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HomeMy WebLinkAbout9/8/81 Cable TV Method of Franchising Const,Oper,Main Amendment Sect 5Ba ORDINANCE AMENDING "AN ORDINANCE PROVIDING FOR THE METHOD OF FRANCHISING THE CONSTRUCTION, OPERATION AND MAINTENANCE OF A CABLE, TELEVISION SYSTEM IN THE COUNTY OF HARNETT, STATE OF NORTH CAROLINA" WHEREAS, This Board adopted on the 1st day of June, 1981, an ordinance entitled, "An Ordinance Providing for the Method of Franchising the Construction, Operation and Maintenance of a Cable Television System in the County of Harnett, State of North Carolina "; and WHEREAS, The Board is of the opinion that certain amendments are necessary to the clear and efficient working of the Ordinance. NOW THEREFORE, BE IT ORDAINED as follows: 1. That Section 5D 3 of the ordinance be amended to read as follows: �3. If applicant had prepared by a certified public accountant, an audit for the fiscal year next preceding the application date, a copy of that audit. In any event an income statement and balance sheet for the fiscal quarter next preceding the application which may be either audited or unaudited,' which shall show the applicant's financial status and its financial ability to complete the construction of the proposed CATV system and to provide the CATV service. Any additional financial information_ which applicant feels would further evidence his ability to construct the proposed system and provide CATV service may also be submitted. Information with respect to financial projections of the proposed system, including methods of financing,_ shall be submitted as part of the application. All financial and ownership information relating to the applicant submitted in compliance with this ordinance shall be confidential and shall not be regarded as public information to the extent provided by law. 2. That Section 7C of the\Ordinance be amended to read as follows: C. Expiration of Franchise. Within three years of the expiration of the. term. of the franchise and subject to approval by the Board of Commissioners, the franchisee may negotiate renewal of its franchise for an additional period not inconsistent with FCC rules and regulations: -. The franchisee shall notify the County in writing not less than one (1) year in advance of the expiration date of its desire to renew or not to renew the franchise. The County may propose certain franchise modifications to the franchisee and make any given renewal contingent upon acceptance of such modifications. Renewal shall be preceded by a public hearing held at feast thirty (30) days in advance of decision by the Board of Commissioners. A renewal may be granted not more than two (2) years prior to the expiration of any existing term. The Board of Commissioners may determine whether or not the franchisee has performed satisfactorily its obligations under the franchise by reviewing the following: -1- • t 1. Technical developments and performances of the system; 2. Programming; 3. Other services offered; 4. Cost of Service; 5. Compliance with any requirement ordinance or in FCC regulations; Annual and other reports made to or the FCC; 7. Extension of service; and 8. Other matters of concern. 0 in the the County In the event the current franchisee is determined by the Board of Commissioners to have performed unsatisfactorily, new applicants shall be sought and evaluated by the County Manager and Board of Commissioners and a franchise award may be made according to application and award procedures set forth herein. 3. That Section 7D(6) of the ordinance be amended to read as follows: 6. Failure to have full service available as set forth in franchisee's application and in Section 8B hereof, provided the period may be extended by the Board of Commissioners under the same circumstances set forth in subsection above. The franchisee shall have sixty (60) days to remedy defects following written notice by the County Manager to the franchisee of such a defect. If any defect continues beyond the sixty (60) days (or any extension thereof granted by the Board of Commissioners) without written proof that corrective action has been taken or is being actively and expeditiously pursued, the Board of Commissioners shall call a public hearing on the termination of the franchise. Immediately following the public hearing, the Board of Commissioners may, by resolution, declare that the franchise be terminated. At least ten (10) days prior to the Board of Commissioners' meeting at which the public hearing will be held, the County Manager shall cause to be served upon the franchisee a written notice of the public hearing on the question of termination. The notice shall state the time and place of the meeting. Should the County revoke the franchise, new applicants shall be sought and evaluated by the County Manager and Board of Commissioners and a franchise award may be made according to application and award procedures set forth herein. 4. That Section 7I of the original ordinance be deleted and that_ Section 7J be redesignated as.Section 7I. 5. That Section 8B of the ordinance be amended to read as follows: B. Service. Within the first year after the effective date of the franchise the franchisee agrees to make available basic CATV service to all residents of the County within the basic service area as set forth in franchisee's application. Thereafter, franchisee shall provide service in all areas of the County contiguous to the Franchisee's then existing cables where the average density of residential units is equal to or greater than 30 residential units per -2- cable mile, provided that the percentage of the franchise area to be served where there are 30 residential units per cable mile shall not be less than: 1. 508 at the end of 2 years. 2. 708 at the end of 3 years. 3. 808 at the end of 4 years. 4. 1008 at the end of 5 years. Franchisee shall extend cable television service to those areas with an average density of at least 30 occuppied residential units per mile of cable. In addition, Franchisee shall extend cable television service to areas of lesser density, upon written request of any five (5) or more customers living within one -half mile from each other as follows: Franchisee shall determine the gross revenue that it would receive should franchisee aerially construct its cable system and extend cable television service to such customers assuming the requesting individual subscribed to the service. Franchisee shall also determine the costs of the requested construction. Franchisee shall also determine what would be its gross revenue were there 30 occupied dwellings per mile of cable and assuming that potential subscribers became franchisee's customers at a.rate equal to its system wide penetration rate within the County. Franchisee shall determine his gross annual yield on investment under both the former and the latter situations. Franchisee shall pay as its portion of the costs of extension an amount which would give it the same gross annual yield on investment in the former situation as it would have had in the latter situation. The balance of the costs of construction shall be advanced, pro rata, prior to construction commencing, by the requesting customers. In addition, the requesting parties shall agree to pay for the service for a period of two years. For two (2) years subsequent to completion of extension (or until there are 30 occupied dwellings per mile of cable along such extension), said prorata shares shall be recalculated as additional customers along said extension subscribe to Franchisee's system. Said additional customers shall pay their prorata share of the subscriber service extension costs, and customers originally having made such payments shall receive a refund equal to the excess of their original prorata subscriber extension costs payment over and recalculated prorata share together with any prior refund. At the end of said two (2) years period, payments for subscribers service extension costs remaining in the Franchisee's possession should be credited to its capital plant account. 6. That Section 9C of the ordinance be amended to read as follows: C. Adjustment to Rates. Initial rates and charges for basic sources and for installation and disconnect shall be fixed in the Franchise application. Thereafter, the County or the franchisee may request rate adjustments at any time. After a public hearing affording due notice to the Franchisee and other interested persons, the Board of Commissioners may adjust rates. (Public Hearing advertisement to be once per week in a newspaper of general circulation in the County for two weeks preceding hearing). The criterion to determine whether rates adjustments shall be permitted are the same as those currently set forth in Chapter 162 of the North Carolina General Statutes for rate adjustment hearings related to rate adjustments -3- for public utilities other than motor carriers and certain water and sewer utilities. Franchisee may appeal the decision of the Board to the Courts as permitted by law. However, the Franchisee may increase or decrease its rates at any time, without prior Board approval, provided that no increase has been made in the preceding six months and provided that the annualized rate of increase within a given twelve month period shall not exceed the average annual rate of increase over the preceding twelve months in the "Consumer Price Index for all Urban Consumers &. U. S. City Average Other Utilities and Public Services (1967 -100) as Published by the United States Department of Labor, Bureau of Labor Statistics." (In the event that at any time The United States Department of -Labor begins publishing a Consumer Price Index on the annual cost adjustments in Cable T.V. costs in particular then that index and its base year shall be used in lieu of the index for Other Utilities and Public Services). The Franchisee shall notify the County in writing at least ninety days in advance of the effective date of any proposed rate increase within the limits set forth above. The County may then challenge the increase and schedule meetings, hearings, request additional information, or take whatever action it deems appropriate. If no such action is taken within 60 days of receipt of original written notice by the County, then the increase will automatically take effect. Except as set forth in the preceding paragraph rates shall not be changed without Board approval, except that nothing in this provision shall prohibit the reduction or waiving of charges in conjunction with promotional campaign for the purpose of attracting subscribers. 7. That Section 10 of the ordinance be amended to read as follows: Section 10. PAYMENT TO THE COUNTY. As compensation for the authorization granted herein and in consideration for permission to use the easements which the County controls for the construction, operation, and maintenance of a CATV system within the County, the Franchisee shall pay to the County quarterly on or before the first day of July, October, January, and April for the preceding quarter an amount equal to three (3) percent of the gross revenues. This payment shall be in addition to any other fees or payments made to the County by the franchisee, such as pole rental, business licenses and other fees not based on gross revenues. Payment shall be accompanied by a certified annual report showing the basis for the computation and such other relevant:-facts- as,may be required by the County. 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 County may have for further or additional sums payable under the provisions of this Ordinance. All amounts paid shall be subject to recomputation by the County within sixty (60) days of the receipt of the franchise annual report. This time limitation shall not apply should the franchisee provide false or erroneous information. In the event that recomputation results in additional revenue to be paid to the County, such amount shall be subject to an interest charge at 1 the highest rate permitted by law. Nothing in this provision shall limit franchisee's liability to pay other local taxes and charges. 8. That Section 11E of the ordinance be amended to read as follows: E. Faithful Performance Bond. The franchisee shall, concurrently with its acceptance of this franchise, file with the County Manager and at all times thereafter maintain in full force and effect for the term of this franchise or any renewal thereof, at franchisee's sole expense, a corporate surety bond with a responsible company licensed to do do business in North Carolina and approved by the County, in the amount of five (5) percent of the anticipated cost of construction of the proposed CATV system for the unincorporated areas of the County, renewable annually, and conditioned upon the faithful performance of the franchisee, and in accordance with the provisions of this Ordinance and upon the further condition that in the event franchisee shall fail to comply with any one or more of the provisions of the franchise, there shall be recoverable jointly and severally from the principal and surety of such bond any damages or loss suffered by the County as a result thereof, including the full amount of any compensation, indemnification, or cost of removal or abandonment or any property of the franchisee as prescribed hereby, plus a reasonable allowance for attorneys' fees and costs, up to the full amount of the bond, said condition to be a continuing obligation for the duration of the franchise and any renewal thereof and thereafter until the franchisee has liquidated all of its obligations with the County that may have arisen from the acceptance of this franchise or renewal by the franchisee or from its exercise of any privileges or rights herein granted. The bond shall provide that at least thirty (30) days prior written notice of intention not to renew, cancellation, or material change be given to the County by filing same with the County Manager. Said required performance bond shall be reduced to $2,000 once the franchisee has connected sufficient energized cable to serve the areas required to be served by Section 8B hereof. Failure to keep a performance bond in�force at all times as herein provided shall constitute an event of default. 9. That Section 13C of the ordinance be amended to read as follows: C. Pole Use. The franchisee is obligated to obtain pole space and other facilities from the towns of Lillington, Angier, Erwin, Coats, any utility companies, and other lawful users at its own expenses and costs and copies of all pole use agreements in whatever form as to be filed with the County Manager. In the event of termination for failure to construct-tfieyCATV- System -or -- expiration of the.franchise, franchisee is to relinquish all rights to pole use immediately and enter into whatever agreements and execute whatever documents may be necessary to accomplish such relinquishment. In the event of termination of franchise once the system is operating, franchisee is to relinquish all rights to pole use after a reasonable time has elapsed for franchisee to attempt to sell the system; however, during such time franchisee shall diligently be attempting to find a buyer. Such reasonable time, unless otherwise agreed to by the County, shall be nine months. This provision may be enforced by appropriate equitable remedy from a court of competent jurisdiction as set forth in N.C.G.S. 153A -123. Such equitable relief includes, but is not limited to, injunctions and orders of -5- abatement and upon refusal to comply, franchisee may be cited for contempt. 10. That Section 14M of the ordinance be amended to read as follows: M. Quarterly Reports. The franchisee shall file with the County Manager on a quarterly basis construction reports until the system is completed. 11. That Section 14N of the ordinance be amended to read as follows: N. Annual Reports. If written request is made by the County Manager, the following reports shall be filed by the franchisee with the County Manager annually, no later than February 1, except where otherwise provided: 1. A summary of complaints received during the preceding calendar year showing nature of the complaint, area of the County, disposition and complaints subsequent to disposition; 2. A total facilities report together with a current system map showing the location and total miles of plant and equipment installed and /or operating at the close of the preceding calendar year; 3. A map of system; 4. One copy of each type of agreement currently offered to subscribers and to users; 5. A complete set of current rules and regulations of the operator incorporating the latest amendments filed with the County; In addition the franchisee shall file a complete financial audit statement including a statement of income to be certified by a public accountant to be submitted no later than ninety (90) days after the end of the preceding fiscal year of the franchisee and such reports on other topics as the Board of Commissioners may direct. 6. A complete financial audit statement including a statement of income to be certified by a public accountant to be submitted no later than ninety (90) days after the end of the preceding fiscal year of the franchisee. 7. Reports on other topics as the Board of Commissioners may direct. 12. That Section 15A should be deleted from the original ordinance and the following redesignations be made within Section 15 of the ordinance: 15B of the original ordinance should be redesignated as 15A. 15C of the original ordinance should be redesignated as 15B. 15D of the original ordinance should be redesignated as 15C. 15E of the original ordinance should be redesignated as 15D. MM. Adopted this day of dtf., i 1981. Board of Commissioners for Approved as to form Edward H. McCormick, County -7-