1988-628
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EXHIBIT CC
ORDINANCE NO.
88-628
An Ordinance Amending CATV Relief Ordinance,
Ordinance No.85-551 , Providing Modifications
in Contemplation of a Transfer of Ownership of
the City's Cable Communications Franchise and
Permitting continuance of Relief to the
Transferee of the Franchise in Accordance with
this Ordinance.
The City Council of the City of
follows:
ordains as
Hookins
section 1. Short Title.
This Ordinance shall be known as the "CATV Relief Ordinance
Amendment."
section 2. Background and Purpose.
Rogers Communications, Inc. ("Rogers") has agreed to sell
all interests and holding in its U.S. cable systems to KBL Cable,
Inc., a Texas corporation ("Proposed Transfereetl). The transfer
from Rogers to the Proposed Transferee shall be effectuated
through the transfer of the controlling stock interest in RCA
CablesystemsHolding co., the parent corporation of the Grantee.
The City previously granted relief to the Grantee under the
Franchise by Ordinance known as the CATV Relief Ordinance..
Rogers has requested relief from the Franchise to be extended
after the Closing, irrespective of the requirement in the CATV
Relief Ordinance that the CATV Relief Ordinance terminates upon
transfer of ownership and control of Grantee of the Franchise to
a new owner.
The Southwest Suburban Cable Commission ("SWSCC") has
reviewed the request of Rogers and recommended extending certain
portions of the CATV Relief Ordinance to a proposed new owner.
This recommendation is based upon compliance with certain
conditions by the Grantee and acceptance of requirements
including this Ordinance, by the Proposed Transferee of the
Franchise. A Stipulation of Settlement with Rogers and Grantee,
Exhibit A ("stipulationtl) and a Resolution of Approval of
Settlement, Exhibit B ("Resolution"), are attached. The
Stipulation and Resolution provide a description of requirements
and conditions and are made part of this Ordinance by reference.
This Ordinance will be effective only if the stipulation and
Resolution are satisfied and Proposed Transferee agrees to be
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bound.bythetermsofthisOrdinanceas.part.of its acceptance of
the transfer of the ownership of Grantee.
Section 3. That section 4 of the Relief Ordinance is hereby
amended to read as follows:
SECTION 4.
DEFINITIONS.
Subdivision 1. The definitions in the
Franchise also apply to this ordinance.
-Lll [(2)] "Franchise"means the Cable
Communications Ordinance as now or hereafter
amended.
12.l [(3)] "Local Programming Obligations"
means, for the purpose of this ordinance, Grantee's
obligations under the Franchise and the Offering
for cablecast access, community access and local
origination programming.
1.ll. [(4)] "Performance Agreement" means a
contractual agreement between Grantee, City and
SWSCC providing a means for monitoring Grantee's
financial condition, assuring an adequate level of
local programming, and providing for certain other
matters related to Grantee's requested reliefT.l..L.
as amended.
Section 4. That Section 5 of the CATV Relief Ordinance is
amended to read as follows:
SECTION 5.
RELIEF GRANTED.
While this Ordinance is in effect the obligations
of Grantee are modified to the extent provided in
this section.
Subdivision 1. FranchiseFees- Percentage.
until the effective date of this Ordinance Number
. the annual franchise fee shall be
3% of qross revenues. Commencing with [Grantee's
fiscal year 1985] the effective date of this
Ordinance Number the annual
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franchise. fee is [reduced from] "5% of Gross
Revenues [to 3%]. Such annual fees shall be paid
to city in equal quarterly payments on or before
the first day of each of the months of November,
February, May and August next following the end of
Grantee's fiscal year.
[If this ordinance terminates during any of
Grantee's fiscal years, the franchise fee shall be
restored to the rate of 5% of Gross Revenues at the
end of the calendar month in which termination
occurs. The restored rate of 5% and the reduced
rate of 3% shall be applied respectively to the
Gross Revenues collected only in the months during
which each rate was in effect. The fees accruing
at the restored rate shall be paid in accordance
with the terms of the Franchise. The fees accruing
at the reduced rate shall be paid in equal
quarterly installments in accordance with the
terms of this ordinance.]
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[Subd. 2. Past Due Franchise Fees. The 1984
franchise fee in the amount of $57,253 payable on
or before November 1, 1984 shall be deemed fully
discharged and paid if, but only if, Grantee pays
the sum of $34,352 to the City, in four equal
payments on or before June 1, June 15, August 15
and October 15, 1985.]
Subd. [3.] ~ Letters of Credit. The City
Council may by resolution reduce the required
amount of the Letter of Credit below $50,000 if in
its sole discretion it determines that a lesser
amount is reasonable and adequate to protect the
public. It may thereafter, by resolution, require
the amount of the Letter of Credit to be increased
or fully restored to the amount of $50,000.
Grantee shall comply with this requirement within
sixty days after written notice has been given by
the city.
Subd. [4.] .1 Performance Bond. The Grantee
may dispense with the $300,000 performance bond
required by the Franchise. The city council may
thereafter by resolution require that such bond, or
a similar bond ina lesser. amount, be provided by
Grantee. Grantee shall comply with this
requirement within sixty days after written notice
has been given by the City.
subd. [5.] 4 Local Programming Obligations.
Grantee shall expend at least 1% of its annual
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Gross Revenues each fiscal year in fulfilling its
Local Programming Obligations under the Franchise
for public, governmental, and educational access,
but it shall not be obligated to expend more than
that amount for such access. That amount shall not
include any costs of operation. caoital for access
equipment replacement previouslY aqreed tobv the
parties ,in Exhibit 2 to the Contract'for Local
Proqramminq Facilities. which is Exhibit A to the
Performance Aqreement. which shows theeauipment to
be maintained, and replaced., or,administration'not
directly related to the provision of local
programming. This expenditure shall be in complete
satisfaction of Grantee's total Local Programming
Obligations during the period of this ordinance.
section 5. That section 6 of the Relief Ordinance is hereby
amended to read as follows:
SECTION 6. AUTOMATIC TERMINATION OF RELIEF
ORDINANCE PROVISIONS.
Cat
The provisions of this ordinance, and the relief
herein granted, shall cease to be effective,
automatically, upon the occurrence of the earliest
of any of the following events:
[Subdivision 1. Failure of the Grantee to
complete refinancing its Existing Indebtedness by
December 31, 1987 in accordance with Article II,
section 4 of the Franchise.]
[Subd. 2. The end of the next month after
Grantee has collected cumulative Gross Revenues in
the amount of one hundred million dollars as
measured from September 1, 1984. The
determination of cumulative Gross Revenues shall be
based upon audited financial statements for periods
for which they are available and upon Grantee's
operating reports for period for which audited
statements are not then available. Granteeshall
provide City with its financial statements and
financial operating reports promptly after they are
prepared. ]
[Subd. 3.] Subdivision 1. March 1, 1992.
[Subd. 4. Payment, discharge, or
satisfaction of the Existing Indebtedness, except
through refinancing as provided in Article II,
Section 40f the Franchise.]
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[Subd. 5 . Payment, discharge ,or
satisfaction of the indebtedness arising from the
refinancing provided in Article II, section 4 of
the Franchise.]
[Subd. 6.] SUbdivision 2. Failure of the
Grantee to restore or replace the full required
amount of the Letter of Credit as provided in
Article VIII, section 4, paragraph H of the
Franchise.
[Subd. 7. Failure of the Grantee to pay the
fees as required in section 5, Subd. 2 of this
ordinance. ]
[Subd. 8.] Subdivision 3. Failure of the
Grantee to restore, replace or< increase either a
Letter of Credit or bond within sixty 'days of
written notice by the City, as provided in section
5, Subdivisions [3 and 4] 2 and 3 of this
ordinance.
[Subd. 9.] Subdivision 4. A holding or
determination by any court or agency that any
term, condition or provision of this Relief
Ordinance is invalid or unenforceable, as a result
of any action taken by Grantee or anyone acting on
Grantee's behalf seeking such determination.
[Subd. 10. Sale or transfer of all or
substantially all of the System to a person or
entity other than a parent, SUbsidiary, related
corporation, affiliated corporation, partner or
joint venturer of Grantee or any parent of
Grantee. ]
[Subd. 11.] Subdivision 5. Termination of
the Franchise.
Section 6. That section 70f the Relief Ordinance is amended to
read as follows:
SECTION 7.
OTHER TERMINATIONS.
This ordinance may also be terminated for cause,
under the same procedures for termination as are
contained in the Franchise, for the following
reasons:
Subdivision 1.. All grounds for termination
provided in the Franchise, includinq the Relief
Ordinance as amended, except to the extent that
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Grantee's perfornance'obligationsare'modified in
this Ordinance.
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[Subd. 2. The purchase by Grantee, its
general partner, or any parent, subsidiary,
affiliate or other related corporation of Grantee
or its general partner, of a cable communications
system or any part thereof or interest therein,
located within the seven-county metropolitan area
as defined in Minnesota statutes, section 473.121,
Subd. 2. For this purpose the definition of a
cable communications system shall be as that term
is currently defined by the Board.
Such a purchase shall not be grounds for
termination of this ordinance, however, if the
Grantee demonstrates to the reasonable
satisfaction of the City that the purchase (1)
will not impair-the operating cash flow or
financial position of Grantee and (2) will involve
independent financing of the purchase without
resort to the assets of the System.]
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[Subd. 3.] Subdivision 2. Failure of the
Grantee to comply with any of the provisions of the
Performance Agreement.
section 7. Effective Date.
This ordinance shall be effective upon passage and adoption
by City and upon satisfaction of all of the following conditions:
(1) Publication of this Ordinance;
(2) Passage and adoption by each of the Member Cities of
the SWSCC of an Ordinance similar to this Ordinance
within 45 days of the adoption of this Ordinance;
(3) Conformance by Grantee with all the terms and
conditions of the Resolution, Exhibit B and of the
Stipulation, Exhibit A, and of the Amendment to the
Performance Agreement, Exhibit DO to the stipulation,
Exhibit A;
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Acceptance by Grantee in conformance with section 8 of
this Ordinance;
(5) Closing of the transfer of ownership from Rogers to
Proposed Transferee within one (1) year from the date
hereof and notice thereof to the Member cities of
swscc.
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(6) Execution and delivery by proposed Transferee of a
guarantee agreement as required by Paragraph 5 of the
stipulation.
section 8. Acceptance of the Relief Ordinance as amended;
Providing of Guarantees.
Except as otherwise provided herein, this Ordinance shall be
effective in accordance with the provisions of Article XIV of the
Franchise including delivery to the City of the acceptance,
opinion of legal counsel, guarantees and other documents as
required by said Article XIV.
Hopkins
Passed by the City council of the City of
Minnesota this day of
,
, 1988.
/i"7(jtcl j ";./ /!LY'c
City Mayor
Action on above ordinance:
Date of first reading: November 15, 1988
Date of second reading: December 13, 1988
Motion for Adoption:
Seconded by:
Voted in favor:
Voted against:
Abstained:
Absent:
Counci1member Anderson
Counci1mernber Redepenning
Unanimous
None
None
None
Ordinance adopted.
Date of publication:
SW2/0RD2
11/7/88
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