HomeMy WebLinkAbout2010/04/13 Item 14
ITEM TITLE:
SUBMITTED BY:
REVIEWED BY:
CITY COUNCIL
AGENDA STATEMENT
~f:. CITY OF
-~ (HUlA VISTA
APRlL 13,2010, ItemL
PUBLIC HEARING: CONSIDER TERMINATION OF
NEXHORlZON COMMUNICATIONS INC., CABLE TELEVISION
SYSTEM FRANCHISE FOR FAILURE TO COMPLY WITH
MATERIAL PROVISIONS OF THE FRANCHISE AGREEMENT
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA TERMINATING THE NEXHORlZON
FRANCHISE AND AFFIRMING ITS PRlOR ACTION
TERMINATING THE NEXHORlZON FRANCHISE
DIR. OF CONSE:pN & ENVlRONMENTAL SERVICES ~
CITY MANAGE '
ASSISTANT CITY ANAGER "')~
4/5THS VOTE: YES D NO ~
SUMMARY
NexHorizon Communications, Inc. ("NexHorizon") has been operating a cable television
system pursuant to a Franchise Agreement with the City (Attachment A). NexHorizon
has failed to meet certain material provisions of the Franchise Agreement. Accordingly,
pursuant to the terms of the Agreement, the City provided NexHorizon with notice
identifYing the material provisions that had been violated and providing NexHorizon in
excess of 30 days to correct the violations. Staff provided NexHorizon with that notice on
August 19, 2009 (Attachment B). City staff worked diligently with NexHorizon to
facilitate its compliance with the provisions of the Agreement and deferred the hearing
date while those efforts were in progress. However, NexHorizon ultimately was
unsuccessful in curing the violations. As a result, staff notified NexHorizon that the
public hearing would go forward on November 17, 2009. The Council held the public
hearing on that date and directed staff to take the steps necessary to begin termination of
the franchise (Resolution No. 2009-274). Staff did so and notified NexHorizon that the
franchise had been terminated. Subsequently, NexHorizon asserted that it had not
received adequate notice of the termination hearing. Staff disputes that assertion and
contends that the franchise was properly terminated in the prior proceedings. However, in
an effort to resolve the matter and out of professional courtesy staff scheduled a second
public hearing on the franchise termination, for April 13, 20 I o.
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APRIL 13, 2010, Item~
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ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed project
for compliance with the California Environmental Quality Act (CEQA) and has
determined that the project qualifies for a Class 1; categorical exemption pursuant to
Section 153218 [Actions by Regulatory Agencies for Lease Permit or Agreement] of the
State CEQA Guidelines. Thus, no further environmental review is necessary.
RECOMMENDA nON
City Council conduct the Public Hearing and adopt the Resolution.
BOARDS/COMMISSION RECOMMENDA nON
Not Applicable.
DISCUSSION
On May 20, 2008, the City Council approved the assignment of the Chula Vista Cable
Franchise Agreement, to NexHorizon. Pursuant to the terms of that assignment,
NexHorizon assumed all of the obligations of the Franchise Agreement, and agreed to
comply with and be bound by the terms and conditions of the Franchise Agreement.
Since that time, the City staff has become aware that NexHorizon has failed to comply
with certain material provisions of the Franchise Agreement.
Section 3.c. of the Franchise Agreement provides, in pertinent part:
"The Franchise may be terminated at any time by the City Council in the event
the Council shall have found, after notice and hearing, that:
(I) The Grantee fails to comply with any material provision of this
Agreement; however, termination proceedings shall only be commenced
in a public meeting affording due process, if, after thirty (30) days from
written notification from the City stating with particularity the grounds
upon which the City relies, Grantee fails to correct stated violation. In the
event the stated violation is not reasonably curable within thirty (30) days,
termination proceedings shall not be commenced if the Grantee provides,
within the said thirty (30) days, a plan, satisfactory to the City Manager to
remedy the violation and continues to demonstrate good faith in seeking to
correct said violation."
In accordance with Section 3.c., on or about August 19, 2009 staff provided NexHorizon
Inc., with a detailed list of the material provisions in the Franchise Agreement with which
NexHorizon had failed to comply (Attachment B). Staff worked diligently with
NexHorizon to provide them with every reasonable opportunity and with additional time
to cure the violations and meet their obligations under the Franchise Agreement prior to
the public hearing on November 17, 2009. The Agreement and Municipal Code provide
for 30 days to cure the issues and additional time when the Franchisee has demonstrated a
plan to cure issues that cannot be cured within the 30 day period. NexHorizon was given
approximately three months to cure the violations prior to the November hearing. It failed
to do so. Although NexHorizon has continued to operate its franchise since the
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APRIL 13, 2010, Item~
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termination, it has not cured the franchise violations. Staff worked closely with
NexHorizon over the past year and extensively over the past seven months since the
official notice of failure to meet certain material provisions of the Agreement was
delivered to NexHorizon. Over the past two years NexHorizon has made one franchise
fee payment which is estimated to be less than 10% of the total amount due. During the
cure period the City also discovered that NexHorizon had failed to maintain worker's
compensation insurance as required by state law and the franchise or post and maintain
the performance bond.
Additionally, NexHorizon has failed to meet its obligation in the current under-grounding
program on Fourth Avenue (Underground District No. 133). Chula Vista Municipal Code
section 15.32.160 makes it illegal for a utility company to "keep, maintain, continue,
own, employ or operate poles, overhead wires and associated overhead structures in the
district on and after the date when overhead facilities are required to be removed by the
resolution ...." Thus, NexHorizon's failure to comply with the requirements of the
Underground District is a violation of the franchise Agreement, as well as the City's
Municipal Code. Furthermore, the City has received a high volume of customer service
complaints regarding NexHorizon's service and resolution process from problems over
the past 18 months. Staff will be prepared at the public hearing to provide the City
Council with an update of the status of their efforts.
For all of the above reasons, staff recommends that the City Council terminate the
NexHorizon franchise and affirm its prior action terminating the NexHorizon franchise.
DECISION MAKER CONFLICT
Staff has determined that the recommendations requiring Council action are not site-
specific and consequently the 500-foot rule found in California Code of Regulations
section l8704.2(a)(1) is not applicable to this decision.
CURRENT YEAR FISCAL IMP ACT
The City has not received Franchise Fee or Utility User's Tax payments for the current
fiscal year and the total payments are estimated to be approximately $68,000.
Additionally, staff has invested resources in the development and bid implementation
process for two (2) 20a utility undergrounding projects. These costs for these projects are
recoverable through an allocation pursuant to the Public Utilities Commission and funded
by local ratepayers. The projects represent a value to the citizens of Chula Vista and to
the extent the projects are not completed, costs increase or are duplicated by failure of the
Franchisee to meet the obligations in a timely fashion, the City would either absorb those
costs or the project would not be completed and the community would not receive the
benefit of their investment. By example, the estimated cost for completing the Fourth
Avenue under-grounding project has increased by approximately $28,000 due to the
delay.
ONGOING FISCAL IMPACT
The Franchise Agreement contains mutual benefits to the Franchisee, ratepayers and City
of Chula Vista which would not be realized if the Franchisee fails in their obligation and
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the Franchise is terminated. Those include the payment of an approximately $30,000 per
year in Franchise Fee and Utility User's Tax that fund public services, in-kind support
and telecommunications support that contribute to the cost effective operation ofthe City.
The Franchise Fees and Utility User's tax would be paid by AT&T or Cox
Communications if the estimated 1,500 current NexHorizon cable, telephone and internet
customers migrated to AT&T or Cox Communications for their service. These customers
also have the option of transitioning to satellite television service which is not currently
required to pay the Franchise Fee for television service.
ATTACHMENTS
A. Franchise Agreement
B. Thirty-day notice to cure to the Franchise Violations
Prepared by: Michael T. Meacham, Director, Conservation & Environmental Services
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ATTACHMENT A
AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND
ULTRONICS, INC., A CALIFORNIA CCRPOOATICN,
GRANTING TO ULTRONICS, INC. THE NOO-EXCLUSIVE
RIGHT, PRIVILEGE AND FRANCHISE TO LAY AND USE
LINES, WIRES, COAXIAL CABLE AND APPURTENANCES FCR
TRANSMITTING, DISTRIBUTING AND SUPPLYING CABLE
TELEVISION SERVICE ALCNG, ACROSS AND UPON THE
PUBLIC STREETS, WAYS, ALLEYS AND PLACES WITHIN
TIlE CITY OF CHULA VISTA
The parties to
hereinafter referred to as
as "Grantee."
this agreement are the City of Chula vista,
"City" and Ultronics, Inc., hereinafter referred to
Section 1.
DEFINITIONS.
For the purpose of this franchise, the following terms, phrases,
words, and their derivations shall have the meaning given herein. When not
inconsistent with the context, words used in the present tense include the
future, words in the plural number include the singular number, and words in
the singular number include the plural number. Provisions of this franchise
shall be construed in accordance with the laws of the State of California.
a. "City": The City of Chula Vista, a municipal corporation of the
State of California, in its present incorporated form, or in any
later reorganized, consolidated, enlarged or reincorporated form.
b. "Council": The present governing body of the City or any future
board constituting the legislative body of the City.
c. "Franchise Property": All property owned, installed or used
under authority of this franchise.
d. "Grantee": The person or corporation to whom or which this
franchise is granted by the COuncil, and the lawful successor or
assignee thereof, and who or which has filed with the City an
acceptance referred to in Sections 3 hereof.
e. "Street": The surface of, and the space above and below any
public street, road, highway, freeway, lane, alley, court,
sidewalk, parkway, easement, drive or other public place nOW or
hereafter existing as such within the City.
f. "Cable Television System": Shall mean a system of antennas,
cables, wires, lines, towers, wave guides, or any other
conductors, converters, equipment or facilities, designed and
constructed for the purpose of producing, receiving, anplifying
and distributing, audio, video and other forms of electronic or
electrical signals.
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g. .Subscribers': Any person or entity receiving for any purpose
the Cable Television System service of the franchise herein.
h. .Total Gross Receipts.: Any and all compensation in any form
paid by the subscriber to the Grantee arising from the sale of
basic and pay Cable Television service to customers within the
corporate limits of the City. Without limitation, total gross
receipts shall not include (a) uncollectible amounts; (b)
refunds or rebates made by Grantee; (c) revenues received as a
direct reimbursement of Grantee's expense in the operation of
any access channels; (d) sales, ad valorem, or other types of
. add on. taxes, levies or fees calculated by gross receipts or
gross revenues which Grantee might have to payor collect for
Federal, State or local government (exclusive of franchise fees
provided for herein); (e) revenues received for advertising on
Grantee's local origination channel, to the extent of Grantee's
direct costs of operation of Grantee's system; and (f)
non-operating revenues such as income from operations not
requiring use of a franchise or gain from sale of an asset.
Section 2.
FRANCHISE GRANT.
The franchise hereby granted by the City authorizes Ultronics, Inc.,
Grantee, subject to the provisions herein contained, to engage in the business
of operating and providing a Cable Television System in the City, and for that
purpose to erect, install, construct, repair, replace, reconstruct, maintain
emd retain in streets such poles, wires, cable, conductors, ducts, conduit
aults, manholes, amplifiers, appliances, attachments, and other property as
may be necessary and appurtenant to the cable Television Systems; and, in
addition, so to use, operate and provide similar properties rented or loaned
from other persons, firms, or corporations, for such purpose.
Section 3.
DURATION OF GRANI'.
a. The Franchise granted hereunder shall not become effective until
the happening of following events:
(1) The written acceptance hereof by the Grantee accepting all
of the terms and conditions of this Franchise and agreeing
to be bound thereby, delivered to the City in a form
approved by the City Attorney.
(2)
The filing wi th the
comprehensive liability
Section 15(a) hereof.
City of evidence of a general
insurance policy as required in
b. 'llie term of this Franchise shall be twenty-three (23) years,
commencing on the effective date of the Franchise as provided in
paragraph (a) of this section, provided, however, that the term
of this Franchise may be extended in accordance with the
procedures set forth below:
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(1) lhe prOVlSLOns of this Franchise shall be subject to
renegotiation every five (5) years during the term of the
Franchise, including any extensions thereof. These
renegotiation opportunities shall be referred to as
"renegotiation intervals." Renegotiation may be initiated
upon written notice given Ify the City or Grantee to the
other not less than one (1) year prior to the particular
renegotiation interval. Any renegotiation necessary shall
be directed towards effecting alterations in the terms and
conditions of this Franchise to reflect any significant
changes which occurred during the interim period.
(2) If any renegotiation prior to the end of the term,
including extensions of this Franchise, results in
agreement between the City and Grantee, or if,
alternatively, both parties agree, at any renegotiation
interval as defined above, that no renegotiation is needed
or required, then the term of this Franchise shall be
extended for an additional five (5) years by an appropriate
action of the City Cbuncil. If any renegotiation fails to
result in agreement, the term shall not be extended unless
the City Council so specifies by appropriate action.
(3) lhis Franchise shall terminate without further action by
the City at the end of the term, including extensions, of
this Franchise; provided, however, the total term of this
Franchise, with extensions, shall not exceed fifty (50)
years from the effective date of this ordinance; provided,
further, that the City Council, at or before the end of the
term, or the term as extended, retains the exclusive power
to grant a further extension, or a renewal of this
Franchise, or a new Franchise to Grantee.
c. lhe Franchise may be terminated at any time by the City Council
in the event the Council shall have found, after notice and
hearing, that:
(1) The Grantee fails to comply with any material provision of
this Agreement; however, termination proceedings shall only
be commenced in a public meeting affording due process, if,
after thirty (30) days from written notification from the
City stating with particularity the grounds upon which the
City relies, Grantee fails to correct stated violation. In
the event the stated violation is not reasonably curable
within thirty (30) days, termination proceedings shall not
be col11!l€nced if the Grantee provides, within the said
thirty (30) days, a plan, satisfactory to the City Manager
to remedy the violation and continues to demonstrate good
faith in seeking to correct said violation.
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(a) It shall not be a failure to corrply with a material
provision of this ordinance for Grantee to corrply with
any rules and regulations of the Federal
communications Commission, or any Federal or State
regulatory commission or agency having jurisdiction
over Grantee's operations or any Federal or State law.
(b) The Council's finding of materiality is subject to a
de novo review by a court of corrpetent jurisdiction; or
(2) Any provision hereof has become invalid or unenforceable,
and the Council finds that such provision constituted a
material consideration to the grant of this Franchise.
The Grantee shall be given at least thirty (30) day's notice of any
termination proceedings.
Section 4.
RATES.
The Grantee may establish its own rates and charges.
Section 5.
FRANCHISE PAYMENI'S.
a. The Grantee shall pay annually to the City, during the life of
this franchise, and at the times hereinafter specified, a sum of
three percent (3%) of the total gross receipts of the Grantee
until January, 1990, after which the rate shall be the greater
of three percent (3%) of the total gross receipts of Grantee or
the rate then charged Cox Cable for its franchise, subsequent to
the periodic renegotiation of rate provision in Cox's
franchise. Such payment by the Grantee shall be in lieu of any
occupation tax or any other tax based upon the gross receipts of
Grantee.
b. 'Ibe Grantee shall file with the City within ninety (90) days
after the expiration of any calendar year during which this
Franchise is in force, a verified statement showing in
appropriate detail the total gross receipts, as defined herein,
of Grantee, its successors or assigns, during the preceding
calendar year. It shall be the duty of Grantee to pay to the
City, within fifteen (15) days after the time for filing such
statements, the remaining sum due for the calendar year covered
by such statements. 'Ibis statement shall be the basis for
quarterly estimated payments as deposits on the franchise
payment due for the following year. Such quarterly estimated
payments are to be made to the City on or before June 30,
September 30, and December 31 of each calendar year for that
year's estimated payments. Each estimated payment shall be
equal to twenty five percent (25%) of the previously filed
verified statement, rounded to whole, even dollars. 'The fourth
payment due after the filing of the annual verified statement
shall adjust for all estimated payments made for that calendar
year.
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c. In the event Grantee fails to make the payment for this
Franchise on or before the date due as hereinabove provided,
Grantee shall pay as additional consideration a sum of money
equal to one percent (1%) of the amount due for each month or
fraction thereof during which the payment is due and unpaid, as
interest and for loss of use of the money due.
d. No acceptance of any payment shall be construed as an accord
that the amcunt paid is, in fact, the correct amount, nor shall
such acceptance of payment be construed as a release of any
claim which the City may have for further or additional sums
payable under the provisions of this section.
Section 6.
LIMITATICNS OF GRANT.
a. No privilege or exemption is granted or conferred by this
Franchise except those specifically prescribed herein or by law.
b. Any privilege claimed under this franchise by the Grantee in any
street shall be subordinate to any prior lawful occupancy of the
streets, or other public property; provided, however, Grantee
does not hereby waive any rights it has acquired vis-a-vis third
parties as a result of Grantee's own proper occupancy.
c. This Franchise is a privilege to be held in personal trust by
the original Grantee. It cannot in any event be transferred in
part, and it is not to be sold, transferred, leased, assigned,
or disposed of as a whole, whether by forced sale, merger,
consolidation, or otherwise, without prior consent of the City
expressed by Resolution, unless pursuant to transfer of
ownership of Grantee as provided in Section 9 hereof, and then
only under such conditions as may be therein prescribed,
provided, however, that no such consent shall be required for
any transfer in trust, mortgage, or other hypothecation, as a
whole, to secure an indebtedness. The said consent of the City
may not be arbitrarily refused, provided, however, the proposed
assignee must show financial responsibility and must agree to
comply with the provisions of this agreement.
d. Time is of the essence of this franchise. The Grantee shall not
be relieved of its obligation to comply promptly with any of its
provisions by any failure of the City to enforce prompt
compliance.
e. Any right or power in, or duty impressed upon, any officer,
employee, department, or board of the City, is subject to
transfer by the City to any other officer, employee, department
or Board of the City.
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f. Grantee is subject to all requirements of the City ordinances,
rules, regulations, and specifications of the City, not
inconsistent with this Franchise, heretofore or hereafter
enacted or established, including but not limited to, those
concerning street wor k , street excavations, use, removal and
relocation of property within a street, and other street work.
g. 'lhis Franchise does not relieve the Grantee of any obligation
involved in obtaining pole space from any department of the
City, the utility companies or from others maintaining poles in
streets.
Section 7.
RIGHTS RESERVED TO CITY.
a. 'lhere is hereby reserved to the City every right and power which
is required to be herein reserved or provided by any ordinance
of the City, and the Grantee, by its acceptance of this
Franchise, agrees to be bound thereby, and to comply with any
action or requirement of the City in its exercise of any such
right or power, heretofore or hereafter enacted or established.
b. 'lhis franchise shall be non-exclusive, and neither the granting
of this Franchise nor any of the provisions contained herein
shall be construed to prevent the City from granting any
identical, or similar franchise to any person or corporation
other than the Grantee.
Section 8.
SERVICES 'TO CITY AND PUBLIC OCHOOLS.
Grantee shall at its own expense and without any cost to the city
whatsoever, provide and maintain the following facilities and services to the
City and Public Schools as hereinafter provided:
a. one active cable television connection to each City unit
designated by the City Manager such as police stations, fire
stations, public libraries and other City facilities within
Grantee's franchise area that require an aerial drop of 150 feet
or less from the existing cable television distribution system.
Grantee shall not be required to provide the cable television
distribution system within said facilities;
b. One active cable television connection to each public elementary
school site, secondary school site, college or university site
and educational administrative site within Grantee's Franchise
area that require an aerial drop of 150 feet or less from the
existing cable television distribution system. Grantee shall
not be required to provide the cable television distribution
system within said facilities;
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c. Grantee shall not charge the City or plblic schools any fee for
providing the distribution of video images or audio signals to
any of the buildings so connected;
d. In the event that the City or school system desires additional
service, the Grantee shall provide the basic cable outlet,
services and hardware, charging - the Ci ty or school system the
actual variable cost to Grantee of such services.
e. Grantee shall make available without cost one channel for use by
Local Governments in all of its San Diego franchises for the
distribution of programming in the pUblic interest. Grantee may
provide interconnection of such channel with all other Qlble
Television Systems operating pursuant to a franchise granted by
City. If Grantee operates a remote or permanent vehicle and
equipment for telecasting and video taping, Grantee shall
provide origination service to City at such reasonable times and
costs as are mutually agreed upon.
f. Grantee shall make available without cost, one channel for use
by Public Schools in all of its San Diego franchises. As
required by Grantee, the Public Schools shall save and hold
harmless Grantee from any uses made bY the Public Schools in the
distribution of programming.
g. Ci ty shall save and hold harmless Grantee from any uses made by
the City in the distribution of programming in the pUblic
interest as provided for in SUbsection (e) of this section.
h. Grantee shall make available without cost, one channel for
pUblic or community access in all of its San Diego franchises in
accordance with reasonable rules, regulations and conditions,
provided, however, that to the extent that the Federal
Conmunications Commission (FCC) exercises jurisdiction as
determined by Federal statute or decisional law to be valid and
appropriate, said access rules shall govern.
Section 9.
TRANSFER OF CM'NERSHIP OR CCNTROL OF GRANTEE.
In the event the Grantee is a corporation, prior approval of the City
Council, expressed by resolution, shall be required when ownership or control
of thirty percent (30%) or IOCJre of the voting stock of Grantee is acquired by
a person or a group of persons acting in concert, none of whom already own or
control thirty percent (30%) or JOC>re of the voting stock, singularly or
collectively.
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Section 10.
ESTABLISHMENT OF SERVICE.
Installation of a CAW System shall be commenced within one hundred
eighty (180) days after the effective ate of this franchise, and extensions
and service pursued with due diligence thereafter. Failure to so commence and
diligently pursue to completion shall be grounds for termination of this
franchise.
Section 11.
LOCATION OF FRANCHISE PROPERTIES.
a. Franchise property shall be constructed or installed in streets
only at such locations and in such manner as shall be approved
by the Superintendent of Streets, acting in the exercise of
reasonable discretion.
b. The Franchise property shall be placed underground in all
subdivisions which are subject to the provisions of the Olula
Vista MUnicipal Oode.
Section 12.
ABANDONMENT OF SERVICE.
a. After Grantee has established service pursuant to this
Franchise, such service shall not be suspended or abandoned in
the whole of or any part of the Franchise area unless the
suspension or abandonment is authorized by the City Oouncil.
b. Whenever Grantee shall file with the City CbuncH a written
application alleging that the public interest, convenience and
necessity no longer require that Grantee furnish service
pursuant to this ordinance in the whole of or in any part of the
Franchise area, the City Cbuncil, at a public hearing, shall
take evidence upon that question and shall make a finding with
respect to it. Notice of the hearing shall be given by Grantee
in writing to each Subscriber in the part of the Franchise area
in question at least fifteen (15) day prior to the date
scheduled for the hearing. If the City CbuncH shall find that
the public interest, convenience and necessity no longer
requires that Grantee furnish service, the City Cbuncil, after
hearing as provided herein, shall authorize suspension or
abandorunent of service upon such reasonable terms and conditions
as may be prescribed by the City Oouncil.
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Section 13.
DISPOSITI00
DISTRIBUTlOO
FRANCHISE.
OF FRANCHISE PROPERTY OR CABLE
SysrEM UPOO EXPlRATlOO OR TERMINATlOO OF
a. Upon the termination of this Franchise under Section 3 or 11
hereof, the City may purchase the cable television system, or
any part thereof, in accordance with subsection (b) of this
section. If the City elects to purchase the system, or any part
thereof, the Grantee shall promptly execute, upon receipt of the
fair market value purchase price, all appropriate docwnents to
transfer title to the City. Upon acquisition of and payment for
the system, or any part thereof, the Grantee shall cooperate
with the city, or with any other person authorized or directed
by the City to operate the system, in maintaining continuity of
service. Nothing herein is intended as a waiver of any other
rights the City may have.
b. The purchase price to the City for the Grantee's property shall
be determined by agreement or by arbitration as provided in
subsection (e) hereof. The standard for determining the price
to be paid for the property so acquired shall be that provided
by law affecting the fair market value of similar properties
applicable on the effective date of the purchase. If the City
does not purchase the system, the Grantee shall deal with the
part of the system located in the streets in accordance with
provisions of subsections (c) and (d) of this section.
c. In the event that (1) the use of any Franchise property is
discontinued for any reason for a continuous period of twelve
(12) months; or (2) the Franchise has been installed in any
street without complying with the requirements of this
Franchise; or (3) the Franchise has been terminated,
surrendered, cancelled or has expired, and City has not
exercised its rights pursuant to subsection (a) of this section,
the Grantee shall promptly remove from the street all such
property other than any which the City Engineer may permit to be
abandoned in place. In the event of any such removal, the
Grantee shall prorrq;>tly restore the street or other area from
which such property has been removed to a condition satisfactory
to the City Engineer.
d. Franchise property to be abandoned in place shall be abandoned
in such manner as the City Engineer shall prescribe.
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e. In the event that arbitration is necessary to determine the
purchase price to the City for the Grantee's property the
parties may agree upon one arbitrator, but in the event that
they cannot agree, there shall be three, one named in writing by
each of the parties within fifteen (15) days after demand for
arbitration is given and a third chosen by the two appointed.
Should either party refuse or neglect to join in the appointment
of the arbitrator(s) or to furnish the arbitrator(s) with any
papers or information demanded, the arbitrator(s) are empowered
by both parties to proceed ex parte. If there is only one
arbitrator, his decision shall be binding and conclusive on the
parties, and if there are three arbitrators the decision of any
two shall be binding and conclusive. A jUdgment confirming the
award of the arbitrator(s) may be rendered by any SUperior Court
having jurisdiction. Arbitration hereunder shall be governed by
the provisions of the California Arbitration Act, Section 1280
through 1294.2 of the Code of Civil Procedure. Each party shall
bear the cost of its own appointee and bear the cost equally for
any arbitrator appointed by both parties.
Section 14.
CHANGES REQUIRED BY PUBLIC IMPRClVEMENTS.
The Grantee shall, at its expense, protect, support, temporarily
disconnect, relocate above or below ground at Grantor's option in the same
street, alley, or public place, or remove from any street, alley or public
place, any Franchise property when required by the City Engineer by reason of
traffic conditions, public safety, street vacation, freeway and street
onstruction, change or establishment of street grade, installati~n of sewers,
drains, water pipes, power lines, signal lines, and tracks and of any other
type of structures or in;:>rovements by governmental agencies when acting in a
governmental or proprietary capacity or any other structures or public
improvements; provided, however, that Grantee shall in all such cases have the
privileges and be subject to the obligations to abandon Franchise property in
place, as provided in Section 12(d) hereof.
Section 15.
FAILURE TO PERFOOM STREET WORK.
Upon failure of the Grantee to complete any work required by the
provisions of this Franchise to be done in any street, within the time
prescribed and to the satisfaction of the City Engineer, the City Engineer may
cause such work to be done and the Grantee shall pay to the City the cost
thereof in the itemized amounts reported by the City Engineer to the Grantee,
within thirty (30) days after receipt of such itemized report. The City shall
give at least a thirty (30) day notice to the Grantee of such work to be done
prior to City's commencement of such work.
-10-
14-14
Section 16.
FAITHFUL PERFORMANCE BOND.
The Grantee shall, within five (5) days after the award of this
franchise, file with the City Clerk, and at all times thereafter maintain in
full force and effect, an acceptable corporate surety bond, in duplicate, in
the arrount of Five Thousand Dollars ($5,000.00) effective for the entire term
of this franchise, and conditioned that in the event the Grantee shall fail to
comply with anyone or more of the provisions of this franchise, then there
shall be recoverable jointly and severally from the principal and surety of
such bond, any damages suffered by the City as a result thereof, including the
full amount of any compensation, indemnification, or costs of removal or
abandorunent of property as prescribed by Section 5 hereof which may be in
default, up to the full amount of the bond; said condition to be a continuing
obligation for the duration of this franchise and thereafter until the Grantee
has liquidated all of its obligations with the City that may have arisen from
. the acceptance of this franchise by the Grantee or from its exercise or any
privilege herein granted.
Section 17.
INDEMNIFICATION TO CITY.
a. Grantee agrees that at all times during the existence of this
Franchise it will maintain in force, furnish and file with the
City a certificate of insurance evidencing, at its own expense,
a general conprehensive liability insurance policy, naming the
Ci ty as addi tional insured, in protection of Ci ty, its boards,
COImlissions, officers, agents and eITployees, in a company
authorized to do business in the State of California, and in
form satisfactory to the City Attorney, protecting the City and
said persons against liability for loss or damages for personal
injury, death and property damage occasioned by the operations
of Grantee under this Franchise, with miniJ1l.lm liability limits
of $500,000 for personal injury or death of anyone person, and
$1,000,000 for personal injury or death of two or more persons
in anyone occurrence, and 1;300,000 for damage to property
resulting from anyone occurrence.
b. The policies mentioned in the foregoing paragraph shall contain
a provision that a written notice of any cancellation or
reduction in coverage of said policy shall be delivered to the
city ten (10) days in advance of the effective date thereof. If
such insurance is provided in either case by a policy which also
covers Grantee or any other entity or person than those above
named, then such policy shall contain the standard
cross-liability endorsement.
_'_'_'_U_
-11-
14-15
:". ( ~
-.------
c. In addition to the above policies Grantee shall agree to
inderrmify City, its boards, commissions, officers, agents and
employees, against all claims, demands, actions, suits and
proceeding by others and against all liability to others, and
against any loss, cost and expense resulting therefrom,
excepting acts of negligence -or other acts by the City,
including reasonable attorneys fees, arising out of the exercise
or enjoyment of this Franchise.
Section 18.
REX;ULATION OF SERVICE.
Grantee shall:
a. Operate the cable Television System authorized by this Franchise
in accordance with the minimum technical standards set forth by
the FCC, to the effect that the Subscriber shall receive the
best possible signal to his television set consistent with the
state of the art and economic operation of the system.
b. Limit failure to a minimum by locating and taking steps to
correct nalfunctions promptly, but in no event longer than
seventy-two (72) hours after notice.
c. Upon complaint by subscriber make a demonstration satisfactory
to the City Manager or his designated representative that a
signal is being delivered which is of sufficient strength and
quality to meet the said technical standards referenced to in
(a) above.
~ d. Render efficient service, naking repairs promptly and
interrupting service only for good cause and for the shortest
time possible; such interruptions insofar as possible shall be
preceded by notice given to Subscribers twenty-four (24) hours
in advance where possible and shall occur during periods of
minimum use of system.
e. Have a toll free telephone number listed in the local telephone
directory, and be so operated that requests for repair may be
received at any time.
f. Operate the Cable Television System authorized by this ordinance
twenty-four (24) hours per day, seven (7) days per week.
g. Not refuse to accept a subscriber unless it was not in the
public interest or not reasonably economically feasible for
Grantee to furnish service for that proposed subscriber.
h. Not deny access to cable services to any group of potential
residential cable subscribers because of the income of the
residents of the local area in which such group resides.
-12-
14-16
.A- ...-'.
,
..,/ ,- .
. { /
If a Subscriber is unable to obtain satisfactory resolution of a
~omplaint filed with Grantee, the Subscriber may notify the City in writing,
stating the Subscriber's name and address, the nature of the complaint and the
action taken to secure resolution of the complaint by the Grantee.
Section 19.
FILINGS AND COMMUNICATION WITH RffiULATORY AGENCIES.
Copies of all petitions, applications and communications of all types
submitted by Grantee or City to the Federal Oommunications Oommission,
California Public Utilities Commission, or any other Federal or State
regulatory commission or agency having jurisdiction over any matter affecting
operation of Grantee's Cable Television System shall be submitted
simultaneously to the City or Grantee. A copy of each document filed by the
Grantee with the City Clerk in accordance with this section shall be deemed to
be delivered.
Section 20.
INSPEX:TIlli OF PROPERTY AND RECCRDS.
At all reasonable times, the Grantee shall permit any duly authorized
representative of the City to examine all Franchise property, together with
any appurtenant property of the Grantee situated within the City, and to
examine all maps and other records kept or maintained by the Grantee, which
treat the operations, affairs, transactions or property of the Grantee with
respect thereto and to determine whether the Grantee has paid franchise fees
in the amounts prescribed in Section 5. The Grantee shall prepare and furnish
to the City Engineer at the time and in the form prescribed by the City
~gineer, such reports, with respect to its operations, affairs, transactions
,r property, as may be reasonably necessary or appropriate to the performance
of any of the duties of the City or any of its officers and employees in
connection with this Franchise. The Grantee shall, at all times, make and
keep full and complete plans, maps, and records, showing the exact location of
all Cable Television System equipment installed or in use by Grantee in
streets, alleys and public places of the City.
The Grantee shall maintain a written record of customer service
requests and complaints and make an annual report to the City thereof. Such
records shall be available for inspection by the City. The Grantee shall
notify the City of any changes in the customer service agreement or in the
complaint procedure to be followed by the customers.
Section 21.
DISPUTES.
In the event of a bringing of any action by either party hereto
against the other hereon or hereunder, or by reason of the breach of any term,
covenant or condition on the part of the other party, or arising out of this
Agreement, the party in whose favor final judgment shall be entered, shall be
entitled to have and recover from the other party reasonable attorney's fees
to be fixed by the Court which shall have rendered the judgment.
-13-
- .'
\
_...-----,
14-17
Section 22.
MISCELLANmus PROIISIONS.
a. All notices herein provided for may be by prepaid registered or
certified mail addressed to the parties as follows:
TO THE CITY:
WITH CCPY 'ID:
City Clerk
276 Fourth Avenue
Chula Vista, CA 92010
Thomas J. H3.rron
City Attorney
276 Fourth Avenue
Chula Vista, CA 92010
'ID THE GRANTEE:
WITH COPY 'ID:
ultronics, Inc.
7777 Alvarado Rd., Suite 700
La Mesa, CA 92041
and shall be considered as given only when received by the other
party.
All matters herein provided to be filed with the City shall be filed
with the City Clerk.
b. The Grantee shall not engage in the business of repairing
television receivers or the sale of parts for the same. It is
understood, however, that the foregoing does not apply to
converters, decoders, or other types of electronic signal
adapters or decoders required for the subscriber I s television
set to receive any of Grantee's signals.
c. Grantee and the City agree to discuss future non-entertainrnent
uses of the cable television system during the term of this
franchise agreement. Both parties agree to discuss and consider
entering into mutually advantageous joint ventures to promote
business or other non-entertainment uses of the cable system,
which discussion may include City taxation and bonding powers.
This discussion and consideration may be initiated by either
party upon a minimum of 30 days written notice, with a proposed
agenda to be included. This paragraph reflects the intent of
the Grantee and the City to maintain a strong cooperative
relationship which may lead to the introduction of new cable
related business services within the City in a manner which is
mutually advantageous and acceptable to both the Grantee and the
City.
__. _._.M_". _
-14-
14-18
..
. .
"
d. Not withstanding any other provisions of this agreement, Grantee
shall at all times comply with all state and Federal laws, rules
and regulations, or any administrative agency thereof; provided,
however, if any such ordinance, law, rule or regulation shall
require the Grantee to perform any act or shall permit the
Grantee to perform any act in conflict with the provisions and
terms of this agreement, then such provision or term in conflict
may be modified or amended by agreement of the parties to such
reasonable extent necessary to carry out the full intent and
purpose of this agreement.
EXECUTED THIS 15th
day of
September
,19~
CITY OF CHULA VISTA
a Municipal Corporation
ULTROOICS, INC.
'Y' ~ R ~
Gregory , Mayor
By:/JJ~ ~~~/ff1
;:?/U~",J
~L<:~
A'lTEST:
J~'J~RK
, Y of Chula Vista
Approved as to form
D. Richard Rudolf,
Assistant City Atto
WPC l696A
--- --~-_.
-15-
14-19
"
ORD INANCE NO. 2230
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA APPROVING THE FRANCHISE AGREEMENT WITH ULTRONICS,
INC. GRANTING TO ULTRONICS THE 'NON-EXCLUSIVE RIGHT,
PRIVILEGE AND FRANCHISE TO LAY AND USE LINES, WIRES,
COAXIAL CABLE AND APPTURTENANCES FOR TRANSMITTING,
DISTRIBUTING AND SUPPLYING CABLE TELEVISION SERVICE
ALONG, ACROSS AND UPON THE PUBLIC STREETS, WAYS,
ALLEYS AND PLACES WITHIN THE CITY OF CHULA VISTA
The City Council of the City of chula Vista does ordain
as follows:
SECTION I: The City Council of the City of Chula Vista
does hereby adopt the Franchise Agreement wi th Ul tronics, Inc.,
granting to Ultronics the non-exclusive right, privilege and
franchise to lay and use lines, wires, coaxial cable and
appurtenances for transmitting, distributing and supplying cable
television service along, across and upon the public streets,
ways, alleys and places within the City of Chula Vista, attached
as Exhibit "A", and incorporated herein by reference as if set
forth in full.
SECTION II:
~ereby authorized and
on behalf of the City
The Mayor of the City of Chula Vista is
directed to execute said Agreement for and
of Chula Vista.
SECTION III: This ordinance shall take effect and be in
full force on the thirty-first day from and after its adoption.
Presented by
Approved as to form by
..--r. ..~ .
c~_:- ",
~---' ~. ~ ~_________ -os
E:" . 1\ us, Assistant City
Manager
<-=-.
D. Richard Rudolf,
City Attorney
tant
32lla
14-20
-.....---.".
FIRST READ AT A REGULAR MEETING OF THE CITY COUNCIL OF THE
r -Y OF CHULA VISTA, CALIFORNIA, HELD September 8 . 19 E-, AND
F INALL Y PASSED AND ADOPTED AT A REGULAR MEETING THEREOF HELD September 15
19 87
AYES:
NAYES:
ABSTAIN:
ABSENT:
, BY THE FOLLOWING VOTE, TO-WIT:
CO'-'ICilmen :
Councilmen:
Ccu1cilmen :
Councilmen :
Cox, Moore, Nader, McCandliss
None
Malcolm
None
1n m!c~ q.cauo va~
ATTEST a~-,'<"~Q'k.e:7~
t::7 City C
~ ,.E OF CALIFORNIA )
COUNTY OF SAN DIEGO ) S s.
CITY OF CHULA VISTA )
I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of ChuIa Vista, California,
00 HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
ORDINANCE NO.
2230
,and that the same has not been amencled or repealed.
DATED
~~~
~
c~~
ClW OF
CHUlA VISTA
City Clerk
CC-660
--_.._-
1 4- 21
UI1:ranic.
November I, 1987
Mr. John Goss
City Manager
City of Chula Vista
Chula Vista, CA 92010
Dear Mr. Goss,
On behalf of ULTRONICS, INC., I accept all of the terms and
conditions of the Cable Television Franchise Agreement granted to
ULTRONICS. I look forward to the challenge presented to me; and
am excited about giving the citizens of Chula Vista an alternative
t ~eir present cable television service.
I have enclosed an insurance certificate as required by the
Agreement. -The surety bond will be in the mail to you in the next
few days.
Sincerly,
/JJvd-n (~~
Martin Altbaum, President
ULTRONICS. INC.
,rl I:'
Ci',
'.::HUU\
\iL;.~./,. c.~~
OCT
C:;'~~7
e... :""_~
SATELUTE MASTER ANTENNA TELEVISION
7777 ALVARADO ROAD, SUITE 700, LA MESA, CAUFORNIA 92041 - (619) 461-7977
" 'i ;:;>
--.(,'1',: -)
t' ~""..,
14-22
~.._.,._-_._, --- ....--.--
.,........
9-2:.1-87
Teague Insurance Agency, Inc.
77- Alvarado Rd., #606
Lc sa, CA 92041
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE ODES NOT AMEND,
EXTEND OR ALTER THE COVERAGE AFFORCEC BV THE POLICIES BELOW_
COMPANIES AFFORDING COVERAGE
INSURED
COMPANY A Golden Eagle
LETTER
COMPANY B
LETTER
COMPANY C
LETTER
COMPANY D
LETTER
COMPANY E
LETTER
Ultronics A Calif, Cor~.
DBA: The Satellite Store
7777 Alvarado Rd., #700
La Mesa, CA 92041
.
THIS IS TO CERTIFY THAT POliCIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.
NOTWITHSTANDING ANV REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY
BE lSSUeD OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRtBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI-
TIONS OF SUCH POLICIES.
CO
LTA
P()LlCYHFECTIVE
OATf(MM!OO/YYj
POUCY EKPIAATION
DATE (MMIOONYI
LIABILITY LIMITS IN THOUSANDS
OCC~~~NCE AGGREGATE
TYPE OF INSURANCE
POLICY NUMBER
GENERAL LIABILITY
A X COMPREHENSIVE FOAM
PREMISEs/OPERA. TIONS
~~~lE:'~~~~OLlAPSE HAlARD CMP 016525-01
PAODUCTs/cOMPLETEO OPERATIONS
CONTRACTUAL
INOEPENDENT CO~TRACTORS
~'1AO FORM PROPERTY DAMAGE
JONAl INJURY
4-14-87
4-14-88
BOOILY
INJURY $ $
PROPERTY
DAMAGE $ $
81 & PD $1,000
CQMEJjNED
PERSONAL INJURY $
"",v
""" $
(Pl:APER'iJN1
"",v
I~"" $
iPfRAO::IOOfT)
PROPERTY
DAMAGE $
131 & PO
COMBINED $
AUTOMOBILE LlABIUTY
ANY AUTO
AU OWNED AUTOS (PRIV, PASS I
AlL OWNED AUTOS (OTHER THAN. )
P~V. PASS
HIRED AUTOS
NON-OWNED AUTOS
GARAGE LIABILITY
EXCESS LIABILITY
UMBRELLA fORM
OTHER THAN UMBRELLA FOAM
~t:~ED $
$
WORKERS' CaMPENSA TION
AND
EMPLOYERS' LIABILITY
STATUTORY
$
$
$
(EACH ACCIDENT)
(DISEASE-POLICY LIMIT)
(DISEASE.EACH EMPLOYEE)
OTHER
)ESCRIPTI0N OF OPERATIONSlLOCATlONSlVEHICLESlSPECIAL ITEMS
CERTIFICATf HOLDER IS NAMED
AS ADDITIONAL INSURED
- CHULA VISTA
AVENUE
VISTA, CA 92010
. . ,"~~S:_'..";. ,~it::~.:.\.;.~;"
01.,",' ,.......~... '.1.:.-rrtit. ~,. ~",...~ ';1;,:' -
"~~,j~''''''';. ~~.;;,~.., "~~:'"" .......,.., .'.;,~.'\:.'
':"U\.t.,..,....,.~~ ....._..,.s:.~ __.,",.~",_oj.-_, .
\ ~~':"'\:::i...-~'~')';" -;"'J"'~'" .. "-'- .......
\~~...., ,'. ..... -', ':--.~ - ...
~ ~ !...... :1.... ' ._~J. ,..>. ,'~~ "(' . '-l..'
N~~~ . '.~" ';"::':',' :,'r;.'; ..~~'. _~ '. ;-....\(
I~. .~,.:...~,.,i..:.... .....". .:~."i:~'.ACREEMm ton ^SSIGNHENT
. '-~~,;. ,- ':;, ~'r. .:,.\~<: .~~;~:)~~ Of'
,.~$.I'. ",:.,:;"::::. ~LB '.t'&LIWISION F1\ANC!llSE
I ~:f))' 'l'HIS AC~EMENT lII~ae thh \2.tl\ day of Iw-fA'Y , UU,
'n ~~::;:~ ..~:~Ill.~'~b~~; ~ California, by and batween ULTRONICS, INC"
I!":j.>"; · ca.llfornb. 'cOrporation, hereinafter referred to as
~h"" "Asai91l0r", and'CII1JlA VISTA 08LE, a California limited
.~L:'.. FArtne;ra~ip,rlif~~nd to in thb Agreement u "Anignee",
f. r}...... 1fREtmAS,' by~<:,rdin.nce Number 223t>, Anillnor wsa IIr..nted
(: >, a non.~"xc~U'.~VG'franChS'Ie, herainafter referrad to as tne
~::-. "Fr.ni:~l~~~:~'by.,ths C:i.ty f)f Chula Vieta, California, to
. . \."
contract end operate IS
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;15:'::';' aixt.y percent (GD\) equity ownership Intarut in Anillnee
,1;' ~r~;:, . and IS deferred cuh payJll8nt, and'
: B-1' ~ .; ~
~~!.~~~: . VBERZAS.Aeeignor desiro. to .eaign tha Franchiea to
'!':\ I\>' ,- .
i'0~~~ Aaalin" in accordanco with the Partnerehip Agreement and in
\; .' .. , '
:.' .: c:QiipllaJ1ce with Chul. viate Chutar SecUon 1203 and Chub
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cable televieion ey.t"m and .ervice
~ within ede!' city, -Gnd
_'" I' .
, ;c,. WHERBAS,' ~..ignor~ u. the 'leneral partner, on or about
'. lIove=ber'lO,'U87, by. written limited partnenhip Agree-
. .' .': - ..;'., ~.'.~~ . ;:
.ent. hereinafter referred
to .s the "partner.hip Agree.
IMnt., 'forllled'.,.:..ignee for the purpoa8 of the ownenhip And
operation of a cabl. television system within .aid city
.
puilluant to the Franchiao, and
WHEREAS, purGuant to said partnershl? hgreemont,
"'elwnor 1e required, ae a p~rt of itw capital cvntribution,
to ..eiqn tho Franchi.s to Aesignee in. conlidera.tion of a
"1
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,~. \," c:hb.. a. thereln .et forth. In ,pechl conlideration tor \ ;:',.,
. :- . ..~~:: .~ ~,
,ti ~,,.,, the conlent of the City Councll of the City of Chula Vbta, ""',~'~
,~:: ,~0.\ ., california, to the a..lgMent herein made, Auigneo cove-, "'~<-' '
!1~~~~t.:;' '~lIt. aDd ogre.. to perform and be bound by each and all Of'{,:{~, '
: "t;,~' " the tet1U and concUUon. impeled by the rranchh., and by, ' '
"~~';j,r..~; , ,," '
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l ~1)o::1t~rT -;. .,t".. ~.. .
1~:\:~~<~E~~/vt~~I.~'l~l Code Section 5.30.010, and 1I...I...n.. d..lru
~ Q' , ':.-:--,'.' to a~e;~ .uch a..io;nmont,
,~ .
~\ i~' .\ ,', ~":*' ~ERt,,?U, ln c:onddoxaUon of tho mutual pro\!lb..
2,I'~:. herob contained, and other 9004 and vllluable conddoraUon,
~ !; I the partle,"heretn agree.. followS!
. !;:' ..' 0
'\ G! .1. ASSIGmmNT.
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.~A"lgnor hltrlby
~l;i~ and lntore.t
a..i9~a to A..lgn.e all of its
in and to tho Franchhe.and All
......
of ~e' rlghts/ privilofjJo, and po_re therein contained,
\-::
warranting t~ ~.l~n.o
.- ....,. ..... ',,- 0"_ ,,'
...igned, tran.ferred,
that the !~e have nQt p~.ViOU8~y
or hypothecated in anyway to any
"-
other party- -'
2.
CONSIDBIlATION.
'-.."..
Aa and for con.ideration for the a.signment herein
.;-~
"
, ,;.
~de, A..iin.. confirms to A..ignor a sixty percent (60')
"capital intere.t ln A..linee and delivers to A..ignor 1t.
promi..ory note ln accordance with the term. of the r~rtnar-
'"
.h~p Agreement, rece1pt of wh1ch i. hereby acknowledged by
balgnor.
3.
ACCEPTANCE.
~~:
.,
'1",'"
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A.sign.. here~y accept. said e.si9~ent of tho
Franchi.e, and A..ume. all of the obllgation. of the fran-
.,
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bo governed by tho lAW. of'
.
to Agreoment. made and t~ 1~~~
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the Chule Vista Municipal
'.,.
'~",;'1'he lubject he.dinql
, '. ~.;..'\. '.
p.~a9rap~~ of this Aqreement are included for the purro...
of the paragraphl and lub-
of convenience only and ahall not effect the con.truction or
ih~erp~ta't;.ion of.,~n:r. of its prov1aiona. . This A'lreamllnt
. . conatltut... .the '''ntl~e l\grnmont bet_en th.. partin pu-
r. "'-".
. . taIninf'.~" the eubject mattn containod in it and lIuparcede~',
all prlo~'or.cont-=poraneou. agreemente, repre.entationa,
.o' r._.-
and underatandJ.n9 of the part!e.. No aupplement, mocUUca-.;
. tion, or ~ndD.nt of thi. Agreement .holl b. binding unlea.
executed in writin9 by both of the partie. hereto.
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ATTOJUfEY'S FEE8.
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ULTRONICS, INC., II California .' ,: ;r' "
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.con..n~ of the'City'Council for the city of Chula
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Vista, .callforni.~' i. hereby 91ven to the aa.ig~ent and
tran.f.r of the franchi.. righta hereinabove made from
ULTRONICS,'lNC.,'a California corporation, to CHULb VISTA
CABLE, 4 California Limited Partnership, and CHULA VISTA
CABLE, . California Limited partner.hip, i. horeby accepted
a. the Franchi..e ~nd~r Chala Viata Ordinance Number 2230 in
,"place and in IteaeS of ULTRONICS, INC., a CAlifornia corpo-
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AGREEMENT FOR ASSIGNMENT
OF
CABLE TELEVISION FRANCHISE
THIS AGREEMENT made this 8th day of May, 2008;at Chula Vista, California, by and between
CHULA VISTA CABLE, LTD., a California Limited Partnership, hereinafter referred to as
"Assignor" or "CVC", and NEXHORIZON COMMUNICATIONS, INe. or its subsidiary, referred
to in this Agreement as "Assignee."
WHEREAS, on September 8, 1987, by Ordinance number 2230, the City of Chula Vista (the
"City") granted a franchise to Ultronics, Inc., pursuant to the "Agreement Between the City of Chula
Vista and Ultronics, Inc., a California corporation, Granting Ultronics, Inc. the Non-Exclusive Right,
Privilege and Franchise to Lay and Use Lines, Wires, Coaxial Cable and Appurtenances for
Transmitting, Distributing and Supplying Cable Television Service Along, Across and Upon the
Public Streets, Ways, Al1eys and Places Within the City of Chula Vista" (the "Franchise"); and
WHEREAS, on June 7, 1989, the City approved the assignment of the Franchise from
Ultronics, Inc. to Assignor, pursuant to Resolution No. 14134; and
WHEREAS, Assignor, as the general partner, on or about January I, 2008, by a written
Agreement Regarding Sale of Assets of, and Stock in Two Cable Companies Agreement, hereinafter
referred to as the "Purchase Agreement", agreed to sel1 100% of the assets and the business in
Assignor for the purpose of transferring the ownership and operation of a cable television system
within said city pursuant to the Franchise provided that approval is granted by City Council for
transfer of franchise.
WHEREAS, pursuant to said Purchase Agreement, Assignor is required, as a part of its
capital contribution, to assign the Franchise to Assignee in consideration of a one hundred percent
(100%) equity ownership interest in the form of cash, stock and note payment; and
WHEREAS, Assignor desires to assign the Franchise to Assignee in accordance with the
Partnership Agreement in compliance with Chula Vista Charter Section 1203, Chula Vista
Municipal code Section 5.30.010, and section 6.c. of the Franchise agreement, and Assignee desires
to accept such assignment;
NOW, THEREFORE, in consideration of the mutual promises herein contained, and other
good and valuable consideration, the parties hereto agree as follows:
1) ASSIGNMENT
Assignor hereby assigns to Assignee all of its right, title, and interest in the Franchise, and al1 of
the rights, privileges and powers therein contained, warranting to Assignee that the same has not
previously been assigned, transferred, or hypothecated in anyway to any other party.
2) CONSIDERA nON
In exchange for the Franchise the Assets to be Acquired, Buyer shall pay and deliver to CVC the
consideration established in the Purchase Agreement.
,.
14-28
3) ACCEPTANCE
Assignee hereby accepts said assignment of the Franchise, and assumes all of the obligations of
the Franchise, as set forth in the Purchase Agreement. In special consideration for the consent of
the City Council of the City of Chula Vista, California, to the assignment herein made, Assignee
covenants and agrees to comply with, perform and -be bound by each and all of the ternlS and
conditions imposed by the Franchise, and by the Chula Vista City Charter and the Chu\a Vista
Municipal Code with respect thereto.
4) FORM AGREEMENT
The subject headings of the paragraphs and subparagraphs of this Agreement are included for the
purposes of convenience only and shall not effect the construction or interpretation of any of its
provisions. This Agreement constitutes the entire agreement between the parties pertaining to the
subject matter contained in it and supersedes all prior or contemporaneous agreements,
representations, and understanding of the parties. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions ofthis Agreement shall be deemed, or shall constitute, a waiver
of any other provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in \\iTiting by the parties making the waiver.
5) ATTORNEY'S FEES
Should any legal proceeding by instituted to enforce this Agreement, or any ofthe provisions
thereof, the prevailing party shall be entitled to, in addition to any other remedy provided by law
or equity, reasonable court costs and attorney's fees as determined by a cOUl1 of competent
jurisdiction.
6) CALIFORNIA LAW
This Agreement shall be governed by the laws of the State of California applicable to agreements
made and to be executed within California.
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14-29
IN WITNESS WHEREOF, the parties to this Agreement have duly executed on the day and year
first above written.
Chula Vista Gable. Ltd.. a California Limited Partnership
BY:~..<4/r .?.J Au6~
(Signature)
Barbara Altbaum. General Partner
Barbara Altbaum, Trustee of the Altbaum Family Trust
Barbara Altbaum, President ofUltronics, Inc.
NexHorizon Communications. Inc.
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By:( ~ p I . \) ...-'..:>(
C ~Lv"'" (S~a!J1~ M.l<.< S~.
Calvin D. Smiley, Sr. J '
President & CEO
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14-30
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CITY OF
CHUIA VISTA
Departmen.t of con.setvatLon.
& EtwLron.mental ServLces
August 19, 2009
Calvin D. SmiJey, Chairman/CEO
NexHorizon Communications, Inc.
9737 Wadsworth Parkway
Westminster, CO 80021
RE: Notice of Violations of Franchise Agreement
Dear Mr. Smiley:
This letter is sent to provide NexHorizon Communications, Inc. ("NexHorizon") notice, pursuant
to Section 3.c.1 of the Franchise Agreement between the City of Chula Vista ("City") and
NexHorizon that NexHorizon has failed to comply with material provisions of the Franchise
Agreement. By this notice, the City is providing NexHorizon thirty days to correct the violations
described below. IfNexHorizon fails to do so, the City shall hold a public hearing on October 6,
2009, at 4:00 p.m., in tbe City Council Chambers, City HalL Building 100, located at 276 4th
Avenue, Chula Vista, California, to considerterrnination of the Franchise Agreement.
The speCific material provisions of the Franchise Agreement which NexHorizon has violated,
and the grounds on which the City is relying are as follows:
Section 5. Franchise Pavments.
Section 5, requires NexHorizon to make specified payments to the City, so long as the Franchise
Agreement is in effect. The City approved the assignment of the Franchise Agreement from
Chula Vista Cable to NexHorizon on May 20, 2009, Since that time. the City has not received
any payments from NexHorizon, as required by Section 5. The City's records indicate that the
last payment received from Chula Vista Cable or NexHorizon was $4,920 on April 7, 2008 for
the 2007 reconciliation payment. The City has no record of having received franchise fee
payments or the corresponding late fees from Nexborizon for the period from the first quarter of
2008 through June 30, 2009. With penalties and late fees, we estimate that amount to be
approximately $50,000. An additional quarterly payment for 2009 is also due no later than
September 30, 2009.
Section 14. Changes Required bv Public 1mprovements. and
Section 15. Failure to Perform Street Work.
These Sections of the Franchise Agreement require NexHorizon to, among other things, relocate
Franchise Property below ground, at NexHorizon's expense, when Tequired by the City
14-31
NexHorizon Franchise Default Notice
August 19, 2009
Page 2
Engineer. Pursuant to these provisions, the City has requested, both verbally and in writing that
NexHorizon fulfill its responsibilities for participating in a trench agreement v-ith the Utility as
part of a 20a power line and utility undergrounding project. Copies of that written
correspondence are attached as Exhibit 1.
Section 16. Faithful Performance Bond.
NexHorizon has not renewed and transmitted an executed bond to the City.
NexHorizon also needs to address the following additional items of the Agreement in a timely
manner after the material provisions identified above are cured in order to bring NexHorizon into
full compliance with the agreement.
Section 8. Seryices to Citv and Public Schools.
NexHorizon has not complied with any of the requirements of this section.
Section 10. Establishment of Service.
NexHorizon has failed to diligently pursue installation and ex1:ensions of the Cable System to
completion, and plans submitted to the City for undergrounding appear to eliminate service to
some residential areas.
Section 11. Location of Franchise Properties (b).
NexHonzon has failed to place Franchise property underground in a timely manner as described
under Section 14 and 15.
Section 18. Re!rulation of Service (b).
Failure to proyide cable services to any group of potential cable residential subscribers because
of the income of the residents of the local area in which such group resides. NexHorizon appears
to have made plans to reduce their service area as part of the transition ITom overhead to
underground service.
Section 19. Filinl!s and Communication v-ith re!!Ulatorv Al!encies.
Failure to prO\ide the City v-ith a copy of any communications to State or Federal agencies at the
same time such communications are submitted to the respective agencies. The City has not
received an annual FCC report.
The City requests that NexHorizon immediately cure its violations of the Franchise Agreement.
Over the years the City of Chula Vista has demonstrated patience and flexibility when working
v-ith Ultonics, Chula Vista Cable, and Nexhorizon to bring the potential value of a cable and
communications over-builder to the City's consumers. The City is under a declared economic
emergency and more than ever has a responsibility to all its citizens to protect their interests and
ensure cos.! effective and efficient use, and proper maintenance of the Right of Way by all users.
14-32
NexHorizon Franchise Default Notice
August 19,2009
Page 3
The City has worked diligently to ensure that all franchisees are working in a collaborative
manner that extends their services to all citizens in as competitive a manner as possible, and does
not unnecessariJy add to the cost of maintaining the right of way or their respective rates.
Nexhorizon has failed to do its part to meet the intent and spirit of that Franchise Agreement,
cooperate in a timely manner in planning and implementing right of way projects, or
communicate resolution of those issues effectively ",~th the City. It is for those reasons and the
material provisions stated above that I am compelled to send this 3D-day notice. Please contact
me immediately if you have an)' questions regarding how to respond to these concerns.
Sincerely,
H. ~
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CH'''''''__'''hHi___.\i!./\.II . .0~
- Michael rMeacham. Director.'u ..
Conservation & Environmental Setyices
(Utility Services)
6194095870
mmeacham@ci.chula-vista.ca.us
cc: JeffVaglio, ChuIa Vista Office
Scott Tulloch. Assistant City Manager
Jill Maland, Deputy City Attorney
14-33
RESOLUTION NO. 2010
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA TERMINATING THE
NEXHORIZON FRANCHISE AND AFFIRMING ITS
PRIOR ACTION TERMINATING THE NEXHORIZON
FRANCHISE
WHEREAS, on May 20, 2008, the City Council approved the assignment of the
Chula Vista Cable Franchise Agreement to NexHorizon Broadband of Southern
California, Inc. ("NesHorizon"); and
WHEREAS, pursuant to the terms of that assignment, NexHorizon assumed all of
the obligations of the Franchise Agreement, and agreed to comply with and be bound by
the terms and conditions of the Franchise Agreement; and
WHEREAS, subsequent to the assignment of the franchise, staff became aware
that NexHorizon had failed to comply with certain material provisions of the Franchise
Agreement; and
WHEREAS, on or about, August 19,2009, pursuant to the franchise Agreement,
City staff provided NexHorizon with notice identifying the material provisions of the
Agreement that had been violated, providing NexHorizon in excess of 30 days to correct
the violations, and notifying NexHorizon that a public hearing would be held on October
6, 2009 to consider termination of the franchise; and
WHEREAS, City staff worked diligently with NexHorizon to facilitate its
compliance with the provisions of the Agreement and deferred the hearing date while
those efforts were in progress; and
WHEREAS, NexHorizon failed to cure the violations and, as a result, staff
notified NexHorizon that the public hearing would go forward on November 17, 2009,
and the Council held the public hearing on that date and directed Staff to take the steps
necessary to begin termination of the franchise (Resolution No. 2009-274); and
WHEREAS, staff took the necessary steps, as directed by Council, and notified
NexHorizon that the franchise had been terminated; and
WHEREAS, NexHorizon subsequently asserted that it had not received adequate
notice of the termination hearing and, in response, although staff disputes that assertion
and contends that the franchise was properly terminated in the prior proceedings, in an
effort to resolve the matter and out of professional courtesy staff scheduled a second
public hearing on the franchise termination, for April 13, 2010; and
14-34
Resolution No. 2010-
Page 2
WHEREAS, NexHorizon has continued to operate its cable television system in
the City despite being notified that its franchise was terminated and, although it has
continued to operate, it has not cured the franchise violations; and
WHEREAS, since NexHorizon was assigned the franchise nearly two years ago,
it has only made one franchise fee payment, in the amount of $6,000, which is less than
10% of the estimated total amount due (approximately $68,000); and
WHEREAS, during the cure period the City also discovered that NexHorizon had
failed to maintain worker's compensation insurance as required by state law and the
franchise Agreement, or post and maintain the performance bond; and
WHEREAS, NexHorizon has also failed to meet its obligations in the current
under-grounding program on Fourth Avenue (Underground District No. 133), which is a
violation of the franchise Agreement, as well as Chula Vista Municipal Code section
15.32.160, which makes it illegal for a utility company to "keep, maintain, continue, own,
employ or operate poles, overhead wires and associated overhead structures in the district
on and after the date when overhead facilities are required to be removed;" and
WHEREFORE, the City has received a high volume of customer service
complaints regarding NexHorizon's service and resolution process over the past 18
months.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Chula Vista that the NexHorizon franchise is terminated and that the Council's prior
action terminating the NexHorizon franchise (Resolution No. 2009-274) is affirmed.
Presented by
Michael T. Meacham
Director of Conservation and
Environmental Services
Approved as in form by
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14-35