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HomeMy WebLinkAboutAGENDA REPORT 1999 0519 CC REG ITEM 09ETO: FROM: DATE: MOORPARK CITY COUNCIL AGENDA REPORT Honorable City Council 338 . I O ITEM q.E [-x V Y OF X100RP -IRK, CALWORNIA City Counei] :'1lieeting Of ACTION- I'r1, q 1 BY: W / , John E. Nowak, Assistant City Manager G� 07 May 1999 (Council meeting of 05- 19 -99) SUBJECT: Consider Resolution No. 99- Approving the Change of Control of the Cable Communications Franchise held by TCI Cablevision of California to Century Communications Corporation. BACKGROUND: TCI Cablevision of California is entering into a partnership with Century Communications where certain assets of each company are being combined and /or exchanged. As a result, the Moorpark cable television franchise held by TCI Cablevision of California is being transferred to Century Communications Corporation. City Council approval is required for this change of control pursuant to the Moorpark Municipal Code. DISCUSSION: In February 1999 the City Council approved a change of control in the cable television franchise held by TCI of Ventura County to AT &T as part of their merger. A TCI subsidiary remained as the holding company of the franchise pursuant to the merger agreement. Subsequently TCI and Century Communications have entered into an agreement for the exchange and sharing of certain assets including franchise agreements. A request for the City of Moorpark to approve the change of control has been submitted, as has the Federal Communications Form 934. The Council's Ad Hoc Committee on Cable Television (Council members Evans and Harper) met with representatives from TCI and Century Communications on April 26. The Committee recommended approval of the change of control request subject to the conditions contained in the resolution. 000309 TCI / Century Change of Control Meeting of 19 May 1999 Page 02 Resolution No. 99- would approve the change in control of the cable television franchise subject to the following conditions: 1. Neither Century nor TCI will take any actions that would modify or diminish the City's current certification from the Federal Communications Commission to regulate basic cable rates within the franchise area. 2. An equipment grant of $5, 000 be paid to the City within twenty days of the adoption of the resolution. This is being used to upgrade equipment in the Apricot Room. 3. The Franchise, Chapter 5.06 of the Municipal Code, Resolution 99 -1574 and this Resolution are recognized as the regulatory basis for the franchise. 4. Any future transfers, exchanges or assignments of the franchise are subject to the provision of the Moorpark Municipal Code and the City will have final authority to determine compliance with the Code. The first condition is essential to maintain the City's ability to protect the cable subscribers in Moorpark. The City gained the authority under Certification from the Federal Communications Commission to regulate basic cable rates (the basic and expanded basic rates under TCI). When discussed with the representatives from TCI and Century they were not willing to concede the City's retention of this authority and therefore it is highlighted in this resolution as an absolute condition of approval. The requirement for the equipment grant is the same as the City has required for all of the franchise change of 000310 TCI / Century Change of Control Meeting of 19 May 1999 Page 03 control applications received to date, and should remain as a condition. The remaining conditions are included as a protection for the residents of Moorpark that the City will retain all of its current rights to regulate cable franchises and protect subscribers to the fullest extent permitted by the Municipal Code, the franchise agreements, approval resolutions and federal law. The proposed resolution submitted by the change of control applicants contained recommended language which would diminish the City's authority and therefore this language was added as enforcement to the City's position. For the Council's information, the City has already received the application for a change of control of this franchise to be held by Century Communications to Adelphia Communications Corporation. This matter has been advertised for a public hearing. The Council is requested to take testimony and make a decision on this change of control application. RECOMMENDATION• 1. open the public hearing and take testimony. 2. Close the public hearing and enter into discussion on the matter 3. Adopt Resolution No. 99 -_ approving the change of control of the cable communications franchise held by TCI Cablevisions of California, Inc. to Century Communications Corporation. Attached: Resolution No. 99- 000,311 RESOLUTION NO. 99- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, APPROVING THE CHANGE OF CONTROL OF THE CABLE COMMUNICATIONS FRANCHISE HELD BY TCI CABLEVISION OF CALIFORNIA, INC. TO CENTURY COMMUNICATIONS CORPORATION WHEREAS, TCI Cablevision of California, Inc. (hereinafter "Franchisee ") is duly authorized to own, operate and maintain a cable communications system in Moorpark, California (hereinafter the "System ") by the City of Moorpark (hereinafter "Franchise Authority ") pursuant to a franchise (hereinafter as amended to date, the "Franchise ") granted by the Franchise Authority in March 1996; and WHEREAS, Franchisee and Century -TCI California, L.P. (hereinafter "Transferee ") , a partnership between certain affiliates of Century Communications Corporation and certain affiliates of Franchisee, are parties to an asset contribution agreement (hereinafter "Contribution Agreement ") pursuant to which the System and the Franchise (after one or more intermediate transfers pursuant to an internal restructuring) will be transferred to Transferee (hereinafter "Transfers); and WHEREAS, Franchisee and Transferee have requested consent by the Franchise Authority in accordance with the requirements of the Franchise and have filed a Federal Communication Commission's Form 394 with respect to the Transfer; and WHEREAS, Section 5.06.312 of the Moorpark Municipal Code requires the City's consent for any change in control of a franchise prior to the change in control occurring; and WHEREAS, TCI has agreed to pay related administrative costs incurred by the City in preparation and review of this change in control request; and WHEREAS, an equipment grant of $5,000 to be expended at the City's sole discretion is to be provided by TCI in 000312 Resolution No. 99- Page 02 consideration for the Franchise Authority's consideration; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Franchise Authority hereby consents to and approves a change in control of the Franchise as a result of the Contribution Agreement to the extent such consent is required by the terms of the Franchise and the Moorpark Municipal Code and subject to each and every condition contained herein in order to fulfill the requirement of satisfying local cable communications standards and goals. SECTION 2. Neither the Franchisee nor the Transferee shall at any time take any actions whatsoever that would modify or in any manner diminish the Franchise Authority's existing Certification from the Federal Communications Commission to regulate basic cable rates with the area of the Franchise. Both Franchisee and Transferee do agree and attest that any such action is in direct violation of this resolution and shall nullify the Franchise Authority's approval. SECTION 3. That the equipment grant of $5,000 shall be due and payable within twenty (20) days of the adoption of this resolution. SECTION 4. That the approval of this change of control by the Franchise Authority shall in no manner whatsoever abrogate, modify or diminish the requirements contained in the Franchise. SECTION 5. The Franchise Authority confirms as follows: (1) that the Franchise was properly granted or transferred to Franchisee; (2) the Franchise, Chapter 5.06 000313 Resolution No. 99- Page 03 of the Moorpark Municipal Code, Resolution No. 99 -1574, and this Resolution represent the entire understanding of the parties and Franchisee has no obligations to the Franchise Authority other than those specifically stated in said aforementioned documents; (3) Franchises is materially in compliance with the provisions of the Franchise and there exist no fact or circumstance known to the Franchise Authority at the time of preparation of this Transfer authorization which constitutes or which, with the passage of time or the giving of notice or both, would constitute a material default or breach under the Franchise, or would allow the Franchise Authority to cancel or terminate the rights thereunder, except upon the expiration of the full term of the Franchise. SECTION 6. Transferee may transfer the System and /or the Franchise, or control related thereto, to any entity controlling, controlled by, or under control of Transferee solely as permitted by Section 5.06.312 of the Moorpark Municipal Code. The Franchise Authority shall have the final authority to determine compliance with said Section. SECTION 7. The Franchise Authority hereby consents to and approves the assignment, mortgage, pledge, or other encumbrances, if any, of the System, or assets related thereto, as collateral for a loan. The Franchise may be so assigned, mortgaged, pledged or otherwise encumbered upon notification to the Franchising Authority no less than ten (10) calendar days prior to such action. SECTION 8. This Resolution shall be deemed effective for the purposes of the Transfers upon the consummation of the transaction contemplated by the Contribution Agreement (hereinafter "Closing "), provided that the conditions set forth in Sections 2 and 3 herein have been fully complied with. 000314 Resolution No. 99- Page 04 SECTION 9. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original Resolutions. PASSED AND ADOPTED this 19th day of May 1999. Patrick Hunter, Mayor ATTEST: Deborah S. Traffenstedt, City Clerk 000315