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08-26-02 CCITEM 5. 1, CLAIMS LIST CITY COUNCIL MEETING AUGUST 26, 2002 TO: Judy Hudson Attached is the Claims List for the City Council. For more details, please refer to the Check Detail Registers. If you have any questions regarding this service, please let me know. Claims Register 8-14-2002 $ 762.54 8-15-2002 $1,257,576.43 GRAND TOTAL $1,258,338.97 If you have any questions or if you would like to review this list further, please let me know. Kathy Grover Bookkeeper CITY OF OTSEGO 08/15/02 1:47 PM Page 1 *Check Summary Reqister@ AUGUST 2002 FILTER: None Name Check Date Check Amt 10100 BANKOFELICRIVER UnPaid AIRGAS, INC. $19.75 UnPaid AMERICAN ENGINEERING TESTING $680.60 UnPaid ARCON CONSTRUCTION CO $590,858.64 UnPaid COLSERG-YOUNG CONSTRUCTION INC $1,000.00 UnPaid CONSTRUCTION BULLETIN $347.73 UnPaid CROW RIVER FARM EQUIPMENT $336.44 UnPaid DRAKE CONSTRUCTION, INC. $1,000.00 UnPaid ECM PUBLISHERS INC $202.29 UnPaid FENNA HOMES $1,000.00 UnPaid G & K TE)(TILE LEASING SYSTEM $563.84 UnPaid GOPHER STATE ONE -CALL INC $3.80 UnPaid GRIDOR CONSTR., INC. $447,315.00 UnPaid HARDRIVES INC $199,571.47 UnPaid ICMA RETIREMENT TRUST $422.31 UnPaid JACQUIE ROGNLI $875.00 UnPaid NBL FINANCIAL CORPORATION $1,000.00 UnPaid NORTHERN TOOL & EQUIPMENT CO $9.57 UnPaid NORTHWEST ASSOC CONSULTANTS $7,531.13 UnPaid PUBLIC EMPLOYEES RE71REMENT FD $1,271.38 UnPaid RODNEY OR DIANA WUORNOS $1,000.00 UnPaid SCHUETT GENERAL CONTRACTORS IN $1,000.00 UnPaid SCOTT OR VICKIE RAMSIER $1,000.00 QnPajd WOODLINE SAWMILLS INC $497.88 iPaid WRIGHT COUNTY AUDITOR -TREASURE $12.00 .nPajd WRIGHT COUNTY RECORDER $20.00 UnPaid XCELENERGY $37.67 Total Checks 1.257,576.43 FILTER: None CITY OF OTSEGO 08/15/02 1:47 PkA. Page 1 *Check Detail ReqisterC AUGUST 2002 10100 BANKOFELKRIVER Unpaid AIRGAS, INC. E101-43100-210 Operating Supplies (GENERAL) $19.75105628327 ACET/HA2MAT/OXY Total AIRGAS, INC. $19.75 RING TESTING 'Cn E 420-43100-302 Engineering Fees $680.60 19438 PAGE CONSTRUCTION Total AMERICAN ENGINEERING TESTING $680.60 __ -1111-111-- -11 Unpaid ARCON CONSTRUCTION CO E 423-43100-530 Improvements Other Than BIdgs $590,858.64 —PAY 1 QUADAY & 91 ST ST Total ARCON CONSTRUCTION CO $590,858.64 Unpaid COLBERG-YOUNG CONSTRUCTION INC .............. E 702-41400-310 Miscellaneous $1,000.00 8198 PALMGREN LNDSCP REFUND Total COLBERG-YOUNG CONSTRUCTION INC $1,000.00 Unpaid CONSTRUCTION BULLETIN E 434-43100-350 Print/Binding (GENERAL) $115.91 2106949 85TH ST EXTENTION E434-43100-350 Print/Bincling (GENERAL) $115.91 2112276 85TH ST EXTENTION E434-43100-350 Print/Bincling (GENERAL) $115.91 2118122 85TH ST EXTENTION Total CONSTRUCTION BULLETIN $347.73 Unpaid CROW RIVER FARM EQUIPMENT E101-43100-220 Repair/Maint Supply (GENERAL) $336.44 91348 REPAIR/MAINT SUPPUES Total CROW RIVER FARM EQUIPMENT $336.44 Unpaid DRAKE CONSTRUCTION, INC. E 702-41400-310 Miscellaneous $1,000.00 8265 PARELL AVE LNDSCP REFUND Total DRAKE CONSTRUCTION, INC. $1,000.00 Unpaid ECM PUBLISHERS INC . ................................. E101-41400-350 Print/Binding (GENERAL) $202.22132830 AD FOR BID Total ECM PUBLISHERS INC $202.22 Unpaid FENNA HOMES E 702-41400-310 Miscellaneous $1,000.00 8336 PADRE CIR LNDSCP REFUND Total FENNA HOMES $1,000.00 Unpaid G & K TEXTILE LEASING SYSTEM E 101-43100-225 Uniforms $66.62 817635 UNIFORMS E 101-41940-390 Contracted Services $80.09 822483 MATS E 101-43100-225 Uniforms $99.15 822484 UNIFORMS E 101-43100-225 Uniforms $76.77 827278 UNIFORMS E 101-41940-390 Contracted Services $81.78 832072 MATS E 101-43100-225 Uniforms $73.26 832073 UNIFORMS E 101-43100-225 Uniforms $86.17 836866 UNIFORMS Total G & K TEXTILE LEASING SYSTEM $563.84 Unpaid GOPHER STATE ONE -CALL INC E 101-41400-310 Miscellaneous $3.80 2070616 LOCATE TICKETS Total GOPHER STATE ONE -CALL INC $3.80 J�pZ GRIDOR CONSTR., INC. . ..... ............ E 429-43256-500 Capital Outlay (GENERAL) $447,315.00 5 EAST WWT PHASE 2 Total GRIDOR CONSTR., INC. $447�315.00 U n paid HARDRIVES INC E 420-43100-530 Improvements Other Than Bldgs $199,571.47 PAY I PAGE AVE CITY OF OTSEGO 08115/02 1:47 PM Page 2 Theck Detail Reqister@ AUGUST 2002 Check Amt Invoi ce Comment Total HARDRIVES INC $199,571.47 Unpaid ICMA RETIREMENT TRUST G 101-21705 Other Retirement $230.00 PPE 8/3 E 101-41400-121 PERA $192.31 PPE 8/3 CK DTO 817 Total ICMA RETIREMENT TRUST $422.31 JACQUIE ROGNLI ................................ E 101-41400-347 Newsletter $875-00 2002-05 JULY/AUG VIEW Total JACQUIE ROGNLI $875.00 Unpaid NBL FINANCIAL CORPORATION E 702-41400-310 Miscellaneous $1,000.00 7904 PALMGREN LNDSCP REFUND Total NIBL FINANCIAL CORPORATION $1,000.00 Unpaid NORTHERN TOOL & EQUIPMENT CO .............. .. ...... E101-43100-203 Supplies -General $9.57 06771291 BLUE TARP Total NORTHERN TOOL& EQUIPMENT CO $9.57 Unpaid NORTHWEST ASSOC CONSULTANTS G 701-22322 REGER CUP $86.48 12008 REGER G701-21978 KreusarCUP $260.69 12008 HOOFBEATS/HEARTBEATS G 701-22328 WATERFRONT EAST $84.50 12008 WATERFRONT EAST G 701-22306 DeMars Plat $532-59 12008 DEMARS G701-22320 RETAIL OFFICE SPACE $874.31 12008 RETAIL WATERFRONT G 701-22313 BLACKWOODS SITE $117.00 12008 BLACKWOODS G701-22315 OTSEGO MEADOWS GOLF $136.50 12008 OTSEGO MEADOWS GOLF G 701-22324 RIVERPOINTE 3 $237.72 12008 RIVERPOINTE 3 G 701-22325 101 MARKET $588-66 12008 NATHE 101 MARKET G 701-22326 VALERIUS $58-50 12008 VALERIUS REZONE G 701-22318 RIVERVIEW BANK $65.00 12008 WATBANK/OFFICE E 101-41570-303 Planning Fees $55-00 12009 ZONING MAP UPDATE E 203-45210-303 Planning Fees $88.00 12009 SCHOOL KNOLL E 101-41570-303 Planning Fees $249.48 12009 SUBDIV ORD E 101-4157G-303 Planning Fees $700.21 12009 GENERAL E 101-41570-303 Planning Fees $0.85 12009 03 BUDGET E 101-41570-303 Planning Fees $1.89 12009 PHEASANT DREAMS E 101-42420-310 Miscellaneous $205.75 12010 CODE ENFORCEMENT E 101-41570-303 Planning Fees $1,600.00 12011 MEETINGS E 101-41570-303 Planning Fees $1,120.00 12012 CITY CODE E 101-41570-303 Planning Fees $468-00 12013 ZONING ORDINANCE Total NORTHWEST ASSOC CONSULTANTS $7,631.13 Unpaid PUBLIC EMPLOYEES RETIREMENT FD G 101-21704 PERA $609.98 PPE 8/3 CK 8a E 101-41400-121 PERA $314.65 PPE 8/3 CK 8/7 E 101-41550-121 PERA $110.60 PPE 8/3 CK 8/7 E 101-43100-121 PERA $236.15 PPE 8/3 CK 8/7 Total PUBLIC EMPLOYEES RETIREMENT FD $1,271.38 Unpaid RODNEY OR DIANA WUORNOS E 702-41400-310 Miscellaneous $1,000.00 7842 PARELL LNDSCP REFUND Total RODNEY OR DIANA WUORNOS $1,000.00 Unpaid SCHUETT GENERAL CONTRACTORS IN E 702-41400-310 Miscellaneous $1,000.00 7926 PALMGREN LNDSCP REFUND Total SCHUETT GENERAL CONTRACTORS IN $1.000.00 CITY OF OTSEGO 08/15/02 1:47 PM Page 3 *Check Detail Re_qister@ AUGUST 2002 k Amt Invoice Comment---- ------------- -------------------- .............. .................. ......... -_1 ....... Uwii `­_­,,,,,­­,_­­�� ------ ��­_, _SCOTT OR VICKIE RAMSIER E 101-43160-322 Utilities $37.67 054157132';v" RIVERPOINTE Total XCEL ENERGY $37.67 10100 BANKOFELKRIVER 1,257,576.43 '-TER: None E 702-41400-310 Miscellaneous $1,000.00 10134 JANDEL LNDSCP REFUND Total SCOTT OR VICKIE RAMSIER $1.000.00 Un WOODLINE SAWMILLS INC E 203-45210-310 Miscellaneous $497.884718 NATURE WALK Total WOODLINE SAWMILLS INC $497.88 Unpaid WRIGHT COUNTY AUDITOR -TREASURE E101-41400-203 Supplies -General $12.00 02-083 TOTAL MARKET VALUE Total WRIGHT COUNTY AUDITOR -TREASURE $12.00 Unpaid WRIGHT COUNTY RECORDER E 101-41400-340 Recording Few $20.00 DAVID LEFEBVRE RECORDING FEES Total WRIGHT COUNTY RECORDER $20.00 Unpaid XCELENERGY ........................... E 101-43160-322 Utilities $37.67 054157132';v" RIVERPOINTE Total XCEL ENERGY $37.67 10100 BANKOFELKRIVER 1,257,576.43 '-TER: None CITY OF OTSEGO *Check Summary Register@ AUGUST 2002 UnPaid MARSHALL CONCRETE PRODUCTS INC $762.54 Total Checks $762.54 FILTER: None 08/14/02 10:47 AM Page 1 CITY OF OTSEGO 08/14/02 10:47 AM Page I *Check Detail Reqister@ AUGUST 2002 10100 BANKOFELKRIVER Unpaid MARSHALL CONCRETE PRODUCTS INC E 203-45210-501 Equipment $762.54 088414 CEMENT FOR PARK Total MARSHALL CONCRETE PRODUCTS INC $762.54 10100 BANK OF ELK RIVER $762.54 FILTER: None ITEM 6. 1. 114011tTOWRIST ASSOCIATab 111114c, 5775 Wayzata Boulevard, Suite 555, St. Louis Park, MN 55416 Telephone: 952-595.9636 Facsimile: 952.595.9837 planners@nacplanning.com MEMORANDUM TO: Otsego Mayor and City Council FROM: Mike Darrow / Daniel Licht R E.- Otsego- Riverview Community Bank; Site Plan/Final Plat DATE: August 20, 2002 APPLICATION DATE: August 7, 2002 NAC FILE: 176.02-02.29 CITY FILE: 2002 - Please be advised that the Planning Commission considered the application of the Welsh Development, LLC for site plan and final plat to construct a 10,840 square foot bank on the southeast corner of 88 th Street and CSAH 42. This meeting was not a public hearing as this site was preliminary platted in 1994 as part of the MRD Commercial Park. The applicants were in attendance at the meeting. The applicants stated that they had discussed the issue of keeping two parking stalls at the east end of the two parking rows on the north end of the building. Staff had discussed this issue with the applicants and recommended allowing these two stalls. The applicants also asked about building a freestanding sign on the northwest corner of the site. They would like to begin construction on the sign immediately. The City Administrator stated that an amendment to the sign ordinance to allow such a sign in the permitted setback could be amended as early as November. The applicants were instructed to construct only those signs that are allowed under City Code. The Planning Commission voted 6-0 to recommend approval of the applications, subject to the conditions as outlined below. The applicantions will be considered at the City Council meeting on August 26, 2002 at 6:30 PIVI. A. Motion to approve site and building plans and a final plat for MRD 2nd Addition, subject to the following conditions: The site plan is revised to illustrate the 20 foot setback requirement from the rear (east) lot line. 2. The landscape plan is revised to add trees along 88th Street in order to provide one tree every 40 feet, to provide trees or a shrub line along the south lot line of the property, and specify foundation planting details, subject to review and approval of City Staff. 3. The applicant is to submit a photometric light plan showing fixture types, locations, and illumination patterns, subject to approval of City Staff. 4. The site plan is modified to eliminate four stalls at the north end of the row of parking along the east lot line. All off-street parking and drive aisles are to be surfaced with asphalt or concrete and with painted stalls. 5. All signs shall conform with Section 37 of the Zoning Ordinance. 6. The trash enclosure must be constructed of materials consistent with those of the principal building with additional shrubs planted on the east and south sides of the trash enclosure, subject to review and approval of City Staff. 7. Park and trail dedication requirements are subject to review of the Parks and Recreation Commission and approval of the City Council. 8. All grading, stormwater drainage, utilities, easements, and access issues are subject to review and approval of the City Engineer. 9. The applicant is to submit a final plat in the form required by Sections 21-6-3 and 21-6-4 of the Subdivision Ordinance together with a sketch plan for Block 2 of the MRD Commercial Park preliminary plat. 10. The applicant shall enter into a development contract with the City and pay all fees and securities required by it, subject to review and approval of the City Attorney. 11. Comments of other City Staff. B. Motion to deny the application based upon a finding that the request is inconsistent with the Comprehensive Plan, Zoning Ordinance, and Subdivision Ordinance. 2 C. Motion to table the request. PC. Mike Robertson Judy Hudson Andy MacArthur Ron Wagner Dan Russ Lynn Sloat CITY OF 0 T S E G 0 WRIGHT COUNTY, NUNNESOTA APPLICANT: Welsh Development, LLC. 08-21-02 FINDINGS & DECISION SITE AND BUILDING PLANS/FINAL PLAT APPLICATION: Request for site and building plan review and final plat approval for construction of a 10,840 square foot bank and office use at the southeast corner of CSAH 42 and 88 1h Street. CITY COUNCIL MEETING: 26 August 2002 FINDINGS: Based upon review of the application, the recommendation of the Planning Commission, and evidence received, the City Council of the City of Otsego now makes the following findings of fact: A. The legal description of the property is attached as Exhibit A. B. The property lies within the Sanitary Sewer Service District and is guided for commercial land uses by the Otsego Comprehensive Plan, as amended. C. The property is zoned B-3, General Business District; Bank and office uses are a permitted uses within the B-3 District. D. The planning report dated 14 August 2002 prepared by the City Planner, Northwest Associated Consultants, Inc., is incorporated herein. E. The engineering review dated 15 August 2002 prepared by the City Engineer, Hakanson Anderson Associates, Inc., is incorporated herein. F. The Otsego Planning Commission considered the application at their regular meeting on 19 August 2002. Upon review of the application and evidence received, the Otsego Planning Commission recommended by a 6-0 vote that the City Council approve the request based on the aforementioned findings. DECISION: Based on the foregoing information and applicable ordinances, the request for site and building plan review and final plat for Riverview Community Bank is hereby approved based on the most current plan and information received to date, subject to the following conditions: The site plan is revised to illustrate the 20 foot setback requirement from the rear (east) lot line. 2. The landscape plan is revised to add trees along 88th Street in order to provide one tree every 40 feet, to provide trees or a shrub line along the south lot line of the property, and specify foundation planting details, subject to review and approval of City Staff. 3. The applicant is to submit a photometric light plan showing fixture types, locations, and illumination patterns, subject to approval of City Staff. 4. The site plan is modified to eliminate four stalls at the north end of the row of parking along the east lot line. All off-street parking and drive aisles are to be surfaced with asphalt or concrete and with painted stalls. 5. All signs shall conform with Section 37 of the Zoning Ordinance. 6. The trash enclosure must be constructed of materials consistent with those of the principal building with additional shrubs planted on the east and south sides of the trash enclosure, subject to review and approval of City Staff. 7. Park and trail dedication requirements are subject to review of the Parks and Recreation Commission and approval of the City Council. 8. All grading, stormwater drainage, utilities, easements, and access issues are subject to review and approval of the City Engineer. 9. The applicant is to submit a final plat in the form required by Sections 21-6-3 and 21-6-4 of the Subdivision Ordinance together with a sketch plan for Block 2 of the MRD Commercial Park preliminary plat. 10. The applicant shall enter into a development contract with the City and pay all fees and securities required by it, subject to review and approval of the City Attorney. PASSED by the Otsego City Council this 26th day of August, 2002. Attest: CITY OF OTSEGO By: Larry Fournier, Mayor Judy Hudson, Zoning Administrator/City Clerk 2 CITY OF OTSEGO CITY COUNCIL CITY ENGINEER'S AGENDA August 26, 2002 Item 7. 1: Consider Pay Estimate No. 2 for City of Otsego Project #02-03 (Waterfront) Item 7.2: Consider Pay Estimate No. 2 for City of Otsego Project #02-01 (Page Avenue — 79' Street to 85t' Street) Item 7.3-. Consider Awarding City of Otsego Project #02-09 (85t' Street Bike Path — Page Avenue to School Knoll Park Trail) Item 7.4: Any Other Engineering Business G:\Municipal�AOTSEGO\Agendas\councilagenda2O.doc August 20, 2002 Honorable Mayor & City Council City of Otsego 8899 Nashua Avenue NE Otsego, MN 55330 Pay Estimate No. 2 City of Otsego Improvement Project 02-03 Quaday Avenue NE and 91st Street NE RE: Improvement Project No. 02-03, Quaday Avenue NE and 91st Street NE Contractor: Arcon Construction Contract Amount: $1,054,085.50 Award Date: Completion Date: Dear Council Members: The following work has been completed on the above referenced project: Bid Schedule "A" - Streets ITEM 7A Item Description Contract Quantity Unit Unit Price Used To Date Extension 1 Mobilization 1 LS $20,000.00 1 $20,000.00 2 Remove Culvert 94 LF $6-00 94 $564.00 3 Remove Bituminous Pavement 50 SY $3.001 0 $0.00 4 Sawinq Bit Pavement (Full Depth) 200 LF $4.001 0 $0.00 5 _ Salvage & Reinstall Sign 1 EACH $120.00 0 $0.00 6 Common Excavation (P) 7,070 CY $3.33 7070 $23,543.10 7 Topsoil Stripping (P) 15,260 CY $1.15 15260 $17,549.00 8 Class 5 Aggregate Base (7) 3,300 TON $10.87 4022.5 $43,724.58 9 Mill Bituminous Surface 25 SY $5.73 0 $0.00 10 Type LV 4 Wearing Course Mixture (C) 1,190 TON $32.73 0 $0.00 11 Type LV 3 Non -Wearing Course Mixture (B) 1,480 TON $28.30 0 $0.00 12 Bituminous Material For Tack Coat 550 GAL $1.00 0 $0.00 13 Adjust Valve Box 34 EACH $150.00 0 $0.00 14 Adjust Frame & Ring Casting 16 EACH $300.00 0 $0.00 15 Raise Ex. Manhole (w/ Barrel Sections) 6 VF $160.00 6 $960.00 16 Raise Ex. Valve Box 1 VF $150.00 6 $900.00 17 Raise Ex. Hydrant (V Hydrant Extension) 1 EACH $285.00 3 $855.00 18 Stamped Concrete Sidewalk (4") 1,700 SY $57.00 0 $0.00 19 Stamped Concrete Sidewalk (6") 150 SY $62.00 0 $0.00 20 Construct Pedestrian Curb Ramp 6 EACH $200.00 0 $0.00 21 Concrete Median (6") 470 SY $28.50 0 $0.00 22 Concrete Curb & Gutter Design B61 8 5,600 LF $7.00. 4267 $29,869.00 23 6" Concrete Apron / Valley Gutter 250 SY $29.001 205 $5,945.00 24 Traffic Control 1 LS $2,500.00 1 $2,500.00 25 Sign Panels, Type C 420 $21.50 0 $0.00 26 Pavement Message (Right Arrow) - Epoxy 24 EACH $76.001 0 1 $0.00 27 Pavement Message (Left Arrow) - Epoxy 20 1 EACH $76.001 0 1 $0.00 FILE Share\Municipai/aotsegolot347pe.xls SHEET. PAY ESTIMATE 2 Pay Estimate No. 2 ITEM 7.1 City of Otsego Improvement Project 02-03 Quaday Avenue NE and 91st Street NE Bid Schedule "A" - Streets (Continued) Item Contract Description Quantity Unit Unit Price Used To Date Extension 28 Pavement Message (Thru Arrow) - Epoxy 20 EACH $76.001 0 $0.00 29 4" Solid Line White - Epoxy 3,000 LF $0.36 0 $0.00 30 12" Solid Line White - Epoxy 450 LF $1.25 0 $0.00 31 24" Stop Line White - Epoxy 185 LF $2.50 0 $0.00 32 Bale Check - 30 EACH $5.00 0 $0.00 33_ Silt Fence, Type Machine Sliced 4,500 LF $1.75 0 $0.00 34 Seeding - Type Lawn Restoration 3 ACRE $1,500.00 0 $0.00 35 Soddinq - Type Lawn Restoration 2,250 SY $2.50 0 $0.00 36 Seeding Mixture - 60B - 300 LBS $2.20, 0 $0.00 37 Commercial Fertilizer, 10-10-10 1,500 LBS so -25 T o $0.00 38 Hydraulic Soil Stabilizer Type 5 1 TON $630.00 0 $0.00 L 39�Hydraulic Soil Stabilizer Type 6 3 TON $630.00 0 $0.00 Total Bid Schedule "A" Bid Schedule "B"- Watermain $146,409.68 '�em Description Contract Quantity Unit Unit Price Used To Date Extension 40 Connect to Existing Watermain 1 LS - $300.00 2 $600.00 41 16" Ductile Iron Pipe Cl 52 1440 LF $28.95 1440 $41,688.00 42 12" Ductile Iron Pipe Cl 52 790 LF $19.55 790 $15,444.50 43 8" Ductile Iron Pipe Cl 52 3425 LF $17.15 3435 $58,910.25 44 6" Ductile Iron Pipe Cl 52 365 LF $22.80 365 $8,322.00 45 Ductile Iron Fittings 11,000 LB $1.65 6901 $11,386.65 46 _ 16" Butterfly Valve and Box 4 EACH $1,425.00 4 $5,700.00 47 12" Butterfly Valve and Box 2 EACH $800.00 2 $1,600.00 48 8" Gate Valve and Box 18 EACH $675.00 13 $8,775.00 49 6" Gate Valve and Box 17 EACH $495.00 6 $2,970.00 50 _ Hydrant 8 EACH $1,670.00 6 $10,020.00 51 Hydrant Extension 24 LF 5 $1,425.00 52 Salvage and Reinstall 16" P1 1 EACH $100.00 1 $100.00 2" Insulation 500 SF $1.40 448 $627.20 t53 54 12" DIP CL 52, Fastite Jt, Installed by Jacking and Boring of 20" Steel Casing 230 LF $165.00 245 $40,425.00 Total Bid Schedule "B" FILE: Share\MunicipaVaotsego/o(347pe.xls SHEET: PAY ESTIMATE 2 $207,993.60 Pay Estimate No. 2 ITEM 7.1 City of Otsego Improvement Project 02-03 Quaday Avenue NE and 91st Street NE Bid Schedule "C" - Storm Sewer Item Description Contract Quantity Unit Unit Price Used To Date Extension 55 15" PVC SDR 26 16-18' Deep 203 LF $61.2-5 2-03 $12,433.75 56 15" PVC SDR 26 18-20'Deep 690 LF $61.25 690 $42,262.50 57 12" PVC SDR 26 18-20'Deep 427 LF $60.50 413 $24,986.50 58 12" PVC SDR 26 20-22'Deep 110 LF $60.501 110 $6,655.00 59 10" PVC SDR 26 16-18'Deep 20 LF $55.95 20 $1,119.00 60 10" PVC SDR 26 18-20'Deep 10 LF $55.95- 50 $2,797.50 61 10" PVC SDR 26 20-22' Deep 416 LF $62.05 346 $21,469.30 62 10" DIP CL 52, Fastite Jt., 10-12' Deep - 10 LF $69.10 0 $0.00 63 10" DIP CL 52, Fastite Jt., 12-14'Deep 9 LF $69.10 -9 $621.90 64 10" DIP CL 52, Fastite Jt., 14-16'Deep 10 LF $69-10 -10 - $691.00 65 10" DIP CL 52, Fastite Jt., 16-18' Deep 36 LF $69.10 3-6 - $2,487.60 66 10" DIP CL 52, Fastite Jt., 18-20' Deep - 10 LF $69.10 10 $691.00 67 10" DIP CL 52, Fastite Jt., 20-22' Deep 60 LF $69.10 60 $4,146M 68 8" PVC SDR 35 0-8' Deep 10 LF $15.15 0 $0.00 69 8" PVC SDR 35 8-10' Deep 252 LF $15.151 232 -T3-,51480 70 8" PVC SDR 35 10-12'Deep 10 LF $15.15 0 $0.00 71 6" PVC SDR 35 Service Lateral 360 LF $17.40 360 $6,264.00 72 Standard Sanitary Sewer Manhole 0-8' Deep 11 EA $1,910-00 11 $21,010.00 73 74 Manhole Overdepth Outside Drop Connection 0-2' 126 1 VF EA $135.00 $960.00 ---� -17 1 $15,795.00 $960.00 Extra Depth Outside Drop Connectioin >2' 8 VF $65.001 8 $520.00 r75 76 -77 Connect to Existing Sanitary Sewer at Manhole 1 EA $1,180.00 1 $1,180.00 6" PVC Riser Pipe 67 VF $17.40 57 $991.80 78 15"x 6" PVC Wye 2 EA $185.00 2 $370.00 79 12"x 6" PVC Wye 3 EA $125.00 3 $375.00 80 1 0"x 6" PVC Wye 2 EA $105.00 2 $210.00 81 8"x 6" PVC Wye 1 EA $65.001 1 $65.00 82 12" Pluq 1 EA $60.00 1 $60.00 83 _ 10" Plug 2 EA $55.00 -2- $110.00 84 6" Plug 1 9 EA $30.00 9 $270.00 85 _ 10" DIP CL 52, Fastite Jt., Installed by Jacking and Boring of 18" Steel Casing 260 LF $180.00 260 $46,800.00 86 Televise Sanitary Sewer 2533 LF $0.601 --T-- $0.00 Total Bid Schedule "C" Bid Schedule "D" - Storm Sewer $218,856.65 Item Description Contract Quantity Unit Unit Price Used To Date Extension 87 _ 42" RC Pipe Apron 1 EACH $1,085.00 1 $1,085.00 88 _ 36" RC Pipe Apron 1 EACH $900.00 1 $900.00 89 45" x 73" RC Arch Pipe Apron w/ Dropwall 1 EACH $1,545.00, 1 $1,545.00 90 _ 15" RC Pipe Sewer Design 3006 CIL V (all depths) 80 LF $29.80 79 $2,354.20 91 18" RC Pipe Sewer Design 3006 CL III (all depths) 48 LF $31.50 $1,512.00 92 21 " RC Pipe Sewer Design 3006 CL III (all depths) 61 LF $32.50 ---48 61 $1,982.50 93 _ 27" RC Pipe Sewer Design 3006 CIL III (all depths) 160 LF $37.45 160 $5,992.00 94 _ 30" RC Pipe Sewer Design 3006 CL III (all depths) 64 LF $44.50 65 $2,892.50 95 _ 33" RC Pipe Sewer Design 3006 CL III (all depths) 275 LF $46.751 275 $12,856.25 96 36" RC Pipe Sewer Design 3006 CL III (all depths) 59 LF $55.60 59 $3,280.40 97 142" RC Pipe Sewer Design 3006 CIL III (all depths) 864 LIF $31.051 820 $25,461.00 FILE: Share\Municipai/aotsego/ot347pe.xis SHEET: PAY ESTIMATE 2 Pay Estimate No. 2 City of Otsego Improvement Project 02-03 Quaday Avenue NE and 91st Street NE Iid Schedule "D" - Storm Spwpr ff-nntini is-ril ITEM 7.1 Total Bid Schedule "D" $199,364.50 Summary Of Work Completed To Date: ld Schedule "A" - STREETS $146,409.68 Contract Bid Schedule "C" - SANITARY SEWER Used To Item Description Quantity Unit Unit Price Date Extension 98_ 48" RC Pipe Sewer Design 3006 CL III (all depths) 105 LF 2-5 1-05 $7,796.25 99 45" x 73" RC Arch Pipe Sewer CL III (all depths) 651 LF _$T4 $129.15 651 $84,076.65 100 15" Pipe Plug 4 EACH $60.00 4 $240.00 101_ 18" Pipe Plug 2 EACH $65.00 2 $130.00 102 42" Pipe Plug 2 EACH $140.00 2 $280.00 103 45" x 73" RCPA 45" Bend 2 EACH $2,180.00 2 $4,360.00 104 45" x 73" RCPA 350 Bend 1 EACH $2,180.00, 1 $2,180.00 105 Connect to Existing Storm Sewer i EACH $480.00 1 $480.00 106 Construct Draingage Structure Design 48" 4020 3 EACH $1,225.00 3 $3,675.00 107 Construct Draingage Structure Design 66" 4020 __2 EAC H $1,985.00 2 _�_3_,97000 108 do'nstruct Draingage Structure Design 72" 4020 1 EACH $2,315.00 _1 $23-15.00 109 Construct Draingage Structure Design 78" 4020 2 EACH $3,130.00 _2 $6,260.00 110 Construct Draingage Structure Design 84" 4-020 1 EACH $3,965.001 —1— $3,965.00 111 Construct Draingage Structure Design 90" 4020 0 EACH $0.00 000 0 $0.00 112 Construct Draingage Structure Design 96" 4020 1 EACH 1!$4,040.00 t _1 $4,040.00 1 Construct Draingage Structure Design 120" 4020 1 EACH 7 065 00 $ 'g —1 $7,065.00 — 114 Random RipRap Class 111 100 CY $55.00 106.65 $5,865.75 — 11 5 Random RipRap Class IV 40 CY $55.00 ___1 ---T--$2,805.00 5__ Total Bid Schedule "D" $199,364.50 Summary Of Work Completed To Date: ld Schedule "A" - STREETS $146,409.68 -id Schedule "B" - WATERMAIN Bid Schedule "C" - SANITARY SEWER $207,993.60 $218,856.65 Bid Schedule"D" STORM SEWER $199,364.50 WORK COMPLETED TO DATE: $772,624.43 LESS 10% RETAINAGE: — $77,262.44 LESS PAY ESTIMATE NO. I — $590,858.64 WE RECOMMEND PARTIAL PAYMENT OF: $104,503.34 APPROVALS: CONTRACTOR: Arcon Construction Certification by Contractor: I certify that all items and amounts are correct for the work completed to date. Signed: Title: Date: ENGINEER: Certification by Engineer: We recommend payment for work and quantities as shown. HAKANSON ANDERSON ASSOCIATES, INC. Signed: Title: OWNECITY OF OTSEGO Signed: Date: Title: Date: FILE: Share\Municipal/aotsegoiot347pe.xis SHEET: PAY ESTIMATE 2 4 Pay Estimate No. 2 City of Otsego August 21, 2002 MSAP 217-103-02 Page Avenue Honorable Mayor & City Council City of Otsego 3899 Nashua Avenue NE Otsego, MN 55330 RE: MSAP 217-103-02, Page Avenue NE Contractor: Hardrives, Inc. Contract Amount: Award Date: Completion Date: Dear Council Members: The following work has been completed on the above referenced project: Bid Schedule "A" - Streets ITEM 7.2 Item Description Contract Quantity Unit Unit Price Used To Date Extension 1 Mobilization 1 LS $5,500.00 1 $5,500.00 2 Clearing and Grubbing 1 LS $5,400.00 1.12 $6,048.00 3 Pavement Marking Removal (4" Solid) 1360 LF $0.38 $0.00 4 Remove Sewer Pipe (Storm - 18" RCP) 90 LF $5.40 105 $567.00 5 Remove Pipe Drain (8" PVC) 40 LF $5.40 40 $216.00 6 Remove Concrete Curb & Gutter 170 LF $3.45 200 $690.00 7 Remove Bituminous Pavement 1665 SY $1.30 1652 $2,147.60 8 Remove Catch Basin 1 EACH $105.00 1 $105.00 9 Sawing Bit Pavement (Full Depth) 246 LF $215 351 $965.25 10 Salvage Metal Culverts (15" CMP) 48 LF $5.40 122 $658.80 11 Salvage Retaining Wall 50 SF $8.00 1 $8.00 12 Salvage & Reinstall Sign 2 EACH $130.00 1 $130.00 13 Common Excavation (P) 5175 CY $3.70 6502 $24,057.40 14 Common Borrow - LV 1620 CY $8.10 1998 $16,183.80 15 Class 5 Aggregate Base (6") 7911 TON $7.50 7052 $52,890.00 16 Mill Bituminous Surface 25 SY $11.50 $0.00 17 Type LV 4 Wearing Course Mixture (B) 2685 TON $29.35 457.25 $13,420.29 18 Type LV 3 Non -Wearing Course Mixture (B) 2655 TON $26.90 2572.17 $69,191.37 19 Bituminous Material For Tack Coat 995 GAL $1.00 80 $80.00 20 Reconstruct Retaining Wall 50 SF $15.00 50 $750.00 21_ Adjust Gate Valve 6 EACH $160.00 $0.00 22 AdJust Frame & Ring Casting --3 EACH $180.00 $0.00 23 Concrete Curb & Gutter Design B618 - 7070 LF $7.65 6894 $52,739.10 24 6" Concrete Valley Gutter 86.3 SY $31.35 86.3 $2,705.51 25 6" Concrete Apron 81 SF $3.75 69 $258.75 26 Relocat Mailbox Support 1 EACH $70.00 2 $140.00 27 Traffic Control 1 LS $4,300.00 1 $4,300.00 FILE: Share\Municipal/aramsey/ot344PE.xls SHEET. PAY ESTIMATE 2 Pay Estimate No. 2 City of Otsego IVISAP 217-103-02 Page Avenue Bid Schedule "A" - Streets (Continued) ITEM 7.2 Item Description Contract Quantity Unit Unit Price Used To Date Extension 28 Sign Panels, Type C 110.25 SF $21.00 95.25 $2,000.25 29 Pavement Message (Left Arrow) - Epoxy 1 EACH $162.00 2 $0.00 30 Pavement Message (Right Arrow) - Epoxy 2 EACH $162.00 1 $0.00 31 Pavement Message (Left-Thru Arrow) - Epoxy 1 EACH $324.00 314 $0.00 32 Pavement Message (Right-Thru Arrow) - Epoxy 1 EACH $324.00 734 $0.00 33 4" Double Solid Line Yellow - Paint 4715 LF $0.06 3305.5 $198.33 34 12" Solid Line White - Paint - 150 LF $0.06 52 $3.12 35 4" Double S lid Line Yellow - Epoxy 4715 LF $0.32 1 $0.00 36 4" Solid Line White - Epoxy 7300 LF $0.27 0 $0.00 37 12" Solid Line White - Epoxy 170 LF $4.30 1 $0.00 38 8" Solid Line Yellow - Epoxy 375 LF $1.08 3 $0.00 39 24" Stop Line White - Epoxy 76 LF $6.45 11 $0.00 40 Bale Check 24 EACH $6.65 17 $113.05 41 Silt Fence, Type Machine Sliced 1100 LF -- $1.95 1137 $2,217.15 42 Seeding - Type Lawn Restoration (Hydroseeding) 3.1 ACRE $1,075.00 $0.00 43 Sodding - Type Lawn Restoration 150 SY $4.30 $0.00 44 Seeding Mixture - 60B 310 LBS $3.25 $0.00 45 Commercial Fertilizer, 20-10-10 1550 LBS $0.38 $0.00 46, Hydraulic Soil Stabilizer Type 6 3.9 TON . $1,240.00 $0.00 Total Bid Schedule "A" Bid Schedule "B" - Storm Sewer $258,283.77 Item Description --C-ontract Quantity Unit Unit Price Used -To Date Extension 1 15" RC Pipe Apron 1 EACH $430.00 1 $430.00 2 21 " RIC Pipe Apron 2 EACH $605.00 2 $1,210.00 3 24" RC -Pipe Apron 1 EACH $685.00 1 $685.00 4 15" RC Pipe Sewer Design 3006 CL V (all depths) 310 LF $22.701 314 $7,127.80 5.18" RIC Pipe Sewer Design 3006 CL III (all depths) 760 LF $24.35 734 $17,872.90 6. 21" RC Pipe Sewer Design 3006 CL III (all depths) 501 LF $27.05 461 $12,470.05 7 24" RC Pipe Sewer Design 3006 CIL III (all depths) 33 LF $29.20 30 $876.00 8 21" Pipe Plug 1 EACH $95.00 1 $95.00 9 Connect to Existing Storm Sewer 1 EACH $324.00 0 $0.00 10 Install Salvage 15" CMP 48 LF $8.65 1 $8.65 11 Construct Drainage Structure 2' x 3' 3 EACH $1,155.00 3 $3,465.00 12 Construct Draingage Structure Design 48" 4020 10 EACH $1,535.00 11 $16,885.00 13 Construct Draingage Structure Design 54" 4020 1 EACH $1,865.00 1 $1,865.00 14 Random RipRap Class 111 30 CY $75.00 30 $2,250.00 -ital Bid Schedule "B" FILE: Share\Municipallaramsey/ot344PE.xis SHEET: PAY ESTIMATE 2 $65,240.40 Pay Estimate No. 2 ITEM 7.2 City of Otsego MSAP 217-103-02 Page Avenue Summary Of Work Completed To Date: Bid Schedule "A" - STREETS $258,283.77 Bid Schedule "B" - STORM SEWER $65,240.40 WORK COMPLETED TO DATE: $323,524.17 LESS 10% RETAINAGE: $32,3 52.42. LESS PAY ESTIMATE NO. 1 $199,571.47 WE RECOMMEND PARTIAL PAYMENT OF: $91,600.28 APPROVALS: CONTRACTOR: Hardrives, Inc. Certification by Contractor: I certify that all items and amounts are correct for the work completed to date. Signed: Title: Date: ENGINEER: Certification by Engineer: We recommend payment for work and quantities as shown. HAKANSON ANDERSON ASSOCIATES, INC. Signed: Title: OWNECITY OF OTSEGO Signed: Title: Date: Date: FILE: Share\Municipal/aramsey/ot344PE.xls SHEET: PAY ESTIMATE 2 3 Aug -21-02 02:28P QUOTE PROPOSAL C�ty of Otsego Improvement Project No. 02-08 85th Street NE Bike Path Bid Schedule "A" - Streets Item .No. S2ec. Ref, Description 1 2104,501 Remove Concrete Curb & Gutter 2 42105.501 Common Excavation (P) 3 2211.501 Class 5_t2REe _ ISZL2 Aaar gate Base 4 2350,501 TZDe LV 4 Wearin2 Course Mixture (B) 14 160, 00 2531.501 Concrete Curb & Gutter Desi-- 861s 7 2564.531 2564.603 "J� S�n Panels, Type C 12" Solid Line White - Epox 4 2575.501 F2� e Seedi�n2 - Type Lawn Restoration (Hydroseedin 50 2 �_2575.502 '-'J""'u4 5 ; 7 5.5; 3 2 SLeedin M' �d ixturd - 606 Co Commercial Fertilizer, 20-10-10 1 �-57-5 —6c)—q-LH--Y—drauiicso,, Stabilizer Type 6 P-02 417?e Estimated Number of Units Unit Unit Cost Ext nsion 64 LF -5qo- -A 2. 0, Co 75� CY -76 7--6- 17 4 60, 2c- 380 TON qo 14 160, 00 215 TON -50,00 10, '750, 00 64 L F 2-2,001 Hoo'co 18.75 S F 2,60 140 LF 10-00 0.5 75 ACRE LBS 5 Z27.20 250 LBS 0.63 TON QUOTE PROPOSAL City of Otsego Improvement Project No. 02-08 85th Street NE Bike Path Bid Schedule "A" - Streets Item No. Spec. Ref. Description Estimated Number of Units Unit Unit Cost Extension 1 1 2104.501 Remove Concrete Curb & Gutter 64 LF 0, SO G -7 2 2105.501 Common Excavation (P) 759 Cy . '. W� 3 2211.501 Class 5 Aggregate Base 380 TON -3V S-.4 C3 4 2350.501 Type LV 4 Wearing Course Mixture (B) 215 TON z 5 2531.501 Concrete Curb & Gutter Design B618 64 LF 1 -7, K51 + .4 0 6 2564.531 Sign Panels, Type C 18.75 SF -24,oal G3 7 -To 7 2564.603 12" Solid Line White - Epoxy 140 LF I, C-5- 1 4 Ca 1, Q-�. 8 2575.501 Seeding - Type Lawn Restoration (Hydroseeding) 0.5 ACRE J-4-Wa-zN1 j 4- -7�S,oq; 9 1 2575.502 iSeeding Mixture - 60B 75 LBS '76 a -7 7,,,m 10 2575.532 ornmercial Fertilizer, 20-10-10 250 LB qz,-� ls;z:l 11 1 2575.609 Hydraulic Soil Stabilizer Type 6 0.63 TON W9o,-," e 7..3 Total - Schedule "A';2.) 0 -Z F-1, �0 -V SUMMARY OF QUOTE: Schedule "A" - Bike Path TOTAL QUOTE shared docs/municipaUaotsegol :?a-) OLE-�L, lz<T -2 -2� , X W.X ,Q� �S- CITY OF OTSEGO REQUEST FOR COUNCEL ACTION August 22, 2002 ITEM NUMBER: ITEM DESCRIPTION: PREPARED BY: 8.1. Aslagson Septic System Public Hearing City Administrator 8.1. Aslagson Septic System. Andy MacArthur will have an order drawn up for the Council meeting if Council wishes to take action. Jerry Olson or myself will make the presentation. Mr. Aslagson has told me he will be at the hearing and that his only request is that this work should be assessed across four years rather than one year. STAFF RECOMMENDATION Order the work done immediately. The length of assessment will not have any effect on City finances. CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTIONNO. 2002-35 RESOLUTION ADOPTING NOTICE OF ABATEMENT WHEREAS, the City Building Inspector has identified the following City ordinance violations, Nuisance Ordinance Section 6-2-2 subd. C&F; Individual Sewage and Wastewater Treatment Ordinance Section 8.40 on that property located at 15972 62 d St. NE, Elk River, Minnesota and owned and/or occupied by Gary and Venessa Aslagson; and WHEREAS, notice of said violations were served upon the property owner and/or occupant on or about August 29, 2001, said notice setting forth the violations and providing a reasonable time period in which to come into compliance; and WHEREAS, the owners and/or occupants have failed to remedy the violations; and WHEREAS, the Office of the City Attorney on August 16, 2002 notified the owners and/or occupants of the City of Otsego's intent to consider abatement of the violations on the property, as set forth above, and of their right to appear in front of the City Council and present any testimony or evidence relative to this matter; and WHEREAS, the City did hold a hearing on August 26, 2002 at the Otsego City Hall at which time the owners and/or occupants had an opportunity to appear and be heard; and WHEREAS, the City Council has reviewed the evidence and materials presented and finds that the ordinance violations constitute public health and safety hazards, as defined by the City's nuisance ordinance and Individual Sewage and Wastewater Treatment Ordinance. THEREFORE, the City Council of the City of Otsego makes the following Findings and Order: 1. That the owners and/or occupants of the property identified above have created and are maintaining a public nuisance upon their property creating a hazard to public health and safety and as defined by the City's nuisance ordinance and Individual Sewage and Wastewater Treatment Ordinance. 2. That the owners and/or occupants are hereby given _ days from the date of service of this Notice of Abatement to abate those nuisances upon their property of which they were notified and provided opportunity to be heard. 3. That in the event that they fail to fully comply with this order the City Council directs the Building Inspector, City Administrator, Code Enforcement Attorney and City Attorney to proceed to cause abatement of the nuisances by the City, including procurement of contractors, storage, and any necessary Court orders to effectuate this Order. 4. That in the event that City action to abate the nuisances is necessary all City incurred costs, including legal and administrative fees, shall be billed to the owner and/or occupant of the property, and if not timely paid after billing said costs shall be certified to the County Auditor as an assessment against the described property. 5. The documents, reports, letters, pictures and other data supplied to the City Council are herein incorporated by reference. ADOPTEDthis 26t dayof Augu,;i- IN FAVOR: Mayor Larry Fournier; Councilmembers: Vern Heidner, Jerry Struthers, Suzanne Ackerman and Jerry Struthers OPPOSED: None K CITY OF OTSEGO arry F2�&r, fvlay-or x M, a N Ci� Clerk A A 91 w X, -t - m Irk Al 1--, 4, 4z� F1 �k R Jr 7 1P ZI M\ N L D # 39 T, Sto negai.e. m msor Poncti,--i Estates'4,%m z Cr!6s;n �,,Prairie 'creek ond',,j ' L ST NE on Pheasan Ridge LI Pheasant Ridge xr. —e Pointe OTSEGO v 7� MMMIL. 30 APPENDIX C M ppi I -A IMF Aar may go I 1� J FA TO:OTSEGO NU. 024 P. 1/5— NUMORANDUM To: Mike Robertson, Administrator From: Ronald 1. Wagner, P.E. Date: August 26, 2002 I�e: SOUthbound Quaday Avenue Access to 6AH 39 Cc: Jim Johnson, PE 130b Fields, Landcor Wayne Fingalson, PE A meeting was held today to discuss th�, type Of access from southbound Quaday Avenue Onto CSAH 39. 1! Currently, the design meets the Co PU ;I ve Agreement between the CitY and the County, The developer, Landcor, has 0 41'0� stated seveW real estate deals have fallen through specifically because of the restricted ac��.ss and has requested the Cooperative Agreement be amended. Landcor �requ that the SOUthbOUnd access from Quaday Avenue be open to full right out 0 y I ght out 0 )u I the "trigger" for M closure being the stacking Of northbound QuadaY Avenue cars sou of the north Right Of WaYlinL' Of CSAH 39. Added to the proposed amendment W _ I , astfipulations which require the title of properties south Of 9 1 "t St to have acknowledg I. Of the potential of AM clostre Of southbound Quaday Avenue access to CSAH 39 wh " 7 as the fmt stipulation is met and that no partW closure or driveway into the proposed station/convinence store,, lot is allowed, only full closure, I have attached my 8/15/2002 memo to E �Ow MY position On the south bound suggested Opening. I do have concern on the futur economics of the closure (who pays for the closure — probably the city) and political pnd/or legal battles when closure does occur have tried tO address this with the stip 'on regarding disclosure during sale of lots south of 91st St). I of closure on the title a;Issee the possibility of more U-turns from CSAH 39 west to CSAH 39 eastwith flffl so th,, "Ound Quaday Avenue access. My co eaga . James Johnson, iz ! , ed a letter to myself which I am attaching. The le , tte ints Out the possible probic "s c f the full access southbound Quaday Avenue right out and the positive points of�' 0 a . I th,e restricted right out as is designed and allowed by the ooper 've Agreement. ��401\Sjllr*d DoclULM'G'PA'\AD'SrsGO�901\2002\ct9Olmr6ot347.d CITY OF OTSEGO REQUEST FOR COUNCIEL ACTION August 22, 2002 ITEM NUMBER: ITEM DESCRIPTION: PREPARED BY: 8.2. Cable Ordinance City Administrator 8.2. The Council packet includes an ordinance (8.2) giving the Council the ability to grant a cable franchise, an analysis of the issues by attorney Bob Vose (8.3), and an ordinance awarding a cable franchise (8.4). As Bob Vose notes in his memo, the City can award a franchise to both applicants. If franchises are awarded to both applicants, the City would adopt an ordinance for each franchise awarded. The public hearing has already been held and closed for both Charter and WH Link. Andy recommends that they be given a chance to speak but we should ask them to direct their remarks to the proposed ordinance, which they have both received and had a chance to review. The Council should also feel free to ask questions of both applicants. The Council can make a decision to award franchises at the Council meeting, or it can consider the information received and the comments heard at the meeting and make a decision in the future. ITEM 8.2. CITY OF OTSEGO, MINNESOTA ORDINANCE NO. 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 Cablg—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 I 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 in part, to the provisions of subchapter II of 47 U. S.C. § 52 1, 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 ser -vices; (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). f "LW' 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 "DLoR" means the cable that connects the ground block on the Subscriber's Terminal Device to the nearest feeder cable of the System. i means the Federal Communications Commission, or its lawful successor. j "Franchise', "Cable Franchise'or "Franchise Aareemen " 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 "Fe ,e" 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, inderrinification, penalties or liquidated damages; (iv) any fee imposed under Title 17 of the United States Code. I "Grantee' is any recipient of a Franchise, and its agents and employees, lawful successors, transferees or assignees. rn "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 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 Devicei'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 Bus . ss 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 Qperating 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 "Qpen 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-prograrn 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 "Leumod' means any natural person, firm, partnership, association, corporation, company, or other legal entity. v "Right -of -W 'or "Rights-of-Wa means the area on, below, or above a public roadway, highway, street, cartway, bicycle lane, and public sidewalk in which the local government unit has an interest, including other dedicated rights-of-way for travel purposes and utility easements of local government units. Right -of -Way does not include the airwaves above a Right -of -Way with regard to wireless or other nonwire telecommunications or broadcast service. w "Riaht-of-W Y 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 Teet or less. y "Subscribe '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. ab "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 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 A Grantee must file with the City maps, plats, or other record of the location and character of all facilities constructed in the City, including underground facilities. A Grantee must update such maps, plats and permanent records annually if changes have been made in the System. Consistent with applicable state law, Grantee may identify such maps, plats or other records as "confidential trade secret," and City shall comply with all state laws regarding the protection and dissemination of such materials. 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. 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 any trees upon and overhanging the Rights -of -Way, alleys, sidewalks, or public easements of City so as to prevent the branches of such trees from coming in contact with wires and cables of a System. The City may supervise tree trimming activities and condition the authority to trim trees as it reasonably deems appropriate. Section 4.4 Franchise Term. Franchises will be granted for a term established in the Franchise ApIreement. No Franchise may be granted for a period exceeding fifteen (15) years Er-orn 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). 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. To the extent consistent with applicable laws, the City will require reimbursement of the City's expenses incurred in processing the renewal. 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 perform the restoration required herein, the City shall have the right, following fifteen (15) 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. c A Grantee must bury new Drops within a reasonable time period, which must not exceed fifteen (15) business days, subject to weather conditions. In the event the ground is frozen, a Grantee will be permitted to delay burial until the ground is suitable for burial which in no event must be later than June 30th. 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 Service 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 making 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. Section 6.7 Nonvoice Return Capability. Grantees are required to provide a System with capacity and technical capability to provide nonvoice return con-ununications. 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. The City will stay and not enforce this Section 7 during periods when 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 Grantees must file a list of current Subscriber rates and charges with the City, which lists will be maintained on file with City and will be available for public inspection. Grantees must give the City and Subscribers written notice of any change in a Cable Service rate or charge no less than thirty (30) days prior to the effective date of the change. 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. 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 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 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. Section 7.11 Refunds and Credits. a If a Grantee's Cable Service is interrupted or discontinued for 24 or more consecutive hours, its Subscribers must be credited pro rata for such interruption. Credits must be issued no later than the Subscriber's next billing cycle following the determination that a credit is warranted. b In the event a Subscriber establishes or terminates Cable Service and receives less than a full month's Cable Service, the Grantee must prorate the monthly rate on the basis of the number of days in the period for which Cable Service was rendered to the number of days in the billing. Refund checks will be issued promptly, but no later than the return of the equipment supplied by the Grantee if Cable Service is terminated. Section 7.12 Local Office/Drop Box. .4 Grantees must maintain a local office or a local drop box for receiving Subscriber payments. Section 7.13 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. COINMUNITY SERVICES Section 8.1 PEG Access Facilities. Franchises will establish obligations to provide PEG Access Facilities to meet the co=unity'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. 1 c -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. 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 10.11NDEMNIFICATION AND INSURANCE Section 10.1 Indernnification 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: I 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 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 (S500,000.00) 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 1l.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 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. Any sale or transfer of stock in a Grantee creating a new controlling interest constitutes a sale or transfer of ownership. A 44controlling interest" includes majority stock ownership or a lesser -amount sufficient to confer actual workino, control in whatever manner exercised. City approval is not be 0 required where a Grantee grants a security interest in its Franchise or System 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: I 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 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 Written Subscriber authorization is limited to a period not to exceed one (1) year. Subscriber authorization may be renewed at the option of the Subscriber. No penalty may be invoked for a Subscriber's failure to provide or renew such authorization. The authorization must be revocable at any time by the Subscriber without penalty of any kind whatsoever. 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 take 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 determination is issued. 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: I 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. ITEM 8.3. Robert J.V. Vose 470 Pillsbury Cente,1200 South Sixth Street Minneapolis X"%'X"3'JPORT TO THE CITY OF OTSEGO CONCERNING CABLE FRANCHISE APPLICATIONS BY: )8W LINK AND CHARTER COMMUNICATIONS AUGUST 21, 2002 rav en Y av!!! tto: enne. v-arnus-n r-n— (612) 337-9275 telephone (612) 337-93 X"%'X"3'JPORT TO THE CITY OF OTSEGO CONCERNING CABLE FRANCHISE APPLICATIONS BY: )8W LINK AND CHARTER COMMUNICATIONS AUGUST 21, 2002 1. BACKGROUND This Report is submitted to the City of Otsego ("City") by the City's special legal counsel, Kennedy & Graven. The City retained Kennedy & Graven to assist in addressing several cable television related matters. The information in this Report is based on information contained in City files, the franchise applications, written comments, correspondence or other information submitted by the applicants, information provided during discussions with representatives for both applicants, and certain publicly available information. Cable service was initially authorized in the community when Otsego Township issued a "line extension permit" dated May 6, 1985 to Rite Cable Company of Minnesota, Ltd. Ownership of the local cable system has changed several times since 1985. Charter Communications Holding Co, LLC ("Charter") currently provides cable service in the City. Charter serves approximately 1000 customers. The line extension permit incorporates the terms of the franchise ordinances issued by the member municipalities in the Sherbume/Wright Counties Cable Commission (Buffalo, Rockford, Cokato, etc.). The Cable Commission's franchises expire on December 31, 2002. Charter's predecessor concluded that the City's permit expires at the same time and requested that the City renew the permit. WH LINK, LLC ("WH LINK") currently provides facilities -based and resold telecommunications services in the City. WH LINK has authorization from the Minnesota Public Utilities Commission ("MPUC") to operate as a competitive local exchange carrier ("CLEC") in the City and several neighboring communities. Last year, WH LINK also obtained certification as an open video system ("OVS") operator. At that time, WH LINK advised the City that it intended to provide cable service over its CLEC facilities in portions of the City. In response to these events, the City established a cable franchise application form and published notice of its intent to consider issuance of cable franchise(s). Both Charter and WH LINK timely applied for cable franchises and paid $7500 application fees to offset the City's expenses. The Council held a public hearing on May 13, 2002 to consider the applications. Although the public hearing was closed on May 13, 2002, the City left the record open to allow both companies to file written comments concerning several issues. The Council allowed 45 additional days, through the end of June, for such comments. The City's process for considering comments was confirmed in letters dated May 17, 2002, from the City's legal counsel to both companies. The letters requested information concerning specific issues raised by each company's application. The letters also invited the companies to comment on each others' franchise application. WH Link responded by letter dated June 21, 2002. Charter did not respond. The City's legal counsel also e-mailed a draft regulatory ordinance and franchise to both companies on May 13, 2002. WH LINK provided several rounds of comments concerning the documents. Representatives for the City and WH LINK met on two occasions to discuss these comments. Charter also provided comments concerning the documents. Ultimately, the City's legal counsel incorporated a number of changes to address concerns raised by the companies. EXECUTIVE SUMMARY For convenience, we have prepared a single report concerning both franchise applications. This is not a competitive bidding process. The City is prohibited from granting an exclusive franchise and may grant both franchise applications. As discussed below, the City recently concluded that Charter is qualified to provide cable service in the City. There is no reason to reconsider this conclusion in evaluating Charter's franchise application. The City may also conclude that WH LINK is qualified. However, the City may consider WH LINK's "character" in evaluating VVH LINK's franchise application. In addition, City may require that any successful applicant accept reasonable franchise terms and conditions, and the City may enact an appropriate regulatory ordinance. Therefore, the City Council must evaluate each applicants' service proposal. The Ci1y Council must determine whether the proposals are reasonable and adequate to meet the communi1y's interests. The applicants have applied for franchises containing different service requirements and propose delivering cable service to very different segments of the City. Charter seeks to continue to serve the entire City to the extent there is a sufficient density of potential customers in a given area. This is typical in the cable industry. Conversely, WH LINK will only commit to provide service in five (5) identified subdivisions and any areas it subsequently provides competitive telephone services over its own facilities. This type of service obligation is not typical. WH LINK indicates that the City should accept this service proposal because WH LINK is an OVS operator. Although we reject WH LINK's legal arguments concerning its OVS status, we conclude that the City could accept WE LINK's application and grant a franchise. We have prepared a regulatory ordinance that contains general requirements applicable to all cable service providers. This approach will accommodate future cable competition in the City. Notably, the regulatory ordinance provides that the City will refrain from regulating customer service issues during any period in which there is competition between two (2) or more cable providers. The market will regulate these issues. We have also negotiated individual franchises with each of the applicants. The franchises generally reflect the service proposals made by the applicants. WH LINK representatives have indicated that if the company's franchise application is denied, WH LINK may initiate litigation to protect certain rights it allegedly possesses as an OVS operator under federal law. Charter representatives have indicated that if WH LINK's franchise application is granted, Charter may initiate litigation to protect certain rights it allegedly possesses as an incumbent cable operator under Minnesota law. If the Ci1y elects to issue only one franchise. the franchise and regulatory ordinance ma need to be modified t)rior to adoDtion- 111. ANALYSIS 1. Cable Franchising Under Minnesota Law Cable service in Minnesota is regulated under federal, state and local law. Federal law requires a cable operator to obtain a franchise to provide cable service. In addition, unlike many states, Minnesota has a comprehensive state statutory scheme governing cable systems and service. Minnesota municipalities must require a franchise "of any cable communications system providing service within the municipality." A "cable communications system" is defined as "a system which operates the service of receiving and amplifying programs... and distributing those programs by wire, cable, microwave or other means, whether the means are owned or leased, to persons who subscribe to the service." Moreover, the Minnesota cable franchising regime applies to: ... every cable communications system and every cable communications company as defined in section 2 3 8.02, operating within the state, including a cable communications company which constructs, operates and maintains a cable tions system in whole or . n part through the facilities of a person franchised to) offer comm -t carrier services. The Minnesota legislature also enacted a "declaration of legislative findings and intent" which clarifies the scope of Minnesota Statutes, Chapter 238. The legislature clearly stated its intent to broadly provide for local franchising of cable service, cable systems and cable operators. In sum, a "cable communications system" is very broadly defined under Minnesota law and both VVH LINK and Charter are subject to cable franchising. The City has broad, inherent authority to decide matters of local importance and protect local interests. Cable franchising is such a matter of local importance as reflected by the statutory requirement that cable operators obtain municipal authorization as a condition of providing cable service. The City is not obligated to issue a single franchise, let alone multiple franchises. Accordingly, the City may require applicants to accept reasonable franchise terms and conditions, and may impose appropriate ordinance requirements. In addition, Minnesota law outlines the municipal cable franchise application process. The franchise application process requires applicants to submit information detailing legal, financial, technical and other qualifications. The City may review and consider the legal financial, technical, and other relevant qualifications of the applicants. The City's decision whether to grant or deny the franchise applications is quasi-judicial. The courts may only reverse the City's decision if it is arbitrary and capricious. A decision supported by substantial evidence will not be arbitrary and capricious. The meaning of "substantial evidence" in this context is well defined and generally means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Some cable operators have used the franchising process to attempt to slow or stop competition. However, the record in this proceeding forms a sufficient basis for the City's decision(s) because the City properly followed the statutory franchising process and received completed franchise applications. Finally, any successful franchise applicant must indemnify the City. Further, the City is not be liable for monetary damages associated with its decisions on the applications. 2. Open Video System Certification WH LINK is willing to accept a cable franchise but asserts that it is exempt from traditional service -area requirements based on its status as an OVS operator. Charter did not formally comment on WH LINK's application. However, Charter previously responded to WH LINK's OVS application by indicating that it would "legally object" if the City did not require WH LINK to receive a franchise. No court has considered the applicability of Minnesota's cable laws to an OVS operator. The City must consider whether WH LINK's OVS certification exempts the company from any requirements under state law. Congress enacted the Telecommunications Act of 1996 (" 1996 Act") to promote telecommunications and cable competition. The 1996 Act established the OVS regulatory regime. OVS is an alternative for providing "cable service" without having to comply with many of the federal requirements governing cable service found in Title VI of the Communications Act of 1934 ("Cable Act"). Particularly, an OVS operator is not required to obtain a franchise under the Cable Act. The FCC adopted rules to implement the OVS regime. The FCC initially concluded that OVS certification eliminated an OVS operator's obligation to receive a franchise under state laws. However, in 1999, the Fifth Circuit Court of Appeals held that Congress did not preempt state and local franchising requirements. The Dallas decision is entirely consistent with the FCC's own analysis of the limited preemptory effect of the 1996 Act. On remand from the Dallas decision, the FCC concluded that its rules did not need to be amended because, although the issue was extensively discussed in prior implementation orders, the rules did not prohibit franchising under state or local law. The City, along with the City of Medina and the Northwest Suburbs Cable Communications Commission (on behalf of Plymouth and Maple Grove), filed comments with the FCC in response to WH LINK's request for OVS certification. The City commented on Minnesota's cable franchising laws. The FCC granted WH LINK's OVS certification, but stated: The comments received relate to a franchising issue and the assertion that a franchise is required to provide open video service. With regard to the process of obtaining local franchising authority, we note that this issue relates to matters beyond the adequacy and accuracy of LINK's application. Nevertheless, we note in the Order on Remand of the Fifth Circuit's decision in City ofDallas, Texas v. FCC, the FCC stated that the Fifth Circuit determined that localities retain existing franchising authority, but that localities need not exercise this authority through the imposition of open video system franchises. In addition, the FCC stated that the decision of whether to impose a franchise on an open video system operator is committed to the discretion of the locality. Accordingly, we conclude that the FCC has acknowledged the City's authority to require WH LINK to obtain a cable franchise pursuant to state or local law. In turn, Minnesota law mandates that the City issue a franchise to WH LINK. Notwithstanding, WH LINK argues that Congress preempted and superceded state and local franchising laws by creating the OVS regime in the 1996 Act. We are aware of three arguments made by WH LINK concerning this issue: The federal OVS obligations address each of the issues raised by the Minnesota "level playing field" statute (discussed below). The 1996 Act provides that OVS operators: 1) are authorized to provide cable service in their "telephone service area"; 2) can be required to provide community programming support, channels and equipment equivalent to that provided by the local cable operator, and; 3) can be required to pay a fee "in lieu" of a franchise fee. Because these issues were addressed in the 1996 Act, WH LINK argues that they are preempted and superceded in Minnesota law. 2 Minnesota law defines "cable communications system" to include phone networks used to provide video programming; i.e. OVS. The federal Cable Act defines "cable system" and, by virtue of an amendment made by the 1996 Act, excludes OVS. Because the Cable Act definition is different than the Minnesota definition, WH LINK argues that the Minnesota definition is preempted and superceded. Further, because local franchising under Minnesota law applies to "cable communications systems" and this definition has been superceded by the Cable Act definition of "cable system," WH LINK is not subject to franchising under Minnesota law. 3 WE LINK suggests that because it holds MPUC certification as a CLEC, and has received a valid permit from the City, it should not be required to obtain a franchise as a condition of using the right-of-way to provide cable service. We disagree with VVH LINK. WH LINK will operate a telephone network to provide "cable service." Accordingly, absent preemption of the state franchising requirement, WH LINK must receive a cable franchise under Minnesota law. WH LINK's first argument concerning this issue is unpersuasive because Congress has specifically indicated when provisions in the Cable Act and 1996 Act preempt and supercede state and local laws. Congress provided for relatively broad preemption in the Cable Act but very narrow preemption in the 1996 Act. Section 636(c) of the Cable Act preempts any "inconsistent" state or local laws. However, Section 601(c) of the 1996 Act provides: "[t]his Act and the amendments made by this Act shall not be construed to modify, impair, or supersede Federal, State, or local law unless expressly so provided in such Act or amendments." Although the Minnesota "level playing field" statute arguably contains different requirements than those imposed by the federal OVS regime, the 1996 Act does not preempt "inconsistent" or even conflicting state and local laws, nor allows for preemption by implication or based on apparent Congressional intent. Rather, the 1996 Act only preempts state and local laws where Congress explicitly said so. In the Dallas decision, the Fifth Circuit concluded that Congress did not expressly state an intention to preempt state and local franchising laws in creating the OVS regime. Therefore, different, inconsistent or even contrary state and local cable franchising requirements are not preempted with respect to OVS. WH LINK's second argument is somewhat more complicated. The 1996 Act's "express statement" preemption requirement applies to "the amendments made by this Act." Section 302(a) of the 1996 Act established the substantive OVS provisions including Section 653 of Communications Act of 1934. Section 302(b) of the 1996 Act contains "conforming and technical amendments" that implement the substantive provisions of Section 302(a). The Cable Act definition of "cable system" was amended by Section 302(b). Therefore, the Cable Act's definition of "cable system" was amended in the 1996 Act and is subject to the "express statement" preemption requirement analyzed in the Dallas decision. However, the Dallas decision specifically addressed Section 302(a) of the 1996 Act, not Section 302(b). To sustain its argument, WH LINK would need to show that while Congress did not explicitly preempt state and local laws in Section 302(a), Congress did explicitly preempt such laws in adopting conforming and technical amendments in Section 302(b). We are unaware of any support for such claim. We conclude that the analysis in the Dallas decision applies to the amendment of the definition of "cable system" in the Cable Act. WH LINK is not exempt from Minnesota's franchising requirement applicable to "cable communications systems" because this definition was not preempted and superceded. Finally, WH LINK recently filed comments in an FCC proceeding to consider how cable modem service should be regulated. WH LINK requested that the FCC: specifically affirm its tentative conclusion that if the provider is already a regulated right-of-way user under state law, that provider does not need an additional franchise to provide a federally authorized service like cable modem service or OVS. WH LINK suggests that it need not obtain a cable franchise because it received a certificate of authority as a CLEC from the MPUC. WH LINK claims that this position is supported by the FCC's order on remand from the Dallas decision, which states: Nothing in the [5th Circuit's] decision requires new franchises for entities that already have the requisite authorization to use public rights-of-way. Thus, for example, an open video system operator that already has a franchise as a telephone company would not necessarily require another franchise. In both the Dallas remand order and the current cable modem proceeding, the FCC was referring to a situation where the provider had all requisite authority under state law to use the right-of-way for any lawful purpose. Under current Minnesota law, a cable franchise is required to operate a cable system even if the MPUC has authorized construction of a telephone system. Therefore, while WH LINK may have "the requisite authorization" under Minnesota law to use rights-of-way to construct and operate a telephone system, it is not authorized to provide video or cable service in the City without a franchise. Essentially, WH LINK's last argument is that the FCC should re -write Minnesota law to exempt companies like WH LINK from franchising. VVH LINK is subject to franchising under current Minnesota law. This Report is focused on current laws not potential changes in the law. 3. Legal, Technical, Financial and Other Qualificatiol2s The City has not previously evaluated WH LINK's legal, technical and financial qualifications. Because WH LINK is subject to Minnesota's cable franchising requirements, we evaluate the company's qualifications below. For several reasons we have not evaluated Charter's legal, technical and financial qualifications for purposes of this report. First, Charter is*publicly traded (CHRT) and is the fourth largest cable operator in the US with operations nationwide. Charter was founded and is controlled by Microsoft co-founder Paul Allen. This suggests that Charter is well qualified to operate a cable system in the City. In addition, Charter acquired Bresnan Communications in 1999. Bresnan had been providing cable service in the City. After reviewing the proposed transaction and Charter's legal, technical and financial qualifications, the City approved the transaction and Charter's qualifications. Charter has operated in the City since mid -1999 and the City has not identified concerns related to Charter's qualifications. Finally, to the extent Charter has valid franchise renewal rights under the Cable Act, the City's ability to deny franchise renewal based on Charter's qualifications is limited. It is, however, worth noting that on August 16, 2002, Charter announced that a federal grand jury has subpoenaed documents concerning its accounting for labor costs and number of customers. Moreover, Charter shares are trading at their lowest level since the company's initial public offering in late 1999. In a deflated market, Charter's shares have been particularly hard hit due to concerns about its debt load which totaled $17.6 billion in long-term debt as of June 30, 2002. Mr. Allen recently indicated that he is considering taking Charter private as one of several options to reduce the company's debt. The City has not had an opportunity to consider the impact of these developments. a. Legal Qualifications. WH LINK is validly incorporated as a limited liability company under Minnesota law. WH LINK has two members: Lakedale Communications, LLC (a local exchange telephone provider) and Wright Hennepin Electric Cooperative Association (a power provider). WH LINK has received authorizations from the Minnesota Public Utilities Commission ("MPUC") and Federal Communications Commission ("FCC") to provide certain communications services. WH LINK is legally authorized to conduct business in Minnesota and is legally qualified to provide cable service in the City. b. Financial Qualifications. State and federal law provide little guidance concerning evaluation of a cable franchise applicant's financial qualifications. However, the Minnesota Court of Appeals recently considered a municipality's appropriate role in reviewing the financial qualifications of a cable franchise applicant, stating: Although we agree [the applicant's] prospective financial status does not necessarily guarantee future success, the Cable Act does not require such a guarantee. Citations omitted. Because the ci1y properly focused on rthe applicant'sl abili1y to construct and initially operate its proposed system, we conclude it sufficiently considered substantial evidence of [the applicant's] financial condition. In sustaining the city's review, the Court of Appeals noted that the city examined the applicant's capital resources and financing plans, and required the company to furnish a substantial performance bond, and a corporate guarantee the performance of its subsidiary's obligations. The Court's analysis is consistent with the criteria used by the MPUC in evaluating the financial worthiness of new telephone companies. The MPUC is solely responsible for granting authorization to construct and operate local exchange and competitive local exchange telephone service. The MPUC may only authorize a new telephone provider in the event the applicant possesses the technical, managerial, and financial resources to provide the proposed services. The MPUC's criteria for whether an applicant is financially qualified is the extent to which the applicant's cash reserves and cash equivalents are adequate to meet the start-up costs and expenses. The long term likelihood of profitability is not reviewed. Accordingly, our consideration is focused on WH LINK3s ability to finance construction and initial operation of its network. WH LINK obtained MPUC authorization to construct a telephone network in the City and certain neighboring areas subject only to the City's permitting requirements. WH LINK has constructed substantial portions of this telephone network. WH LINK indicates that construction of these facilities was financed primarily through a secured loan from Rural Telephone Finance Cooperative. In addition, WH LINK indicates that its two members have equity in excess of $2.7 million. Further comprehensive analysis of WH LINK's financial qualifications is not necessary. First, the MPUC already approved WH LINK's financial qualifications related to construction of a telephone network. The City had no role in determining whether WH LINK was financially qualified to build and operate this network. In addition, the City's interest in WH LINK's finances is primarily focused on assuring that construction in local rights-of-way can be safely and promptly completed. WH LINK indicates that its video services will be provided over its telephone network. WH LINK's video network has, therefore, already been substantially constructed under MPUC authority. There is little additional construction for the City to be concerned about. WH LINK will have certain financial and other obligations to the City and may need to perform additional work in the right-of-way associated with construction of its network. Therefore, any franchise granted to WH LINK will require a $50,000 construction bond, a $5,000 security fund, adequate insurance and full indemnification. These instruments protect the City in the event WH LINK fails to perform under the Franchise due to financial or other reasons. WH LINK 's long-term financial viability is outside the City's ability to reasonably evaluate. Given that the MPUC has approved WH LINK's financial qualifications, the network is substantially constructed, and WH LINK is required to provide the additional security described above, the City may conclude that WH LINK is financially qualified. C. Technical Qualifications. The technical qualifications standard relates to an applicant's experience in constructing, operating, and maintaining cable communications systems and/or telecommunications network, and the ability provide video services as proposed. WH LINK's franchise application details the company's plans for providing automated services, two-way services, system status monitoring, channel scrambling, two customer service centers (maintained in relation to its telephone ser -vices), customer service responsiveness and complaint resolution, and system maintenance and performance testing in accordance with FCC requirements. WH LINK has been certificated by the MPUC to provide competitive telephone services as a CLEC. WH LINK provides local phone, long distance, Internet, voice conferencing, and data services in portions of 12 or more cities. WH LINK's management, operations and technical personal will support its video operation. WH LINK employees and management have extensive experience in the delivery of telecommunications services and operation of telephone networks. However, WH LINK is not providing cable services in any communities. The company has no experience in providing such service. WE LINK's affiliate, Lakedale Communications, LLC, is a diversified teleconu-nunications holding company which operates companies including Lakedale Telephone Company. Lakedale has provided local telephone service in several communities since 1946. Lakedale Communications is also affiliated with Lakes Cable Systems, Inc. which provides franchised cable service in four cities. Another affiliate, North Star TV Systems ("North Star TV"), sells and installs satellite video dishes/equipment. In cooperation with Pegasus Satellite Television, North Star TV provides DIRECTV service in Wright, Steams, Meeker, and Kandiyohi counties. Accordingly, WH LINK's affiliates have some experience in the delivery of video services. WH LINK seeks to provide video service over its existing telephone lines using VDSL technology (Very high speed Digital Subscriber Line). WH LINK, along with thirteen other independent Minnesota-based telephone companies jointly own Broadband Visions, LLC (BBV). BBV owns a digital "headend" located in Hutchinson, Minnesota. One of the participating phone companies, Hutchinson Telephone through its subsidiary Hutchinson Telecommunications, Inc., serves as the managing entity for this video headend. W`H LINK will receive video signal transported from Hutchinson via BBV. BBV will provide video services to WH LINK using technology provided by Next Level Communications ("NLC"). NLC supplies equipment which permits the integration of voice, high-speed data and high-quality digital video services over a copper, twisted pair telephone wire. Information on the company can be found by accessing NLC's corporate website at: http://www.nlc.com. Several telephone companies in Minnesota are offering video services using this technology including Hickory Tech (St. Peter), Sherburne Cable (Becker), HutchTel (Hutchinson), NU -Telecom (New Ulm). Qwest is also experimenting with NLC technology. The BBV owner companies will deploy voice, video and data to their customers using the digital head -end. Reports from communities in which NLC video technology has been rolled out are mixed. In some cases, significant difficulties such as outages have been reported shortly after roll-out. However, it is apparent that the technology can be deployed to provide good quality video service. In addition, the NLC technology is "telephone technology" not traditional cable television technology. Accordingly, the extensive experience of WH LINK's employees and management with telephone networks is directly relevant. WH LINK also represents that it "has enlisted the services of an experienced consultant, CHR Solutions, to assist WH LINK during the implementation of its services." CHR Solutions ("CHR"), is a telecommunications management consulting company providing services including technology and engineering expertise. The firm is headquartered in Dallas, Texas but has a regional office in Minneapolis. CHR has over 250 professional employees with extensive telecommunications experience in areas including video services and competitive environments. CHR provides services to a wide variety of companies including engineering and technology expertise to cable television operators. To summarize, WH LINK has extensive experience in the telephone and telecommunications business and intends to provide cable service over a telephone network using a telephone technology. Moreover, WH LINK will receive signal from a video supplier, BBV, which is providing service to several companies. BBC has a strong incentive to provide a good quality product. WH LINK has also contracted with a qualified consultant. Finally, WH LINK would provide cable service in competition with Charter. If WH LINK is unable to provide good quality video service, the market will provide other choices. We believe that the City may conclude that WH LINK has adequate technical qualifications even though WH LINK has no experience delivering cable television service. d. Other Qualifications WH LINK is a relatively new provider with limited operational history in the City. To date, the City's relationship with WH LINK is primarily based on contacts between City and company representatives related to WH LINK's OVS certification and cable franchise application, and right-of-way permitting issues. If the City accepts WH LINK's application and grants a cable franchise, the City and company will enter into a comprehensive, long-term contractual and regulatory relationship. Therefore, it is reasonable and appropriate for the City Council to consider the character of the company and its employees and management. WH LINK filed an OVS certification application with the FCC in April, 2001. In response, Charter notified the City that it would legally object if WH LINK was not required to obtain a franchise under Minnesota law. The City filed comments with the FCC indicating that WH LINK would be required to obtain a franchise under Minnesota law. WH LINK is one of three companies in Minnesota that have obtained OVS certification from the FCC. In response to V;H LINK's OVS certification, the City's legal counsel promptly inquired whether WH LINK intended to comply with state and local cable franchising requirements. WH LINK indicated that OVS certification exempted it from cable franchising. Notwithstanding, WH LINK began participating in a franchising process initiated by the Northwest Suburbs Cable Communications Commission. By letter dated September 4, 2001, V;H LINK advised the City and other affected communities that the Northwest Commission's franchising process might produce a workable model "Open Video Services Franchise." During the same time period, WH LINK representatives began a series of meetings with the City's legal counsel and attorneys for other affected communities to discuss OVS and cable franchising issues. Despite these activities, by letter dated December 26, 2001, WH LINK indicated that "the City has not taken any steps to establish any requirements governing WH LINK as an OVS operator." WH LINK further advised the City that it intended to begin offering cable service in the City in January 2002. Implicitly, WH LINK was planning to provide cable service without a City -issued franchise. WH LINK also withdrew its franchise application in the Northwest Commission having concluded that it was unlikely to receive a franchise on acceptable terms. Subsequently, WH LINK retracted the position taken in the December letter and indicated that it would file an application if the City of Otsego initiated a cable franchising process. Since filing the application, WH LINK's representatives have fully cooperated with the City in processing the application and negotiating the regulatory ordinance and proposed franchise. WH LINK began constructing its network in the City prior to filing its franchise application. WH LINK or its affiliate, Wright -Hennepin Electric, obtained City permits to install facilities in portions of the City. In some cases, WH LINK and Wright - Hennepin Electric applied for and obtained single permits for "joint trenching projects." City staff has since advised both companies that each must obtain its own permits. WH LINK's franchise application discloses that the company "has already substantially completed the installation of the network facilities necessary to activate video service in Otsego." City staff has advised WH LINK that not all of its facilities were installed under permits that identify OVS, cable television or video facilities. For example, it appears that some permit applications submitted on behalf of Wright -Hennepin Electric and/or W`H LINK refer to "installation of fiber and copper communications cable, duct, pedestals and cabinets for communications distribution use." WH LINK indicates that it has received City permits authorizing the installation of video facilities where appropriate, in addition to telephony facilities and Wright- Hennepin's electric facilities. City staff has directed both WH LINK and Wright - Hennepin to clearly identify the facilities they are installing in their permit applications. City staff can provide updated information concerning the permitting process at the Council's request. The foregoing information does not disqualify WH LINK ftom receiving a ftanchise. Of note, WH LINK has not activated video services despite the fact that company representatives have concluded that it is exempt from franchising under Minnesota law and the network is currently capable of providing cable service. WH LINK representatives have agreed to provide notice to the City in the event such service is activated. However, WH LINK plainly considers the franchising requirements established by state and local law to be impediments rather than appropriate local controls. The City Council may consider this when evaluating the franchise application. e. Conclusion. For the reasons discussed above, the City may conclude that WH LINK is adequately qualified to provide cable services in the City. The City has previously concluded that Charter is adequately qualified. 4. Other -Considerations- Level Playing Field Requirement Minnesota law requires a "level playing field" between an incumbent cable operator and a new competitor. The applicable statute provides: No municipality shall grant an additional franchise for cable service 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. WH LINK and Charter specifically addressed the "level playing field" issues in their franchise applications. a. Area Served. Charter applied for a franchise authorizing service throughout the City but requiring service only where there are 9 or more homes per quarter mile. Such a requirement is typical in cable franchises. Cable operators are commonly required to extend their systems and services based on a density standard (expressed in terms of dwellings, homes, potential customers, etc). In accordance with the Sherburne/Wright Counties Cable Commission franchises, Charter currently provides cable service in all areas of the City where there are 9 or more homes per quarter mile (36 homes per mile). WH LINK applied for a franchise authorizing the provision of cable service throughout the entire City. However, WH LINK applied for a franchise that requires service only in certain specific subdivisions where VY'H LINK currently has CLEC facilities. The subdivisions are identified in a map attached to WH LINK's application as Exhibit C. WH LINK would be required to provide cable service wherever it provides facilities - based telephone service in the City. Similarly, WH LINK would not be authorized to provide cable service in areas where it has not extended its telephone network; i.e. WH LINK would not be authorized to provide only cable service in any area of the City. This "limited area" service requirement is not typical in cable franchises. The required service area is the primar�� "level playing field" issue raised by the applicat ons. b. Public, Educational, and Governmental (PEG) Access Requirements. Charter currently does not provide local PEG programming or PEG channels, equipment or support to the City. To the extent any PEG programming is provided, it originates in other communities using PEG equipment and support provided to those communities. Charter proposed the provision of one (1) channel to the City along with such equipment and support as is required by law. WE LINK's application indicates that it will meet any requirement for PEG channel capacity or support imposed on Charter. VvrH LINK notes that federal law requires the local cable operator to cooperate with an OVS operator in sharing PEG connections, feeds and programming. WH LINK also proposes providing free cable services and connections for live cablecasting to those institutions located in areas it serves. The proposed franchises reflect significant discussion between the City and the applicants, primarily WH LINK, concerning these issues. The franchises would allow the City to request two (2) PEG channels and adequate equipment and support to provide PEG programming. WH LINK and Charter would be required to negotiate concerning the provision of PEG but the City would retain final decision-making authority. C. Franchise Fees. V;_H LINK will agree to pay a fee in an amount of up to 5% of its gross revenues derived from cable service. WH LINK notes that federal law permits municipalities to require OVS operators to pay a fee "in lieu" of a franchise fee. Charter currently pays a franchise fee of 5% of its gross revenues from cable service. Although Charter's application does not address the issue, Charter can be required to continue this payment. Both companies would be required to pay the same fees. 5. The Ci1y Has Flexibilfty In Establishing Service Req.uirements, The City Council may have concerns about WH LINK's proposal to only to commit to serve five (5) subdivisions and those areas where WH LINK subsequently extends its network. WH LINK is unwilling to modify its proposal and would treat issuance of a franchise requiring service throughout the City as a denial of its franchise application. WH LINK indicates that it is exempt from the "level playing field" requirement and its service proposal is appropriate because it is an OVS operator. Although we conclude that WH LINK is subject to Minnesota franchising laws, we further conclude that the City has significant flexibility in considering WH LINK's service proposal. The City needs to specifically consider whether the "level playing field" requirement applies to WH LINK's proposal. The City also needs to consider the public interest implications of the proposal. First, the "level playing field" statute applies to "an additional franchise for cable service for an area included in an existing franchise." However, Charter currently operates in the City under a "extension permit" rather than a franchise ordinance. Minnesota law allows municipalities to authorize the extension of a cable system from a franchised area (typically a city) into an adjacent area (typically a township) by permit. It is not clear that Charter's extension permit constitutes "an existing franchise" for these purposes. Moreover, the "level playing field" statute requires that the new and existing franchises have equivalent "terms and conditions ... pertaining to the area served." An extension permit must indicate that the parties agree to abide by those terms in the neighboring municipality's franchise concerning several specific issues. Charter's extension permit references the terms of the franchises issued by the members of the SherburneAVright Counties Cable Commission and incorporates those terms "which relate only to" the issues mandated by statute. Charter's line extension permit specifically incorporates "standards for system installation, maintenance and operation." This provision does not, however, clearly incorporate the service area/system extension requirement contained in the Cable Commission's franchises (expressed in terms of the density of homes per quarter mile). If Charter is not currently subject to the Cable Commission's service area/system extension requirement, the City is arguably not required to impose an equivalent obligation on WH LINK. Even if the "level playing field" requirement does apply to WH LINK's service proposal, the law requires that a second franchise be no "more favorable or less burdensome" than the incumbent's franchise. Other states have similar "level playing field" statutes. Several courts have concluded that incumbent and competitive franchises need not be identical under these statutes. Cable TVFund 14-A, Ltd. v. City ofNaperville, 1997 WL 280692, * 12 (N.D.111. 1997); Cable Systems of Southern Connecticut, Ltd. v. Connecticut Department ofPublic Utility Control, 1996 WL 661818, *2 (Conn. Super. 1996); Southeast Florida Cable v. Martin County, 173 F.3d 1332, 1334 (11 th Cir. 1999). By its terms, Minnesota's statute requires roughly equivalent, but not identical, franchise terms. Therefore, the City has discretion in establishing service requirements for both Charter and VVH LINK. Finally, the statute applies to "an additional franchise for cable service for an area included in an existing franchise." This language implies that a municipality may issue an additional franchise which requires service in an area "included in," but smaller than, the incumbent's service area. For these reasons, we believe that the City could accept WH LINK's franchise application and service area proposal. In such case, the City could issue a franchise to WH LINK authorizing service as proposed. However, the City must also consider whether it ought to accept WH LINK's service area proposal. This is not, strictly speaking, a legal issue but rather requires consideration of the public interest implications of the proposal. IV. CONCLUSION The City's franchise application process complies with state law. Charter and WH LINK submitted franchise applications with detailed information. The City requested additional information concerning the applications. The City's decisions should be supported by substantial evidence. The City may accept both franchise applications. If both are accepted, the City need not make the service area requirements or other franchise obligations identical. However, the City Council must make a policy decision about what franchise commitments are acceptable and in the public interest. Stated differently, even though the City is legally permitted to issue franchises to Charter and WH LINK under different terms, the City must determine whether it should do so. The applicants propose the provision of service on different terms. Charter proposes serving areas that are developed with sufficient density. This approach reduces Charter's per customer system construction cost and is typical in the cable industry. WH LINK proposes serving certain areas that have recently been developed. WH LINK proposes providing cable service over its telephone facilities in these new developments. VVH LINK and affiliated companies were able to economically install their facilities underground in these areas. Neither company has proposed a service plan based on the income of residents. reasonable and appropriate terms. Neither company intends to provide cable service to every home in the City. However, the City Council may conclude that these proposals have different public interest implications and make appropriate determinations. 00