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HomeMy WebLinkAboutRES CC 1996 1190 1996 0320 RESOLUTION NO. 96-1190 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, APPROVING THE TRANSFER OF A CABLE TELEVISION FRANCHISE FROM THE CHRONICLE PUBLISHING COMPANY TO TCI CABLEVISION OF CALIFORNIA, INC. WHEREAS, pursuant to Chapter 6 of Title 5 (Section 300 et seq.) of the Moorpark Municipal Code (the "Cable Television Ordinance"), which establishes the terms and conditions for granting a franchise to construct, operate and maintain a cable television system within the City of Moorpark, the City Council adopted Ordinance No 134, granting a franchise renewal to The Chronicle Publishing Company(dba, Ventura County Cablevision, hereinafter referred to as "Chronicle") for a ten(10) year term, through December 20, 2000 (hereinafter referred to as the "Franchise"); and WHEREAS, on June 28, 1995, Chronicle entered into an Agreement and Plan of Merger with Tele-Communications, Inc. ("TCI"), by which Chronicle will merge with and into TCI (hereinafter referred to as the"Transaction"; WHEREAS, TCI is the parent of TCI Communications, Inc. ("TCIC"), and also owns and controls TCI West, Inc. ("TCl/West"), which in turn own TCI of California, Inc. ("TCl/California"). TCI proposes that TCl/California will own and manage the Franchise and the cable system; WHEREAS, the Franchise requires City Council consent to any transfer of the Franchise; WHEREAS, FCC Regulations (47 CFR § 76.502(I)(l)) currently require that in order for a cable operator to obtain City approval of a transfer of the Franchise, it must submit to the City a FCC Form 394 and any other information as may be required by law; WHEREAS, Chronicle and TCI have filed a FCC Form 394 with the City requesting City Council approval of the transfer of the Franchise to TCIC (hereinafter, the "Transfer"). In its transfer application, TCI proposes that depending upon the tax consequences of the Asset Exchange, it may transfer the Franchise to TCl/California; WHEREAS, in support of its Form 394 Application, Chronicle and TCI have submitted to the City the following documents which are on file with the City Clerk, and are collectively referred to as the "Transfer Documents": 1. Form 394, filed with the City on September 8, 1995; 2. Letters with exhibits from Sherman& Howard to Scott Field, special counsel to the City, dated October 6, and 10, 1995. WHEREAS, as part of the Form 394 application, TCI certified that it "will use its best efforts to comply with the terms of the Franchise and applicable state laws or local ordinances and related regulations, and to effect changes, as promptly as practicable, in the operation of the system, if any changes are necessary to cure any violations thereof or defaults thereunder presently in effect or ongoing"; WHEREAS, the Conference Report to the 1992 Federal Cable Television Act, in discussing franchise renewal under Section 626 of the Communications Act of 1934 (47 U.S.C. § 546) states that transfers of a cable television franchise are not responsible for breaches of the franchise committed by the transferor. Consequently, the City Council finds that it is necessary that all franchise noncompliance issues be remedied prior to the Transfer; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, DOES RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. A. The Moorpark City Council finds that, based upon the representations contained in the Transfer Documents, and the terms and conditions of this Resolution, TCIC and TCl/California will have the legal, financial and technical qualifications to own and manage the Franchise. Subject to the conditions of approval contained in Section 2 of this Resolution, the City Council approves and consents to the Transfer of the Franchise to TCIC and the subsequent transfer of the Franchise to TCUCalifornia. B. The City Council finds that, as of the date of this Resolution, Chronicle is in compliance with the Franchise. Section 2. The approval of the Transfer is subject to the following conditions of approval: A. TCIC and TCl/California(hereafter jointly referred to as "Grantee") shall comply with and be bound by the following documents: (a) The Cable Television Ordinance (b) City Ordinance No. 134 © The Settlement Agreement between the City of Moorpark and The Chronicle Publishing Company regarding Cable Television Rates and Charges. (d) This Resolution moorparkres March 12,1996 B. Grantee agrees and acknowledges that compliance with the Franchise as of the closing of the Transaction, including the conditions contained herein, is not Commercially Impractical as that term is used in Section 625(a) of the Cable Act. C. Chronicle shall arrange independent financing of the obligations set forth on subparagraphs E and I so that they will not cause Grantee to incur"external costs" under Title 47, Section 76.922 of the Code of Federal Regulations. D. The parties hereby acknowledge and recognize that the City has expressed a concern regarding the effect its approval of the Transfer may have upon the amount or level of rates subject to the jurisdiction of the City under existing and future provisions of the Cable Act, as amended, or any successor statute, and has further expressed its intent and understanding that it would not approve the Transfer if that transaction or the City's consent thereto, could, in any way, be utilized by Grantee to justify rates subject to the jurisdiction of the City higher than could be justified in the absence of the Transfer. By accepting and agreeing to this Transfer Resolution, Grantee hereby covenants, represents and warrants to the City, as partial consideration for the City's approval of the Transfer as follows: 1. From the date the Council approves this Resolution through March 31, 1999 (the"Forbearance Period") Grantee shall not include any "Goodwill" as that term is defined in Paragraph 99 of the Report and Order and Further Notice of Proposed Rulemaking [MM Docket No. 93-215, CS Docket 94-28] March 1994, (the"Interim Report") or as that term is defined in the Final Report on Cost-of-Service, as announced by the FCC on December 17, 1995 (the"Final Report")which will be generated as a result of the Transfer("Transfer Goodwill") in any filing with the City related to the justification of any rates; however, to the extent that any Goodwill arose prior to the Transfer, and/or was not created as a result of the Transfer then the Grantee shall not be prohibited from including such Goodwill in the calculation or determination of any such rate. 2. This agreement by Grantee not to include Transfer Goodwill in the rate base for regulated rates during the Forbearance Period shall be a waiver of its rights to include "Goodwill" (as defined in the Interim Report and the Final Report) in the rate base of rates subject to the jurisdiction of the City only as it may apply to the Transfer Goodwill. E. By no later than April 1, 1996, Grantee shall install a fiberoptic cable from the system head-end at Rasnow Peak to the hub located in the City of Moorpark. Said fiberoptic cable shall permit Grantee to offer similar programming as offered on the remainder of Grantee's Ventura County system. moorparkres March 22,1996 3 F. Failure of Grantee to comply with any material provisions of this Resolution or the Franchise shall be grounds for the City to invoke any of the City's remedies under and in accordance with the Franchise. G. This approval of the Transfer shall be deemed effective upon the issuance of a Certificate of Closing (the "Certificate of Closing") by the City Attorney or Special Counsel (the "Effective Date") so long as the Acceptance and Guarantee of the Transfer Resolution (Exhibit A) has been executed and returned by Chronicle, Grantee and TCl/West, and the payments specified in Paragraph L have been made to the City, within ten (10) days of approval by the City Council. If this Transfer Acceptance and Guarantee is not so executed and returned to the City Clerk within ten(10) days of approval by the City Council, it shall become null and void and the Transfer shall be deemed disapproved for good cause as of the date of approval of this Resolution. A Certificate of Closing shall be issued by the City Attorney or Special Counsel at such time that the following documents have been provided to the City or acts completed in a form acceptable to the City Attorney or Special Counsel.: 1. The receipt of a certified check for the payments referenced by Section 2 I. 2. Execution and delivery of Exhibit A to this Resolution by Chronicle, Grantee and TCl/West. H. TCl/West shall agree to guarantee all obligations of Grantee hereunder, and Chronicle agrees to perform the obligations imposed upon it pursuant to the terms and conditions of this Resolution. The Acceptance and Guarantee shall be notarized so as to indicate that the persons executing the Acceptance and Guarantee have the authority to bind Grantee, TCl/West and Chronicle. Failure of Grantee, TCl/West and Chronicle to timely file the Acceptance and Guarantee shall void the approval of the Transfer. I. The City shall be reimbursed its reasonable administrative, consulting, accounting and legal costs ("consulting") incurred in connection with the Settlement Agreement and the application for approval of the Transfer. The reimbursement amount shall not exceed Eight Thousand Dollars ($8,000.00). Within ten(10) days of the adoption of this Resolution, the City shall be paid Eight Thousand Dollars($8,000.00). Section 3. By delivering a copy of this Resolution to Grantee, the City hereby gives notice that pursuant to Revenue and Taxation Code §107.6, the Franchise may create a possessory interest which, if created, may be subject to property taxation and that Grantee and TCI may be subject to payment of property taxes levied on such interest. Grantee and TCI do not waive their rights to contest the amount or legality of the possessory interest tax. moo,parkres March 22,1996 4 Section 4. The City Manager, the City Attorney and Special Counsel, or their designees, are hereby authorized and empowered to execute any documents necessary, in their discretion, to implement the approvals contained herein. PASSED, APPROVED AND ADOPTED this 20thday of MARCH 1996. CITY OF MOORPARK Uv ul W. Lawrason, •., Mayor ATTEST: i y Mayor Pro Tempore John E. Wozniak pPQK Ca< Lillian Hare, City Clerk Z '_ 4 � S �n grEO J�� moarparkres March 22,1996 5 PP glow `'� glow * MOORPARK a`,��to V'� 799 Moorpark Avenue Moorpark, California 93021 (805) 52 �9„ P ( ) 9 6864 9� TFO Jv STATE OF CALIFORNIA ) COUNTY OF VENTURA ) ss . CITY OF MOORPARK ) 1 I, Lillian E. Hare, City Clerk of the City of Moorpark, California, do hereby certify under penalty of perjury that �t the foregoing Resolution No. 96-1190 was adopted by the City Council of the City of Moorpark at a meeting held on the 20th day of MARCH 1996, and that the same was adopted by the following vote: AYES : COUNCILMEMBERS HUNTER, PEREZ, WOZNIAK NOES : NONE ABSENT: MAYOR LAWRASON ABSTAIN: NONE WITNESS my hand and the official seal of said City this 25th day of MARCH 1996. 4 Lillian E. Hare 9.1-ty Clerk aK °4c 90�� 4 v 4 ,.FO Jv.. PAUL W. LAWRASON JR. JOHN E.WOZNIAK PATRICK HUNTER BERNARDO M. PEREZ Mayor Mayor Pro Tern Councilmember Councilmember