CR 2000-095 Authorize Reduction Of Time Warner Bond Requirement
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June 6, 2000
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Council Report 2000-95
AUTHORIZE REDUCTION OF TIME WARNER BOND REQUIREMENT
Proposed Action
Staff recommends that the Council approve the following motion: Move to authorize reduction of Time
Warner bond requirement based upon the stipulation from Time Warner that the upgrade of the cable
system to 750 MHz is completed.
This action will reduce the bond required from Time Warner from $300,000 to $100,000.
Ovet"view
Time Warner is requesting that the bond required by the franchise agreement be reduced from $300,000
to $100,000. During the recent upgrade of the cable system, Time Warner was required to increase the
bond to $300,000 due to the extensive work that was being done. The upgrade is now completed and
Time Warner has requested that the bond amount be lowered to $100,000. Time Warner has stipulated in
their letter to the Cable Commission's attorney that the upgrade is completed.
Nonnal1y the cable company maintains a $100,000 bond with each city. The purpose of this bond is to
allow the city to recover costs associated with a possible failure ofthe cable company to repair, replace,
or restore city right-of-way. As far as I know, no city has ever had to call on this bond.
The Cable Commission, at its May 24 meeting, recommended that the individual cities reduce the bond
amount.
Supportin~ Information
· Letter to Brian Grogan from Time Warner
· Memorandum from Brian Grogan
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Ja A. Genellie
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. . sistant City Manager
Financial Impact: $ $0 Budgeted: Y IN
Related Documents (CIP, ERP, etc.):
Notes:
Source:
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~ TIME WARNER
~ CABLE
May 11,2000
Mr. Brian Grogan
SWSCC Administrator/Moss & Barnett, P.A.
4800 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4129
Dear Brian:
As you know, Time Warner Cable completed the upgrade in the Southwest Suburbs to a 750
MHz cable system by December 31, 1999 as was required by the cable franchise ordinance.
The Southwest Cable Franchise Agreement, Section 10.3, under the General Financial and
Insurance Provisions, required Time Warner Cable to maintain with each city a bond in the sum
of $300,000 through the completion of the upgrade work in the Southwest Suburbs. Upon
completion of the system upgrade, each city at its sole discretion may reduce the bond to the sum
of $100,000.
We believe we have reached the point where the requirement to maintain the $300,000 bond is no
longer needed. We would like the Southwest Suburban cities to consider our proposal to lower
the bond to the sum of$IOO,OOO as the franchise ordinance would allow.
I hope to hear from you soon regarding this proposal. If you have any further questions or
concerns, please contact me at (612) 287-3659.
If you have any questions or concerns, please call us at (612) 287-3659.
Sincerely,
~fM~
Arlen Mattern
Public Affairs Administrator
Cc:
Chris Enger, City of Eden Prairie
Gordon Hughes, City of Edina
Jim Genellie, City of Hopkins
David Childs, City of Minnetonka
Steve Devich, City of Richfield
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May-3D-DO 02:43pm From-MOSS & BARNETT
T-855 P.02/03 F-818
+4900
MOSS & BARNETT
A Professional Association
MEMORANDUM
TO
City Representatives and S~aff
FROM.
Brian Grogan, Moss & Barnett
DATE.
May 30, 2000
RE.
Cable Franchise Ordinance - Bond Requirement
Per the anached letter dated May II, 2000, Time Warner Cable has requested that the
$300,000 bond required under Section 10.2 ofc:a.ch city's FCdllchise Ayeement Ordinance
("Franchise") be reduced to $100,000 as contemplated in the Franchise.
The above-referenced maner was discussed aT the Southwest Suburban Cable Commission
("Commission") meeting held on May 24, 2000 The provisions in th~ Franclnse require that when
system construction IS complete the bond will be reduced back down to a lower level. Each City
could hire an engineer to verify that the construction is complete or each City could simply accept
Time Warner's stipulation that they have completed construction as evidenced by the fact that
they are providing the advanced services promised
Based on Time Warner's representation that the construction has been completed, the
Commi:s:sion voted to reconunend reducing The bond from $300,000 ro $100,000 as contemplated
by the franchise documents We recommend that each City place Ihis item on its agenda to
reduce the bond from $300,00010 $100,000
Enclosure
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