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HomeMy WebLinkAbout10 Video Services Agenda Item # Memorandum To: Board of Directors From: Peter Holzmeister Date: April 11, 2003 Subject: Franchise with the Town of Truckee for the provision of video services 1. Why the matter is before the board Attached is a draft Cable System Franchise to be entered into by the district and the Town of Truckee. This document will need to be finalized and approved by you and the Town Council before being submitted to Nevada County LAFCo as one to the last conditions placed on the District to be met prior to the provision of Broadband Services. 2. History Truckee Donner Public Utility District received Conditional Approval from Nevada County LAFCo to provide Broadband Services on January 18, 2001. At that time the Commission approved it's Resolution 01-01 specifying those conditions the District must meet prior to receiving a Certificate of Compliance to provide Broadband Services within the District's service area. One of these conditions was that the District enter into a Franchise Agreement with the Town of Truckee for the provision of video (cable television) services. In the past the board has asked whether we are required to secure a franchise agreement from the Town. We have been advised by counsel that we are required. Our overall approach to the franchise has been influenced by the idea that there should be a level playing field between USA Media and us. We do not expect to have a regulatory advantage over USA Media, nor should they have an advantage over us, since we will be in direct competition with them and the rules of engagement should be fair. 3. New Information District and Town staff have worked together to prepared the attached Cable System Franchise Agreement. This Franchise Agreement provides the District the opportunity to provide video, cable television services to residential and commercial customers within the Town's limits. This Agreement includes specific requirements that must be met by s the District. In the following paragraphs I have summarized these requirements for Board review. 1. Duration of Franchise: The term of the Franchise has been agreed to be ten (10) years from the effective date of the Agreement. 2. Franchise Fees: Per Federal Communications Commission rules, the District has agreed to pay the Town five percent (5%) of gross annual Cable Service Revenue. Cable Service Revenues are currently defined as revenues collected for the provision of all video services. 3. Insurance: Insurance requirements found within the Franchise Agreement for General Liability, Automobile Liability, Worker's Compensation, and Errors and Omissions coverage has been reviewed by District management and General Counsel, and has been found to be in line with current District coverage, thus acceptable. 4. Service Area: District staff has agreed that once operational its Broadband system will provide services to all residential and commercial opportunities within the District and Town's limits. 5. Construction of the District's Broadband System: Under the Agreement the District would guarantee that the construction of its Broadband system would be complete within five (5) years, or April 31, 2008. 6. Most Favored Nations: In approving the Agreement the District agrees that it's system will be compared to systems in specific communities, and that if the average services provided by these predetermined communities is greater than that provided by the District, that the District will increase its offerings to meet them. 7. EAS: The District shall provide an Emergency Alert System in compliance with applicable Federal Communications Commission requirements. 8. Standby Power: In order to ensure that the District's video services are available on an ongoing basis the Agreement includes language that requires the District to include in its system infrastructure devices that will provide standby power generating capacity capable of providing twelve (12) hours of emergency power. 9. Parental Control Lock: The District has agreed to provide, for sale or lease, to subscribers, upon request, a parental locking devise or digital code that permits inhibiting the video and audio portions of premium channels. 10. Public Educational and Governmental (PEG) Access: As the Board is aware, the Truckee Community does not currently have a broadcast television station in place. As such local news and sports is generally found in a local weekly newspaper. For over eight years Channel 6, a Public, Educational and Governmental (PEG) cable channel, owned by the Town of Truckee and operated by the Tahoe Truckee Unified School District, has provided up to date community information to those subscribing to the local cable television service. It is the District's intent to provide support to this channel in order to ensure it's continued growth and success. As part of the Franchise Agreement with the Town of Truckee the District would provide the following PEG support: (a) Carriage of Truckee Channel Six in its entirety with no restrictions on the amount of revenue generated by the Channel or its programming; (b) Carriage of two additional PEG channels; (c) A one time PEG Capital Equipment Grant of$60,000 (d) Ongoing PEG financial support in the amount of$.40 per subscriber per month. 4. Recommendation It is staffs recommendation that the Board approve the Cable System Franchise Agreement between the District and the Town of Truckee, and direct Telecommunications Director Alan Harry to submit the Agreement to the Town of Truckee for Town Council review and approval, and Nevada County LAFCo. CABLE SYSTEM FRANCHISE AGREEMENT BETWEEN THE TOWN OF TRUCKEE AND TRUCKEE DONNER PUBLIC UTILITY DISTRICT. EFFECTIVE: April 17, 2003 TABLE OF CONTENTS SECTION 1 GRANTING OF FRANCHISE.,................................ 3 SECTION 2 GENERAL REQUIREMENTS................................. 5 ....................... .. SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY.........................................13 SECTION 4 SYSTEM UPGRADE............................................................................................14 SECTION 5 SERVICES AND PROGRAMMING....................................................................17 SECTION 6 SUPPORT FOR PUBLIC EDUCATIONAL AND GOVERNMENTAL (PEG) CABLE ACCESS................. ....... ....1g ................................... SECTION7 REGUL.ATION......................................................................................................21 EXHIBITS A LINE EXTENSION POLICY B PUBLIC BUILDINGS AGREEMENT This Agreement, made and entered into this 17 day of April, 2003, at Truckee, California, by and between the Town of Truckee, a municipal corporation of the State of California, and Truckee Donner Public Utility District, a public utility district governed by the California Public Utility District Act, WITNESSETH WHEREAS, the Town of Truckee,pursuant to Federal and California law and Ordinance No. 99-01, is authorized to grant and renew one or more non-exclusive revocable Franchises to own, operate, construct, maintain and reconstruct a Cable System within the Town; and WHEREAS, the Town, after due evaluation of Truckee Donner Public Utility District, and after public hearings, has determined that it is in the best interests of the Town and its residents to grant a Franchise to Truckee Donner Public Utility District. NOW, THEREFORE, the Town of Truckee (hereinafter the "Grantor") hereby grants to Truckee Donner Public Utility District(hereinafter the "Grantee") a renewal of its Cable System Franchise in accordance with the provisions of Ordinance No. 99-01, Federal and State Law and this Agreement. SECTION I RENEWAL OF FRANCHISE 1.1 Grant A Cable System Franchise is hereby granted, subject to the terms and conditions of this Agreement, to the Truckee Donner Public Uitlity District. The granting of such Franchise grants the authority, right and privilege, to construct, reconstruct, operate and maintain a Cable System within the Streets and Public Ways in the Town of Truckee as it is now or may in the future be constituted, and also provides the authority to offer to Subscribers any Cable Service or other services that legally may be offered, utilizing the facilities of Grantee's Cable System. 1.2 Right of Grantor to Issue and Renew Franchise Grantee acknowledges and accepts the present right of Grantor to issue and/or renew a Franchise 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 unless there is a change in statutory, regulatory or desisional law. This is not, however, a waiver of any constitutional or legal right or privilege on the part of the Grantee. 1.3 Effective Date of Renewal The Franchise shall be effective on the date that both parties have executed this Agreement, provided that said date is no later than thirty (30) days after the date the Town Council, by Resolution, approves this Agreement. The Franchise is further contingent upon the filing by Grantee with the Town 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 Resolution approving this renewal and any extension of time hereunder, the Grantor may declare this Franchise null and void. 1.4 Duration The term of the Franchise shall be ten (10) years from the effective date hereof, after which time it shall expire and be of no force and effect unless renewed. Franchise shall be in accordance with applicable law. 1.5 Conflict with Cable Ordinance (a) The provisions of the Town of Truckee Cable System Regulatory Ordinance, Ordinance No. 99-01, are hereby incorporated herein by reference as if set out in full, and form part of the terms and conditions of this Agreement. In the event of any conflict between the terms and conditions of this Agreement and the provisions of Ordinance No. 99-01, this Agreement shall prevail. (b) Should Ordinance No. 99-01 be amended, revised, superseded or otherwise changed after the effective date hereof in such way as would materially affect the terms and conditions of this Agreement, said amendment, revision or change shall not apply to this Agreement without Grantee's written approval. 1.6 Definitions The definitions contained in Ordinance No. 99-01 are incorporated herein as if fully set forth. SECTION 2 GENERAL REQUIREMENTS 2.1 Governing Requirements Grantee shall comply with all lawful requirements of this Agreement, Ordinance No. 99- 01 and applicable State and Federal law. 2.2 Franchise Fee (a) The Grantee shall pay to the Grantor an annual Franchise Fee of five percent (5%) of Gross Annual Cable Service Revenues received by the Grantee from all operations of the Cable System in the Town of Truckee, provided, that if Federal and State law permit the Grantee to provide non-video telecommunications services to Subscribers (such as telephone communications) through the facilities of the Cable System, and the Grantor has the regulatory authority to collect either a Franchise Fee or an in-lieu-of-franchise-fee payment on such services, then the fee for revenues derived by the Grantee from such services shall be at the maximum rate permitted by law. (b) The Franchise Fee, and any other applicable fee, shall be payable quarterly, by no later than sixty (60) days after the end of the quarter for which payment is due. (c) Revenues collected as Franchise Fees shall be included in Gross Annual Cable Service Revenues as permitted by law. (d) The Grantee, with each Franchise Fee payment, shall provide the Grantor with an itemization of all revenues included, or received and excluded, from the computation of the Franchise Fee due. Such itemization shall be made in a form and manner to the Grantor's reasonable satisfaction. 2.3 Payment to Grantor No acceptance of any payment shall be construed as an accord that the amount 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 further or additional sums payable under the provision of this Agreement. All amounts shall be subject to audit, as authorized by Section 9.1 of Ordinance No. 99-01. 2.4 Insurance Scope and Limits The Grantee shall procure and maintain, for the duration of the Franchise, insurance against claims for injuries to Persons or damages to property which may arise from or in conjunction with the performance of the work hereunder by the Grantee, its agents, representatives,employees or subcontractors. (a) Coverage shall include at least the following: (1) Comprehensive General Liability Insurance. (2) Automobile Liability Insurance. (3) Worker's Compensation Insurance as required by the State of California and Employer's Liability Insurance. (4) Errors and Omissions Insurance appropriate to the Franchise. The insurance shall be endorsed to include contractual liability. (b) The Franchise Holder shall maintain limits no less than: (1) General Liability: Two Million Dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Franchise or the general aggregate limit shall be twice the required occurrence limit. (2) Automobile Liability: Two Million Dollars ($2,000,000) combined single limit per accident for bodily injury and property damage. (3) Worker's Compensation and Employer's Liability: One Million Dollars ($1,000,000) each accident, One Million Dollars ($1,000,000) policy limit bodily injury or disease, One Million Dollars ($1,000,000) each employee bodily injury by disease. (4) Errors and Omissions Liability: One Million Dollars ($1,000,000) each occurrence. (c) Any deductibles or self-insured retentions must be declared to and approved by the Grantor. At the option of the Grantor, either the insurer shall reduce or eliminate such deductibles or self insured retentions as respects the Grantor, its officers, officials, employees and volunteers; or the Grantee shall provide evidence satisfactory to the Grantor guaranteeing payment of losses and related investigations, claim administration and defense expenses. (d) Other Insurance Provisions. (1) The policies shall contain, or be endorsed to contain,the following provisions: (A) The Grantor, its officers, officials, employees and agents shall be covered as insureds with respect to liability arising out of automobiles owned, leased, hired, or borrowed by or on behalf of the Grantee for all franchise related activities; and with respect to liability arising out of work or operations performed by or on behalf of the Grantee including materials, parts or equipment furnished in connection with such work or operations related to the provision of cable television. (B) The Grantee's insurance coverage for all franchise related activies shall be primary insurance as respects the Grantor, its officers, officials, employees and agents. Any insurance or self-insurance maintained by the Grantor, its officers, officials, employees and agents shall be excess of the Grantee's insurance and shall not contribute with it. (C) Each insurance policy required by this Agreement shall be endorsed to state that coverage shall not be canceled or reduced by the insurer except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the Grantor. (D) The Grantee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (2) With respect to Worker's Compensation and Employers Liability Coverage, the insurer shall agree to waive all rights of subrogation against the Grantor, its officers, officials, employees, and volunteers for losses arising from work performed by the Grantee for the Grantor. (3) Each insurance policy required by this Agreement shall be endorsed to state that coverages shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty(30)days'prior written notice by certified mail, return receipt requested, has been given to the Grantor. (e) Insurance shall be placed with insurers with a current A.M. Best's rating acceptable to the Grantor, but no less than A:VII, and the insurer shall be "admitted" in the State of California. A non-admitted company submitted for Grantor consideration shall have an A.M. Best's rating of A:X or higher. (f) Grantee shall furnish the Grantor with endorsements effecting the coverage required by this Section. The endorsements shall be signed by the person authorized by that insurer to bind coverage on its behalf The Grantor shall receive an original document with an original "wet" signature for each endorsement and/or certificate of insurance. All endorsements shall be received and approved by the Grantor in accordance with the schedule established in Section 1.3 of this Agreement. (g) The Grantee shall include all subcontractors involved in franchise related activities as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. (h) Grantee hereby indemnifies Grantor for any damage resulting to it from failure of either Grantee or any subcontractor to take out and maintain such required insurance. 2.5 Indemnification (a) Grantee shall indemnify, hold harmless, release and defend Grantor, its officers, employees and agents from and against any and all actions, claims, 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 arising from the activities of Grantee, its subcontractors, employees and agents hereunder. Grantee shall be solely responsible and hold Grantor harmless from all matters relative to payment of Grantee's employees including compliance with Social Security, withholding,etc. (b) This indemnification obligation shall not be limited in any way by a limitation on 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 Section. (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 of such damages or claims for damages. (e) Grantee shall not be required to indemnify Grantor for sole negligence or willful misconduct on the part of Grantor or its officials, boards, commissions, agents, or employees (hereinafter "such acts"), Grantor shall hold Grantee harmless from any damage resulting from any such acts of the Grantor or its officials, boards, commissions, agents or employees in utilizing any Governmental or Educational Access Channels, equipment, or facilities and for any such acts committed by Grantor in activating any Emergency Alert features of the Cable System, or in connection with work performed by Grantor and permitted by this Agreement, on or adjacent to the Cable System. 2.6 Security Fund (a) In accordance with Section 9.2 of Ordinance No. 99-01, within sixty(60) days of the Resolution adopting this Agreement, Grantee shall establish and provide to Grantor a security fund, as security for the faithful performance by Grantee of all material provision of this Agreement. The security fund shall consist of two (2) parts. The first part shall be a bond, which may be a corporate guarantee and which shall be in the amount of One Hundred Fifty Thousand Dollars ($150,000), and in a form acceptable to the Grantor's Town Attorney. The second part shall be in the amount of at least Fifteen Thousand Dollars ($15,000) and shall either be in the form of an irrevocable letter of credit, or a cash deposit established in a local bank in an interest-bearing account payable to the order of the Grantor as trustee for Grantee, with all interest distributed to the Grantee. (b) The bond shall be maintained at the One Hundred Fifty Thousand Dollar ($150,000) level until the System upgrade provided for in Section 4.1 herein is completed, at which time the bond shall be released, provided there are then no outstanding material violations of this Agreement. The cash or letter of credit portion of the security fund shall be maintained at the Fifteen Thousand Dollar ($15,000) level throughout the term of this Agreement, provided that at intervals no more often than each three (3) years, Grantor shall have the right to require that this amount be increased to reflect changes in the San Francisco/Sacramento Metropolitan Area Consumer Price Index during the prior three (3) year period. (c) The security fund may be drawn upon by Grantor for those purposes specified in Section 9.2 of Ordinance No. 99-01, in accordance with the procedures of Section 9.2 of said Ordinance, provided that Grantee has received written notice and thirty(30) days after receipt of notice to cure any material violations prior to any draw. As long as the Grantor follows the procedures specified herein and in Ordinance No. 99-01 for assessing and/or withdrawing funds from said security fund, Grantee shall not initiate litigation or non-Town administrative action to prevent or impair Grantor from drawing down those funds. Grantee's recourse, in the event Grantee believes any taking of security funds is improper, shall be through legal action after the security has been drawn upon. If the Grantor's action or taking is found to be improper by any court or agency of competent jurisdiction, Grantee shall be entitled to a refund of the funds plus interest and/or any other award which such court or agency shall make. (d) Nothing herein shall be deemed a waiver of the normal permit and bonding requirements made of all contractors working within the Town's Rights-of-Way. 2.7 Procedure for Remedying Franchise Violations (a) The procedure for remedying Franchise violations or breaches shall be consistent with the procedures of Section 15 of Ordinance No. 99-01. Grantor, by action of the Grantor's Town Manager, shall first notify Grantee of the violation in writing by personal delivery or registered or certified mail, and demand correction within a reasonable time, which shall not be less than fifteen (15) 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. 99-01, 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 written notice of not less than thirty (30) days of a public hearing to be held before the Council. 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 Council finds that Grantee has corrected the violations or has diligently commenced correction of such violation after notice thereof from Grantor and is diligently proceeding to fully remedy such violation, or that no material violation has occurred, the proceedings shall terminate and no 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 thereby, whether the violation was chronic, and 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 correction of such violation, the Council may impose liquidated damages, assessable from the security fund, of up to Two Hundred Fifty Dollars ($250) per day or per incident, provided that all violations of a similar nature occurring at the same time shall be considered one (1) incident. Breaches of customer service requirements shall not be considered on an individual basis. If the Grantor elects to assess liquidated damages, pursuant to the provisions of this Franchise Agreement, then such election shall constitute Grantor's exclusive remedy for a period of one hundred twenty (120) days. Thereafter, if the Grantee remains in non-compliance with the requirements of the Franchise Agreement, the Grantor may pursue any available remedy. 2.8 Reservation of Rights Grantor and Grantee reserve all rights that they may possess under the law unless expressly waived herein. By entering into this Agreement, neither Grantee nor Grantor waives any rights which it now or may later enjoy under applicable law, and specifically Grantor and Grantee reserve their rights to take full advantage of any changes in law during the term of the Franchise. 2.9 State or Federal Preemption In the event that the State or Federal Government discontinues preemption in any area of Cable System regulation 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 in the then applicable law. If such preemption has a material impact upon the term of this Agreement, Grantor and Grantee shall negotiate in good faith to attempt to restore the mutual considerations provided in this Agreement. SECTION 3 SERVICE AREA AND LINE EXTENSION POLICY 3.1 Franchise and Service Area The Grantee's Franchise and Service Areas shall be co-extensive with the Truckee Donner Public utility District's service area, as approved by the Nevada County Local Agency Formation Commission, with in the town limits of the Town of Truckee, including any and all territory as may be annexed thereto during the term of this Agreement. The Grantee shall offer the full range of residential Cable Services to all residents of the Town, at standard installation charges, subject to the line extension policy of Exhibit"B" herein. 3.2 Commercial Areas For areas of the Town that are primarily commercial,the Grantee shall install appropriate conduit at any time that open utility trenches are available and the Grantee has received at least ten (10) working days advance notice of the availability of the trenches. Residences in primarily commercial areas shall be provided with Cable Service upon request, on a time and materials basis. SECTION 4 SYSTEM CONSTRUCTION 4.1 Construction (a) By no later than April 31, 2008, the Grantee shall launch and make available to all Subscribers, through various techniques, multiple tiers of video programming. Such date may be extended if system construction is delayed due to Litigation, administrative action, delays in securing permits or acts of god. (b) Grantee shall construct the Cable System to provide a capacity of at least Five Hundred Fifty Megahertz (550 MHz) utilizing a fiber-to-the-user within sixty (60) months of the effective date of this Agreement. Grantor and Grantee agree that completion of the upgrade shall be defined as the activation of downstream capacity of at least 54-550 MHz to Subscribers, activation of upstream capacity of at least 5-40 MHz from Subscriber locations, and the satisfactory completion of any permit-specified requirements and the public building connections provided in Section 4.2 below. 4.2 Most Favored Nation (a) To assure that Grantee's Cable System continues to reflect the general cable industry state-of-the-art throughout the term of the Franchise, Grantor and Grantee agree to utilize Cable Systems in the following communities as a basis for comparison. The comparison communities (also referred to as the"comparison group") shall be: (1) City of South Lake Tahoe (5) City of Big Bear Lake (2) City of Grass Valley (6) City of Mount Shasta (3) City of Auburn (7) City of Oakhurst (4) City of Yuba City (8) City of Susanville (b) Grantor and Grantee agree that subsequent to the completion of the upgrade required in Section 4.1 above, but no earlier than five (5)years after the effective date of this Agreement, when four (4) or more of the communities in the comparison group have Cable Systems that offer programming services which exceed the services provided on Grantee's System by ten (10) video programming services or more, Grantor may require Grantee to provide additional programming services to meet or exceed the average provided by the comparison group. Grantee shall complete any modification required to meet the comparison group average within six (6) months of receipt of a Grantor written request. (c) No earlier than five (5) years after the effective date of this Agreement, when four (4) or more of the comparison group have Cable Systems that are offering new or advanced residential services not available to Grantee's Subscribers, Grantee shall offer comparable services in the Town within twelve (12) months of receipt of a Grantor written request. (d) If any Grantor request made pursuant to (b) or(c) above,would require a substantial new investment of funds in the Cable System, Grantee may request an appropriate extension of the Franchise term. If Grantor and Grantee cannot agree upon the duration of the extension, and Grantee otherwise is unwilling to comply with Grantor's request, Grantor, after a public hearing, and with at least thirty (30) days written notice to Grantee, may shorten the existing Franchise term so that the term will expire not less than thirty-six (36) months after Grantor's notification to Grantee of Grantor's intent to shorten the term. 4.3 Emergency Alert Capability Grantee shall provide Emergency Alert System capability in full compliance with applicable Federal Communications Commission requirements. Until such time as a system satisfying the requirements of the Federal Communications System is implemented, Grantee shall provide a telephone-activated, voice-override local Emergency Alert. Authorized Grantor officials shall be permitted to utilize the emergency system at no cost in the event of a local or regional emergency. Grantor and Grantee shall establish procedures for Grantor testing and use of the emergency system. 4.4 Standby Power Grantee shall provide standby power generating capacity at the Cable System control center capable of providing at least twelve (12) hours of emergency supply. Grantee shall maintain standby power system supplies at all nodes and throughout the major trunk cable networks capable of providing emergency power within the standard limits of commercially available power supply units. 4.5 Parental Control Lock Grantee shall provide, for sale or lease, to Subscribers, upon request, a parental control locking device or digital code that permits inhibiting the video and audio portions of premium Channels. 4.6 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 to Grantee's satisfaction. 4.7 Technical Standards The Federal Communications Commission (FCC) Rules and Regulations, Part 76, Subpart K (Technical Standards), as amended from time to time, shall apply, to the extent permitted by applicable law. 4.8 Right of Inspection Grantor shall have the right to inspect all construction, reconstruction or installation work performed subject to the provisions of the Franchise and other pertinent provisions of law, and as part of Grantor's obligation to protect the public health,safety and welfare of its citizens. SECTION 5 SERVICES AND PROGRAMMING 5.1 Services and Programming Grantee shall provide Grantor with a list of program services offered, which list shall be updated each time a change is made. Grantee shall not reduce the number of program services without thirty(30) days prior written notification to the Grantor and System Subscribers. 5.2 Leased Channel Service Grantee shall offer leased channel service on reasonable terms and conditions and in accordance with applicable law. SECTION 6 SUPPORT FOR PUBLIC EDUCATIONAL AND GOVERNMENTAL (PEG) CABLE ACCESS 6.1 Grantee Support for Public,Educational and Governmental(PEG)Access Grantee shall provide the following support for PEG Access within the Franchise Area: (a) Upon the effective date of this Agreement, Grantee shall make the existing downstream video Channel Number 6 available exclusively for Public, Educational and Governmental (PEG)Access use. This Channel shall be dedicated for the term of the Franchise. (b) Revenues which may be generated from program sponsorship or the sale of local advertising on the Local Organization (LOC) Channel(s) shall be retained by the management of the Council's designated LOC to defray Channel costs. (c) No sooner than the completion of the System construction as defined in Section 4.1, Grantee shall provide two(2) additional Channels for PEG Access use. (d) The Grantee, within sixty (60) days of the comemsment of eontruction, shall provide the Grantor with an initial PEG Accessment capital equipment grant of Sixty Thousand Dollars ($60,000). (e) Grantee shall provide Grantor with further PEG Access support grants throughout the term of this Agreement. The grants shall be computed at the rate of Forty Cents ($0.40) per Subscriber per month, paid quarterly concurrent with the Franchise Fee. The ongoing grants may be used for any and all PEG Access purposes, including operating expenses and capital expenditures and, furthermore, Grantor and Grantee agree that said funds are not franchise fees for the purposes of the Cable Communications Policy Act of 1984, as amended. (f) If any third-party entity, other than Grantor, is successful in litigation which determines that any funds provided in paragraph (f) above must be considered as Franchise Fees,the Grantor shall credit such funds against future Franchise Fees. (g) Upon completion of the Cable System construction provided in Section 4.1, Grantee shall provide at least one (1) connection and the highest tier of basic Cable Service, at no installation or monthly service charge, to all of the public buildings listed in Exhibit"C." (h) No later than completion of the System upgrade, Grantee shall provide an optical fiber upstream communications link from the Council Chambers, and from a designated High School location, to the Cable System headend, to permit live cablecasting of video programming from those locations. (i) During the term of this Agreement, Grantor may request, in writing and at least one hundred twenty (120) days in advance, and Grantee shall provide one (1) additional upstream link from a public facility within the Town. 6.2 Competitive Video Service Providers If any Town-franchised or licensed multichannel video service providers serving the Town shall achieve and maintain in the aggregate,at least twenty percent(20%) of the number of subscribers served by Grantee, and if, further, any competitive providers achieving that percentage are not subject to providing PEG Access support, or are subject to providing a lower level of support than Grantee is required to provide under Section 6.1 above, then Grantee shall have the right to negotiate to reduce its level of support to that which is applicable to the competitive provider(s). 6.3 Title to PEG Equipment Grantor shall retain title to all PEG equipment procured with funding made available in accordance with Section 6.1 above. 6.4 Relocation of PEG Channels If Grantee relocates any PEG Access Channel to a different Channel number, Grantee shall reimburse Grantor for any out-of-pocket Grantor costs, up to a maximum of Five Thousand Dollars ($5,000) incurred as a result of the relocation. Grantee shall provide Grantor and all subscribers with at least thirty(30) days written notice of such relocation. 6.5 Promotion of PEG Access Grantee shall allow the Grantor to place bill staffers in Grantee's subscriber statements at a cost to the Grantor not to exceed Grantee's cost, no more than twice per year upon the written request of the Grantor and at such times that the placement of such materials would not affect Grantee's cost for the production and mailing of such statements. The Grantor agrees to pay Grantee in advance for the actual cost of such bill stuffers. Grantee shall also make available access information provided by Grantor in subscriber packets at the time of installation and at the counter in the System's business office. 6.6 Pass-Through of PEG Access Costs If permitted by Federal and State law, Grantor shall not oppose any "pass-through" of the PEG Access grants provided in Section 6.1 above, so long as said "pass-through" is done in a manner consistent with the provisions of said Federal and State law. 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 Ordinance No. 99-01. 7.2 Force Majeure The force majeure provisions of Section 16 of Ordinance No. 99-01 shall apply. 7.3 Service Standards A verified and continuing pattern of noncompliance with the service standards contained in Ordinance No. 99-01, this Agreement or standards established by any regulatory body having the authority to formulate service standards for Cable Systems, shall constitute a material breach of this Agreement, entitling Grantor to utilize the provisions set forth in Section 15 of Ordinance No. 99-01. Such a breach must relate to a pattern of service, and not to individual Subscribers. 7.4 Notices Notices transmitted by either party to this Agreement to the other party shall be addressed as follows: Grantor: Town Manager Town of Truckee 11570 Donner Pass Road Truckee, CA 96161 Grantee: General Manager Truckee Donner Public Utility District Po Box 309 Truckee, CA 96160 Either party may designate by written notice a different address to which notices shall be sent. 7.5 Successors and Assigns All provisions of this Agreement shall apply to any lawful successors and assigns. 7.6 Severability If any provision of this Agreement or the application of such provision to any circumstance is declared unconstitutional or otherwise invalid by the lawful judgment of any court of competent jurisdiction, the remainder of this Agreement or the application of the provision to other circumstances, shall not be affected thereby. 7.7 Choice of Law This Agreement shall be governed by and interpreted under the laws of the State of California. The venue for any legal proceedings under this Agreement shall be in either Nevada County or any federal district located in Nevada County. 7.8 No Waiver Grantee shall not be excused from complying with any of the terms and conditions of this Agreement by any failure of the Grantor upon any one (1) or more occasions to insist upon or to seek compliance with any such terms or conditions. IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement the date and year first above written. APPROVED AS TO FORM: TOWN OF TRUCKEE By: -- By Town Attorney Title: Town Manager Date: (SEAL) ATTEST: Deputy Town Clerk TRUCKEE DONNER PUBLIC UTILITY DISTRICT By:- --- -- Name, Title Date: s EXHIBIT A LINE EXTENSION POLICY B-1 EXHIBIT A LINE EXTENSION POLICY A. The Grantee shall extend service to areas which are contiguous to the designated Service b Areas, whenever the density of such contiguous areas reaches a level of thirty (30) units s, per road mile for aerial utility areas and fifty (50) units per road mile for underground utility areas, or portion thereof. Such contiguous areas shall then be considered, for all purposes under this Agreement, to be incorporated into the initial Service Area of this Franchise following authorization by the Nevada County Local Agency Formation Commission (LAFCo). B. The Grantee shall extend Service to all other areas whenever requested to do so by residents who are willing to pay the cost of such extension of service. Any such line extensions shall be made pursuant to a written contract between the Grantee and the resident. If such extension exceeds Grantee's sphere jof influence, Grantee, prior to constructing the extension, must receive Nevada County LAFCo authorization to extend it's boundries. f 5 EXHIBIT B z PUBLIC BUILDINGS s y D-3 EXHIBIT B LIST OF PUBLIC BUILDINGS Y 5 A. TOWN AND UTILITY DISTRICT BUILDINGS # Name Address Town Hall 10183 Truckee Airport Road Truckee Donner Public Utility District 11570 Donner Pass Road Truckee Fire Protection Dist., Station 91* 10049 Donner Pass Road Truckee Fire Protection Dist., Station 92 11479 Donner Pass Road Future Truckee Fire Protection Dist. Station** Within the Town Truckee Donner Rec&Park District 10046 Church Street Future Truckee Donner Rec& Park District Within the Town Recreation Center** Truckee Donner Rec&Park Dist. Youth 11695 Donner Pass Road Center — Veterans Hall 10214 High Street Nevada County Sheriffs Substation 10879 Donner Pass Road Nevada County Joseph Center 10075 Levone Nevada County Library 10031 Levone Future USES Office** Tahoe Forest Hospital Administration Donner Pass Road and Pine Avenue Truckee Sanitary District Truckee Tahoe Sanitation Agency* B. SCHOOLS Name Address Truckee High School 11725 Donner Pass Road Sierra High School 11661 Donner Pass Road Truckee Elementary School 11911 Donner Pass Road Genshire Elementary School 10990 Dorchester Sierra Mountain Middle School 11603 Donner Pass Road * Future buildings connected in accordance with Line Extension Policy.