(A) (1) The village shall have the right to shorten the term of a franchise to a term not less than 31 months from the date of the action shortening the franchise term, or to revoke the franchise, for a franchisee’s substantial and ongoing failure to construct, operate or maintain the cable system as required by this code or a franchise agreement; for defrauding or attempting to defraud the village or subscribers; if the franchisee is declared bankrupt; or for any other substantial and ongoing material violation of this code or substantial and ongoing material violation of a franchise agreement.
(2) To invoke the provisions of this division, the Village Board shall give the franchisee written notice of intent. If, within 30 calendar days following the written notice from the village to the franchisee, the franchisee has not completed corrective action or corrective action is not being actively and expeditiously pursued to the satisfaction of the Village Board, the Village Board may give written notice to the franchisee of its decision to commence a proceeding to consider shortening the term of or revoking the franchise, stating its reasons; provided that no opportunity to cure shall be afforded in the event the franchisee is declared bankrupt. Revocation for bankruptcy shall be governed by division (C) below.
(B) (1) Prior to shortening the term of or revoking a franchise, the Village Board shall hold a public hearing, after giving at least 15 calendar days’ notice by posting and publication, at which time the franchisee and the public shall be given an opportunity to be heard.
(2) Following the public hearing, the Village Board may determine whether to shorten the franchise term or to revoke the franchise based on the information presented at the hearing and other information of record. If the Village Board determines to shorten a franchise term or revoke a franchise, it shall make the decision by ordinance setting forth the reasons for its decision.
(3) The village may make the decision conditional on a franchisee’s failure to resolve outstanding problems or take appropriate steps to resolve the problems within a specific period of time.
(4) A copy of the decision shall be provided to the franchisee.
(C) Any franchise may, at the option of the Village Board following a public hearing, be revoked by ordinance 120 calendar days after an assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the business of the franchisee, whether in a receivership, reorganization, bankruptcy, assignment for the benefit of creditors or other action or proceeding unless within that 120-day period:
(1) The assignment, receivership or trusteeship have been vacated;
(2) The assignee, receiver or trustee has fully complied with the terms and conditions of this code and the existing franchise agreement and has executed an agreement, approved by a court of competent jurisdiction, assuming and agreeing to be bound by the terms and conditions of this code and the existing franchise agreement; and
(3) In the event of foreclosure or other judicial sale of a material portion of the facilities, equipment or property of a franchisee (other than pursuant to a pledge or mortgage which qualified as an exception to the definition of a “franchise transfer” and after which the franchise transfer was ultimately approved), the Village Board may revoke the franchise, following a public hearing before the Village Board, by serving notice on the franchisee and the successful bidder, in which even the franchise and all rights and privileges of the franchise will be revoked and will terminate 30 calendar days after serving the notice, unless:
(a) The Village Board has approved the franchise transfer; and
(b) The successful bidder has covenanted and agreed with the village to assume and be bound by the terms and conditions of the franchise agreement and this code.
(D) If the Village Board revokes a franchise, if a franchise expires, or if for any other reason a franchisee abandons, terminates or fails to operate or maintain service to its subscribers after notice and reasonable opportunity to cure of at least 30 days, the following procedures and rights are effective:
(1) The Village Board may require the former franchisee to remove its facilities and equipment at the former franchisee’s expense. If the former franchisee fails to do so within a reasonable period of time, the Village Board may have the removal done at the former franchisee’s or surety’s expense. In removing its plant, structures and equipment, the franchisee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good condition as prevailed prior to the franchisee’s removal of its equipment and appliances without affecting the electrical or telephone cable wires or attachments. The village shall inspect and approve the condition of the public ways and public places; and cables, wires, attachments and poles after removal. The liability, indemnity and insurance as provided herein shall continue in full force and effect during the period of removal and until full compliance by the franchisee with the terms and conditions of this section and this code. In the event of a failure by the franchisee to complete any such work or any other work required by village law or ordinance within the time as may be established and to the reasonable satisfaction of the village, the village may cause the work to be done and the franchisee shall reimburse the village the reasonable cost thereof within 30 days after receipt of an itemized list of the costs.
(2) At the expiration of the term for which any franchise is granted, if renewal is either not sought or denied, the village, at its election, shall have the right to purchase and take over all or any part of a cable system located within the village upon the payment to the franchisee of a sum equal to the fair market value of the system or the part taken, based on system value as a going concern. In the event of revocation, as provided for in this code, the village at its election, shall have the right to purchase and take over all or any part of a cable system located within the village upon payment to the franchisee of a sum equal to an equitable price for the system or the part taken. If the village elects to purchase only a part of the system, the fair market value shall include both the fair market value of the part purchased together with the diminution in value of the part not purchased. The price for the cable system or the part taken, shall not include, and the franchisee shall not receive, anything for the value allocated to the franchise itself unless the valuation is now or subsequently provided for by the Cable Act or in the franchise itself. Upon the exercise of the option by the village and its service of an official notice of the action upon the franchisee, the franchisee shall immediately transfer to the village possession and title to all of the purchased facilities and property, real and personal, of the cable system, with any existing liens and encumbrances, provided the village can require application of purchase price to such liens and encumbrances at closing; and the franchisee shall execute such warranty deeds or other instruments of conveyance to the village as shall be reasonably necessary for this purpose. Each contract entered into by franchisee with reference to its operations under the franchise shall be subject to the exercise of this option by the village.
(3) If a cable system is abandoned by a franchisee during the franchise term, or if the franchisee fails to operate its system in accordance with this code during any transition period, or the franchisee otherwise terminates the franchise, upon decision of the Village Board made after providing the franchisee reasonable notice of at least 30 days and an opportunity to be heard, the ownership of all portions of the cable system in public rights-of-way shall revert to the village and the village may sell, assign or transfer all or part of the assets of the system, or the Village Board, at its option, may operate the system, designate another entity to operate the system temporarily until the franchisee restores service under conditions acceptable to the village or until the franchise is revoked and a new franchisee selected by the village is providing service, seek an injunction requiring the franchisee to continue operations and/or seek to recover all damages sustained as a result of the abandonment or failure to operate. A franchisee retains all rights to contest such actions and all rights to compensation provided by law.
(4) A franchisee shall be deemed to have abandoned its system or failed to operate its system during any transition period, if:
(a) The franchisee fails to provide cable service in accordance with its franchise over a substantial portion of the cable system for 96 consecutive hours unless the Village Board authorizes a longer interruption of service in writing; or
(b) The franchisee, for any period, willfully and without cause refuses to provide cable service in accordance with its franchise over a substantial portion of the cable system.
(E) Notwithstanding any other provision of this code, where the village has issued a franchise requiring the completion of construction, system upgrade or other specific obligation by a specified date, failure of the franchisee to complete the construction or upgrade or to comply with such other specific obligations as may be required, within such time limits, as same shall be extended by the Village Board for good cause shown by the franchisee, will result in the forfeiture of the franchise upon decision of the Village Board made after providing the franchisee with reasonable notice of at least 30 days and an opportunity to be heard.
(`92 Code, § 8-1-111) (Ord. 96-19, passed 10-2-96)