or occurrence, and naming the county, its boards, officers, agents and employees as additional insureds.

b. Concurrently with the filing of an acceptance of award of any license granted under this division, the grantee shall furnish to the county and file with the Clerk of the Board certificates of insurance evidencing the required insurance coverage and requiring at least 30 days’ written notice to the county of policy lapse or cancellation or reduction in coverages required by this division.

c. The insurance policies shall be issued by companies authorized to sell insurance in California with a current rating of "B" or better by the A.M. Best Company, and shall be in a form acceptable to the county Finance Director.

d. The County Administrator reserves the right, at any time, to increase the amount of insurance required under this section if reasonably related to inflation or to hazards associated with the operation of a cable system. Such increase shall occur no more frequently than once every 24 months, and the amount of such increase during such period shall not exceed 25% or the rate of change in the CPI, whichever is greater. Increases shall be applicable to all grantees and occur substantially in a concurrent time frame, except in cases of increases due to hazards related to a specific grantee. Within 60 days of receipt of a notice requiring increased insurance and explaining the reason for the increase, the grantee shall obtain such increased coverage and shall furnish to the County Administrator and file with the clerk of the board amended certificates evidencing the increased coverage.

e. In the event a policy of insurance furnished by the grantee lapses or is canceled, and the grantee fails to reinstate coverage within the notice and time to cure set forth in Section 5.4.802(a), the county reserves the right, but shall not be obligated, to purchase comparable insurance at the grantee’s expense and to recover the cost from the grantee or any bonds or other security posted by the grantee. The availability of this remedy shall not limit any other remedies available to the county.

f. The insurance provided under this section is not conditioned or dependent on whether or not the county has approved any plans or specifications in connection with this license, or has insurance or other indemnification covering any of these matters. The insurance provided under this section shall provide primary coverage.

By accepting a license, the grantee agrees to defend, indemnify, save and hold harmless the county, its boards, commissions, officers and employees against any and all claims, costs and liability for any damages, injury or death arising from or connected with the grantee’s operations, due to or claimed or alleged to be due to negligent or wrongful acts, errors or omissions of the grantee, its officers, employees, contractors, agents or any person under its direction or control, save and except claims or litigation arising through the county’s sole negligence or sole willful misconduct, and will defend any such suits at the sole cost and expense of the grantee, and failing to do so, will make good to and reimburse the county for any expenditures, including reasonable attorney’s fees, the county may make by reason of such matters. The provisions of this section are in addition to, and not in lieu of, bond and insurance requirements contained in this division. Nothing in this section shall limit the liability of the companies issuing such bonds or insurance. Similarly, the furnishing of bonds and insurance, as required in this division, shall not in any way limit the grantee’s obligations under this section.

a. Notwithstanding the provisions of Section 5.4.310, the county agrees to defend, indemnify, save and hold harmless the grantee, its directors, officers, shareholders and employees against any and all claims, costs and liability for any damages, injury or death arising from or connected with the county’s use of the grantee’s cable system, due to or claimed or alleged to be due to negligent or wrongful acts, errors or omissions of the county, its officers, employees, contractors, agents or any person under its direction or control, save and except claims or litigation arising through the grantee’s sole negligence or sole willful misconduct, and will defend any such suits at the sole cost and expense of the county, and failing to do so, will make good to and reimburse the grantee for any expenditures, including reasonable attorney’s fees, the grantee may make by reason of such matters. As used in this section, the term "use" shall refer only to physical use of the grantee’s cable system, such as the cable casting of PEG programming described in Section 5.4.608, the use of the grantee’s poles and aerial structures described in Section 5.4.424 and the activation by the County of the Emergency Override System described in Section 5.4.520, but shall not include free service installed to public buildings, as described in Section 5.4.616.

b. Nothing in Section 5.4.310 or this section is intended or shall be construed to:

1. Impose any standard of care toward third parties greater than the standard of care normally imposed by law; or

2. Preclude the assertion against third parties of any defense provided by statute, case law or other wise. The county shall indemnify the grantee as set forth in the interconnect and public access agreement described in Section 5.4.608.