(a) Term. The term of the franchise granted pursuant to this chapter shall be for a period of ten years beginning on the first day following the effective date of this subsection (a) hereof.
(Ord. 83-84. Passed 5-23-83.)
(b) Notice to the Grantee. Council shall not hold any meeting involving the review, renewal, revocation or termination of the grantee's franchise unless the Mayor has:
(1) Advised the grantee in writing, at least sixty days prior to such meeting, as to its time, place and purpose; and
(2) Published a notice at least once ten days before the meeting in a newspaper of general circulation within the City.
(Ord. 76-146. Passed 12-13-76.)
(c) Review.
(1) Within ninety days after the end of the fifth year and the ninth year of the renewal of this franchise, Council may adopt a resolution setting forth the time and place of a Council meeting, the purpose of which shall be to consider grantee's performance, under the franchise agreement, as amended, and the possible need for reasonable and appropriate modifications of this chapter, or any amendment thereto, and the franchise agreement of a nature that would not result in effectively terminating the same under the then existing Federal Communications Commission Rules for Cable Television.
(2) Within the ninety day period, above provided, a preliminary review of the franchise shall be conducted by a special committee of Council and their recommendations forwarded to Council for its benefit and consideration.
(Ord. 83-84. Passed 5-23-83.)
(d) Renewal.
(1) Council shall adopt a resolution setting forth the time and place of a Council meeting to be held not less than twelve months prior to the franchise expiration date, the purpose of which will be to review the grantee's performance during the entire term of its franchise, to consider the adequacy of this chapter and the franchise agreement from the standpoint of the City, the grantee and the Federal Communications Commission's rules and regulations relative to cable television and to determine the advisability of renewing the grantee's franchise for a period not inconsistent with such FCC rules.
(2) Council shall hear any interested persons during such Council meeting and shall determine whether or not the grantee did reasonably comply with the terms and conditions imposed by this chapter and the franchise agreement.
(3) If Council determines that the grantee has been in substantial compliance with the terms and conditions imposed by this chapter and the franchise agreement, Council may renew the grantee's franchise for a period of time not inconsistent with the then prevailing FCC Rules for Cable Television in which event Council shall modify this chapter and the franchise agreement to bring them into compliance with the FCC Rules for Cable Television.
(4) Notwithstanding the fact that Council may determine that the grantee has been in substantial compliance with the terms and conditions imposed by this chapter and the franchise agreement, Council shall have the right not to renew the franchise, in which event Council shall on the expiration date of the franchise, have the option to either; (1) purchase the assets of the grantee's cable television system serving the City and adjacent areas at its then fair market value, (2) lease the assets of the grantee's cable television system serving the City and adjacent areas for a sum based upon its then fair market value, or (3) consistent with the provisions of Section 757.03(j), select a new grantee after a full public proceeding and cause such new grantee to purchase such assets at fair market value.
(e) Revocation Procedure.
(1) Whenever the grantee willfully fails, refuses or neglects to operate or maintain its cable television system in accordance with the terms of this chapter and the franchise agreement or to comply with the conditions of street occupancy, or to make required extensions, or in other ways violates the terms and conditions of this chapter, the Mayor may notify the grantee in writing, setting forth the nature and facts of such noncompliance he believes have occurred. If within thirty days following such written notification by the Mayor, the grantee has not furnished proof that corrective action has been taken or is being actively and expeditiously pursued, or evidence that the alleged violations did not occur, the Mayor shall place a request for termination of the franchise agreement on the agenda of the next regular Council meeting.
(2) If, after considering the Mayor's request for termination of the franchise agreement and hearing all interested parties, Council determines that the noncompliance of the grantee was with just cause, it shall direct the grantee to comply within such time and manner and on such terms and conditions as are reasonable.
(3) If Council determines that such noncompliance was without just cause, then Council may adopt a resolution that either (1) forthwith terminates the franchise agreement and instructs the grantee to promptly remove from the public way all of its cable television system facilities within ninety days from the date the grantee receives a written copy of such resolution, (2) invokes the City's right to purchase the assets of the grantee's cable television system serving the City and adjacent areas, including the head-end, at a price not exceed its depreciated value as defined herein, or, (3) invokes the City's right to lease the assets of the grantee's cable television system serving the City, including the head-end, for a sum based upon its depreciated value as defined herein, unless there is compliance by the grantee within such period as Council may fix.
(4) In addition to all the other rights reserved to the City by virtue of this chapter or otherwise, the City may invoke the rights as defined in subsection (e)(3) hereof in the event:
A. The grantee becomes insolvent, or unable or unwilling to pay its debts or is adjudged bankrupt.
B. The grantee attempts to or does practice any fraud or deceit upon the City or its subscribers.
(5) No revocation or termination of the franchise agreement shall be effected unless Council, at any regular or special meeting at which all interested parties have been heard, has adopted a resolution setting forth the reasons for the termination; in the event the termination of such agreement depends upon a finding of fact, such finding of fact as made by Council after such hearing shall be deemed to be conclusive unless modified as a result of arbitration provided for in Section 757.06(h).
(6) The grantee shall not be declared at fault or be subject to any sanction under any provision of this chapter in any case in which performance of any such provision is prevented for reasons beyond the grantee's control.
(7) The termination of the franchise agreement shall in no way affect any of the rights of the City under this chapter, the franchise agreement or any provision of law.
(f) Termination for Cause of Forced Purchase by City.
(1) If at any time during the term of this franchise, Council determines the grantee has materially breached the terms and conditions imposed by this chapter and the franchise agreement after the City has exhausted all of the remedial steps provided for herein, the City may either terminate the franchise agreement or purchase or lease the assets of the grantee's cable television system serving the City and adjacent areas including the head-end, at a cost based on depreciated value as hereinbefore provided.
(2) In the event the City exercises its option to purchase or lease the assets of the grantee's cable television system within the City at their depreciated value, it shall give the grantee written notice of its intent to do so. The grantee shall within seven days of receipt of such notice, enter into bona fide negotiations with the City for the purpose of consummating the transaction at the earliest possible moment.
(g) Arbitrary and Capricious Action by Grantee. If, as a result of a dispute between the grantee and the City and prior to a settlement of that dispute as provided for herein, the grantee arbitrarily or capriciously discontinues service to its subscribers, the grantee shall forfeit its rights of notice and a hearing as provided for Sections 757.03(b) and (e), and Council shall by resolution declare the grantee's franchise agreement immediately terminated, and the City shall forthwith seek appropriate judicial injunction relief and shall proceed to exercise its rights and powers as provided for herein.
(h) Provision for Arbitration. In the event the City elects to purchase or lease the grantee's cable television system at the fair market value or its depreciated value and the terms and conditions of such purchase or lease cannot be agreed upon, the final terms and conditions shall be determined by arbitration as described in Section 757.06(h).
(i) Transfer of Ownership to City.
(1) Upon execution of the purchase agreement or lease agreement and any payment that may be stipulated therein, the grantee shall immediately transfer to the City possession, and in the case of purchase, title to all facilities and property, real and personal, related to those cable television system assets being purchased, 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 or lease payment. The grantee shall execute such warranty deeds, lease agreements, operating agreements or other instruments of conveyance to the City as are necessary.
(2) The grantee shall make it a condition of each contract entered into by it with reference to its operation under this chapter and the franchise agreement, that each contract shall be subject to the exercise of these options by the City, and that the City shall have the right to succeed to all privileges and obligations thereof upon the exercise thereof.
(j) City's Right to Assign. The City shall have the right and power to assign its purchase rights of the grantee's cable television system to a successor grantee selected by the City in a manner consistent with the provisions of this chapter and the Federal Communications Commission's rules and regulations for cable television.
(k) Grantee's Obligation as Trustee.
(1) Until such time as the grantee transfers to the City or to a new grantee possession and in the case of purchase, title to the cable television system assets, real and personal, being transferred hereunder, the grantee shall, as trustee for its successor in interest, continue to operate the cable television system under the terms and conditions of this chapter and the franchise agreement and to provide the regular subscriber service and any and all of the services that may be provided at that time. During such interim period, the grantee shall not make any material, administrative or operational change that would tend to:
A. Degrade the quality of service to the subscribers,
B. Decrease income, or
C. Materially increase expenses without the express permission in writing of the City or its assignee.
(2) The grantee's obligation as trustee applies to all the circumstances under which it may be required to continue to provide subscriber services under the terms and conditions of this chapter and the franchise agreement.
(l) Management Fee. For its management services during the interim period, the grantee shall be entitled to receive as compensation, the net profit, as defined herein, generated during the period between the date the grantee received written notice from the City of its intent to purchase or lease the grantee's cable television system or the expiration date of the franchise, whichever is earlier, and the payment of the purchase or lease price. Such management services shall not continue without the grantee's consent for more than nine months. However, if Council determines that the grantee is responsible for any delay in transfer of control and, in the case of purchase, ownership, the grantee shall continue to operate the cable television system as provided in subsection (k) hereof without compensation for its services until the sale agreement or lease agreement is executed and control and, in case of purchase, ownership passes to the City or its assignee. In addition, the City shall also have the right to:
(1) Forthwith terminate the grantee's franchise and have the system removed, or
(2) Purchase the assets of the grantee's cable television system at its depreciated value.
(m) Franchise Fee.
(1) The grantee shall pay to the City, in consideration of the granting of the franchise to use the public ways for the operation of a cable television system, three percent (3%) of its annual gross subscriber revenues as defined herein during the period of its operation under the franchise agreement.
(2) The grantee shall file with the City, within thirty days after the expiration of each of the grantee's fiscal quarter, a financial statement clearly showing the gross subscriber revenues received by the grantee during the preceding quarter. Payment of the quarterly portion of the franchise fee shall be payable to the City at the time such statement is filed. The grantee shall also file, within 120 days following the conclusion of the grantee's fiscal year, an annual report prepared and audited by a certified public account acceptable to the City, clearly detailing the yearly total gross subscriber revenues.
(3) The City shall have the right, consistent with the provisions of Section 757.04(b)(2), to inspect the grantee's income records, the right of audit and the recomputation of any amounts determined to be payable under this chapter provided that such audit shall take place within twelve months following the close of each of the grantee's fiscal years. Any additional amount due the City as a result of the audit shall be paid within thirty days following written notice to the grantee by the City which notice shall include a copy of the audit report. The cost of such audit shall be borne by the grantee if it is properly determined that the grantee's annual payment to the City for the preceding year is increased thereby by more than five percent (5%).
(4) In the event that any franchise payment or recomputed amount is not made on or before the applicable dates heretofore specified, interest shall be charged from such due date at the annual rate of nine percent (9%).
(5) In the event the franchise agreement is terminated prior to its expiration date, and the City invokes its right to purchase or lease the grantee's cable television system, the grantee shall file with the City within thirty days of the date that control and, in the case of purchase, ownership passes to the City or its assignee, a financial statement clearly detailing gross subscriber revenues received by the grantee since the end of the previous fiscal quarter. The grantee shall pay the franchise fee due at the time such statement is filed.
(n) Insurance; Bonds; Indemnity.
(1) Upon the filing of the acceptance required under Section 757.06(j) and at all times during the term of the franchise, including the time for removal of facilities or management as a trustee as provided for herein, the grantee shall obtain, pay all premiums for, and file with the City Auditor written evidence of payment of premiums and executed duplicate copies of the following:
A. A general comprehensive public liability policy indemnifying, defending and saving harmless the City, its officers, boards, commissions, agents or employees from any and all claims by any person whatsoever on account of injury to or death of a person or persons occasioned by the operation of the grantee under the franchise herein granted, or alleged to have been so caused or occurred, with a minimum liability of five hundred thousand dollars ($500,000) per personal injury or death of any one person and one million dollars ($1,000,000) for personal injury or death of any two or more persons in any one occurrence.
B. Property damage insurance indemnifying, defending and saving harmless the City, its officer, boards, commissions, agents and employees from and against all claims by any person whatsoever for property damage occasioned by the operation of the grantee under the franchise herein granted, or alleged to have been so caused or occurred, with a minimum liability of two hundred fifty thousand dollars ($250,000) for property damage to the property of any one person and five hundred thousand dollars ($500,000) for any property damage to the property of two or more persons in any one occurrence.
C. Copyright infringement insurance, indemnifying, defending and saving harmless the City, its officers, boards, commissions, agents and employees from and against all claims by any person whatsoever for copyright infringement occasioned by the operation of the grantee under the franchise herein granted, or alleged to have been so caused or occurred, with a minimum liability of one million dollars ($1,000,000) for the infringement of such copyrights.
D. A performance bond running to the City with good and sufficient surety approved by the City in the sum of fifty thousand dollars ($50,000) conditioned upon the faithful performance and discharge of the obligations imposed by this chapter and the franchise agreement executed hereunder from the date thereof.
(2) The bond and all insurance policies called for herein shall list the City of Zanesville as co-insured and shall be in a form satisfactory to the Law Director and shall require thirty days written notice of any modification thereof or cancellation to the City Auditor and the grantee. The grantee shall, in the event of any such cancellation notice, obtain, pay all premiums for and file with the City Auditor, written evidence of payment of premiums, duplicate policies of any insurance so cancelled within thirty days following receipt by the City Auditor and/or the grantee of any notice of cancellation.
(3) The grantee shall, at its sole cost and expense, indemnify and hold harmless the City, its officials, boards, commissions, agents and employees against any and all claims, suits, causes of action, proceedings and judgments for damage arising out of the operation of the cable television system under the franchise. These damages shall include, but not be limited to, penalties arising out of any failure of the grantee to secure consents from the owners, authorized distributors or licensees of programs to be delivered by the grantee's cable television system whether or not any act or omission complained of is authorized, allowed or prohibited by the franchise.
(4) The foregoing indemnity is conditioned upon the City's giving the grantee notice of the commencement or making of any suit or action covered by the terms of this section. Nothing herein shall be deemed to prevent the City from cooperating with the grantee and participating in the defense of any litigation by its own counsel at its sole cost and expense. No recovery by the City of any sum by reason of the bond required in this chapter shall be any limitation upon the liability of the grantee to the City under the terms of this chapter except that any sums so received by the City shall be deducted from any recovery which the City shall establish against the grantee under the terms of this chapter.
(o) Transfer of Franchise.
(1) The franchise granted under this chapter shall be a privilege to be held in personal trust by the grantee. It shall not be assigned, transferred, sold or disposed of, in whole or in part, by voluntary sale, merger, consolidation or otherwise, or by forced or involuntary sale, without prior consent of Council expressed by resolution and then only on such conditions as may therein be prescribed.
(2) Any sale, transfer or assignment shall be made by a bill of sale or similar document, an executed copy which shall be filed with the Mayor within thirty days after any such sale, transfer or assignment. Council shall not withhold its consent unreasonably provided the proposed assignee agrees, in writing, to comply with all the provisions of this chapter and the franchise and must be able to provide proof of financial responsibility as determined by Council.
(3) No such consent shall be required for a transfer in trust, mortgage or other instrument of hypothecation, in whole or part, to secure an indebtedness except that when such hypothecation exceeds fifty percent (50%) of the fair market value (as defined in Section 757.01) of such property, prior consent of Council, expressed by resolution, shall be required for such transfer, and such consent shall not be withheld unreasonably.
(4) When there is an actual change in control of the grantee's corporation or where ownership of more than fifty percent (50%) of the grantee's voting stock is acquired by a person or group of persons acting in concert, none of whom already owns fifty percent (50%) or more of the grantee's voting stock, singly or collectively, prior consent of Council, expressed by resolution, shall be required, and such consent shall not be withheld unreasonably.
(5) The consent of Council to any sale, transfer, lease, trust, mortgage or other instrument of hypothecation shall not constitute a waiver or release of any of the rights of the City under this chapter and the franchise agreement.
(Ord. 76-146. Passed 12-13-76.)