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HomeMy WebLinkAboutResolution - 88-268 - Approving Settlement with Grantee Under City's Cable Franchise Ordinance Regarding Extension of Term of CATV Relief Ordinance, Based on Modifications to Transferee - EXHIBIT BB RESOLUTION NO. A RESOLUTION APPROVING A SETTLEMENT WITH THE GRANTEE UNDER THE CITY'S CABLE COMMUNICATIONS FRANCHISE ORDINANCE REGARDING THE EXTENSION OF THE TERM OF THE CATV RELIEF ORDINANCE, BASED UPON CERTAIN MODIFICATIONS THEREOF, TO A PROPOSED TRANSFEREE OF THE FRANCHISE FOR THE CITY'S CABLE COMMUNICATION SYSTEM. WHEREAS , the City Council of the City of Eden Prairie ("City") is the official governing body of City; and WHEREAS, City, in association with other cities, granted a Cable Communications Franchise to Rogers Cablesystems of the Southwest, Inc. ( "Grantee") ; and WHEREAS , the City adopted the CATV Relief Ordinance No. I -85 in 1985 ("CATV Relief Ordinance") , providing for modifications of the requirements of the City's Cable Communications Franchise Ordinance ("Franchise") ; and WHEREAS , in approximately August 1988 , Rogers Communications, Inc. ("Rogers" ) , notified City and the Southwest Suburban Cable Commission ("SWSCC") , a joint powers commission comprised of this City and the cities of Edina I Hopkins , Minnetonka . ,and Richfield ( "Member Cities") , of the fact that Rogers intended to sell all interest and holdings in its U. S. cable systems to KBL Cable, Inc. , a Texas corporation ("Proposed Transferee") ; and WHEREAS , as part of Rogers' proposed sale of its U. S. cable systems, Rogers requested that the City extend the term of the CATV Relief Ordinance after the Closing; and WHEREAS , on behalf of this City and other Member Cities of the SWSCC, the SWSCC undertook an evaluation and study of the request of Rogers ; and WHEREAS , after considerable study and negotiation, the. SWSCC made a reconia--ndation based upon the final offer of Rogers, which is included as Exhibit 1 to this Resolution as a Stipulation of Settlement and Release ("Stipulation") ; and WHEREAS , at a Commission meeting of the SWSCC on September 7 , 1988 , the SWSCC recommended that the City approve and accept the conditions under which an extension of the terms of the CATV Relief Ordinance would be made ; and I 1 WHEREAS , the City has reviewed the recommendation of the SWSCC and the Stipulation and has determined that an extension of the CATV Relief Ordinance as amended, in accordance with the requirements set forth in the Stipulation, is reasonable and acceptable to the City; and WHEREAS , the City understands that Grantee and Rogers agree that the terms of the Stipulation shall not be effective unless the Proposed Transferee enters into a Guarantee Agreement on or before the time of Closing agreeing to guarantee Grantee's performance of the Franchise as amended, the Stipulation, the CATV Relief Ordinance as amended, the Performance Agreement as amended, and compliance with the acceptance terms of the Franchise; and WHEREAS , the City acknowledges that the SWSCC has incurred substantial expense in evaluating this proposed settlement, as set forth in the Stipulation. The City also has incurred expense in this process. Both the SWSCC and City must be paid for the expenses incurred. The City acknowledges that as part of the process undertaken by the SWSCC, the Grantee has paid monies towards such expenses incurred by SWSCC. The balance of such expenses of SWSCC and also the City will be paid from the funds paid pursuant to paragraph 7 below; and WHEREAS , the SWSCC has recommended that Rogers pay to it directly the proceeds of the settlement pursuant to the Stipulation and such monies be held by the SWSCC until the SWSCC is able to recommend the best use and distribution for and on behalf of each of the Member Cities; and WHEREAS, the City has determined that the Stipulation with its attached Exhibits and Resolution, shall not be effective until the sale and transfer by Rogers to the Proposed Transferee is completed. The terms of this Resolution shall not be effective until Grantee and Rogers have complied in full with the Resolution and satisfied all of the requirements of this Resolution, the Stipulation, the acceptance of modifications to the Performance Agreement, and the amendment to the CATV Relief Ordinance, as well as having closed with the Proposed Transferee. NOW, THEREFORE, in a regular meeting assembled of the City Council of the City of Eden Prairie , the following was resolved; 1) That the Stipulation with its exhibits, which is attached hereto as Exhibit 1, is hereby approved and the Mayor and City Manager are authorized to sign the same on behalf of City. 2 2) That the terms of this Resolution are contingent upon approval and adoption of the CATV Relief Ordinance Amendment and Amendment to Performance Agreement, which are attached to the Stipulation, by the City, other Member Cities of the SWSCC and the SWSCC. 3) That the terms of this Resolution shall be null and void if a similar Resolution is not approved by other Member. Cities of the SWSCC within 45 days from the date of this Resolution. 4) That the terms of this Resolution shall be null and void unless Grantee and Rogers shall have signed the Stipulation and the Proposed Transferee guarantees the performance of the Grantee and satisfies the transfer requirements of the Franchise. 5) This Stipulation and all of its Exhibits shall be null and void and shall not be effective, unless Proposed Transferee enters into a guarantee agreement on or before the time of Closing of transfer of ownership from Rogers to Proposed Transferee agreeing to guarantee Grantee's performance of the Franchise as amended, this Stipulation, the CATV Relief Ordinance as amended, and the Performance Agreement as amended, and unless the Proposed Transferee complies with the terms of Article XIV of the Franchise; and 6) That if a Closing of the transfer by and between Rogers and Proposed Transferee does not occur within six (6) months, the terms of this Resolution shall be null and void. The 6-month period commences when the last of the five Member Cities has given final approval to a similar resolution. The 6-month period may be extended by either Grantee or SWSCC for an additional six (6) months without further consideration. Notice of such extension must be done in writing and mailed to the last known address of each of the parties identified herein . The Closing shall also provide that the Proposed Transferee of the Franchise shall agree to be bound by the terms in this Resolution and shall guarantee Grantee's performance of the Franchise, the CATV Relief Ordinance and Amendment to the CATV Relief Ordinance, the Stipulation and such other requirements as may be set forth in the resolution by the City approving the transfer to the Proposed Transferee. 7) The SWSCC is hereby authorized to collect the sum of $3 . 5 Million (U.S . ) in immediately available U.S. funds wired by Rogers to the SWSCC account, First Bank Minneapolis, Account No. 602-3377-564 at the time of the Closing between Rogers and its Proposed Transferee. The sum so collected by the SWSCC may be deposited in the 3 account of the SWSCC and invested in accordance with 1, requirements applicable to municipalities . Within thirty (30) days after the $3.5 Million (U. S. ) payment is deposited in the SWSCC account, the SWSCC shall accomplish the following: (a) The SWSCC is authorized to reimburse itself for its costs and expenses in connection with the Stipulation and not previously paid for by the Grantee and Rogers. (b) The SWSCC will reimburse to each of the Member Cities an advance payment made by the Member Cities to the SWSCC for expenses of the SWSCC in connection with this Stipulation. (c) The SWSCC will pay to Rogers or place the sums in escrow pursuant to Section 2 of the Stipulation, if required, the Cities' portion of casts for the enhancement of the subscriber network as identified in the Stipulation. (d) The balance of the $3 . 5 Million (U. S.) together with accrued interest will be disbursed by the SWSCC in accordance with paragraph 8 below. 8) Unless otherwise specifically authorized by resolution of all the Member Cities, the SWSCC shall distribute the balance of the proceeds to the Member Cities in accordance with the following distribution formula and City shall be responsible for its own costs and expenses in connection with this Stipulation out of its portion of the distribution: PROPORTIONAL DISTRIBUTION* Percent Eden Prairie 20.0% $ 700, 000 Edina 25.0 875, 000 Hopkins 10.0 350, 000 Minnetonka 24 .5 857, 500 Richfield 20.5 717, 500 TOTAL 100 .0% $3 , 500, 000 *Based on an average of each city's proportion of the total subscriber revenues for •the 7-year period of the Relief Agreement adjusted to reflect the fact that each city provides an equal contribution for a portion of the funding of the SWSCC. 4 The SWSCC shall review cable--related needs of the Member Cities and shall make its recommendations on the uses of the $3 . 5 Million (U.S. ) proceeds prior to the Closing between Grantee and the Proposed Transferee. The Member Cities shall have the opportunity for consideration and approval . Consideration of such recommendations shall not delay distribution of such balance to the Member Cities. This Resolution is passed and adopted the P p �' day of 1988 . CITY OF Eden Prairi SW3/RESOL2 . SW - 11/7/88 5