CITY COUNCIL AGENDA ITEM NO. 9
Meeting Date: November 13, 2001
Subject/Title: Renewal of Cable Television Franchise
Submitted by: Dennis Beougher, City Attorney
Approved by: John Stevenson, City Manager
Staff recommends approval of the attached resolution granting a three year franchise renewal to AT&T Broadband until September 30, 2004.
By Resolution No. 83-33, adopted June 28, 1983, the City Council entered into a License Agreement with Televents of East County, which became TCI Cablevision of Contra Costa County and now is currently doing business as AT&T Broadband, under the former obtained franchise to provide cable television system and service to residents of Brentwood. By Resolution No. 98-160, the City Council approved extending the term of the franchise with TCI until September 30, 2001.
During the past three years the Telecommunications Subcommittee has met, or attempted, to negotiate with representatives of TCI and now AT&T Broadband. No terms were ever finalized and the franchise expired on September 30, 2001. The last three years have been frustrating to staff and subcommittee members.
The City hired David Kinley to recommend alternatives to the city concerning how to deal with the current cable television franchise. Mr. Kinley has recommended, and the subcommittee accepted his recommendations, another 3-year renewal, subject to certain recommended changes.
A summary of the six changes is as follows:
1) Change the franchise fee to 5% of all revenues, with none of the current deductions allowed under the current franchise agreement, which many are outdated and inappropriate.
2) Provide for quarterly payments of the franchise fee, rather than the annual payments. .
3) This provision would broaden the requirements for filing copies of technical or performance test as required by the Federal Communications Commission.
4) This section would update insurance limits to reflect current City standards
that have changed since 1983.
5) This provision would broaden and tighten the requirements for prior City approval of any transfer of control.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD TO GRANT A THREE YEAR FRANCHISE RENEWAL TO AT&T BROADBAND UNTIL SEPTEMBER 30, 2004.
WHEREAS, by Resolution No. 83-33, adopted June 28, 1983, the City Council of the City of Brentwood entered into a License Agreement with Televents of East County, Inc., a Nevada corporation, currently doing business as AT&T Broadband under which the former entity obtained a franchise to provide a cable television system and service to the residents of the City of Brentwood; and
WHEREAS, on September 8, 1998, the City Council adopted Resolution No. 98-160 extending the term of the Cable Television Franchise with TCI Cablevision of Contra Costa County until September 30, 2001;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brentwood as follows:
Section 1. Section 1 of Resolution 83-33 is hereby amended to read as follows:
The City hereby grants and confirms to AT&T Broadband the right and privilege, subject to each and all of the terms and conditions contained in this License Agreement, to lay and use lines, wires, coaxial cable, antennae, microwave, waveguides or other conductors in building, developing, rebuilding, maintaining and operating its cable communications system for originating, transmitting, distributing, delivering and supplying radio and television intelligence, and any other lawful service along, across, or upon the public streets, ways, alleys and places as the same may now or hereafter exist within the City of Brentwood, California, (the “System”) for a term commencing on October 1, 2001 and continuing until 11:59 p.m. on September 30, 2004.
Section 2. Section 2 of Resolution 83-33 is hereby amended to read as follows:
(a) Grantee shall pay to the City during the life of this license, or any renewal or extension thereof, a license fee equal to five percent (5%) of the gross revenues from whatever source derived by Grantee from its operation of the System.
Section 3. Section 3 (a) of Resolution 83-33 is hereby amended to read as follows:
(a) The license fee and any other costs or penalties assessed shall be payable quarterly to the City of Brentwood. The Grantee shall file a complete and accurate verified statement of all gross revenues derived from its operation of the System during the period for which said quarterly payment is made. Said payment shall be made to the City not later than forty-five (45) days after the end of each calendar quarter.
Section 4. Section 5 (e) of Resolution 83-33 is hereby amended to read as follows:
File with the City a copy of any technical or performance tests required to be filed with the Federal Communications Commission, such as the “Cumulative Leakage Index” test.
Section 5. Section 10 of Resolution 83-33 is hereby amended in its entirety to read as follows:
Grantee shall maintain throughout the term of the License from a reputable insurance company policy of liability insurance in amounts not less than the following, with such deductibles as are ordinary and reasonable under standards of the cable television industry:
(a) comprehensive general liability: combined single limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate.
(b) Comprehensive automobile liability: combined single limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) in the annual aggregate.
Section 6. Section 11 of Resolution 83-33 is hereby amended in its entirety to read as follows:
(a) Neither the System nor this License shall be sold, assigned, transferred, leased, or disposed of, either in whole or in part, either by involuntary sale or by voluntary sale, merger, consolidation, or otherwise hypothecated in any manner, nor shall title thereto, either legal or equitable, control thereof, or any right, interest, or property therein pass to or vest in any person or entity, nor shall the control of the License be changed, without the prior written consent of the City, which consent shall not be unreasonably withheld.
(b) Grantee shall immediately provide written notification to the City of any proposed or actual change in, or transfer of, or acquisition by any other party of control of the Grantee. The word “control” as used herein is not limited to a majority of the stock but includes actual working control in whatever manner exercised. A rebuttable presumption that a transfer of control has occurred shall arise upon the disposal by the Grantee, directly or indirectly, by assignment, transfer, voluntary sale, merger, or otherwise, of fifty-one percent (51%) or more at one time of the ownership or controlling interest in the System, or fifty-one percent (51%) cumulatively over the term of the License of such interest to a corporation, partnership, limited partnership, limited liability corporation, trust, or association, or person or group of persons acting in concert.
(c) For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the City may inquire into all qualifications of the prospective controlling party. Grantee shall assist the City in any such inquiry. The City may require any reasonable conditions which it deems necessary at the time of review to ensure that the proposed transfer will satisfy the public interest of the City and its citizens for the balance of the term of the License.
(d) Nothing in this provision shall preclude Grantee from pledging, mortgaging, or hypothecating its interests to a recognized financial institution to secure borrowed funds. Said institution may foreclose on, hold, sell, assign or transfer such interests, but only to the extent that the mortgagee pledges, and the transferee undertakes to assume, and has the ability to perform, all Grantee’s obligations under the License; and provided further that said mortgage, pledge, sale or assignment shall not relieve Grantee of any obligations under this License.
(e) All rights, obligations and duties hereunder shall inure to, and be binding upon any transferee or assignee of the Grantee. The transferee or assignee shall agree, in a duly executed written instrument filed with the City, to comply with all the provisions of this License prior to the effectiveness of any such transfer or assignment.
PASSED by the City Council of the City of Brentwood, at its regular meeting of November 13, 2001 by the following votes:
Michael A. McPoland, Mayor
Karen Diaz, CMC, City Clerk