The service rates and installation and connection charges for CATV system use, as contained in the proposal submitted by grantee, are hereby adopted and approved and may be changed from time-to-time by resolution of the City Council pursuant to this section.
All rates and charges contained in said proposal shall remain in effect with no increase for a period of three years from the effective date of the ordinance codified in this chapter. All basic rate and charge increases, defined to include those services and installations which are classified as "Basic Service" in grantee's proposal, submitted or proposed by grantee for all services and installations except those programming services for which a separate charge is made including charges for remote control converters after said three-year period shall be based upon the following criteria which shall be considered and evaluated by the City Council:
A. The initial rates as hereinabove set may be adjusted after the initial three-year period and at such time thereafter as hereunder specified, based upon the Consumer Price Index (Urban Wage Earners) prepared by the Bureau of Labor Statistics of the United States Department of Labor, relating to all items. Services A, for the Los Angeles/Long Beach area (1967 = 100) (Herein the "CPI") in accordance with the following formula:
1. For the initial rate increase request, the grantee shall submit to the City a report of the most recent CPI information for the period preceding the report.
2. For subsequent rate increase requests, the grantee shall submit to the City a report of the most recent CPI information for the period since the effective date of the last previous rate increase.
3. The number of points of increase or decrease in the CPI for said periods, divided by the index base of one hundred shall be used as the total percentage increase in the CPI.
4. The grantee may request and the City shall thereon grant a rate adjustment in the amounts requested by grantee, provided that:
a. The amount of such rate adjustment divided by the current subscriber rates shall not exceed seventy-five percent of the total percentage increase in the CPI as determined under subdivision 3 of this subsection A, and
b. The grantee provides the City with written financial statements showing that the rate adjustment is justified by increased expenses incurred by the grantee in the operation of its CATV system.
5. Any application by the grantee for a rate increase shall be accompanied and supported by the following information:
a. Copies of financial reports and income statements certified by a certified public accountant for at least the three preceding years. If the grantee is a subsidiary of another firm, similar financial data shall be furnished for the parent corporation.
b. An itemization of capital assets, both tangible and intangible, the accounting basis for depreciation and the depreciation schedule. If intangible assets such as goodwill are being amortized, the amortization period shall be stated.
c. A detailed breakdown of operating, marketing and general and administrative costs by category for each of the three preceding years.
d. The number of subscribers for basic CATV service and Pay-TV service for each of the three preceding years.
e. The number of cable plant-miles and dwelling units passed by the cable plant for each of the three preceding years.
f. A statement as to any allocation of funds to parent company overhead or operating costs, and the basis for such allocation.
B. Upon receipt of a rate increase request, accompanied by all of the supporting information of subsection A of this section, it shall be the obligation of the City Council to act upon this request within a period of ninety days from the date upon which all supporting materials has been submitted in adequate form. Prior to taking action on the request at least one noticed public hearing shall be held upon the rate request. The Council shall approve, partially approve, or disapprove any increase of rates or charges for additional services on the basis of the following considerations:
1. Performance of the grantee in abiding by the terms and conditions of this chapter and the proposal.
2. Whether the grantee has adequately served or serviced the subscribers in the city and the community in general.
3. Rates for comparable CATV service or services in surrounding communities.
4. Revenues and profits from services offered.
5. Operating and construction expenses of the system.
6. Completeness of the information submitted by grantee in support of the request for increase.
7. Other such evidence or testimony as may arise during the public hearing.
The decision by the City Council approving, partially approving, or disapproving the request for increase shall not be unreasonably withheld, and such decision shall be in resolution form, which shall contain findings indicating the basis for the decision and any new rates or charges thereby approved and adopted. Any increase in rates or charges thereby approved shall become effective thirty days after the date of approval of the resolution.
C. In the event a rate increase is granted as requested, the grantee shall refrain from applying for further increases for a period of twenty-four months from the effective date of the prior increase. If the rate request is denied, or a lesser increase than requested is approved, the grantee shall refrain from applying for further increases for a period of six months from the date of the resolution denying the request or approving the lesser request.
D. The State of California Government Code, Section 53066.1 (Chapter 1086 Statutes of 1979, Assembly Bill No. 699) pertains to cost of living rate increases in CATV systems. By its acceptance of the terms and conditions of this chapter, grantee hereby waives its rights to the provisions and protection of said code section during the term of this franchise ordinance and during any renewals or extensions thereof. (Ord. 2476 Exhibit B § 5, 1983; Ord. 2326 § 1 (part), 1980).