Pacifica Municipal Code Art. 3 Franchise Payments, Term, and Enforcement

(a) In consideration of the granting and exercising of a franchise for the operation of a cable television system, any grantee shall pay annually to the City during the life of the franchise an amount not to exceed that allowable by Federal law, so long as such payment is consistent with applicable State laws or regulations.

(b) The percentage payments shall be made in the manner, amounts, and at the times directed in the franchise agreement or in a Council resolution adopting the rules for service and rate regulation.

(c) Delinquent franchise fees shall bear interest at an annual rate equivalent to the Federal Reserve Discount Rate on advances to member banks in the quarter preceding the delinquency.

(d) The City shall have the right, at its sole cost and expense, to inspect the grantee's revenue records, books, and accounts under the franchise and the right of audit and recomputation of any and all amounts payable under this chapter. The grantee shall bear the expense of any other audit which reveals an error of five (5%) percent or greater in the amounts payable under this chapter.

(e) The City shall have the right, at its sole cost and expense, from time to time, as it may reasonably determine, to select and retain professional consultants having any relevant expertise to determine whether a grantee is complying with the terms of this chapter and its franchise and to make a report and recommendations for improvements. The cost of such consultations, reports, and recommendations shall be borne by the grantor, except with respect to costs arising out of the grant or renewal of a franchise. The grantee shall pay such costs arising out of the grant or renewal of a franchise as further specified in Sections 7-1.401 and 7-1.402 of Article 4 of this chapter and in the franchise agreement.

(f) No acceptance of any payment shall be construed as a release, or as an accordance and satisfaction, of any claim the City may have for further or additional sums payable under this chapter or for the performance of any other obligation under this chapter.

(§ 2, Ord. 461-86, eff. May 14, 1986)

Any franchise granted by the Council pursuant to this chapter shall be for a set term of years from the date of its acceptance by the grantee. The determination of the term of a franchise shall be made by the Council at the time of granting the franchise.

(§ 2, Ord. 461-86, eff. May 14, 1986)

(a) In addition to all other rights and powers pertaining to the City by virtue of this chapter or otherwise, the City reserves the right to impose liquidated damages, penalties, or sanctions or to terminate, cancel, and revoke any franchise granted pursuant to this chapter and all rights and privileges of a grantee pursuant to this chapter in the event any grantee:

(1) Violates any material provision of this chapter or any rule, order, or determination of the City made pursuant to this chapter; or

(2) Fails, refuses, or neglects to do or comply with any material requirement or limitation contained in this chapter, a franchise granted pursuant to this chapter, or any material rule or regulation of the City or City Manager validly adopted pursuant to the grantor's police power; or

(3) Becomes insolvent, unable, or unwilling to pay its debts or is adjudged a bankrupt; or

(4) Attempts to dispose of any material part of the facilities or property of its cable business to prevent the City from purchasing the same as provided for in this section; or

(5) Fails to complete the system construction or extension as provided in this chapter or a franchise granted pursuant to this chapter; or

(6) Fails to provide and maintain the types of services, facilities, equipment, or personnel provided for in the franchise and this chapter; or

(7) Fails to restore service within the time period specified in this chapter, unless approval of any such interruption has been obtained from the City: or

(8) Misrepresents any material fact in the grantee's proposal or in the execution of a franchise agreement or in any report required to be filed pursuant to this chapter; or

(9) Fails to abide by the privacy provisions of this chapter; or

(10) Fails to timely make payment of any money due the City pursuant to this chapter.

(b) In the event any cause for liquidated damages, penalties, sanctions, termination, cancellation, or revocation pursuant to this section occurs, the following procedures shall apply:

(1) The City Manager shall make a written demand that the grantee correct or comply with any such requirement, limitation, term, condition, rule, or regulation which is a part of the cause for termination, cancellation, revocation, damages, penalties, or sanctions. The City Manager's demand shall specify the particular provision of the franchise agreement or ordinance breached and the facts of the alleged breach. If the grantee complies with the City Manager's request within thirty (30) days, the grantor shall take no further action against the grantee, unless the alleged breach is a material breach, in which case the City Manager may proceed as set forth in subsection (2) of this subsection (b).

(2) In the event of any material failure, breach, refusal, or neglect, the City Manager may place a request for liquidated damages, penalties, sanctions, termination, cancellation, or revocation of the merchandise upon the next available regular Council agenda. The City Manager shall cause to be served upon such grantee, at least thirty (30) days prior to the date of such Council meeting, a written notice of the intent to request such sanction, termination, cancellation, or revocation and the time and place of the meeting.

(3) After providing the grantee with notice and an opportunity to be heard and in the event the Council determines that the grantee, by its acts or omissions, has given the City cause for sanction, termination, cancellation, or revocation of the franchise, the Council may:

(i) Direct the grantee to comply within such additional time in such manner and upon such terms and conditions as the Council may direct.

(ii) Impose, after a hearing and due process and commencing with the date of imposition, liquidated damages, penalties, or sanctions as follows:

(aa) For failure to complete system improvements in accordance with any agreement or ordinance of the City, unless the council specifically approved the delay by motion or resolution due to the occurrence of conditions beyond the grantee's control, a grantee shall pay to the City Two Hundred Fifty and no/100ths ($250.00) Dollars per day for each day, or part thereof, the deficiency continues.

(ab) For failure to test, analyze, and report on the performance of the system in a timely manner following a written request by the City Manager pursuant to this chapter, a grantee shall pay to the City Fifty and no/100ths ($50.00) Dollars per day for each day, or part thereof, such noncompliance continues.

(ac) For failure to provide the aggregate number of services proposed in the accepted application or franchise agreement, unless the Council specifically approves a delay or change, a grantee shall pay to the City One Hundred and no/100ths ($100.00) Dollars per day for each day, or part thereof, such noncompliance continues.

(ad) For failure by a grantee to comply with the operational, maintenance, or technical standards, performance guidelines, or any other material requirement of the franchise, a grantee shall pay to the City Fifty and no/100ths ($50.00) Dollars for each day, or part thereof, such noncompliance continues.

(ae) For failure to resolve a subscriber complaint pursuant to Section 7-1.203 of Article 2 of this chapter, a grantee shall pay to the City Twenty and no/100ths ($20.00) Dollars for each day, or part thereof, as specified in the declaration of breach. Such liquidated damages shall be in addition to the rebates for which provision is made in subsection (d) of said Section 7-1.203.

(iii) If the Council should impose on a grantee liquidated changes more than twice in any twelve (12) month period or assessed liquidated damages exceed Ten Thousand and no/100ths ($10.000.00) Dollars in any twelve (12) month period, the Council, after a hearing and due process, may revoke, terminate, or cancel the franchise.

(iv) For the purposes of this subsection, an occurrence shall be deemed a separate occurrence for each twenty-four (24) hour period in which the occurrence continues and shall be deemed a separate occurrence. In no event shall total liquidated damages exceed Ten Thousand and no/100ths ($10,000.00) Dollars per month.

(v) Liquidated damages levied by the grantor pursuant to this subsection shall not be general revenue to the grantor and shall be used by the grantor only for purposes related to the operation, maintenance, and programming of the system.

(vi) Prior to any judicial review and if the grantee objects to the imposition of liquidated damages, in writing and within sixty (60) days after notice to the City, the grantee and City may conduct arbitration in the manner set forth in Section 7-1.604 of Article 6 of this chapter.

(c) If the Council declares the franchise terminated, the City and the grantee may pursue any remedy available to the City pursuant to this chapter, the franchise agreement, and State and Federal laws.

(d) In the event the City requires a grantee to dismantle the system, the grantee, in an expeditious manner, at its own expense and at the direction of the City, shall restore any property, public or private, to the condition in which it existed prior to the erection or construction of the system, including any improvements made to such property subsequent to the construction of the system.

(e) In the event the City terminates a franchise agreement pursuant to any provision of this chapter, or at the normal expiration of a franchise agreement, the City shall have the first option to purchase the system. The City shall have ninety (90) days prior to the effective date of termination to notify the grantee of the City's intent to exercise the option to purchase as set forth in this section.

(f) Upon notification of intent pursuant to this section, the City and a grantee shall attempt to mutually agree upon the value of the system in accordance with the provisions of this section. However, if, within a reasonable period of time, they cannot agree upon a valuation, then such valuation shall be similarly determined by a three (3) member board of appraisers, one selected by the City, one selected by the grantee, and one selected by the appraisers themselves. The cost of such appraisal shall be borne by the City. Any appraisal pursuant to this section shall be consistent with the terms of the Cable Act.

(g) In the event of a termination of a franchise agreement by the City, the value of the system shall be determined according to the provisions of Section 627 of the Cable Act.

(§ 2, Ord. 461-86, eff. May 14, 1986)

(a) Performance bonds to the City. Upon being granted a franchise, and upon the filing of the acceptance required by Section 7-1.405 of Article 4 of this chapter, the grantee shall file with the City Clerk and shall thereafter, annually, during the entire term of such franchise, maintain in full force and effect a corporate surety bond or other adequate agreement in such amount and kind as shall have been approved by the Council. The bond or agreement shall be so conditioned that, in the event the grantee shall fail to comply with any one or more of the provisions of this chapter or of such franchise, whether or not such franchise is terminated, there shall be recoverable jointly and severally from the principal and surety any damages, losses, or costs suffered or incurred by the City as a result thereof, including attorneys' fees and costs of any action or proceeding, and including liquidated damages, delinquent franchise fees, costs of repairing or completing the cable television system, repair of streets or other public or private improvements, and the full amount of any compensation, indemnification, cost of removal or abandonment of any property, or other cost which may be in default up to the full principal amount of such bond. Such condition shall be a continuing obligation during the entire term of such franchise and thereafter until the grantee shall have satisfied in full any and all obligations to the City which arise out of or pertain to such franchise. Neither the provisions of this section, nor any bond accepted by the City pursuant thereto, nor any damages recovered by the City thereunder shall be construed to excuse faithful performance by the grantee or limit the liability of the grantee under any franchise issued pursuant to this chapter or for damages either to the full amount of the bond or otherwise. The bond shall contain a provision which prohibits cancellation by the surety during the term of the franchise, whether for failure to pay the premium or otherwise, without thirty (30) calendar days' written notice mailed by the surety to the City Manager.

(b) Letters of credit.

(1) In lieu of compliance with subsection (a) of this section, a grantee may deposit with the City an irrevocable letter of credit in the amount determined by the franchise agreement. The letter of credit shall be used to ensure the faithful performance by the grantee of all obligations of this chapter and any franchise agreement and applicable State or Federal laws, and compliance with all orders, regulations, and ordinances, and the payment by the grantee of any penalties, liquidated damages, claims, liens, fees, and taxes due the City which arise by reason of the construction, operation, or maintenance of the system.

(2) The letter of credit shall be maintained at the specified amount during the entire term of a franchise even if amounts have been drawn against such letter of credit pursuant to Section 7-1.303 of this article.

(3) If a grantee fails to pay to the City any compensation within the time fixed by this chapter; or fails, after ten (10) days' notice, to pay to the City any liquidated damages, fees, or taxes due and unpaid; or fails to repay the City within ten (10) days any damages, costs, or expenses which the City is compelled to pay by reason of any act or fault of the grantee in connection with a franchise; or fails, after three (3) days' notice by the City of such failure, to comply with any provision of a franchise which the City reasonably determines can be remedied by demand on the letter of credit, the City, after providing all due process provisions contained in this chapter, may immediately require the payment of the amount thereof, with interest and any penalties, from the issuer of the letter of credit.

(4) The letter of credit shall be issued by a financial institution authorized to do business in the State and shall be executed in a form acceptable to the City.

(5) The letter of credit shall specify that, upon presentation of a resolution of demand of the Council, attested to by the City Clerk, the issuing institution of such letter of credit, upon demand, shall pay to the City such sum as shall be specified in the resolution of demand. The letter of credit instrument shall explicitly acknowledge that the issuing institution of such letter of credit shall have no discretion to dispute the validity of a demand made upon it pursuant to a duly authenticated resolution.

(6) Any resolution authorizing a demand against the letter of credit issued pursuant to the provisions of this chapter shall be adopted only after a duly noticed public hearing shall have been conducted at which a grantee shall have had the opportunity to dispute any penalty, claim for liquidated damages, liens, fees, taxes, or other claims made by the City.

(c) Hold-harmless agreements. A grantee, at its own expense, shall fully indemnify, defend, and hold harmless the City, and its officers, boards, commissions, agents, and employees, against and from any and all claims, demands, causes of action, suits, proceedings, damages (including, but not limited to, damages to City property, damages arising out of copyright infringements, damages arising out of invasion of privacy, defamation, failure to comply with any statute or regulation of the United States or the State, and damages arising out of any failure by the grantee to secure consents from the owners, authorized distributors, or licensees of programs to be delivered by the grantee's cable television system), costs, judgments, or liabilities (including costs or liabilities of the City, and its officers, boards, commissions, agents, and employees) of every kind and nature whatsoever, including damages for injury or death or damages to persons or property, including any loss of use, and regardless of the merit of any of the same, and against all liability to others, and against any loss, cost, and expense resulting or arising out of any of the same, including all reasonable and legitimate expenses of litigation in any way arising out of or pertaining to the acts or omissions of the grantee, or its officers, agents, employees, or contractors, in the exercise or the enjoyment of any franchise granted pursuant to this chapter by the grantee in any way arising out of or pertaining to the acts or omissions of the grantee, or its officers, agents, employees, or contractors, in or the granting thereof by the City.

(d) Defense of litigation. A grantee, at the sole risk and expense of the grantee, upon demand by the City made by and through the City attorney, shall appear in and defend any and all suits, actions, or other legal proceedings, 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, or its officers, boards, commissions, agents, or employees, and arising out of or pertaining to the acts or omissions of the grantee in the exercise or the enjoyment of such franchise or arising out of or pertaining to the acts or omissions of the grantee in the granting of the franchise by the City. Nothing set forth this section shall prevent the City from participating in the defense of any litigation by its own separate counsel at the grantor's sole expense. Such participation shall not under any circumstances relieve the grantee from its duty of defense against liability or of paying any judgment or of any obligation assumed pursuant to this section.

(e) Satisfaction of judgments, decrees, and the like. A grantee shall pay and satisfy, and shall cause to be paid and satisfied, any judgment, decree, order, directive, or demand rendered, made, or issued against the grantee or the City, or its officers, boards, commissions, agents, or employees, arising out of this Section 7-1.304, and such indemnity shall exist and continue without reference to or limitation by the amount of any bond, policy of insurance, deposit, undertaking, or other assurance required by this section or otherwise; provided, however, neither the grantee nor the City shall make or enter into any compromise or settlement of any claim, demand, cause of action, action, suit, or other proceeding without first obtaining the written consent of the other, such consent not to be unreasonably withheld.

(f) Insurance required. Upon being granted a franchise, and upon the filing of the acceptance required by Section 7-1.405 of Article 4 of this chapter, the grantee shall file with the City Clerk, and shall thereafter, during the entire term of such franchise, maintain in full force and effect at its own cost and expense, each of the following policies of insurance:

(1) General comprehensive liability insurance in the amount of Two Million and no/100ths ($2,000,000.00) Dollars, together with bodily injury liability insurance in an amount not less than One Million and no/100ths ($1,000,000.00) Dollars for injuries, including accidental death, to any one person, and subject to the same limit for each person in an amount not less than One Million and no/100ths ($1,000,000.00) Dollars on account of any one occurrence, and property damage liability insurance in an amount not less than Two Hundred Thousand and no/100ths ($200,000.00) Dollars resulting from any one occurrence; provided, however:

(i) The grantee shall name the City as an additional insured in any of such insurance policies.

(ii) Where such insurance is provided by a policy which also covers the grantee or any other entity or person, the policy shall contain the standard cross-liability endorsement.

(iii) Each insurance policy shall contain a waiver by the insurance company of all rights of recovery by way of subrogation against the City if such waiver can be obtained without extra cost to the grantee.

(iv) Each policy of insurance shall contain a statement that the insurer will not cancel or fail to renew the policy for any reason except after thirty (30) days' written notice to the City.

(v) The City shall be provided with certificates of insurance in the form provided by the City, such certificates to contain the information set forth in subsections (i) through (iv) of this subsection.

(§ 2, Ord. 461-86, eff. May 14, 1986)