A. Franchise Fees:
1. The operator shall pay to the city, an annual amount equal to five percent (5%) of its gross revenues. The foregoing payment shall be compensation for use of streets and other public property, as well as payment for the right to operate a cable television system in the city.
2. Payments due the city under this provision shall be known as "franchise fees", shall be computed monthly and shall be paid on or before the thirtieth calendar day following the last day of the previous month to the city during regular business hours. Each payment shall be accompanied by a brief report showing the basis for the computation and such other relevant facts as may be required by the city. The city may provide a procedure for the electronic payment of franchise fees under this subsection.
3. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the city may have for further or additional sums payable under the provisions of this chapter, or for the performance of any other obligation hereunder. All amounts paid shall be subject to audit and recomputation by the city.
4. Within thirty (30) days of a request by the city, the operator shall provide the city with a certification of the gross revenues for the preceding year, signed by a director of the operator and that fairly and accurately presents the gross revenues of the operator for the year. The calculation of the five percent (5%) fee shall be clearly shown as part of this certification in a form approved by the city. This certification shall be used to determine the exact amount of payments due the city and to correct any overpayments or underpayments by the operator.
5. All payments to the city shall be by check, made payable to the city of Moorhead, and delivered or sent by mail to the city clerk, or by a procedure provided by the city for electronic payment.
6. In the event any payment is not made on the due date, interest on the amount due shall accrue from such date at the annual rate permitted by Minnesota Statutes Annotated, section 334.01 and set out in the franchise agreement.
B. Capital Support: Capital support from the operator will be in an amount equal to up to one-half percent (1/2%) of the operator's gross revenues. This amount will be computed and paid in the same manner and on the same schedule as the franchise fees set forth in subsection A of this section and will be subject to the right of the city to inspect, audit and recompute at their option, in the same manner as are franchise fees. The amount of capital support may be passed through to the customers by the operator at the operator's discretion. The capital support specified herein will be used by the city for access channel capital costs, including, but not limited to: capital costs for equipment; studio facilities; studio and portable production equipment; and editing equipment and program playback equipment.
C. Not Franchise Fees:
1. The operator expressly acknowledges and agrees that except for the payments expressly required by subsection A of this section, none of the payments or contributions made by, or the services, equipment, facilities, support, resources, or other activities to be provided or performed by the operator at the direction of the city or otherwise pursuant to this chapter, or otherwise in connection with the construction, operation, maintenance, or upgrade of the system (including specifically, but not by way of limitation, such payments, contributions, services, equipment, facilities, support, resources, or other activities as described in or provided for in this chapter and the exhibits hereto) are franchise fees chargeable against the compensation payments to be paid to the city by the operator pursuant to subsection A of this section.
2. The operator expressly acknowledges and agrees that the compensation payments due from the operator to the city pursuant to subsection A of this section, shall take precedence over all other payments, contributions, services, equipment, facilities, support, resources, or other activities to be paid or supplied by the operator pursuant to this chapter and the compensation and other payments to be made pursuant to subsection A of this section shall not be deemed to be in the nature of a tax, and shall be in addition to any and all taxes of general applicability or other fees or charges which the operator shall be required to pay to the city or to any state or federal agency or authority, all of which shall be separate and distinct obligations of the operator.
3. The operator shall not have or make any claim for any deduction or other credit of all or any part of the amount of the compensation or other payments to be made pursuant to this chapter from or against any city or other governmental taxes of general applicability or other fees or charges which the operator is required to pay to the city or other governmental agencies. This subsection does not apply to excavation permit fees as those fees are included in the definition of franchise fees.
4. The operator shall not apply or seek to apply all or any part of the amount of the compensation or other payments to be made pursuant to this chapter as a deduction or other credit from or against any city or other government taxes of general applicability which shall be deemed to be separate and distinct obligations of the operator.
5. The operator shall not apply or seek to apply all or any part of the amount of any city or other governmental taxes or other fees or charges, including permit fees for excavation, of general applicability as a deduction or other credit from or against any of the compensation or other payments to be made pursuant to this chapter, each of which shall be deemed to be separate and distinct obligations of the operator.
6. In the event the operator applies or seeks to apply all or any part of the amount of said compensation payments as a deduction or other credit from or against such city or other governmental taxes of general applicability or other fees or charges, or in the event that the operator applies or seeks to apply all or any part of the amount of such taxes or other fees or charges as a deduction or other credit from or against said compensation obligations, the city may terminate operator's franchise for cause due to a material breach, pursuant to subsection K of this section, without any liability or compensation to the operator.
D. Performance Bond:
1. The city may, in its sole reasonable discretion, require an operator to furnish and file with the city a performance bond to ensure the faithful performance by operator of all construction requirements contained in this chapter and any franchise granted hereunder. The bond shall run to the city in the penal sum of at least one hundred thousand dollars ($100,000.00). The rights reserved to the city with respect to the bond are in addition to all other rights the city may have under the ordinance or any other law. The company providing such bond must be licensed to do business in the state.
2. Following the completion of any construction as determined by the city in accordance with subsection 1-12-6B of this chapter, the requirement to maintain said bond referred to above shall be eliminated.
3. The bond shall be subject to the approval of the city and shall contain the following endorsement:
It is hereby understood and agreed that this bond may not be canceled without the consent of the City until sixty (60) days after receipt by the City by registered mail, return receipt requested, of a written notice of intent to cancel or not to renew.
E. Security Fund:
1. Within thirty (30) days after the effective date of the franchise agreement, operator shall establish a "security fund" by establishing with a financial institution, approved by the city, either a letter of credit or escrow account in the amount of twenty thousand dollars ($20,000.00). Any written instrument evidencing the security fund shall be subject to the approval of the city.
2. In the event the operator fails to perform any obligation under this chapter or any franchise granted hereunder, the city shall provide thirty (30) days' written notice to the operator of such failure. If, after such thirty (30) days the failure remains uncured, and the city has been compelled to pay any damages, costs or expenses, or has not received a payment from the operator as required by this chapter, the city shall provide written notice of the amount of such payment to the operator. If within ten (10) days after operator's receipt of written notice of such payment, the operator fails to reimburse the city, then the city may withdraw the amount of such payment from the security fund.
3. Within ten (10) days after such withdrawal, the city shall provide operator with written notice of the date and amount of such withdrawal. Within ten (10) days from receipt of such notice that any amount has been withdrawn, the operator shall deposit a sum of money sufficient to restore such security fund to the required amount.
4. At a minimum, the letter of credit or escrow account shall: a) provide that it shall not be canceled without the prior written consent of the city, and b) not require the consent of operator prior to the collection by the city of any amounts covered by the said security fund. The security fund shall be maintained, at operator's sole expense, through the term of the franchise.
5. Interest on the amount in the security fund shall accrue to the benefit of the operator and may be withdrawn by operator.
6. The city reserves the right, in its sole discretion, to reduce the required amount of the security fund. Upon any termination of the franchise, operator shall be entitled to the return of the security fund, or portion thereof as remains on deposit at such termination. In the event operator continues to operate the system following any termination, then operator shall not be entitled to a return of the security fund until the end of such continued operation.
7. This subsection applies only to new operators. It does not apply to operators who are existing providers and who have an established track record with the city.
F. Damages And Defense:
1. As between the city and the operator, the operator shall be responsible for any liability of the city, including, without limitation, any officer, employee, or agent of the city, arising out of or in connection with the construction, operation, maintenance, repair, upgrade or removal of the system by the operator or its subcontractors, or the distribution of any service over the system. The operator shall, at its own cost and expense, replace, repair, or restore any damaged property to its prior condition and shall pay appropriate compensation in the event of any wrongful injury to or death of any individual person occasioned by any negligent act or failure to act of the operator, or any officer, employee, agent, or subcontractor thereof, in connection with the construction, operation, maintenance, repair, upgrade or removal of the system.
2. The city, its officers, employees, agents, attorneys, consultants and independent contractors, shall not be liable for any liability of the operator, or any other person, arising out of or in connection with the construction, operation, maintenance, repair, upgrade or removal of, or other action or event with respect to, the system, or the distribution of any service over the system.
3. The city may, at any time, in case of fire, disaster, or other emergency, as determined by the city, in its sole discretion, cut or move any of the wires, cables, amplifiers, appliances, or other parts of the system, in which event the city shall not incur any liability to the operator or any other person. When possible, the operator shall be consulted prior to any such cutting or movement of its wires and be given the opportunity to perform such work itself. All costs to repair or replace such wires, cables, amplifiers, appliances, or other parts of the system shall be borne by the operator unless state law provides otherwise.
4. The city, its officers, employees, agents, attorneys, consultants and independent contractors shall have no liability to the operator or any other person for any special, incidental, consequential, punitive, or other damages as a result of the lawful exercise of any right of the city pursuant to this chapter, or any franchise granted pursuant to this chapter or applicable law, including the rights of the city to grant, terminate, amend, or otherwise modify all or any part of this chapter, or any franchise granted pursuant to this chapter.
5. The operator shall:
a. Defend, indemnify, and hold harmless the city, its officers, employees, agents, attorneys, consultants and independent contractors from and against all liabilities, special, incidental, consequential, punitive, and all other damage, cost, and expense (including reasonable attorney fees) arising out of or in connection with any and all negligent acts of the operator in:
(1) The award or renewal of a franchise;
(2) The construction, operation, maintenance, repair, upgrade or removal of the system; or
(3) The distribution of any service over the system.
b. Cooperate with the city, by providing nonfinancial assistance in connection with any claim arising out of or in connection with the adoption of this chapter or the granting of a franchise.
6. As between the city and the operator, the foregoing liability and indemnity obligations of the operator pursuant to this section shall not apply to:
a. Any wilful misconduct or gross negligence of any city officer, employee, agent, attorney, consultant or independent contractor;
b. Any liability arising out of the distribution of services over the governmental channels to the extent that the operator has not performed or failed to perform any act forming the basis of such claim;
c. Any liability arising out of the distribution of services over public channels to the extent that the operator has not performed or failed to perform any other act forming the basis of such claim; or
d. Any liability arising out of the city's use of the emergency alert system.
G. Liability Insurance:
1. The operator shall, at its own cost and expense, obtain a liability insurance policy or policies, together with evidence in the form of a certificate of insurance, demonstrating that the premiums for said policy or policies have been paid and evidencing that said policy or policies shall take effect and be furnished at or before the granting of a franchise. Such companies must carry a rating by best of not less than "A-". Such policy or policies shall be issued by companies duly licensed to do business in the state. Such policy or policies shall insure the company and the city and its officers, boards, commissions, elected officials, agents, and employees (through appropriate endorsements if necessary) against each and every form of liability of the company referred to in subsection F of this section in the minimum combined amount of three million dollars ($3,000,000.00) for bodily injury and property damage. The foregoing minimum limitation shall not prohibit the operator from obtaining a liability insurance policy or policies in excess of such limitations, provided that the city, its officers, boards, commissions, elected officials, agents, and employees shall be named as additional insureds to the full extent of any limitation contained in any such policy or policies obtained by the operator.
2. The liability insurance policies required by this section shall be maintained by the operator throughout the term of any franchise and such other period of time during which the operator operates or is engaged in the removal of the system. Each such liability insurance policy shall contain the following endorsement:
It is hereby understood and agreed that this policy may not be canceled nor the intention not to renew be stated until sixty (60) days after receipt by the City, by registered mail, of a written notice of such intent to cancel or not to renew.
Within sixty (60) days after receipt by the city of said notice, and in no event later than thirty (30) days prior to said cancellation, the operator shall obtain and furnish to the city, replacement insurance policies.
3. The legal liability of the operator to the city and any person for any of the matters which are the subject of the liability insurance policies required by this section, including, without limitation, the operator's indemnification obligation set forth in subsection F of this section, shall not be limited by such insurance policies nor by the recovery of any amounts thereunder, except to the extent necessary to avoid duplicative recovery from or payment by the operator.
H. Limitation Of Liability:
1. In any court proceeding involving any claim against the city or any official, member, employee, or agent of the city, arising from the regulation of cable service or from a decision of approval or disapproval with respect to a grant, renewal, transfer or amendment of a permit, any relief, to the extent such relief is required by any other provision of federal, state, or local law, shall be limited to injunctive relief and declaratory relief.
2. The limitation contained in subsection H1 of this section shall not apply to actions that, prior to such violation, have been determined by a final order of a court of binding jurisdiction, no longer subject to appeal, to be in violation of an operator's rights.
3. Nothing in this section shall be construed as limiting the relief authorized with respect to any claim against the city or any official, member, employee, or agent of the city, to the extent such claim involves discrimination on the basis of race, color, sex, age, religion, national origin, or handicap.
4. Nothing in this section shall be construed as creating or authorizing liability of any kind, under any law, for any action or failure to act relating to cable service or the granting of a franchise by the city, or any official, member, employee, or agent of the city.
I. City's Right To Revoke: In addition to all other rights which the city has pursuant to law or equity, the city reserves the right to revoke, terminate or cancel any franchise granted pursuant to this chapter, and all rights and privileges pertaining thereto, in the event that, through wilful failure, refusal or neglect:
1. The operator substantially violates any material provision of this chapter; or
2. The operator attempts to evade any of the provisions of this chapter and refuses to cure it; or
3. The operator is found guilty of practicing any fraud or deceit upon the city or any subscriber; or
4. The operator becomes insolvent, unable or unwilling to pay its debts, or is adjudged as bankrupt; or
5. The operator knowingly misrepresents a material fact in the application for or negotiation of, or renegotiation of, or renewal of, any franchise granted pursuant to this chapter.
J. Enforcement Of Franchise Provisions: In addition to any other remedies provided herein, the city may require operator to appear before the city to address any alleged violations of the terms and conditions of this chapter, or any franchise granted hereunder. The city shall provide operator thirty (30) days' advance written notice of such a meeting, which notice shall include a detailed description of any alleged violation. Operator shall be prepared to explain the circumstances regarding such alleged violation, including any actions taken by operator to cure such alleged violations or other relevant facts. If city is dissatisfied with the responses received from operator, it may exercise any other rights available to it under the terms and provisions of this chapter, any franchise granted hereunder, or applicable local, state and federal law.
K. Revocation Procedures: In the event that the city determines that the operator has violated any provision of this chapter, or any franchise granted pursuant to this chapter, the city may make a written demand on the operator that it remedy such violation and that continued violation may be cause for revocation of said operator's franchise. If the violation, breach, failure, refusal, or neglect is not remedied or commenced to be remedied to the reasonable satisfaction of the city within thirty (30) days following such demand, the city shall determine whether or not such violation, breach, failure, refusal or neglect by the operator is due to acts of God or other causes which result from circumstances beyond the operator's control.
1. A public hearing shall be held and the operator shall be provided with an opportunity to be heard upon fourteen (14) days' written notice to the operator of the time and the place of the hearing. The causes for pending revocation and the reasons alleged to constitute such cause shall be recited in the notice. Said notice shall affirmatively recite the causes that need to be shown by the city to support a revocation.
2. If notice is given and, at the operator's option, after a full public proceeding is held, the city determines there is a violation, breach, failure, refusal or neglect by the operator, the city shall direct the operator to correct or remedy the same within such reasonable additional time, in such manner and upon such reasonable terms and conditions as city may direct.
3. If after a public hearing it is determined that the operator's performance of any of the terms, conditions, obligations of the franchise or this chapter, or any requirements of law, was prevented or impaired due to any cause beyond its reasonable control or not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof, provided the operator has notified city in writing within a reasonable period of time of its discovery of the occurrence of such an event and the realization of the event's impact on franchise performance. Such causes beyond the operator's reasonable control or not reasonably foreseeable shall include, but shall not be limited to, acts of God and civil emergencies.
4. If, after notice is given and, at the operator's option, a full public proceeding is held, the city determines there was a violation, breach, failure, refusal or neglect, then the city may declare, by resolution, the franchise revoked and canceled and of no further force and effect unless there is compliance within such period as city may fix, such period not to be less than thirty (30) days, provided no opportunity for compliance need be granted for fraud or misrepresentation.
5. The issue of revocation shall automatically be placed upon the city council agenda at the expiration of the time set by it for compliance. The city then may terminate the operator's franchise forthwith upon finding that the operator has failed to achieve compliance or may further extend the period, in its discretion.
6. If the city, after notice is given and, at the operator's option, a full public proceeding is held and appeal is exhausted, declares the franchise breached, the parties may pursue their remedies pursuant to this chapter or any other remedy, legal or equitable.
7. Within one hundred eighty (180) days after the city declares an operator's franchise terminated, and regardless of the exercise of any right of the city hereunder, the operator may sell, remove or (by means divesting operator of all right, title, and interest) transfer the entire system of operator, subject to the provisions of subsection 1-12-12B of this chapter, and upon any such sale or transfer in addition to any of the rights hereunder or otherwise, city shall have a lien (next in order of preference to any liens or encumbrances existing of record on the date of such termination) against any and all proceeds thereof, and against the system of operator, in the full amount of any loss, cost, expense or other financial detriment incurred by the city in the exercise of any right hereunder, or by reason of such termination.
8. In the event operator shall fail or refuse to sell, remove or transfer the entire system of operator, as hereinabove provided, and regardless of the exercise of any other right of city hereunder, then by operation of law, all of the properties, facilities, records, files, rights, privileges, powers, authorities and immunities of operator, which are part of the system of operator, shall become the property of the city, subject to any and all valid liens or encumbrances of record, and the system shall belong to the city; and operator shall cause to be executed, acknowledged and delivered to the city, upon demand therefor, such instruments as the city attorney shall prescribe and approve, evidencing or affecting the ownership or control of any of the same in the city.
9. In the event the system shall become the property of the city, as herein provided, then city may solicit and call for offers to purchase such system, by bid process; providing, that city may, in the manner provided in subsection 1-12-7C of this chapter, solicit and call for offers and applications for a franchise, and may specify, as a term and condition thereof, that any such offer and application shall include the purchase of such system from city.
10. Nothing herein shall be construed to obligate or require city to exercise any right of city hereunder, and city shall at no time be obligated or required to undertake or assume the ownership or operation of any system, or to provide any services. (Ord. 2014-04, 5-27-2014)