(A) Right to purchase of the system by the city.
(1) Right to Purchase. In the event the grantee forfeits or the city terminates the franchise, pursuant to provisions of this chapter, or upon the denial of a renewal, the city shall have the right, directly or as an intermediary, to purchase the franchised cable communications system. Purchase price shall be in accordance with § 627 of the Communications Act (47 U.S.C. 547) and shall be based upon the value of the system determined pursuant to this section.
(2) Date of Valuation. The date of valuation shall be no earlier than the day following the date of the denial of a renewal and no later than the date the city makes a fair and reasonable offer for the system or the date of transfer of ownership, whichever occurs first.
(3) System Valuation. Except in connection with purchase, pursuant to § 61.020, the value of the cable system shall be determined by a qualified appraiser mutually agreed upon by the grantee and the city. The appraiser shall determine the current worth of the assets based upon what a willing buyer would pay a willing seller for the assets involved, not including the value of the franchise itself and its attendant goodwill value. Under no circumstances shall the value under this section be less than the book value of the assets, less accumulated depreciation. If the franchise is terminated or not renewed, no value shall be assigned to either the franchise or any right, privilege or expectancy arising to the grantee out of the right to transact business under the franchise, and particularly no value shall be allowed for any increase in value arising out of any expectation of cable communications system's revenues beyond the forfeiture and termination date or expiration date, whichever is sooner.
(4) Intent to Purchase. Except in connection with purchase, pursuant to § 61.020, upon receipt of notice of the city's intent to purchase the system at the value established above, the grantee shall have 30 days within which to accept that valuation as the purchase price of the system. In the event that purchase price is not acceptable, the parties shall have 120 days from the date of the rejection of the offer in which to negotiate an acceptable purchase price.
(5) Transfer to City. Upon exercise of this option pursuant to this section, and the payment of the agreed upon sum by the city to the grantee, the grantee shall immediately transfer to the city possession and title to all facilities and property, real and personal, of the cable communication 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 set forth above; and the grantee shall execute such warranty deeds or other instruments of conveyance to the city as shall be necessary for this purpose.
(6) Arbitration. In the event the city and grantee are unable to agree upon the value of the cable television system within the time limits set forth above, either party may require by written notice to the other that the value of cable television system be submitted to arbitration in the following manner:
(a) The city and the grantee shall each within 15 days after such written notice select an arbitrator who shall be a disinterested person with reasonable knowledge and experience relative to the subject to be arbitrated. The two arbitrators thus selected shall immediately thereafter select a third arbitrator who shall likewise be a disinterested person having reasonable knowledge and experience relative to the subject to be arbitrated.
(b) Within 30 days after appointment of all arbitrators and upon ten days written notice to the parties, the panel of arbitrators shall commence a hearing on the issue of valuation and shall receive all relevant information from the parties.
(c) The hearing shall be recorded and may be transcribed at the request and expense of either party. All hearing proceedings, debate and deliberations shall be open to the public and at such times and places as contained in the notice or as thereafter publicly stated, except that if two arbitrators agree, debate and deliberations may be held in closed session as permitted by state open meeting laws.
(d) The value of the system as determined by the arbitration panel shall be the fair market value, determined on the basis of the cable system valued as a going concern, but with no value allocated to the franchise itself if terminated or not renewed. Under no circumstances shall the value established by the arbitration panel be less than the net book value of the assets nor, in the case of a terminated or revoked franchise, greater than the current replacement cost of the system as determined by the appraiser appointed under subsection (3) above.
(e) Within 30 days after the close of the hearing, the panel of arbitrators shall prepare findings and decision agreed upon by a majority of the panel which shall be filed with the City Manager's Office and served by mail upon the grantee. The decision of the panel regarding the value of the system shall be final and binding upon the parties. Should there be no majority decision, the proceedings shall become null and void and shall be started anew, unless the parties extend by written mutual agreement the time which the panel of arbitrators has to make a decision.
(f) Either party may seek judicial relief in the following circumstances:
(i) A party fails to select an arbitrator;
(ii) The arbitrators fail to select a third arbitrator;
(iii) One or more arbitrators is unqualified;
(iv) Designated time limits have been exceeded;
(v) The panel has not proceeded expeditiously;
(vi) The decision was procured by corruption, fraud or undue means;
(vii) There was evident partiality on the part of one or more of the arbitrators;
(viii) The arbitration panel exceeded its authority hereunder; or
(ix) Based upon the record, the panel abused its discretion.
(g) In the event a court of competent jurisdiction determines that judicial relief is appropriate to the circumstances set forth above, the court in its discretion may order the arbitration procedure repeated and issue findings, orders and directions.
(h) The expenses of the arbitrators chosen by each party shall be borne by the party choosing such arbitrators, and the expenses of the third arbitrator and those expenses incurred by the panel as a whole shall be borne equally by the parties.
(7) Notification. Except in connection with a purchase pursuant to § 61.020, upon receipt of the decision of the arbitration panel, the city shall have 30 days in which to notify the grantee of its intent to exercise its option to purchase the system. The purchase price shall be the value of the system as determined by the arbitration panel.
(8) The county reserves the right to amend any section or part of this chapter after negotiation and agreement with the grantee, and upon so doing, will give the grantee reasonable notice of a public hearing.
(B) Right of Inspection of Records. Upon reasonable notice, the city shall have the right to inspect all books, records, reports, maps, plans, financial statements, and other like materials of the grantee, as they relate to the operation of the cable system, at any time during normal business hours.
(C) Right of Inspection of Construction. The city shall have the right to inspect all construction or installation work performed subject to the provisions of the franchise and to make such test as it shall find necessary to ensure compliance with the terms of this chapter and all applicable laws.
(D) Right of Inspection of Property. At all reasonable times and upon reasonable notice, the grantee shall permit examination by any duly authorized representative of the city of the system facilities, together with any appurtenant property of the grantee situated within or without the city.
(E) Right of Intervention. The city shall have the right of intervention in any suit or proceeding to which the grantee is party, and the grantee shall not oppose such intervention by the city.
(F) Right to Require Removal of Property. Upon denial of renewal of the franchise, or upon its revocation, as provided for herein, the city shall have the right to require the grantee to remove, at its own expense, all portions of the cable television system required by public necessity from all streets and public ways within the city which removal shall be done and paid for in accordance with § 61.024, divisions (F) and (G).
(G) Right to Amend. The city reserves the right to amend any section or part of this chapter after negotiation and agreement with grantee.
(Ord. 99-38, passed 7-6-99)