ITEM 4.1 Charter Communication Franchise0
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MINNESOTA C7
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Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR: MEETING DATE:
Legal
City Attorney January 28, 2018
PRESENTER(S)
REVIEWED BY: ITEM #:
City Attorney
City Administrator/Finance Director Flaherty 4.1
Robert Vose, Kennedy & Graven
STRATEGIC VISION
MEETS:
THE CITY OF;OTSEGO:
X
Is a strong organization that is committed to leading the community through innovative
communication.
That the Council approve amendments to the Otsego City Cable Ordinance, Title 4, Chapter 10 of the City
Has proactively expanded infrastructure to responsibly provide core services.
Charter has also requested that the City approve a resolution approving transfer of the City franchise to
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
recommends that the City adopt the revised resolution.
Is a social community with diverse housing, service options, and employment opportunities.
Charter relative to payments for service to City facilities that should not have been billed.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
That the Council approve the attached Ordinance Granting a Franchise to CC VIII LLC D/B/A Charter
Communications to Construct, Operate, and Maintain a Cable System and Provide Cable Service in the City
of Otsego, Minnesota.
That the Council approve amendments to the Otsego City Cable Ordinance, Title 4, Chapter 10 of the City
Code.
Charter has also requested that the City approve a resolution approving transfer of the City franchise to
another related entity. The proposed resolution has been reviewed and revised by City Cable counsel who
recommends that the City adopt the revised resolution.
That the Council approve proposed Settlement Agreement and Release between the City of Otsego and
Charter relative to payments for service to City facilities that should not have been billed.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
I No
BACKGROUND/JUSTIFICATION:
The City originally entered into a Cable franchise agreement with Charter in 2002. The original agreement
was for a term of 15 years and expired in 2017. The City and Charter agreed to extend the Franchise
Ordinance for an additional year in order to negotiate a new Franchise during the course of 2018. The City
was represented by Robert Vose of Kennedy & Graven in negotiations with Charter.
The Ordinance is similar to the original Franchise Ordinance except a service area map has been excluded.
The original Agreement had a service area map, showing the City service area for cable. The original service
area map failed to show major areas of the City by the end of the current franchise, due to the rapid
development of the City over the fifteen year franchise period. The current proposed Agreement relies
upon a density calculation for the requirement to deliver services. This density calculation has been
changed so that less density is required within an area in order to require service. City staff has met with
Charter and reviewed Charter's facility locations which indicate that they have facilities in place to serve
the areas anticipated for development over the next fifteen years.
The Franchise fee remains the same as before, as do many of the terms and conditions of the original
franchise.
The Council is undoubtedly aware that the technology in the area of cable television and internet delivery
is rapidly changing. This technology is far ahead of the statutes and rules regulating or not regulating these
industries. Under current law, the City only has authority to regulate cable television service delivery, not
internet service. At this point in time many residents are abandoning traditional cable television for
streaming or other services. This obviously changes the business plan of companies delivering cable or
cable and internet, particularly in areas where the service is to business or industrial areas.
The proposed approval also includes minor changes to the City Cable Ordinance, which is separate from
the proposed Cable Franchise Agreement. The proposed changes in both documents have been reviewed
and approved by the City's franchise counsel.
Also attached is a short memo from The City's franchise counsel, Robert Vose regarding the proposed
franchise ordinance and its relationship to other City franchise ordinances.
During the course of negotiations it was determined that the City paid bills for Charter service to City
facilities that should not have been billed. City representatives insisted that Charter settle this matter with
a one- time payment of $5,000.00 to the City. City staff recommends that the Council approve the attached
Settlement Agreement and Release regarding that issue.
Additionally, the City recently received a request from Charter that the City approve a transfer of its
franchise obligations to another entity created by Charter. The original proposed resolution was
transmitted to the City Cable counsel who made revisions to the resolution in order to better protect the
City. City Staff is also recommending that the Council adopt this proposed resolution as attached.
I SUPPORTING DOCUMENTS ATTACHED:
• Memo from Attorney Robert Vose
• Charter Franchise Ordinance, Ordinance No. 2019- 02
• Summary of Ordinance for Publication
• Proposed Amendment to City of Otsego Cable Ordinance, Title 4, Chapter 10 of the City Code
• Ordinance Amendment Repealing Former Ordinance and Replacing with Revised Ordinance
2019-03
• Ordinance Summary for Publication
• Proposed Settlement Agreement between the City of Otsego and Charter.
• Proposed Resolution approving transfer of Charter Cable assets to related e
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
The following motions need to be made separately:
Motion to Approve Cable Franchise Ordinance No. 2019-02 Granting A Franchise to CC VIII Operating LLC
D/B/A Charter Communications to Construct, Operate, and Maintain a Cable System and Provide Cable
Service in the City of Otsego, Minnesota and Approve Ordinance Summary for Publication.
Motion to Adopt City of Otsego Ordinance No. 2019 03- Repealing Existing City of Otsego Cable Ordinance,
Title 4, Chapter 10 Otsego City Code and Replace it with New City of Otsego Cable Ordinance, Title 4,
Chapter 10 Otsego City Code and Approve Summary for Publication.
Motion to approve Settlement and Release Agreement between City of Otsego and Spectrum Mid —
America (Charter).
Motion to Approve Resolution No. 2019- 06 Consent to Transfer of Cable Franchise.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A N/A
C H A R T E R E D
Offices in
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis
Minneapolis MN 55402
Saint Paul
(612) 337-9300 telephone
(612)337-9310 fax
St. Cloud
www.kennedy-graven.com
rvose@kennedy-graven.com
Affirmative Action Equal Opportunity Employer
MEMORANDUM
DATE: December 20, 2018
TO: City of Otsego
FROM: Bob Vose
RE: Franchise Renewal
Several years ago, Charter requested renewal of its cable franchise. The franchise was last
renewed in 2002 and was set to expire in November, 2017. By agreement, the franchise was
extended through 2018.
I was retained to assist with finalizing a renewal. In recent years, cable operators have sought to
reduce franchise commitments. Particularly, operators are seeking to reduce the availability of
community programming channels, reduce funding for such programming, and eliminate
expensive obligations such as requirements to extend the system for any reason other than a
company -determined business reason. The industry's efforts have been encouraged by the
FCC's recent proposal to adopt rules allowing cable operators to offset the "value" of a variety of
franchise commitments from their franchise fee payments. By proposing to allow this offset, the
FCC has gave cable operators added leverage in pending franchise negotiations.
Despite these developments, our negotiations with Charter have been productive:
0 The franchise will be renewed for 15 years.
• Charter's service extension obligation will be modestly strengthened. Moreover, the
company will be required to explain its determination about a requested extension ---
based on the franchise's development density standard--- within 30 days. Where the
standard is not met, developers will be afforded the opportunity to contribute a portion of
the construction costs to ensure that service is timely offered. These are unique
requirements not negotiated in other Charter renewals.
• Should the City elect to establish community programming on the cable system, the
franchise will allow the use of a channel for that purpose and provide for funding of the
needed programming equipment (cameras, etc.).
• The Franchise Fee remains at 5% of gross revenues.
• The existing system capacity and technical requirements are retained.
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• A number of revisions to both the franchise and cable regulatory ordinance will reflect
the fact that the City now has a comprehensive ROW regulatory ordinance which will
control ROW management issues. The City's authority over the ROW has not been
waived or limited.
• The right to free cable service at several City institutional sites has been clarified. One
free converter per site will also be provided. This is a compromise.
• The existing $30,000 performance bond, insurance requirements, indemnification
obligations, and franchise enforcement mechanisms have been retained.
• The existing customer service obligations have been streamlined, but all rights to address
current, relevant customer concerns remain.
I recommend approval and adoption of the negotiated franchise renewal and associated revisions
to City's cable regulatory ordinance.
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CITY OF OTSEGO, MINNESOTA
ORDINANCE NO. 2019-02
AN ORDINANCE GRANTING A FRANCHISE TO CC VIII OPERATING LLC D/B/A
CHARTER COMMUNICATIONS TO CONSTRUCT, OPERATE, AND MAINTAIN A
CABLE SYSTEM AND PROVIDE CABLE SERVICE IN THE CITY OF OTSEGO,
MINNESOTA.
RECITALS
1. This Cable Franchise Ordinance ("Franchise") is made and entered into by and
between the City of Otsego, a municipal corporation of the State of Minnesota ("City")
and CC VIII Operating LLC d/b/a Charter Communications, a limited liability company
("Grantee").
2. Pursuant to Ordinance No. ("Cable Ordinance"), the City is authorized to grant
and issue a non-exclusive Franchise authorizing the Grantee to provide Cable Service and
construct, operate, and maintain a Cable System in the City.
3. The Grantee timely submitted a request for a Franchise.
4. Upon evaluation of Grantee's technical, financial, legal qualifications, completion of
Franchise negotiations, and as a result of a public hearing, the City finds that it is in the
best interests of the City and its residents to grant and issue a Franchise to Grantee.
5. This Franchise is nonexclusive and complies with applicable laws and regulations.
THE CITY COUNCIL OF THE CITY OF OTSEGO HEREBY ORDAINS:
SECTION 1. GENERAL PROVISIONS
Section 1.1 Definitions.
Unless otherwise defined herein, the terms, phrases, and words contained in this
Franchise have the meaning provided in the Cable Ordinance. Terms, phrases and words
contained in this Franchise that are not defined here or in the Cable Ordinance will have
their normal and customary meaning.
Section 1.2 Written Notice.
All notices, reports, or demands required to be given in writing under this Franchise or
the Cable Ordinance must be delivered personally to any officer of Grantee or the City
Administrator or deposited in the United States mail in a sealed envelope, with registered
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or certified mail postage prepaid thereon, addressed to the party to whom notice is being
given, as follows:
If to City: City of Otsego
Attn: City Administrator
City of Otsego
13400 90th Street NE
Otsego, MN 55330-7314
If to Grantee: Charter Communications
Attn: Senior Manager Government Affairs
16900 Cedar Avenue S.
Rosemount, MN 55069
Email: Amanda.Duei7@charter.com
With copies to: Charter Communications
Attn. Vice President of
Government Affair
12405 Powerscourt Drive
St. Louis, MO 63131
Such addresses may be changed by either party upon notice to the other party given as
provided in this Section.
SECTION 2. GRANT OF FRANCHISE
Section 2.1 Grant.
a. Grantee is authorized to deliver Cable Service and construct, operate and
maintain a Cable System in the Rights -of -Way in the City.
b. This Franchise is granted pursuant to the Cable Ordinance. By accepting this
Franchise, Grantee agrees to be bound by the terms of the Cable Ordinance. In the event
of any conflict between the provisions of this Franchise and the Cable Ordinance, the
provisions of this Franchise shall govern. The City shall, at all times, have the right to
amend the Cable Ordinance in the exercise of its police powers and as otherwise
permitted by applicable law. To the extent required by law, the City will not grant a
Franchise for an area included in this Franchise on terms and conditions more favorable
or less burdensome than those in this Franchise pertaining to: (1) area served; (2) public,
educational, or governmental access requirements; or (3) franchise fees. The City may
impose additional terms and conditions in any other Franchises.
c. Grantee acknowledges the right of City to issue this Franchise.
Section 2.2 Franchise Term.
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This Franchise will be in effect for a period of fifteen (15) years from the date of
acceptance by the Grantee, unless sooner renewed or revoked.
Section 2.3 Service Area.
a. Where density requirements of Section 2.3(b) below are met, Grantee shall
engage in joint trenching in accordance with the Right -of -Way Ordinance unless the
Grantee does not receive a timely request for the extension of the Cable System and
Service from the developer or City, or otherwise demonstrates to the City good cause for
failing to complete such Cable System extension.
b. The Grantee will extend its System and offer Cable Service within the City
within a reasonable time, not exceeding 120 days, after receipt of a request for Service
provided, however, that Grantee will only be required to extend its System without cost to
the Person who will receive Service where such extension will make Service available to
at least eight (8) residential units per one-quarter (1/4) cable mile of System, as measured
from the nearest accessible tie-in point on the Cable System. The Grantee will meet at
the City's request, within a reasonable time not exceeding thirty (30) days, to explain its
determination of the "nearest accessible time -in point" and its calculation of the foregoing
residential density standard.
C. Where the density is less than that specified above, Grantee shall inform
the developer or other Persons requesting Service that such Service will be provided upon
payment of a portion of the cost of Installation or line extension and Grantee shall provide
a free written estimate of such cost within fifteen (15) days of the Service request. The
charge for Installation or extension for each Person requesting Service shall not exceed a
pro rata share of the actual cost of extending the Service.
SECTION 3. SYSTEM
Section 3.1 System Capacity.
Grantee will construct and operate a Hybrid Fiber Coaxial System. The System will
provide a minimum of 750 MHz of capacity. Grantee's System will be capable of
offering at least 75 video programmed Channels throughout the tern of this Franchise. A
portion of the capacity may be reserved for additional services such as digital
programming, Internet Service or other Telecommunications Services. Grantee's System
will have return capability.
Section 3.3 Pedestals.
Pursuant to Section 5.3b of the Cable Ordinance, Grantee shall be permitted to install
standard pedestals necessary for Standard Installations without receiving prior approval
from the City. A standard pedestal shall be no larger than 2'X 2' and 3' tall.
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SECTION 4. COMMUNITY SERVICES
Section 4.1 PEG Access Facilities.
a. PEG Access Channel. Grantee shall provide to each of its Subscribers who
receive some or all of the services offered on the System, reception on at least one
specially designated access Channel on the Cable System for use by the Grantor for non-
commercial, video programming for public, education and government ("PEG") access
programming. The PEG Channel shall be placed on the lowest tier of service available
to Subscribers. The Grantor shall administer the Channel and shall establish rules for its
use.
b. PEG Access Facilities and Equipment. At any time during the term of this
Franchise, the City may notify the Grantee of the need for capital support for PEG access
equipment and facilities as provided in this Section and consistent with federal law. Such
notice shall include a summary of the City's plans for acquiring PEG access equipment
and facilities, producing programming, and funding operations. PEG funds shall not be
used for purposes other than as prescribed by federal law. The City shall afford the
Grantee and the public an opportunity to comment on the level of PEG capital support
that is reasonable to meet the needs of the community considering the cost to meet those
needs. The City shall notify the Grantee in writing at least thirty (30) days prior to the
deadline for such comments and shall thereafter notify the Grantee of the final amount of
capital support required.
c. Recovery of PEG Access Facility Costs . The Grantee shall be permitted to
recover PEG capital costs from Subscribers via a per -customer pass through on bills if
allowed by law ("Access Fee"). The Access Fee must not exceed one dollar ($1.00) per
Subscriber per month.
d. Access Rules. The City may implement rules for use of the PEG Access
Channels. Prior to the cablecast of any program on any PEG Access Channel established
herein, any Person who requests access to the System to provide video programming must
provide a written certification acceptable to City which releases, indemnifies, and holds
harmless Grantee, City and their employees, offices, agents, and assigns from any
liability, cost, damages and expenses, including reasonable expenses for legal fees,
arising or connected in any way with said program.
e. Parity of Obligations. In the event there is Competition in the City during the
term of this Franchise, the City will impose equivalent PEG Access obligations on all
franchised providers of Cable Service in the City and the Access Fee shall be identical for
all providers.
Section 4.2 Drops and Service to Public Buildings.
The Grantee must install one (1) Drop, one (1) outlet, and one (1) converter (if
necessary) and provide monthly Cable Service (excluding pay -per -channel or pay-per-
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program) without charge to all public and state -accredited parochial primary and
secondary schools and those sites listed in Exhibit A, attached.
SECTION 5. ADMINISTRATION PROVISIONS
Section 5.1 Fee.
The Grantee must pay a Fee to the City in an annual amount equal to five percent (5%) of
its Gross Revenues. The parties acknowledge that the Grantee may offer a bundle or
package of Cable Services and non -Cable Services at a discounted rate. In such case, to
calculate Gross Revenues the Grantee will allocate revenues between Cable Services
(which are subject to the Franchise Fee) and non -Cable Services (which are not subject to
the Franchise Fee but may be subject to other fees and/or taxes) included in the bundle or
package of services. The Grantee shall apportion the revenues generated from bundled or
packaged services on a proportionate pro rata basis among the services offered unless
such allocation methodology is directly in conflict with GAAP, in which case Grantee
shall allocate bundled revenues in accordance with GAAP, and in no event shall the
Grantee allocate the revenues to evade its Franchise Fee obligations under this Franchise
or disproportionately reduce Gross Revenues.
Section 5.3 Rules of Grantee.
The Grantee may promulgate such rules, terms and conditions governing the conduct of
its business provided that such rules, terms and conditions must not be in conflict with the
provisions of this Franchise, the Cable Ordinance, or applicable laws or regulations.
SECTION 6. INDEMNIFICATION, INSURANCE, BONDS AND SECURITY
FUND
Section 6.1 Indemnification.
By acceptance of this Franchise, the Grantee agrees to indemnify, defend, and hold the
City harmless in accordance with the Cable Ordinance.
Section 6.2 Insurance.
At the time of acceptance of this Franchise, the Grantee will file with the City a
Certificate of Insurance in accordance with the Cable Ordinance. The Grantee must
maintain such insurance for the entire term of this Franchise.
Section 6.3 Performance Bond.
a. The Grantee must furnish the City a performance bond in the amount of
Thirty Thousand Dollars ($30,000.00) in a form and with such sureties as are reasonably
acceptable to the City. At the time of acceptance of this Franchise, the Grantee will file
with the City a copy of the performance bond. The Grantee must maintain the
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performance bond until this Franchise expires or is terminated, and the Grantee has
liquidated all of its obligations with the City.
b. The performance bond must be conditioned upon Grantee's faithful
performance in accordance with the terms of this Franchise, the Cable Ordinance, and
applicable laws and regulations. The bond must provide that in the event the Grantee
fails to comply with any law, ordinance or regulation, any damages or loss suffered by the
City 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
attorneys' fees and costs, up to the full amount of the bond, will be recoverable jointly
and severally from the principal and surety of the bond, and further guaranteeing payment
by the Grantee of claims, liens and taxes due the City which arise. In the event this
Franchise is revoked or the rights hereunder relinquished or abandoned by Grantee, the
City must be entitled to collect from the performance bond any resultant damages, costs
or liabilities incurred by the City.
C. It may be difficult or impossible to accurately quantify actual damages or
losses suffered by the City due to a violation or unsatisfied obligation under this
Franchise, the Cable Ordinance, or applicable laws or regulations. Accordingly, the City
may, in its reasonable discretion, collect from the performance bond liquidated damages
in an amount of up to Two Hundred and Fifty Dollars ($250.00) per violation of any
provision of this Franchise, the Cable Ordinance, or applicable laws or regulations. Each
violation may be considered a separate violation for which separate liquidated damages
can be imposed. Any collection of liquidated damages under this provision may not
occur prior to completion of the procedures set forth in Section 14.1 of the Cable
Ordinance applicable to enforcement actions by the City.
d. In the event the City will make any claim against the performance bond,
the City must comply with Section 14 of the Cable Ordinance governing enforcement of
this Franchise.
e. The City's rights pursuant to the performance bond are in addition to all
other rights the City may have. Any action with respect to the performance bond does not
constitute an exclusive remedy nor limit any other right.
SECTION 7. MISCELLANEOUS REQUIREMENTS
Section 7.1 Complaint and Other Service Records.
a. Upon written request by the City, and subject to a Grantee's obligation to
maintain the privacy of certain information, Grantees must prepare and maintain for up to
three years, the written records of all complaints received and the resolution of such
complaints, including the date of such resolution.
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b. Written complaint records must be on file at the office of a Grantee. Upon
written request by the City, Grantees must provide the City with a written summary of
such complaints and their resolution on a quarterly basis and in a form mutually agreeable
to the City and Grantee.
C. Upon written request by the City, Grantees must provide detailed
compliance reports on a quarterly basis with respect to the objectively measurable service
standards required in this Section. A Grantee will not be required to acquire equipment or
perform surveys to measure compliance with the telephone answering standards
contained in this Section unless a historical record of complaints indicates a failure to
comply.
Section 7.2 Amendment of Franchise Ordinance.
The Grantee and the City may agree, from time to time, to amend this Franchise. Nothing
herein restricts the City's lawful exercise of its police powers, ordinance -making
authority, and power of eminent domain.
Section 7.3 Force Majeure.
In the event Grantee's performance of this Franchise is prevented due to a cause beyond
its reasonable control, such failure to perform must be excused for the period of such
inability to perform provided Grantee has notified the City in writing within ten (10) days
of its discovery of such cause preventing performance.
Section 7.4 Severability.
If any term, condition or provision of this Franchise or the application thereof to any
Person or circumstance is held, to any extent, invalid or unenforceable, the remainder and
all the terms, provisions and conditions herein must, in all other respects, continue to be
effective provided the loss of the invalid or unenforceable provisions do not substantially
alter the agreement between the Parties. In the event such law, rule or regulation is
subsequently repealed, rescinded, amended or otherwise changed so that the Franchise
provision which had been held invalid or modified is no longer in conflict therewith, such
Franchise provision will return to full force and effect and thereafter be binding.
Section 7.5 Nonenforcement by City.
The Grantee is not relieved of its obligations to comply with this Franchise or the Cable
Ordinance due to any failure or delay of the City to enforce prompt compliance. The City
and Grantee may only waive its rights by expressly so stating in writing.
Section 7.6 Rights Cumulative.
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All of the City's and Grantee's rights and remedies pursuant to this Franchise are in
addition to and not exclusive of any and all other rights and remedies available to the City
or Grantee.
Section 7.7 Work Performed by Others.
All obligations of this Franchise apply to any agent, subcontractor or other Person
performing any work, or services on behalf of the Grantee pursuant to this Franchise to the
extent applicable, however, in no event will any such Person obtain any rights to maintain
and operate a System or provide Cable Service.
Section 7.8 Acknowledgment of Validity of Franchise.
The Grantee acknowledges that it believes that the terms and conditions of this Franchise
comply with current laws, are not unreasonable or arbitrary, and the City has the power to
enter into this Franchise on the terms and conditions contained herein.
SECTION 8. ACCEPTANCE OF FRANCHISE
Section 8.1 Publication and Effective Date.
This Franchise will be effective on the date of acceptance by Grantee. As required by
applicable law, this Franchise must be enacted and published as an ordinance.
Section 8.2 Time for Acceptance.
a. The Grantee must accept this Franchise within thirty (30) days of
enactment by the City, unless the time for acceptance is extended by the City.
Acceptance by the Grantee will be deemed the grant of this Franchise for all purposes.
b. Upon acceptance of this Franchise, the Grantee and City will be bound by
all the terms, conditions and obligations contained herein.
Section 8.3 Manner for Acceptance.
The Grantee must accept this Franchise in the following manner:
a. The Franchise must be fully executed and acknowledged by Grantee and
delivered to the City.
b. The Grantee must also deliver any construction bond and insurance
certificates required herein that have not previously been delivered, with its acceptance.
Section 8.4 Failure to Accept.
In the event the Grantee does not timely accept this Franchise in accordance with the
requirements herein, this Franchise and all rights granted herein are null and void.
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Passed and adopted this of , 2018.
CITY OF OTSEGO
By:
Its:
By:
Its:
ACCEPTED: This Franchise is accepted and we agree to be bound by its terms and
conditions.
CC VIII OPERATING LLC D/B/A CHARTER COMMUNICATIONS
Dated:
Lo
Its:
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EXHIBIT A
Free Service Locations
City Hall —13400 90th Street NE
Prairie Center — 8899 Nashua Avenue NE
Wastewater West — 7551 Lancaster *
Wastewater East — 5850 Randolph Avenue *
Future Fire Hall--- Address Unknown *
• The Grantee's rights to recover its actual, demonstrated costs of completing these
connections shall be governed by Section 2.3 of the Franchise.
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SUMMARY OF ORDINANCE NO.: 2019-02
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE GRANTING FRANCHISE TO CC VIII LLC DIB/A CHARTER
COMMUNICATIONS TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE
SYSTEM AND PROVIDE CABLE SERVICE IN THE CITY OF OTSEGO, MINNESOTA.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. The City hereby adopts the above referenced Ordinance granting a
Cable Service Franchise upon certain terms and conditions for a fifteen year period.
Section 2. The Ordinance replaces the previous Ordinance granting a Franchise
to the above mentioned entity and its predecessors.
Section 3. The new ordinance strengthens the obligation to provide service
within the City.
Section 4. The new ordinance provides for establishment and funding of
community programming if desired by the City.
Section 5. The new ordinance continues to provide for a Franchise Fee of 5% of
gross revenues.
Section 6. The existing system capacity and technical requirements are
retained.
Section 7. The new ordinance has been modified in certain aspects due to the
fact that the City has a right of way ordinance.
Section 8. The City's right to free cable service at City sites has been clarified.
Section 9. The previous performance bond, insurance requirements
indemnification and enforcement mechanisms have been retained.
force.
Section 10. Customer service obligations have been streamlined but remain in
1
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SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 28th day of
January, 2019.
CITY OF OTSEGO
Jessica L. Stockamp, Mayor
ATTEST:
Tami Loff, City Clerk
Pursuant to Minnesota Statutes 412.191, Subd. 4 and 331A.01, Subd.10, this
Ordinance is published in summary form. Complete copies of the ordinance are
available for inspection by contacting the City Clerk, Otsego City Hall, 13400 90TH Street
NE, Otsego, Minnesota 55330 during regular office hours.
2
CITY OF OTSEGO, MINNESOTA
ORDINANCE NO. -2019-03
SECTION 1. INTENT
Section 1.1 Findings.
The City finds that multiple providers may be interested in providing Cable Service in the City.
The City is authorized to grant one or more nonexclusive Franchises to provide Cable Service in
the City.
Section 1.2 Intent.
The City's intent in adopting this Cable Ordinance is to further the public interest in the delivery
of Cable Service and ensure that all providers of Cable Service are subject to comparable burdens
consistent with applicable law. This Cable Ordinance may encourage further development of,
and competitive choices for, Cable Service and related communications services in the City.
Such a development could contribute significantly to the communication needs and desires of
residents of the City, benefit local economic development, and improve public and municipal
services.
SECTION 2. SHORT TITLE
This Ordinance will be known and cited as the "Cable Ordinance."
SECTION 3. DEFINITIONS
For the purposes of this Cable Ordinance, the following terms, phrases, words, and their
derivations must have the meaning given herein. Terms, phrases and words contained in this
Cable Ordinance that are not defined herein or in a Franchise will have their normal and
customary meaning. When not inconsistent with the context, words in the singular number
include the plural number. The words "must" and "will" are always mandatory and not merely
directory. The word "may" is directory and discretionary and not mandatory.
a. "Basic Cable Service" means any service tier which includes the lawful
retransmission of local television broadcast signals and any public, educational, and
governmental access programming required by a Franchise.
b. "Cable System" means a facility, consisting of a set of closed transmission paths and
associated signal generation, reception, and control equipment that is designed to provide Cable
Service which includes video programming and which is provided to multiple Subscribers within
a community, but such term does not include (1) a facility that serves only to retransmit the
television signals of 1 or more television broadcast stations; (2) a facility that serves Subscribers
without using any Right -of -Way; (3) a facility of a common carrier which is subject, in whole or
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in part, to the provisions of subchapter II of 47 U.S.C. § 521, except that such facility shall be
considered a Cable System to the extent such facility is used in the transmission of video
programming directly to Subscribers, unless the extent of such use is solely to provide interactive
on -demand services; (4) an Open Video System that complies with 47 U.S.C. § 573; or (5) any
facilities of any electric utility used solely for operating its electric utility system.
d. "Cable Service" means (1) the one-way transmission to Subscribers of (i) video
programming, or (ii) other programming service; and (2) Subscriber interaction, if any, which is
required for the selection or use of such video programming or other programming service.
e. "Channel" means a portion of the electromagnetic frequency spectrum which is used
in a System and which is capable of delivering a television channel (as television channel is
defined by the FCC by regulation).
£ "City" means the City of Otsego, Minnesota, a municipal corporation, in the State of
Minnesota.
g. "Competition" means the offering of Cable Service to substantially the same potential
customers in the City by two (2) or more providers pursuant to Franchises.
h. "Drop" means the cable that connects the ground block on the Subscriber's Terminal
Device to the nearest feeder cable of the System.
i. "FCC" means the Federal Communications Commission, or its lawful successor.
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"Franchise", "Cable Franchise" or "Franchise Agreement" means an agreement
between the City and any provider of Cable Service pursuant to this Cable Ordinance granting an
initial authorization, or renewal thereof, to provide Cable Service or operate a System in the City.
k. "Fee" means a franchise fee, a fee on Gross Revenues in -lieu of a franchise fee or an
assessment imposed by the City on a Grantee solely because of its status as a recipient of a
Franchise. The term "Franchise Fee" does not include: (i) any tax, fee or assessment of general
applicability; (ii) capital costs which are required by the Franchise related to the provision of
public, educational, or governmental access facilities; (iii) requirements or charges incidental to
awarding or enforcing the Franchise, including payments for bonds, security funds or letters of
credit, insurance, indemnification, penalties or liquidated damages; (iv) any fee imposed under
Title 17 of the United States Code.
1. "Grantee" is any recipient of a Franchise, and its agents and employees, lawful
successors, transferees or assignees.
in. "Gross Revenues" means all revenues received by a Grantee or its affiliates from the
sale or provision of Cable Service in the City. By way of example and not limitation, Gross
Revenues shall include all carriage revenues received by a Grantee or its affiliates from
unaffiliated video programming providers, and any advertising revenues received by a Grantee or
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its affiliates in connection with the provision of Cable Service. Gross Revenues shall not include
bad debt, any taxes or fees on services furnished by Grantee imposed by any municipality, state,
or other governmental unit and collected by Grantee for such governmental unit, revenues
received by the Grantee or its affiliates from the provision of Telecommunications Services in
the City, Fees collected by a Grantee or its affiliates from Subscribers, and any other fees
collected by a Grantee or its affiliates from Subscribers to support PEG Access Facilities.
n. "Installation" means the connection of the System with the Subscriber Terminal
Device.
o. "Lockout Device" means an optional mechanical or electrical accessory to a Terminal
Device which inhibits the viewing of a certain program, certain Channel or Channels provided
over a System.
p. "Normal Business Hours" means those hours during which most businesses in the
City are open to serve customers. Normal Business Hours generally means between 8:00 a.m.
and 5:00 p.m. but must include some evening hours at least one night per week and/or some
weekend hours.
q. "Normal Operating Conditions" means those service conditions which are within the
control of a Grantee. Those conditions which are not within the control of a Grantee include, but
are not limited to, natural disasters, civil disturbances, power outages, telephone network
outages, and severe or unusual weather conditions. Those conditions which are ordinarily within
the control of a Grantee include, but are not limited to, special promotions, pay-per-view events,
rate increases, regular peak or seasonal demand periods, and maintenance or
upgrade/construction of a Grantee's facilities.
r. "Open Video System" means a facility consisting of a set of transmission paths and
associated signal generation, reception, and control equipment that is designed to provide Cable
Service which includes video programming and which is provided to multiple subscribers within
a community, provided that the FCC has certified such Open Video System complies with 47
C.F.R. Subpart S.
s. "Pay Television" means the delivery of pay -per -channel or pay -per -program
audio-visual signals to Subscribers for a fee or charge, in addition to the charge for Cable
Service.
t. "PEG Access Facilities" means public, educational, and governmental programming
channels, or any equipment or facilities for use of such Channels.
u. "Person" means any natural person, firm, partnership, association, corporation,
company, or other legal entity.
v. "Right -of -Way" or "Rights -of -Way" means the area on, below, or above a public
roadway, highway, street, cartway, bicycle lane, and public sidewalk in which the local
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government unit has an interest, including other dedicated rights-of-way for travel purposes and
utility easements of local government units.
w. "Right -of -Way Ordinance" means an ordinance adopted by the City creating
requirements regarding regulation, management and use of Rights -of -Way, including registration
and permitting requirements.
x. "Standard Installation" means any residential installation that can be completed using
a Drop of 150 feet or less.
y. "Subscriber" means any Person who lawfully receives Cable Service via a System.
z. "System" means a Cable System, an Open Video System or any other network of
antennas, cables, wires, lines, towers, waveguides, or other conductors, terminal devices,
equipment, or facilities located in whole, or in part, in the City and designed and constructed for
the purpose of producing, receiving, transmitting, amplifying, or distributing Cable Service in the
City.
aa. "Telecommunications Services" shall have the meaning ascribed in 47 U.S.C. §
153(46), as may be explained or interpreted by final action of the FCC.
bb. "Terminal Device" means an electronic device that converts signals to a form
accessible by the Subscriber.
SECTION 4. FRANCHISES
Section 4.1 Generally
a. No Person may provide Cable Service in the City, nor operate a System in the City,
unless and until such Person is granted a Franchise. All Franchises must be granted pursuant to
the provisions of this Cable Ordinance.
b. Any Franchise granted hereunder will authorize the Grantee to deliver Cable Service
and construct, operate and maintain a System in the Rights -of -Way in the City.
c. All Franchises shall be nonexclusive, and City may grant additional Franchises at any
time. To the extent consistent with applicable law, the City will not grant a Franchise for an area
included in an existing Franchise on terms and conditions more favorable or less burdensome
than those in the existing Franchise pertaining to: (1) the area served; (2) public, educational, or
governmental access requirements; or (3) franchise fees, unless the area in which the additional
Franchise is being sought is not actually being served by any existing Grantee. The City may
impose additional terms and conditions on any additional Franchises.
d. This Cable Ordinance and Franchises granted pursuant hereto are intended to comply
with Minnesota Statutes Chapter 238 and applicable law. Any applicable requirement
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established by Minn. Stat. § 238.084 not expressly incorporated in this Cable Ordinance or a
Franchise shall be deemed incorporated by reference in the Franchise as though fully set forth
therein.
e. The performance of any Grantee is subject to periodic evaluation by the City upon
reasonable notice to the Grantee.
Section 4.2 Use of Rights -of -Way
a. Use of the Rights -of -Way to provide Cable Service and operate a System must not be
inconsistent with the terms and conditions by which such Rights -of -Way were created or
dedicated and is subject to all legal requirements related to the use of such Rights -of -Way.
b. The City may adopt and enforce a Right -of -Way Ordinance and all Grantees shall be
subject to such Right -of -Way Ordinance. To the extent that rights, duties and obligations
regarding the use of Rights -of -Way are specifically addressed in a Franchise, such Franchise
terms shall prevail over any conflicting provisions of a Right -of -Way Ordinance. The terms of
the Cable Ordinance shall be subordinate to any conflicting provisions of a Right -of -Way
Ordinance. A Grantee shall not, through adoption or amendment of a Right -of -Way Ordinance
be subject to additional burdens or obligations with respect to usage of the Right -of -Way which
exceed the burdens on other users of the Right -of -Way under a Right -of -Way Ordinance.
c. The City may construct, maintain, repair or relocate sewers; grade, pave, maintain,
repair, relocate and/or alter any Right -of -Way; construct, repair, maintain or relocate water
mains; or construct, maintain, relocate, or repair any sidewalk or other public work.
d. All System facilities, lines and equipment in the City must be located so as not to
obstruct or interfere with the proper use of Rights -of -Way, alleys and other public ways and
places, and cause minimum interference with the rights of property owners who abut any of the
said Rights -of -Way, alleys and other public ways and places, and not interfere with existing
public utility installations.
e. Upon request, the Grantee shall make available to the City maps, plats, and permanent
records of the location of all facilities in the Right -of -Way.
f. If the City alters, or changes the grade or location of any Right -of -Way, alley or other
public way, a Grantee shall, at its own expense, upon reasonable notice by City, remove and
relocate poles, wires, cables, conduits, manholes and other System fixtures, and in each instance
comply with the standards and specifications of City. If City reimburses other occupants of the
Right -of -Way, the affected Grantee will be likewise reimbursed.
g. A Grantee shall not place poles, conduits, or other System fixtures where the same
will interfere with any gas, electric, telephone, water or other utility fixtures and all such poles,
conduits, or other fixtures placed in any Right -of -Way shall be so placed as to comply with all
lawful requirements of City.
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h. A Grantee will, on request of any Person holding a moving permit issued by the City,
temporarily raise or lower its wires or fixtures to permit the moving of buildings with the
expense of such temporary removal to be paid by the Person requesting the same, and the
Grantee will be given no less than ten (10) business days advance notice to arrange for such
temporary changes. A Grantee may require payment in advance.
i. A Grantee will be liable for the failure to exercise reasonable care during
construction, operation or maintenance of a System.
Section 4.3 Tree Trimming
A Grantee is authorized to trim trees in or overhanging Rights -of -Way to the extent reasonably
necessary to prevent the branches of such trees from coming in contact with wires and cables of a
System, or as is otherwise necessary to protect a System. The City may condition the authority to
trim trees as it deems appropriate and may supervise tree trimming activities.
Section 4.4 Franchise Term.
Franchises will be granted for a term established in the Franchise Agreement. No Franchise may
be granted for a period exceeding fifteen (15) years from the date of acceptance by Grantee.
Section 4.5 Regulation of Cable Service.
a. The requirements of this Cable Ordinance define the City's regulatory authority over
Systems and Cable Services subject to applicable laws. All Grantees are subject to all lawful
exercise of the City's police power, ordinance -making authority, and power of eminent domain.
b. The terms of a Franchise Agreement define the contractual rights and obligations of
the City and the Grantee thereunder.
Section 4.6 Initial Franchise Applications.
a. Upon request or its own initiative, the City may initiate a cable franchise application
process consistent with Minnesota Statutes Section 238.081 and other applicable laws. Any
Person desiring an initial Franchise must file an application with the City.
b. The City will establish an application fee in an amount to offset the costs of
processing applications and awarding a Franchise. Such application fees will not constitute a
Franchise Fee.
c. Upon receipt of an application for a Franchise, City staff will prepare a report and
recommendations to the City Council regarding the application(s).
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d. A public hearing concerning applications will be held prior to rejection or acceptance
of applications, and award of any Franchises.
Section 4.7 Franchise Renewal.
Franchise renewals will be conducted in accordance with applicable laws.
SECTION 5. CONSTRUCTION STANDARDS
Section 5.1 Registration, Permits and Construction Codes.
a. Within ninety (90) days of acceptance of a Franchise, the Grantee must apply for the
necessary governmental permits, licenses, certificates, and authorizations to construct, repair,
replace, relocate, operate, maintain or reconstruct a System. Grantees must strictly adhere to all
state and local laws and building and zoning codes currently or hereafter applicable to location,
construction, installation, operation or maintenance of the facilities used to provide Cable Service
in the City.
b. The City may inspect any construction or installation work performed pursuant to the
provisions of a Franchise. The City may make such tests as it must find reasonably necessary to
ensure compliance with the terms of this Cable Ordinance, the Franchise, and applicable
provisions of local, state and federal law.
Section 5.2 Repair of Rights -of -Way and Property.
a. Any Rights -of -Way or other property disturbed or damaged during the construction,
repair, replacement, relocation, operation, maintenance or reconstruction of a System shall be
fully and promptly restored, subject to weather conditions (i.e., winter conditions/frozen ground),
by the Grantee performing such work, at its expense, to a condition as good as that prevailing
prior to such work.
b. If a Grantee fails to promptly perforin the restoration required herein, the City shall
have the right, following ten (10) business days written notice to Grantee, to restore Rights -of -
Way and other public property to a condition as good as that prevailing prior to the Grantee's
work. The City shall be fully reimbursed by the Grantee for its actual costs relating to such
restoration.
Section 5.3 Undergrounding of Facilities.
a. In all areas of the City where utility facilities are required to be placed underground,
or where all other utility lines are underground, all Grantees must construct and install System
facilities underground.
b. Amplifier boxes and pedestal mounted terminal boxes may be placed above ground,
but such facilities shall be of such size, design, and location as not to be unsightly or unsafe, as
reasonably approved by the City.
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c. A Grantee must bury new Drops within a reasonable time period, subject to weather
conditions. If the ground is frozen, Grantee will be permitted to delay burial until the ground
thaws.
Section 5.4 Erection, Removal and Joint Use of Poles.
a. In any area of the City where facilities may be located above ground, a Grantee must
make use of existing poles and other facilities to the extent technically and economically feasible.
b. No poles, above -ground conduits, amplifier boxes, similar structures, or other
wire -holding structures may be erected or installed by the Grantee on public property without
prior approval of the City with regard to location, height, type and other pertinent aspects.
c. All facilities are subject to applicable zoning and other land use regulations.
Section 5.5 Safety Requirements.
a. A Grantee must at all times employ ordinary and reasonable care in the construction,
installation and maintenance of System facilities and must use commonly accepted methods and
devices for preventing failures and accidents which are likely to cause damage, injuries, or
nuisances to the public. All System facilities must at all times be kept and maintained in good
condition, order, and repair so that the same must not menace or endanger the life or property of
the City or any Person.
b. A Grantee must install and maintain equipment and facilities in accordance with all
applicable federal, state and local laws and regulations, and the requirements of the National
Electric Safety Code and in such manner that they will not interfere with private radio, police and
fire communications or any installations of City or of any public utility serving City.
SECTION 6. SYSTEM DESIGN AND EXTENSION PROVISIONS
Section 6.1 System Capacity and Channels.
At a minimum, any Franchise granted hereunder shall describe the Grantee's network in terms of
the total System capacity such as the total number of analog and digital video channels which can
be provided, and the minimum number of video channels which will be offered.
Section 6.2 Cable Service Availability.
a. Any Franchise granted hereunder may authorize Cable Service throughout the City, or
a portion thereof.
b. Each Franchise will identify a required service area. A Grantee will be required to
offer Cable Service to all dwellings, homes and businesses within its required service area.
Franchises may authorize and require Cable Service throughout the corporate boundaries of the
City, as it exists from time to time, or such smaller area as the City reasonably and lawfully
deems appropriate and is agreeable to the Grantee.
c. Any Franchise granted hereunder may establish requirements for the extension of the
System and provision of Cable Sei vice beyond the initially required service area.
d. Cable Service shall not be denied to any group of potential residential cable
Subscribers because of the income of the residents of the area in which such group resides.
Section 6.3 Non -Standard Installations. Grantees must provide Cable Service to any
Person requesting other than a Standard Installation provided the Cable Service can meet FCC
technical specifications and all payment obligations are met, except that a Grantee may charge
for the incremental increase in material and labor costs incurred above the cost of malting a
Standard Installation.
Section 6.4 Technical Standards. Any System offering Cable Service in the City
must comply, at minimum, with the technical standards promulgated by the FCC relating to
Cable Systems pursuant to Title 47, Section 76.601 to 76.617, as may be amended or modified
from time to time.
Section 6.5 System Testing.
a. In the event City finds that there are signal or System performance difficulties which
may constitute violations of applicable FCC technical standards, the Grantee will be notified and
afforded fifteen (15) business days to investigate and, if necessary, correct problems or
complaints. If the performance difficulty is not resolved within fifteen (15) days the City may
require the Grantee to demonstrate compliance via testing or other means selected by the
Grantee.
b. If a performance difficulty continues after the provision of Section 6.5(a), the City
may test any System or facilities used to provide Cable Service in the City. The City will seek to
arrange its testing so as to minimize hardship or inconvenience to Grantee and Subscribers. In
the event that testing reveals that the source of the technical difficulty is within the Grantee's
reasonable control, the cost of the testing must be borne by the Grantee. If the testing reveals the
difficulties to be caused by factors that are beyond Grantee's reasonable control, the cost of the
testing must be borne by the City.
Section 6.6 FCC Reports.
Grantees must, upon written request from City, file all required FCC technical reports with the
City.
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Section 6.7 Nonvoice Return Capability.
Grantees are required to provide a System with capacity and technical capability to provide
nonvoice return communications.
Section 6.8 Lockout Device.
Grantees shall provide by sale or lease a Lockout Device to any requesting Subscriber.
Section 6.9 Emergency Alert System.
All Grantees must provide an emergency alert system (EAS) that complies with FCC
requirements. Grantees must further ensure that City can insert, or direct the insertion of, brief
audio and video emergency messages simultaneously on all channels. The City shall indemnify
Grantee for City's use of a System for emergency messages unless such use is consistent with the
FCC's EAS requirements.
SECTION 7. CONSUMER PROTECTION AND CUSTOMER SERVICE STANDARDS
Section 7.1 Enforcement of Customer Service Standards. This Section 7 shall be
fully applicable except during periods when Competition exists in the City. The City will stay
and not enforce this Section 7 in areas where Competition exists in the City, except that the City
may initiate enforcement of this Section while Competition exists in the event the City receives,
in any thirty (30) day period, at least five (5) written complaints with respect to each competitor
concerning similar customer service issues. In such case, the City Council may initiate
enforcement of this Section by adopting a Resolution indicating the basis for initiating
enforcement.
Section 7.2 Regulation of Cable Service Rates.
a. The City may regulate rates for the provision of Cable Service to the extent allowed
under federal or state law(s).
b. Upon request, a list of Grantee's current Subscriber rates and charges for Cable
service shall be filed with City, and shall also be made available on Grantee's consumer website
or otherwise be available for public inspection. For purposes of this section, the availability of
this information on Grantee's website shall constitute compliance.
Section 7.3 Sales Procedures.
A Grantee may not exercise deceptive sales procedures when marketing any of its Cable Services
within City. Grantees may conduct marketing consistent with local ordinances and other
applicable laws and regulations.
Section 7.4 Telephone Inquiries and Complaints.
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a. A Grantee must maintain local, toll-free or collect call telephone access lines which
will be available to its Subscribers 24 hours a day, seven days a week.
b. During Normal Business Hours, trained representatives of Grantee must be available
to respond to Subscriber inquiries. Grantees must ensure that: (1) an adequate number of trained
company representatives will be available to respond to customer telephone inquiries during
Normal Business Hours, and; (2) after Normal Business Hours, the access line will be answered
by a trained company representative or a service or an automated response system such as an
answering machine.
c. Inquiries received after Normal Business Hours must be responded to by a trained
company representative on the next business day.
Section 7.5 Telephone Answer Time and Busy Signals.
a. Under Normal Operating Conditions, telephone answer time by a customer
representative, including wait time, must not exceed thirty (30) seconds when the connection is
made. If the call needs to be transferred, transfer time must not exceed thirty (30) seconds.
b. These standards must be met no less than ninety (90) percent of the time under
Normal Operating Conditions, measured on a quarterly basis. Under Normal Operating
Conditions, the customer must receive a busy signal less than three (3) percent of the time.
Section 7.6 Installation, Outage and Service Calls.
Under Normal Operating Conditions each of the following standards will be met no less than
ninety five (95) percent of the time measured on a quarterly basis:
a. Excluding conditions beyond the reasonable control of a Grantee which prevent
performance, Grantees will begin working on service interruptions promptly, and in no event
later than twenty-four (24) hours after the interruption becomes known, and Grantees must begin
actions to correct other service problems the next business day after notification of the service
problem and resolve such problems as soon as is reasonably possible;
b. The "appointment window" alternatives for Installations, service calls, and other
Installation activities will be either a specific time or, at maximum, a four-hour time block during
Normal Business Hours. Grantees may schedule service calls and other installation activities
outside of Normal Business Hours for the convenience of the customer;
c. A Grantee may not cancel an appointment with a customer after the close of business
on the business day prior to the scheduled appointment;
d. If a representative of a Grantee is running late for an appointment with a customer and
will not be able to keep the appointment as scheduled, the customer will be contacted. The
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appointment will be rescheduled, as necessary, at a time during Normal Business Hours which is
convenient for the customer.
Section 7.7 Complaint and Other Service Records.
a. Upon written request by the City, and subject to a Grantee's obligation to maintain the
privacy of certain information, Grantees must prepare and maintain for a period of three (3)
years, written records of all complaints received and the resolution of such complaints, including
the date of such resolution.
b. Written complaint records must be on file at the office of a Grantee. Upon written
request by the City, Grantees must provide the City with a written summary of such complaints
and their resolution on a quarterly basis and in a form mutually agreeable to the City and Grantee.
c. Upon written request by the City, Grantees must provide detailed compliance reports
on a quarterly basis with respect to the objectively measurable service standards required in this
Section. A Grantee will not be required to acquire equipment or perform surveys to measure
compliance with the telephone answering standards contained in this Section unless a historical
record of complaints indicates a failure to comply.
Section 7.8 Subscriber Contracts.
Grantees must provide to the City upon request any standard form Subscriber contract utilized. If
no such written contract exists, Grantee must provide a document completely and concisely
stating the length and terms of the Subscriber contract offered to customers.
Section 7.9 Video Programming.
All Franchises will identify the initial video channels to be provided by a Grantee. To the extent
required by 47 U.S.C. § 544(b), prior City approval is required for any change in the broad
categories of video programming provided. Individual programming decisions may be made in
the discretion of a Grantee.
Section 7.10 Billing and Subscriber Communications.
a. A Grantee must give the City and Subscribers thirty (30) days advance written notice
of any changes in rates, programming services, or channel alignments.
b. Bills must be clear, concise, and understandable. Bills must clearly delineate all
activity during the billing period, including optional charges, rebates, and credits. In case of a
billing dispute, the Grantee must respond to a written complaint from a Subscriber within 30
days.
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Section 7.11 Additional Customer Service Requirements.
The City may adopt additional or modified customer service requirements to address subscriber
concerns or complaints. Such requirements must be consistent with applicable laws.
SECTION 8. COMMUNITY SERVICES
Section 8.1 PEG Access Facilities.
Franchises will establish obligations to provide PEG Access Facilities to meet the community's
needs and interests.
Section 8.2 Service to Public or Educational Institutions.
Franchises will establish obligations for the provision of free or reduced cost services to
identified public or educational institutions.
SECTION 9. ADMINISTRATION PROVISIONS
Section 9.1 Administration of Franchise.
a. The City Administrator will have continuing regulatory supervision over Systems,
Cable Services, and Franchise compliance; provided, however, the City Council shall have the
sole authority to hold hearings and take final enforcement action as provided in Section 14.1c -d
or revoke a Franchise as provided in Section 14.2.
b. The City Administrator may delegate this regulatory supervision by giving written
notice of such delegation to affected Grantees. Grantees must cooperate with any such delegatee
of the City Administrator.
Section 9.2 Fee.
a. A Grantee must pay to the City a Fee in the amount established in the Franchise
Agreement.
b. Fee payments are payable quarterly. Fee payments must be made within sixty (60)
days of the end of each calendar quarter.
c. Each Fee payment must be accompanied by a report certified by an officer of the
Grantee, in form reasonably acceptable to City, detailing the computation of the payment. All
amounts paid must be subject to audit and recomputation by the City and acceptance of any
payment must not be construed as an accord that the amount paid is in fact the correct amount.
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d. A Grantee may designate that portion of a Subscriber's bill attributable to the Fee as a
separate line item on the bill.
Section 9.3 Access to Records.
a. The City may, upon reasonable notice and during Normal Business Hours, and subject
to the privacy provisions of 47 U.S.C. § 521 et seq., inspect any records maintained by a Grantee
which relate to its Franchise or System operations, including specifically Grantee's records
relating to Gross Revenues. Grantees must make copies of documents upon City's reasonable
request but may identify and label any such documents as "confidential trade secret" in
accordance with Section 4.2 above.
b. Grantees must prepare and furnish to the City such reports with respect to the
operations, affairs, transactions or property, as they relate to this Franchise or Cable Services as
City may reasonably request.
SECTION 10. INDEMNIFICATION AND INSURANCE
Section 10.1 Indemnification of the City.
a. A Grantee must indemnify, defend and hold harmless the City, its officers, boards,
committees, commissions, elected officials, employees and agents (an "Indemnified Party") from
and against any loss or damage to any real or personal property of any Person, or for any injury to
or death of any Person, arising out of or in connection with the construction, operation,
maintenance, repair or removal of, or other action or event with respect to a System or other
facilities used by a Grantee to deliver Cable Service.
b. A Grantee must indemnify, defend, and hold harmless an Indemnified Party from and
against all lawsuits, claims, actions, liability, damages, costs, expenses or penalties incurred as a
result of the award or enforcement of a Franchise.
c. A Grantee shall not be required to provide indemnification or defense for any
intentional misconduct, willful neglect or negligence by an Indemnified Party, for any
enforcement action taken by an Indemnified Party against a Grantee, or for any claim based
solely on the City's operation of PEG Access Facilities, delivery of PEG Access programming, or
EAS messages originated by the City.
d. With respect to each claim for indemnification:
1. the Indemnified Party must promptly notify the Grantee in writing of any suit,
claim or proceeding which gives rise to such right;
2. the Grantee must afford the Indemnified Party an opportunity to participate in
any compromise, settlement or other resolution or disposition of any suit,
claim or proceeding; and
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3. the Indemnified Party must cooperate with reasonable requests of the Grantee,
at Grantee's expense, in its participation in a suit, claim or proceeding.
e. Subject to the limitations in Minnesota Statutes Chapter 466, the City shall
indemnify, defend and hold a Grantee harmless for any damage resulting from any intentional
misconduct, willful neglect or negligence by an Indemnified Party in utilizing any PEG Access
Facilities or PEG Channels, or in connection with work performed on or adjacent to the System.
Section 10.2 Insurance.
a. A Grantee must obtain and maintain in full force and effect, at its sole expense, a
comprehensive general liability insurance policy, in protection of the Grantee, and the City, its
officers, elected officials, boards, commissions, agents and employees for damages which may
arise as a result of operation of the System or delivery of Cable Service.
b. The policies of insurance must be in the sum of not less than One Million Dollars
($1,000,000.00) for personal injury or death of any one Person, and Two Million Dollars
($2,000,000.00) for personal injury or death of two or more Persons in any one occurrence, Five
Hundred Thousand Dollars ($500,000.00) for property damage to any one person and Two
Million Dollars ($2,000,000.00) for property damage resulting from any one act or occurrence.
c. The insurance policy must be maintained by Grantee in full force and effect during
the entire term of the Franchise. Each certificate of insurance must contain a statement on its
face that the insurer will not cancel the policy or fail to renew the policy, whether for
nonpayment of premium, or otherwise, and whether at the request of Grantee or for other
reasons, except after thirty (30) days advance written notice have been provided to the City.
SECTION 11. FRANCHISE TRANSFER OR ABANDONMENT
Section 11.1 Abandonment of Service. A Grantee may not discontinue the provision
of Cable Service without having first given three (3) months written notice to the City.
Section 11.2 System Removal After Abandonment, Termination or Forfeiture.
a. In the event of termination or forfeiture of the Franchise or abandonment of the
System, the City may require the Grantee to remove all or any portion of its System from all
Rights -of -Way and public property within the City; provided, however, that the Grantee will not
be required to remove its System to the extent it is authorized to provide Telecommunications
Services or non -Cable Services over the System.
b. If the Grantee has failed to commence removal of its System, or such part thereof as
was designated by the City, within one hundred twenty (120) days after written demand for
removal is given, or if the Grantee has failed to complete such removal within twelve (12)
months after written demand for removal is given, the City may apply funds secured by the
Franchise toward removal and/or declare all right, title, and interest in the System to be in the
15
City with all rights of ownership including, but not limited to, the right to operate the System or
transfer the System to another for operation by it pursuant to the provisions of 47 U.S.C. § 547.
Section 11.3 Sale or Transfer of Franchise.
a. No sale or transfer of ownership of a Grantee or "fundamental corporate change" in a
Grantee as defined in Minn. Stat. 238.083, nor sale of transfer of a Franchise, is permitted
without City approval. However, no consent shall be required for sales of property or equipment
in the ordinary course of business or for a transfer in trust, mortgage, or other instrument of
hypothecation, in whole or in part, to secure an indebtedness.
b. A Grantee must file a written request with the City prior to any transaction described
above. The City will approve or deny a transfer request within one hundred and twenty (120)
days of receipt of a written request. The City will not unreasonably withhold, delay or condition
its approval.
c. In no event will a transaction be approved under Section 11.3(a) unless the transferee
becomes a signatory to, and assumes all rights and obligations under, the Franchise.
d. In the event of any proposed transaction described above, the City will have the right
to purchase the System. In the event a Grantee has received a bona fide offer for purchase of its
System, the City shall have the right to purchase for the price which the proposed assignee or
transferee agreed to pay. The City will be deemed to have waived its right to purchase the
System in the following circumstances:
1. The City does not notify the Grantee in writing, within 90 days of notice, that
it accepts all material terms and conditions of the purchase of the System; or
2. The City approves the transaction.
SECTION 12. PROTECTION OF INDIVIDUAL RIGHTS
Section 12.1 Discriminatory Practices Prohibited.
No Grantee may deny Cable Service or otherwise discriminate against citizens or businesses on
the basis of race, color, religion, national origin, sex, age, status as to public assistance,
affectional preference, or disability.
Section 12.2 Subscriber Privacy.
a. Grantees must comply with the subscriber privacy -related requirements of 47 U.S.C.
§ 551.
b. No signals of a Class IV Channel may be transmitted from a Subscriber terminal for
purposes of monitoring individual viewing patterns or practices without the express written
authorization of the Subscriber.
c. No lists of the names and addresses of Subscribers or any lists that identify the
viewing habits of Subscribers may be sold or otherwise made available to any party other than to
16
Grantee and its employees for internal business use, and also to the Subscriber subject of that
information, without the express written authorization of the Subscriber.
d. .
e. Written authorization from a Subscriber is not be required for conducting System-
wide or individually addressed electronic sweeps to verify System integrity or monitor for billing
purposes. This information must be kept confidential subject to the provision set forth in
Subparagraph (b) of this Section.
SECTION 13. UNAUTHORIZED CONNECTIONS AND MODIFICATIONS
Section 13.1 Unauthorized Connections or Modifications Prohibited.
a. It is unlawful for any Person, without the express consent of the Grantee, to make or
possess, or assist anybody in making or possessing, any connection, extension, or division,
whether physically, acoustically, inductively, electronically or otherwise, with or to any segment
of a Grantee's System or receive Cable Service from a Grantee's System without a Grantee's
authorization.
b. It is unlawful for any Person to willfully interfere, tamper, remove, obstruct, or
damage, or assist thereof, any part or segment of a System for any purpose whatsoever.
c. Any Person found guilty of violating this section may be fined not less than One
Hundred Dollars ($100.00) and the costs of the action nor more than Five Hundred Dollars
($500.00) and the costs of the action for each and every subsequent offense.
SECTION 14. ENFORCEMENT OF THE CABLE ORDINANCE OR FRANCHISE
Section 14.1 Violations or Other Occurrences Giving Rise to Enforcement Action.
a. In order to talce enforcement action pursuant to this Cable Ordinance or a Franchise,
the City must provide the Grantee with written notice of the violation or other occurrence giving
rise to the City's action.
b. The Grantee shall have thirty (30) days subsequent to receipt of the notice to cure the
violation or occurrence giving rise to the City's action. Alternatively, the Grantee may, within
fourteen (14) days of receipt of notice from the City, notify City in writing that there is a dispute
as to whether a violation or failure has in fact occurred. Such written notice by the Grantee to the
City shall specify with particularity the matters disputed by Grantee.
c. In the event a Grantee does not timely cure to the City's reasonable satisfaction the
violation or other occurrence giving rise to the City's action, or timely disputes whether a
violation has occurred, the City will schedule a public hearing affording Grantee due process.
The City will endeavor to schedule the hearing for a date within ninety (90) days of the initial
violation notice. Notice of the hearing must be provided to the Grantee.
d. At the completion of the hearing, the City will issue written findings of fact and its
final determination. A Grantee may not initiate legal proceedings until the City's final
17
f
determination is issued. The Grantee may appeal such determination to an appropriate court,
which shall have the power to review the decision of the City de novo and may stay the City's
right to pursue the enforcement remedies provided for in subsection 14.1 until such time as the
action has been finally adjudicated. The Grantee may continue to operate the Cable System until
all legal appeals procedures have been exhausted.
e. In the event City determines that no violation has taken place, the City will rescind the
notice of violation in writing.
Section 14.2 Franchise Revocation.
a. In addition to all other rights and remedies that the City possesses pursuant to
applicable law, equity and the terms of the Franchise Agreement, the City may revoke or
terminate the Franchise, and all rights and privileges pertaining thereto, in accordance with the
procedures set forth in Section 14. 1, if the City determines that:
1. The Grantee has violated any material requirement or provision of the Cable
Ordinance or a Franchise and has failed to timely cure; or
2. The Grantee has attempted to evade any of the material provisions of the
Cable Ordinance or a Franchise; or
3. The Grantee has practiced fraud or deceit upon the City; or
4. The Grantee has filed for bankruptcy.
a. During any revocation proceeding, including any appeal period, the Franchise will
remain in full force and effect unless the term thereof sooner expires.
Section 14.3 Compliance with Federal, State and Local Laws.
The City and Grantee will conform to state laws and rules regarding Cable Service or the System
not later than one year after they become effective, unless otherwise stated, and conform to
federal laws and regulations regarding Cable Service or the System as they become effective.
18
SUMMARY OF ORDINANCE NO.: 2019-03
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE REPEALING EXISTING CABLE TELEVISION ORDINANCE AND
REPLACING IT WITH NEW CABLE TELEVISION ORDINANCE.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. Title 4, Chapter 10 of the City Code is hereby repealed and replaced
with new Title 4, Chapter 10.
Section 2. Section 3, Definitions, definition of right of way is slightly modified.
Section 3. Section 4.2, e is modified so that maps are provided upon request
rather than filed with City.
Section 4. Section 4.7 deletes requirement that Cable operator reimburse City
for costs related to Franchise renewal.
Section 5. Section 5.3, c requires drops to be buried in a reasonable time rather
than a specified time period.
Section 6. Section 7.2, b changed to require subscriber rates on website.
Section 7. Section 7.7, consumer complaints must be retained for one year
instead of three years.
Section 8. Section 7.11 Section modified to allow City to adopt future
requirement s for refunds and credits.
Section 9. Section 7.12 Section is deleted requiring local office and drop box.
Section 10. Section 11.3 Section is modified to not require City consent for
transfers made within the entity.
Section 11. Section 12.2, d is deleted so that subscriber authorization regarding
information is not limited to one year.
Section 12. Section 14.1, d allows Cable Company to appeal City action for
violation of ordinance or Franchise.
1
MOTION BY:
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 28th day of
January, 2019.
CITY OF OTSEGO
M.
Jessica L. Stockamp, Mayor
ATTEST:
Tami Loff, City Clerk
Pursuant to Minnesota Statutes 412.191, Subd. 4 and 331A.01, Subd.10, this
Ordinance is published in summary form. Complete copies of the ordinance are
available for inspection by contacting the City Clerk, Otsego City Hall, 13400 90TH Street
NE, Otsego, Minnesota 55330 during regular office hours.
2
ORDINANCE NO.: 2019-03
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE REPEALING AND REPLACING A PORTION OF THE CITY CODE.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. Title 4, Chapter 10 of the City Code (Cable Television Service) is
hereby repealed in its entirety and is replaced with the attached new Title 4, Chapter 10
(Cable Television Service).
Section 2. This Ordinance shall become effective immediately upon its passage
and publication.
MOTION BY:
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 28th day of
January, 2019.
ATTEST:
Tami Loff, City Clerk
1
CITY OF OTSEGO
M.
Jessica L. Stockamp, Mayor
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (the "Settlement Agreement") is made
this day of , 2019, by and among the City of Otsego, Minnesota (the
"City") and Spectrum Mid-America, LLC, locally known as Charter Communications
("Charter") (collectively referred to herein as "the Parties")
72'VP19PA T .0
WHEREAS, Charter operates a cable system in the City of Otsego pursuant to a
franchise agreement between the parties (the "Franchise");
WHEREAS, Charter agrees to submit payment to the City in the amount of five
thousand dollars ($5,000) to forever settle certain past claims of Franchise
noncompliance;
WHEREAS, the City and Charter now desire to conclude, settle, release and
discharge once and forever, all rights, claims, causes of actions, liabilities, disputes and
demands relating to the City's past claims of Franchise noncompliance identified in
Franchise renewal negotiations ("Claims").
WHEREAS, the Parties fin-ther expressly agree that terms related to this
Settlement shall not be used by either Party as precedent on a going -forward basis in
connection with any future dispute between the Parties;
NOW THEREFORE, in consideration of the foregoing, and in consideration of
the mutual promises and obligations hereinafter set forth, and for good and valuable
mutual consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties to this Settlement Agreement hereto agree as follows:
AGREEMENT
1. SETTLEMENT AMOUNT
The City and Charter have agreed that Charter shall submit payment to the City in
the amount of five thousand dollars ($5,000) in full settlement of past Claims. Charter
agrees to pay this amount to the City within forty-five (45) days after receipt of the
executed Settlement Agreement from the City. It is expressly understood and agreed that
the Settlement Amount represents full and complete satisfaction and compromise of any
and all claims, actions, causes of action, controversies, demands, damages, debts,
agreements, obligations, liabilities, interest, liens, expenses, costs, attorney's fees and
demands of any kind or nature, known or unknown, arising out of or in any way related
to the Claims. It is understood and agreed by the City and Charter that nothing herein
shall be deemed to be an admission of liability by Charter with respect to the matter of
this Settlement Agreement. It is further understood and agreed that this Settlement
Agreement in no way waives, releases, or otherwise relates to claims associated with
alleged noncompliance with the Franchise on or after the date of this Settlement
Agreement including, specifically, any renewal of the Franchise (expected to occur in
2019).
2. RELEASE OF CLAIMS
For the consideration set forth in this Settlement Agreement, the City does hereby
release and forever discharge Charter, and its parents, subsidiaries, related affiliates and
their respective officers, directors, shareholders, owners, partners, employees, agents,
contractors, representatives, predecessors, successors, assigns, insurers and attorneys, and
each of them, from any and all claims, demands, actions, causes of action, liabilities,
obligations, losses, accounts, debts, damages, judgments, costs, interest, expenses,
attorney's fees and demands of any kind or nature, known or unknown, arising out of or
in any way related to the Claims. Furthermore, the City expressly agrees that this
settlement, and/or the events leading up to it may not be used in any way in any
subsequent judicial or administrative proceeding against Charter other than to enforce the
terms of this Settlement Agreement.
3. VOLUNTARY AGREEMENT
This Settlement Agreement is freely and voluntarily given by each party, without
any duress or coercion, and after each party has consulted with its counsel. Each party
has carefully and completely read all of the terms and provisions of this Settlement
Agreement.
4. AUTHORITY AND BINDING EFFECT
City and Charter represent and warrant to the other that each has the legal right,
power and authority to enter into this Settlement Agreement and to perform its
obligations hereunder. This Settlement Agreement will inure to the benefit of and be
binding upon the parties and their respective successors and assigns. The parties for
themselves and their respective successors and assigns agree to join in or execute any
instruments and to do any other act or thing necessary or proper to carry into effect this or
any part of this Settlement Agreement.
5. ENTIRE AGREEMENT
This Settlement Agreement sets forth the entire agreement between the City and
Charter relating to the subject matter of this Settlement Agreement.
6. GOVERNING LAW
This Settlement Agreement, and any controversies arising hereunder, shall be
interpreted and adjudicated in accordance with applicable federal law and the laws of the
State of Minnesota, whose courts shall have exclusive jurisdiction thereof.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as
their free and voluntary acts and deeds, effective as of the date first above written.
City
C
Spectrum Mid-America, LLC,
1/k/a Charter Communications
Division President
Sworn before me in the City or County of , State of , this day of
, 2019.
My Commission Expires:
Notary Public
CITY OF OTSEGO
RESOLUTION NO. 2019-06
CONSENT TO TRANSFER OF
CABLE FRANCHISE
WHEREAS, CC VIII Operating LLC d/b/a Charter Communications, an indirect, wholly-
owned subsidiary of Charter Communications, Inc. ("Charter") provides cable service in the City of
Otsego, Minnesota ("City");
WHEREAS, the City issued a cable communications franchise (the "Franchise") authorizing
Charter to operate and maintain a cable communications system and provide cable service in the
City under terms and conditions specified in the Franchise and applicable law;
WHEREAS, Charter is the second largest cable operator in the US providing cable services to
approximately 16.14 million cable subscribers with operations in 42 states;
WHEREAS, in October, 2018, Charter filed an FCC Form 394 with the City seeking approval
to merge the Franchise -holder with Spectrum Mid-America, LLC ("Spectrum"), another indirect,
wholly-owned subsidiary of Charter;
WHEREAS, the Form 394, Exhibit 3, provides that, upon consummation of the merger,
Spectrum will become the Franchise -holder;
WHEREAS, the Form 394, Section V, Part II(c), provides that Spectrum:
Will use its best efforts to comply with the terms of the franchise and applicable state
laws or local ordinances and related regulations, and to effect changes, as promptly as
practicable, in the operation of the system, if any changes are necessary to cure any
violations thereof or defaults thereunder presently in effect or ongoing.
WHEREAS, the FCC Form 394, Exhibit 1, indicates that there is no single agreement or
instrument specifying the terms of the proposed merger and no document specifying such terms was
provided to the City;
WHEREAS, subsequent to filing the FCC Form 394, Charter has confirmed that Spectrum is
an existing indirect, wholly-owned subsidiary of Charter;
WHEREAS, under the terms of the Franchise and pursuant to Minnesota Statutes, Section
238.083, subds. 1 and 2, the proposed merger and resulting transfer of the Franchise "requires the
written approval of the franchising authority;"
WHEREAS, Minnesota Statutes, Section 238.083, subd.4, provides: "[t]he franchising
authority shall approve or deny in writing the [request]," and that "approval must not be
unreasonably withheld."
544487v1 RJV VS105-10
NOW, THEREFORE, BE IT RESOLVED BY THE CITY AS FOLLOWS:
1. The foregoing recitals are incorporated by reference. The City consents to the merger and
resultant transfer of the Franchise as provided herein.
2. Charter shall notify the City in writing within ten (10) days of completion of the merger of
the Franchise -holder with Spectrum.
3. Spectrum shall reimburse the City's legal fees and other costs incurred in review of the
FCC Form 394 in an amount not to exceed $500 within thirty (30) days of receipt of an
invoice.
4. Except as specifically stated herein, the City makes no findings or representations
regarding the continuing validity and enforceability of the Franchise, nor any Franchise
compliance matters. The City expressly reserves and does not waive authority to enforce
the Franchise with respect to any Franchise violations or compliance matters whether
arising before or after the date of this Resolution, and whether known or unknown as of the
date hereof.
5. This Resolution shall be effective upon adoption. Violation of this Resolution shall render
consent to the Transaction null and void. The City shall provide written notice of any
violation of this Resolution.
PASSED, ADOPTED AND APPROVED this 28th day of January, 2019.
Mayor
ATTEST:
City Clerk
544487v1 RJV VS105-10 2