Point Arena Municipal Code Art. III Franchise Payments, Term and Enforcement

(1) In consideration of the granting and exercising of a franchise, as herein defined, 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 law or regulation.

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

(3) The city shall have the right, at its sole cost and expense, to inspect the grantee's revenue records 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 such an audit not more frequently than once every five years. In addition, grantee shall bear the expense of any other audit which reveals an error of five percent or greater in the amounts payable under this chapter.

(4) 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.

(5) 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 hereunder.

(Ord. 127 § 4.04.050, 1987.)

Any franchise granted by the council under this chapter shall be for a term of years, not to exceed 15, 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.

(Ord. 127 § 4.04.060, 1987.)

(1) Subscriber Complaints.

(a) Grantee shall resolve all complaints as defined in PAMC 5.15.020 within 30 days following receipt thereof from a subscriber or referral thereof by the grantor.

(b) In the event that grantee has failed to resolve a complaint within the 30 days specified, a subscriber may request that grantor declare the grantee in breach of the franchise and in violation of this chapter.

(c) A request for a declaration of breach and violation shall be received by the city manager or such other person as grantor shall designate and within 30 days of such receipt the city manager or such designee shall determine whether to recommend to the council that a declaration of breach and violation should be adopted by the council.

(d) In the event that the city manager recommends that a declaration shall issue, such declaration shall include a description of the complaint and a recommendation with respect to the imposition of liquidated damages as set forth in subsection (3)(c)(iii) of this section, and such declaration shall be set for hearing by the council.

(e) Grantee shall be given not less than 15 days' notice of the hearing required under subsection (3)(c) of this section and of the recommendation of the city manager or grantor's designee with respect to the imposition of liquidated damages.

(f) The council may consider the recommendation for which provision is made in subsection (1)(d) of this section, shall afford grantee an opportunity to be heard with respect to such recommendation, shall make a determination as to the merit of the complaint, and may impose liquidated damages in an amount not in excess of that set forth in the recommendation.

(2) 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 hereunder and all rights and privileges of a grantee hereunder in the event that any grantee:

(a) Violates any material provision of this chapter or any rule, order, or determination of the city made pursuant to this chapter or any franchise granted or franchise agreement awarded pursuant to this chapter; or

(b) Fails, refuses or neglects to do or comply with any material requirement or limitation contained in this chapter, a franchise granted pursuant to it, or any material rule or regulation of the city or city manager validly adopted pursuant to this chapter; or

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

(d) Attempts to dispose of any material part of the facilities or property of its cable business to prevent the city from purchasing same, as provided for herein; or

(e) Attempts to evade any of the provisions of this franchise or practices any fraud or deceit upon the city; or

(f) Fails to complete system construction or extension as provided in this chapter or a franchise granted thereunder; or

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

(h) 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

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

(j) Fails to abide by the privacy provision of this chapter; or

(k) Fails to timely make payment of any moneys due the city pursuant to this chapter.

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

(a) The city manager shall make written demand that the grantee correct or comply with any such requirement, limitation, term, condition, rule or regulation that is a part of the cause for termination, cancellation or revocation.

(b) In the event of any failure, breach refusal or neglect, the city manager may place a request for liquidated damages, penalties, sanctions, termination, cancellation or revocation of the franchise upon the next regular council meeting agenda. The city manager shall cause to be served upon such grantee, at least 30 days prior to the date of such council meeting, a written notice of the intent to request such sanctions, termination, cancellation or revocation and the time and place of the meeting, notice of which shall be published by the clerk of the council at least once 10 days before such meeting in a newspaper of general circulation within the city.

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

(i) Instruct the city manager to make written demand upon grantee for full compliance;

(ii) If the violation breach, failure, refusal or neglect is not or cannot be remedied to the satisfaction of the council within 30 days following such demand, may take either of the following actions:

(A) Direct the grantee to comply within such additional time, in such manner and upon such terms and conditions as the council may direct; or

(B) Declare the franchise terminated and of no further force and effect;

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

(A) 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 grantee's control, a grantee shall pay $500.00 per day for each day, or part thereof, the deficiency continues;

(B) For failure to test, analyze and report on the performance of the system following a written request pursuant to this chapter, a grantee shall pay to city $50.00 per day for each day, or part thereof, that such noncompliance continues;

(C) For failure to provide the aggregate number of services proposed in the accepted application, unless the council specifically approves a delay or charge, grantee shall pay to the city $200.00 per day for each day, or part thereof, that such noncompliance continues;

(D) For failure by grantee to comply with operational, maintenance or technical standards, grantee shall pay to the city $50.00 for each day, or part thereof, that such noncompliance continues;

(E) For failure to resolve a subscriber complaint pursuant to a declaration of breach as set forth in subsection (1)(d) of this section, grantee shall pay to the city $20.00 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 PAMC 5.15.135(4);

(iv) For the purposes of this subsection, an occurrence shall be deemed a separate occurrence for each 24-hour period in which it continues. In no event shall total liquidated damages exceed $10,000 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 grantee objects to the imposition of liquidated damages, in writing and within 60 days of notice, to the city, grantee and city shall conduct arbitration in the manner set forth in PAMC 5.15.180.

(4) No franchise shall be terminated, canceled or revoked when the grantee thereunder has made a reasonable and diligent effort in good faith to correct or remedy the breach, failure, refusal or neglect.

(5) If the council declares the franchise terminated, the city may pursue any remedies available to the city pursuant to this chapter, the franchise agreement or any other remedy available to the city as provided by law.

(6) In the event that the city requires grantee to dismantle the system, grantee shall, in an expeditious manner, at its own expense and at the direction of the city, 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. Grantee shall have the option, however, of abandoning the system. If grantee exercises this option, grantor shall have the right to dismantle the system and charge the reasonable costs of such work to grantee.

(7) In the event the city terminates a franchise agreement pursuant to any provisions 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 90 days prior to the effective date of termination to notify grantee of the city's intent to exercise the option to purchase stated herein.

(8) 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-member board of appraisers, one selected by the city, one selected by the grantee, and one selected by the appraisers themselves. Such determination to be specifically subject to subsection (9) of this section. The cost of such appraisal shall be borne equally by the city and the grantee. Any appraisal under this section shall be consistent with the terms of the Cable Communications Policy Act of 1984.

(9) In the event of a termination of a franchise agreement by the city, the value of the system shall be based on the fair market value of the system including value that may be assigned to the system as an ongoing concern; provided, that no value shall be assigned to either the franchise itself, the franchise agreement or any right, privilege or position within the market arising out of the opportunity to transact business under the franchise or the franchise agreement.

(Ord. 127 § 4.04.065, 1987.)

(1) Performance Bond to City. Upon being granted a franchise, and upon the filing of the acceptance required under PAMC 5.15.100, 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 two performance bonds in the sum of $5,000 each. The bonds shall be so conditioned that, in the event that grantee shall fail to comply with any one or more of the provisions of this chapter or of such franchise, then there shall be recoverable jointly and severally from the principal and surety any damages or loss, or costs suffered or incurred by the city as a result thereof, including reasonable attorneys' fees and costs of any action or proceeding, and including the full amount of any compensation, indemnification, cost of removal or abandonment of any property, or other costs which may be in default up to the full principal amount of such bond. Said condition shall be a continuing obligation during the entire term of such franchise and thereafter until grantee shall have satisfied in full any and all obligations to the city which arise out of or pertain to said 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.

(2) Performance Bond for Subscribers. Upon being granted a franchise, and upon filing of the acceptance required under PAMC 5.15.100, the grantee shall file, annually, with the clerk of the council, and shall thereafter during the entire term of such franchise maintain in full force and effect, a corporate surety bond, or other adequate surety agreement, in the amount as shall have been approved by the council. The bond or agreement shall be so conditioned that, in the event such grantee shall fail to comply with any one or more of the provisions of any agreement or undertaking made between grantee and any subscriber, then there shall be recoverable jointly and severally from the principal and surety any damages or costs suffered or incurred by any subscriber as a result thereof, including reasonable attorneys' fees and costs of any action or proceeding. Said condition shall be a continuing obligation during the entire term of such franchise and thereafter until grantee shall have satisfied in full any and all obligations to any subscriber which arise out of or pertain to any such agreement or undertaking.

(3) Letter of Credit.

(a) In lieu of compliance with subsections (1) and/or (2) of this section, grantee may deposit with the city an irrevocable letter of credit in the amount of $30,000. The letter of credit shall be used to ensure the faithful performance by grantee of all subscriber protection provisions of its franchise and applicable state or federal law and compliance with all orders, permits and directions of any agency, commission, board, department, division, or office of the city having jurisdiction over its acts or defaults under a franchise 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.

(b) The letter of credit shall be maintained at $30,000 during the entire term of a franchise even if amounts have been drawn against such letter pursuant to PAMC 5.15.065.

(c) If a grantee fails to pay to the city any compensation within the time fixed herein; or fails, after 10 days' notice, to pay to the city any liquidated damages, fees or taxes due and unpaid; or fails to repay the city within 10 days any damages, costs or expenses which the city is compelled to pay by reason of any act or default of the grantee in connection with a franchise; or fails, after three 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 may, after providing, all due process provisions contained in this chapter, immediately require payment of the amount thereof, with interest and any penalties, from the issuer of the letter of credit.

(d) The letter of credit will be issued by a financial institution authorized to do business in the state of California and shall be executed in a form acceptable to the city.

(e) The letter of credit shall specify that, upon presentation of a resolution of demand of the council, attested to by city clerk, the issuing institution of such letter of credit shall, upon demand, pay to 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 shall have no discretion to dispute the validity of a demand made upon it pursuant to a duly authenticated resolution.

(f) Any resolution authorizing a demand against the letter of credit issued pursuant to the terms 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 city.

(4) Hold Harmless Agreement. Grantee shall indemnify and hold harmless the city, its officers, boards, commissions, agents, and employees against and from any and all claims, demands, causes of actions, suits, proceedings, damages (including, but not limited to, damages to city property, and damages arising out of copyright infringements, and damages arising out of any failure by grantee to secure consents from the owners, authorized distributors, or licensees of programs to be delivered by grantee's cable television system), costs or liabilities (including costs or liabilities of the city, its officers, boards, commissions, agents and employees), of every kind and nature whatsoever, including damages for injury or death or damage to person or property, 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 any attorney fees, accountant fees, expert witness or consultant fees, court costs, per diem expense, traveling and transportation expense, or other costs or expense arising out of or pertaining to the acts or omissions of the grantee in the exercise or the enjoyment of any franchise hereunder by grantee or the granting thereof by the city.

(5) Defense of Litigation. Grantee shall, at the sole risk and expense of grantee, upon demand of the city, made by and through the city attorney, 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, its officers, boards, commissions, agents, or employees and arising out of or pertaining to the acts or omissions of grantee in the exercise or the enjoyment of such franchise or the granting thereof by the city.

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 grantee, the city, its officers, boards, commissions, agents, or employees arising out of this section 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 hereunder, or otherwise; provided, that neither grantee nor 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.

(6) Insurance Required. Upon being granted a franchise, and upon the filing of the acceptance required under PAMC 5.15.100, 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:

(a) General comprehensive liability insurance in the amount of $1,000,000; together with bodily injury liability insurance in an amount not less than $1,000,000 for injuries, including accidental death, to any one person, and subject to the same limit for each person in an amount not less than $1,000,000 on account of any one occurrence; and property damage liability insurance in an amount not less than $200,000 resulting from any one occurrence; provided, however, as follows:

(i) Grantee shall name the city as an additional insured in any of said insurance policies.

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

(iii) City shall be provided with certificates of insurance on the form provided by the city and shall receive a copy of all insurance policies.

(Ord. 127 § 4.04.070, 1987.)