Ordinance 1076 ~., . ,:
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ORDINANCE N0. 1076
AN ORDINANCE AMENDING VARIOUS SECTIONS OF CHAPTER 6.28
OF THE CUPERTINO MUNICIPAL CODE RELATING TO THE GRANT-
IiiG OF PRANCHISES FOR COMtNNITY ANTENNA TELEVISION
SYSTEMS, AHD THE TERMS AND CONDITIONS FOR TiiE OPERA-
TION OF THE SAME WITHIN TgE BOUNDARIES OF THE CITY AND
DECLARING THE URGENCY THEREOF
The City Council of the City of Cupertino hereby amends. portions of
various sections of Cupertino Municipal Code Section 6.28 to read as follows:
Section 6.28.010 Definitions.
D. "Grantee" shall mean the person, firm or corporation to whom or
which a franchise, as hereinabove defined, is granted by t}ie Council under
this Ordinance, and the lawful successor, transferee or assignee of said
person, firm or corporation.
Section 6.28.045 Regulations of Rates and Services.
b. (4) (b) Grantee's net profit has increased beyond a reasonable
rate of return allowed in paragraph c.(2)(i~) page 6 of Ordinance tio. 930
in a greater percentage amount than the increase in the CPI, or
c. (1) (a) Copies of certified financial reports and income
statements for at least the preceding three (3) fiscal years. If the grantee
is a subsidiary of another firm, similar financial data shall be furnished
for the parent corporation.
c. (2) (g) Depreciated original cost of the cable plant and associ-
ated equipment. All intangible assets for wi~ich costs have not actually
been expended, such as the value of the franchise, goodwill, and the value
of the going concern shall not be amortized as an expense, and a return
shall not be calculated on any of these values. Actual coats, such as the
purchase of a system above net book value, may be amortized over a period
of not less than twenty (20) years, but the unamortized portion shall not
be included in any rate base or rate of return calculations.
Section 6.28.060 Terms of Acquisition.
B. Said grantee shall notify the City within ten (10) days in writing,
of any bona fide purchase offer made by a third party. Thereupon, the City
shall have sixty (60) days within which to elect to purchase that part of
the CATV system described in said offer. Within such period grantee shall
not remove, destroy, transfer, replace or render inoperative any material
part of the system so described.
Section 6.28.070 Franchise Payments. Any grantee granted a franchise under
this Chapter shall pay to the City, during the life of such franchise, a
sum equal to three percent (3X) annually of the Basic Service Gross Aeceipta
of the grantee together with a'sum eyual to three percent (3X) annually
of the additional service net receipts of tits grantee. Such payment by
the grantee to the City shall be made annually, or as otherwise provided
in the grantee's franchise by delivery of the same to the City Clerk. The
said payment shall be-in lieu of any business license tax as provided for
in Title 5 of this Code.
The grantee shall file with tide City, within ninety (90) days after
the expiration of tl~e operator's fiscal year or portion thereof during which
such franchise is in force, a financial statement to include balance sheet
and profit/loss statement prepared by a certified public accountant, or person
otherwise satisfactory to the Council, showing in detail the gross and net
receipts as defined herein, of grantee during the preceding calendar year or
portion thereof It shall be the duty of the grantee to pay to the City, within
fifteen (15) days after the time for filing such statements, the sum hereinabove
prescribed or any unpaid balance thereof for the calendar year or portion thereof
covered by auc~t statements.
The City shall have the right to inspect or audit the grantee's fiscal
records. If any independent audit of the grantee's records directed by
the City shows a franchise fee error 1n excess of five percent (SX) in the
City's favor, the grantee shall assume all reasonable coats for said audit.
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 additional sums
payable under this section for the performance of any other obligation hereunder.
If any payment is not made within the time limits above described,
it is imposed upon the grantee a penalty in the amount of lOX per month
on the unpaid balance until said amount is paid. In addition to any other
remedy provided in this ordinance to insure payment of said sums, the City
shall have the ril;ht to bring acivil action against the grantee for collec-
tion of said sums. In the event that there is a dispute between the Franchisor
and ttte Franchisee as to the amount of tl~e franchise fee property due from
the Franchisee to the Franchisor, no penalty shall be assessed against the
Franchisee and/or paid by the Franchisee if resolution of the dispute,results
in a finding that no further franchise fee payments are due from the Franchisee.
Section 6.28.100 Permits, Installation and Service.
C. Within ninety (90) days after the commencement of construction
and installation of the system, grantee shall proceed to render service
to subscribers, and the completion of the construction and installation s}iall
be pursued with reasonable diligence thereafter so that service to all
areas designated as mandatory service areas on the map accompanying the franchise
agreement shall be provided.
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Section 6.28.110 Location of Property of Grantee.
Paragraph 2 atiall read ae collows:
A. Any poles, wires, cable lines, conduits, or other properties of
the grantee to be constructed or installed in streets, shall be so constructed
or installed only at such locations and in such manner as shall be approved
by the Director of Public Works acting in the exercise of his reasonable
discretion. Any poles, wires, cable lines, conduits, or other properties
of the grantee to be constructed or installed in public utility easements
shall 6e sa constructed or installed in such manner as shall be approved
by the Director of Public Works acting in the exercise of his reasonable dis-
cretion. Such approval shall not be needed wherever the property of the grantee
is to be attached to, constructed. or installed on existing aerial public utility
property.
Section 6.28.180 Oaerational Standards.
A. a. (4) Provide at least one (1) channel without charge for use
as public access channel. As a minimum, the public access channel capabilities
shall include a timebase corrected videotape playback capability (3/4"-U-matic
cassette or other approved format).
A. d. The grantee shall provide one (1) basic non premium subscriber
connection without cost and, as designated by the Council, when the system passes
within five hundred (500} feet of the lot line or boundary of any of the
following facilities:
A. e. When service is within one thousand (1,000) feet of the lot
line or boundary of City Hall, the grantee shall provide both one basic
non premium subscriber connection and an origination connection capability
at said facility. Said origination capability shall be limited to:
8. g. System m_,ps and layout. The grantee shall have at all times
up-to-date route maps of suitable scale showing all transmitting and receiving
pickup locations and the location of all amplifiers and trunk and distribution
lines in the Cable System. Maps shall be annotated so that a failure or mal-
function in the transmission lines and assorted equipment can be evaluated
in terms of service area receiving less than full service. The scale of the
maps shall be sufficient to clearly show details to include horizontal and
vertical dimensions and in no event less than 1 inch s 200 feet. Grantee
shall provide City initial copies of said maps. At the beginning of con-
struction and every six (6) months after grantee shall indicate to the
City its plans for installation and engineering during the next slx (6)
months.
Section 6.28.190. Miscellaneous Provisions.
C. No person, firm or corporation in the existing service area of
the grantee shall be arbitrarily refused service; provided, however, that
the grantee shall not be required to provide service to any subscriber
wl~o does not pay the applicable connection fee or monthly service charge.
The Grantee shall provide free basic .non premium service to schools, City fiall,
and the Library provided that such locations are passed by transmission cable
maintained for [}ie service of paying subscribers. An installation charge
based on the cost of materials, labor, and easements will be charged in the
event that service to such public buildings requires tl~e installation of
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undergound cable or a service connection cable greater than one hundred fifty
(150) feet in length.
Section 6.28.246 Inadequate service remedies. `
a. In .the event and upon notice to the City that its service to any
group of five (5) or more subscribers served by a common distribution feed
is interrupted for forty-eight (48) or more consecutive hours, except for
acts of God, acts beyond the control of the grantee, and except in circum-
stances for which the prior approval of the interruption is obtained from
the City Manager, grantee shall pay a fine to the City as a duly levied
penalty up to the amount of Five Hundred Dollars ($S00) per day. The City
Planager shall rule to the applicability of said penalty with appeal by the
grantee available via [he City Council.
Section 6.28.260 Arbitration. In the event that any provision of this
Chapter or of any franchise granted hereunder may be held to be invalid
or unenforceable by a court of competent jurisdiction, the City Council
may find and declare [liar such provision constitutes an essential considera-
tion material to the grant of said franchise. In such event the City Council
or grantee shall forward to the other party a written request that substitute
or alternative provisions be established in lieu of any provisions thus
invalidated. Establishment of said alternative provisions shall be by binding
arbitration conducted pursuant to and governed by the provisions of the California
Arbitration Act, Sections 12H0-1294.2 of tl~e California Code of Civil Pro-
cedure. The alternative provision so eatablislied shall be binding and con-
clusive on the parties to said franchise subject to review by a court of competent
jurisdiction, and shall be considered in effect and enforceable ns though
a part of the original ordinance or franchise from ti:e date the original
provision xas declared invalid.
UrEency Clause: The Council hereby finds, determines, and declares that
this ordinance is an urgency measure necessary for the public welfare and
shall go into effect immediately upon adoption in order to award a Cable TV
franchise within the time requirements previously determined.
INTRODUCED AND ENACTED at a regular meeting of the City Council of the
City of Cupertino this 14th day of October , 1980 by the following vote:
Vote Members of the City Council
AYES: Gatto, Plungy, Sparks, Rogers
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST: APPROVED:
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City Clerk Idayor, City of Cu no
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