Sec. 7A-32. Bonding.

   (1)   Performance bond. Within thirty (30) days after written notification of the award of a license by the city, the licensee shall file with the city a performance bond for the benefit of the city in the amount of one million dollars ($1,000,000.00) to be effective upon the execution of the license agreement and conditioned that in the event that the licensee fails to comply with any provision of this chapter, the license agreement or other law applicable to the license, then there shall be recoverable jointly and severally from the principals and surety any and all damages or costs suffered or incurred by the city, including but not limited to attorney's fees and costs of any action or proceeding, and including the full amount of any compensation, indemnification, cost of removal or abandonment of any property or other costs due and owing the city up to the full principal amount of such bond. The performance bond shall be maintained in full as a continuing obligation during the entire term of the license agreement and thereafter until the licensee shall have satisfied in full any and all obligations to the city which arise out of or pertain to the license agreement. The performance bond shall be issued by a surety company authorized to do business in the state and shall be in a form approved by the city attorney.

   (a)   The performance bond shall contain the following endorsement:

It is hereby understood and agreed that this bond may not be canceled by the surety nor the intention not to renew be stated by the surety until sixty (60) days after receipt by the City of Tucson, by registered mail, of written notice of such intent to cancel or not to renew.

   (b)   None of the provisions of this section or section 7A-33 ("Security Fund"), nor any damages recovered by the city thereunder, shall be construed to excuse the faithful performance by or limit the liability of the licensee.

   (c)   Upon application to the city, the licensee shall be entitled to the return of the performance bond at the expiration of the license agreement, or any renewal thereof provided there is then no outstanding default or moneys due the city by the licensee; provided that, nothing herein shall be read to excuse a licensee from its obligation to have a performance bond during the renewal term.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-33. Security fund.

   (1)   Within thirty (30) days after written notification of the award of a license by the city, the licensee shall deposit with the finance director of the city, and maintain on deposit throughout the term of the license agreement, a security fund in the sum of fifty thousand dollars ($50,000.00) in cash as security for the faithful performance by the licensee of all provisions of this chapter and the license agreement and compliance with all orders, permits and directions of any agency or department of the city having jurisdiction over the licensee's operations. In lieu of the cash deposit, a licensee may provide an irrevocable and unconditional fifty thousand dollar ($50,000) letter of credit with a local financial institution, in a form acceptable to the city attorney. Both the letter of credit and the cash deposit are referred to by the term "security fund" in subsections (2) through (6).

   (2)   Within fifteen (15) days after written notice to the licensee by the city that the city has withdrawn any amount from the security fund, the licensee shall deposit or pay to the finance director a sum of money sufficient to restore such security fund to the original amount of fifty thousand dollars ($50,000.00), or, in the case of a letter of credit, restore the letter of credit to its full amount.

   (3)   If the licensee fails to pay the city any moneys due within the time fixed in this chapter or the license agreement; or fails after ten (10) days' written notice to pay to the city any taxes due and unpaid; or fails to repay to the city after ten (10) days' written notice any damages, penalties, costs or expenses which the city may be compelled to pay by reason of any act, omission or default of the licensee; or fails, after ten (10) days' written notice, to comply with any provision of this chapter or the license agreement which the city reasonably determines can be remedied or partially cured by an expenditure from the security fund, the finance director may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the finance director shall in writing notify the licensee of the amount and date thereof. In the event the security fund is insufficient to pay the city for any compensation, damage, penalties, costs or expenses owing to the city pursuant to this chapter or the license agreement, the performance bond may be drawn upon by the city for any amount due the city over and above the amount in the security fund.

   (4)   The security fund, including any interest that may have accrued, shall become the property of the city in the event that a license agreement is terminated by the city by reason of a violation of this chapter or breach of the license agreement pursuant to the provisions of section 7A-24 ("renewal and termination").

   (5)   Upon application to the city, the licensee shall be entitled to the return of all moneys remaining in the cash security fund, including accrued interest, at the expiration of the license agreement or any renewal thereof, provided there is then no outstanding default or moneys owing on the part of the licensee to the city; provided that, nothing herein shall be read to excuse a licensee from its obligation to have a security fund during the renewal term.

   (6)   The rights reserved to the city with respect to the security fund are in addition to all other rights of the city, whether reserved by this chapter or authorized by law; and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the city may have.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-34. License fee.

   (1)   In addition to any other consideration supporting the award of a license by the city, including but not limited to the granting of the privilege to utilize the rights-of-way of the city pursuant to this chapter for the purpose of providing cable service, and the license agreement to construct and operate the system, the licensee shall pay to the city an amount equal to five (5) percent of gross revenues.

   (2)   It is the intent of the city that these license fees may be utilized, in the discretion of the mayor and council, to defray certain of the costs of local regulation of the licensee and the system, to support the development and maximum utilization of all PEG channels to generally encourage development of the system to full utilization and potential, and for other purposes.

   (3)   Payments due the city under this section shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30 and December 31 of each year. Each quarterly payment shall be due and payable no later than thirty (30) days after the applicable computation date. Each payment shall be accompanied by a financial statement showing in detail the gross revenues of the licensee relating to the relevant calendar quarter as well as any other report required by section 7A-22.

   (4)   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 due and payable. The city or its designate shall have a right to audit all financial records of licensee reasonably necessary to the determination of whether gross revenues and franchise fees have been accurately computed and paid upon the giving of reasonable notice and during normal business hours. In the event an audit results in additional moneys owed the city, interest shall be charged at the rate of one (1) percent per month on the unpaid balance. If there is a dispute as to whether a particular item of revenue is within the scope of the term "gross revenues," records will be provided without prejudice to any claim the licensee might have that a franchise fee is not owed on such revenues. Provided that, a licensee may withhold revenue records for items that it claims are not "gross revenues" so long as the licensee (i) provides a certified statement describing the nature of the revenues contained in the records withheld and (ii) agrees, in its license agreement, to pay all costs, including attorney fees, that the city incurs should the city seek production of the records and ultimately prevail. Each licensee shall be required, in accordance with the terms of its license, to pay for any audit where the audit shows the licensee failed to pay the license fee due to the city.

   (5)   The payment required pursuant to this section shall be in addition to and not in lieu of any other tax, fee (including by way of example and not limitation, permit fees), or payment owed the city by the licensee pursuant to any other applicable provisions of this Code or laws of the state, unless the tax, fee or payment is required to be treated as a franchise fee under 47 U.S.C. § 542.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-35. Rights reserved to the city.

   (1)   Without limitation upon the rights which the city might otherwise have, every license issued shall be deemed to expressly reserve the following rights, powers and authorities, whether expressly set forth in the license or not:

   (a)   To exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the city.

   (b)   To determine any question of fact relating to the meaning, terms, obligations or other aspects of this chapter and the license agreement, subject to applicable judicial review.

   (c)   To inspect all construction or installation work performed by the licensee, and to supervise all construction in the rights-of-way or on city property.

   (2)   Nothing in this chapter shall be deemed or construed to impair or affect the right of the city to exercise its power of eminent domain to acquire the property of the licensee for just compensation, which shall not include any amount for the license itself or any privilege thereunder.

   (3)   The city reserves the right, during the term of the license agreement, to install and utilize, upon the poles and conduits owned or jointly owned by the licensee, any wire or pole fixtures required for municipal purposes, without cost to the city so long as such installation and utilization does not unduly interfere with the operation of the system.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-36. Nondiscrimination and equal employment opportunity.

   (1)   A licensee shall not deny service, access or otherwise discriminate against subscribers, users or any resident of the city. In this regard, each licensee shall comply with the human relations provisions of this Code, section 17-21, incorporated herein by this reference. The licensee shall strictly adhere to the equal employment opportunity requirements of the FCC. The licensee shall comply at all times with all other applicable federal, state and city laws, rules and regulations, and all executive and administrative orders relating to nondiscrimination.

   (2)   A licensee shall define the responsibility of each level of management to ensure positive applications of the policy of equal opportunity, making all reasonable efforts to assure employment at the higher and midmanagement levels for minority persons. The licensee shall conduct a continuing review of employment structures and employment practices and adopt positive recruitment policies, on-the-job training, job design and other measures needed to assure genuine equality of opportunity.

   (3)   Each licensee shall abide by the following general employment practices:

   (a)   Recruiting through schools and colleges with high minority enrollments.

   (b)   Maintaining systematic contacts with media advocacy groups, minority and human relations organizations, leaders, spokespersons and other appropriate recruitment sources within the county to make it known that qualified minority persons sensitive to the needs of the minority community are being sought for consideration whenever the licensee prepares to hire employees so as to assure nondiscrimination in selection for employment.

   (c)   Instructing personally those on the licensee's staff who make hiring decisions that applicants for all jobs are to be considered without discrimination in accordance with the provisions of this section.

   (d)   Making all reasonable efforts to avoid the use of selection techniques or tests that have the effect of discriminating against minority persons.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-37. Selection of licensee.

   (1)   Any person submitting a proposal for a license shall provide all information required by this chapter and all other information as may be solicited in the city's request for proposals or otherwise required by the city. Any misrepresentation, failure, neglect or refusal to provide any required information may at the option of the city render a proposal invalid and it may be given no consideration. The requested information must be complete and verified as true by the applicant. Every proposal must be submitted as an offer, so that the city may incorporate the proposal into a license agreement by reference and may condition the award of any license upon the incorporation of the proposal into the license agreement.

   (2)   All proposals received by the city from the applicants shall become the sole property of the city.

   (3)   The city reserves the right to reject any and all proposals and to waive all informalities where the best interest of the city may be served.

   (4)   Before submitting a proposal, each applicant shall be solely responsible for and must: (a) examine this chapter and the request for proposal documents thoroughly; (b) be familiar with local conditions that may in any manner affect performance under the license, including but in no event limited to relevant demographics, topographics, pole attachment policies of appropriate utility authorities, undergrounding, and subscriber and user desires; (c) be familiar with federal, state and local laws, ordinances, rules and regulations affecting performance under the license; and (d) carefully correlate all observations with the requirements of this chapter and the request for proposals documents.

   (5)   The city may make such investigations as it deems necessary to determine the ability of the applicant to perform under the license agreement, and the applicant shall furnish to the city all such information and date for this purpose as the city may request. The city reserves the right to reject any proposal if the evidence submitted by or investigation of such applicant fails to satisfy the city that such applicant is properly qualified to carry out the obligations of the license agreement, comply with the provisions of this chapter, or to satisfactorily construct and operate the system. Conditional proposals shall not be accepted.

   (6)   In evaluating an application for a license, the city may consider the following factors:

   (a)   The extent to which the applicant has substantially complied with the applicable law and the material terms of any existing cable license for the city;

   (b)   Whether the quality of the applicant's service under any existing license in the city, including signal quality, response to customer complaints, billing practices and the like has been reasonable in light of the needs and interests of the communities served;

   (c)   Whether the applicant has the financial, technical, and legal qualifications to hold a cable license; which qualifications require that the applicant can be relied upon to perform as promised and in accordance with applicable law;

   (d)   Whether the application satisfies requirements established by the city under this chapter or in an RFP or is otherwise reasonable to meet the future cable-related needs and interests of the community, taking into account the cost of meeting such needs and interests;

   (e)   Whether, to the extent not considered as part of this Code, the applicant will provide adequate public, educational, and governmental use capacity, facilities, or financial support thereof;

   (f)   Whether issuance of a license is in the public interest considering the immediate and future effect on the public rights-of-way and private property that would be used by the cable system, including the extent to which installation or maintenance as planned would require replacement of property or involve disruption of property, public services, or use of the public rights-of-way; and the comparative superiority or inferiority of competing applications; and

   (g)   Whether the approval of the application may eliminate or reduce competition in the delivery of cable service in the city.

If the city finds that it is in the public interest to issue a license considering the factors set forth above, the city may adopt a license ordinance setting forth the terms and conditions of the license, which license shall become effective upon satisfaction of conditions precedent to effectiveness, and when signed and accepted by the applicant. If the city denies a license, it will cause a written explanation of the denial to issue, which may be in any appropriate form. Without limiting its authority to deny an application for a license, the city specifically reserves the right to reject any application that is incomplete or fails to respond to an RFP. Nothing in this chapter shall be construed in any way to limit the discretion and legislative authority of the city council in making decisions relative to the granting, denial, or renewal of license.

Notwithstanding the foregoing, to the extent required by federal law, requests for cable license renewal under the Cable Act will be received and reviewed in a manner consistent with Section 626 of the Cable Act, 47 U.S.C. § 546, and every provision of this Chapter shall be interpreted in a manner consistent therewith.

   (7)   Application fees.

   (a)   Notwithstanding any other requirement of this chapter, each applicant must furnish with its proposal a nonrefundable filing fee in the amount of seventy-five hundred dollars ($7,500.00) by certified or cashiers check made payable to the City of Tucson. No proposal for a license shall be considered without receipt of such check.

   (b)   All checks received will be deposited to an account of the city and will serve to recover all expenses incurred by the city in the preparation and granting of the license, the execution of the license agreement and regulation of the licensee pursuant to this chapter. Such expenses shall include but not be limited to any and all publication costs, consultant's expenses and the reasonable value of services performed by the city's employees, agents or contractors.

   (c)   In the event that expenses exceed the total amount of filing fees collected from the applicants, the applicant awarded the license shall pay to the city (pro rata in the event more than one (1) applicant is awarded a license) the excess amount, not to exceed fifty thousand dollars ($50,000.00) within sixty (60) days of demand by the city.

   (8)   The decision of the mayor and council concerning licensee selection shall be final.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-38. Cost of consultant.

Except as otherwise provided by law, notwithstanding any other payment required by this chapter or the license agreement, when necessary to aid in the analysis of matters relating to the system, including but not limited to, rate investigations and regulation, technical standards, construction supervision or market surveys in the city, the city shall be entitled to employ the services of a consultant to assist and advise the city manager and the mayor and council. All reasonable fees of the consultant incurred by the city in this regard shall be shared equally by the licensee and the city, regardless of the nature or outcome of any specific matter under consideration. The terms of this section shall not apply to any research cost incurred by the city in connection with the right of the city to purchase the system.

(Ord. No. 8937, § 2, 9-2-97)

Sec. 7A-39. Theft of service and tampering.

It shall be unlawful for any person, without the express consent of the licensee, to make any connection or attachment, extension or division, whether physically, acoustically, inductively, electronically or otherwise with or to any segment of the system for the purpose of receiving or redistributing service where the person has not paid for it. Nothing in this section shall be read to prohibit a subscriber to cable service to utilize lawful subscriber-owned equipment in the enjoyment of such service.

(Ord. No. 8937, § 2, 9-2-97)