01-21-2003 - Public Hearing for Termination of Cable TV ContractCity of west UOVina
Memorandum
AGENDA
TO: Andrew G. Pasmant, City Manager and ITEM NO. B-6i
City Council {!
DATE 1-21-03
FROM: Artie Fields, Assistant City Manager
SUBJECT: PUBLIC HEARING FOR TERMINATION OF CABLE TV CONTRACT
RECOMMENDATION:
It is recommended that the City Council set April" 1, 2003 as the date for a public hearing
concerning the termination of the cable television franchise with Charter Communications.
DISCUSSION:
On August 25, 1998, Charter submitted a transfer of ownership application to the City to transfer
control to Mr. Paul G. Allen and the City Council denied, without prejudice, Charter's
application on December 1, 1998. Said denial was based on Charter's refusal to provide certain
information requested by the City relating to the legal, technical, and financial qualifications of
Mr. Allen. Charter completed said transfer in direct violation of the denial and it is on this basis
that the City is holding this public hearing.
After numerous attempts to resolve this matter informally, the City Council gave direction to staff
on December 3, 2002, to commence the process to commence a breach of franchise proceeding
against Charter Communications. The first step in this process required that the City Manager send
a letter pursuant to ' Section 11-22(b)(2) of the West Covina Municipal Code to demand that
Charter Communications ("Charter") cure its default/breach of Section 12.1 of the franchise
agreement and its violation of West Covina Code Section 11-25(d). Essentially, these sections
require prior City Council approval of certain transfers of ownership and/or control.
The City Manager's letter to Charter was mailed on December 5, 2002 and requested that Charter
cure the aforementioned default within thirty (30) days. The letter also stated that if such a cure
was not completed within 30 days, the City Manager would be recommending to the City
Council that they terminate the cable franchise that Charter currently holds with the City of West
Covina.
In order to terminate the contract with Charter Communications, it is necessary that the City
Council set a public hearing prior to the termination; send Charter Communications a thirty -day
notice of the public hearing, and have the notice published in the newspaper. At the public
hearing, the City Council will consider the request of the City Manager, hear any persons
interested in this matter, and then make a determination as to whether the actions of the cable
operator were with just cause.
If the City Council finds there was just cause, then: it will direct the cable operator to comply
within a reasonable period of time and under conditions determined by the Council. However, if
the City Council does not find just cause, the Council will, by resolution declare that the
franchise shall be terminated and forfeited unless there is compliance by the cable operator
within such period as the Council may fix.
The City Council will also need to make a determination as to whether the cable operator can
continue to provide service as a holdover after the termination of the franchise and under what
conditions.
FISCAL IMPACT:
The City Attorney's Office estimates that the administrative legal costs will be approximately
$20,000. If the matter should be litigated, it is estimated that the cost could range between
$100,000 and $200,000. There are funds available inithe FY 2002-2003 budget for this item.
Prepared b
Artie A. Fiel
Assistant City Manager
Charter - open session -setting public hearing