Title 13 - Streets and Sidewalks

13.50.160 Financial Provisions, Remedies, Procedures and Due Process.

1. A.
   Annual Cable Franchise Fee.

   1. 1.
      As compensation for grant of a Cable Franchise and in consideration of permission to use the Rights-of-Way of the City for the construction, operation, maintenance and reconstruction of a Cable System, and to defray the costs of Cable Franchise obligations, every Cable Franchisee shall pay to the City on an annual basis throughout the term of its Cable Franchise, a sum totaling five percent (5%) of the Cable Franchisee's Gross Revenues.
   2. 2.
      Further, every Cable Franchisee that offers any "bundled" services shall fairly reflect as part of its calculation of applicable Franchise Fees an appropriate and reasonable division of services among the various services offered. The specific cost accounting for such revenue attribution shall be set out in the individual Franchise or other agreement.
   3. 3.
      Payments due City under this section shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30, and December 31. Each quarterly payment shall be due and payable no later than forty five (45) days after the dates listed in the previous sentence. Each payment shall be accompanied by a brief report by the Cable Franchisee showing the basis for the computation and a "Cable Franchise Fee Worksheet," listing all of the sources of revenues attributable to the operation of the Cable Franchisee's System.
   4. 4.
      Should any additional monies be due to the City as a result of information contained in the annual financial report of a Cable Franchisee or by audit as permitted by this Chapter, the Cable Franchisee shall pay such additional monies to the City within sixty (60) days after receipt of notice of same from the City.
   5. 5.
      In the event that any of the quarterly Cable Franchise Fee payments are not timely made, a Cable Franchisee shall also pay the City interest thereon at the then-current prime rate. Said interest to be applied commencing with the forty-fifth (45th) day after the end of the quarter and continuing until all such overdue sums (including interest) are paid.
   6. 6.
      No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for further sums payable under the provisions of this Chapter, Code or applicable Franchise. All amounts paid shall be subject to audit and re-computation by the City or its designee, at any time upon reasonable notice and specification of the documents requested to be reviewed. City's right to audit, and the Cable Franchisee's obligations to retain records related to the Cable Franchise Fee audit, shall expire six (6) years from the date on which each Cable Franchise Fee payment by the Cable Franchisee is due.
2. B.
   Security Fund. Each Cable Franchisee may be required to maintain a security fund with the City to ensure compliance with this Code and applicable Franchise, in an amount and in a manner as set forth in the Cable Franchisee's Franchise.
3. C.
   Bonds, Indemnification, and Insurance. Each Cable Franchisee shall maintain bonds and insurance with the City in amounts and in a manner as set forth in the Cable Franchisee's Franchise, and as required by the ROW Code. Each Cable Franchisee also shall be required to indemnify the City in a manner as set forth in Article 1 and in the Cable Franchisee's Franchise.
4. D.
   Remedies and Enforcement Procedure.

   1. 1.
      Whenever the City has reason to believe that a Cable Franchisee has violated any material provision of this Code or its Franchise, including the customer service and telephone availability requirements, the City shall first notify the Cable Franchisee in writing of the violation and demand correction within a reasonable time, which shall not be less than thirty (30) days. If the Cable Franchisee fails to demonstrate to the reasonable satisfaction of the City that no violation exists, or if the Cable Franchisee fails to correct the violation within the time prescribed, or if the Cable Franchisee is unable to correct the violation and fails to commence corrective action within the time prescribed and to diligently remedy such violation thereafter, the Cable Franchisee shall then be given written notice of not less than thirty (30) days of a public hearing to be held before the City Council. Said notice shall indicate with reasonable specificity the violation alleged to have occurred. This procedure shall apply to all alleged Code or Cable Franchise violations, including those in which grounds for revocation are considered.
   2. 2.
      At the public hearing, the City Council shall hear and consider all relevant evidence and thereafter render written findings and a written decision based upon the evidence.
   3. 3.
      In the event the Cable Franchisee has corrected the violation or promptly commenced correction of such violation after notice thereof from the City and is diligently proceeding to fully remedy the violation, or that no violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed.
   4. 4.
      In the event that a violation exists and that the Cable Franchisee has not corrected the same in a satisfactory manner or did not promptly commence and diligently proceed to correct the violation, the City may impose penalties and/or liquidated damages from the security fund, as follows:

      1. a.
         For system construction schedule violations, including, but not limited to provisions relating to initial construction schedules and system upgrade construction schedule, $500 per day of non-compliance;
      2. b.
         For all other violations, $250 per day per violation.

The City shall provide the Cable Franchisee with written notice of its decision together with a written finding of fact explaining the basis for such a decision.

1.   
   5. 5.
      If the City elects to assess penalties or liquidated damages, then such election shall constitute the City's exclusive remedy for a period of sixty (60) days. Thereafter, if the Cable Franchisee remains in non-compliance, the City may pursue any other available remedy, including Franchise revocation.
   6. 6.
      In the event that a Cable Franchise is cancelled or terminated by reason of the default of the Cable Franchisee, the security fund deposited pursuant to the Cable Franchise shall remain in effect and available to the City until all pending claims or penalties are resolved or settled, after which point any remaining amounts in the security fund shall revert to the possession of the Cable Franchisee.
   7. 7.
      The rights reserved to the City with respect to the security fund are in addition to all other rights of City, whether reserved by this Code, applicable Cable Franchise, or authorized by law, and no action, proceeding, or exercise of a right with respect to such security fund shall affect any other right City may have.
   8. 8.
      The foregoing provisions shall not be deemed to preclude the City from obtaining any other available remedies for repeated violations, of the same general type.

5. E.
   Grounds for Revocation. In addition to any rights in this Code or applicable Franchise, the City reserves the right to revoke a Franchise, and all rights and privileges pertaining thereto, in the event that any of the following occur, and the City and a Cable Franchisee are not able to mutually agree upon a cure or alternate remedy:

   1. 1.
      The Cable Franchisee substantially violates any material provision of this Code or its Franchise;
   2. 2.
      The Cable Franchisee practices an act of fraud or deceit upon the City; or
   3. 3.
      The Cable Franchisee becomes insolvent or is adjudged bankrupt.
   4. 4.
      In revoking a Franchise the City shall utilize the enforcement procedures set forth in subsection 13.50.160.D. above.
6. F.
   Right of Appeal.

   1. 1.
      Upon the imposition of a penalty or revocation decision, a Cable Franchisee shall have a period of one hundred and twenty (120) days subsequent to the date of the formal adoption of the decision by the City Council within which to file an appeal with a court of competent jurisdiction.
   2. 2.
      During any such appeal period, the Cable Franchise shall remain in full force and effect.

(History: Ord. CaSC-2293 §1, 2001)

Effective on: 1/1/1901