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HomeMy WebLinkAbout25K - ADELPHIA REQUEST FOR COUNCIL ACTION ~ ~ CITY COUNCIL MEETING DATE: FEBRUARY 7, 2005 TITLE: ADELPHIA COMMUNICATIONS FRANCHISE EXTENSION CLERK OF COUNCIL USE ONLY: APPROVED 0 As Recommended 0 As Amended 0 Ordinance on 1 sl Reading 0 Ordinance on 2nd Reading 0 Implementing Resolution 0 Set Public Hearing For ,y MrZ CONTINUED TO ./ FILE NUMBER CITY MANAGER RECOMMENDED ACTION Adopt a resolution approving the Seventh Amendment to Cable Television Franchise Agreement and authorizing the City Manager and Clerk of the Council to execute this agreement. DISCUSSION The City's current extension with Adelphia will expire on February 20, 2005. The City and Adelphia have been in substantive negotiations over the past six months; however, both sides agree that additional time is necessary to finalize the provisions of the contract. Additionally, the Adelphia bankruptcy proceedings have complicated the process. The subject 120-day extension will allow additional time to permit a thorough renewal process. During the extension, all existing cable services will remain in place, and staff will continue to monitor and document Adelphia's performance. FISCAL IMPACT There is no fiscal impact associated with this action. Gerardo R. Moue Executive Direc or Parks, Recreat'on and Community Services 25K-1 RESOLUTION NO. 2005-008 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE SEVENTH AMENDMENT TO THE CABLE TELEVISION FRANCHISE AGREEMENT BETWEEN THE CITY OF SANTA ANA AND ADELPHIA CABLEVISION OF SANTA ANA, LLC BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. That certain Seventh Amendment to Cable Television Franchise Agreement, in the form presented to this meeting, is hereby approved. Section 2. The City Manager is authorized and directed to execute said Seventh Amendment on behalf of the City, and the City Clerk is directed to attest thereto. Section 3. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of ,2005. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney AYES: Councilmembers NOES: Council members 12097 -0002\784596v2.doc -1- 25K-2 ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2005-008 to be the original resolution adopted by the City Council of the City of Santa Ana on Date: 12097-0002\ 784596v2.doc Clerk of the Council City of Santa Ana -2- 25K-3 SEVENTH AMENDMENT TO CABLE TELEVISION FRANCHISE AGREEMENT THIS SEVENTH AMENDMENT TO THE CABLE TELEVISION FRANCHISE AGREEMENT, effective as of the date specified below in Section 5, is entered into by the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("Grantor"), and Adelphia Cablevision of Santa Ana, LLC, dba Adelphia Cable Communications, a Delaware Limited Liability Company ("Grantee"). RECITALS: A. Grantee currently operates and maintains a cable television system in the City of Santa Ana under the authority of Sections 1300 et seq. of the Santa Ana City Charter, former Article II of Chapter 15 of the Santa Ana Municipal Code (now uncodified), entitled "Community Antenna Television Systems," former Article III of Chapter 15 of the Santa Ana Municipal Code (now uncodified), entitled "Cable Television Subscriber Protection," and Ordinance No. NS-1628, as adopted on May 3, 1982, which granted a nonexclusive franchise to Group W Cable, Inc., a New York corporation. The terms of that nonexclusive franchise were set forth in that certain agreement dated June 21, 1982, entitled "An Agreement between the City of Santa Ana and Group W Cable, Inc. to Use the Streets and Public Ways within the City of Santa Ana for the Operation of a Cable Television System for Fifteen Years under Certain Terms and Conditions and Fixing an Effective Date." This Agreement was later modified by a First Amendment to Agreement dated February 7, 1983, by a Second Amendment to Agreement dated December 28,1984, by a Third Amendment to Franchise Agreement dated March 6,1989, by a Fourth Amendment to Cable Television Franchise Agreement dated June 12,2002, by a Fifth Amendment to Cable Television Franchise Agreement dated February 18, 2003, and by a Sixth Amendment to Cable Television Franchise Agreement dated August 2, 2004. B. Under the provisions of paragraph (d) of Section 13 of the Third Amendment to Franchise Agreement dated March 6, 1989, the City consented to the transfer of the cable television franchise from Group W Cable, Inc. to Comcast Cablevision of Santa Ana, Inc., a Delaware corporation. C. By letter dated January 31, 1997, and in accordance with Section 2.1 ("Grant") of the Agreement, as amended by the Second Amendment to Agreement dated December 28, 1984, the Grantee's predecessor-in-interest exercised its option to extend the initial IS-year term of the franchise for an additional five years by giving written notice by certified mail to the Grantor's City Manager. The Agreement, as previously extended by the Sixth Amendment, is now scheduled to terminate at midnight on February 20,2005. D. In a transaction that was consummated on December 31,2000, Comcast Cablevision of Santa Ana, Inc. was converted to a Delaware limited liability company, and all of the ownership interests in Comcast Cablevision of Santa Ana, LLC were transferred by its parent corporation, Comcast Cablevision Corporation of California, to a wholly-owned subsidiary of the ultimate parent corporation, Adelphia Communications Corporation. This transaction, which 12097-0002\784594v3.doc 1 25K-4 involved a change of control, did not require the prior consent of the Grantor under Section 1300 of the Santa Ana City Charter. E. On February 15,2001, a Certificate of Amendment to Certificate of Formation was filed by Comcast Cablevision of Santa Ana, LLC with the Delaware Secretary of State. This Certificate of Amendment changed the name of Comcast Cablevision of Santa Ana, LLC to Adelphia Cablevision of Santa Ana, LLC. F. On June 25,2002, Grantee, as well as its parent company (Adelphia Communications Corporation) and various affiliated entities, filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The debtors are currently operating their respective businesses as debtors-in-possession and have the right to enter into this Seventh Amendment in the ordinary course of business. G. Grantor and Grantee desire to enter into this Seventh Amendment for the purpose of extending their respective rights and obligations under the Agreement for an additional period of time, not to exceed three months from its current termination date of February 20, 2005. THE PARTIES AGREE AS FOLLOWS: Section 1. Section 2.4 ("Duration") of Section 2 ("Grant of Franchise") of the Agreement is amended in its entirety to read as follows: "2.4 Duration. Notwithstanding any provisions to the contrary set forth in this Agreement, the term ofthe franchise is extended for an additional period of time not to exceed three months from its current expiration date of February 20,2005. The franchise will terminate upon the first to occur of (i) the effective date of an agreement renewing the Cable Television Franchise Agreement; or (ii) midnight on May 20, 2005. Renewal, if any, will be in accordance with then applicable law." Section 2. Except as modified in this Seventh Amendment, either expressly or by necessary implication, the terms and conditions of the Agreement remain in full force and effect. Both parties reserve all rights under applicable provisions of the Cable Act, including Sections 626 and 635. Nothing herein shall be deemed or construed as a waiver, release, or surrender of any right that either party may have under the Cable Act or any other applicable law. Section 3. Grantee's execution of this Seventh Amendment will not constitute either an assumption or a rejection by Grantee of the Agreement, nor a waiver of Grantee's rights under Section 365 ofthe U.S. Bankruptcy Code (11 U.S.C. §365). Section 4. This Seventh Amendment will be legally binding upon the Grantor and Grantee from its "Effective Date," as specified in Section 5 below, and upon any assignee or transferee of the Agreement that may hereafter be authorized by the Grantor, or by the U.S. Bankruptcy Court, or both. 12097-0002\784594 v3 .doc 2 25K-5 Section 5. It is the intention of the parties that the Grantee will first execute this Seventh Amendment and then submit it to the Grantor. The Grantor's City Clerk will insert the execution date in all counterparts of this Seventh Amendment, attest to the execution of those counterparts by a duly authorized officer of the Grantor, and transmit one fully executed counterpart to the Grantee. The "Effective Date" is the date on which this Seventh Amendment is signed on behalf of the Grantor. TO EFFECTUATE THIS SEVENTH AMENDMENT, each of the parties has caused this Seventh Amendment to be signed by its duly authorized representative as of the date set forth below each authorized signature. ATTEST: "GRANTOR" CITY OF SANTA ANA City Clerk APPROVED AS TO FORM: By: City Manager Date: City Attorney "GRANTEE" ADELPHIA CABLEVISION OF SANTA ANA, LLC, a Delaware limited liability company, dba ADELPHIA CABLE COMMUNICATIONS By: UCA, LLC, a Delaware limited liability company, its sole member, By: ACC Operations, Inc., a Delaware corporation, its sole member, By: Title: Date: APPROVED AS TO FORM: Corporate Counsel 12097-0002\ 784594v3.doc 3 25K-6