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03/16/2000
TENTATIVE AGENDA CITY OF SHAKOPEE REGULAR ADJOURNED SESSION SHAKOPEE, MINNESOTA MARCH 16, 2000 LOCATION: 129 Holmes Street South Mayor Jon Brekke presiding 1] Roll Call at 5:00 p.m. 2] Pledge of Allegiance 3] Approval of Agenda 4] Discussion Items: A. Cable Television Franchise Presentation B. MUSA and Transportation Planning Issues 5] Hiring of Receptionist 6] Other Business 7] Adjourn to March 21st at 7:00 P.M. IMP 4-1. A CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Cable Television Franchise Presentation DATE: March 8,2000 INTRODUCTION: At the March 16th meeting,the City Council will hear a presentation by the Shakopee Cable Advisory Commission, and Attorney Adrian Herbst regarding information proposed for negotiation with Time Warner Cable. BACKGROUND: In January, 1999, Time Warner(then known as Paragon Cable), served the City with notice that it wanted to upgrade the trunk cable in Shakopee to a fiber optic system. The fiber optic line will allow for additional channel capacity(up to 80 channels total),better signal quality, and the potential for digital television transmission and high-speed modem hookups,once that technology becomes available to Time Warner. However,to do that,Time Warner asked to renew its franchise with Shakopee,which was three years away from the end of the initial 15 year duration. So that this process could be started,the Shakopee Cable Advisory Commission began to meet and review the franchise. Adrian Herbst, an attorney specializing in cable television law,was hired, and has assisted the Cable Commission in review of the franchise. That review has generated two documents: • Draft Cable Franchise Agreement • Master Cable Services Regulatory Ordinance Mr. Herbst has also provided a summary of each of these documents,which highlight the major points; as well as the complete copies. It should be noted that these are preliminary items only, and will be the subject of negotiation with Time Warner. A significant difference of opinion consists between the Commission and Time Warner,regarding the responsibility to provide an Institutional Network(INET),which would connect major public buildings and schools within Shakopee. That requirement is something that has been in the existing franchise, and has consistently been deferred;the Cable Commission sees INET as being critical for the future of cable for the duration of this franchise,which could be for the next 12 years in Shakopee. Mr. Herbst will be making a presentation;the Cable Commission has also been invited to attend the meeting. If the Council is comfortable with the information contained in the draft documents,the Cable Commission will use these as a basis of negotiation with Time Warner. ACTION REQUIRED: After hearing the presentation,the City Council should indicate whether it is comfortable to direct the Cable Commission to begin formal franchise renewal negotiations with Time Warner. Mark McNeill City Administrator MM:tw CC: Cable Advisory Commission SUMMARY OF SHAKOPEE DRAFT CABLE FRANCHISE AGREEMENT Section 1. Definitions The definitions of the draft Master Cable Services Regulatory Ordinance ("Master Ordinance")are made part of the Franchise Agreement. Section 2. Grant of Franchise • The Agreement is drafted as a franchise renewal but could be utilized as the basis for the grant of an initial franchise to a new competitive cable provider. The Agreement grants a non-exclusive franchise to construct,operate and maintain a cable television system within the public rights-of- ways. • The Agreement is seven-year franchise with the possibility of a three-year franchise extension and a subsequent two-year franchise extension for a total of 12 years. The extensions will be granted on the basis of the cable operator meeting certain performance objectives of the Agreement. • The Agreement incorporates by reference and applies all of the provisions of the Master Ordinance unless specifically stated otherwise. Section 3. General Requirements. This section includes the following: • As compensation for use of the City's rights-of-ways, the Operator shall pay 5% of gross revenues. • Upon mutual agreement,disputes regarding franchise may be submitted to mediation with costs to be borne by Operator. • Operator is required to maintain liability insurance in the amount of$1,000,000,combined single limit. • Operator will indemnify the City for any claims arising out of operations of • Operator or its subcontractors,unless caused by City's sole negligence. • Operator shall maintain a Security Fund of$5,000 throughout term of franchise. • Operator shall maintain a Performance Bond of$100,000 through construction completion. 1 • This section establishes a procedure to remedy franchise violations which consists of notice, opportunity to cure,public hearing to consider relevant evidence,and establishes penalties of up to $500 per day for safety and construction violations and up to $100 per incident for all other violations. • This section also requires compliance with generally applicable laws,rules,and regulations of the United States and the State of Minnesota. Section 4. System Capabilities • The Agreement will incorporate details of the cable system capabilities anticipated to be specified in a proposal from Time Warner and based upon the City's identified priorities and preferences. • The draft Franchise Agreement seeks to retain the concept in the existing franchise of both a subscriber network and an institutional network(capability of voice,video,and data services for public and government institutions). • The existing franchise deferred the obligations to connect the institutional network to specified buildings that were identified until the termination of the Franchise Agreement. With renewal, the new Franchise Agreement seeks to have the connection made. The capabilities of an institutional network can be of considerable benefit. A list of the buildings is included in the attachment from Section 4.1G and H. • The City may commence evaluation and review sessions at any time to consider such topics as system performance; channel capacity; rates; programming; cable modem platform access; public, educational, and governmental access; subscriber complaints; and any other relevant topics. • The franchise requests the system be compatible to other systems in the Twin Cities metro area. • The system will comply with FCC Emergency Alert System rules within 12 months of the effective date of the franchise. • Operator will make audio descriptive service and closed captioning capabilities available to the extent required by law. • Operator will provide a standby power system. • Parental control locking devices will be available at a reasonable charge. • Operator will provide an automatic status monitoring System. 2 • City may enforce FCC Technical Standards. • Operator will convert to High Definition TV in accordance with federal law. • City has right to inspect all construction,reconstruction or installation work. Section 5. Services and Programming • Based on the anticipated proposal from Time Warner and negotiations, the Agreement shall incorporate programming service and service tier obligations. Included among these service options a "Lifeline Service" that is designed to ensure that all residents irrespective of income have access to minimal programming services at the lowest cost possible. • Time Warner shall provide the following Broad Programming Categories: educational; news and information;sports;general entertainment(including movies);children/family oriented;arts, culture and performing arts; foreign language based on population; science/documentary; weather information;programming addressed to diverse ethnic and minority interests in the City; national, state and local governmental affairs; local origination programming concerning local and regional issues;public access programming;educational access programming;governmental access programming;audio programming(including local radio signals);program channel guide; two-way interactive programming; and internet access and Regional Channel 6. • Time Warner will not change the quality of programming categories without complying with federal modification procedures, including notice requirements. • Time Warner shall make leased commercial access channels available in a manner consistent with federal law. • Time Warner will conduct an annual subscriber survey and share the results with the City. Section 6. Support for Local Cable Related Needs • Institutional Network services are identified in the draft Franchise Agreement, including two-way communications and high speed internet access. • Time Warner will offer following access channels required by City. Additional access channels will be provided upon demonstration of need.and a formula as described in the Franchise. Time Warner will cooperate with other cable providers to interconnect to facilitate shared access programming. Oversight and administration of the access channels shall be carried out by the City, however, the City may elect to transfer such responsibility, in whole or in part, to a designated Community Access Corporation. • Time Warner will provide following support for Access: 3 • Reservation, dedication and use of all required access channels. • A capital contribution. • The use of the access channels will be subject to rules and procedures adopted by the City or Community Access Corporation. • Time Warner will provide its subscribers an Access channel promotion annually. • Access channels will be maintained at same level of technical quality required by franchise,the master ordinance, and the FCC for residential cable television subscribers. • Time Warner shall provide at least one free cable drop and outlet to all public buildings specified by the City. • Time Warner will provide a cable modem and Internet access service without charge to every public school and library. • The City reserves the right to implement an "open access" requirement to ensure that Time Warner will be required to provide non-discriminatory access to its cable modem platform. However,Time Warner will not be required to provide such access until further legal review and evaluation by the City of the merits and policy considerations related to this issue. Time Warner shall have the right to participate in any such review. Section 7. Regulation • This Franchise is subject to regulation by the City in accordance with the Master Ordinance. • This section also includes force majeure provisions. 4 FRANCHISE AGREEMENT—March 6,2000 PRELIMINARY DISCUSSION DRAFT FRANCHISE AGREEMENT Between TIME WARNER and SHAKOPEE, MINNESOTA FRANCHISE AGREEMENT-March 6, 2000 TABLE OF CONTENTS Page SECTION 1. DEFINITIONS 2 SECTION 2. RENEWAL OF FRANCHISE 2 2.1 Grant. 2 2.2 Right of Grantor to Issue and Renew Franchise 2 2.3 Effective Date of Renewal 3 2.4 Term 3 2.5 Written Notice 4 2.6 Franchise Not Exclusive 5 2.7 Conflict with Cable Ordinance and Reservation of Rights 5 2.8 Compliance 5 2.9 Binding Contract 6 2.10 Customer Service Standards 6 SECTION 3. GENERAL REQUIREMENTS 6 3.1 Annual Franchise Fee 6 A. Compensation 6 B. Limitation Period 8 3.2 Recovery of Processing Costs and Expenses 8 3.3 Liability Insurance 9 3.4 Indemnification 10 3.5 Grantee's Insurance 12 3.6 Workers' Compensation Insurance 12 3.7 Security Fund and Performance Bond 13 3.8 Procedure for Remedying Franchise Violations 14 3.9 Compliance with Applicable Laws and Ordinances 16 SECTION 4. SYSTEM CAPABILITIES 17 4.1 Upgrade 17 4.2 Performance Review: Performance Monitoring 20 4.3 Agreement Modification 20 4.4 Grantee Cooperation 21 4.5 Periodic Evaluation, Review and Modification 21 4.6 Regional Equity 23 4.7 Emergency Alert Capability 24 4.8 Hearing and Sight Impaired Capabilities 24 4.9 Standby Power 24 4.10 Parental Control Lock 25 4.11 Status Monitoring 25 • 4.12 Technical Standards 25 FRANCHISE AGREEMENT—March 6, 2000 4.13 HDTV/ATV Conversion 25 4.14 Right of Inspection 26 SECTION 5. SERVICES AND PROGRAMMING 26 5.1 Programming 26 A. Broad Programming Categories 26 B. Deletion or Reduction of Programming Categories 27 5.2 Leased Commercial Access 28 5.3 Periodic Subscriber Survey 28 SECTION 6. SUPPORT FOR LOCAL CABLE RELATED NEEDS 29 6.1 Institutional Network Services 29 6.2 Public, Educational and Governmental Access 30 A. Access Channels 30 B. Remote Origination 30 C. Additional Access Channels 30 D. Unused Channels 31 E. Interconnection 31 F. Grantor Support for Local Programming 31 G. Access Channel Designations 32 H. Public, Educational and Governmental Access Rules and Procedures 32 I. Ad Avail Grants 32 J. Technical Quality 32 K. Proof of Performance Testing 33 L. Change in Technology 33 6.3 School and Library Cable Modems 33 6.4 Non-Discriminatory Access to Cable Model System 33 SECTION 7. REGULATION 35 7.1 Franchise Regulation 35 7.2 Force Majeure 35 EXHIBIT A- Grantee Ownership Information EXHIBIT B -Franchise Fee Payment Worksheet EXHIBIT C - Service to Public Building FRANCHISE AGREEMENT—March 6, 2000 FRANCHISE ORDINANCE AGREEMENT AN ORDINANCE GRANTING TO TIME WARNER ("Grantee"), A FRANCHISE TO CONSTRUCT, MAINTAIN AND OPERATE FOR A PERIOD OF SEVEN (7) YEARS, AND DURING ANY EXTENSIONS THEREOF, A CABLE TELEVISION SYSTEM AND FACILITIES AND ADDITIONS THERETO, IN UNDER, OVER, ALONG, ACROSS AND UPON THE STREETS, LANES, AVENUES, ALLEYS, SIDEWALKS, BRIDGES, RIGHTS-OF-WAY, EASEMENTS, HIGHWAYS AND OTHER PLACES IN THE CITY OF SHAKOPEE, MINNESOTA ("Grantor"), LOCATED IN THE COUNTY OF SCOTT. Franchise Agreement between the Grantor and Grantee, granting a franchise to construct, maintain, and operate a cable television system, as defined under applicable federal, state and local law,throughout the City and setting forth terms and conditions herein. WITNESSETH WHEREAS, the Grantor, pursuant to Ordinance No. is authorized to grant and renew one or more nonexclusive revocable Franchises to operate, construct, maintain and reconstruct a cable television system within the City of Shakopee,Minnesota; and WHEREAS, the Grantor seeks to promote the development of advanced communications capabilities on a competitive basis within the City, while at the same time ensuring customer service; and WHEREAS, the Grantor, after due evaluation of Grantee's request to renew its existing franchise, and after public hearings, has determined that Grantee has the legal, technical and financial qualifications to meet the future cable related needs of the community,provided that the Grantee strictly complies in all material respects with the terms and requirements of this Franchise Agreement and Ordinance No._ 1 FRANCHISE AGREEMENT—March 6, 2000 NOW, THEREFORE,the Grantor hereby grants to Grantee renewal of its cable television Franchise in accordance with the provisions of Ordinance No. and this Franchise Agreement. SECTION 1. DEFINITIONS For the purpose of this Agreement, the terms, phrases, words, abbreviations and their derivations shall have the meaning given in the Master Cable Services Regulatory Ordinance, Ordinance No. , and the following, based on specific conditions applicable to this Agreement. The definitions in the Master Ordinance are made part of this Agreement as if fully set forth herein. SECTION 2. RENEWAL OF FRANCHISE 2.1 Grant. The cable television Franchise granted on the_day of to , and now held by Grantee, a corporation whose ownership is indicated in Exhibit A, is hereby renewed, subject to the terms and conditions of this Franchise Agreement (hereinafter also referred to as the "Agreement"). The renewal provides Grantee authority, right and privilege, to construct, reconstruct, operate and maintain a cable television System within the Streets and public ways in the City of Shakopee,Minnesota,as it is now or may in the future be constituted. 2.2 Right of Grantor to Issue and Renew Franchise. Grantee acknowledges and accepts the right of Grantor to issue and/or renew a Franchise Agreement and Grantee agrees that it shall not now or at any time hereafter challenge any lawful exercise of this right in any local, State or federal court. 2 FRANCHISE AGREEMENT—March 6,2000 2.3 Effective Date of Renewal. The renewal shall be effective on the date that both parties have executed this Franchise Agreement, provided that said date is no later than thirty (30) days after the date the Grantor, by Resolution, approves this Franchise Agreement. The renewal is further contingent upon the filing by Grantee with the City Clerk, of the executed Franchise Agreement and the required security fund and insurance certificates, except that if the filing of the security fund or any such insurance certificate does not occur within sixty (60) days after the effective date of the Ordinance approving this renewal and any extension of time hereunder,the Grantor may declare this renewal null and void. 2.4 Term. A. This Franchise Agreement shall commence upon its effective date and shall expire seven (7) years thereafter on , , unless extended, renewed, revoked or terminated sooner as provided for in the Master Cable Services Regulatory Ordinance or pursuant to the specific terms of this Agreement. B. This Franchise Agreement shall be extended for an additional period of three (3) years upon a finding at the end of the fourth year of the franchise by the Grantor, or its delegates, that Grantee is in substantial compliance with the material terms and requirements of this Franchise Agreement and the Master Cable Services Regulatory Ordinance. Such a finding shall specifically reflect, at a minimum that Grantee is in full compliance with: (1) The Franchise Fee requirements of Section_; (2) The Institutional Network and PEG Access requirements of Section_; 3 FRANCHISE AGREEMENT—March 6, 2000 (3) The customer service terms and requirements contained in Section of the Master Cable Services Regulatory Ordinance; and (4) All applicable FCC technical standards. C. The Franchise may be extended for an additional two (2) year term beyond the initial extension upon a finding at the end of the seventh year of the Franchise by the Grantor, or its delegates that the Grantee is in substantial compliance with all of the above listed requirements, has completed the upgrade requirements of 4.1, and that the System provides capabilities and services desired by the community. D. Nothing in this provision shall preclude the ability of the Grantee from seeking to renew its franchise pursuant to the requirements of Master Cable Services Regulatory Ordinance and applicable federal law. 2.5 Written Notice. All notices, reports or demands required to be given in writing under this Franchise Agreement shall be deemed to be given when delivered personally to the Person designated below, or when five (5) days have elapsed after it is deposited in United States mail in a sealed envelope, with registered or certified mail, postage prepaid thereon, or on the next business day if sent by express mail or overnight air courier addressed to the party to which notice is being given,as follows: If to Grantor: If to Grantee: 4 FRANCHISE AGREEMENT—March 6, 2000 Such addresses may be changed by either party upon notice to the other party given as provided in this Section. 2.6 Franchise Not Exclusive. This Franchise shall not be construed as any limitation upon the right of Grantor, through its proper offices, and in accordance with applicable law, to grant to other Persons or corporations rights, privileges or authority similar to or different from the rights, privileges and authority herein set forth, in the same or other Streets and public ways or public places or other places the Grantee is entitled to occupy by this Franchise Agreement,permit or otherwise. 2.7 Conflict with Cable Ordinance and Reservation of Rights. The provisions of the Master Cable Services Regulatory Ordinance of Shakopee, Minnesota, Ordinance No. , are hereby incorporated herein by reference as if set out in full, and form part of the terms and conditions of this Franchise Agreement. In the event of any conflict between the terms and conditions of this Franchise Agreement and the provisions of Ordinance No. , Ordinance No. shall control, except as may be specifically provided in this Franchise Agreement. Grantor and Grantee reserve all rights that they may possess under the law unless expressly waived herein. 2.8 Compliance. Grantee agrees to comply with the terms of the Master Cable Services Regulatory Ordinance, Ordinance No. and any lawfully adopted, generally applicable local ordinance, to the extent that the provisions of the ordinance do not have the effect of materially limiting the benefits or expanding the obligations of Grantee that are granted 5 FRANCHISE AGREEMENT—March 6, 2000 by this Agreement. Grantee agrees that it is subject to the lawful exercise of the police power of the City and amendments to the Master Cable Services Regulatory Ordinance, Ordinance No. , and any ordinance adopted by Grantor based on such exercise. 2.9 Binding Contract. This Agreement (including all of Grantee's particular rights, powers, protections, privileges, immunities and obligations associated therewith as the same exist on the date hereof) shall constitute a legally binding contract between the Grantor and Grantee, and as such, cannot be amended, modified or changed by the Grantor without the consent of Grantee in any manner whatsoever, whether by ordinance, rule, regulation or otherwise, to impose on Grantee more stringent or burdensome requirements or conditions; provided, however, that nothing herein contained shall preclude the Grantor from the proper exercise of its general regulatory and police powers, as set forth in Section 2.8 and/or its powers of eminent domain. 2.10 Customer Service Standards. Grantee will comply with the customer service and consumer protection provisions set forth in the Master Cable Services Regulatory Ordinance. SECTION 3. GENERAL REQUIREMENTS 3.1 Annual Franchise Fee. A. Compensation. (1) As compensation for this Agreement and in consideration of permission to use the Public Right-of-Way of the Grantor for the construction, operation, maintenance and reconstruction of a Cable System, and to defray the costs of Agreement obligations, Grantee shall pay to the Grantor on an annual 6 FRANCHISE AGREEMENT—March 6,2000 basis throughout the term of this Agreement, a sum totaling five percent (5%) of Grantee's Gross Annual Revenues. (2) Payments due the Grantor under this Section shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30 and December 31 of each year during the term of this Agreement. Each quarterly payment shall be due and payable no later than thirty (30) days after the dates listed in the previous sentence. Each payment shall be accompanied by a brief report showing the basis for the computation and other relevant facts and information, and a "Franchise Fee Payment Worksheet," attached as Exhibit A, which shall accurately reflect the sources of all cable service revenues derived from the operation of the system within the Franchise area. (3) Grantee will deliver to the Grantor, not later than 45 days after the last day of each fiscal year during the term of this Agreement(or portion thereof in the event of any prior termination for any reason), a statement signed by a duly authorized officer of Grantee with respect to the entire prior fiscal year, setting forth the same information as is required to be submitted by Grantee in accordance with the Payment Worksheet, Exhibit C. Upon the Grantor's request, such annual statements shall be certified by a certified public accountant, at no additional cost to the Grantor. (4) 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 Grantor may have for 7 FRANCHISE AGREEMENT—March 6,2000 further sums payable under the provisions of this Agreement. All amounts paid shall be subject to audit and re-computation by the Grantor. B. Limitation Period. The period of limitation for recovery of any franchise fee payable hereunder shall be six (6) years from the date on which payment by Grantor is due, unless Grantor initiates legal proceedings for recovery of such fees in a court of competent jurisdiction within this time period. 3.2 Recovery of Processing Costs and Expenses. A. The City reserves the right to recover costs incurred by it, as permitted by applicable law, relating to requests for change made to it by the Grantee including a change in ownership or control. B. Payments of such costs and expenses outlined in Sections 3.2.A and 3.2.B shall not be deemed to be "Franchise Fees" within the meaning of Section 622 of the Cable Act (47 U.S.C. § 542), and such payments shall not be deemed to be: (i) "payments in kind" or any involuntary payments chargeable against the compensation to be paid to the Grantor by Grantee pursuant to Section 3.1 hereof; or (ii) part of the compensation to be paid to the Grantee by Grantee pursuant to Section 3.1 hereof. C. To aid in the analysis and resolution of any future disputed matters relative to this Franchise Agreement, the Grantor and Grantee may, by mutual agreement (both as to whether to hire and whom to hire), employ the services of technical, financial or legal consultants, as mediators. Irrespective of the outcome of any dispute, all reasonable fees of the consultants incurred by the Grantor in this regard shall be borne evenly by both parties. 8 FRANCHISE AGREEMENT—March 6, 2000 3.3 Liability Insurance. A. Upon the effective date of renewal, the Grantee shall, at its sole expense, take out and maintain during the life of this Agreement public liability insurance with a company licensed to do business in the State of Minnesota with a rating by Best of not less than "A" that shall protect the Grantee, the Grantor, and the Grantor's officials, officers, employees and agents from claims which may arise from operations under this Agreement, whether such operations are by the Grantee, its officials, officers, directors, employees and agents, or any subcontractors of Grantee. This liability insurance shall include, but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property, resulting from all Grantee operations, products, services or use of automobiles, or construction equipment. The amount of insurance for Single Limit Coverage applying to Bodily and Personal Injury and Property Damage shall be consistent with the limitations of liability under applicable Minnesota law, and as approved by the risk manager for the City, but not be less than one million dollars ($1,000,000) per occurrence. The following endorsements shall attach to the liability policy: (1) The policy shall cover Personal Injury as well as Bodily Injury. (2) The policy shall cover blanket contractual liability subject to the standard universal exclusions of contractual liability included in the carrier's standard endorsement as to bodily injuries, personal injuries and property damage. (3) Broad Form property damage liability shall be afforded, 9 FRANCHISE AGREEMENT—March 6, 2000 (4) The Grantor shall be named as an additional insured on the policy. (5) An endorsement shall beprovided which states that the coverage is g primary insurance and that no other insurance effected by the Grantor will be called upon to contribute to a loss under this coverage. (6) Standard form of cross-liability shall be afforded. (7) An endorsement stating that the policy shall not be cancelled without thirty (30)days written notice of such cancellation given to the Grantor. B. Grantor reserves the right to adjust the limit coverage requirements, as required by applicable law and/or inflation. C. Grantee shall submit to Grantor documentation of the required insurance including a certificate of insurance signed by the insurance agent and companies named, as well as all properly executed endorsements. D. Any deductible or self-insured retention must be declared to Grantor. 3.4 Indemnification. A. Except as otherwise provided herein, Grantee shall indemnify, hold harmless, release and defend Grantor, its officers, agents and employees from and against any and all lawsuits, claims, actions, demands, damages, disability, losses, expenses including attorney's fees and other defense costs or liabilities of any nature that may be asserted by any Person or entity, including Grantee, from any cause whatsoever, including another's concurrent negligence, arising out of or in any way connected with the aforesaid operations, the exercise of the Franchise renewed pursuant to this Agreement, and/or the activities of Grantee, its subcontractor, employees and agents hereunder. Grantee shall be solely 10 FRANCHISE AGREEMENT—March 6, 2000 responsible and save Grantor harmless from all matters relative to payment of Grantee's employees including compliance with Social Security, withholdings, etc. B. This indemnification obligation is not limited in any way by a limitation of the amount or type of damages or compensation payable by or for Grantee under Workers' Compensation, disability or other employee benefit acts, acceptance of insurance certificates required under this Agreement, or the terms, applicability or limitations of any insurance held by Grantee. C. Grantor does not, and shall not, waive any rights against Grantee which it may have by reason of this indemnification, because of the acceptance by Grantor, or the deposit with Grantor by Grantee, of any of the insurance policies described in this Agreement. D. This indemnification by Grantee shall apply to all damages and claims for damages of any kind suffered by reason of any of the aforesaid operations referred to in this Section, regardless of whether or not such insurance policies shall have been determined to be applicable to any such damages or claims for damages. E. Grantee shall not be required to indemnify Grantor for damages arising solely from the negligence or malfeasance of the Grantor or its officials, boards, commissions, agents, or employees. Grantor shall hold Grantee harmless for any damage resulting from any such acts of the Grantor or its officials, boards, commissions, agents, or employees in utilizing any PEG access channels, equipment, or facilities and for any such acts committed by Grantor in connection 11 FRANCHISE AGREEMENT—March 6, 2000 with work performed by Grantor and permitted by this Agreement, on or adjacent to the Cable System. 3.5 Grantee's Insurance. A. Grantee shall not commence or continue any Cable System reconstruction work or permit any subcontractor to commence or continue work until both shall have obtained or caused to be obtained all insurance required under this Section. Said insurance shall be maintained in full force and effect until the completion of reconstruction, and approval thereof by the Grantor. B. Grantee shall maintain broadcaster's liability coverage for loss or damage arising out of publications or utterances in the course of or related to advertising, broadcasting, telecasting, or other communication activities conducted by or on behalf of Grantee with minimum limits of one million dollars ($1,000,000) as the single limit coverage. C. Grantee shall maintain automobile liability insurance covering all owned, hired, and non-owned vehicles in use by the Grantee, its employees or agents, with personal protection insurance and property protection insurance to comply with the provisions of the Minnesota No-Fault Insurance law, including residual liability insurance with minimum limits of two million dollars($2,000,000) as the combined single limit for each occurrence for bodily injury, personal injury and property damage. 3.6 Workers' Compensation Insurance. Grantee shall obtain and maintain Workers' Compensation Insurance for all Grantee's employees, and in case any work is sublet, Grantee shall require any subcontractor 12 FRANCHISE AGREEMENT—March 6, 2000 similarly to provide Workers' Compensation Insurance for all subcontractor's employees, all in compliance with State laws, and to fully protect the Grantor from any and all claims arising out of occurrences on the work, with minimum limits of one hundred thousand dollars ($100,000) for each accident. Grantee hereby indemnifies Grantor for any damage resulting to it from failure of either Grantee or any subcontractor to take out and maintain such insurance. Grantee shall provide the Grantor with a certificate of insurance indicating Workers' Compensation coverage prior to commencing reconstruction of the system. 3.7 Security Fund and Performance Bond. A. Grantee shall deposit into a bank account established by the Grantor and maintain on deposit through the term of this Agreement, the sum of five thousand dollars ($5,000.00) as security for the faithful performance by it of all the provisions of this Agreement, and compliance with all orders, permits and directions of the Grantor, and the payment by Grantee of any claim, liens and taxes due the Grantor which arise by reason of the construction, operation or maintenance of the Cable System. Interest accrued on this deposit shall remain with the deposit as additional security unless, after periodic review,the Grantor determines, in its sole discretion, to rebate all or part of the accrued interest or to reduce the required amount of such security fund. Provision shall be made to permit the Grantor to withdraw funds from such security fund as and to the extent permitted by this Agreement. Grantee shall not use such security fund for other purposes and shall not assign,pledge or otherwise use this security fund as security for any purpose. 13 FRANCHISE AGREEMENT—March 6,2000 B. The Security fund may be drawn on by Grantor for those purposes specified in Section 3.8 hereof, according to the procedures of Section 3.8, as the case may be, provided that Grantee has received written notice and thirty (30) days after receipt of notice to cure any material violations before any payment. C. Within thirty (30) days after notice to Grantee that any amount has been withdrawn by the Grantee from the security fund pursuant to Section 3.8, Grantee shall deposit a sum of money sufficient to restore such security fund to its original amount. D. Commencing in the third year of the Franchise Grantee shall maintain a one hundred thousand dollar ($100,000.00) performance bond until the System upgrade and/or rebuild provided for in Section 4.1 herein is completed, at which time that portion of the performance bond shall be released. The residual portion of the security fund shall be maintained at a level of ten thousand dollars ($10,000)throughout the term of this Agreement. E. Nothing herein shall be deemed a waiver of the normal permit and bonding requirements made of all contractors working within the Grantor's rights-of-way. F. Maintenance of the requisite security fund and performance bond shall not in any way limit the liability of the Grantee for any failure to fully perform its obligations under this Franchise Agreement. 3.8 Procedure for Remedying Franchise Violations. A. The procedures for remedying Franchise violations or breaches shall be consistent with the procedures of the Master Cable Services Regulatory Ordinance, Ordinance No. . Grantor shall first notify Grantee of the violation in writing 14 FRANCHISE AGREEMENT—March 6, 2000 by personal delivery or registered or certified mail, and demand correction within a reasonable time, which shall not be less than ten (10) days in the case of the failure of the Grantee to pay any sum or other amount due the Grantor under this Agreement or Ordinance No. , and thirty (30) days in all other cases. If Grantee fails to correct the violation within the time prescribed, or if Grantee fails to commence corrective action within the time prescribed and diligently remedy such violation thereafter, the Grantee shall then be given a written notice of not less than twenty (20) days of a public hearing to be held before the City. Said notice shall specify the violations alleged to have occurred. B. At the public hearing, the Council shall hear and consider all relevant evidence, and thereafter render findings and its decision. C. In the event the Grantor finds that Grantee has corrected the violation or has diligently commenced correction of such violation after notice thereof from Grantor or residents and is diligently proceeding to fully remedy such violation, or that no material violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed. In determining whether a violation is material Grantor shall take into consideration the reliability of the evidence of the violation, the nature of the violation and the damage, if any, caused to the Grantor or the residents thereby, whether the violation was chronic, any justifying or mitigating circumstances, and such other matters as the Grantor may deem appropriate. D. In the event the Council finds that a material violation exists and that Grantee has not corrected the same in a satisfactory manner or has not diligently commenced 15 FRANCHISE AGREEMENT—March 6, 2000 correction of such violation, the Council may impose liquidated damages, payable from the security fund, of up to five hundred dollars ($500) per day or per incident, for construction or safety violations or unexcused violations of the System upgrade and/or rebuild completion schedule provided in Section 4.1 herein, and up to one hundred dollars ($100) per day or per incident for all other violations. E. Repeated violations, whether remedied or not, shall result in special notice by the Grantor outlining further remediation requirements. Failure to cure, measured by continuation of notice of violation and opportunity to cure the same type of violation, may lead to franchise revocation action under Article of the Master Cable Services Regulatory Ordinance, as an evasive practice. 3.9 Compliance with Applicable Laws and Ordinances. A. Grantee shall conform to all generally applicable laws, rules and regulations of the United States and the State of Minnesota in the construction and operation of its Cable System and all generally applicable rules and regulations of the FCC. B. Grantee shall not refuse to hire or employ nor bar nor discharge from employment nor discriminate against any person in compensation or terms, conditions or privileges of employment because of age,race, creed, color,national origin or sex. C. Any right, power, protection, privilege or immunity which is provided, granted or imposed on Grantee under or by virtue of the federal Cable Acts or the federal Telecommunications Act of 1996, as may be amended or interpreted from time to time after the date hereof, shall remain inviolate and shall be available to Grantee notwithstanding any contrary provision of this Agreement, and the acceptance of 16 • FRANCHISE AGREEMENT—March 6,2000 the terms and conditions of this Agreement shall not be construed as a waiver or release by Grantee or Grantor of any right, power, protection, privilege, immunity or obligation under the above Acts, the laws or Constitution of the United States or the laws and Constitution of the State of Minnesota. Nothing herein, nor Grantee's acceptance hereof, shall be construed to deny Grantee or Grantor the right to seek administrative and/or judicial review of any action or threatened action under, or arising out of,this Agreement. SECTION 4. SYSTEM CAPABILITIES 4.1 Upgrade. A. System Design Concept. Grantee shall construct and operate two functionally separate networks: the Subscriber Network and the Institutional Network, which includes a regional interconnection link with any cable system operator within the City of Shakopee. The Subscriber distribution plant will consist of a single trunk, single feeder, bi-directional cable in a hub-radial design. The Institutional Network will be a separate,two-way transmission system. Both networks shall be activated capable of transmitting audio, video, and data signals two-way. [This Section will be completed based on Grantee Upgrade Proposal using fiber optic cable and nodes. B. Capacity. Grantee shall construct a MHz Subscriber Network. This network will have a total capacity of_channels. _channels will be initially activated and channels initially programmed. Grantee shall further provide return capability to accommodate two-way services and data services. Grantee shall utilize the existing Institutional Network or upgrade it by dedicating 17 FRANCHISE AGREEMENT—March 6,2000 capacity on the fiber optic Subscriber Network. [This Section will be completed based on Grantee Upgrade Proposal.] C. Two-Way. The upgrade system shall retain and enhance the two-way subscriber communications capabilities of the existing system. D. Review Process. In order to ensure that the upgraded cable system will perform as promised, the parties agree to establish a process that includes: a review of the system design plan; testing of the actual design as part of the earliest phase of construction; preventative testing of system components before and after installation to ensure that performance is adequate; and time lines for performance. E. Geographic Area. The System, both Subscriber and Institutional, shall be designed and constructed to serve the entire area of the City. F. The parties recognize that the system capabilities are a material part of the consideration given by the Grantee in return for the issuance of the franchise renewal. G. Grantee shall provide a two-way connection and service, at no cost, with both the Subscriber Network and the Institutional Network for each of the institutions listed: • Scott County Government/Justice Center • Scott County Workforce Development Center • Shakopee City Hall • Shakopee Public Library • Shakopee Police Department • Shakopee Fire Stations • Shakopee Community Center • Shakopee Public Works Facilities 18 FRANCHISE AGREEMENT—March 6,2000 • Shakopee Public Schools and District Offices • Shakopee Area Catholic School Buildings and Administration • St. Francis Regional Health Center • Minnesota Women's Correctional Facility • All future buildings reflecting expansion,relocation, or new uses similar to the above. • Bell Telephone Company Building—2nd and Sommerville • Scott County Jail Annex/JAF • Scott County Highway Department • Carver County Government/Justice Center • Chaska Police Department • Scott County Extension and Conservation Center • Burnsville Workforce Center H. Cable Drops. A downstream connection for basic cable shall be provided at no cost to the following: • Shakopee High School(present and future) • Shakopee Jr. High School(present and future) • All Public Elementary Schools(present and future) • All Private Elementary Schools(present and future) • Shakopee City Hall • Shakopee School District Service Center • Shakopee Public Library • St. Francis Regional Medical Center • Shakopee Fire Stations • Shakopee Police Station • Shakopee Public Works • Shakopee Public Utilities Office • Scott County Courthouse • All Churches • Minnesota Women's Correctional Institution • Scott County Workforce Center • Shakopee Senior Citizens Highrise • All relocated,Expanded, or New Facilities Providing Similar Services • Shakopee Community Center • Shakopee Community Center Studio (ind. Return) • Stans Museum 19 FRANCHISE AGREEMENT—March 6,2000 I. Additional connections shall be made, within 90 days of request by City, at no cost, when new public buildings, schools, and institutions are built or available to Grantor's systems for connection. 4.2 Performance Review: Performance Monitoring. A. Any time after completion of the upgrade pursuant to Section 4.1 and during the franchise term, the Grantor may commence a review of Grantee's performance under this Agreement. B. The Grantor shall conduct public hearings to provide the Grantee and the public an opportunity to comment on Grantee's performance and other issues considered as part of the review. C. Any revisions to this Agreement that are made as a result of these reviews shall be proposed under the procedures established herein. 4.3 Agreement Modification. A. The Grantor or Grantee may, at any time after the public hearing referenced in Section 4.2B above, provide the other with a full description of any changes it proposes, as well as the reasoning behind the proposal. If the Grantor is the party proposing the changes, Grantee shall develop a thorough analysis of the impact of such changes upon its operations or its Subscribers, taking into consideration the acceptability of such changes and their cost, if any, to its Subscriber rates and Grantee's return on investment. Grantor shall consider all the alternative means for recovering such costs. B. Following its receipt and analysis of a proposal, the Grantor and Grantee shall negotiate the proposed changes in good faith. If the parties are unable to reach 20 FRANCHISE AGREEMENT—March 6, 2000 agreement within ninety (90) days, or whatever longer period may be mutually acceptable, either party may call for arbitration of the disagreement pursuant to the then current arbitration rules of the American Arbitration Association. C. The Grantor and Grantee will indemnify the arbitrator so selected,whose fees will be shared equally by the parties. D. At the completion of the process outlined above, the Grantor may amend this Agreement either: (i) as agreed upon by the parties; or (ii) in the case of an impasse, in accordance with the arbitrator's findings to allow for implementation of the changes, which findings shall take into account the submissions of the parties pursuant to Section above. 4.4 Grantee Cooperation. Grantee shall cooperate in the performance review and this Agreement modification process described in this Agreement. 4.5 Periodic Evaluation, Review and Modification. Grantor and Grantee acknowledge and agree that the field of cable service is a relatively new and rapidly changing one that may experience many regulatory, technical, financial, marketing and legal changes during the term of this Franchise Agreement. Therefore, to provide for the maximum degree of flexibility in this Franchise Agreement, and to help achieve a continued, advanced and modern Cable System, the following evaluation and review provisions will apply: A. The Grantor may request evaluation and review sessions at any time during the term of this Agreement and Grantee shall cooperate in such review and 21 FRANCHISE AGREEMENT—March 6, 2000 evaluation; provided, however, that there shall not be more than one (1) evaluation and review session during any calendar year. B. Topics which may be discussed at any evaluation and review session include, but are not limited to, rates, channel capacity, System performance, programming, cable modem platform access, PEG access, municipal uses of cable, Subscriber complaints, judicial rulings, FCC rulings and any other topics the Grantor or Grantee may deem relevant. C. During an evaluation and review session, Grantee shall fully cooperate with the Grantor and shall provide without cost such reasonable information and documents as the Grantor may reasonably request to perform the evaluation and review. D. If at any time during the evaluation and review, the Grantor reasonably believes there is evidence of inadequate technical performance of the Cable System, the Grantor may require Grantee, at Grantee's expense, to perform appropriate tests and analyses directed toward such suspected technical inadequacies. In making such request, the Grantor shall describe and identify as specifically as possible the nature of the problem and the type of test the Grantor believes to be appropriate. Grantee shall cooperate fully with the Grantor in performing such tests and shall report to the Grantor the results of the tests,which shall include at least: (1) A description of the problem in System performance which precipitated the special tests; (2) The System component tested; (3) The equipment used and procedures employed in testing; 22 FRANCHISE AGREEMENT—March 6,2000 (4) The method, if any, by which the System performance problem was resolved; and (5) Any other information pertinent to said tests and analyses. E. As a result of an evaluation and review session, the Grantor or Grantee may determine that a change in the System or in the terms of the Franchise Agreement may be appropriate. In that event, either the Grantor or the Grantee may propose modifications to the System or the Franchise. Grantee and the Grantor shall, in good faith,review the terms of the proposed change and any proposed amendment to this Franchise Agreement and seek to reach agreement on such change or amendment. F. The Grantor and Grantee shall act in good faith during such negotiations and shall be obligated to agree to the reasonable requests of the other party for changes in the System or amendment to the Franchise Agreement when the change or amendment is not inconsistent with the other terms of the Franchise Agreement, or with applicable law or regulations, and the change or amendment is technically feasible, and economically reasonable and will not result in a material alteration of the rights and duties of the parties under the Franchise Agreement. 4.6 Regional Equity. In the event Grantee or any of its affiliates shall enter into any other cable television franchise with any political subdivision in the Twin Cities metro area in which the Grantee or its affiliate commits to make technological improvements or upgrade not currently available in the Franchise Area, or otherwise provide such improvements or upgrade in any such other political subdivision, Grantee shall notify the Grantor within 23 FRANCHISE AGREEMENT—March 6,2000 ninety (90) days of the effective date of the commitment to make such improvements or upgrade. In the notification, Grantee shall submit a schedule for providing these system enhancements in the Franchise Area within ninety (90) days of the other political subdivision; provided, however, that Grantee is able to recoup its costs in a manner consistent with the terms in the other community(ies). The Grantor shall notify the Grantee within thirty (30) days as to whether it desires the Grantee to undertake such improvements. The Grantor shall grant extensions of the schedule, where necessary,upon receipt of an application by the Grantee which demonstrates good cause for the extension. 4.7 Emergency Alert Capability. Consistent with the FCC's Emergency Alert System rules, Grantee shall provide the System capability for the Grantor to override the audio and superimpose emergency information in a right to left crawl at the bottom of each and every system channel in event of an emergency. 4.8 Hearing and Sight Impaired Capabilities. Upon request Grantee shall provide descriptive audio services and closed captioning capabilities to subscribers. 4.9 Standby Power. Within twelve (12) months of the effective date of this Agreement, Grantee shall provide standby power generating capacity capable of providing at least twelve (12) hours of emergency supply at the cable communications System control center and at all hubs. Grantee shall maintain standby power System supplies throughout the major trunk cable networks capable of providing emergency power within the standard limits of commercially available power supply units. 24 FRANCHISE AGREEMENT—March 6, 2000 4.10 Parental Control Lock. Upon request, Grantee shall provide Subscribers a parental control locking device or digital code that permits inhibiting the video and audio portions of any channels offered by Grantee. Such device shall be provided free of charge unless otherwise required under applicable federal rules. The Grantee may in all instances impose a reasonable security deposit requirement for the use of such devices. 4.11 Status Monitoring. Grantee shall provide an automatic status monitoring System, or a functional equivalent, when the Cable System has been activated for interactive service provided that such status monitoring is technically and economically feasible. 4.12 Technical Standards. Grantee shall have the right to enforce the Federal Communications Commission (FCC) Rules and Regulations, Part 76, Subpart K (Technical Standards), as may be amended from time to time, to the extent permitted by applicable law. The Grantee shall furnish the Grantor a copy of its annual proof of performance filing with the FCC. If the FCC no longer establishes technical standards, this Franchise shall control and the then-current FCC standards shall, at a minimum, be made part of this Agreement and enforceable by the Grantor. 4.13 HDTV/ATV Conversion. Conversion to High Definition Television/Advanced Television (HDTV/ATV) formats shall occur in accordance with applicable law. The Grantee shall provide channel capacity on the Cable System to allow cablecasting of programming in both HDTV/ATV and analog NTSC for a reasonable period of transition. Channel capacity on the Cable 25 FRANCHISE AGREEMENT—March 6, 2000 System for Public, Educational and Governmental (PEG) programming shall be made available during the transition period commensurate with programmer's production use of HDTV/ATV. The Grantee shall fund an upgrade of PEG facilities to HDTV/ATV. 4.14 Right of Inspection. Grantor shall have the right to inspect all construction,reconstruction or installation work performed by Grantee under the provisions of the Franchise and other pertinent provisions of law, to ensure Grantee's compliance and to protect the public health, safety and welfare of Grantor's citizens. Grantee shall have the right to be present at such inspection. SECTION 5. SERVICES AND PROGRAMMING 5.1 Programming. A. Broad Programming Categories. Grantee shall provide or enable the provision of at least the following Initial broad categories of Programming: (1) Educational programming; (2) Twenty-four hour a day news channel; (3) Sports; (4) General entertainment(including movies); (5) Children/family-oriented; (6) Arts; culture and performing arts; (7) Foreign language based on population; (8) Science/documentary; (9) Audio and video weather information; 26 FRANCHISE AGREEMENT—March 6,2000 (10) Programming addressed to diverse ethnic and minority interests in the community; (11) Complete coverage of both Houses of the U.S. Congress, to the extent available; (12) State government affairs programming providing coverage to the extent available of all branches of Minnesota government; (13) Local Origination Programming concerning local and regional issues, events, and affairs of interest to residents; (14) Public access programming; (15) Educational access programming; (16) Governmental access programming; (17) Audio programming(including local radio signals); (18) Program channel guide; (19) Two-way interactive programming; (20) Internet access; and (21) Regional Channel 6. B. Deletion or Reduction of Programming Categories. (1) Grantee shall not delete or change the mix, level, or quality of programming and services, or so limit as to effectively delete any broad category of Programming identified in Section 5.1.A and within its control without the consent of the Grantor as provided for in the Master Cable Services Regulatory Ordinance or as otherwise authorized by law. 27 • FRANCHISE AGREEMENT—March 6, 2000 (2) In the event of a modification proceeding under federal law,the mix, level, and quality of services provided by the Grantee on the effective date of this Franchise shall be deemed the mix and quality of services required under this Franchise throughout its term. 5.2 Leased Commercial Access. Grantee shall offer leased commercial access on reasonable terms and conditions and according to applicable law. Grantee shall publicize the availability of channel capacity and rates to encourage community use. 5.3 Periodic Subscriber Survey. A. Commencing in January 2001, and at least once every year thereafter,the Grantee shall conduct a subscriber survey and provide Grantor the results of subscriber surveys, to the extent it determines that those results are not confidential. Each questionnaire shall be prepared and conducted in good faith so as to present reasonably reliable measures of Subscriber satisfaction with: (1) Signal quality; (2) Response to Subscriber complaints; (3) Billing practices; (4) Program services; (5) Installation practices; and (6) PEG viewing. B. As a part of each annual report, Grantee shall provide the Grantor the results of any survey conducted during the prior year and shall report in writing the steps 28 FRANCHISE AGREEMENT—March 6, 2000 Grantee is taking to implement the findings of the survey, such as correcting problems and expanding services. C. The Grantee may petition the Grantor for waiver of the 5.3A survey requirement under Article of the Master Cable Services Regulatory Ordinance. Upon a showing that two previous and consecutive surveys were substantially equivalent, the Grantor may waive the annual survey requirement for one year. SECTION 6. SUPPORT FOR LOCAL CABLE RELATED NEEDS 6.1 Institutional Network Services. Grantee shall make available upon activation of its Subscriber Network and Institutional Network described in Section 4.1A and B, at least the following services to the institutions outlined in Section 4.1G without charge: A. Broadcasting of City Council, County Board, and School Board meetings to other connected facilities. B. Share satellite broadcasts received at central location with other City, County, and school facilities. C. Teleconferencing between facilities. D. Data transfer. E. Broadcasting educational programs, seminars, and other school events to connect the facilities. F. Interactive video between connected facilities. G. Remote transfer of community affairs programming to connected facilities. H. High speed interne access. 29 FRANCHISE AGREEMENT—March 6, 2000 [This Section will be completed based on Grantee Proposal.] 6.2 Public, Educational and Governmental Access. A. Access Channels. Grantee shall continue to comply with the terms and obligations included in the existing access plan, "Access Support Agreement," as modified, Attachment , made part of this Franchise Agreement, and such other terms and conditions described in this section. Consistent with applicable law, Grantee shall offer the following access channels to each of its Subscribers who receive all or any part of the Cable Services offered on the Cable System. (1) Public Access -- Channel 33 (a) Local Educational Access --Channel 32 (2) Government Access—Channel 34 B. Remote Origination. Signal input points and equipment shall be provided without cost at sites specified by the Grantor for live program origination on the Public, Government, and Educational Access channels. Each Access Channel shall be activated to enable the Grantor and schools to remotely initiate programs and services. C. Additional Access Channels. Whenever any of the specially designed access channels is in use during 80% of the weekdays, Monday to Friday, for 80% of the time during any consecutive three-hour period for six weeks running, and there is demand for use of an additional channel for the same purpose, the Grantee shall then have six months in which to provide a new specially designated access channel for the same purpose. 30 FRANCHISE AGREEMENT—March 6, 2000 D. Unused Channels. If demand for use of the Access Channels does not warrant the use of all such Channels, Public and Educational Access programming may be combined on one or more additional Channels. In no case, however, shall the Government Access Channel or government programming be combined with any other use except by express written permission of the Grantor. To the extent that time is available, Access Channels may also be used for other broadcast and non-broadcast services, provided that such services are subject to immediate displacement if there is demand to use the Channel for its specifically designated purpose. Prior to any such use of Access Channels the Grantor shall request an Administrative hearing pursuant to the requirements of Article 7.19 of the Master Cable Services Regulatory Ordinance. E. Interconnection. Grantee shall cooperate with other cable providers in the Franchise Area and the surrounding metropolitan areas to interconnect its network where feasible in order to facilitate shared access programming on a local and regional basis. The Cable System shall be designed to enable cablecasting of all access or local origination channels throughout the entire Franchise Area without respect to the specific cable operator. Grantee and Grantor shall jointly be responsible for coordination of technical arrangements with other cable service providers in the Franchise Area and the County. The Grantor shall utilize its best efforts to facilitate such interconnection. F. Grantee Support for Local Programming. The Grantee shall provide support for Access according to the Access Support Agreement,Attachment_ (1) Capital Improvement Budget—Attachment 31 FRANCHISE AGREEMENT—March 6, 2000 (2) Access Support Agreement—Attachment G. Access Channel Designations. Grantee acknowledges and agrees that on the Effective Date, the Access Channels activated and used by the Grantor have the following Channel designations: [TO BE INSERTED] H. Public, Educational and Governmental Access Rules and Procedures. The use of Access Channels shall be in accordance with and subject to the rules and procedures adopted by the Grantee and Grantor as authorized under the Cable Act. The non-commercial designation of the Public and Educational Access channels shall not limit the ability of programmers from obtaining sponsorship, underwriting or advertising, provided that all such funding is capped at the actual cost of production. Ad Avail Grants. In order to promote Access Programming, Grantee will provide the Franchise dollars ($ ) worth of ad avails each year at no cost. The ad avails will be on a "run of schedule" basis and shall appear on Channels used by Grantee for local advertising. J. Technical Quality. Grantee shall maintain all Access channels, including interconnected Access channels, at the same level of technical quality and reliability required by this Agreement, the Master Cable Services Regulatory Ordinance and the FCC, for residential cable television subscribers. Grantor will regularly monitor Access Channels on a weekly basis throughout the Cable System to determine the level of picture and sound quality of Access Channels and to ensure that they receive the same level of quality as other Channels. 32 FRANCHISE AGREEMENT—March 6,2000 K. Proof of Performance Testing. To ensure high quality service on Access Channels, proof of performance testing of the Cable System shall be made available to the Grantor throughout the term of this Agreement. Included in such proof of performance testing, a number of Cable System taps will be designated, corresponding to each of the public buildings where programming is originated. L. Change in Technology.. In the event Grantee makes any change in the Cable System and related equipment and facilities or in its signal delivery system,which will have a material adverse impact on the transmission or signal quality of Access Programming, the Grantee shall at its own expense replace equipment as needed and take all necessary steps to ensure, at a minimum, the same level of quality for PEG Access Programming. 6.3 School and Library Cable Modems. Within one year of their commercial availability throughout the Franchise Area, Grantee shall provide cable modems and Internet access service without charge to every state- accredited, public, private and parochial K-12 school, library and government building in the Franchise Area. Such access shall enable each facility to serve up to a minimum number of classrooms/workstations as determined by the Grantor in consultation with the schools, libraries and Grantee. 6.4 Non-Discriminatory Access to Cable Modem System. A. The City and its residents have an increasing need and desire for broadband access to the Internet and other on-line services. B. In order to protect competition and provide for the future needs of the City,unless otherwise required by applicable state or federal law, applicable state or federal 33 FRANCHISE AGREEMENT—March 6, 2000 law, the Grantor reserves any legal right it now has, or may in the future have, to implement an open Internet access requirement to ensure that every Grantee will be required to provide non-discriminatory access to its Cable System to providers of Internet access service irrespective of whether such providers are affiliated with the Grantee. The reservation of this authority by the City does not constitute a waiver of any rights, obligations, claims, defenses or remedies available to a Grantee regarding the imposition of such conditions. Prior to the enactment of any such requirement all Grantees will be provided with reasonable notice and an opportunity to be heard, including the right to present evidence on any findings to be made by the City with respect to the need for such a requirement. C. The foregoing notwithstanding, it is recognized that "open access" and the legal authority of local franchise authorities to compel such access is under review, and that the potential impact on Subscribers is not yet fully known. Accordingly, a Grantee will not be required to provide non-discriminatory access to its cable modem platform until further review by the Grantor and pending clarification of the City's legal authority, as well an evaluation by the City of the merits and policy considerations and related matters affecting a decision to require "open access." 34 FRANCHISE AGREEMENT—March 6, 2000 SECTION 7. REGULATION 7.1 Franchise Regulation. The Franchise renewed under this Agreement shall be subject to regulation by Grantor in accordance with all of the lawful provisions of the Master Cable Services Regulatory Ordinance, Ordinance No. 7.2 Force Majeure. In accordance with the Master Cable Services Regulatory Ordinance, Ordinance No. in the event Grantee's performance of any of the terms, conditions, obligations or requirements of this Franchise Agreement or such Ordinance No. is prevented or impaired due to any cause beyond its reasonable control or not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof, provided Grantee has notified Grantor in writing within thirty (30) days of its discovery of the occurrence of such an event, and provided such notice is reasonable under such circumstances. In the event said notice is not given, then the delay permitted under this Section shall be thirty (30) days from the date of discovery of the event causing said delay. Such causes beyond Grantee's reasonable control or not reasonably foreseeable shall include, but shall not be limited to, acts of God, civil emergencies and labor unrest or strikes, untimely delivery of equipment, inability of Grantee to obtain, without cost, access to an individual's property, and inability of Grantee to secure all necessary permits to utilize utility poles and conduit so long as Grantee made all reasonable efforts to ensure that required equipment, parts, components, personnel and proprietary activity was ordered, hired, paid for, scheduled, checked, approved and/or facilitated. 35 FRANCHISE AGREEMENT—March 6,2000 IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the date and year first above written. CITY OF SHAKOPEE,MINNESOTA By: Date: ATTEST: , City Clerk (SEAL) TIME WARNER By: (Corporate Seal) Date: STATE OF MINNESOTA ) ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me on , 20_, by ,the of the City of Shakopee, on behalf of the City. Notary Public STATE OF ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me on , 20_, by ,the of Time Warner,on behalf of the company. 36 FRANCHISE AGREEMENT—March 6, 2000 Notary Public 37 • FRANCHISE AGREEMENT—March 6, 2000 EXHIBIT B FRANCHISE FEE PAYMENT WORKSHEET 5% REVENUE SOURCE NUMBER OF GROSS FRANCHISE YTD SUBSCRIBERS REVENUE FEE Installation Basic Service Premium—HBO 1 Premium—HBO 2 Premium—HBO 3 Premium—Cinemax 1 Premium—Cinemax 2 Premium-The Movie Channel Premium—Showtime 1 Premium—Showtime 2 Premium—Showtime 3 Premium—Disney Premium—MSC Premium—Other Pay-Per-View Additional Outlets FM Service Remote Control VCR Late Fees Collection Fees Advertising Shopping Internet Access Subscriber Franchise Fees Other TOTAL FRANCHISE AGREEMENT—March 6, 2000 REVENUE SOURCES INCLUDE: INSTALLATION: Standard Installation Commonly occurring normal installation Additional Outlet Installation on additional sets within a customer's home FM Service Separate installation of FM Service VCR Installation of converter to a VCR Reconnection of Service Reconnection of cable to a customer's address A/B Switch Separate installation of an A/B Switch Relocation Moving an outlet within a customer's home Non-Standard Usually installation of a commercial type of an account Change of Service Charge for upgrading or switching a premium service BASIC SERVICE: Basic Service Revenue derived from basic service Bulk Rates Revenue derived from non-standard billings (i.e.,apt. complex) Reduced Promotional Basic Revenue derived from a discounted basic service PREMIUM SERVICE: All Premium Services Revenue derived from premium service(s). PAY-PER-VIEW All Movie Services Revenue derived from separate pay movie services Events Revenue derived from special events (i.e., concerts, boxing matches,etc.) ADVERTISING: National Revenue generated from a national ad sales representation firm Regional Revenue generated from a regional ad sales representation firm Program Launch Fees/ Revenue from programmers for program launch market support Marketing Support Local Ad Production Revenue generated locally from the production of a locally Ads Production Income Revenue generated from the production of training tapes, studio rentals,personnel fees,or rental income from renting vans or equipment Tape Duplication Revenue generated from duplication of L.O. or Access tapes Cable Guide Revenue generated from selling advertising in our guide Bill Stuffer Revenue generated as a result of providing a bill stuffer to an advertiser FRANCHISE AGREEMENT—March 6, 2000 OTHER: Returned Check Fees Revenue generated from charges on returned checks Pre-wire Cable Purchases Revenue generated from the sale of cable to individuals who pre-wire their ho Antenna Rental Any revenue derived from renting space on one of the towers A/B Switch Revenue generated from sale of an A/B Switch Late Tape Fee Revenue generated from receiving a late fee for in-house tape library Internet Access Revenue generated from Internet Access service as defined in the Agreement Subscriber Franchise Fees Fees collected from subscribers to pay franchise fees. Subscriber PEG Fees Studio Expense Fee Studio and Equipment Maintenance Fees Verified and submitted this day of , 20_ By: Its: FRANCHISE AGREEMENT—March 6, 2000 EXHIBIT C PUBLIC BUILDINGS Note: Buildings not identified on above list may be included by Grantor's notice to Grantee of the building and location. Grantor shall provide a drop within ninety (90) days after receipt of notice. SUMMARY OF PRELIMINARY DRAFT CITY OF SHAKOPEE MASTER CABLE SERVICES REGULATORY ORDINANCE Article 1. Statement of Intent and Purpose To help ensure that local cable operators provide the best possible Cable Service for residents of the City. Article 2. Short Title The title of this ordinance is the Shakopee Master Cable Services Regulatory Ordinance. Article 3. Definitions This article establishes definitions for terms used throughout the Ordinance and individual franchise agreements granted pursuant to the Ordinance. Article 4. Franchise Requirements 4.1 It is unlawful to operate a cable system without a franchise. 4.2 Franchises granted pursuant to the Ordinance are non-exclusive. 4.3 It is the City's policy to grant franchises on terms that are non-discriminatory and competitively neutral. 4.4 The Franchise Area shall be the entire territorial area of the City. 4.5 A Franchise Agreement may provide for a term of up to 15 years. 4.6 This ordinance applies to all franchises granted or renewed after the effective date of this ordinance. To the extent permitted by applicable federal or state law, the ordinance shall apply to all existing Franchise Agreements,to the extent not inconsistent with terms of any such Franchise Agreement. 4.7 City reserves every right and power that is required to be reserved by another ordinance or under another franchise. 4.8 Every grantee shall agree to the terms and conditions of a franchise agreement as negotiated between the City and the grantee. Every franchise agreement shall provide that the grantee agrees to comply with and incorporate all provisions of the Master Ordinance. 1 4.9 Initial franchise applications shall be accompanied by nonrefundable fee. The application shall contain: Statement of proposed franchise area;Resume of applicant,including the legal, technical and financial qualifications of applicant; list of partners or percentage of stock owned or controlled by each shareholder; name and address of any parent or subsidiary of applicant; current financial statement verified by a CPA audit or otherwise certified to be true;proposed construction and service schedule;and any additional information required by City. 4.10 The City Manager shall prepare a report and make recommendations respecting such application to the City Council. A public hearing may be held prior to any initial franchise grant. The City will be compensated for its costs of reviewing and negotiating an initial application. 4.11 Franchise renewals will be in accordance with applicable law. 4.12 The City may issue a franchise in an area where another grantee is operating, and may consider the potential impact of an additional franchise. This public hearing may be held simultaneously with the hearing on the grantee's franchise agreement. The City shall consider the following issues:the positive or negative impact of an additional franchise;the ability and willingness of the applicant to provide cable services to the entire franchise area currently served;the amount of time it will take the applicant to complete construction and activate service; whether the applicant can complete service in a timely manner;applicant's financial capabilities; quality and technical reliability of proposed system; applicant's experience in construction and operation of cable television system; capacity of the rights-of-way to accommodate an additional cable system;likelihood and ability of applicant to continue to provide cable service;and such other information deemed appropriate by City. 4.13 The City may issue a permit to allow another party to traverse a portion of the grantee's franchise area to provide service outside the City. 4.14 It is the desire of the City to be a communications friendly city that encourages the development of competitive advanced communications capabilities for the benefit of all its citizens. Therefore the regulatory ordinances and franchises should not impede or restrict competition, but are intended to provide uniform and consistent requirements. The City Manager is authorized to undertake an ongoing evaluation of changing technologies and applicable laws and submit a report regarding the impact of this Ordinance. Article 5. Design Provisions 5.1 Every Grantee will offer service that meets the current and future needs of the City. The Franchise Agreement will include a description of the design and capabilities of the System based on the Operator's proposal and shall describe how the System will meet current and future needs. The Franchise Agreement will provide for periodic reviews. 5.2 Service shall be provided in accordance with the schedules and line extension policies in the 2 applicable franchise agreement. 5.3 Every Grantee will provide installation of at least one cable drop and one outlet,and provide monthly basic cable service without charge to public buildings specified in the franchise agreement. 5.4 The City shall be authorized to utilize the Grantee's poles,ducts and conduits to the extent that such installation and maintenance does not interfere with operations of a Grantee. 5.5 Every Grantee will upgrade its System if required in the Franchise Agreement. 5.6 The City reserves the right to implement an"open access"requirement to ensure that Grantee will be required to provide non-discriminatory access to its Cable System to Internet Access Service providers. However, Grantee will not be required to provide such access until further legal review and evaluation by the City of the merits and policy considerations related to this issue. Article 6. Institutional Network and Public,Educational and Government Access 6.1 Every Grantee will, to the extent provided in its Franchise Agreement, make available capacity from its network or dedicated fibers, or provide other support for an Institutional Network for governmental and educational use. Every Grantee will also provide channels, bandwidth capacity,service and funding for separate PEG access channels as specified in its Franchise Agreement. Every Grantee shall make a good faith effort to negotiate with other cable providers to interconnect its network to facilitate shared access programming. The City may designate a Community Access Corporation to administer one or more of the Access Channels. 6.2 Proof of performance testing shall be made available to ensure high quality on the Institutional Network and the PEG access channels. Article 7. Technical Standards and Customer Service Practices 7.1 Grantee shall comply with these standards,as well as any stricter federal,state or local laws or regulations. Grantee shall maintain equipment and keep records to verify compliance. 7.2 Grantee shall comply with FCC technical standards in operation of its System. 7.3 System tests will comply with FCC specifications. Tests, results, and Grantee's corrective actions shall be made available and may be witnessed by the City. 7.4 Every Grantee will provide emergency alert override capabilities consistent with FCC rules. 7.5 Every Grantee will provide programming from each broad programming category listed in its Franchise Agreement. Any changes to channel lineup must be compliance with notice 3 requirements of federal law. City may require Grantee to conduct programming surveys at Grantee's sole expense. 7.6 Every Grantee will maintain a customer service office in City,open no less than nine hours per day on weekdays including some evening hours, and four hours on Saturday. Every Grantee shall maintain a local telephone line that is available 24 hours a day, seven days a week. This section also establishes telephone response standards which must be met 95%of the time. Grantee is encouraged to maintain a home page on the Internet. 7.7 This section establishes service call and installation standards which must be met 95%of the time. 7.8 This section addresses Grantee's responsibilities to respond to service interruption calls.For example,repairs and Grantee will begin working on service interruptions and outages within a reasonable timeframe but in no event later than 24 hours.Credits shall be provided for one day's service for each service interruption exceeding four hours in a 24-hour period. Technicians will be available 24 hours a day, seven days a week, including weekends and holidays. 7.9 Grantee will provide following information at least annually,at any time upon request,and at least 30 days prior to making significant changes: • Product and services offered • Prices and options for programming services • Installation and maintenance policies • Instructions on how to use Services • Instructions on how to place a service call • Channel positions • Billing and complaint procedures Subscribers will be given 30 days advance notice of any changes in rates, programming services or channel positions if the change is within Grantee's control. However, Grantee shall not be required to provide prior notice of any rate change that is a result of a regulatory fee. 7.10 The City and the Grantee will maintain written records of all complaints made to them and the resolution of such complaints. 7.11 Every Grantee will make available for a reasonable charge lockout device for blocking video and audio portions of programming. 7.12 The Franchise Agreement will require periodic subscriber surveys to assess cable-related needs of the City as well as procedures for implementing changes identified through such survey. 4 7.13 No Grantee may discriminate in the build-out of its System to a particular area of the City or provision of Service to individual or groups of residents on the basis of race,creed,religion or economic condition. Grantee will serve all areas of the City with populations of at least 30 dwelling units per cable mile, including areas annexed subsequent to the grant of a Franchise. This section describes procedures for extension of service to new area. 7.14 City may require the Grantee to provide reports of compliance with these customer service requirements. 7.15 Grantee will provide the City one service outlet that will receive without charge all basic and expanded basic programming provided by Grantee to allow the City to monitor the use of the cable system for compliance with FCC technical standards, this ordinance, and other applicable local, state,and federal law. Article 8. Construction Standards 8.1 Grantee will obtain all necessary permits and licenses prior to construction in the City. Grantee will also comply with all applicable laws related to the construction,maintenance and operation of the cable television system. 8.2 Grantee will comply with all building, electrical, and zoning codes in effect in the City. Grantee will comply with laws and construction standards of the State of Minnesota,OSHA, the National Electrical Safety Code,National Electrical Code, and FCC, as well as other applicable laws and regulations. 8.3 Grantee's constructions and operations will be conducted as to cause minimum interference with rights and reasonable convenience of the public and any affected property owners. The City may require removal of lines from City rights of way if such interference occurs. 8.4 Grantee will promptly repair and restore any City or private property it damages. 8.5 Grantee shall not erect any pole on or along any public rights-of-way in an existing aerial utility system without advance written City approval. 8.6 City work in its Rights-of-Ways shall be done insofar as practicable,in such manner as not to obstruct Grantee's cable system. If City determines that Grantee's property will interfere with City work in the Rights-of-Ways, then City may require Grantee to remove its property, at Grantee's expense. 8.7 Grantee will place its facilities underground in those areas of the City where cable system facilities are currently placed underground. Grantee may place its facilities above ground in those areas where either telephone or electrical lines are above ground. When both telephone and electrical lines are placed underground, Grantee will likewise place its cable system facilities underground. 5 8.8 City shall not be responsible for any cuts or damage to buried cable facilities that are not clearly marked as such or cannot be located through the Minnesota "One Call" service. Grantee shall provide detailed strand and trench maps in paper and electronic format. Grantee shall provide telephone contact number for City to call in emergency situations requiring immediate response. 8.9 Grantee shall compensate the City or any private owner of damage to trees proximately caused by Grantee's negligent conduct. Except in emergency situations, Grantee will provide 10 days advance notice of its intent to trim or cut trees located on public streets. 8.10 Grantee shall temporarily move its cable system facilities to permit the moving of large objects upon request of City or any other person holding a City or state-issued building permit. 8.11 City may require Grantee to provide names and business addresses of its subcontractors. All provisions of this Ordinance apply to any subcontractors. 8.12 The ordinance does not relieve any person from liability for failure to exercise reasonable care to avoid injuring Grantee's facilities while performing any utility work in the rights-of-way. Article 9. Operation and Maintenance 9.1 City has right to inspect all of Grantee's books and records that relate to operation of cable system. Grantee is required to maintain such documents five years. 9.2 Copies of all communications with regulatory agencies will be made available to City. 9.3 Grantee shall provide annual reports showing:Gross Revenues;List of officers,directors and other management personnel; Current billing practices and charges; Current Subscriber Service contract;and Annual stockholder reports.The City shall have authority to conduct an audit of the books and records upon 20 calendar days notice. 9.4 City may require Grantee to prepare and furnish additional reports. 9.5 All lines, equipment in right-of-way and private property of City shall at all times be kept and maintained in a safe and suitable condition and in good order and repair. Upon completion of any construction, upgrade or rebuild, Grantee shall provide a copy of all strand-and-trench maps. 9.6 Grantee's rules, regulations, terms and conditions governing its business shall not be in conflict with this Ordinance. Grantee shall give City any subscriber contract form it uses. Article 10. General Financial and Insurance Provisions 6 10.1 As compensation for use of City rights-of-ways, Grantee shall pay franchise fee of 5%of Gross Revenues. 10.2 Grantee shall be required to maintain a Security Fund with the City in amount set forth in Franchise Agreement. 10.3 This section establishes a penalties procedure. City will give Grantee 20 days notice of failure to pay any sum due. City will give Grantee 30 days notice of other franchise or ordinance violations. If Grantee fails to take corrective action within time prescribed, Grantee will be given written notice of a public hearing to be held before the City Council. At the public hearing,the Council shall hear and consider all relevant evidence and thereafter make a finding and decision. If Council finds that a violation occurred,the City may impose liquidated damages from the Security Fund as provided in the Franchise Agreement. This shall be City's exclusive remedy for 60 days; after which, City may pursue other available remedies. Repeated violations may be evidence of an evasive practice and may lead to revocation under Article 11. 10.4 Grantee shall maintain bonds and insurance as required in Franchise Agreement. Article 11. Revocation 11.1 Grounds for revocation: Substantial violation of any material provision of this Ordinance or Franchise Agreement;Grantee attempts to evade such provisions;Grantee practices fraud or deceit upon the City; or Grantee becomes insolvent or bankrupt. 11.2 Sets out procedures for revocation hearing. Upon revocation,Grantee shall have 60 days to appeal to a court of competent jurisdiction. During appeal,the Franchise Agreement remains in force. Article 12. Foreclosure,Receivership and Abandonment 12.1 Foreclosures or other judicial sales of the System shall be treated as notice of change of control. 12.2 City shall have right to cancel a Franchise Agreement 120 days after appointment of receiver or trustee to take over the business of a Grantee. Article 13. Purchase of System 13.1 City has right of first refusal of any bona fide offer to purchase the System. 13.2 City may,upon payment of fair valuation,take over the property of Grantee,if:Franchise is revoked; Franchise expires; or city terminates Franchise pursuant to the Ordinance or Franchise Agreement. 7 Article 14. Sale or Transfer 14.1 No Grantee shall sell or transfer any part of interest or control of a Franchise or Cable System without prior consent of the City. City may require Grantee to pay all costs incurred in connection with such sale or transfer. Article 15. Rights of Individuals Protected 15.1 No Grantee shall deny Service, access or otherwise discriminate on basis of race, color, religion,national origin, sex,disability or age. 15.2 Grantee shall comply with federal subscriber privacy requirements. Article 16. Miscellaneous Provisions 16.1 City reserves right to regulate rates for Basic Cable Service and any other services to extent permitted by federal and state law. 16.2 Upon expiration or revocation of franchise,City shall have right to permit/require Grantee to continue operations for period not to exceed six months. 16.3 City or its designee is responsible for administration of this Ordinance and all Franchise Agreements. 16.4 The City's failure to enforce prompt compliance does not relieve Grantee of its obligations. 16.5 The parties consent to jurisdiction of the courts sitting in Minnesota. 16.6 If any material Section of the Ordinance or Franchise Agreement is found void or invalid, then such provision shall be considered a separate part of this Ordinance,and to the extent possible,such holding shall not affect the validity and enforceability of all other provisions. 16.7 All notices required to be published shall published in the official newspaper of the City. Grantee shall pay publication costs. 8 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 PRELIMINARY DISCUSSION DRAFT CITY OF SHAKOPEE, MINNESOTA MASTER CABLE SERVICES REGULATORY ORDINANCE MASTER CABLE SERVICES REGULATORY ORDINANCE-March 1,2000 TABLE OF CONTENTS Page ARTICLE 1. STATEMENT OF INTENT AND PURPOSE 1 1.1 Statement of Intent and Purpose. 1 ARTICLE 2. SHORT TITLE 2 ARTICLE 3. DEFINITIONS 2 3.1 "Basic Cable Service" 2 3.2 "Cable Act" 2 3.3 "Cable Internet Service" 3 3.4 "Cable Service"or"Service" 3 3.5 "Cable Television System"or"Cable System" 3 3.6 "Capital Contribution" 4 3.7 "Capital Costs" 4 3.8 "Channel" 4 3.9 "City" 4 3.10 "Class IV Cable Communications Channel" 4 3.11 "Community Access Corporation"or"CAC" 4 3.12 "Complaint" 4 3.13 "Converter" 5 3.14 "Council" 5 3.15 "Direct Incremental Costs" 5 3.16 "Drop" 5 3.17 "Educational Access Channels" 5 3.18 "Effective Date" 5 3.19 "FCC" 5 3.20 "Franchise" 5 3.21 "Franchise Agreement" 6 3.22 "Franchise Area" 6 3.23 "Franchise Fee" 6 3.24 "Government Access Channels" 6 3.25 "Grantee" 7 3.26 "Grantor" 7 3.27 "Gross Revenues" 7 3.28 "Incumbent Grantee" 8 3.29 "Institutional Network"or"I-Net" 8 3.30 "Institutional Network Services" 8 3.31 "Lockout Device" 8 MASTER CABLE SERVICES REGULATORY ORDINANCE-March 1,2000 3.32 "Municipal Telecommunications Consent Fee" 9 3.33 "Non-Commercial" 9 3.34 "Normal Business Hours" 9 3.35 "Normal Operating Conditions" 9 3.36 "Other Programming Service" 9 3.37 "Person" 9 3.38 "Public Access Channels" 10 3.39 "Resident" 10 3.40 "Right-of-Way" 10 3.41 "Service Interruption" 10 3.42 "Standard Installation" 10 3.43 "Subscriber" 10 3.44 "System" 11 ARTICLE 4. FRANCHISE REQUIREMENTS 11 4.1 Unlawful to Operate Without a Franchise. 11 4.2 Franchises Non-Exclusive. 11 4.3 Franchises Non-Discriminatory. 11 4.4 Franchise Territory 12 4.5 Term of the Franchise. 12 4.6 Federal, State, and City Jurisdiction. 12 4.7 Rights Reserved To Grantor. 14 4.8 Franchise Agreement. 14 4.9 Initial Franchise Applications. 15 4.10 Consideration of Initial Applications. 17 4.11 Franchise Renewal. 17 4.12 Grant of Additional Franchise and Competing Service. 18 4.13 Permits for Non-Franchised Entities 20 4.14 Review for Competition 20 ARTICLE 5. DESIGN PROVISIONS 21 5.1 System Design. 21 5.2 The System 22 5.3 Drops to Public Buildings. 22 5.4 Use of Grantee Facilities 23 5.5 Upgrade of System 23 5.6 Non-Discriminatory Access To Cable System. 23 ARTICLE 6. INSTITUTIONAL NETWORK,AND PUBLIC EDUCATIONAL AND GOVERNMENTAL ACCESS OR PEG ACCESS 24 6.1 Institutional Network,Access Channels 24 6.2 Proof of Performance Testing. 25 • ii I MASTER CABLE SERVICES REGULATORY ORDINANCE-March 1,2000 I ARTICLE 7. TECHNICAL STANDARDS AND CUSTOMER SERVICE PRACTICES 26 7.1 General Technical Standards and Customer Service Practices 26 7.2 Technical Standards. 26 7.3 Test and Compliance Procedure. 27 7.4 Emergency Requirements. 27 7.5 Programming Decisions 27 7.6 Cable System Office Hours and Telephone Availability 28 7.7 Service Calls and Installations. 29 7.8 Repairs and Interruptions. 3030 7.9 Communications Between Grantees and Subscribers 32 7.10 Complaint Log. 7.11 Parental Control 32 332 7.12 Periodic Subscriber Survey. _ 7.13 Service Area. 3 333 7.14 Customer Service Reporting Requirements. 6 37 7.15 City Monitoring. ARTICLE 8. CONSTRUCTION STANDARDS 37 8.1 Right-of-Way Construction. 37 387 8.2 Compliance with Laws. 38 8.3 Minimum Interference. 39 8.4 Repair of Property. 39 8.5 Erection of Poles. 39 8.6 Reservations of Street Rights 8.7 Underground Installation. 49 410 8.8 Conduit 41 8.9 Clearing Poles and Cables. 42 8.10 Moving Facilities. 42 8.11 Work Performed by Others. 42 8.12 Duty to Grantee ARTICLE 9. OPERATION AND MAINTENANCE 43 9.1 Open Books and Records. 4343 9.2 Communications with Regulatory Agencies. 44 9.3 Annual Reports. 45 9.4 Additional Reports. 45 9.5 Strand-and-Trench Maps 45 9.6 Service Contract and Subscriber Information. iii MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 ARTICLE 10. GENERAL FINANCIAL AND INSURANCE PROVISIONS 46 10.1 Franchise Fee. 46 10.2 Security Fund. 47 10.3 Penalties Procedure. 48 10.4 Bonds,Indemnification, and Insurance 50 ARTICLE 11. REVOCATION 50 11.1 Grounds for Revocation. 50 11.2 Procedure. 50 ARTICLE 12. FORECLOSURE,RECEIVERSHIP AND ABANDONMENT 51 12.1 Foreclosure 51 12.2 Receivership - 52 ARTICLE 13. PURCHASE OF SYSTEM 52 13.1 Grantor's Right to Purchase System upon Receipt By Grantee of a Bona Fide Offer. 52 13.2 Purchase By Grantor Upon Termination of Franchise Term or Revocation of Franchise. 53 ARTICLE 14. SALE OR TRANSFER 54 14.1 Sale or Transfer of Franchise. 54 ARTICLE 15. RIGHTS OF INDIVIDUALS PROTECTED 55 15.1 Discriminatory Practices Prohibited. 55 15.2 Subscriber Privacy. 56 ARTICLE 16. MISCELLANEOUS PROVISIONS 56 16.1 Rate Regulation 56 16.2 Rights Reserved to Grantor 56 16.3 Administration of Franchise. 57 16.4 Non-Enforcement by the City. 57 16.5 Governing Law and Choice of Forum. 57 16.6 Severability. 57 16.7 Publication of Notices. 58 iv MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 ORDINANCE NO. ARTICLE 1. STATEMENT OF INTENT AND PURPOSE 1.1 Statement of Intent and Purpose. A. The City of Shakopee, Minnesota, pursuant to applicable federal and State law, is authorized to grant one or more non-exclusive Franchises to construct, operate, maintain,and reconstruct Cable Systems within the City. B. The City Council of Shakopee finds that Cable Service has become an integral part of its citizens' lives, and that evolving Cable Systems have the potential to play an even more dramatic role in the future, providing great benefits and advanced capabilities to the City. At the same time,the Council further finds that the public convenience, safety, and general welfare can best be served by establishing regulatory powers that are vested in the City or such Persons as the City designates. C. In order to ensure that the City and its Residents receive state-of-the-art Cable Services and capabilities as this technology further evolves, all Franchises granted pursuant to this Ordinance will be subject to periodic review and modifications to keep current with changing law, technology, and Services. It is the intent of this Ordinance to help ensure that local cable operators provide the best possible Cable Service to Residents of the City and any Franchises issued pursuant to this Ordinance shall be deemed to include this finding as an integral part thereof. D. The Council further fmds that on-going industry consolidation could result in less local accountability, and that therefore stringent customer service standards, 1 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 including liquidated damage provisions, may be the only practical means of ensuring compliance and approximating the costs of Franchise Agreement non-compliance to the City and its Residents. ARTICLE 2. SHORT TITLE This Ordinance shall be known and may be cited as the "City of Shakopee Master Cable Services Regulatory Ordinance." ARTICLE 3. DEFINITIONS For the purpose of this Ordinance, 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 tense,words in the plural number include the singular number, and words in the singular number include the plural number. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning. 3.1 "Basic Cable Service" means any Cable Service tier that includes the lawful retransmission of local television broadcast signals and any Public, Educational, and Governmental Access programming required by this Ordinance or a Franchise Agreement to be carried on the basic tier. Basic Cable Service as defined herein shall be consistent with 47 U.S.C. § 543(b)(7)(1997). 3.2 "Cable Act" means the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, (codified at 47 U.S.C. §§ 521-611 (1982 & Supp. V. 1987) as amended by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, and 2 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 the Telecommunications Act of 1996, Pub. L. No. 104-104 (1996) as may, from time to time, be amended. 3.3 "Cable Internet Service" means any Cable Service offered by a Grantee whereby Persons receive access to the Internet through the Cable System. 3.4 "Cable Service"or"Service"means: A. The one-way transmission to subscribers of (i) video programming, (ii) other programming service; or (iii) other Services agreed to in a Franchise Agreement unless lawfully determined not to be a Cable Service. B. Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service; and C. For purposes of this Ordinance, unless determined otherwise under applicable federal law, Cable Internet Service shall be considered Cable Service. 3.5 "Cable Television System" or "Cable System" means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide Cable Service to multiple Subscribers within the Franchise Area,but such term does not include: A. A facility that serves only to retransmit the television signals of one or more television broadcast stations; B. A facility that serves Subscribers without using any public Right-of-Way; or C. A facility of a common carrier which is subject, in whole or in part, to the provisions of 47 U.S.C. §§ 201-226, except that such facility shall be considered a Cable System to the extent such facility, whether on a common carrier basis or 3 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 otherwise, is used in the transmission of video programming directly to Subscribers. 3.6 "Capital Contribution" means a contribution provided by a Grantee as determined in a Franchise Agreement that may at the City's discretion be utilized for the Capital Costs of the municipal access channel facilities, or to help defray the costs of an I-Net. 3.7 "Capital Costs" means costs associated with the purchase of assets, products or other resources that are designed to provide Service for more than one year. 3.8 "Channel" means a portion of the electromagnetic spectrum [or fiber optic capacity] that is capable of carrying one standard six (6) megahertz video signal, in either analog or digital form. Consistent with future changes in technology and/or applicable law, the parties may mutually agree to a different definition in an individual Franchise Agreement. 3.9 "City"means the City of Shakopee, Minnesota. 3.10 "Class IV Cable Communications Channel" means a signaling path provided by a Cable System to transmit signals of any type from a Subscriber terminal to another point in the System. 3.11 "Community Access Corporation" or "CAC" means a non-profit Access Corporation serving the City, its assignees or delegees, or any other entity designated by the Grantor whose duties shall include the financing, management, and programming of Public and Educational Access, and whatever other duties with respect to the PEG Access Channels that the Grantor from time to time may delegate. 3.12 "Complaint" means any oral, written or electronic inquiry, allegation, or assertion, made by a Person regarding Service. 4 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 3.13 "Converter" means an electronic device that converts signals to a frequency not susceptible to interference within the television receiver of a Subscriber and, through the use of an appropriate Channel selector, permits a Subscriber to view all authorized Subscriber signals delivered at designated converter dial locations. 3.14 "Council"means the City Council of Shakopee,Minnesota. 3.15 "Direct Incremental Costs" means the costs actually incurred by Grantee in meeting an obligation under its Franchise which Grantee would not otherwise have incurred in order to either operate and conduct the business of its Cable System or meet another obligation of the Franchise. 3.16 "Drop" means the cable or cables that connect users of the System to the distribution system in order to receive Service. 3.17 `Educational Access Channels" means Channels specially designated for Non- Commercial educational access programming use. 3.18 "Effective Date" means the date a Franchise becomes effective in accordance with the Franchise and the rules and procedures of the City. 3.19 "FCC"means the Federal Communications Commission or a designated representative. 3.20 "Franchise" means the rights and obligations extended by the City to a Person to own, lease, construct, maintain, or operate a Cable System in the Right-of-Way within the Franchise Area for the purpose of providing Cable Services. Any such authorization, in whatever form granted, shall not mean or include: (i) any other permit or authorization required for the privilege of transacting and carrying on a business within the City required by the ordinances and laws of the City; (ii) any permit, agreement, or 5 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 authorization required in connection with operations in the Right-of-Way including, without limitation, permits and agreements for placing devices on or in poles, conduits, or other structures, whether owned by the City or a private entity, or for excavating or performing other work in or along the Right-of-Way. 3.21 "Franchise Agreement"means a Franchise granted pursuant to this Ordinance. 3.22 "Franchise Area"means the entire geographic area within the City as it is now constituted or may in the future be constituted. 3.23 "Franchise Fee" means any tax, fee, or assessment of any kind imposed by the City or other governmental entity on a Grantee solely because of its status and activities as such. The term "Franchise Fee" does not include: (i) any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their Services but not including a tax, fee, or assessment that is unduly discriminatory against cable operators or cable Subscribers); (ii) capital costs that are required by a Franchise Agreement to be incurred by a Grantee for PEG Access equipment and facilities; (iii) costs associated with the construction and operation of an I- Net; (iv) requirements or charges incidental to the award or enforcement of a Franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, compliance audits, penalties, or liquidated damages; or (v) any fee imposed under Title 17 of the United States Code. 3.24 "Government Access Channels" means Channels specially designated for non- commercial governmental access programming use. 6 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 3.25 "Grantee" means a Person who is granted a Franchise or that Person's lawful successors, transferees, or assignees. 3.26 "Grantor"means the City or its delegates. 3.27 "Gross Revenues"means any revenue derived directly or indirectly by a Grantee from the operation of its Cable System to provide Cable Service, within the Franchise Area, including revenues received by its affiliates, subsidiaries, parent, or any other Person, in which a Grantee has a financial interest of five percent(5%)or more,where such revenue in the ordinary course of business should have been paid to Grantee. By way of illustration and not limitation, this definition would include revenue derived from the sale of Cable System advertising time by an Affiliate of Grantee. Gross Revenues shall include but are not limited to,pay cable fees, installation and reconnection fees, Franchise Fees collected from Subscribers, leased channel access fees, Converter rentals, fees for Cable Internet Service (unless it is determined by applicable law that it is not a Cable Service), home shopping revenues, all Cable service lease payments from the Cable System; payments or other consideration received by the Grantee from programmers for carriage of programming on the Cable System and accounted for as revenue under GAAP; and advertising revenues. The term does not include taxes on Services furnished by a Grantee and imposed directly upon any Subscriber or user by federal, state, or local law and collected by Grantee on behalf of such governmental unit, or amounts collected from subscribers for public, educational and government access. Nor does the term include any revenues earned by the Grantee through the provision of telecommunications services as defined under the Telecommunications Act of 1996. 7 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 3.28 "Incumbent Grantee " means a cable operator that has been granted a Franchise by the City prior to the effective date of this Ordinance. 3.29 "Institutional Network" or "I-Net" means capacity, fibers or both, from both within the primary cable network and/or separately constructed networks that are dedicated to municipal users or other governmental and educational users as determined by the City Manager or his/her designee for two-way, broadband communications. The I-Net includes all equipment and maintenance of equipment required to make the capacity available including but not limited to fiber, cable modems, coaxial cable, switching, routing, transmitting and receiving equipment necessary for the use of the network as determined in the individual Franchise Agreement. 3.30 "Institutional Network Services" means the provision of an I-Net by a Grantee to municipal users and other governmental and educational users as determined by the City Manager or his/her designee, pursuant to the terms of a Franchise Agreement for non- commercial applications including but not limited to, two-way dedicated voice, data, video, Internet and telephony channels connecting and interconnecting user facilities; computerized traffic control systems; Supervisory Control and Data Acquisition (SCADA) or automatic meter reading (AMR) systems for municipally-owned utilities; and the interconnection of facilities serving police,fire and other public safety systems.. 3.31 "Lockout Device" means a mechanical or electrical accessory to a Subscriber's terminal that inhibits the video or audio portions of a certain program or certain Channel(s) provided by way of a Cable System. 8 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 3.32 "Municipal Telecommunications Consent Fee" means a fee assessed on a telecommunications provider for the use of the City's Rights-of-Way pursuant to Title , Chapter of the Minnesota Local Government Code, or other applicable law. 3.33 "Non-Commercial"means Channels or programming that are operated on a not-for-profit basis. 3.34 "Normal Business Hours"means those hours during which most similar businesses in the community are open to serve customers. In all cases, Normal Business Hours must include some evening hours,at least one night per week,and some weekend hours. 3.35 "Normal Operating Conditions" means any and all situations or conditions that are ordinarily within the control of a Grantee, including but not limited to, management or corporate decisions; employee conduct; staffing levels; special promotions; pay-per-view events; rate increases; regular peak or seasonal demand periods; electronic and video equipment; maintenance, repair or upgrade of the Cable System, and any associated computer or software systems. Those conditions that are not within the control of a Grantee include, but are not limited to, natural disasters; civil disturbances; power outages; telephone network outages; and severe or unusual weather conditions. 3.36 "Other Programming Service" means information that a Grantee makes available to all Subscribers generally. 3.37 "Person" means any corporation, partnership, proprietorship, individual, organization, governmental entity or any natural person. 9 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 3.38 "Public Access Channels" means Channels specially designated for non-commercial public access programming use. 3.39 "Resident"means any Person residing in the City. 3.40 "Right-of-Way" means each of the following which have been dedicated to the public or are hereafter dedicated to the public and maintained under public authority or by others and located within the City, including without limitation the surface and space within, above and below any real property in which the City has an interest in law or equity, whether held in fee, or other estate or interest, or as a trustee for the public, including,but not limited to any public street, boulevard, road, highway, freeway, lane, alley, court, sidewalk, parkway, swale, river, tunnel, viaduct, bridge, park, or any other place, area, easements, rights-of-way and similar public property and areas, or real property owned by or under the control of the City. 3.41 "Service Interruption"means the loss of picture or sound on one or more Channels on the System, or the degradation of the picture and/or sound quality on such Channels to the extent that the Subscriber is unable to use the signals, regardless of the cause, for any reason whatsoever. 3.42 "Standard Installation"means any Service installation that can be completed using a Drop of one hundred twenty-five (125) feet or less, unless otherwise specified in the Franchise Agreement. 3.43 "Subscriber" means any Person who or which elects to subscribe for any purpose to Cable Service provided by a Grantee by means of, or in connection with, the Cable System, and whose premises or facilities are physically wired and lawfully activated to 10 ', MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 receive Cable Service from Grantee's Cable System, including Persons who receive Cable Service without charge according to the terms of the Franchise Agreement. 3.44 "System" means a Grantee's Cable System operated pursuant to a Franchise Agreement within the Franchise Area. ARTICLE 4. FRANCHISE REQUIREMENTS 4.1 Unlawful to Operate Without a Franchise. It shall be unlawful for any Person to construct, operate or maintain a Cable System or to provide Cable Service in the City without a Franchise. Any such person shall be subject to a fine of$500 per day. The payment of such fine notwithstanding, all such violators shall be subject to all other applicable provisions of this Ordinance, including but not limited to the payment of a Franchise Fee. 4.2 Franchises Non-Exclusive. Any Franchise granted pursuant to this Ordinance shall be nonexclusive. The Grantor specifically reserves the right to grant, at any time, such additional Franchises for a Cable Television System or any component thereof, to any other Person including itself, as it deems appropriate, subject to applicable federal and State law. 4.3 Franchises Non-Discriminatory. In the event the City grants more than one Franchise or similar authorization for the construction, operation, or maintenance of any Cable System to a qualified Person in a Franchise Area, the City's policy shall be to grant the Franchises on terms that are non-discriminatory and competitively neutral, provided that nothing herein shall be 11 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 construed as requiring the use of identical terms or conditions, or limit the enforceability of conditions that are freely negotiated. 4.4 Franchise Territory. Any Franchise shall be valid within the entire Franchise Area. Unless a Franchise Agreement specifically states otherwise, every Franchise shall apply to the entire territorial area of the City. 4.5 Term of the Franchise. A Franchise Agreement shall establish the term of Franchise. A Franchise Agreement may provide for a term of up to fifteen(15)years. 4.6 Federal, State,and City Jurisdiction. A. This Ordinance shall be construed in a manner consistent with all applicable federal and State laws. B. In the event that the federal or State government discontinues preemption in any area of cable communications over which it currently exercises jurisdiction in such manner as to expand rather than limit municipal regulatory authority, Grantor may, if it so elects, adopt rules and regulations in these areas to the extent permitted by law. C. Grantee's rights are subject to the police powers of the City to adopt and enforce ordinances necessary to the health, safety, and welfare of the public. Grantee shall comply with all applicable general laws and ordinances enacted by the City pursuant to that power. 12 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 D. The provisions of this Ordinance shall apply to all Franchises granted or renewed after the effective date of this Ordinance. This Ordinance shall also apply to all existing Franchises, to the extent not inconsistent with the terms of any such Franchise or applicable law. In the event of any conflict between the terms and conditions of a Franchise Agreement and the provisions of this Ordinance, and other generally applicable regulatory ordinances of the City, the specific terms of the Franchise Agreement shall control. A Franchise Agreement (including all of Grantee's particular rights, powers, protections, privileges, immunities and obligations associated therewith as the same exist on the date hereof) shall constitute a legally binding contract between the City and Grantee, and as such, cannot be amended, modified or changed by the City without the consent of Grantee in any manner whatsoever, whether by ordinance, rule, regulation or otherwise, to impose on Grantee more stringent or burdensome requirements or conditions; provided, however, that nothing herein contained shall preclude the City from the proper exercise of its police powers, or its powers of eminent domain. E. In the event of a change in state or federal law which by its terms would require the City to amend this Ordinance, the parties shall modify the existing Franchise in a mutually agreed upon manner. F. Grantee shall not be relieved of its obligation to comply with any of the provisions of this Ordinance or a Franchise Agreement by reason of any failure of the City to enforce prompt compliance. 13 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 4.7 Rights Reserved To Grantor. A. In addition to any rights specifically reserved to Grantor by this Ordinance or a Franchise Agreement, Grantor reserves to itself every right and power that is required to be reserved by a provision of any other ordinance or under any other Franchise. B. Grantor shall have the right to waive any provision of this Ordinance or a Franchise Agreement, except those required by federal or State regulation, if the Grantor determines: (1) that it is in the public interest to do so and (2) that the enforcement of such provision will impose an undue hardship on a Grantee or the Subscribers. To be effective, such waiver shall be evidenced by a statement in writing signed by a duly authorized representative of Grantor. Waiver of any provision in one instance shall not be deemed a waiver of such provision subsequent to such instance,nor be deemed a waiver of any other provision of this Ordinance or a Franchise Agreement unless the statement in its final form approved by the City Council so recites. 4.8 Franchise Agreement. A. Every Grantee shall agree to the terms and provisions of a Franchise Agreement as negotiated between the Grantee and the Grantor. B. In addition to those matters required elsewhere in this Ordinance to be included in the Franchise Agreement, each Franchise Agreement must contain the following express representations by each Grantee: 14 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 (1) Grantee accepts and agrees to all of the provisions of this Ordinance, as it exists as of the effective date of the Grantee's Franchise Agreement, except as set forth in Section 4.6, and any supplementary specifications as to construction, operation, or maintenance of the System which the City may include in the Franchise Agreement. (2) Grantee has examined all of the provisions of this Ordinance and agrees to the terms and conditions herein. (3) Grantee recognizes the right of the City to adopt such additional regulations of general applicability as it shall find necessary in the exercise of its police power. C. Every Franchise Agreement shall contain such further conditions or provisions as may be negotiated between the City and a Grantee,except that no such conditions or provisions shall be such as to conflict with any provisions of state or federal law. In case of any conflict or of any ambiguity between any terms or provisions of a Franchise Agreement and this Ordinance, the provisions of the Franchise Agreement shall control. 4.9 Initial Franchise Applications. Any Person desiring an initial Franchise for a Cable System shall file an application with the City. A reasonable nonrefundable application fee established by the City shall accompany the application. Such application fee shall not be deemed to be "Franchise Fees" within the meaning of Section 622 of the Cable Act (47 U.S.C. § 542), and such payments shall not be deemed to be (i) "payments in kind" or any involuntary payments 15 • MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 chargeable against the compensation to be paid to the City by Grantee, or (ii) part of the compensation to be paid to the City by Grantee pursuant to this Ordinance or a Franchise Agreement. An application for an initial Franchise for a Cable Television System shall contain, where applicable: A. A statement as to the proposed Franchise Area; B. Resume of prior history of applicant, including the legal, technical, and financial expertise of applicant in the cable television field; C. List of the partners, general and limited, of the applicant, if a partnership, or the percentage of stock owned or controlled by each shareholder, if a corporation; D. List of officers, directors, and managing employees of applicant, together with a description of the background of each such Person; E. The names and addresses of any parent or subsidiary of applicant or any other business entity owning or controlling applicant in whole or in part, or owned or controlled in whole or in part by applicant; F. A current financial statement of applicant verified by a CPA audit or otherwise certified to be true, complete, and correct to the reasonable satisfaction of the City; G. Proposed construction and Service schedule; and H. Any additional information that the City may require for the administration of the Franchise. 16 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 4.10 Consideration of Initial Applications. A. Upon receipt of any application and application fee for an initial Franchise, the City Administrator shall prepare a report and make his or her recommendations respecting such application to the City Council. B. A public hearing may be held prior to any initial Franchise grant, at a time and date approved by the Council. Within thirty (30) days after the close of the hearing, the Council shall make a decision based upon the evidence received at the hearing as to whether or not the Franchise(s) should be granted, and, if granted, subject to what conditions. C. All applicants for an initial Franchise grant shall submit an application fee of five thousand dollars ($5,000) to compensate the City for its costs in reviewing, preparing and awarding a Franchise, including the costs of outside consultants. Upon grant of a Franchise the City may request the payment of an additional fee to the extent that the reasonable costs of the franchise review and negotiation process exceed the initial application fee amount. Consistent with the Cable Act, all such fees shall not constitute or be credited towards a Grantee's Franchise Fee obligations. 4.11 Franchise Renewal. Franchise renewals shall be in accordance with applicable law including, but not necessarily limited to, the Cable Communications Policy Act of 1984, as amended. Grantor and a Grantee, by mutual consent, may enter into renewal negotiations at any 17 MASTER CABLE SERVICES REGULATORY ORDNANCE—March 1,2000 time during the term of the Franchise. Franchise renewal may also arise if there are substantial changes to the contractual relationship between the Grantor and the Grantee. 4.12 Grant of Additional Franchise and Competing Service. A. Since competing or overlapping Franchises may have an adverse impact on the public Rights-of-Way, on the quality and availability of Services to the public and may adversely affect an existing operator's ability to continue to provide the Services and facilities it is presently providing under a Franchise, in granting a franchise in an area where another Grantee is operating the City may consider the potential impact which the grant of an additional Franchise may have on the community. This determination may be made simultaneously with the adoption of the Grantee's Franchise Agreement. In considering whether to grant one or more additional Franchises, the City shall specifically consider, and address in a written report or in provisions of the Franchise Agreement,the following issues: (1) The positive and/or negative impact of an additional Franchise on the community. (2) The ability and willingness of the specific applicant in question to provide Cable Services to the entire Franchise Area which is served by the existing cable operator. The purpose of this subsection is to ensure that any competition which may occur among Grantees will be on terms which when taken as a whole do not give a competitive advantage to one Grantee over another. 18 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 (3) The amount of time it will take the applicant to complete construction of the proposed System and activate Service in the entire Franchise Area; and, whether the applicant can complete construction and activation of its System in a timely manner. (4) The fmancial capabilities of the applicant and its guaranteed commitment to make the necessary investment to erect, maintain, and operate the proposed Cable System for the duration of the Franchise term. In order to ensure that any prospective Grantee does have the requisite current fmancial capabilities, the City may request equity and debt financing commitment letters, current audited financial statements, bonds, letters of credit,or other documentation to demonstrate to the City's satisfaction that the requisite funds to construct and operate the proposed System are available. (5) The quality and technical reliability of the proposed System, based upon the applicant's plan of construction and the method of distribution of signals, and the applicant's technical qualifications to construct and operate such System. (6) The experience of the applicant in the erection, maintenance, and operation of a Cable Television System. (7) The capacity of the public Rights-Of-Way to accommodate one or more additional Cable Systems and the potential disruption of those public 19 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 Rights-Of-Way and private property that may occur if one or more additional Franchises are granted. (8) The disruption of existing Cable Service and the potential taa proposed Franchise would adversely affect the Residents of the City. (9) The likelihood and ability of the applicant to continue to provide competing Cable Service to Subscribers within the entire Franchise Area for the duration of the Franchise. (10) Such other information as the City may deem appropriate to be considered prior to granting any competing or overlapping Franchise. 4.13 Permits for Non-Franchised Entities. A. The City may issue a license, easement, or other permit to a person other than the Grantee to permit that person to traverse any portion of the Grantee's Franchise Area within the City in order to provide Service outside, but not within the Such license or easement, absent a grant of a Franchise in accordance will: ,' Ordinance, shall not authorize nor permit said person to provide Cable Serie, any type to any home or place of business within the City nor render any other Service within the City. B. Such license, easement or permit shall require the payment of fee for occupancy of the public Right Of Way to the extent permitted by applicable law. 4.14 Review for Competition. A. The City recognizes that the cable television and telecommunications _ are in a period of convergence and that the technologies and services provided by 20 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 these industries are rapidly changing, and that the Telecommunications Act of 1996 promoted and encouraged competition between and among these formally discrete industries. At this time it is premature to know fully the extent to which there will be changes in law, technology or services that may impact entities that have been or may be granted Franchises or licenses to use the City's Rights-Of- Way. It is the desire of the City to be a communications friendly city, that encourages the development of competitive advanced communications capabilities for the benefit of all its citizens, for this reason the regulatory ordinances and Franchises of the City should not impede or restrict the fair opportunity to compete, but rather are intended to provide uniform and consistent requirements for all similarly situated providers. B. Consistent with the above findings, the City Manager or designate, is authorized to undertake an on-going evaluation and study of these changing and emerging technologies and services,as well as legal requirements relating to them, and upon request by the City, submit a report to the City regarding the impact of this Ordinance and its impact on existing providers within the City and the development of competition. ARTICLE 5. DESIGN PROVISIONS 5.1 System Design. A. Every Grantee shall offer Service that meets the current and future needs of the City. The Franchise Agreement shall incorporate a description of the Grantee's proposal including the general design and capabilities of the System to identify 21 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 for the City how the System will meet the current and future Cable needs of the City. B. Periodic Review. The Franchise Agreement shall include provisions to provide for a "periodic review" between the City and a Grantee to evaluate changes in law, technology, or service, and reasonable procedures for mutually agreed upon modifications to the Franchise Agreement to incorporate changes identified as desirable or necessary as a result of any such periodic review. 5.2 The System. Every System shall pass by every single-family dwelling unit and multiple-family dwelling unit within the Franchise Area in accordance with line extension policies set forth in the applicable Franchise Agreement. Service shall be provided to Subscribers in accordance with the schedules and line extension policies specified in the applicable Franchise Agreement. 5.3 Drops to Public Buildings. A. Every Grantee shall provide installation of at least one (1) cable Drop, and one(1) outlet, provide monthly Basic Cable Service, without charge, to public buildings as specified by the Franchise Agreement, irrespective of the distance of the drop. Specific requirements with respect to such drops shall be included in individual Franchise Agreements. B. All such Cable Service outlets shall not be utilized for commercial purposes. The City shall take reasonable precautions to prevent any use of the Grantee's cable system in any inappropriate manner or that may result in loss or damage to the 22 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 system. Users of such outlets shall hold the Grantee harmless from any and all liability or claims arising out of their use of such outlets, other than for those claims arising out of improper installation or faulty equipment. 5.4 Use of Grantee Facilities. The Franchise Agreement shall incorporate provisions regarding the City's use of a Grantee's poles,ducts and conduits,on mutually agreed upon terms. 5.5 Upgrade of System. Every Grantee shall upgrade its System (herein referred to as the "System Upgrade"), if required, as set forth in its respective Franchise Agreement. 5.6 Non-Discriminatory Access To Cable System. A. The City and its Residents have an increasing need and desire for broadband access to the Internet and other on-line Services. B. In order to protect competition and provide for the future needs of the City,unless otherwise required by applicable state or federal law, the Grantor reserves any legal right it now has, or may in the future have, to implement an "open access" requirement to ensure that a Grantee will be required to provide non-discriminatory access to its Cable System to providers of Internet Access Service, irrespective of whether such providers are affiliated with the Grantee. A Grantee may be required, if legally permissible, to implement "open access" requirements to its Cable System to non-affiliated Internet Access Service providers if the Grantee or its affiliates or subsidiaries under its control determine 23 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 to do so in a similar manner in other Cable Systems owned and operated by the Grantee or its affiliates or subsidiaries under its control. C. The foregoing notwithstanding, it is recognized that "open access" and the legal authority of local franchise authorities to compel such access is under review, and the potential impact on Subscribers is not yet fully known. Accordingly, Grantees will not be required to provide non-discriminatory access to their Cable System until further review by the Grantor and pending clarification of the City's legal authority, as well as an evaluation by the City of the merits and policy considerations related to this issue. By adopting this Ordinance, neither the City nor any Grantee has waived any rights, obligations, claims, defenses or remedies regarding the city's authority to impose such conditions. Prior to the enactment of any such requirement, a Grantee will be provided with reasonable notice and an opportunity to be heard, including the right to present evidence on any findings to be made by the City with respect to the need for such a requirement. ARTICLE 6. INSTITUTIONAL NETWORK,AND PUBLIC EDUCATIONAL AND GOVERNMENTAL ACCESS OR"PEG ACCESS" 6.1 Institutional Network, Access Channels A. Every Grantee shall, consistent with applicable law and enforceable commitments of a Grantee, to the extent provided in its Franchise Agreement, make available capacity from its network or dedicated fibers, or provide other support for an Institutional Network for governmental and educational use. To the extent that a Grantee is obligated to provide such support pursuant to its Franchise Agreement, such obligation will be implemented in a competitively neutral manner, on a per 24 • MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 Subscriber basis with respect to any other Franchises granted after the adoption of this Ordinance. B. Every Grantee shall provide a channel or channels, bandwidth capacity, Service, and funding, for separate Public, Educational and Government Access Channels, as specified in their Franchise Agreement. All such PEG Access Channels shall be available to all Subscribers as part of their Basic Cable Service. Every Grantee shall make a good faith effort to negotiate with other cable providers in the City and the surrounding area to interconnect its network where feasible in order to facilitate any requirements with respect to shared access programming on a local and regional basis. The City reserves the right to negotiate Franchise Agreement provisions with respect to the uniform cablecasting of PEG Access programming throughout the entire City without respect to the specific Cable operator. Oversight and administration of the PEG Access channels shall be set forth in the Franchise Agreement. The City reserves the right to designate a Community Access Corporation or similar entity to administer one or more of the Access Channels. 6.2 Proof of Performance Testing. To ensure high quality Service on the Institutional Network and Access Channels, proof of performance testing throughout the System and on all Channels will be made available to the City throughout the term of a Franchise Agreement. Every Grantee will monitor Access Channels throughout the System to determine the level of technical quality of Access Channels is in conformance with FCC Rules and to ensure that the level of 25 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 technical quality on such Channels is the same as on other Channels. A log of such monitoring shall be maintained by the Grantee, for inspection by the City. In the event that a Complaint is made by a programmer of any PEG Access Channels, the Grantee shall immediately investigate the Complaint and determine whether the Grantee is in compliance with the technical standards set forth in Section 7.2 of this Ordinance. The procedures set forth in Section 7.3 of this Ordinance shall apply with respect to technical testing of Access Channels. ARTICLE 7. TECHNICAL STANDARDS AND CUSTOMER SERVICE PRACTICES 7.1 General Technical Standards and Customer Service Practices A. This Ordinance incorporates technical standards and establishes customer service practices that a Grantee must satisfy. In addition, a Grantee shall satisfy any additional or stricter requirements established by FCC regulations, or other federal, state or local law or regulation that may be adopted or amended from time to time. B. A Grantee shall maintain such equipment and keep such records as are required to enable the Grantor to determine whether the Grantee is in compliance with all standards required by these regulations and other applicable laws. 7.2 Technical Standards. The technical standards used in the operation of a System shall comply, at a minimum, with the technical standards promulgated by the FCC relating-to Cable Systems pursuant to the FCC's rules and regulations and found in Title 47, Sections 76.601 to 76.617, as may be amended or modified from time to time, which regulations are expressly 26 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 incorporated herein by reference. The results of any tests required by the FCC, or a Franchise Agreement shall be made available to the City within thirty (30) days of written request. 7.3 Test and Compliance Procedure. Tests for a System shall be performed periodically in a manner so as to conform with FCC specifications. The tests may be witnessed by representatives of the City and written test reports shall be made available to the City. If any test locations fail to meet the performance standards, the Grantee shall be required to indicate what corrective measures have been taken and shall have the site re-tested. 7.4 Emergency Requirements. Each Grantee must provide emergency alert override capabilities in a manner consistent with the FCC's emergency alert system ("EAS") rules and consistent with any State and/or regional emergency alert system plans adopted in response to the FCC's EAS rules that are applicable to the Franchise Area. 7.5 Programming Decisions. Each Grantee shall provide programming from each of the broad programming categories identified in its Franchise Agreement. All programming decisions remain within the sole discretion of each Grantee provided that each Grantee complies with federal law regarding notice to Grantor and Subscribers prior to any Channel additions, deletions, or realignments, and further subject to the Grantee's signal carriage obligations pursuant to 47 U.S.C. §§ 531-536, as may be amended and subject to the City's rights pursuant to 47 U.S.C. § 545, as may be amended. Grantor may require as part of a Franchise Agreement 27 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 that a Grantee conduct and disclose the results of programming surveys, no more frequently than annually, at the Grantee's sole expense to obtain input on programming decisions from Subscribers in order to ensure that the Grantee meets the City's Cable-related needs and interests. 7.6 Cable System Office Hours and Telephone Availability. A. Every Grantee shall maintain a conveniently located customer service center, which shall include a place where subscribers may pay their bills, pick up and return converter boxes and comparable items and receive information on the Grantee and its services. Such service center shall be open at least during Normal Business Hours, including some evening hours, and at least one night per week and/or some weekend hours. Every Grantee shall also maintain a publicly listed toll-free or local telephone line that is available to Subscribers twenty-four (24) hours a day, seven(7)days a week. B. Every Grantee shall have trained company representatives available to respond to Subscriber telephone inquiries during Normal Business Hours. The term "trained representatives" shall mean employees of the Grantee who have the authority and capability while speaking with a subscriber to, among other things, answer billing questions, and schedule service and installation calls. C. After Normal Business Hours, the telephone access line may be answered by a service or an automated response system, including an answering machine. Inquiries received after Normal Business Hours must be responded to by a trained representative on the next business day. 28 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 D. Under Normal Operating Conditions, telephone answer time by a customer service representative or automated response unit, including wait time, shall not exceed thirty (30) seconds when the connection is made. If a call must be transferred, transfer time shall not exceed thirty (30) seconds. Under Normal Operating Conditions, these standards shall be met no less then ninety percent (90%)of the time,measured on a quarterly basis. E. Under Normal Operating Conditions, Grantee shall establish an inbound telephone system upon which Subscribers shall not receive a busy signal more than three percent(3%)of the time. F. A Grantee will not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply. 7.7 Service Calls and Installations. Under Normal Operating Conditions, each of the following standards must be met no less than ninety-five percent(95%)of the time as measured on a quarterly basis: A. Standard Installations will be performed within seven (7) business days after an order has been placed. Unless the Franchise Agreement specifies otherwise, "standard installations" are those that are located up to 125 feet from the existing distribution system. B. -The appointment window alternatives for installations, Service calls, and other installation activities, will be either a specific time or, within a maximum four(4) hour time block during Normal Business Hours. Grantees may schedule Service 29 for the 'lose of t)scriber must be which 7.8 ill begin iity-four must H lowing q•more 7.9 each of to all MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 (b) Prices and options for programming Services and conditions of subscription to programming and other Services and facilities. (c) Installation and service maintenance policies; (d) Instructions on how to use Services; (e) Channel positions of programming offered on a System; and (I) Billing and Complaint procedures, including the name, address and telephone number of the City. (2) Subscribers will be given thirty(30)days advance notice of any changes in rates, programming Services, or Channel positions, if the change is within the control of the Grantee. All such notice shall be provided in writing by any reasonable means. In addition, every Grantee shall notify Subscribers thirty (30) days in advance of any significant changes in other information required by this section. Notwithstanding the foregoing or any provision of this Ordinance to the contrary, a Grantee shall not be required to provide prior notice of any rate change that is the result of a regulatory fee, Franchise Fee, or any other fee, tax assessment, or change of any kind imposed by any government entity on the transaction between the Grantee and the Subscriber. B. Billing. (1) Bills must be clear, concise, and understandable. Bills must be fully itemized, with itemizations including, but not limited to, Basic and premium Service charges and equipment charges. 31 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 (2) Bills must clearly delineate all activity during the billing period, including optional charges,rebates,and credits. (3) In case of a billing dispute, a Grantee must respond to a written Complaint from a Subscriber within thirty(30)days. (4) Credits for Service shall be issued no later than the Subscriber's next billing cycle after determination that the credit is warranted. C. Refunds Refund checks will be issued promptly,but no later than either: (1) The Subscriber's next billing cycle following resolution of the request or thirty(30)days,whichever is earlier,or (2) The return of equipment supplied by the Grantee if Services is terminated. 7.10 Complaint Log. Subject to the privacy provisions of 47 U.S.C. § 521 et seq., Grantor and every Grantee shall prepare and maintain written records of all Complaints made to them and the resolution of such Complaints, including the date of such resolution. Such written records shall be on file at the office of each Grantee. Every Grantee shall make available to Grantor a written summary of such Complaints and their resolution upon request. 7.11 Parental Control Every Grantee shall make available to any Subscriber upon request a"lockout" device for blocking both video and audio portions of any charmel(s) of programming entering the Subscriber's premises. Such device shall be provided at a reasonable charge, except to 32 ' MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 the extent that federal law specifically provides otherwise. The Grantee may, however, require a reasonable security deposit for the use of such a device 7.12 Periodic Subscriber Survey. The Franchise Agreement shall provide terms for a periodic Subscriber survey to assess the Cable-related needs of the community throughout the term of the Franchise as well as procedures for review and implementation of changes identified through any such survey. 7.13 Service Area. No Grantee may discriminate in the build-out of its System to a particular area of the City or provision of Service to individual or groups of Residents on the basis of race, creed, religion or economic condition. Unless the Franchise Agreement provides otherwise, every Grantee shall serve all areas of the City with populations of at least thirty (30) dwelling units per cable mile, including areas annexed subsequent to the grant of the Franchise. The Franchise Agreement shall provide a schedule of the areas to be served, and the specific build-out requirements of the Grantee. Unless the Franchise Agreement provides otherwise, every Grantee shall extend its System into any areas not specifically covered in its build-out plan if any of the following conditions are met: A. Mandatory Extension Rule. The Grantee shall extend the System and make Service available at regular installation and regular monthly charges upon request to any contiguous area not designated for initial Service in the plan when potential Subscribers can be served by extension of the System past occupied dwelling units equivalent to thirty (30) units or more per street mile. Such extension shall be at Grantee's cost. If Where aerial extension is allowed by regulation but 33 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 underground installation is requested by benefited Subscribers, the cost of undergrounding that exceeds estimated aerial extension cost may be charged to benefited Subscribers. B. Line Extension. (1) The Grantee shall also extend the System and make Service available at regular monthly rates to any contiguous area where the average density of occupied dwelling units passed by the extension is the equivalent of less than thirty (30) dwelling units per street mile upon receipt of payment, by each occupied dwelling unit requesting Service in such area, of a special installation charge determined by the following formula: Cost - Cost = Special installation Subscriber 60 x Penetration charge per Subscriber Where: Cost = Capital cost to construct the extension of plant including each house drop requested but excluding the cost of converters or other necessary Subscriber terminal devices. Subscribers = Number of occupied dwelling units requesting Cable Service in the area and paying calculated special installation charge. Penetration = The total number of Subscribers to the Cable System divided by the number of occupied dwelling units passed by the Cable System. 34 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 (2) Following the activation of the extension, any new Subscriber along the extension shall pay the Grantee the special installation charge determined above. (3) On the anniversary date of the first and second year following the activation of any extension, the Grantee shall recalculate the special installation charge in accordance with subsection 7.14.B(1), above. If the new calculated special installation charge is less than the net special installation charge paid by any Subscribers, the Grantee shall refund each such Subscriber the net amount paid in excess of the most recently calculated special installation charge. After the recalculation of the special installation charge on the second anniversary and the payment of any associated refund to Subscribers, no further recalculation of the special installation charge shall be made and no further refunds shall be required, except that in the event that the number of occupied dwelling units passed by the extension becomes equivalent to a density of thirty (30) units or more per street mile, each Subscriber served by the extension shall receive a refund from the Grantee of the net special installation charge paid less the Grantee's regular installation charge. C. Newly Annexed Areas. In such cases where mandatory extension of the Cable System is required for areas newly annexed after the date of the Franchise Agreement, but the technical capabilities of the then-existing Cable System are such that the minimum technical performance standards required by this 35 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 Ordinance, the Franchise Agreement and the FCC cannot be met, then the Grantee shall be required to make such extension only if the Grantee can earn a fair return (as measured by the Grantee's weighted average cost of capital) on the incremental investment required combined with the overall investment base of the Cable System within the boundaries of the Franchise Area. D. Special Agreements. Nothing herein shall be construed to prevent the Grantee from serving areas not covered under this section upon agreement with developers,property owners or residents. E. Commercial Areas. A Grantee shall extend Service to any requesting commercial areas at no additional costs where the costs to do so does not exceed the same costs of providing service in a residential area with a density of thirty (30) homes per mile. 7.14 Customer Service Reporting Requirements. The Grantor may require upon reasonable request a Grantee to periodically prepare and furnish to Grantor semi-annual reports and any other reasonable information relevant to the Grantee's compliance with the customer Service requirements of this Ordinance. Such reports shall include, at minimum,the following: A. A Service Interruptions Report that tracks information on a monthly basis to include: (1) Total number of reported Service Interruptions; (2) Date and time of all reported Service Interruptions; 36 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 (3) Total hours that the System was out-of-Service as related to planned upgrades, maintenance or Channel line-up changes performed by a Grantee; and (4) Estimated number of Subscribers affected by each incident. In addition to the above, the City may request that Service Interruption Reports contain graph(s) that depict a Grantee's performance with respect to the items above for up to a three (3) year period prior to the date the report was requested. B. Results of any FCC required technical or performance testing on the System. 7.15 City Monitoring. In addition to free outlets, free Cable Service or Services otherwise required by the Franchise, Grantee shall provide one Service outlet (which shall be at the Cable Administrator's office at City Hall, unless otherwise specified by City) that shall receive without charge all basic and expanded basic Cable programming provided by Grantee. Such Service shall be provided in such a manner that the City may monitor the programming and use of the Cable System for compliance with the Franchise Agreement, this Ordinance, FCC technical standards, and applicable State and federal law. The Services provided pursuant to this requirement shall be in a secure office location, and not in a location open to public viewing. ARTICLE 8. CONSTRUCTION STANDARDS 8.1 Right-of-Way Construction. Prior to commencing any construction in the City, a Grantee must obtain all necessary permits and licenses required by federal, state and city laws, ordinances and rules, and 37 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 pay all associated fees. Further, a Grantee shall comply with all applicable laws, ordinances, rules, and standards relating to the construction, operation and maintenance of a Cable Television System. 8.2 Compliance with Laws. At a minimum, and without limitation, a Grantee shall adhere to all building, electrical and zoning codes currently or hereafter in force in the City. The construction, installation, and maintenance of the Cable System shall be effectuated by Grantee in a manner that is consistent with the laws, ordinances and construction standards of the State of Minnesota, the Occupational Safety and Health Administration, the National Electrical Safety Code, National Electrical Code and the FCC, to the extent applicable, as well as all other applicable laws, rules, regulations and ordinances that are generally applicable and promulgated pursuant to the City's lawful police power. All open connections on splitters, couplers and other devices shall be properly terminated. 8.3 Minimum Interference. All of Grantee's construction, installation, operation, repair and maintenance, and the arrangement of its lines, cables and other appurtenances, on both public and private property, shall be conducted in such a manner as to cause minimum interference with the rights and reasonable convenience of the public and any property owners that may be affected. In the event of any such interference, the City may require the removal of Grantee's lines, cables and appurtenances from the Public Rights-of-Way in question, at the sole expense of the Grantee. 38 • MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 8.4 Repair of Property. Grantee shall promptly repair and restore any City or private property which may be damaged as a result of the construction, installation, operation, repair or maintenance of the Cable System. Any such property damaged or destroyed shall be promptly repaired and restored by Grantee, at Grantee's sole cost and expense and to the reasonable satisfaction of the City, to its condition prior to being damaged or shall be replaced by Grantee with equivalent property. 8.5 Erection of Poles. Grantee shall not erect, for any reason, any pole on or along any Public Rights-of-Way in an existing aerial utility system without the advance written approval of the City. If additional poles in an existing aerial route are required, Grantee shall negotiate, as needed, with the utility for the installation of the needed poles. Any such addition shall require the advance written approval of the City. Grantee shall negotiate the lease of pole space and facilities from the existing pole owners for all aerial construction, under mutually acceptable terms and conditions. 8.6 Reservations of Street Rights. Nothing in this Ordinance shall be construed to prevent the City from constructing storm or sanitary sewers, grading, paving, repairing or altering any Public Rights-of-Way, or laying down, repairing or removing water mains or gas lines, traffic signal control systems, City fiber plant, or constructing or establishing any public utility, Service or other public work that the City may operate or undertake now or in the future. All such work shall be done, insofar as practicable, in such manner as not to obstruct, injure or 39 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 prevent the free use and operation of poles, wires, conduits, conductors, pipes or appurtenances of Grantee. If City in its sole discretion shall determine that Grantee will interfere with the construction or repair of any Public Right-of-Way or public improvement, whether it be construction, repair or removal of a sewer or water main, the improvement of any Public Way or any other public improvement,then all such property of Grantee shall be removed or replaced, or temporarily disconnected, in such manner as shall be directed by the City so that the same shall not interfere with the public works of such City. Such removal or replacement shall be at the expense of Grantee; provided, however, that nothing in this Ordinance shall preclude Grantee from seeking reimbursement for removal or replacement costs from any public funds generally available to Rights-of-Way users for the reimbursement of such costs. 8.7 Underground Installation. In those areas within the City where Cable System facilities are currently placed underground, all Cable System facilities shall remain or be placed underground. In areas where either telephone or electric utility facilities are above ground at the time of installation, Grantee may install its Cable System facilities above ground,provided that at such time as both electric and telephone utility facilities are placed underground, Grantee shall likewise place its Cable System facilities without cost to the City or if City requires undergrounding in the future pursuant to a separate ordinance. Nothing contained in this Section shall require a Grantee to construct, operate and maintain underground any ground-mounted appurtenances, except that Grantee shall take steps to minimize the number and visual impact of such facilities. 40 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 8.8 Conduit. A. The City shall not be responsible for any cuts or damage to buried or underground facilities of a Grantee that are not clearly marked or cannot be located through the Minnesota"one-call' service. B. Grantee shall provide the City detailed strand and trench maps in both paper and a mutually agreed upon electronic format of all new underground and buried cable facilities upon activation of such sections of the System. C. Grantee shall provide a contact number for the City to call in emergency situations requiring an immediate response on the part of the City, or a City Utility. If the Grantee does not properly and effectively identify the precise location of its facilities within forty-five minutes of an emergency call from the City or City Utility, the City shall not be responsible for damage to the Grantees facilities. 8.9 Clearing Poles and Cables. Grantee shall have the right to remove, trim, cut and to keep clear of its poles, cables, underground conduits and related equipment the trees in and along the public streets, but, in the exercise of such right, Grantee shall not cut such trees to any greater extent that is reasonably necessary for the construction, erection, installation, maintenance and use of Cable System equipment. Except in emergency situations, Grantee shall not remove,trim or cut such trees from any public streets without first providing reasonable notice to the City of its intention to do so, such notice to be delivered not less than ten (10) days in 41 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 advance. The Grantee shall compensate the City or any private owners of such trees for any damage proximately caused by Grantee's negligent conduct. 8.10 Moving Facilities. Grantee, on the request of the City, or any Person holding a building permit issued by the City, or any permit issued by an appropriate State agency, shall temporarily move its wires, cables,poles or other Cable System facilities to permit the moving of large objects, vehicles, buildings or other structures. The expense of such temporary moves shall be paid to Grantee by the Person requesting the same and Grantee shall have the authority to require such payment in advance. Grantee shall be given not less than thirty (30) days advance notice to arrange for such temporary moves. 8.11 Work Performed by Others. A. A Grantee shall make available to the City upon reasonable request the company names and businesses addresses of any Person, other than the Grantee, which performs Services pursuant to a Franchise Agreement; provided, however, that all provisions of this Ordinance remain the responsibility of Grantee. B. To the extent applicable, all provisions of this Ordinance shall apply to any subcontractors or others performing any work or Services pursuant to the provisions of a Franchise Agreement on behalf of a Grantee. 8.12 Duty to Grantee. Nothing contained in this Ordinance shall relieve any person from liability arising out of the failure to exercise reasonable care to avoid injuring Grantee's facilities while performing any work connected with grading, regarding or changing the line of any 42 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 Public Way or with the construction or reconstruction of any sewer or water system or utility system. ARTICLE 9. OPERATION AND MAINTENANCE 9.1 Open Books and Records. Each Grantee shall cooperate with the Grantor with respect to Grantor's administration of this Ordinance and its applicable Franchise Agreement. Grantor shall have the right to inspect, at any time during Normal Business Hours all books, records, maps, plans, income tax returns, financial statements, Service complaint logs,performance test results, and other existing like materials of a Grantee that relate to the operation of a Grantee's System and that are reasonably necessary to Grantor's enforcement or administration of this Ordinance and/or a Franchise Agreement. The Grantee shall not be required to maintain any books or records for Franchise compliance purposes longer than five (5) years. Upon request,the Grantor will treat designated information disclosed by a Grantee as confidential to the extent permissible under state and federal law. 9.2 Communications with Regulatory Agencies. A Grantee shall provide the City with timely notice of all petitions, applications, communications, and reports submitted by each Grantee to the FCC, Securities and Exchange Commission, or any other federal or State regulatory commission or agency having jurisdiction in respect to any matters affecting System operations, and shall make copies of such filings and pleadings available to Grantor upon request within thirty (30) days of the filing. Copies of responses from the above regulatory agencies to each Grantee likewise shall be made available promptly to Grantor,upon request. 43 ' MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 9.3 Annual Reports. A. Upon request, each Grantee shall make available to Grantor, at the end of each of the applicable Grantee's fiscal years during the term of a Franchise Agreement, the following: (1) A revenue statement certified by an officer or certified public accountant of the Grantee showing, in such detail as acceptable to Grantor, the Gross Revenues of the Grantee for the preceding fiscal year; (2) A current list of names and addresses of each officer and director and other management personnel of the Grantee; (3) A copy of all documents that relate to the Grantee's System that were filed with any federal, State, or local agencies during the preceding fiscal year and that were not previously filed with Grantor; (4) A statement of the Grantee's current billing practices and charges; (5) A copy of the Grantee's current Subscriber Service contract; and (6) A copy of Annual Reports, if any, to stockholders for operating company and parent company. B. Grantor and its agents and representatives may and shall have the authority to arrange for and conduct an audit of and copy the books and records necessary for the enforcement of the Franchise Agreement of any Grantee. A Grantee shall first be given twenty (20) calendar days notice of the audit, the description of and purpose for the audit, and a description, to the best of Grantor's ability, of the books,records, and documents that Grantor wants to review. 44 ' MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 9.4 Additional Reports. Upon request, each Grantee shall prepare and furnish to Grantor, at the times and in the form prescribed, such additional reports with respect to its operations, affairs, transactions, or property, which are reasonable and in the sole discretion of the Grantor are necessary. 9.5 Strand-and-Trench Maps . A. All lines, equipment, and connections in, over, under, and upon the Right-of-Way and private property within the City, wherever situated or located, shall at all times be kept and maintained in a safe and suitable condition and in good order and repair. B. Upon completion of any construction, upgrade or rebuild the Grantee shall provide the Grantor a copy of all strand-and-trench maps. 9.6 Service Contract and Subscriber Information. A. Each Grantee shall have authority to promulgate such rules, regulations, terms, and conditions governing the conduct of its business as shall be reasonably necessary to enable the Grantee to exercise its rights and perform its obligations under this Ordinance and any Franchise Agreement and to assure.uninterrupted Service to all of its Subscribers; provided such rules, regulations, terms, and conditions shall not be in conflict with the provisions of this Ordinance, a Franchise Agreement, federal, State and/or City law, or any applicable rules and regulations. • 45 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 B. Every Grantee shall submit to Grantor any Subscriber contract form that it utilizes. If no written contract exists, a Grantee shall file with the City a document completely and concisely stating the terms of the residential Subscriber contract offered, specifically including the length of the Subscriber contract. The length and terms of any Subscriber contract shall be available for public inspection during Normal Business Hours. C. The term of an end-user residential Subscriber contract for Service shall not be for more than twelve (12) months duration unless after twelve (12) months the contract may be terminated at the Subscriber's option with no penalty to Subscriber. Nothing in this paragraph shall prohibit a Grantee from entering into Subscriber contracts by reason of a line extension policy for a term that is longer than twelve (12)months in duration. ARTICLE 10. GENERAL FINANCIAL AND INSURANCE PROVISIONS 10.1 Franchise Fee. A. As compensation for a Franchise, and in consideration of permission to use the Rights-of-Way of the City for the construction, operation and maintenance, of a Cable System within the City, and to defray the costs of regulation,.each Grantee shall pay to Grantor an annual amount equal to five percent(5%) of the Grantee's Gross Revenues. B. Payments due Grantor under this section shall be computed quarterly, for the preceding quarter. Each quarter payment shall be due and payable no later than forty-five (45) days after the end of the preceding quarter. Unless the Franchise 46 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 Agreement provides otherwise, at the request of the City, Grantee shall electronically deposit payments into a financial institution designated by the City. Any associated charges for electronic transfer may be credited against the Franchise Fee. Verification of this deposit shall be provided to the City Treasurer. Each payment shall be accompanied by a brief report by a Grantee showing the basis for the computation and a "Franchise Fee Worksheet" listing all of the sources of revenues attributable to the operation of Grantee's System. A Grantee that is subject to a Municipal Telecommunications Consent Fee shall maintain separate accounts and records with respect to the calculation and payment of such fees. C. 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 Grantor may have for further sums payable under the provisions of this Ordinance or a Franchise Agreement. All amounts paid shall be subject to audit and recomputation by Grantor or its designee at any time during any calendar year (but no more than once per calendar year) upon twenty (20) calendar days notice, including information on the specific documents requested to be reviewed. 10.2 Security Fund. Each Grantee shall maintain a security fund with the City to ensure compliance with this Ordinance and the applicable Franchise Agreement, in an amount and in a manner as set forth in the Grantee's Franchise Agreement. 47 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 10.3 Penalties Procedure. A. Whenever Grantor has reason to believe that a Grantee has violated any provision of a Franchise Agreement or this Ordinance, Grantor shall first notify the Grantee of the violation and demand correction within a reasonable time, which shall not be less than twenty(20) days in the case of the failure of a Grantee to pay any sum or other amount due the Grantor under a Franchise Agreement, and thirty (30) days in all other cases. If a Grantee fails to correct the violation within the time prescribed, or if a Grantee is unable to correct the violation and fails to commence corrective action within the time prescribed and to diligently remedy such violation thereafter, the Grantee shall then be given written notice of not less than twenty (20) days of a public hearing to be held before the Council. Said notice shall indicate with reasonable specificity the violation alleged to have occurred. B. At the public hearing, the Council shall hear and consider all relevant evidence and thereafter render findings and a decision based upon the evidence. Any such hearing must, at a minimum, provide the Grantee a full and fair opportunity to be heard by the City. C. In the event the City finds that a Grantee has corrected the violation or promptly commenced correction of such violation after notice thereof from Grantor 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. 48 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 D. In the event the City finds that a violation exists and that a Grantee 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 liquidated damages from the security fund, as set out in the Franchise Agreement. E. If Grantor elects to assess liquidated damages, then such election shall constitute Grantor's exclusive remedy for a period of sixty (60) days. Thereafter, if a Grantee remains in non-compliance, the Grantor may pursue any other available remedy. F. In he event that a Franchise is cancelled or terminated by reason of the default of a Grantee, the security fund deposited pursuant to a Franchise Agreement shall remain in effect and available to the Grantor 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 Grantee. G. The rights reserved to Grantor with respect to the security fund are in addition to all other rights of Grantor, whether reserved by a Franchise Agreement, this Ordinance, or authorized by law, and no action, proceeding, or exercise of a right with respect to such security fund shall affect any other right Grantor may have. H. In instances of repeated violations, whether remedied or not, the Grantor shall serve special notice outlining additional remediation requirements. Failure to cure, as measured by repeated instances of the same violation, is evidence of an evasive practice and may lead to revocation under Article 11. 49 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 10.4 Bonds, Indemnification, and Insurance. Each Grantee shall maintain bonds and insurance with the City in amounts and in a manner as set forth in the Grantee's Franchise Agreement. Each Grantee also shall be required to indemnify the City in a manner as set forth in the Grantee's Franchise Agreement. ARTICLE 11. REVOCATION 11.1 Grounds for Revocation. In addition to any rights in this Ordinance or a Franchise Agreement, Grantor reserves the right to revoke the Franchise, and all rights and privileges pertaining thereto, in the event that: A. A Grantee substantially violates any material provision of this Ordinance or a Franchise Agreement; B. A Grantee attempts to evade any of the provisions of this Ordinance or a Franchise Agreement; C. A Grantee practices an act of fraud or deceit upon the Grantor; or D. A Grantee becomes insolvent, unable or unwilling to pay its debts, or is adjudged bankrupt. 11.2 Procedure. A. Whenever Grantor has reason to believe that there may be grounds for revocation of a Franchise, Grantor shall first notify the Grantee in writing of its basis for believing grounds for revocation exist. Such notice shall indicate with reasonable specificity the grounds for revocation that are believed to exist so that 50 MASTER CABLE SERVICES REGULATORY ORDNANCE—March 1,2000 the Grantee may have a reasonable opportunity to cure or otherwise address the grounds. If a Grantee fails to adequately cure or address the purported grounds for revocation within thirty (30) days of such notice, then the Grantor may, upon thirty (30) days written notice to the Grantee, commence a public administrative hearing to determine whether there exists ground for revocation. B. The administrative hearing shall be conducted so as to protect the full due process rights of the parties and provide for, at a minimum, the right to have counsel, the right to call and cross examine witnesses, if requested the right to a full transcript of the proceedings, and the right to have the matter heard before a mutually agreed upon third party hearing officer. C. After the close of the hearing, Grantor or the designated hearing officer shall issue a written decision based on the record of the proceedings, stating with specificity the findings and reasons supporting the decision. D. Upon revocation, a Grantee shall have a period of sixty (60) days subsequent to the date of the formal adoption of a revocation of the Franchise by the City within which to file an appeal with a court of competent jurisdiction. E. During the appeal period,the Franchise shall remain in full force and effect. ARTICLE 12. FORECLOSURE,RECEIVERSHIP AND ABANDONMENT 12.1 Foreclosure. Upon the foreclosure or other judicial sale of all or a part of a System, or upon the termination of any lease covering all or part of a System, a Grantee shall notify Grantor of such fact and such notification shall be treated as a notification that a change in control 51 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 of the Grantee has taken place, and the provisions of this Ordinance governing the consent to transfer or change in ownership shall apply without regard to how such transfer or change in ownership occurred. 12.2 Receivership. Grantor shall have the right to cancel a Franchise Agreement one hundred twenty (120) days after the appointment of a receiver or trustee to take over and conduct the business of a Grantee, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty(120)days, or unless: A. Within one hundred twenty (120) days after its election or appointment, the receiver or trustee has fully complied with all the provisions of Grantee's Franchise Agreement and this Ordinance and remedied all defaults thereunder; and B. Such receiver or trustee, within said one hundred twenty (120) days, has executed an agreement, duly approved by a court having jurisdiction, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this Ordinance and the applicable Franchise Agreement. ARTICLE 13. PURCHASE OF SYSTEM 13.1 Grantor's Right to Purchase System upon Receipt By Grantee of a Bona Fide Offer. Grantor shall be entitled to a right of first refusal of any bona fide offer to purchase the System made to a Grantee. Bona fide offer as used in this section means an offer received by a Grantee that it intends to accept. The City shall have thirty (30) days to " • 52 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1,2000 notify the Grantee of its intent to purchase the System, upon receipt of such notice the Grantee shall have thirty (30) days to provide the City with all information reasonably necessary for the city to conduct a due diligence with respect to the purchase of the System. Consistent with Section 14.1 the City shall notify the Grantee days in writing within 120 days of notice of the bona fide offer of its decision whether to purchase the System. 13.2 Purchase By Grantor Upon Termination of Franchise Term or Revocation of Franchise. A. The Grantor may, in accordance with and to the extent permitted by 47 U.S.C. § 547, upon the payment of a fair valuation, ascertain, purchase, condemn, acquire, take over, and hold the property and plant of a Grantee, in whole or in part, on the following conditions: (1) Upon revocation of a Franchise, such valuation shall not include any sum attributable to the value of the Franchise itself and plant and property shall be valued according to its book value at the time of revocation, or the System's initial cost less depreciation and salvage. (2) At the expiration of a Franchise Agreement, such valuation shall be at fair market value, exclusive of the value attributed to the Franchise itself. (3) In the event Grantor shall terminate a Franchise pursuant to the provisions of this Ordinance or a Franchise Agreement, and commenced operation of the System, Grantor shall reimburse the Grantee for the fair market value of the System. 53 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 ARTICLE 14. SALE OR TRANSFER 14.1 Sale or Transfer of Franchise. A. No Grantee shall sell, transfer, lease, assign, sublet, or dispose of, in whole or in part, an interest in or control of a Franchise or Cable System or any of the rights or privileges granted by a Franchise Agreement, without the prior consent of the Grantor, which consent shall not be unreasonably denied or delayed and may be. denied only upon a good faith finding by the Grantor that the proposed transferee lacks the legal,technical, or financial qualifications to consummate the transaction and operate the System so as to perform its obligations under this Ordinance and the applicable Franchise Agreement. This section shall not apply to sales of property or equipment in the normal course of business. Consent from the Grantor shall not be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part,to secure an indebtedness, or for a pro forma transfer to a corporation, partnership, or other entity controlling, controlled by, or under common control with a Grantee. B. The following events shall be deemed to be a sale, assignment, or other transfer of an interest in or control of a Franchise or Cable System requiring compliance with this section: (i) the sale, assignment, or other transfer of all or a majority of a Grantee's assets; (ii) the sale, assignment, or other transfer of capital stock or partnership, membership, or other equity interests in a Grantee by one or more of - its existing shareholders,partners,members, or other equity owners so as to create a new controlling interest in a Grantee; (iii) the issuance of additional capital 54 MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 stock or partnership membership or other equity interest by a Grantee so as to create a new controlling interest in a Grantee; and (iv) a Grantee's agreement to transfer management or operation of the Grantee or the System to an unaffiliated entity. The term "controlling interest" as used herein means majority equity ownership of a Grantee. C. In the case of any sale or transfer of ownership of an interest in or control of a Franchise or Cable System, the City shall have one hundred twenty (120) days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with FCC Regulations and the requirements of this Ordinance and the applicable Franchise Agreement. If the City fails to render a final decision on the request within one hundred twenty (120) days after receipt by the City of all required information, such request shall be deemed granted unless the requesting party and the City agree to an extension of the one hundred twenty(120)day period. D. Grantor reserves any rights it may have to require that a Grantee pay all costs and expenses incurred by Grantor in connection with the sale, assignment, or transfer of a Franchise, including but not limited to the Grantor's costs of reviewing the qualifications of any proposed transferees. ARTICLE 15. RIGHTS OF INDIVIDUALS PROTECTED 15.1 Discriminatory Practices Prohibited. No Grantee shall deny Service, deny access, or otherwise discriminate against Subscribers, programmers, or general citizens on the basis of race, color, religion, 55 MASTER CAE I: national origin, ;•.• employment comply at executive anc: 15.2 Subscriber Privz Grantees shall codified at 47 16.1 Rate Regulati•_-•• The City reserve Services offered ( Grantee shailb,-,• the FedenllL. The City at 4'i C .. 16.2 Rights Res .c A. Upon ei , disczetio; System for an - of unf rt." • ► MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 Agreement and to provide the regular Subscriber Service and any and all of the Services that may be provided at that time. B. The Grantor shall have the right to compel continued operation of the Cable System whether by the Grantee, by a trustee or receiver or by the Grantor, and to ensure that such operation is consistent with public interest as determined by a court of competent jurisdiction. The Grantee may not remove equipment or documents necessary for continued operation of the system. 16.3 Administration of Franchise. The City shall be responsible for the continued administration of this Ordinance and all Franchise Agreements. The City may delegate this authority from time to time. 16.4 Non-Enforcement by the City. Grantee shall not be relieved of its obligation to comply with any of the provisions of this Ordinance by reason of any failure of the city to enforce prompt compliance. 16.5 Governing Law and Choice of Forum. Any dispute arising with respect to this Ordinance or a Franchise Agreement granted pursuant to it, shall be subject to review by the state and federal courts sitting in 16.6 Severability. If any material Section of this Ordinance or a Franchise Agreement adopted pursuant to it is held by a governmental authority of competent jurisdiction,to be invalid or unlawful as conflicting with applicable laws now or hereafter in effect, or is held by a court or competent governmental authority to be modified in any way in order to conform to the 57 ►I MASTER CABLE SERVICES REGULATORY ORDINANCE—March 1, 2000 requirements of any such applicable laws, such provision shall be considered a separate, distinct, and independent part of this Ordinance, and, to the extent possible, such holding shall not affect the validity and enforceability of all other provisions hereof. 16.7 Publication of Notices. All public notices or ordinances required to be published by Grantor under this Ordinance or any Franchise Agreement shall be published in the official newspaper of the City. Each Grantee shall pay the costs for publication of its Franchise Agreement and any amendments thereto, as such publication is required or authorized by law. Passed and adopted this day of 20 ATTEST: By By City of Shakopee,Minnesota 58 :.1 'T1 4 m r) 5i x � cf) rtTiltml 4 z 4 y el m toCA L-1 L--1 o . . -.11 4 0 Z ci,'-i 5 . ,-, P.D. 2 y n 2, m owl ba" 1 ;1,1.1 04;,+. t--, Ln iI • • • • )-c 1 I cr -ci ottt to 0-t 0 CD -.11 0-1 °--4 ' 8 P CD 0 2 . q cA 1712 2 ri p ' -$O b E� ' c4 c,-, FL 0 0-c ci) (,.) g „, 0 ,_ p 0 = crc? 1—) i-id 0 0-i • 0-i • ph) v) 2 m.i cn � E ' ri F4) 0 I 1 Cr i CD P C o CD 1-i rD CD cp 0 CD a � P 0 * (i°mr w° Z E . Z P Cm P.4 P pi D P °111 E". Z � CSD �.CSD *0 P,, c4 00004„ orm) .-ND 1.c c-Li Pp p P .0 li rs) 1 r+ Cr 0 Cr )=I3 Illd 1.1 1 Il N � � 5 h '' ..-1 cl. 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Michael Leek, Community Development Director SUBJECT: Metropolitan Urban Service Area(MUSA)and Transportation Planning Issues MEETING DATE: March 16, 2000 INTRODUCTION: After its recent meeting with the Jackson Township board, the Council set this meeting to discuss MUSA allocations generally. Subsequently, Council reviewed the proposed roadway improvement project for CSAH 17 at both Vierling Drive and 1r Avenue. In discussing that project, it has been stated that the City has not planned for, or planned inadequately for, transportation/traffic impacts of development. This memo discusses the planning that has taken place to date relative to MUSA and transportation, and alternatives that the Council may wish to discuss. DISCUSSION: Following for the Council's information is a summary of planning that has taken place relative to both MUSA and transportation. At least two things are immediately apparent from looking at the plans referred to below. First is that construction of the STH 169 was anticipated and provided for in the City's planning for a long time. Second, is that over time the City's planning efforts, especially for transportation, have become more sophisticated. At this time the City has a traffic forecasting model. New assumptions can be plugged into this model, and a revised analysis generated. • August 4, 1981 - City adopts"Shakopee Comprehensive Plan" in Response to the 1976 Metropolitan Land Planning Act. That plan included a `Comprehensive Plan for Sanitary Sewer Service 1980—1990 and `Proposed Transpor[t]ation' (copy attached) • October 10, 1996- After about 7 years of effort, the City Council adopted"Shakopee Comprehensive Plan 1995. This is the City's current, adopted Comprehensive Plan. The plan includes a 'City Wide Land Use Plan' that shows area added to MUSA(2000), as well as anticipated areas for expansion of MUSA in 2010, as well as a`Transportation Plan' (copies attached) • April 18, 1998 - City Council approves a new `Transportation Plan,' subject to approval by the Metropolitan Council. This plan includes 1) 1995/1996 traffic volumes, 2) 2020 traffic volumes, 3)2020 transportation deficiencies, and 4)proposed 2020 transportation improvements(copies attached) • May 4, 1999 - City Council received a report related to traffic and traffic improvements at the intersections of Vierling Drive and CSAH 17, and 17th Avenue and CSAH 17. Council directed staff to implement the recommendations contained in the report. • December 31, 1999 - The City submits a revised comprehensive plan to the Metropolitan Council for consideration. The plan includes the `Transportation Plan' element adopted in April 1998. It also proposes a'Land Use Plan' that proposes a"floating MUSA line." This amounts to an identified area(s)within which the City could extend MUSA based on proposed policies and prior agreement with the Metropolitan Council about the City's annual demand for MUSA by land use category. It appears to staff, the issues that Council discuss can be framed as follows; 1. How should future expansions of MUSA be staged in the City of Shakopee? In areas of possible orderly annexation? 2. How might the future expansion of MUSA be affected by development in communities surrounding the City of Shakopee? 3. Has transportation planning by the City to date taken adequate account of future possible development? 4. How might development in communities surrounding the City of Shakopee affect the City's transportation plan forecasts? In this memo I will try to provide the Council with possible answers to these questions. How should future expansions of MUSA be staged in the City of Shakopee? In areas of possible orderly annexation? How might the future expansion of MUSA be affected by development in communities surrounding the City of Shakopee? The City's current comprehensive plan(i.e. the 1995 plan)identifies 3 areas for possible 2010 MUSA expansion. These areas are located south and west of the MUSA area on either side of CSAH 17, and south of the proposed Shakopee Crossings development. The 1995 plan leaves open the question of what the end land uses and MUSA staging would be for the balance of the City of Shakopee. It places these areas in a holding category simply called"Future Urban Area." Based on input received from the Planning Commission and members of the public, the draft, revised plan goes several steps further than the 1995 plan. First, it identifies areas to be guided `permanent' rural residential, rather than areas for future urban development. Second, it proposes a `floating MUSA area' with attendant policies for the actual extension of MUSA. Consistent with the 1995 plan, the draft plan includes a portion of Jackson Township for MUSA expansion. This approach is consistent with early input from the Commission and public, who expressed a desire to have an identifiable green or rural area surrounding the City. It is also consistent with the Metropolitan Council's vision of development in northern Scott County. There are issues with the approach outlined above, including; 1. It ignores the existence of MUSA to the City's eastern border in the City of Savage, and the likely expansion of MUSA in the City of Prior Lake to the City of Shakopee's southern boundary. 2. It would foreclose the ability of some Shakopee residents to develop, or sell land for development, with sewer and water service, while allowing the expansion of MUSA into adjacent township areas. Staff has had ongoing issues with the Metropolitan Council's Growth Blueprint as it relates to Shakopee, including; 1. The mapping included in the Growth Blueprint still incorrectly depicts the MUSA area already existing in the City of Shakopee, thereby creating the impression that there are significant rural/agricultural areas to be preserved. This is largely an incorrect impression. 2. It also ignores the existence of MUSA to the City's eastern border in the City of Savage, and the likely expansion of MUSA in the City of Prior Lake to the City of Shakopee's southern boundary. This results in an unnatural staging of MUSA, whose major effects seem to be to accelerate the increase of property values in the City. This can only serve to increase the cost of housing, and to hasten development of areas near the City that aren't served by sewer, but where land is somewhat less costly. Some of these issues are buttressed by the attached"Executive Summary, Builders Association of the Twin Cities Public Policy Committee Presentation to: the Metropolitan Council." In that document the Builders Association argues that the 2020 reserve area in the 7-county region should be available to communities for MUSA expansion. An alternative for the City is to assume that, over time, the entire City will develop at urban densities and designate the remaining land in the City as within the floating MUSA area. This alternative would require the City to 1) further identify end land uses throughout the City, and 2)negotiate land absorption rates with the Metropolitan Council. Julie Klima of the planning staff calculated the total acreage platted for commercial and residential purposes from 1996 to the present date. While this does not equate directly to the Metropolitan Council's view of land consumption, it can help to understand what the approximate annual rate of consumption is: Commercial acres consumed by platting 114 acres(28.5 acres per year) Residential acres consumed by platting 1,128 acres(282 acres per year) Also attached for the Council's information is a copy of the service area boundaries map for the Chaska Interceptor. As is apparent from the map, all of Shakopee, and a portion of the adjacent townships is within the service boundaries. Has transportation planning by the City to date taken adequate account of future possible development? How might development in communities surrounding the City of Shakopee affect the City's transportation plan forecasts? Future travel forecasting was done by the City's consultant used the TranPlan Computer model, which in turn was based on the Metropolitan Regional Travel Model and Scott County Transportation Model. As a result the model does assume growth in travel outside of the City based on the regional forecasts from 1995. If growth is taking place at a faster rate than was assumed in the 1995 forecasts, that could have an impact on the analysis. The current Transportation Plan assumes the land uses identified in the draft, revised comprehensive plan. If the Council decides that this land use pattern should be changed, then it would be worthwhile to feed those assumptions into the transportation model, and re-run the analysis in order to determine whether additional roadway capacity would be required anywhere in the City. In the current and proposed comprehensive plans staff has tried to implement the policy direction from the Planning Commission and the Council to preserve a rural/rural residential area that separates it from the areas to the south. If after discussion the Council wishes to change that policy direction, it should provide staff with specific direction regarding any change. The Metropolitan Council staff would be notified of any proposed change in the draft comprehensive plan that has already been submitted. If Council does direct a change in MUSA staging and land use, it should also direct staff and the City's consultant to analyze whether that will significantly change the City's current Transportation Plan. ACTION REQUESTED: Provide staff with any direction it feels necessary regarding 1) staging of MUSA expansions within the City and areas that might be subject to orderly annexation, and 2) changes in the analysis underlying the City's Transportation Plan. " � racers JO A1I �--. ,I 1 I C ('',..16 E rr�MS JO,A111 -7 I I —I l rtlIr r r J r fF / 1 lr 73:35 a --aK 'OHOIt " a :I se- .1. "► a *Y• �' I ' —� W Ir N t t ; t„�� V� t �I N —_P9 I!j _0,0oa 1r' i - ;I,e I r I A; '.r ; ! ej 1t t 1 e _ : : II"",11 �/ // 1 ��1 `� • i. ` — 9 i 9 ‘gti ' tttttttrrrrir r 'l,;s0 tar RIM I' t Ia !e • t ii (Ie ) �' �� !€illi i ; iiliiisli17i7 I i i ! 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' Ar 1 : Hi ggi A 11 41 1 ! _rm---.7.- _ }� %. �� �1.-i \Vali �, �`` — of , °°° ��/ �/. 1. ! �� �� 'Fir-4V4 I. ., • , : ® ; . 1 ,,,, 0 • > ...:„,:. am , , , ,,,,.,,,,, #4.411 r' Mala ' !I'll-1,N � ! /10 �,1 '�1_ l�/fir 4, `dorres l JO A113 I e I i e /% 7 I_� uatuo ILs:± e �i�,�,� ��eit ��� Hilt i 4us..u�..ssorr \ � 1131611111...' ..eao� gottraiiikowp, \vitt lig 1 �'rt-.' I • It i UJ 1 )04014.11--!, � iii- . �-Silly;\111 :41rily4.---AW II __ , , —�- ,______, . ', , ,_-°OW ,..., _ 4 ,,,i, 4.0*-01,,,ar i , .- --- MC ti 4': 460411 = 44 27 si- ,0,,, - v....•,,,.., sipir \ ``� a„,,,n ,...1i1I ± IIIL . a >. ,,, 1--s •\..n el OV 03 M V <� 11 m • a G x 3 1981 CC MPPEAMN6I VE flout 1 These local forecasts of 1990 and 2000 anticipations were further analyzed in a regional transportation computer exercise to determine projected travel data. Assumptions of the system included increased growth influences attributable to Shakopee, new roadways, and future behavior trends to receive 1990 and 2000 estimates. Based on the geographic units of traffic assignment zones and contributions, the major roadways of Shakopee can be simulated for future traffic flow and volumes on map 17 . More localized traffic demand and collector need will obviously result from the new urban service area expansion. Detailed spacing of collectors, interconnection with arterial system and antici- pated densities all contribute to the new urbanizing sector transportation needs. Most evident in this area is the need for east-west linkage between C.R. 's 79, 17 and 16, equally spaced between existing Tenth Avenue and the proposed bypass (Thirteenth Avenue) . Table 30 TRAFFIC ASSIGNMENT ZONE FORECASTS AND PROJECTED TRAVEL Demographic Data Travel Data TOTAL TOTAL TOTAL RETAIL- ZONE HOUSEHOLDS POPULATION EMPLOYMENT SERVICE PRODS ATTS ADT-MVT 9751 200 632 40 34.0% 2,100 400 1,600 976 2,146 6,147 2,400 40.2% 21 ,700 17,700 25,600 977 1 ,436 4,200 1 ,440 40.3% 14,100 10,800 16,800 978 0 0 0 0 0 0 0 979 2,270 7,016 5,635 31 .0% 24,900 34,300 38,400 980 410 1,181 2,505 31 .7% 4,800 14,800 12,000 9812 267 792 0 0 2,600 220 1 ,800 9823 271 762 0 0 2,500 220 1 ,750 Total 7,000 21,000 12,080 34.1% 72,700 74,800 97,950 Shakopee 7,000 21,000 11,500 34.1% 72,400 74,800 95,500 The other part of Shakopee's transportation needs is a reflection of existing system deficiencies. Predominate deficiencies and critical flow problems focus upon an acceptable Minnesota River bridge crossing. The existing two lane Holmes Avenue bridge facility is not capable of matching existing service demand, regardless of future additions. 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Va ��s/ 4` 11l E �J L .- -Ill - / ---; mkt,,,- *isle \Iloilo!. u eiiir eii,Hu : =-,,,,:, ,. , Iti 41 1 „,, . i ...0.,,Istearriiiiiii , , ., ,. ,,,, ,1 ..-0,0-r•--- . 0o NAaaN -�i i,`� Imsu Io it . ) 1'', ® { ill .91:1 ,I L!IjSe E • 0 t � X ,/ :',iiitn114.14•Ailiki- ---, - ---.--7i''''''-`- - - a ,, -__ a dr 1 i 1 .r , 4-0,6101,,------04,. iTi,-.:,i_.-4_41 41, en tiiiiii , - ire r /- v: vIlt'-,-,tottp_.1,„:. , Iblv,Ift,!:)',1. .,, Ili I _./�”' 0 _- _I '.. - ----- �: Hca1 ;- ti MI \_____ 4,11--,, b�, • Yrarosn 700 fi u6P•ZI-61 J\Po3\00.6001\4 ZO.BIiSI L6 X3011 0 11, 0 EXECUTIVE SUMMARY BUILDERS ASSOCIATION OF THE TWIN CITIES PUBLIC POLICY COMMITTEE PRESENTATION TO: The Metropolitan Council Livable Communities Committee Tuesday, February 22, 2000 Room 1A, 2:00 p.m. OUTLINE Introduction A. Background 1. Brief Summary of 1996 BATC Study Key Findings and Recommendations A. Findings: 1. Actual available land supply substantially smaller than previously recorded 2. Major barriers and developmental constraints exist within the planned urban areas B. Study Predicted: 1. Land prices within MUSA will continue to escalate rapidly 2. Land prices will drive housing costs up and limit the housing that can be provided, i.e. reduced affordability. 3. Exurban development will increase significantly, as buyers follow price and availability C. Recommendations: 1. Expand the MUSA now 2. Support market based infill and redevelopment in the core 3. Adopt flexible, simplified MUSA expansion process 4. Delineate and preserve urban transition areas 5. Adopt restrictive rural density standards to protect the urban Transition areas 2. Metropolitan Council Response - Regional Growth Management Strategy A. Commitment to - 20 yr. land supply, 80,000 acres to be added! (Reduced to 60,000) B. Local communities to prepare amended comprehensive plans- submit by 12/98! C. General agreement with all major BATC Recommendations II. The State of the Region's Urban Land Supply A. +/- 50% of local plans submitted and approved B. Combination of critical shortage of sewered land and 5 year Mini- MUSAs has led to explosive land price increases. Land prices within the MUSA have escalated between 2 and 4 times since 1995! III. The Twin Cities Region's Housing Market 1. Strong, steady, a vital component of region's economic health and vitality - 15,000 units every year- like a drum beat. Table I Twin Cities MSA Housing Market Average Annual Number of Units 2/21/00 Year Average Annual Permits 1980-1989 16,763 1990-1996 13,319 1997 12,252 1998 14,289 1999 +/- 17,000 Data source:Metropolitan Council 2. The Twin City Metropolitan Area's housing market area extends well beyond the seven county area. Both the rate of growth outside the seven counties and its percentage of the entire SMSA are growing rapidly. Table 2 Permits Issued in MSA Counties Adjacent to the Twin Cities Area 2/18/00 COUNTY 1991 1992 1993 1994 1995 1996 1997 1998 1999 Chicago 332 416 526 467 449 582 443 574 619 Isanti 185 255 206 274 217 266 173 319 267 Pierce (Wisc.) 93 146 196 162 303 293 316 292 297 St. Croix (Wisc.) 311 282 418 478 402 430 384 642 647 Sherburne 460 610 686 687 875 989 847 1091 1045 Wright 512 652 873 834 883 975 875 1134 1293 6-County Total 1893 2361 2905 2902 3129 3535 3038 4052 4168 Percent of the 13-County MSA 13.6% 12.9% 14.8% 16.4% 17.8% 19.4% 19.2% 20.7% 20.2% Figure 1 - Housing Growth Collar Counties Figure 2 - Total Collar Counties Building Permits 1999 Figure 3 -Major Regional Developers Delineation of Current Twin City Metro Housing Market Boundaries 3. Effect on Lot Prices inside and outside MUSA Figure 4 -Lot Prices Inside and Outside MUSA Twin Cities Region FIGURE 1 Housing Growth . _- • - . . r • • . . . .... .. ... r . . . ,.:.....„:,..„...,..:,,,„,,.‘,.,,:r.,„,„.„.•,„,:,,•,.,,,:5,..„,,,,,.„, .... .. . ... .. . .. ._• • •" • ... • .. . • .. . • • . ,....„ . . • .,....117.4% / 1,109 . . ' .i,,,,,,,,:.,,-,,.-.7,,.1..\771-,,,.-:.2..'iy•TiF...,::".-7,' ' li.4.„„i. i 2 088 4A ANA• : ' • 14.6% / 1 125 -.:•-. .. ----• ••• • -• - -- , '26.4% • , , 1,11--,-,:;-.•;•.-, • ..-, • - . , .. . ',7f,;..,-... - ..• 52.1% I 3,040- -. . - • CHTSAGO POLK : - ' . ., ......... .. ... ... . .... ......_.. .. . . „ -..,,,,...—,.,....,,,,....,...,,,;,.,...efig,,,,,: . • SIIERBURNE:. !_„,:,:-,:;;'..-,•,•,,...;: ,,.i.:,:•,..i,-,...,..,:,,:....,i-_,;;;;::.:,.,'-; ..,..,e,i;f;i,i•j,1;1:1!?.:1Y-,11,iii.,.. .!i?.-•:',,5.-!ff- i•,'..i.-;.....;:c:;,_,-. ,:::4,-:01- ., •_ael,-fl jo....-;. • .• ,,!„:,7.2,,,,N- '4:7:-,-;•.--7:1.1. '-:•::. ':-'--. -•-:?..-..:.'•,,1--- •-••....-.' •••••• i w ..:..-,Nr• .-/L.--,r.-7vA1.4.4b-, )-,--.:-,...:::,,•.- - :'— •. •, ' • ' . -...,.' ,'1.- 1 --‘.0-6',`--...t•Aji.bN•I' • =.••', ,'' - . : ' ' • - • ' ::•:'.,•,•• j-•—"-. P1 •:. - •• .-- '"?;f4I-Ir . .. . . ' ,:L',.... •-,.., '-9—' :' i I : .l'Atr44' '. . . . • 24.9% 1 3,443 ,'"' —sr7' — A I 2 ---1W- 1. „ Celkm':4.',, • .,_ ,, ‘• - .,.,,..:0 --';-5.k.: ,,, 1 - , ......r_i_, ......,,, ,:-.:,...: • WRIGHT .',.; ,. 1 ..— ,-,. .. 24,6% / 1,895 • ..„,-!.• I , • '- • ,,,,,, • . .-L,,,...,,e,:, ,__ '7...,-,t14 .,. -"— ... :.1'..e. • ST. CROIX ...,,,,, r‘.... 64-4,--,,Z r4 •.',,,,,.. t.:.,,. ----` -•ot...-4,.. •, 41: • -.4 , , . .p......, 1. --- :A.,---:.4., , Ir--4-: 1 -,_.— :A :: • t"'.•3Yef t-,-.... .C. if , . - P---;:,--,I _ ).1._,..) —•A . l'''''M'z•-`/`.1)' •-g- ; ..: , . , ,, ' ' - 1 „------- ... . 12.1% / 725 ,.,11„::,. t.,..,_,41,7,,,,„.1.,.-,,,,:„.4. . ,• ,, 1, _;----. -• ..,IU . -kik: ,.. ... .... " ..li -, ,,,,,-, rip-...1,.,.. -. . `'-.N . --t, •t:lt.0 WO'itgq PIERCE . -s--,,,..,:_,A -,-,.,:iii,* ' "-, .. •i..;','','''-,-;14. ttrn. .,' 41: . • -:t.,*, eq,arreq*..r .,. -.. , ,,,.,,,...,_,A, ..-0,,,toy..,,,,; . ...,.: ,,,,,, ,.. .,, ,,!....-. _,4,.?...-iw,g--• -..ki--.,. ...15,ii t ' .Sy-11611:AW*N."!*11.44 ,..:ikr...;.,.&*. ,„ ,-..... wi,..7.•g ..4.. . - .. ..0, • . ,..,..,, ,,-,,,, A"isi; ;4,si,,,l:/.1,,,•..... ':,,i; ,1 • '- 1 41, .. r• • ,. 11--V4' ;,....4i.wg.,i-t.gf., • . . — _ • ,,.. Increase in Households 1980 - 1990 I Building Permits 1990 - 1994 . . ... , ..• ,,,, ..., . •,, 0,,,L , VIDUBAN AllAllit;1; re 2.41.7.4d?!.11.31DG .1:de3:-lit 1111?1,15 Atijilipg49-0t9CW; a mi AP,u3c.fa um1,. 5 Marc*19soum.:dontstmo&D51.1 utflj.ng(14.1 DNR wale maw,/boundaries and community houndariet % ylI FIGURE 2 e ISANTI SHERBURNE SF 262 /MF 5 CHISAGO . SF 1043 /MF 2 TOTAL 267 SF 605 /MF 14 TOTAL 1045 TOTAL 619 3481 IQ f WRIGHT1.101#00ANOKA SF 1116 /MF177 TOTAL 1293 4, 4 Z I 0 ST. CROIX 3/ G jl, fi RAMSEY C7 SF 383 /MF 264 =__Ai, HENNEPIN = TOTAL 647 1 ic) CARVERL.3.„_,I„.../ PIERCE SF 287 /MF 10 -- SCOTT DAKOTA TOTAL 297 d. - ......_,Ii RICE GOODHUE SF 73 /MF „.,_O____All _ 4 SF 87 /MF 0 ' TOTAL 87 TOTAL 73 "") t--------- 1 1 1 1 1 J Total Collar Counties Building Permits 1999 Key: AN Single Family /Multi-Family DAHLGRE SHARDLO 15 0 15 Miles Total AND•UBA 1 ®1— -. February 17,20d FIGURE 3 Cass Crow Wing• Aitkin 01111111111116'. Wadena • East Gull Lake 41, Aldrich Aldrich Bralnetd i Sturgeon Lake Hewitt Staples -.. — Denham Motley • Pillager..." Boxier Willow River Otter Garrison Bruno Bertha Tail - McGrath Rutledge ' .`Flnbyeon Askov • agb Bend Fort Ripley isle 011.--- - Pine Larissa Wahkon -' Todd Harding Sandstone Broworvrlb Randall Onamla • Iaswp Ka :bec Hinckley • Lon.Prairie Hillman Mill- Lacs r tittle Falls .pbrz swanvilie'Flensburg Morrison [mamba Brook Perk - Sobieski Buckman • Osakls Buy m Upsala Royalton Be, Mora HenrleMe f pine City ` Burnett `^ Elmdab Ore :gle OBMi: g West Union Bewkrs Douglas Westport Sauk Centre Rico Fomsto Rock Creek Po St.Rosa HokdbgfBrd •Gilman Mllaca Braham Melrose St.Anthony "-option. \ Be • ease • reopen • Ronnebyj Rush Cay l Metre _ Pope Grove Munich Aroany s.nem ,, ISantl reenwald Sauk Cloudill Rapids WNW ._,y.-,... Harris —`_ Spring is Stearns ", � �, �� Brooten �� North Branch Polk SI.Martin Pleas- am. elgrade Lake Henry Rlchnwnd � Clear pr ����' Cob B• eke Roscoe Regal Barwal�� '�i i(�ss 0 1•bre Falb •Peynesville - 14� ck� �r Eden Valley Laka �� • Kimbell / JsowLandon Watkins earn H I1' �� Spicer Annandale • Kingston 1 n 11(•• itill'. om .' sl.Mich.' • 'II C ' Pennock V�i ghl Kan.'.I •r H. .r , it ashingt. .� Litchfield Atwater I t. Will Davin Dessel CokatO anneal -',Ttiiiii."0116- ii. • jpiiii1v l W ' i— Re Son k .ill 11 Danube ri Bu/fele Laky ° IIIIM... t of. , nville Glean Isle New AuburnAlik , 41,11 Anington '1J101'�� Altai I_, Retlw00d F01Ia S i b l e ri�`�� /, Falk odor L1 Franklin ...a aybrd H `a ^ ,I �� . _ PP.Grolwn .116,:. IP H delbengf Pr- _' I! _Lafayette ir Les ai ' Montgomery 411110W.P.,‘ �_��'�- Qedhue Morganillk a Center. all Rice �, 'Mien Goodhue Clemente Evan • Nicullet Belbcnosia I. ,,' rimilWa ash. Redwood New Ulm ClevebndKilkenny F wanamt..* __-- Sl• eepy Eye Nicolle .;BS«• Le Sueur Cobden midland Kenyon Zumbrota rl Mazeppe Sanborn Springfield B IOW.n Norm Waterville Mortlslown Pine Island - -. - late Madison __�slan Lak • Henske -te M-.ford Wast cemfreEagle Concord OroneCO y Skyline Lake nosville e r La sem -keCrystal SI.Cb Owatonna Rochester Olmsted Blue arth Waseca "" Mant°Mlle Modelle' � Byron t. C[tOnWOOd Pero,.. j Iaseca Dodge K...Gootl Thumb Mountain Lake M•,,,oK_w Vernon Center . Dodge Major Residential Developer's Delineation of /� Developer#1 Current TC Metro HousingMarket Boundaries v Developer#2 SHARDLEN N �� Developer#3 SHARDLOW A ,/ Developer#4 AND.UBAN 20 0 20 Miles Developer#5 February I,2D00 FIGURE 4 SHERBURNE $40,500 ANOKA $59,200 WRIGHT WASHINGTo N- $42,300 $58, 100 $84,500 $104,000 RAMSEY HENNEPIN $63,700 $137,100 $78,400 $83,200 CARVER $54,300 $57,300 $67,950 SCOTT DAKOTA $73,300 — $50,300 7---, Lot Prices Inside & Outside MUSA N 0 County Boundary A 95 MUSA DAHLGREN SHARDLO AND•UBA 10 Miles 10 0 Source:Residential Research Services Co.,February 2000 February 17,290( Table 3 COMPARISON 1999 RESIDENTIAL PERMIT VALUES - SEVEN COUNTY METROPOLITAN AREA VS. ADJACENT `COLLAR' COMMUNITIES 2/18/00 Seven County Collar Counties Price Difference % Difference Average Single Family Single Family $202,614.03 $164,195.02 38,419 23% Multi-Family Multi-Family $106,602.31 $95,952.51 10,650 11% Note:Amounts reflect an increase of 35%to reflect land values Data Source:Metropolitan Council, City of St.Paul, Goodhue and Rice Counties Table 4 COMPARISON OF AVERAGE NEW HOME PRICES BATC SPRING PREVIEWsM BOOKS Year Overall Twin Cities Sherburne & Price Difference %Difference Market Wright Counties 1995 $235,800.00 $154,634.00 81,166 34.4% 1998 $251,556.00 $188,285.00 63,271 25.2% 2000 $295,952.00 $226,162.00 69,790 23.6% Data Source:BATC Spring Previews"'Books, 1995, 1998,2000 Suburban Northwest Builders Association Table 5 COMPARISON OF NEW HOME PRICES - 1995 AND 2000 BUILDERS ASSOCIATION OF THE TWIN CITIES SPRING PREVIEWsI, INSIDE AND OUTSIDE MUSA 2/15/00 HOME PRICES 1995 SPRING PREVIEWsM 2000 SPRING PREVIEWsM Total #Outside 7 %Outside 7 Total #Outside 7 %Outside 7 Homes County Area County Area Homes County Area County Area Under 100,000 31 6 19% 1 0 0% $101,000-$125,000 63 9 14% 12 4 33% $125,000-$150,000 68 6 10% 71 29 41% Data Source:Builders Association of the Twin Cities, 2000. IV. Summary, Conclusion, Recommendations 1. Summary of Key Points: • The existing large lot development pattern and substantial natural constraints within the planned urban areas have already substantially decreased the efficiency and reduced the opportunities for compact, orderly and cost effective urban development. • Strong, pervasive no-growth and low density growth preferences in local jurisdictions controlling land use within these planned urban areas present major obstacles to the orderly growth of the seven county metro area's urban area. • The concept of incremental, staged expansions of the MUSA is a rational theory that served the Twin Cities Metropolitan Area well through the 1980's. That policy worked when the land supply was abundant and the cities were all eager to plan for full urbanization. The application of that policy today has evolved into a system of artificial shortages, leaving the region with rapidly escalating housing prices, widespread urbanization outside the seven counties and the decimation of the urban reserve. • From 1980 to 1998 Minneapolis gained a net total of 4,208 housing units. Between 1980 and 2000, St. Paul gained somewhere between 458 and 4500 units. Both communities are projected to gain 9,000 units in the next 20 years. The combination of the core cities and the 1st tier suburbs will only account for 13% of the projected households. • No system of growth control can function when there is an abundance of sewered land available beyond the line. Not only is there currently no meaningful growth constraints in place outside the seven county area, it is highly unlikely that any will exist in the foreseeable future. Figure 5 - Regional Municipal Wastewater Treatment Plants Table 6 Regional Cities Wastewater Treatment Plants (Population Capacity), 1996 versus 2000 Existing Planned Total 1996 242,100 58,700 300,800 2000 356,350 20,000 376,350 Difference 75,500 • Every city that our members work in understand that their comprehensive plans must have five year staging areas, which they interpret to be 5 year MUSAs. Some of them actually include the policy that the first five year area must be completely developed before the next area can be opened up. This practice completely negates the 20 year land supply that has been proven critical to allow the market to function and the local planning process to work effectively. 2. Conclusions and Recommendations: No more Mini-MUSAs! The policy of incremental MUSA expansion out to the 2020 growth area line must be be abandoned. Any land within the 2020 MUSA should be available for local communities, land owners and developers to plan for and develop. It should be consistent with regional and local policy for any of this area to be urbanized when metropolitan services are available. -7 . I FIGURE 5 1ll Harris _1 Cambridge .` __ 1 _t 1 --- 1 ,, North B .nch s - ' •- _? � iS N I POL.K. 1 Isanti 1 Zimmerma • c}I s M/� i Becke t --- t Bethel -Stacy �Schaf$r t 1 i I t.Franc r- ^ `1 Chisago =• Lakes "-1 ,:i. Lake , Oak Grov , -A III Montice . Ik Riv> -,' r ' r '4 Wyomin.yomin• r 't 1 Albertville tkt ego/Dayt. i `r Maple Lake •--- ' . 1 L 1r f \� 1 1 1119.111111 - C.a. St;Michael c- • _ ----r- --- / ---------- C ,_ 1 1 ! puffalo ; ,_-1- 1 Rogers ' �j V -/ -' ' .. , ' ' L _- 1 ---- ASHINl TO, , 1 1 `1r � •omerset r Waverly Rockfor. 1 ' t- ST } ' . Howard Lake Montrose '� _ Delano i i' '� 1yJ 111 -jb .__ _ _ - -_- - I .1.!, Watertow 1 - _�,- udson 1 i t Mayer • -- ' iv a - -. — ew I ---- Germany . - _ r 1� 1 _ 1- 1 ; 1 •fiver Falls -, Norwood _ ---- �,- - my ' Cologne er , - ..r, 1 ,- Prescott Hamburg -' :t:- ' , LI , = ; 1 Jordan 1 r, V ' . rt., _ _1 Belle Plain Elkot New Pragu New Market -ed Win. iiy ,_, - r 110(`' .. Northfiel• ; • Cannon Falls 7y . 1 ) r1 r 1 I-- Municipal Wastewater Treatment Plants • Currently Permitted Ej County Boundary A N • Currently Permitted, Being Upgraded Urban Reserve Highways 95 MUSA DAHLGREN SHARDLOW 10 0 10 Miles i �,\% Municipal Boundary AND'UBAN February 17,2000 NOTE: THE FOLLOWING TABLES CONTAIN THE BACKGROUND DATA SUPPORTING SUMMARY TABLE 6 IN THE EXECUTIVE SUMMARY 2000 BATC Survey Wastewater Treatment Plants Notes: 1. "Current PE"calculated from 1999 flow data. 2. "Capacity PE"calcuated from NPDES permitted AWW flow and BOD loading. 3. "Planned Increases PE"calculated either from proposed facility info in NPDES permit or from knowledge of proposed expansion. Population Equivalents(PE) Planned State City Current Capacity Increases Comment Minnesota Albertville 2,400 5,700 0 Becker 2,100 4,800 0 Belle Plain 4,450 5,350 0 Bethel 450 450 0 Big Lake 4,000 9,900 0 Buffalo 8,300 10,750 0 Carver 1,100- 3,100 0 Cologne 600 2,400 0 Cambridge 8,000 11,200 0 Elko/New Market 550 1,100 0 Improvements under construction. Chisago 5,900 11,300 0 Delano 3,500 6,500 0 Dayton/Otsego 0 0 2,500 Under construction. Elk River 9,000 21,600 0 Frankfort/Rockford 0 0 0 No project planned. Hamburg 550 650 0 Harris 300 450 0 Howard Lake 1,800 3,500 0 Isanti 1,500 6,500 0 Jordan 3,000 4,600 1,500 Maple Lake 1,400 1,550 0 Just starting long-term planning. Mayer 550 700 1,000 Monticello 21,200 54,000 0 Montrose 850 1,500 0 New Germany 390 500 0 New Prague 5,900 13,200 0 Norwood/Y.Amer. 7,100 10,000 0 North Branch 3,500 6,300 0 Northfield 18,800 22,150 15,000 Recent bid opening. Oak Grove Small communal drainfield Rockford 3,300 5,700 0 Rogers 2,700 15,300 0 St.Francis 2,400 3,600 0 St.Michael 3,500 8,100 0 Shafer 330 400 0 Stacy 1,250 2,500 0 Red Wing 18,000 30,600 0 Watertown 2,400 14,300 0 Waverly 550 1,200 0 Wyoming 3,700 3,700 0 Zimmerman 1,400 2,700 0 Wisconsin Hudson 11,000 20,000 0 Expansion being completed. Prescott 3,500 5,000 0 River Falls 17,000 22,000 0 Somerset 1.200 1.500 0 Totals 189,420 356,350 20,000 J:1ral • Sheet1 000217WWTFmeWsurvey 2/17/00 11:06 AM d 0 m y '•p.. c C l0 O a c c H 2 m 10. p H N O m E Cl -0 W Ol 1p E .m+ C ep w O X T L ` a, a 'X T ci Ti >. _ C or m O C Ci V d N C N fZ la W i• {a o C r, d 3 V • C X 0. 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X ••1 4 vN, \ I rz f_,,,...1.. .,, .4, r Jev ItY .,/.\\ nil rI • jà? r 11P J 1 y 't,a, inaat , X1 � 1�.1 N ;jJ jag�......:::::'11141::7: —X9 �.a�,a/� 1‘ , ,,i.,._ 711 ).\1 . ) li m 74 \ lipsC.: ' L_ t I / ii Ili 1 V \ A i 1 1 , /1 ,1 ). -1 . - 'i xi 1 �/ m A ' r.�J7 _ i i .. 2 0 Al' it ,),............A._ L..-1 Piw i 1 1 I al' C AIM tri .\1it 1 rj—Iy ) 111/ --. i r i2 11 11 1 1 6"1 1� - 1 1 C r1, 1 i l; m Z .1 1 'nray i :1141. > i M I • '—,440, J Arry I or 6 i ftES CITY OF SHAKOPEE Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Judith S. Cox, City Clerk SUBJECT: Hiring of Receptionist DATE: March 6, 2000 INTRODUCTION: The City Council is asked to consider the hiring of Terry McDonald to fill the receptionist position. BACKGROUND: A vacancy was created with the transfer of Patty Latzke from Receptionist to Office Service Worker in the Building Division effective February 21, 2000. Following the transfer, City Council approved filling the vacant position. You may remember that staff utilized the Scott County Human Resources Department in November for the selection process to fill this position when Tami Vidmar was transferred from Customer Service Representative to Secretary in the Community Development Department. Utilizing the same certification list by the County at that time, interviews were scheduled with four applicants who were still interested in the position. Staff interviewed three candidates and the fourth candidate withdrew her name from consideration the day of the interviews. The interview panel consisted of the City Clerk, the Assistant Finance Director, and the Payroll/Benefits Coordinator. After reviewing the results of the interviews, applications and reference checks, the recommendation is to hire Terry McDonald. RECOMMENDATION: The interview panel recommends the hiring of Terry McDonald for the position of Receptionist effective March 17, 2000, contingent upon successful completion of a pre-employment physical and background check. RECOMMENDED ACTION: Authorize the hiring of Terry McDonald as Receptionist at Step 1, Grade AA of the 2000 Pay Plan, effective March 17, 2000, contingent upon successful pre-employment physical and background check. 0,ftb4 . gr Ci y Clerk