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HomeMy WebLinkAbout13486ORDINANCE NO 13,486 AN ORDINANCE TO PROVIDE FOR THE GRANTING BY THE CITY OF LITTLE ROCK, ARKANSAS, TO THE PERSON, FIRM OR CORPORATION, HEREAFTER TO BE ASCERTAINED IN THE MANNER PRESCRIBED BY LAW, THE FRANCHISE, RIGHT AND PRIVILEGE TO CONSTRUCT, ERECT, OPERATE AND MAINTAIN IN, UPON, ALONG, ACROSS, ABOVE, OVER AND UNDER THE STREETS, ALLEYS, PUBLIC WAYS AND PUBLIC PLACES, NOW LAID OUT OR DEDICATED, AND ALL EXTENSIONS THEREOF, AND ADDITIONS THERETO, IN THE CITY, POLES, WIRES, CABLES, UNDER- GROUND CONDUITS, MANHOLES, AND OTHER CONDUCTORS, AND FIXTURES NECESSARY FOR THE MAINTENANCE AND OPERATION IN THE CITY OF A CABLE TELEVISION SYSTEM FOR THE INTERCEPTION, SALE AND DISTRIBUTION OF TELEVISION AND RADIO SIGNALS; TO PROVIDE FOR PENALTIES FOR VIOLATION OF THE FRANCHISE PROVISIONS BY THE GRANTEE; AND TO AUTHORIZE THE CITY CLERK TO ADVERTISE FOR SEALED PROPOSALS FOR THE PURPOSE OF GRANTING THE AFORESAID FRANCHISE; AND FOR OTHER PURPOSES BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS. SECTION 1. That there shall be granted in the manner prescribed by law after notice and a public hearing to the person, firm or corporation, the franchise right and privilege to operate and maintain a Cable Television System in the City of Little Rock, within its corporate.limits as the same now exist or may be hereafter extended or altered, substantially in form and substance as contained and set out in the following ordinance for the term and upon and subject to the terms, provisions and limitations herein stated, namely: AN ORDINANCE TO GRANT TO THE FRANCHISE, RIGHT AND PRIVILEGE TO CONSTRUCT, ERECT, OPERATE AND MAINTAIN IN, UPON, ALONG, ACROSS, ABOVE, OVER AND UNDER THE STREETS, ALLEYS, PUBLIC WAYS, AND PUBLIC PLACES NOW LAID OUT OR DEDI- CATED, AND ALL EXTENSIONS THEREOF, AND ADDITIONS THERETO IN THE CITY, POLES, WIRES, CABLES, UNDERGROUND CONDUITS, MANHOLES, AND OTHER CONDUCTORS, AND FIXTURES NECESSARY FOR THE MAINTENANCE AND OPERATION IN THE CITY OF A CABLE TELEVISION SYSTEM FOR THE INTERCEPTION, SALE AND DISTRIBUTION OF TELEVISION AND RADIO SIGNALS. BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY QF LITTLE ROCK, ARKANSAS. SECTION 1. That the franchise, right, and privilege is hereby granted to to establish., maintain, and operate in the City of Little Rock a Cable Television System upon the condition that within sixty (60) days after the date of the passage of this ordinance the Grantee shall file with the City Clerk its unconditional acceptance of this franchise and promise to comply with and abide by its provisions, terms and conditions. Such acceptance and promise shall be in writing duly executed and sworn to, by or on behalf of the Grantee before a notary public or other officer authorized by law to administer oaths, provided, how- ever, that should the Grantee fail to comply with the latter prescribed filing of acceptance, the Grantee shall acquire no rights, privileges, or authority under this franchise whatever; further, the Grantee shall enter into a contract with the City in substantially the fol- lowing form: THIS CONTRACT, made this day of 19 by and between the City of Little Rock, a municipal corporation of the State of Arkansas, hereinafter referred to as "CITY ", and to as "GRANTEE "; W I T N E S S E T H herinafter referred That for and in consideration of the mutual undertaking of the parties to this contract, the City and the Grantee hereby covenant and agree each with the other as follows: 1. Purpose. The purpose of this ordinance is to provide for the granting of franchises to operate a Cable Television System in the City of Little Rock in the public interest in accordance with all State and Federal laws. 2. Definitions: A. "Access Channel" includes all public and Leased Channels. B. "Basic Service" means the delivery by the Grantee of those audio and visual signals required or permitted by the FCC to be carried on a Cable Television System. C. "Channel" means a frequency band which is capable of carrying a standard broadcast audio -video television signal. D. "City Manager" means the City Manager of Little Rock, or his duly authorized representative. -2- ' E. "City" means the City of Little Rock. F. "Board" means the Board of Directgrs of the City of Little Rock. G. "Cable Television System ", or "CTS ", or "System ", means any facility which is operated to perform for hire, either in whole or in part, the service of receiving, amplifying, modifying or originating television, radio or other electrical signals for the purpose of transmitting or distributing such signals by wire, cable or other means to subscribing members of the public, except that such definition shall not include: (1) any system which serves fewer than two hundred and fifty (250) subscribers: (2) any system which serves only the residents of one or more continuous apartment dwellings under common ownership, control or management, and commercial establishments located on the premises of such dwellings; or (3) any system commonly known as a master antenna system. H. "Depreciated Value" shall mean the value as shown on the Grantee's books and records of all the cable television system's tangible assets after depreciation which shall be calculated to the end of the Grantee's last fiscal year. Said value shall not include "good will" or any value that Grantee's books and records attribute to the franchise. I. "Fair Market Value" shall mean the price that a willing buyer would pay to a willing seller for a going concern based on the system valuation and sale multiplies prevailing in the industry at the time at which the Board elects to exercise its option. J. "FCC" means the Federal Communications Commission. K. "Franchise" means and includes any authorization granted hereunder in terms of a franchise, privilege, permit, license or otherwise to construct, operate and maintain a Cable Television System in the City. L. "Gross Revenues" means any and all compensation, in whatever form, exchange or otherwise, derived from all cable services in the City, not including any taxes on services furnished by the Grantee imposed directly on any subscriber or user by a city, county, state, or other governmental unit and collected by the Grantee for such entity." -3- `arm' i M. "Grantee" means the person, firm, or corporation to whom or to which a Franchise is granted by the Board under this ordinance, or anyone who succeeds said person, firm or corporation in accordance with the provisions of this franchise. N. "Leased Access Channel" means a channel on the System which is reserved for carriage of program material provided by persons who lease channel time from the Grantee. 0. "Net Profit" shall mean the amount remaining after deducting from gross revenues all of the actual, direct and indirect, expenses associated with operating the cable television system including the franchise fee, interest, depreciation and Federal or State income taxes. P. "Passed by the CTS" means the construction of the System in a given area has been completed such that no major construction is required to provide Basic Service upon request. Q. "Residential Subscriber" means a purchaser of service delivered over the system to an individual dwelling unit, where the service is not to be utilized in connection with a business, trade, or profession. R. "Streets" means the surface space of, above and below streets, avenues, highways, boulevards, bridges, tunnels, alleys, public places, and any other rights -of -way and easements within or belonging to the City. S. "Subscriber" means a purchaser of service delivered over the system. T. "Total Number of Subscribers" means the number of Subscribers determined as follows: In the event a single fee is paid for service to a multiple dwelling unit, the number of equivalent subscribers shall be determined by dividing such fee by the then prevailing Residential Subscriber rate and rounding the resulting quotient to the nearest whole number. To this number shall be added the number of all other-Subscribers. 1E 3. Franchise required; Duration; Exclusivity. A. The City shall require a Franchise for the use of the streets within the City for the construction, operation, and maintenance of a Cable Television System. No System shall be allowed to operate without a CTS Franchise. B. The Franchise shall be granted for a term of fifteen (15) years; thereafter, after full public hearings, the Franchise may be renewed for terms of ten years as provided for in Section 16 hereof. C. The Franchise, rights and privileges herein granted are not exclusive and nothing in this ordinance shall be construed to prevent a grant by the City of a similar franchise,,right and privilege to other persons or corporations. 4. Use of the Streets. A. The Grantee shall have the right to use the streets of the City for the construction, operation and maintenance of a Cable Television System as prescribed, regulated and limited by provisions of this ordinance, and by state, local and Federal law, both present and future. B. The right granted shall allow the grantee to construct, erect, maintain, and operate such poles, conduits, towers, manholes, subways, wires, cables, appliances and equipment necessary for the safe and efficient operation of the CTS; provided that: . i. The Grantee shall utilize the facilities of utilities and subways, wherever possible. ii. In no case may the Grantee install poles where underground facilities are in use by utility companies, provided, however, the City Manager shall have the option of permitting such installation. iii. Nothing in this section shall be construed to act as a waiver of the power of the City to require by ordinance the substitution of underground service for overhead service, if_all other utilities are so required. -5- T` iv. Nothing in this section shall be construed to relieve the Grantee from its obligation to pay any fees or rents for its use of facilities of the City, utility companies, or other legal entities. C. The Grantee shall not erect or install, move, alter, or change the location of any pole, tower, wire, conduit, subway, line, manhole, cable or equipment in any street, alley or other public place of the City or dig, cut or disturb any street, alley or other public place of the City unless prior written notice of its intention to do so is given to such department or agency of the City as shall have been or may be designated by the City Manager, or the Board of the City and permission- in writing so to do is granted by such department or agency or such requirement is waived by such department or agency. Such permission shall be conditioned upon compliance with the terms, conditions, provisions and limitations of this franchise and with such other terms, provisions, conditions and limitations as will preserve, protect and promote the safety of the public using the streets, alleys and other public places by the City or by any other public utility or public service corporation for their respective purposes and functions. Such permission shall also be conditioned upon such other terms, conditions, provisions and limitations as will preserve, protect and promote the health, safety and general welfare of the City and its citizens subject to the lawful exercise of the police power. D. In the event the relocation, construction, reconstruction, maintenance or repair by the City of any of its facilities or services now or hereafter acquired, and including, but not limited to any street, alley or other public place, sewer, electric, water, fire alarm, emergency communication, or traffic control facilities or any part thereof, or in the event access to any street, alley or other public place to or from any property of the City is required, and it is necessary to move, alter or relocate, either permanently or temporarily, any of the Grantee's poles, towers, wires, appliances, conduits, subways, lines, manholes, cables or equipment or any part thereof in the public right -of -way in order for the City to relocate, construct, reconstruct, maintain or repair any such facility, service, street, alley or other public place or any such sewer or electric, water, fire alarm, police communication or traffic control facility, or any part thereof, or to obtain access to or from such property, upon notice from the City, the Grantee will move, alter, or relocate such pole, tower, appliance, conduit, subway, line, manhole, cable or equipment or part thereof, at its own cost and expense; and should the Grantee fail, refuse or neglect to comply with such notice, such pole, tower, wire, appliance, conduit, subway, line, manhole, cable or equipment or part thereof may be removed, altered or relocated by the City at the cost of the Grantee and the City shall not be liable to the Grantee for damages resulting from such removal, alteration or relocation. E. The Grantee shall at no cost to the City erect, install and maintain on any of its poles, towers, wires, appliances, conduits, subways, lines, manholes, cables or equipment in or near the streets, alleys and other public places of the City such reasonable devices to apprise or warn persons using the streets, alleys and other public places of the existence of.such poles, towers, wires, appliances, conduits, subways, manholes, lines, cables or equipment as shall be from time to time reasonably prescribed or approved for purposes of public safety by such department or agency of the City as shall have been or may be designated for the purpose by the City Manager or Board of the City. F. The Grantee shall have the right to remove, trim, cut and keep clear of its poles, towers, wires and other overhead appliances and equipment the trees in and along the streets, alleys and other public places of the City, provided it first obtains a written permit from the City so to do, except in cases of emergency and further provided, that in the exercise of such right, the Grantee shall not cut, remove, trim or otherwise injure such trees to any greater extent than is reasonably necessary for the installation, maintenance and use of such poles, towers, wires and other overhead appliances. -7- G. The Grantee in the exercise of any right granted to it by this Franchise, shall at no cost to the City promptly reconstruct, replace, restore or repair any facility or service of the City, now or hereafter acquired, including, but not limited to any street, alley, or other public place, sewer, electric, water, fire alarm, police communication or traffic control facility or any part thereof which may be damaged, disturbed, or destroyed by the exercise of any such right, in a manner, with such materials and to the satisfaction of such department or agency as shall have been or may be designated by the City or Board of the City; provided that should the Grantee fail to comply with these requirements, the City shall have the right to carry out the provisions of this paragraph and Grantee shall reimburse the City for all expenses incurred in so doing. 5. Maintenance of the System. A. The Grantee shall at all times employ ordinary care and shall install and maintain devices or systems for preventing failures and accidents which are likely to cause damage, injuries or nuisances to the public. B. The Grantee shall install and maintain its wire, cable, fixtures, and other equipment so as not to interfere with the equipment of any utility of the City, or any other entity lawfully and rightfully using the conduit, pole, subway or other part of the right -of -way. C. The Cable Television System shall at all times conform to the construction and maintenance standards set forth in the Grantee's bid and to the standards set forth below: (a)(1) Methods of construction, installation, and maintenance of the City's cable television system shall comply with the National Electrical Safety Code 1975 (ANSI CI -1975) to the extent that such Code is consistent with local law affecting the construction, installation, and maintenance of electric supply and communications lines. To the extent that such Code is inconsistent with other provisions of this franchise or with local law, the latter shall govern. (a)(2) Any tower constructed for use in the City's cable television system shall comply with the standards contained in Structured Standards for Steel Antenna Towers and Antenna Supporting Structures, EIA Standards RS -222 -A as published by the Engineering Department of the Electronic Industries Association, 2001 Eye Street, N.W., Washington, D.C. 20006. (a)(3) Installation and physical dimensions of any tower constructed for use in the City's cable television system shall comply with all appropriate Federal Aviation Agency regulations, including, but not limited to, Objectives Affecting Navigable Airspace, 14 C.F.R. 77.1 et.seq., February 1965. (a)(4) Any antenna structure in the City's cable television system shall comply with Construction, Marking and Lighting of Antenna Structure, 47 C.F.R. 17.1 et. seq., September 1967. (a)(5) All working facilities and conditions used during construction, installation and maintenance of the City's cable television system shall comply with the standards of the Occupational Safety and Health Administration. (b) Each cable distribution system on the public streets shall comply with all applicable laws and ordinance and governmental regulations regarding clearances above ground. (c) The grantee shall at all times use ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public. (d) The grantee shall construct and operate the system and related facilities in accordance with all generally accepted related industry codes, standards and recommendations, that are applicable. D. All conductors, cables, towers, poles and other components of the System shall be located and constructed by the Grantee in back of street curbs so as to provide minimum interference with access by adjoining property owners to the streets and public ways nor shall any pole or other fixtures of the Grantee placed in the public way interfere with the usual travel in such public way. E. Neither the Grantee, its officers nor its employees shall engage in the business of selling, leasing, repairing or installing television receivers, radio receivers or accessories for such receivers ME within the City of Little Rock during the term of this Franchise. This paragraph shall not preclude the selling, leasing, repair or installation of such convertors or other devices as may be necessary to render the Subscribers' receiver capable of receiving all channels of the Cable Television System. 6. Construction Schedule and Reports. A. Upon accepting the Franchise, Grantee shall, within sixty (60) days, file the documents required to obtain all necessary Federal, State and local licenses, permits and authorizations required for the conduct of its business, and shall upon request of the City submit reports to the City Manager on progress in this respect until all such documents are in hand. B. Construction and installation of the system shall be completed as presented in grantee's proposals, within years of the date that FCC certification is required. C. The wiring schedule offered by the grantee and accepted by the City includes property inside the City limits of the following census tracts: Construction Year Census Tract Number Line Extension Policv: D. Every three (3) months after the start of construction, Grantee shall furnish the City a report on progress of construction until complete. The report shall include a map that clearly defines the areas wherein regular subscriber service is available. E. Copies of any agreements, reports, petitions, correspondence or other documents filed with any local, state or federal government or any person or legal entity relating to the Grantee's operations within the City shall be filed with the City Manager simultaneously. 7. System Description and Service. A. System design and capacity shall be: -10- B. System services shall include: 8. Rates. A. Initial Rates to Subscribers - The Grantee shall be permitted to charge subscribers up to the following rates for its services: B. Rate Change Procedure - (1) The rates as specified in paragraph "A" above shall be in effect for a minimum period of two Years from the date of providing initial service. (2) The Grantee may establish rates for service from time to time thereafter by filing with the City Manager a schedule of rates thirty (30) days prior to their implementation. (3) Between September 1 and November 30 of the years 1981, 1984, 1987 and 1990, and each three years thereafter, the Board shall determine whether it will assume rate modification authority. If the Board declines rate modification authority, then rates may be modified by the Grantee as specified in subparagraph (2) above. If the Board assumes rate modification authority, then for the next three (3) years rates shall be subject to modification only by the Board and only in accordance with the following procedures: (a) The grantee may petition the Board for a change in rates by filing a revised rate schudule including its justification(s) for said proposed new schedule. (b) Within ten (10) days of notification by the Board of the place and time established for a hearing on said petition, the grantee shall notify its subscribers of the hearing by announcement on at least two (2) channels of its system, between the hours of 7:00 and 9:00 p.m. for five (5) consecutive days. Additionally, hearings shall be announced in a newspaper of general circulation at least five (5) days before the date of the hearing. Follgwing all proper notice, but in no event later than ninety (90) days from the date of said petition, the Board shall hold an appropriate public hearing to consider the proposed new rates, at which heari.ng all parties desiring to be heard, including the grantee, shall be heard on any matters relating to the performance of this franchise, the grantee's services, and the proposed new rates. (c) Within ninety (90) days after said hearing, the Board shall render a written decision on the grantee's petition, either accepting, rejecting, or modifying.the same and reciting the basis of its decision. (d) If the Board fails to act within six (6) months of the Grantee's petition pursuant to paragraph (3) (a) above, the grantee shall thereafter be entitled to put its proposed new rates into effect on a provisional basis, provided that it shall keep a full and accurate accounting of all income resulting from said provisional rates and shall be obliged for a period of six (6) months thereafter to refund the amount by which said provisional rates exceed the rates ultimately established by the Board. Upon request by the Board the grantee shall provide a bond or other reasonable surety to ensure that possible refunds due under this subsection shall be promptly made. The bond or surety shall be in an amount not to exceed the difference between the amount of revenues generated in six months at the previously existing rates and the amount of revenues expected to be generated in six months at the provisional rates. (e) The criteria for the Board's decision in such matters shall be the establishment of rates which are "fair and reasonable" to both the grantee and its subscribers and shall be generally defined as to the minimum rates necessary to meet all applicable costs of service, including fair return on all invested capital, all assuming efficient and economical management. -12- (f) In order for the Board to determine. whether proposed rate changes comport with the criteria established in subsection (e) above, the grantee's petition for a rate increase shall include the following financial reports which shall reflect the operations of the Little Rock system only: 1. Balance sheet 2. Income Statement 3. Cash Flow Statement 4. Statement of Sources and Applications of Funds 5. Detailed Supporting Schedules of Expenses, Income, Assets and other items as may be required. 6. Statement of Current and Projected Subscribers and Penetration. The grantee's accounting records applicable to the Little Rock System shall be available for inspection by the City at all reasonable times. The City shall have access to records of financial transactions for the purpose of verifying burden rates or other indirect costs prorated to the Little Rock operation. The documents listed above shall include sufficient detail and /or footnotes as may be necessary to provide the City with the information needed to make accurate determinations as to the financial condition of the system. All financial statements shall be certified as accurate by an officer of grantee. (g) Any disagreement between the City and the grantee concerning interpretations and calculations of the financial and statistical information provided by the grantee may be submitted to a court of competent jurisdiction. (h) The Board reserves the right to review the purchase price of any transfer or assignment of the system, and any asignee to this franchise expressly agrees that any negotiated sale value which the board deems unreasonable will not be considered in the rate base for any subsequent request for service increases. Reasonableness of purchase price will be determined in accordance with criteria listed in B (3) (e). -13- 9. Franchise Fee. A. The Grantee shall pay to the City, in consideration for the granting of the franchise to use the public ways for the operation of a cable television system, subject to approval by the FCC, not less than 3% of its annual gross revenues during the period of its operation under the franchise. B. The Grantee shall file with the City, within thirty (30) days after the expiration of each of the Grantee's fiscal quarters, a financial statement clearly showing the Gross Annual Revenues received by Grantee during the preceding quarter. Payment of the quarterly portion of the Franchise fee shall be payable to the City at the time such statement is filed. The Grantee shall also file, within one hundred twenty (120) days following the conclusion of the Grantee's fiscal year, an annual report prepared and certified by the Treasurer of the Grantee acceptable to the City, clearly showing the yearly total gross revenues. C. The City shall have the right to inspect the Grantee's income records, the right of audit and the recomputation of any amounts determined to be payable under this ordinance, provided, however, that such audit shall take place within twelve (12) months following the close of each of the Grantee's fiscal years. Any additional amount due the City as a result of the audit shall be paid within thirty (30) days following written notice to the Grantee by the City, which notice shall include a copy of the audit report. The cost of said audit shall be borne by the Grantee if it is properly determined that the Grantee's annual payment to the City for the preceding year-is increased thereby by more than five (5 %) percent. D. In the event that any Franchise payment or recomputed amount is not made on or before the applicable dates heretofore specified, interest shall be charged from such due date at the annual rate of ten (10 %) percent. E. In the event the Franchise is terminated prior to its expiration date, and the City invokes its right to purchase the Grantee's system, the Grantee shall file with the City, within thirty (30) days of the date that ownership and control passes to the City or its assignee, -14- a financial statement clearly showing the Gross Annual Revenues received by Grantee since the end of the previous fiscal quarter. The Grantee shall pay the Franchise fee due at the time such statement is filed. F. No acceptance of any payment shall be construed as a release or as an accord and satisfaction of any claim the City may have for further or additional sums payable under this ordinance. G. Nothing contained in this ordinance shall be construed to exempt the Grantee from any tax, business license tax, levy or assessment which is now or which may hereafter by authorized by law. H. The City reserves the right to increase both the Franchise fee rate and the revenues on which such fee is based so as to increase the Franchise payments in the event that the current Federal Communications Commission limitations as to the Franchise fee rate and the revenues on which such fee may be levied are eliminated or changed, as a result of superseding regulations or court action. Any change in Franchise fee rate or the revenues on which such fee is based shall be accomplished by amendment to this Franchise and to any ordinance granting a Franchise hereunder, provided that such amendments shall be preceded by a public hearing affording due process. I. The City reserves the right to require the Grantee to collect any consumer tax that may be imposed on subscribers by the City. 10. Books and Records of the Grantee. A. The Grantee shall maintain an office in the City for so long as it continues to operate the System or any portion thereof and shall designate such offices as the place where all notices, directions, orders and requests may be served or delivered under this ordinance. The City Manager shall be notified of the location of such office or any change thereof. B. The Grantee shall keep complete and accurate books of account and records of its business and operations under and in connection with the ordinances and Franchise. -15- C• The City Manager or his authorized agent shall have access to all books of account and records of the Grantee for the purpose of ascertaining the correctness of any and all reports and shall be given local access to all other records upon reasonable request. D. Any false entry in the books of account or records of the Grantee or false statement in the reports to the City Manager as to a material fact, knowingly made by the Grantee shall constitute the breach of a material provision of the ordinance and Franchise. 11. Liability for Damages. A. The Grantee shall pay and by its acceptance of this Franchise, the Grantee specifically agrees that it will pay all damages and penalties which the City may legally be required to pay as a result of granting this Franchise. B. The Grantee shall pay and by its acceptance of this Franchise, the Grantee specifically agrees that it will pay all expenses incurred by the City in defending itself with regard to all damages and penalties mentioned in paragraph A above. These expenses shall include all out -of- pocket expenses, such as attorney fees, and shall also include the reasonable value of any services rendered by the City Attorney or his assistants or any City Employee. C. The Grantee shall file with the City Clerk the insurance policies required by this section and evidence of payment of required premiums prior to commencement of the construction of the Cable Television System and thereafter maintain in full force for the full term of the Franchise and in effect at all times, at the expense of the Grantee, a comprehensive liability insurance policy with the City of Little Rock named as an insured, written by a company authorized to do business in the State of Arkansas, in a form approved by the City Attorney, protecting the City against liability for loss, for personal injury and property damage occasioned by the operation of the Cable Television System by the Grantee in the following minimum amounts: -16- i) $250,000.00 for property damage to any one person. ii) $500,000.00 for property damage in any one accident. iii) $500,000.00 for any personal injuries to any one person. iv) $1,000,000.00 for personal injuries in any one accident. V) $1,000,000.00 for all other types of liability. Such insurance shall be kept in full force and effect by the Grantee during the existence and until after the removal of all poles, wires, cables, underground conduits, manholes and other conductors and fixtures incident to the maintenance and operation of the Cable Television System as defined in this Franchise. D. The Grantee shall obtain a performance bond running to the City with good and sufficient surety approved by the City Attorney in the sum of Two hundred and fifty thousand ($250,000) dollars conditioned upon the faithful performance and discharge of the obligations imposed by the ordinance and the Franchise awarded hereunder from the date thereof. The amount of the performance bond will be reduced on an annual basis: 12. Security Fund. A. Within thirty (30) days after the acceptance of this Franchise, the Grantee.shall deposit with the City's Director of Finance and maintain on deposit throughout the term of the Franchise the sum of Fifteen Thousand dollars ($15,000) in cash, or in lieu of cash an irrevocable letter of credit in said amount issued by a local banking institution. If the Grantee has made all required payments and shall have complied with all provisions of this ordinance, the City's Director of Finance shall be authorized to pay to the Grantee any interest earned on the cash deposit required by this Section on or before July 1 of each year in which this Franchise is in effect. B. Within thirty (30) days after notice to it that any amount has been withdrawn from the security fund deposited pursuant to Paragraph (A) of this section the Grantee shall pay to,.or deposit with, the City's Director of Finance a sum of money sufficient to restore such security fund to the original amount of $15,000. -17- C. If the Grantee fails to pay to the City any compensation within the time fixed herein, or, fails after ten (10) days notice to pay to the City, any taxes due and unpaid; or fails to repay to the City within such ten (10) days, any damages, costs or expenses which the City shall be compelled to pay by reason of any act or default of the Grantee in connection with this ordinance or its Franchise, or fails after three (3) days notice by the City Manager of such failure to comply with any provision of this ordinance or its Franchise which the City Manager reasonably determines can be remedied by an expenditure of the security, the City's Director of Finance may immediately withdraw the amount thereof, with interest, and any penalties, from the security fund. Upon such withdrawal, the City's Director of Finance shall notify the Grantee of the amount and date thereof. D. The cash deposit and the performance bond shall become the property of the City in the event that the Franchise is canceled by reason of the default of the Grantee. The cash deposit shall be retained by the City and returned to the Grantee at the expiration of the Franchise provided there is then no outstanding default on the part of the Grantee. E. The rights reserved to the City with respect to the security fund are in addition to all other rights of the City, whether reserved by this ordinance or authorized by law, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the City may have. 13. Transfer of Franchise. A. The Franchise granted under this ordinance shall be a privilege to be held in personal trust by the Grantee. It shall not be assigned, transferred, sold or disposed of, in whole or in part, by voluntary sale, merger, consolidation or otherwise or by forced or involuntary sale, without prior consent of the Board expressed by ordinance and then on only such conditions as may therein be prescribed. The City is hereby empowered to take legal or equitable action to set aside, annul, revoke or cancel the Franchise, or the transfer of the Franchise, if said transfer is not made according to the procedures set forth in this ordinance. so r 4 B. Any sale, transfer or assignment shall be made by a bill Of sale or similar document, an executed copy of which shall be filed with the City Manager within thirty (3) days after such sale, transfer or assignment. The Board shall not withhold its consent unreasonably, Provided, however, the proposed asignee agrees to comply with all the provisions of this ordinance and the Franchise and must be able to provide proof of financial responsibility as determined by the Board. C. No such consent shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in Part, to secure an indebtedness, except that when such hypothecation shall exceed seventy -five (75%) percent of the fair market value of the property used by the Grantee in the operation of its cable television system. Prior consent of the Board, expressed by ordinance, shall be required for such transfer and said consent shall not be withheld unreasonably. D. Prior written notice to the Board shall be required where ownership or actual working control or more than fifty (50 %) percent of the right of control of the Grantee is acqu.ired by a person or group of persons acting in concert, none of whom already own or control fifty (50%) or more of such right of control, singularly or collectively. By its acceptance of this Franchise, the Grantee specifically grants and agrees that any such acquisition occurring without prior notice to the Board shall constitute a violation of this Franchise by the Grantee. E. The Grantee shall promptly notify the City Manager of any actual or proposed change in, or transfer of, or acquisition by any other party of control of the Grantee. Every change, transfer or acquisition of control of the Grantee shall make the Franchise subject to cancellation unless and until the Board shall have consented thereto. For the purpose of determining whether it shall consent to such change, transfer or acquisition of control, the Board may inquire into the qualifications of the prospective controlling party, and the Grantee shall assist the Board in any such inquiry. If the Board does not schedule a hearing on the matter within sixty (60) days after notice of the change or proposed change and the filing of a petition requesting its consent, it shall be deemed to have consented. In the event that the Board adopts an ordinance -19- denying its consent and such change, transfer or acquisition of control has been affected, the Board may cancel the Franchise unless control of the Grantee is restored to its status prior to the change, or to a status acceptable to the Board. F. The consent of the Board to any sale, transfer, lease, trust, mortgage or other instrument of hypothecation shall not constitute a waiver or release of any of the rights of the City under this ordinance and the Franchise. 14. Foreclosure. Upon the foreclosure or other judical sale of all or a substantial part of the system or upon the termination of any lease covering all or a substantial part of the System, the Grantee shall notify the City Manager of such fact, and such notification shall be treated as a notification that a change in control of the Grantee has taken place, and the provisions of Section 13 of this ordinance, governing the consent of the City to such change in control of the Grantee shall apply. 15. Receivership. The City shall have the right to cancel this Franchise one hundred and twenty (120) days after the appointment of a receiver, or trustee, to take over and conduct the business of the Grantee, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred and twenty (120) days, or unless: i) Within one hundred and twenty (120) days after his election or appointment; such receiver or trustee shall have fully complied with all the provisions of this ordinance and remedied all defaults thereunder; and ii) Such receiver or trustee, within said one hundred and twenty (120) days shall have executed an agreement, consented to by the Board and duly approved by the Court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this ordinance and the Franchise granted to the original Grantee. INiII 16. Review and Renewal. A. The Board shall not hold any meeting involving the review, renewal, cancellation or expiration of the Grantee's Franchise unless the City Manager has (1) advised the Grantee in writing, at least thirty (30) days prior to such meeting, as to its time, place and purpose and (2) published a notice, at least once, ten (10) days before the meeting in a newspaper of general circulation within the City. B. It shall be the policy of the City to amend this Franchise upon application of the Grantee, when necessary to enable the Grantee to take advantage of advancements in the state -of- the -art which will afford it an opportunity to more effectively, efficiently,'or economically serve its Subscribers; provided, however, that this section shall not be construed to require the City to make any amendment. Further, every three years during the term of the Franchise, the Board shall hold a public hearing, the purpose of which will be to consider System performance, System design modifications, and the possible need for reasonable and appropriate modifications in the Franchise of a nature that would not result in effectively terminating same under the then existing Federal Communications Commission Rules for Cable Television. This Franchise may be amended at any time in order to conform with the applicable Federal law and FCC rulings after notice and public hearing. C. The Board shall hold a public hearing prior to the Franchise expiration date, the purpose of which will be to review the Grantee's performance during the entire term of its Franchise, to consider the adequacy of the Franchise from the standpoint of the City, the Grantee and the Federal Communications Commission Rules for Cable Television, and to determine the advisability of renewing the Grantee's franchise for a period of ten (10) years. D. The City shall hear any interested persons during said meeting and shall determine whether or not the Grantee did reasonably comply with the terms and conditions imposed by this ordinance and the Franchise. -21- l � + E. If the City determines that the grantee's performance has been satisfactory in accordance with the terms and conditions imposed by this ordinance and the Franchise, the Board shall renew the Grantee's Franchise for a period of ten (10) years in which event the City shall modify this ordinance and the Franchise to bring them into compliance with the FCC Rules for Cable Television. The City shall have the right to recoup from the Grantee those direct expenses above normal administrative costs incurred pursuant to renewal of the Franchise. F. If the City determines that the performance of the grantee has not been satisfactory under the terms and conditions imposed by this ordinance and the Franchise, it shall have the right not to renew the Franchise in which event the City shall, on the expiration date of the Franchise, either purchase the assets of the Grantee's System at its then fair market value, or, select a new Grantee, after a full public proceeding, and at the option of the City, such new Grantee may be required to take the assets at fair market value. 17. Cancellation and Expiration. A. The City shall have the right to cancel the Franchise if the Grantee fails to comply with any material and substantial provision of this ordinance, or amendments thereto, or of the grant of the Franchise or any reasonable order, direction or permit issued by any City Department or agency pursuant to such material and substantial provision, or any rule or regulation promulgated by the City which is reasonable in light of, and consistent with, any provision of this ordinance or the Franchise; or if the Grantee persistently fails to comply with any provision of either, or any reasonable order, direction or permit. Cancellation shall be by ordinance of the Board duly passed in accordance with the following procedures: i) The City Manager shall notify the Grantee of the alleged failure or persistent failure of compliance and give the Grantee a reasonable opportunity to correct such failure or persistent failure or to present facts and argument in refutation of the alleged failure or persistent failure. -22- ii) If the City Manager then concludes that there is a basis for cancellation of the Franchise pursuant to Paragraph (A) of this section, he shall notify the Grantee thereof. iii) If within reasonable time the Grantee does not remedy and /or put an end to the alleged failure or persistent failure, the Board, after a public hearing on notice, may cancel the Franchise if it determines that such action is warranted under Paragraph (A) of this section. B. If for ten (10) consecutive days, the System or any part thereof, is inoperative, or if the same is inoperative for thirty (30) days out of any consecutive twelve (12) months, the Board may cancel the Franchise. C. The Grantee shall not be declared in default or be subject to any sanction under any provision of this ordinance or the Franchise in any case in which the performance of any such provision is prevented for reasons beyond its control. D. If all or part of the streets within the City are closed or discontinued as provided by statute, then the Franchise and all rights and privileges hereunder with respect to said streets or any part thereof so closed or discontinued, shall cease and terminate upon the date of the passage of the ordinance closing and discontinuing such streets and the Grantee shall not be entitled to damages from the City due to the closing or discontinuance of such streets, or for injury to any part of the System in the streets or for the removal or relocation of the same. E. If the System is taken or condemned pursuant to law, the Franchise shall, at the option of the Board, cease and terminate on the date of the vesting of title pursuant to such taking or condemnation, and any award to the Grantee in connection with such taking or condemnation shall not include any valuation based on the Franchise. F. Upon cancellation or expiration of the Franchise, the City shall have the right to purchase the System, and the Board may direct the Grantee to continue or to cease operation of the System. -23- G. If the Franchise is cancelled by the Board by reason of the Grantee's default, the System shall, at the election of the City, become the property of the City at a cost not to exceed its then Fair Market Value according to generally accepted accounting principles, with a reduction for any damages incurred by the City in connection with such cancellation. Damages incurred by the City shall include without limitation, any payments made by the City pursuant to an ordinance by the Board authorizing or directing another agency or person to operate the System for a temporary period until a Franchise therefor is granted, or until the City takes possession of the System in accordance with provisions of this ordinance or other applicable law. H. If the franchise terminates by expiration of its term, the purchase price to the City for the System shall be at its then Fair Market Value. Beginning within two years prior to expiration and whether or not the City has elected to purchase the System, either the City or the Grantee may demand a determination of Fair Market Value, the determination to be made as of the date the request is made. The determination shall be subject to correction or adjustment to reflect the Fair Market Value as of the date of expiration, to be paid by the City if it elects to purchase the System. Such Fair Market Value shall be the Fair Market Value of all tangible and intangible assets forming a part of the System. If the City, or successor franchisee, does not purchase the System, the Grantee shall remove that part of the System located in the streets and restore the streets to a condition satisfactory to the City. 18. Transfer of ownership; Transition Period. A. Continuity of Service Mandatory. It shall be the right of all subscribers to receive all available services insofar as their financial and other obligations to the grantee are honored. In the event that the grantee elects to overbuild, rebuild, modify, or sell the system, or the City terminates or fails to renew this franchise, or the City elects to purchase the system, the grantee shall do everything in its power to ensure that all subscribers receive continuous, uninterrupted service regardless of circumstances. In the event of purchase by the City, or a change of grantee, the current grantee shall cooperate with the City to operate the system for a temporary period in maintaining continuity of service'to all subscribers. -24- B. Upon payment of the purchase price, the Grantee shall immediately transfer to the City all contracts, leases, licenses, permits and any other rights necessary to maintain continuity of service to the public and transfer possession and title to all facilities and property, real and personal, related to its System free from any and all liens and encumbrances not agreed to be assumed by the City in lieu of some portion of the purchase price. The Grantee shall make it a condition of each contract entered into by it with reference to its operations under this ordinance and Franchise, that the contract shall be subject to the exercise of its option by the City and that the City shall have the right to succeed to all privileges and obligations thereof upon the exercise of such option. C.. The City shall have the right and power to assign, its purchase rights to a successor Grantee approved by the City in a manner not inconsistent with the provisions of this Ordinance. D. Until such time as the Grantee transfers to the City or to a new Grantee possession and title to all assets, real and personal, related to its System, the Grantee shall, as trustee for its successor in interest, continue to operate the System under the terms and conditions of this ordinance and the Franchise and to provide the regular subscriber service and any and all of the services that may be provided at that time. During such interim period, the Grantee shall not sell any of the System assets nor shall the Grantee make any physical, material, administrative or operational change that would tend to (1) degrade the quality of service to the Subscribers, (2) decrease income, or (3) materially increase expenses without the express permission, in writing, of the City or its assignee. The City shall be permitted to seek legal and equitable relief to enforce the provisions of this section. E. For its management services during this interim period, the Grantee shall be entitled to receive as compensation, the Net Profit, as defined herein, generated during the period between the date the Grantee received written notice from the City of its intent to purchase the Grantee's System or the expiration date of the Franchise, whichever is earlier, and the payment of the purchase price. Such management services shall not be continued without Grantee's consent for more than twelve (12) months. However, if the Board determines that the -25- Grantee is responsible for any delay in transfer of ownership and control, the Grantee shall continue to operate the System without compensation for its services until the sales agreement is executed and ownership and control passes to the City, or its assignee. In addition, the City shall also have the further right to, (1) forthwith terminate Grantee's Franchise and have the System removed, or (2) to purchase the assets of the Grantee's System. F. In the event the City elects to purchase the Grantee's System and the Fair Market Value cannot be agreed upon, the final price shall be determined by the Circuit Court of Pulaski County, Arkansas. 19. Complaint Procedure. A. The Grantee shall establish a Subscriber complaint procedure and designate a local official for administering the complaint procedure at its local office in the City. Notice of the complaint procedure shall be given to each Subscriber. B. The Grantee shall respond to all service calls within forty -eight (48) hours and correct malfunctions as promptly as possible, but in all cases not longer than seventy -two (72) hours after notification thereof. For this purpose, the Grantee shall maintain an office adequately staffed and trained to provide prompt and efficient service to the Subscribers. C. In cases where requests for service have been ignored or unfilled for whatever reason, the City Manager shall have the power to require the Grantee to provide service in response to all reasonable requests as the City Manager may determine. D. When there have been similar complaints made, or where there exists other evidence, which, in the judgment of the City, casts doubt on the reliability of quality of cable service, the City shall have the right and authority to compel the grantee to test, analyze and report on the performance of the system. Such test or tests shall be made, and the reports of such test or tests shall be delivered to the City no later than 14 days after the City formally notifies the grantee. -26- The City's right under this provision shall be limited to requiring tests, analyses, and reports covering specific subjects and characteristics based on said complaints or other evidence when and under such circumstances as the City has reasonable grounds to believe that the complaints or other evidence require that tests be performed to protect the public against substandard cable service. Said tests and analyses shall be supervised by a registered professional engineer, not on the permanent staff of the grantee and selected jointly by the City and the grantee. The aforesaid engineer shall sign all records of special tests and forward to the City such records with a report interpreting the results of the test and recommending actions to be taken by the City. 20. Penalties. A. For any violation of material provisions of this ordinance the penalties shall be chargeable to the Security Fund as follows: i) For failure to comply with the provisions of Section 6 $100.00 each per day ii) For failure to provide data and reports as requested by the City Manager or the Board . . $100.00 per day iii) For failure to restore the cash deposit as required in Section 12(B) within the specified thirty (30) days, the entire cash deposit remaining shall be forfeited. B. The Grantee may appeal any penalty which it considers unreasonable as provided for in Section 22 of this ordinance. 21. Hiring and Employment Practices. The Grantee shall not refuse to hire or employ, nor bar or discharge from employment, nor discriminate against any person in compensation or in terms, conditions or privileges of employment because of age, race, creed, color, national origin or sex, and Grantee shall have an approved Affirmative Action Plan. 22. Appeals In the event the Grantee questions the reasonableness of any order, requirement, decision, or other action taken by the City Manager or shall be of the opinion that the City Manager lacks authority to take -27- such action, the Grantee shall be allowed to appeal the order, requirement, decision or other action to the Board of Directors. The notice of objection and request for an appeal shall be made in writing to the City Clerk within two weeks of the objectionable order, requirement, decision, or other action. 23. Sundry Provisions. A. Every direction, notice or order to be served upon the Grantee shall be delivered or sent by registered mail to its office in the City as required by Section 10(A) of this ordinance. Every notice served upon the City shall be delivered or sent by registered mail, to. the City Manager, City Hall, Little Rock, Arkansas 72201. B. All provisions of this ordinance shall apply to the Grantee, its successors, and assigns, as such may be approved by the Board, in accordance with the ordinance. C. The rights granted by this ordinance are subject to all Franchises and permits heretofore or hereafter granted by the Board to use the streets of the City by other public utility or public service corporations. It is not intended by the grant of this Franchise to abridge the exercise of the police power heretofore or hereafter granted to the City by the laws of the State of Arkansas. The grant of this Franchise is subject to all ordinances and resolutions of the Board of Directors of the City of Little Rock as the same now exist or may be hereafter amended, revised, or codified, in the lawful exercise of any other power granted to the City by the laws of this State. D. Specific mention of the materiality of any of the provisions herein is not intended to be exclusive of any others for the purpose of determining whether any failure of compliance hereunder is material and substantial. E. If any particular section of this ordinance, or the particular application thereof, shall be held invalid, the remaining provisions, and their application, shall not be affected thereby. F. Grantee's Appl.ication Incorporated. The Grantee shall provide all services specifically set forth in its application to provide cable service to the City of Little Rock, Arkansas and by its ME 59 application is thereby incorporated by reference and made a part of the franchise. In the event of a conflict between such proposals and the provisions of this ordinance, that provision which provides for the greatest benefit to the City, in the opinion of the Board, shall prevail. G. The Grantee shall assume the cost of publication of this ordinance and Franchise as such publication is required by law and such is payable upon the Grantee's filing of acceptance. H. The Grantee to whom the Board grants this nonexclusive franchise, shall, in addition to all other fees, pay to the City at the time the Grantee files its acceptance of the Franchise an amount not to exceed ten thousand (($10,000.00) dollars. Such payment shall be nonrefundable and shall be used to offset any direct costs incurred by the City in granting this Franchise not defrayed by fees submitted with the bids. I. Whenever this ordinance or the Franchise sets forth any time for any act to be performed by or on behalf of the Grantee, such time shall be deemed of the essence and the Grantee's failure to perform within the time alloted shall, in all cases, be sufficient grounds for the City to invoke the remedies available under the terms and conditions of this ordinance and the Franchise. IN WITNESS WHEREOF, the City has caused its name to be subscribed hereunto by its City Manager and its corporate seal to be hereto affixed and attested by its City Clerk and the Grantee has caused its name to be subscribed hereunto by its and its corporate seal to be hereto affixed and attested by its as of the day and year first above written. SECTION 2. This Ordinance shall be in force and effect upon its passage and the City Clerk shall cause to be advertised once a week for four successive weeks in a newspaper of general circulation published in the City of Little Rock, the draft of the ordinance contained in Section 1 of this ordinance, and in addition thereto shall be such advertisement invite bids for the franchise, rights and privileges to be granted in -29- J � r and by said proposed ordinance, which bids shall be delivered to the presiding Mayor of the Board and be dealt with and acted upon in the manner prescribed by law. The said advertisement shall expressly reserve the right to reject any and all bids, shall state that all bids must be received in the office of the City Clerk not later than 5:00 o'clock P.M. on the 16th day of October, 1978, and that no bids received after that time shall be considered and shall state that each bid shall be accompanied by a cash or certified check payment of two thousand, five hundred ($2,500.00) dollars. Such sum shall be applied to the costs incurred by the City in the preparation, publication, review of bids and award of this Franchise and shall not be refunded in any event. PASSED: August 1, 1978 ATTEST: ity Clerk -30- APPROVED: ice Mayor