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FHSRAC PKT 04-25-2006 - -- ------------------- -- - ---------- City of Federal Way City Council Finance/Human Services/Regional Affairs Committee Tuesday, April 25, 2006 City Hall 5:30 p.m. Hylebos Conference Room AGENDA 1. CALL TO ORDER 2. PUBLIC COMMENT 3. COMMmEE BUSINESS A, Approval of the March 28, 2006 Minutes Action B, Monthly Financial Report Kraus Action C. Vouchers Kraus Action D. Com cast Renewal Ordinance Wang Action 4. OTHER 5. FUTURE AGENDA ITEMS 6, NEXT MEETING: May 23, 2006 Committee Members: City Staff: Linda Kachmar, Chair Iwen Wang, Management Services Director Jeanne Burbidge Krystal Kelsey, Deputy City Oerk Jack Dovey (253) 835-2541 K:\f!iSRi\C\'2006\Aptil 25, 2006\+25.06 Agenda.doc -------------- OTHERS IN ATTENDANCE: Doug Levy, Legislative LO' yi 1. CALL TO ORDER Chair Kochmar called the meeting to order 2, PUBLIC COMMENT None 3, COMMmEE BUSINESS A. APPROVAL OF THE FEBRUARY approve the minutes as presented, B. Doug Levy presented the 2006 legislative his update: . e annexations, funding for the Han Woo Ri Festival, ges to the Regional Transit Investment District (RTID) B). 6 WORK PLAN - Angelina Allen-Mpyisi presented the staff y the Human Services Commission, pproval of the Human Services Commission 2006 Work Plan on the t Agenda. E OF WORK FOR THE MULTI-SERVICE CENTER EMPLOYMENT nnell presented the staff report to the Committee. m c to forward approval of the Scope of Work for the Multi-Service Center m on the April 4, 2006 City Council Consent Agenda, ;Ld~'~ E. tCHERS - Tho Kraus presented the monthly vouchers to the Committee for approval. Ms. Krau o provided the Committee with information regarding the Red Cross expenditures they had previously questioned, Ms. Kraus explained that the Red Cross expenditures are for classes offered through the Kenneth Jones Pool. FHSRAC 4/25/06 A-1 ------- The Committee mjsjc to forward approval of the vouchers to the April 4, 2006 City Council Consent Agenda. F. MONTHLY FINANCIAL REPORT - Ms. Kraus provided the report to the Committee for consideration. The Committee mjsjc to forward approval of the Monthly Financial Report to the April 4, 2006 Council Consent Agenda. G. REVIEW THE CITY'S BUDGET POLICY - Iwen Wang reviewed the lesser-known Council policies regarding budget development and inquired about any desired changes. The Committee did not recommend any changes to the policies. Ms, Wang announced the Special Council Meeting on April 25, 2006 at 6:00 to discuss the budget. The special meeting will immediately follow the regular 5:30 FHSRAC meeting. 4. OTHER: Chair Kochmar requested that staff present a report on the City's preparedness status regarding the Avian Flu at a future Council Meeting. Ms, Wang agreed to speak to Cary Roe, Emergency Management Director, about this topic. 5. FUTURE AGENDA ITEMS: None. 6, NEXT MEETING: April 25, 2006 7. ADJOURNMENT: The meeting was adjourned at 6:42 p,m, FHSRAC 4/25/06 A-2 ------ -- ------ - COUNCIL MEETING DATE: May 2,2006 ITEM #: ........-......".................... ................................~........................... ................... . ............................................ .............. ..... ............... ..................... ....... ...................~........... ........... .. ...................... ........................ ....... ..........................-.-.....".............,,--...-.................... ....................-......................" CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: MARCH 2006 MONTHLY FINANCIAL REPORT POLICY QUESTION: Should the City approve the March 2006 Monthly Financial Report? COMMITTEE: Finance, Human Services and Regional Affairs MEETING DATE: April 25, 2006 CATEGORY: ~ Consent 0 Ordinance 0 Public Hearing 0 City Council Business 0 Resolution 0 Other ~!~~~~~2~!)!Y.: ..I1?:~~!.~~~~!.1.~.~...~':l!.1~g~!._._ ...............__ ____ ....._........__~~~:.:_.~~~~~~~~~~_~_~~_c~~__...__...___._..._ ATTACHMENTS: . March 2006 Monthly Financial Report OPTIONS CONSIDERED: 1. Approve the March 2006 Monthly Financial Report as presented and forward to the May 2, 2006 Council Consent Agenda. 2. Deny approval of the March 2006 Monthly Financial Report and provide direction to staff. ........................... ..........................- ........"........................ ..............." ........................... ......... ......... . ........................................... ........................... ................................."...................... ....."...... ........... ...................-............................. ...........................-............ STAFF RECOMMENDATION: St CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: Council Committee Council COMMITTEE RECOMMENDATION: Forward approval of the March 2006 Monthly Financial Report to the May 2, 2006 City Council Consent Agenda. Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey, Member PROPOSED COUNCIL MOTION: "I move approval of the March 2006 Monthly Financial Report as presented." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED COUNCIL BILL # 0 DENIED 1 ST reading 0 TABLED/DEFERRED/NO ACTION Enactment reading 0 MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 02/06/2006 RESOLUTION # ~ CITYOF ~ March 2006 Monthly Financial Report Federal Way GENERAL & STREET FUND OPERATIONS The overall operating of the combined General and Street Fund showed a positive result of $777K through March. Overall revenue total $8.3M and is $711K or 9% above budget, primarily attributable to the exceptional building permit activities and a positive sales tax infused by new constructions. Both permit and construction sales taxes are cyclical in nature and very sensitive to changing economy and should not be overly relied upon for long-term purposes. Year-to-date expenditures total $8.7M and is $66K or 1 % below budget. The favorable expenditure comparison is primarily due the timing difference in when payments are made. 200S 2006 Varlllntjj :;ENeRAL4 STREET FUND Annual Annual YTO Annual YTD YTO Favctab/e(untaIIOfabJ.) ulllmaryl)f$Qul'!;9$4 1,1... Eludget Actual Actual Budget . Budget Actual Dollars ($) PetC8IIt(%) eginning Fund Balance $ 2,945,041 $ 2,945,041 $ 2,945,041 $ 4,728,229 $ 4,728,229 $ 4,728,229 $ 0 0.0% OPERATING REVENUES Property Taxes 8,584,024 8,442,168 314,382 8,692,174 468,643 468,643 - 0.0'1\ Sales Tax 10,793,000 11,305,537 2,812.284 11,120.000 2,768,131 3,166,301 400,171 14.5% riminal Justice Sales Tax 1,781,000 1,817,981 432,987 l,8n,ooo 447,044 487,503 40,459 9.1% Intergovernmental 2,210,000 2,248,446 543,408 2,287,000 552,726 537,066 (15,660) -2.8% Leasehold Tax 2,500 2,026 151 2,500 187 551 364 194.8% 3ambling Taxes 1,430,000 1,501,064 383,285 1,414,000 381,054 388,534 27,481 7.6% ourt Revenue 1,281,000 852,561 215,148 976,000 246,299 248,438 140 0.1% Building PennitslFees-CD 2,942,400 3,141,368 531,759 1,653,400 279,882 569,453 289,571 103.5% ROW Pennits & Development Services Fees-PW 365,000 346,605 72,012 370,000 76,873 117,178 40,305 52.4% icenses 208,517 233,304 60,722 210,517 54,791 56,978 2,187 4.0% ranchise Fees 723,000 787,639 178,910 733,000 166,499 201,800 35,301 21.2% Passport Agency Fees 85,066 63,418 16,105 86,000 21,840 20,340 (1,500) -6.9'% Recreation Fees 872.335 825,052 250,805 874,335 265,786 236,066 (29,720) -11.2% Public Safety 931,090 1,100,604 312,679 934,190 265,402 108,321 (157,081) -59.2% dminlCash Management Fees 552,000 552,000 138,000 560,000 140,000 140,000 0 0.0'1\ Interest Eamings 172,000 277,945 46,101 183,000 30,353 91,n9 61,425 202.4% Mise/Other 184,700 305,019 52,576 208,700 35,973 53,n9 17,806 49.5% Dnooina Transfers In' - Utility Tax-Gelebration Parl< 238,798 238,798 238,798 245,962 24,784 24,784 - 0.0% Utility Tax-Kenneth Jones Pool 314,000 314,000 29,244 319,000 319,000 319,000 - 0.0% Utility Tax-Arts Comm/RW&B Festival 93,750 93,750 - 93,750 93,750 93,750 - 0.0% Utility Tax-Police Positions 625,000 625,000 - 625,000 625,000 625,000 - O.O"A Utility Tax-5treet Bond Projects 192,000 192,000 192,000 202,000 202,000 202,000 0.0% Utility Tax-New Street Lights 93,900 93,900 93,900 108,300 108,300 108,300 0.0% Utility Tax-Camp Kilworth M&O 50,000 50,000 50,000 - 0.0% ()"'I~I!l9..R~llJl\les 34,675;100 35,380,183 6,915,256 33,$25;828 7,802,318 8,313,585 711.249 9,4'1\ OPERATING EXPENDITURES ity Council 388,802 344,138 166,506 409,317 198,042 179,116 18,926 9.6% ity Manager 871,491 853,100 198,796 908,228 211,842 178,097 33,545 15.8% Municipal Court-Operations 1,401,822 959,672 301,292 1,158,496 363,713 260,744 102,969 28.3% Economic Development 302,115 228,584 50,622 292,893 84,884 47,571 17,293 26.7% Management Services 1,883,518 1,862,587 508,434 1,897,272 517,902 559,429 (41,528) -6.0% iviVCriminal Legal Services 1,145,500 1,005,324 246,526 1,200,561 294,402 298,418 (4,016) -1.4% omm. Development Svcs 3,494,215 3,123,953 733,363 3,685,745 865,246 782,995 82,251 9.5% ail Services 1,442,060 1,400,637 121,854 1,384,060 120,411 284,5n (144,186) -119.7'A Police Services 16,397,701 15,843,471 4,127,777 17,134,869 4,484,179 4,443,355 20,824 0.5'A Parl<s and Recreation 3,945,274 3,941,474 605,393 4,057,237 829,047 639,723 (10,676) -1.30/. Public Worl<s 3,910,022 3,844,449 710,251 4,109,988 800,978 810,876 (9,898) -1.20/. ()ja1.O~ng..E)(pendlturllS 35;182;521 33,207,388 7,970,813 36,238,484 8,730,4211 8,864,902 8$,$26 0.8'% Operating Revenues over/(under) Operating expenditures (507,421) 2,152,796 (1,05$,557) (2,412,636) (1,128,112) (351,337) 776,775 -88.9% OTHER FINANCING SOURCES One- Time Transfers In 81,000 73,551 25,000 55,450 4,305 4,305 - 0.00/. Grants & Other 498,256 584,873 52,959 247,n2 40,075 40,075 - 0.0% TotalOther FlnancIIlgSour<:es. 579,256 658,423 77,959 303,222 44,380 44,380 . O.~ OTHER FINANCING USES City Manager Contingency - - - 907,747 - nla nI~ One- Time Transfers to CIP 1,028,030 1,028,030 - 100,000 100,000 100,000 nla nI~ Other 40,000 - - - nla nla Tota.1 Other Financing Uses 1,068,030 1,028,030 . 1,007,747 100,000 100,000 nla nI; ota. Endlno Fund Balance 1,948,848 $ 4,728,229 $ 1,967,443 $ 1,611,068 $ - $ 4,321,272 nla nI FH5RAC 4/25/06 B-2 ---~ DESIGNATED OPERATING FUNDS Through March, designated operating funds revenue total $4.38M and is $826K above the year~to-date budget of $3.55M with utility taxes and real estate excise taxes being the major contributors. Expenditures of $3.50M is $26K below the budget estimate of$3.53M. 2005 2006 Variance DESIGNATED OPERATING FUNDS Annual Annllal VID Annual YTD YTt) Favor.ilble (Unfl!vorable) Summary ofSourc~& Us~ Budget Actual Actual Budget Budget Actual ooUars($) PlIl'cent (%) Begin Balance-Designated Funds $ 4.610,136 $ 4,610,136 $ 4,610,136 $ 5,725,052 $ 5,725,052 $ 5,725,052 $ - 0.0% OPERATING REVENUES Intergovernmental 596,245 565,157 134,161 617,953 136,355 136,355 - 0.0% Utility Taxes 8.225,399 8,292,520 2,251,799 8,407,499 2,283,021 2,517,198 234,176 10.3% HoteVMotel LOdging Tax 150,000 158,117 30,540 150,000 28,972 34,600 5,628 19.4% Real Estate Excise Tax 4,250,000 4,695,984 830,531 3,150,000 557,109 1,211,020 653,911 117.4% Dumas Bay Centre 523,775 452,672 99,611 529,598 116,539 86,938 (29,601) -25.4% Knutzen Family Theatre 78,515 69,648 17,911 84,145 21,639 27,847 6,207 28.7% SWM Fees 3,576,746 3,535,750 172,126 3,607,080 167,232 167,232 - 0.0% Refuse Collection Fees 167,701 165,950 55,273 170,217 56,694 42,226 (14,468) -25.5% Interest Earnings 203,345 217,821 66,230 204,345 62,132 32,193 (29,939) -48.2% Miscellaneous/Other 217,250 284,251 3 - 1 1 - 0.0% f In: - Utility Tax-Knulzen Theatre 118,869 118,869 100,000 121,840 121,840 121,840 - 0.0% Utility Tax-Debt Service 4,242,273 4,202,629 361,859 3,885,861 - - - nla Utility Tax-Arterial Streets 890,625 890,625 890,625 890,625 - - - nla 9tal..OperlltlllgReveO!l9$ 23,~,742 ;l3.~.9I!3 5,1110.66!I 21,8151.162 3.551,533 4.3'11',449 825,916 23.3M OPERATING EXPENDITURES Oty Overlay Program 1,547,040 1.495,865 54,053 1,599,792 46.483 46,483 - 0.0% Utility Tax-Admin/Cash Mgmt Fees 54,429 54,429 13,608 55,237 13,809 13,B09 0 0.0% Solid Waste 387,238 322,151 81,064 340,130 85,588 71,337 14,251 16.7% HoIeVMolel LOdging Tax 567,446 509,592 28,561 282.627 15,840 36,507 (20,667) -130.5% Debt Service 6,833,128 6,801,614 151,016 3,678,856 151,212 151,212 - 0.0% Surface Water Management 2,864,111 2,684,052 544,039 2,975,739 603,162 592,044 11,118 1.8% Dumas Bay Centre 538,575 478,294 103,686 534,628 115,899 111,542 4,357 3.8% Knutzen Family Theatre 201,090 168,945 51,641 201,720 61,659 44,369 17,290 28.0% Utility Tax-celebration Park 238,798 238,798 238,798 245,962 24,784 24,784 - 0.0% Utility Tax-Kenneth Jones Pool 314,000 314,000 29,244 319,000 319,000 319,000 - 0.0% Utility Tax-Arts CommlRW&B Festival 93,750 93,750 - 93,750 93,750 93,750 - 0.0% Utility Tax-PoIice Positions 625,000 625,000 - 625,000 625,000 625,000 - 0.0% Utility Tax-Street Bond Projects 192,000 192,000 192,000 202,000 202,000 202,000 - 0.0% Utility Tax-New Street UghlS 93,900 93,900 93,900 108,300 108,300 108,300 - 0.0% Utility Tax-Knutzen Family Theatre 118,869 118,869 100,000 121,840 121,840 121,840 - 0.0% Utility Tax-Arterial Streets Overlay 890,625 890,625 890,625 890,625 - - - nla Utility Tax-Camp Kilworth M&O - - - 50,000 50,000 50,000 - 0.0% Utility Tax-Debt Service 4,242,273 4,202,629 361,859 3,885,861 - - - nla Utility Tax-Transportation CIP 890,625 890,625 - 890,625 890,625 890,625 - 0.0% !!*"I..()p<<..tI!!{J..l5l!pendUlI!'~ 2O;1i92.l!97 2Q,17M38 2;934.093 17;101.1i92 3.s2lJ,950 3,502,603 26.34l! it"" Operating Revenues over/(under) Operating expenditures 2,547,845 3,474,855 2,076,576 4,717,470 22,583 874,846 852,264 3773.9% OTHER FINANCING SOURCES One-Time Transfers In 60.404 62,904 9,450 - - - - nla Grants/Mitigation/Other 175,036 257,131 99,066 123,280 173,979 173,979 - 0.0% TotafOther Financing SOurces 235,440 320.035 108,516 123,280 173,979 173.979 . 0.0% OTHER FINANCING USES One- Time Transfers Out 2,830.419 2,679,974 1,600,000 4,255,095 3,610,605 3,610,605 - 0.0% Other - - - - - - - nla TOlafOther Flnanc:I!!{JUses 2,830.419 2.679.974 1,600,000 4.255,095 3.610,605 3,610,605 . 0,0% ENDING FUND BALANCE Arterial Street - 97,272 1,071,326 (1) - 194,206 nla nla Utility Tax 868,708 1,027,502 1.465,398 1,228,801 - 1,022,790 nla nla Solid Waste & Recycling 60,641 121,707 144,575 75,072 - 252,471 nla nla HoteVMotel LOdging Tax - 132,627 178,208 - - 131,796 nla nla Paths & Trails 14,991 15,272 7,895 24,831 - 17,746 nla nla Debt Service Fund 2,815,373 3,195.705 2,289,193 3,902,710 - 1,444,433 nla nla Surlace Water Management 799,420 1,120,908 (14,192) 1,059,622 - 17,331 nla nla Dumas Bay Centre Operations - (14,816) (4,174) (16.046) - (23,507) nla nla Knutzen Family Theatre 3,869 28,875 57,001 35,716 - 106,005 nla nla olal Endlna Fund Balance $ 4,563,002 $ 5,725,052 $ 5,195,229 $ 6,310,705 $ - $ 3,163,272 nla nla FHSRAC 4/25/06 2 B-3 Real Estate Excise Tax Sales Tax bv SIC Code Compared to 2005, collections are up $380K or 45.8%. March's receipt of $586K is $202K above March 2005's activity and includes a total of 332 real estate transactions, COMPAtllSON OFSALES tAX COLLECTIONS9YSlCiGROUP of which 118 were tax exempt and of the remaining 214, Year-to-datethruMafch Co/'l'lppnent 2005 1006 qhltiigeft'pro 2005 10 were mobile home sales, The annex area has Grout) Actual A.ctual $ % contributed year-to-date revenue of $21,123. The largest elai! Trade $ 1,597,439 $ 1,685,236 $ 87,797 5.5% transactions in the current month consist of the sales of ervices $ 505,093 $ 620,609 $ 115,516 22.9% Vacant Commercial Land @ 35002 Pacific Highway S, onstructlO>ntract $ 289,119 $ 451,911 $ 162,792 56.3% holesaling $ 124,271 $ 115,528 $ (8,743) -7.0% Walgreens @ 28817 Military Road S, Best Western ranspJUtility $ 2,373 $ 5,480 $ 3,107 130.9% Executel @ 31611 20th Ave S, Vacant Commercial Land Information $ 148,718 $ 130,942 $ (17,776) -12.0% Manufacturing $ 32,226 $ 45,178 $ 12,952 40.2% @ 35001 Pacific Highway S. Govemment $ 33,066 $ 12,805 $ (20,261 ) -61.3% Fin/Ins/Real Estate $ 76,372 $ 83,696 $ 7,324 9.6% Other $ 3,606 $ 14,916 $ 11,310 313.6% ...."'.,01 Total $ 2,812,283 $ 3,166,301 $ 354,018 12.6% Year. to >L..'" ,. . ~OI:l5 21)011 Retail sales continue to remain the largest source of sales iMMth .ACiual Actual $iVar %Var tax revenue, accounting for 53% of all sales tax Jan $ 170,866 $ 157,303 $ (13,563) -7.9o/c Feb 275,617 $ 468,067 $ 192,449 69.8% collections. Year-to-date retail sales tax collection is up Mar 384,048 $ 585,651 $ 201,602 52.5% $88K or 5.5% above year-to-date 2005; majority of the Apr 784,135 $ - $ - - increase is in the following areas: miscellaneous store May 481,264 $ - $ - - retailers, electronics and appliances, and retail building Jun 425,029 $ - $ - - materials. Jul 290,288 $ - $ - - Aug 416,213 $ - $ - - Services industry accounts for 20% of the total sales tax Sep 515,578 $ - $ - - Oct 237,983 $ - $ - - collections. On year-to-date basis, services sales tax is up Nov 357,228 $ - $ - - $116K or 23% compared to 2005. This includes $IOOK in Dee 357,736 $ - $ - - one-time increase from a major software company. YII.l lotal $ 830,531 $ 1,211,020 $ 380,489 45.8"10 Construction and contracting activity, which accounts for Sales Tax 14% of sales tax collections, is up $163K or 56% from Year-to-date revenue of $3.17M is above March 2005 2005's activity. Sales tax received year-to-date on major year-to-date revenue of $2.81M by $354K or 12.6%. The City projects total $116K or 26% of total construction and current month's Sales Tax of $863K is above the 2005 contracting activity. monthly activity by $68K or 8.6%. As shown in the detail by SIC code table below, new construction alone increased Sales Tax bv Activitv by $163K, which is the primary contributing factor of the positive bottom line. In addition, the major projects that .c . i' contributed to this increase are mainly public projects. For ~' these reasons, the sales tax improvement is temporary in GroOt) ::~l ilr:.. nature, different than the broad based economic r< i$i % improvement which would be more sustainable. Total Sales Tax $2,812,283 $3,166,301 $354,018 12.6% S 348th Retail Block $353,384 $377,986 $24,602 7.0% ,. /l''Ji:uJ./ ~t::iTJJ.1I % chg from prev yr -74.1% 7.0% na na .u,,~"'... Percentage of total 12.6% 11.9% -0.6% -5.0% ~Ol)$ .::,. ../VI.. The Commons 319,741 298,433 121,308} -6.7% <Mi:!/jth A(;tuB' i~ % % chg from prev yr -54.6% -6. 7"'{' na na Percentage of total 11.4% 9.4% -1.9% -17.1% Jan $ 862.219 $ 938,053 $ 75,834 8.8% Major Auto Sales 93,914 100,612 6,698 7.1% Feb 1,155,867 1,365,682 $ 209,815 18.2% % chg from prev yr -75.1% 7.1% na na Mar 794,197 862,566 $ 68,369 8.6% Percentage of total 3.3% 3.2% -0.2% -4.8% Apr 752,487 - $ - - S 312th to S 316th 161,935 160,334 /1,601) -1,()o1O May 935.065 - $ - - % chg from prev yr -69.4% -1.0% na na Jun 857,410 - $ - - Percentage of total 5.8% 5.1% -O.7"'{' -12.1% Jul 813,885 - $ - - Pavilion Center 144,287 152,036 7,749 5,4% Aug 1,057,583 - $ - - % chg from prev yr -66.2% 5.4% na na Sep 1,004,058 - $ - - Percentage of total 5.1% 4.8% -0.3% -6.4% Oct 994,469 - $ - - Nov 1,051,158 - $ - - The City's largest retail center, South 348th, which Dec 1,027,139 - $ - - generates 12% of the City's sales tax, is showing an YTu lotal $ 2,812,283 $ 3,166,301 $ 354,018 12.60;' increase of $25K or 7% compared to the year 2005. The Commons is showing a decrease of $21K or 7% compared to year 2005 activity. Major Auto Sale's collection total FHSRAC 4/25/06 3 B-4 $101K and is $7K or 7% above 2005. S 312th to S316th is Compared to year-to-date 2005, Electricity is up $87K or almost the same as prior year. Pavilion Center tax 12%, Gas is up $126K or 25%, Cable is up $16K or 7%, collections are up by $8K or 5% comparing to prior year. Phone is down $12K or 5%, and Cellular phone is up $36K or 9%. Gambling Tax Gambling tax collection through March is $389K. In I UTILITY TAXES I comparison to 2005 year-to-date collection, 2006's tax Year-ta-date thru MatCh collection is higher by $5K or 1.4%. Part of this increase 2005 2006 €;filipcfi'l fNiit2(g)$ is due to the change in accounting for accruals in 2005. To ACtual Actual I liar "Jlar simplify the year-end closing in 2005, the Electric $ 758,488 $ 845,624 $ 87,135 11.5% process Gas $ 502,283 628,131 $ 125,848 25.1% threshold amount for accruals back to 2005 was increased Solid Waste $ 130,576 143,567 $ 12,990 9.9% to $100K, up from the previous threshold of $25K. Cable $ 214,428 230,209 $ 15,782 7.4% Therefore, gambling taxes for 2005 received in early 2006 Phone $ 246,981 235,481 $ (11,500) -4.7% that did not meet the new threshold are included as part of Cellular $ 390,022 425,640 $ 35,619 9.1% Pager $ 546 73 $ (472) -86.6% 2006's revenue. However, gambling tax in March is down SWM $ 8,475 8,473 $ (3) 0.0% by $29K mainly due to two major establishment's ax Rebate $ (7,165) (2,041) $ 5,124 -71.5% decreased activity. The annex area has contributed year- Total $ 2.251,799 $ 2,517,198 $ 265,399 11.8% to-date revenue of $3,992. Tax rebates are excluded from total Also, with the smoking ban effective November 2005, HoteVMotel Lodging Tax there is some concern that gambling tax revenue may see a Hotel/Motel lodging tax collections through March total decline. At this time it is still too soon to determine if the $35K. Compared to 2005, the lodging tax is $4K or 13.3% smoking ban has had an impact. Staff is monitoring and above the same period. will report on any significant changes. HOTEt..IMOTELLODGING TAX REVENUES .. "...2 "'- Year-to-datethruMatr;h 2005 .~:I h"nnlt" 2005 2006 ChaprieM>mZQQ$ ;llIIoot..... A<<:luaI !$::Nlalt %Va". Mon.th Actual Actual $\lat "\lar Jan $137,311 $ 165,496 $ 28,186 20.5% Jan $ 9,669 $ 11,357 $ 1,687 17.5% Feb 115,768 122,301 6,533 5.6% Feb $ 11,717 $ 11 ,290 (427) -3.6% Mar 130,206 100,736 (29,470) -22.6% Mar $ 9.153 $ 11,953 2,800 30.6% Apr 136,467 - - - Apr $ 11,390 $ - - - May 132,353 - - - Mav $ 14.067 $ - - - Jun 122,257 - - - Jun $ 11,566 $ Jul 130,114 - - - - - - Aua 133.906 Jul $ 12,247 $ - - - - - - Seo 115,878 - - - Aug $ 14,632 $ - - - Oct 150,900 - - - Sep $ 17.633 $ - - - Nov 119,925 - - - Oct $ 18,047 $ - - - Dee 75,979 - - - Nov $ 13.765 $ - - - YTD Total $383,285 388,534 5.249 1,4% Dec $ 14,231 $ - - - Table reflects gambling activities on a cash basis. Y fD Total $ 30,540 $ 34,599 $ 4,060 13.3% Annual TotaT $ 158,117 Utility Tax State Shared Revenue Utility taxes received through March total $2.52M and is Year-to-date distribution of$1.2M is above 2005's activity above 2005 year to date collections by $265K or 12%. by $93K or 8%. Through March, new gas tax effective in August 2005 has contributed $47K or 62% of the increase UTILITY TAXES comparing to 2005. Liquor excise tax, local criminal Year-to-c/a.t.ethru March ... 2005 20.0.6 justice sales tax and fuel tax are all up too. . Mi:>fiili ActUal Actual SVar % vai Jan $ 726,583 $ 876.526 $ 149,943 20.6% Feb 794,152 838,758 $ 44.606 5.6% STATESHAREDR!EVENUES Mar 731.064 801,915 $ 70,851 9.7% Year to date thl'llM3rr:h Apr 770,397 - $ - - 200.5 2006 May 745,699 - $ - - .Revemie Actual Actu31 1$ % Jun 592,788 - $ - - Jul 609.227 - $ - - Liquor Profits Tax $ 155,926 $ 139,119 $ (16,807) -10.8% Aug 585,489 - $ - - Liquor Excise Tax 82,474 85,971 3,497 4.2% Sep 590,070 - $ - - Grim Just Low.Pop/oCo 19,026 19,867 841 4.4% Oct 636,521 - $ - - Local Grim Just Sales Tax 432,987 487,504 54,516 12.6% Nov 635,678 - $ - - Fuel Tax. 416,842 467,703 51,061 12.3% Dee 882,017 - $ - - Tax Rebate (7,165) (2,041) $ 5.124 -71.5% oUI - Cities 3,502 3,575 73 2.1% YTO Total $ 2.251.799 $ 2.517.198 $ 265.399 11.8% Total $ 1,110,558 $ 1,203,739 $ 93,182 8.4% Tax rebates are excluded from total . Fuel tax is included in both generaVstreet and designated operating funds. FHSRAC 4/25/06 4 6-5 Permit Activity PS Overtime By Month Chance Year-to-date building permit activity exceeds 2005's year- 2005 2Q06 $ % to-date activity by $38K or 7.1%. Significant permits Jan $ 50,235 $ 51,717 $ 1 .482 3% include: Quadrant, and FW Crossing. Right-of-way Feb 54,688 $ 46,446 $ (8,242) -15% Mar 48,571 $ 51,638 $ 3,067 60/0 permits and development services fees are up in March by Apr 53.135 $ - $ - - $llK and year-to-date activity is up by $45K or 63% when May 38.533 $ - $ - - compared to 2005. Jun 55,867 $ - $ - - Jul 44,155 $ - $ - - Aug 45,364 $ - $ - - BUILOINGPERMITS & FEES Sep 61,691 $ - $ - - Yitar-to-oato Through March Oct 41,252 $ - $ - - 2005 2006 Change from 2005 Nov 67,305 $ - $ - - Actual Actual $ % Dec 42,002 $ - $ - - Jan 164,108 111,925 (52,184) -31.8% YTD $ 153.494 $ 149,802 $ 13;693 -2% Feb 160,765 239,689 78,924 49.1% Annual Total $ 602,799 Mar 206,886 217,839 10,953 5,3% Apr 421,260 - - - Jail Services May 452.483 - - - Jail Services through March is $265K, which is $144K or Jun 330,658 - - - Jul 215,967 - - - 120% above the ytd budget of $120K. The variance is Aug 314,271 - - - mainly due to the timing of 2005 invoices paid in 2006, sep 255,906 - - - Oct 285,630 - - - which will reverse out at year end. Nov 175,341 - - - Dec 158,092 - - - Court Revenue YTO Total 531,759 569,453 37,694 7.1% Annual Total 3,141.368 na na Excluding probation revenue is up $33K or 18% compared to year-to-date 2005. ROW PlORMITS& DlOVELOPMENTSERVICES FEES Year-to-Date ThropghMar<:h COURT REVENUE 2005 2006 Chang!lfrom 2005 TbroulIhMarch Act.....1 Actual $ 0/. 2005 2006 Chan9/Jf1J)IfJ2005 Jan 20,643 36,913 16,271 78,8% Month Actual Actual $Va' %Var Fab 27,622 45,720 18,099 65.5% January 62,618 $63,844 $1,226 2,0% Mar 23,748 34,545 10,797 45.5% February 63,236 $67,088 $3,853 6,1% Apr 23,253 - - - March 61,529 $89,613 $28,084 45.6% May 36,684 - - - April 60,872 $0 $0 0.0% Jun 28,971 - - - May 63,309 $0 $0 0.0% Jul 30,332 - - - June 55,631 $0 $0 0.0% Aug 29,350 - - - July 50,952 $0 $0 0.0% Sap 39,638 - - - August 55,280 $0 $0 0.0% Oct . 19,992 - - - 56,387 $0 $0 0.0% September Nov 27,648 - - - October 77 ,052 $0 $0 0.0% Dec 38,724 - - - November 68,906 $0 $0 0.0% YTD Total 72,012 117,178 45,166 62.7% December 68,535 $0 $0 0,0% Annual Total 346,605 na na Subtotal $187,382 $220,545 $33,163 17.7"10 Public Safety Probation Services 27,766 25,894 (1,873) -6.7% Year-to-date Total 215,148 $246,439 $31,291 14.5% Expenditures through March total $4.4M, which is $20K or .05% above the year-to-date budget of$4.5M. COURTREVENUE Through March, City overtime is 2% or $3K above last By Category TbroughMarch 2005 2006 Chani/l1..ftQrn..2005 year. There is a 26% decrease in overtime for contracted Actual ACtual $Var %Var services, traffic school and the homeland security Civil Penalties $3,056 $3,723 668 21,9% programs. When the decrease from the billable overtime is Traffic & Non-Parking 124,783 $134,780 9,996 8.0% included, the total overtime decrease is at $4K or 2%. Parking Infractions 7,191 $9,065 1,874 26.1% DUI & Other Misd 24,295 $27,998 3,702 15.2% Criminal Traffic Misd 11,002 $9,605 (1,397) -12.7% Type 2005 2006 $ % Criminal Costs. 10,402 $9,962 (440) -4.2% Training $ 3,187 $ 5,860 $ 2,673 84% Interest I Other I Mise 4,547 $4,405 (142) -3.1% Court 8,213 5,986 $ (2,226) -27% Criminal Cony Fees 20 $7,666 7,646 nla Field Operation 97,587 106,957 $ 9,371 10% $3,203 3,002 nla SOAP - $ nla Shared Court Costs 201 Other 18,731 11,979 $ (6,751) -36% Services & Charges 1,886 $10,139 8,253 nla City Portion 127,717 130,783 3,066 2% Subtotal 187,382 220,545 33,163 17.7% Contract or Grant 13,341 11,179 $ (2,162) -16% Probation Services 27,766 25,894 (1,873) -6.7% Traffic School 12,437 7,839 $ (4,597) -37% Total $ 215,148 $ 246,439 31,291 14.5% Homeland Security - $ nla . Criminal costs include screener fees. Billable 25,777 19,018 (6,759) -26% Grand Total $ 153,494 $ 149,802 $ (3,693) -2% FHSRAC 4/25/06 5 B-6 ----- ---- ---- -- Traffic and non-parking fines total $135K and is $10K or Direct program expenditures total $277K or 21.6% of the 8% above year-to-date 2005. Parking infractions total $9K total annual budget of $1.2SM not including indirect costs. and is $2K or 26% above year-to-date 2005. DUI and Including indirect administration costs, recreation other misdemeanors total $2SK and is $4K or 15% above expenditures total $36SK and are 22,7% of the total annual year-to-date 2005. Criminal costs total $10K and is $400 budget of $1.63M. Recreation fees total $260K and are or 4% below year-to-date 2005. Criminal Conviction Fees 30.5% of the total annual budget of $S52K. Recreation total $Sk and is above year-to-date 2005 by $SK. The City fees have recovered 93.9% of direct program costs and is didn't start receiving the fees until August of 2005. 27.3% above the annual budgeted recovery ratio of Services and Charges total is $10K and is above year-to- 66.6%. Considering indirect administration costs, the date 2005 by $8K. This category includes Legal Services recovery ratio is reduced to 70.5% or lS.1% above the which the City didn't start receiving until June of 2005. annual budgeted recovery ratio of 52.4%. Shared Court Costs total is $3K and is above year-to-date 2005 by $3K because this category includes Court Dumas Bav Centre Enhancement revenue which the City didn't start receiving Dumas Bay Centre operating revenue of $S7K is down by until October of 2005. $30K or 25.4% compared to the year-to-date budget of $Il7K. Operating expenditures through March total $112K, which is $4K or 3,S% below the year-to-date Parks & Recreation budget of $116K. Dumas Bay Centre has recovered Overall parks operations expenditures through March total 77.9% of its operating expenses. $S40K, which is $IlK or 1.3% over the year-to-date budget of $S29K. Dumas Bay Centre revenues and Knutzen Familv Theatre expenditures are both below budget. Knutzen Family Operating revenue of $28K is up $6K or 28.7<>10 compared Theatre's revenue exceeds budget while expenditures are to the year-to-date budget of $22K. Operating below. expenditures through March total $44K, which is $17K or 28.0% below the year-to-date budget of $62K. Knutzen Recreation and Cultural Services Theatre has recovered 62.8% of its operating expenses. .R.nIIlTIIDAI ""hRD"'I Yeartouate ... 1 J it 'Yo Pf!9fi1ram 1 l!JiJJlg.~t .J. Actual I 'Yo 1 at/flg.,t 1 Actual J %i (:Buddet: .t. Actual RECREATION & CULTURAL SERVICE PROGRAMS Steel Lake Aquatics 2,000 . 0.0% 20,398 96 0.5% 9.8% nla Arts & Special Events 93,600 35,369 37.8% 185,299 38,482 20.8% 50.5% 91.90/. Youth Athletics 60,558 4,540 7.5% 90,131 17,164 19.0% 67.2% 26.50/. Adult Athletics 204,970 84,558 41.3% 129,766 27,421 21.1% 158.0% 308.4% Community Recreation 170,300 27,884 16.4% 178,019 33,943 19.1% 95.7% 82.1% Community Center 28,500 8,513 29.9% 76,059 29,699 39.0% 37.5% 28.7% Recreation Inc 18,512 12,798 69.1% 60,776 13,291 21.9% 30.5% 96.3% Youth Commission 500 836 167.3% 1,800 386 21.4% 27.8% 216.6% Red, White & Blue" 49,250 29,550 60.0% 41,200 267 0.6% 119.5% nla Senior Services 16,195 11,709 72.3% 70,105 19,158 27.3% 23.1% 61.1% Kenneth Jones Pool 208,000 43,860 21.1% 425,514 96,656 22.7% 48.9% 45.4% Subtotal $ 852,385 $ 259,616 30.5% $ 1,279,067 $ 276,565 21,6% 66,6"10 93.9"1. Administration - - 0.0% 347,132 91,806 26.4% nla nla I TOTAL RECREATION 1$ 852,385 I $ 259,616 I 30.5%1 $ 1,626,199 I $ 368,370 I 22.7"101 52.4"101 70.5o/~ DUMAS BAY CENTRE Dumas Bay Centre I 529,598 I 86,9381 16.4%1 534,628 1 111,542 I 20.9%\ 99.1%1 77.9% Knutzen Family Theatre I 84,145 I 27,847 I 33.1%1 201,720 I 44,369 I 22.0%1 41.7%1 62.8% I TOTAL DUMAS BAY CENTRE 613,743 I $ 736,349 I $ 155,911 I Arts Commission" 70,200 14,661 GRAND TOTAL 2,432,748 $ 538,942 . Excludes interfund transfers and Celebration Park. FHSRAC 4/25/06 6 B-7 --- --------..-- -- CASH & INVESTMENTS The following table shows the in-house investment activity schedule and their related yields and comparison to benchmark. Per policy, the basis used by the City to determine whether market yields are being achieved is the range between the average 6- month US Treasury Bill (4.78%) and the State Investment Pool (4.50%). The portfolio average current in-house investment yield is 4.37% which is slightly lower than the benchmark due to lower rates in in-house investment in 2003. Ihve9tmeht Schedule March .2006 Settlement Interest #IVeStmel1.t ftfitunty '(fie/Clto 'lyl;)(iI Date PaY11J.ent$ Par Amoul1.t Gost Da.te Mat(/ntY Agency - FNMA 3136F3V3 07/21/03 1/21-7/21 $ 800,000 $ 797,500 07/21/06 2.38% Agency- FHlB 31339VZX3 08/14/03 2/14-8/14 $ 1,000,000 $ 1,000,000 08/14/06 2.52% Agency - FFCB 31331QN78 06/09/03 03/09/06 $ 1,000,000 $ 999,500 03/09/07 2.46% Agency - FNMA 3136F3VQ6 OS/27/03 OS/25/06 $ 1,000,000 $ 1,000,750 OS/25/07 2.48% Agency - FNMA 3136F3UT1 05/30/03 06/03/06 $ 1,000,000 $ 997,529 12/03/07 2.59% Agency - FHlMC 3128X1VW4 08/22/03 01/30/06 $ 900,000 $ 887,400 01/30/07 3.18% Agency - FHlB 3133XBT54 OS/25/05 11/25/05 - 5/25/06 $ 1,000,000 $ 1,000,000 05125/07 4.07% Agency - FHlB 3133XBT54 OS/25/05 11/25/05 - 5/25/06 $ 1,000,000 $ 1,000,000 OS/25/07 4.07% Agency - FHLMC 3128X4RFO 10/24/05 04/05/06 - 10/06/06 $ 1,000,000 $ 999,990 10/24/07 4.63% Agency - FHlMC 3128X4RFO 10/24/05 04/05/06 - 10/06/06 $ 1,000,000 $ 1,000,000 10/24/07 4.63% 6 month T-BiII912795WW7 10/15/05 04/06/06 $ 1,000,000 $ 981,280 04/06/06 3.98% 1 yearT-BiII912827Z62 10/15/05 04/15/05 - 10/15/06 $ 1,022,900 $ 1,022,900 10/15/06 4.15% Subtotal In-House Investments $ 11,722,900 $ 11,686,849 Average Maturity 343 Average Yield to Maturity 3.55% Average Yield - 6 mo. T-BiII 4.78% Municipal Investor Account $ 4,005,365 1 day 4.62% State Investment Pool $ 49,346,112 1 day 4.50% Average Portfolio Maturity & Yield 62 4.37% l!;'~! ... >$; The total invested balance at the end of March is $65.04M, which includes $49.35M in the state investment pool, $11.69M in- house investment purchases, and $4.01M in the Municipal Investor Accounts. The state pool is composed of repurchase agreements (47.53%), treasury securities (13.22%), agency coupons and callables (10.72%), IB bank deposit (11.40%), agency floating rate notes (9.64%), discount notes (2.55%) and certificates of deposit (4.94%). The City's total investment portfolio is made up of76% State Pool, 18% In-House Investments, and 6% Municipal Investors Accounts. Total Portfolio by Category Interest Rates Comparison March 31, 2006 Mmicipal For the Month of March 2006 n-Ii:>use nvenstors nvestrrents Account 6.0% 1116 M.:>nth T-Bill 18% 6% 5.0% . Slale Inveslrrent FOOl 4.0% 3.0% Din-house Investrrent 2.0% IlII MmicipaJ Investor 1.0% Account 0.0% . Portfolio Average 2003 2004 2005 2006 FHSRAC 4/25/06 7 8-8 -------- COUNCIL MEETING DATE: May 2,2006 ITEM #:_ __.__~.._........_........~_..___..__.._..___...._~...~~.....~.._......_ ............_~._._~.._......_... ............._.._...._._.....~,__~ ...~.........._....~._~......_.__..........__._....._....._....m.. ............_............ .........._.____......_......._,_..................._......._ ...._...,~,....._.._......._.._....._._ CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: VOUCHERS POLICY QUESTION: Should the City approve the vouchers in the total amount of $4,415,422.17 COMMITTEE: Finance, Human Services & Regional Affairs Committee MEETING DATE: April 25, 2006 CATEGORY: ~ Consent 0 Ordinance 0 Public Hearing o City Council Business 0 Resolution 0 Other .~!AF!.~POR.!_!!.y: .!h~_~~':1.~___.____._.._._.__.._._._..___.__..___..._.....__...__...._...__....__J?~!2'.: M~..~~~~ent Servi_~~__...._ I, the undersigned, do hereby certify under penalty of petjury that the materials have been furnished, the services rendered, or the labor performed as described herein and that the claims are just and due obligations against the City of Federal Way, Washington, and that I am authorized to authenticate and certify said liens. ~~ Management Services Director Attachments: Voucher List Options Considered: NA ......_--_..,.._....~_._.__..._....._.._----_.._......_..._....._..~_..._.--.-..-.......-........-.......-..-..-...................-.-..-..............,...-..--......--....--...-.."....,....------...-....-...--.----------.---......-.-. STAFF RECOMMENDATION: NA CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: \ (A.~ Council Committee Council COMMITTEE RECOMMENDATION: "I move approval of the vouchers and forward to the May 2, 2006 Council Meeting for approval. " Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the vouchers pursuant to RCW 42.24. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: o APPROVED COUNCIL B~L # o DENIED 1ST reading o T ABLEDIDEFERREDINO ACTION Enactment reading o MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 02/06/2006 RESOLUTION # FHSRAC 4/25/06 C-l -------------- -- S 8 8 8 888 8 8 8 8 ~ ~ 8 8 8 ~ 1-0 0 0 0 0 0 0 000 0 m N 0 0 00 ~ ~ 0 ~ 0 ~ ~ ~ ~ ~ 00 ~ ~ ~ M CI) ..ll: OJ. -:to N. ..- LO. ..- LO. -:to ..- <D ("'). <D. 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M MMMMMMM 0; a; M ('II 't:I -q-LOCO......<X>O>O 0 'It: T""" T""" T""" T""" T""" T""" C'\I 0 .II:: NNNNNNN -r-" T""" T""" -r-" -r-" T""" -r-" ....(1) .II:: 0 0>0>0>0>0>0>0> ",0 C (I) -r-"T"""-r-"T"""T"""-r-"T""" ...10 CU .c .II::!:::! m 0 .c 0 OM Q.M cuo FHSRAC 4/25/06 C-58 COUNCIL MEETING DATE: May 2,2006 ITEM CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: COMCAST CABLE FRANCHISE RENEWAL POLICY QUESTION: Should the City renew the cable TV franchise with Comcast based on the draft terms and conditions contained in the attached ordinance and side letterl? COMMITTEE: Finance, Human Services and Regional Affairs MEETING DATE: April 25, 2006 CATEGORY: D Consent ~ Ordinance IZI Public Hearing D City Council Business 0 Resolution 0 Other ~!~!~..~!,Q~!,_~Y: mm!~~~.~!:l:~g'.~~~!3:g.l?~~.~~.~~~~.l?~..P!!:~~~g!: ........ m...J?~~!..:.~~~~~~~~~~~~~~~~~_... m.m..',. ATTACHMENTS: . Staff Report (Attachment A) . Draft Franchise Ordinance and Exhibits (Attachment B) . Draft Side Letter Dated April 10, 2006 (Attachment C) OPTIONS CONSIDERED: 1. Approve the draft Franchise Ordinance/ Agreement in substance and place the ordinance for public hearing/first reading on May 2, 2006. 2. Direct staff to prepare an ordinance extending the current franchise and negotiate specific changes to ........!~~.~~~~~~~~~~~:........ ....mmm_...__..._m.___m_ ....m.._.m___.......m__ m.m___._ ..m.m_.m._mm.mm_ .........._ .........................................................................--.................. STAFF RECOMMENDATION: St CITY MANAGER ApPROVAL: DIRECTOR ApPROVAL: --LlAL Council Comnnttee Council COMMITTEE RECOMMENDATION: Forward Option I to the May 2,2006 City Council Agenda for public hearing and first reading with a "do pass" recommendation. Linda Kochmar, Chair Jeanne Burbidge, Member Jack Dovey, Member PROPOSED COUNCIL MOTION: HI move approval of the draft Franchise Ordinance/Agreement in substance and place the ordinance on the May 16, 2006 Council Agenda for second reading/enactment. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED COUNCIL BILL # 0 DENIED 1 ST reading 0 TABLEDIDEFERREDINO ACTION Enactment reading 0 MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 02106/2006 RESOLUTION # 1 To maintain consistency among its numerous franchises, Comcast frequently uses side letters as a way to cover certain non-standard terms agreed to by both parties. ---~------ - - ---- ------- ___________ _~___ __m_ __~ ---------------- ,~ Federal Way CITY OF FEDERAL WAY STAFF REPORT ATTACHMENT A Date: April 19, 2006 To: Finance, Human Services and Regional Affair:.:.ommn From: Iwen Wang, Management Services Director ~ Via: Derek Matheson, Interim City Manage~ Subject: Comcast Cable Franchise Renewal BACKGROUND As set out in the FCC guidelines, the City and Comcast agreed to enter into an informal renewal process in the fall of 2004, In preparation for the negotiation, the City conducted a community needs assessment; inspected the physical plant/system to identify any deficiencies; and collected and compiled comparisons of all major Comcast franchise agreements in Washington in recent years, Based on the data collected from these processes, the City drafted the opening proposal and forwarded it to Comcast in December of 2004, The City received Com cast's first counter proposal in March 2005 and has been engaged in the renewal discussion since. This renewal has taken longer, and has been more contentious at times, primarily due to the changes in the political and competitive environment for cable television operators, Since the Telecommunications Act of 1996 and emerging broadband communications, there have been many anticipations of an extensive rewrite of the FCC rules governing the cable industry that would address the future direction of the technology, There have been numerous attempts at the federal level to pass something, and some believe that new legislation under the current administration is imminent. Most of the proposed legislation reduces local franchise authority and gives more authority to the FCC including a proposal of a "national franchise" to replace the many local franchises. On the competition side, Comcast has historically managed their rates closely to compete with satellite television services. The ability to now provide broadband internet services (both data and internet phones) has allowed cable operators to generate revenues from video, internet, and phone services using the same fiber infrastructure. This change has enticed some local telcos (e.g, Verizon) to expandjupgrade their systems to allow them to offer video services (most already offer data), These land-line based services would be in direct competition with Comcast, and in Comcast's perspective, dramatically change their competitive environment (end their monopoly status) and could seriously affect their market share and revenue, With situations continuing to evolve, particularly during the latter part of our negotiation, we found it increasingly difficult to get everything the City wanted. In the end, we believe this is a fair and reasonable franchise for both sides. KEY PROVISIONS AND HIGHLIGHTS 1. ONE FRANCHISE As staff had previously recommended to Council, this franchise combines and synchronizes the two different franchises we had with two different operators into one, The operators are still two different legal entities but both are subsidiaries of Comcast Inc., Philadelphia. 2. FIVE-YEAR TERM WITH AUTOMATIC FIVE-YEAR EXTENSION AT COMCAST'S CHOICE The City initially proposed the five-year term, Toward the end of negotiations, the staff pushed hard to increase the length of the term to protect the City from the potential "national franchise", FHSRAC 4/25/06 D-2 -------------- ---- - - -- -- --- ----- -------- - However, because Comcast had already committed to the five year term, it was too late to change. Under the draft agreement, unless Comcast notifies the City in writing 12 months prior to the end of initial term to not renew, the Franchise will be automatically renewed and Comcast will be required to fulfill its capital contribution commitment at the beginning of the second term as described below. 3. FRANCHISE FEES - 50/0 OF GROSS REVENUES The new franchise preserves the 5% franchise fee and changes the remittance frequency from quarterly to monthly, 4. STANDARDIZATION OF SENIOR/DISABLED DISCOUNT AT 300/0 OF BASIC TIER (LIMITED SERVICE) This discount amounts to around $4.50 per month per eligible subscriber and is the standard discount Comcast provides in all their recent settlements (e,g. Seattle in February 06, and Spokane in November 05). Subscribers in the southern portion of the City currently receive a 20% discount if they subscribe to Limited Service (around $lS/mo) or Basic Service (around $4S/mo). Comcast has agreed to grandfather those currently receiving the 20% discount on Basic Service as long as they continue their subscriptions and meet eligibility tests, 5. CUSTOMER SERVICE CENTER VS. PAYMENT CENTER A Customer Service Center is typically staffed by Comcast to address a multitude of customer services needs, including the location to pick up and drop off equipment. A Payment Center is typically a contracted location with banks, grocery stores, or other neighborhood convenience stores to accept customer payments and equipment returns but will not be trained to provide additional services, Comcast has requested that the City change the minimum requirement from a . Customer Service Center to a Payment Center. In general the usage rates of Customer Service Centers throughout the country are in decline, Today's customers are requesting alternative methods for equipment delivery and returns (e,g, direct shipment and postage prepaid return boxes), Therefore, Comcast proposes that City allow them to make their decision based on actual customer needs in the future, Specifically, Comcast agrees to continue the Customer Service Center during the initial five-year term. However, if continuation of the Customer Service Center no longer makes business sense, they would instead maintain a Payment Center in Federal Way. Before implementing any changes, Comcast will provide such evidence and proposal and provide the City an opportunity to conduct a public hearing to determine the community impact, 6. CONSTRUCTION AND RIGHT OF WAY MANAGEMENT The City agrees to allow Comcast to utilize an annual blanket permit for routine and emergency maintenance currently available to all utilities, Permits are still required for all work other than routine and emergency maintenance. Comcast is required to relocate/underground their lines at their expense, This includes requiring Comcast to pay their proportional share of design/construction costs related to the common trench, Currently, the City pays for the common trench, Utilities, including Comcast, only pay for their direct cost related to pipes/equipment/vaults. 7. I-NET AND PEG (PUBLIC EDUCATION AND GOVERNMENT) Comcast is to provide $300,000 at the beginning of each of the five-year terms. Of the $300k, $200k is restricted for PEG capital and $100k unrestricted can be used for PEG operation, Comcast will assess 35</: per subscriber per month during the entire term to recover the $200k lump sum FHSRAC 4/25/06 D-3 -------- -- -- - ----- ------ contribution (approximately 2,25 years) and then directly remit future collections to the City for 1- Net and PEG equipment (restricted for capital), The City can designate programs on three PEG Access channels: Public (77), Education (26 or 28) and Government (21), Currently the Public Channel (77) carries signals/programs broadcasted from the Seattle public access studio located in North Seattle, Another possibility is participating in the puget Sound Access in Kent. Auburn, Burien, Kent, Renton, SeaTac, and Tukwila are current members of the studio and their residents can become members (membership fee required) and use the facility to produce and air their programs. 8. I-NET MAINTENANCE The City entered into the I-Net Agreement with AT&T in 2000 to construct the private network for government purpose. The network provided the City with a fast and reliable communication system while eliminating expensive communication links between various City facilities. The agreement provides that Comcast may bill the City for all maintenance and repairs associated with I -Net fiber, although to date they have not billed such costs to the City due to their oversight. Most recent I-Net agreements are on a managed network basis (Vancouver); no I-Net (Spokane); a fixed per strand mile cost of $500/yr (Kent); or on a time/material basis. The new franchise limits the billable I-Net costs to actual repairs only and only when Comcast is repairing the I-Net fibers that are separated from those of Com cast in different sheath, Now that Comcast is aware of this provision it is possible they will try to recover applicable costs in the future. 9. INSURANCE AND BOND Insurance coverage amounts of $5 million for commercial general liability, $3 million in automobile coverage, and $1 million employer's liability, Worker's Compensation coverage is consistent with State Law, A $250,000 Performance Bond for the term of Franchise covers all work and any construction below $100,000, For construction exceeding $100,000 Comcast will provide additional bonds at 120% of value of work consistent with City Code. 10. COMMUNITY SERVICES Since their acquisition of AT&T Cable, Comcast has placed more focus in their community service efforts. Locally, Com cast was one of the key sponsors of the Chamber's Youth Advancing Leadership Program, Another service they do is to provide public service announcements (Comcast Local Edition) for cities on CNN Headline News (channel 45), They typically invite elected officials and community leaders to talk about news in the communities that are not otherwise known. They produce these messages at their Puyallup studio at their cost. Typically a message is played throughout the day for two weeks, Another service Comcast would provide is an annual insert or message with their bills. The mailing will only reach City residents who subscribe to Comcast services (currently 21,500 households in Federal Way), but again, they would pay for the cost of printing and mailing the insert. 11. BROADCASTING CITY PROGRAMS IN PAA NOT ADDRESSED IN THE AGREEMENT Comcast will not consider this request and the City has no way to enforce it due to a lack of jurisdiction, There are a number of cities in King County interested in doing the same, Perhaps the Suburban Cities Association could be the venue for the cities to address this collectively with King County who does have the jurisdiction in these areas, FHSRAC 4/25[06 D-4 - - - -- - ------ ------ A TT ACHMENT B FEDERAL WAY - COMCAST CABLE FRANCHISE AGB,EEMENT ORDINANCE NO. ORD# , Page 1 FHsRAC 4/25/06 Page 5 --- - ---------------- --- -~--~----- WHEREAS, the public has had adequate notice and opportunity to comment on Grantee's proposal to provide Cable Service within the City; and WHEREAS, the City has a legitimate and necessary regulatory role in ensuring the availability of Cable Service, high technical capability and reliability of Cable Systems in its jurisdiction, the availability of local programming (including educational and Governmental Access programming), quality customer service, and management of City Rights-of-Way; and WHEREAS, diversity in Cable Service and local and non-local programming is an important policy goal and the Grantee's Cable System should offer a wide range of programming services; and WHEREAS, flexibility to respond to changes in technology, Subscriber interests and competitive factors within the Cable Service market is an essential characteristic of this Franchise and both the City and the Grantee stress maximum Cable System flexibility to take advantage of new technology to benefit Subscribers and citizens as such technology becomes available; and WHEREAS, the City is authorized by applicable federal law to grant one or more non-exclusive Franchises to construct, operate and maintain a Cable Television System within the boundaries of the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: This Cable Television Franchise is entered into in Federal Way, Washington, this_ day of , _, by and between Comcast ofPuget Sound, Inc., a corporation, and Comcast of Washington IV, Inc., a corporation, and the City of Federal Way, Washington, a municipal corporation. City and Grantee are sometimes referred to as the "parties," ORD# , Page 2 FHsRAC 4/25/06 Page 6 --- --- - TABLE OF CONTENTS SECTION 1. DEFINITIONS. .... ....... ..... ........... .......... ....... .... ....... .... ...... ........ .... ..... .................. ...... ......... .......... 1 SECTION 2. GRANT OF FRANCHISE..................................................................................................,..........9 2.1 Grant. .............................................................................................. ............................................ 9 2.2 Use of Rights-of- Way......... ..... ............... ..... ..................... ................ ................. ....................10 2.3 Term. ......................... ......... .................... ...... ............. ............ ............. ........ .......... .....................11 2.4 Effective Date. ..................................... ... ......... ............. .......... ..... .... .......................................12 2.5 Franchise Non-Exclusive.......................... .......................................................................... 12 2,6 Grant of Other Franchises.................................................................................................. 13 2.7 Familiarity with Franchise. ................................................................................................13 2.8 Effect of Acceptance .............................................................................................................13 2.9 Police Powers ..... .... ....... ...... ... ..................... ............................. ......... .... ...... ...... .....................13 2.10 Renewal.. ........... ....... ......... ............... ............... ..... ...... .......... ...... ....... .............. ...................... ...14 2.11 Service Area .....:... ............... ............ ................. ....... .... ........ .... .................... ......... ...................14 2.12 Annexation. ............................................................................................................................. .14 SECTION 3. FRANCHISE FEE AND FINANCIAL CONTROLS ..................................................................14 3.1 Franchise Fee... ........ ........... ............ .......... ...................... .... .......................................... ........ .14 3.2 Payments and Reports................................................... .......................................................14 3.3 Acceptance of Payment. ............... .... .... ......................................... .......................................15 3.4 Annual Franchise Fee Reports..........................................................................................15 3.5 Audits. ............. ....... ......... ......................................................................................................... .15 3.6 Financial Records................................................................................................................ .16 3.7 Interest on Late Payments...................................................................................................16 3.8 Additional Commitments Not Franchise Fees ..............................................................16 3.9 Payment on Termination .....................................................................................................16 3.10 Duty to Cooperate ......... ................ .... .... .......... ............. ..................................... ....................17 SECTION 4. ADMINISTRATION AND REGULA TION ................................................................................17 4.1 General Provisions....................................................................................... ........................ 17 4.2 Changes in Law...... ........... ............ ............................... .......... ....... .........................................17 4.3 Rates and Charges ................................................................................................................17 4.4 Rate Discrimination.............................................................................................................. 18 ORD# , Page i FH5RAC 4/25/06 Page 7 -~-----~--~----- ------------ ----~----~------- - ---- --- 4.5 Filing of Rates and Charges...............................................................................................18 4.6 Late Fees.................................................................................................................................. 19 4.7 Time Limits Strictly Construed..........................................................................................19 SECTION 5. FINANCIAL AND INSURANCE REQUIREMENTS .................................................................19 5.1 Indemnification..................................................................................................................... .19 5.2 Insurance Requirements. ..................................................................................................... 20 5.3 Performance Bond ............................................ ..... ................................ ................ ............... 22 SECTION 6. CUSTOMER SERVICE ........................................................................................................,.....23 6.1 Subscriber Contracts ............... ............ ............ ...... .... ......................................... .................. 23 6.2 Subscriber Privacy................................................................................................................ 23 6.3 Payment Center..... ..... .... ................ ...... ........ ........ ....... ......... ...... ................ ............................23 6.4 Telephone Answering Standards. ...... .... ............................ ............... '" ... ......... .............. ... 23 6.5 Service Calls, Installations, and Outages. .....................................................................24 6.6 Notice Requirements............................................................................................................. 26 6.7 Special Notice Procedures. .................. ...... ................... .... ............. ...... ...............................26 6.8 Billing................................................................................................................................ ........27 6.9 Rate Discounts. ...................................................................................................................... 28 SECTION 7. REpORTS AND RECORDS ..,....................................................................................................28 7.1 Open Records ........................................... .................................. .......... ...... .......... .....:............28 7.2 Proprietary and Confidential Records............................................................................ 29 7.3 File for Public Inspection........... ................. ...... .................................................. .... ............30 7.4 Records Available...................................................... ............................................................30 7.5 Annual Reports....................................................................................................................... 31 7.6 Submittal of Documents .............................................. .........................................................31 7.7 False Statements.................................................................................................................... 32 7,8 Penalties for Noncompliance ....................... ......................................................................32 7.9 Report Expense..................................... ........... ...... ............................................ ..................... 32 SECTION 8. PROGRAMMING AND CHANNEL CAPACITY ......................................................................32 8.1 Required Programming Categories ...................... ........................................ .... ...............32 8.2 Obscenity.................................................................................................................................. 32 8.3 Parental Control Device ................ .......... ... .... ............. ............... ...... ................. .................33 ORD# , Page ii FHsRAC 4/25/06 Page 8 -~----------------- --- -------- -------------------------------- - - 8.4 Connection to Public Facilities ............................ ... .......... ................... .............................33 8.5 Continuity of Service............................................................................................................ 34 SECTION 9, PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS...............................................34 9.1 PEG Capital Support. . .... ... ....... ........................ ... ............... .... ...... .................... ........ ....... ....34 9.2 Access Reporting................................................................................................................... 35 9.3 Management and Control of Access Channels. ............................................................ 35 9.4 A ccess Channels.............................. ...................................................................................... 35 9.5 Changes in Technology....................................................................... .... ..................... ........37 9.6 Access Channels on Basic Service. ..................................................................................37 9.7 Access Channel Location/Relocation and Bill Insertions. ........................................37 9.8 Return Lines. ..................................... ................ ............................................................ ..........38 9.9 Technical Quality.................................................................................. ................................ 38 9.10 Access Channel Interconnections .....................................................................................38 SECTION 10. RIGHT-OF- WAY AND CONSTRUCTION STANDARDS.........................................................39 10.1 Permitting..................................................................................................... .......... .............. ...39 10.2 Construction..................................................................................................................... ....... 41 10.4 Maintenance and Workmanship. ......... ...... ................... ............................ ........... ..............44 10.5 Repair and Restoration of Rights-of- Way and City-Owned Property.................... 45 10.6 Location of Facilities............................... ............................................................................. 46 10.7 Relocation......................................................................... .......................................................46 10,8 Undergrounding of Cable .......... ........... ................... ................. .................. ........................47 10.9 Trimming of Trees and Shrubbery..................... ........................... ................................. ...48 10.10 Use of Poles ............................................................................................................................ 48 10,11 Stop Work.. ... ...... ........... ....... ......................................................................................... ...........49 10.12 Work of Contractors and Subcontractors.......................................................................49 10.13 Acquisition ofF acilities. .... ....... ......... ......................... ................. ......................................50 10,14 Reservation of City Rights-of- Way Use Rights ............................................................. 50 10.15 Discontinuing Use of Facilities .........................................................................................50 10.16 Street Vacation .......................................................................................................................51 SECTION 11. CABLE SYSTEM DESIGN AND CAP ACITY .......................................................................... 51 11.1 Equal and Uniform Service ................................................................................................51 ORD# , Page iii FHsRAC 4/25/06 Page 9 _~__n~________ ________ _________ ___ ________________ ________n____ __ 11.2 Cable System Upgrade.. .............. ............. ...... ........................................ ..............................51 11.3 Technical Performance........... ...... ......................................................... ............ .................. 51 11.4. Inspection of Facilities. .................................................................................................. .....52 11.5 Cable System Performance Testing. ................................................................................52 SECTION 12. INSTITUTIONAL NETWORK ...................................................................................................53 12.1 I-Net History........................................................................................................................... 53 12.2 I-Net Use ........ ..... .............. .... ................. ............. .................................... ..................................54 12.3 I-Net Terms and Conditions ...............................................................................................54 SECTION 13. SERVICE AVAILABILITY. .......................................................................................................54 . 13.1 Service Request...................................................................................................................... 54 13.2 Service Extensions................................................................................................................. 54 13.3 Standard of Service ... ......... ...... .... ....................... ............................ ...................................... 55 SECTION 14. STANDBY POWER AND EMERGENCY ALERT SYSTEM ................................................... 55 14.1 Standby Power................... .... .......... ............... ............ ........ ........ ........ ..... .............. ................. 55 14,2 Emergency Alert Service (EAS) Capability. ..................................................................56 SECTION 15. ENFORCEMENT; TERMINATION OF FRANCHISE. .............................................................. 56 15.1 Informal Dispute Resolution ............. ....................................... .... ..... .... ...... ....................... 56 15.2 Procedure for Remedying Franchise Violations .......................................................... 56 15.3 Alternative Remedies............................................................................................................ 58 15.4 Assessment of Liquidated Damages. ................................................................................ 59 15.5 Revocation............................................................................................................................... 61 15.6 Removal............ ................. ...... .................................................................................................63 15.7 Non-Enforcement by City ..... ............... ....... ......................................................................... 63 15.8 Bankruptcy Procedures .. ............. ................. ..................................... ...... ............................64 SECTION 16. ABANDONMENT ............................................................................................................,.........64 16.1 Effect of Abandonment ......................... ......................... ....................................................... 64 16.2 What Constitutes Abandonment ........................................................................................ 64 SECTION 17, TRANSFER OF OWNERSHIP OR CONTROL..........................................................................65 SECTION 18. FRANCHISE REVIEW ............................................................................................................... 67 18.1 Performance Evaluation. .................................................................................................... 67 18.2 Topics to be Addressed at Performance Reviews ........................................................ 68 ORD# , Page iv FHsRAC 4/25/06 Page 10 - -- - ---- ------ - --- ----- ----------- ---- -~ --------------------- ---- SECTION 19. MISCELLANEOUS PROVISIONS............................................................................................. 69 19.1 Equal Employment Opportunity Requirements ............................................................69 19.2 Notices. ..................................................................................................................................... 69 19.3 Costs to be Borne by Grantee ............................................................................................ 70 19.4 Binding Effect......................................................................................................................... 70 19.5 Authority to Amend ..................... ... ........... .... ............... ............... .... ...................................... 70 19,6 Venue......................................................................................................................................... 70 19.7 Governing Law........ ........ ....................................................................................................... 70 19.8 Guarantee................................................................................................................................ 70 19.9 Captions................................................................................................................................... 70 19.10 Construction of Franchise ..................................................................................................70 19.11 No Joint Venture....................................................................................................................70 19,12 Waiver....................................................................................................................................... 71 19.13. Severability.............................................................................................................................71 19.14 Entire Agreement...................................................................................................................71 19.15 Compliance with Federal, State, and Local Laws ....................................................... 7J 19.16 Force Majeure. .......................................................................................................................71 SECTION 20. RA TIFICA TION ...................... ................. .................. ........ ..... ............... ......... ............................72 SECTION 21. EFFECTIVE DA TE .................................................................................................................... 72 EXHffiIT A - ACCEPT ANCE ..................................................................................................................... 73 EXHffiIT B - CITY BOND FORM............................................................................................................. 74 EXHffiIT C - INSTITUTIONAL NETWORK AGREEMENT .........................................................77 ORD# , Page v FHsRAC 4/25/06 Page 11 ___________________ ____________ __ _n_____________ --~------ Section 1. Definitions For all purposes ofthis Franchise, the following terms, phrases, and words have the following meanings. When not inconsistent with the context, words used in the present tense include the future, words in the plural include the singular, and words in the singular include the plural. Words not defined have their common and ordinary meaning. The word "must" is always mandatory and not merely directory. 1.1 "Access" means the availability for Non-Commercial use by various agencies, institutions, organizations, groups and individuals in the community including City and its designees, of particular Channels on the Cable System to receive and distribute Video Programming and information to Subscribers, as required under applicable law and this Franchise, including: (a) "Educational Access" means Access where Schools are the primary users having editorial control over programming and services; (b) "Governmental Access" means Access where governmental institutions or their designees are the primary us~rs having editorial control over programming and services; (c) "Access" means Educational Access and Governmental Access, collectively; and (d) "Public Access" means Access where organizations, groups or individual members ofthe general public, on a nondiscriminatory basis, are the primary users, 1.2 "Access Center" means a facility or facilities where Public, Educational, or Governmental use signals are managed and delivered to the Grantee for downstream transmission to Subscribers or to other Access Centers via a dedicated Connection, ORD# , Page 1 FHsRAC 4/25/06 Page 12 - ---------------------- - --- --- ---- --- --- --- 1.3 "Access Channel" means a Channel, designated for Non-CoI?IDercial Access purposes or otherwise made available to facilitate or transmit Access programming. 1.4 "Access Fees" means the capital contribution paid to the City by the Grantee under Section 9.1. 1.5 "Activation" or "Activated" means the status of any part of the Cable System, in which any Cable Services' requiring use ofthat part is available without further installation of Cable System equipment other than Subscriber premise equipment, whether hardware or software. 1.6. "Affiliated Entity" or "Affiliate" when used in connection with Grantee means any corporation, Person who owns or controls, is owned or controlled by, or is under common ownership or control with, Grantee and its successors. 1.7 "Bad Debt" means amounts lawfully owed by a Subscriber and accrued as revenues on the books of Grantee, but not collected after reasonable efforts by Grantee. 1.8 "Basic Service" means any Cable Service Tier that includes, at a minimum, the re-transmission of local television Broadcast Signals and Public, Educational, and Governmental Access Channels, or such service Tier as may be further defined by federal law . 1.9 "Broadcast Signal" means a television or radio signal transmitted over the air to a wide geographic audience, and received by a Cable System by antenna, microwave, satellite dishes, or any other means. 1.10 "Cable Act" means the Cable Communications Policy Act of 1984 (47 D,S.C. 9521 to 9653), as amended. 1.11 "Cable Operator" means any Person or group of Persons, including Grantee, who provides Cable Service over a Cable System and directly or through one or more Affiliates owns ORD# , Page 2 FHsRAC 4/25/06 Page 13 - - --- --- --- a significant interest in such Cable System or who otherwise controls or is responsible for, through any arrangement, the management and operation of such a Cable System. 1.12 "Cable Service" means the one-way transmission to Subscribers of Video Programming or other programming service and Subscriber interaction, if any, that is required for the selection or use of such Video Programming or other programming service. 1.13 "Cable System" means the Grantee's facility, consisting of a set of closed transmission paths and associated signal generation, reception and control equipment that is designed to provide Cable Service which includes Video Programming and which is provided to multiple Subscribers within a community, but such term does not include (1) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (2) a facility that serves Subscribers without using any public Right-of-Way; (3) a facility ofa common carrier which is subject, in whole or in part, to the provisions of Title II ofthe federal Communications Act (47 U.S.c. S 201 et seq.), except that such facility will be considered a Cable System (other than for purposes of Section 621(c) (47 u.S.C. S 541(c)) to the extent such facility is used in the transmission of Video Programming directly to Subscribers, unless the use is solely to provide interactive on-demand services; (4) an open video system that complies with federal statutes; or (5) any facilities of any electric utility used solely for operating its electric utility systems 1.14 "Channel" means a portion of the frequency band capable of carrying a Video Programming service or combination of Video Programming services, whether by analog or digital signal. 1.15 "City" means the City of Federal Way, Washington, a municipal corporation of the State of Washington. ORD# , Page 3 FHsRAC 4/25/06 Page 14 -- --- ---- 1.16 "Complaint" means a Subscriber contact with the Grantee to express a grievance or dissatisfaction concerning Cable Service. For purposes of enforcement of this Franchise by the City, Complaints do not include matters not within the scope ofthe Franchise. A Complaint may be verbal or in writing, but need not include initial contacts where an issue is promptly resolved to the Subscriber's satisfaction. Nothing in this definition prohibits the City from communicating with Subscribers concerning Grantee's services. 1.17 "Connection" with regard to Connections to public buildings, means installation of Fiber Optic or coaxial cable or other system-related facilities through the outer wall ofthe building. 1.18 "Designated Access Provider" means the entity or entities designated by the City to manage or co-manage Public, Educational or Governmental Access Channels and facilities. The City may be a Designated Access Provider. 1.19 "Designated Distributor" means an entity authorized by the City to distribute Access programming. 1.20 "Downstream Channel" means a Channel capable of carrying a transmission from the Headend to remote points on the Cable System or to Interconnection points on the Cable System, 1.21 "Dwelling Unit" means any residential building, or a portion thereof, that has independent living facilities, including provisions for cooking, sanitation and sleeping, designed for residential occupancy and includes "household" as that term is used in the federal Cable Act, 47 U.S.C. S 521, et seq. Buildings containing more than one set of facilities for cooking are multiple unit buildings unless the additional facilities are clearly accessory, ORD# , Page 4 FHsRAC 4/25/06 Page 15 --- ---- ---- -~- ---~ ----~ ----- 1.22 "Expanded Basic Service" means the Tier of optional Video Programming services not included in the Basic Service and excluding premium or pay-per-view services. 1.23 "FCC" means the Federal Communications Commission or its successor. 1.24 "Fiber Optic" means a transmission medium of optical fiber cable, along with all associated equipment capable of carrying Cable Services or Institutional Network service by means of electric light-waves. 1.25 "Franchise" means this document and any amendments and modifications thereto executed between City and Grantee that contains specific provisions granting authorization and the contractual and regulatory agreement between the parties. 1.26 "Franchise Area" means the area within the jurisdictional boundaries of the City, including any areas annexed by City during the term of this Franchise. 1.27 "Franchise Fee" includes any tax, fee or assessment of any kind imposed by the City on the Grantee or Subscribers, or both solely because oftheir status as such, Franchise Fee does not include: (a) Any tax, fee, or assessment of general applicability; (b) Capital costs which are required by the Franchise to be incurred by the Grantee for Public, Educational, or Governmental Access facilities, including the support required in Section 9,1; (c) Requirements or charges incidental to the awarding or enforcing of the . Franchise, including payments of bonds, security funds, insurance, indemnification, penalties, or liquidated damages. 1.28 "Grantee" means Comcast of Com cast ofPuget Sound, Inc., and Comcast of Washington IV, Inc., and its successors. ORD# , Page 5 FHsRAC 4/25/06 Page 16 -~------ 1.29 "Gross Revenues" means all amounts derived, consistent with federal and State law, either by the Grantee from the operation of Grantee's Cable System to provide Cable Services within the Franchise Area, or by any Affiliate only to the extent such amounts are derived from the operation of Grantee's Cable System to provide Cable Services within the Franchise Area. Gross Revenues includes, without limitation, amounts for Basic Cable service, tiers of service and premium services, audio services, Subscriber installations, disconnection, reconnection, change-in-service fees, late fees, administrative fees, revenues received from programmers for carriage of programming on the Cable System, leased access, advertising, . equipment rentals and sales, commissions on sales from home shopping channels, and all other revenues derived from the operation of Grantee's Cable System to provide Cable Services within the Service Area, Revenues not directly attributable to specific customers (such as advertising revenue and home shopping commissions) will be allocated to systems and jurisdictions on a per Subscriber basis measured in a consistent manner from period to period, Gross Revenues will not be net of: (1) any operating expense; (2) any accrual, including without limitation, any accrual for commissions; or (3) any other expenditure, regardless of whether such expense, accrual, or expenditure reflects a cash payment. Gross Revenues, however, will not be double counted. Revenues of both Grantee and an Affiliate that represent a transfer of funds between Grantee and the Affiliate, and that would otherwise constitute Gross Revenues of both the Grantee and Affiliate, will be counted only once for purposes of determining Gross Revenues, Similarly, operating expenses ofthe Grantee which are payable from Grantee's revenues to an Affiliate and which may otherwise constitute revenue of the Affiliate, will not constitute additional Gross Revenues for the purpose of this Franchise. Gross Revenues will include amounts earned by an Affiliate only to the extent that Grantee could have earned such types of ORD# , Page 6 FHsRAC 4/25/06 Page 17 ---- ------------ -------- ---- - revenue in connection with the operation of Grantee's Cable System to provide Cable Services within the Service Area and recorded such types of revenue in its books and records directly, but for the existence of Affiliates. Gross Revenues will not include (i) to the extent consistent with GAAP, Bad Debt; provided, however, that all or part of any such Bad Debt that is written off but subsequently collected will be included in Gross Revenues in the period collected; or (ii) any taxes on services furnished by the Grantee which are imposed directly on any Subscriber or user by the State, City, or other governmental unit and which are collected by the Grantee on behalf of said governmental unit. The franchise fee is not such a tax, The City acknowledges that Grantee shall maintain its books and records in accordance with GAAP and subject to applicable laws, 1.30 "Headend" or "Hub" means Grantee's facilities for signal reception and dissemination on its Cable System, including cable, antennas, wires, satellite dishes, monitors, lasers, switchers, modulators, processors for Broadcast Signals, and all other related equipment and facilities. 1.31 "Institutional Network" or "I-Net" means that part of the Cable System facilities or capacity owned by the Grantee, designed for Non-Commercial use by non-residential Subscribers including communications to, from, and among government agencies, Schools, libraries, and other public agencies. 1.32 "Leased Access Channel" means any Channel or portion of a Channel commercially available for programming in accordance with Section 612 ofthe Cable Act. 1.33 "Non-Commercial" means, in the context of Access Channels, that particular products and services are not promoted or sold. This term will not be interpreted to prohibit an Access Channel operator or programmer from soliciting and receiving financial support to ORD# , Page 7 FHsRAC 4/25/06 Page 18 ---------- - -------~------ produce and transmit Video Programming on an Access Channel, or from acknowledging a contribution, in the manner of the Corporation for Public Broadcasting. In the context of an Institutional Network, Non-Commercial means private network communications from and among government agencies, Schools, libraries, and other public agencies and excludes any other actions, such as the leasing or reselling Institutional Network capacity to a third party for any purpose. 1.34 "Normal Business Hours" means those hours during which most similar businesses in the community are open to serve customers. 1.35 "Normal Operating Conditions" means those service conditions that are within the control of the Grantee. Those conditions do not include natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Conditions ordinarily within the control of the Grantee include, but are not limited to, special promotions, rate increases, and maintenance or upgrade of the Cable System. 1.36 . "Pay Service" or "Premium Service" means Video Programming or other programming service choices (such as movie Channels or pay-per-view programs) offered to Subscribers on a per-Channel, per-program, or per-event basis. 1.37 "Person" means an individual, partnership, association, joint-stock company, trust, corporation, or governmental entity. 1.38 "Rights-of-Way" means land acquired or dedicated for public Streets or roads, highways, avenues, lanes, alleys, bridges, sidewalks, easements, and similar public property located within the Franchise Area. ORD# , Page 8 FHSRAC 4/25/06 Page 19 1.39 "School" means any State-accredited educational institution including, for example, primary and secondary Schools (K-12), colleges and universities, and excluding home schools, residential facilities, and prison/jail populations. 1.40 "Service Interruption" means the loss of picture or sound on one or more cable Channels. 1.41 "Service Tier" means a category of Cable Service or other services provided by the Grantee and for which the Grantee charges a separate rate. 1.42 "State" means the State of Washington. 1.43 "Street" means Rights-of-Way. 1.44 "Subscriber" means any Person who receives Cable Services provided by Grantee by means of the Cable System and whose premises are lawfully activated to receive Cable Service from Grantee's Cable System. 1.45 "Upstream Channel" means carrying a transmission to the Headend from remote points on the Cable System. 1.46 "Video Programming" means programming provided by, or generally considered comparable to programming provided by a television broadcast station or cable programmer. Section 2. Grant of Franchise 2.1 Grant. (a) City grants to Grantee a non-exclusive and revocable authorization to make reasonable and lawful use of the Rights-of-Way within the Franchise Area to construct, operate, maintain, reconstruct and upgrade the Cable System for the purpose of prQviding Cable Services, subject to the terms and conditions of this Franchise and applicable law. This ORD# , Page 9 FHSRAC 4/25/06 Page 20 - -- ---- - ------------~------------ Franchise constitutes both a right and an obligation to provide the Cable Services and fulfill the obligations required by this Franchise. (b) Grantee has the right to operate its Cable System using City Rights-of- Way within the Franchise Area in compliance with all City construction codes and regulations. This Franchise does not waive the requirements ofany other City ordinances to the extent that they do not materially limit the benefits or expand the obligations of Grantee under this Franchise. The Grantee specifically agrees to comply with all generally applicable City ordinances. If there is a conflict between the provisions of another City ordinance and this Franchise, the specific provisions of this Franchise prevail. Grantee has the right to challenge any City ordinance or decision that conflicts with its rights under this Franchise. (c) Grantee guarantees that any Affiliate of the Grantee involved in offering of Cable Service in the Franchise Area, or in the management or operation of the Cable System in the Franchise Area will also comply with the terms and conditions of this Franchise. (d) Grantee receives no rights by implication. (e) This Franchise conveys limited rights and interests only in the Rights-of- Way in which the City has legal interests. It is not a warranty of title or other legal interest in any Rights-of-Way. It does not provide Grantee with any interest in any particular location within the Rights-of-Way. It does not confer rights other than as expressly provided in this Franchise. 2.2 Use of Rights-of-Wav. (a) Subject to the terms and conditions of this Franchise and applicable Grantor regulations, Grantee may erect, install, construct, repair, replace, reconstruct, and retain in, on, over, under, upon, across, and along the Rights-of-Way within the Franchise Area, such ORD# , Page 10 FHSRAC 4/25/06 Page 21 --------------- wires, cables (both coaxial and Fiber Optic), conductors, ducts, conduit, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary and connected with the operation of a Cable System for the provision of Cable Services within the Franchise Area. (b) Grantee must install Cable System facilities in a manner that minimizes interference with the use of the Rights-of-Way by others, including others that may be installing communications facilities. City may require that Cable System facilities be installed at a particular time, at a specific place or in a particular manner as a condition of access to a particular right-of-way. City may deny access if Grantee is not willing to comply with City's requirements. City may remove, or require removal of, any facility that is not installed in compliance with the requirements established by City, or which is installed without prior City approval of the time, place or manner of installation and charge Grantee for all the costs associated with removal. Grantee agrees when economically and technically feasible, as mutually determined by the City and the Grantee, to cooperate with others to minimize adverse impacts on the Rights-of-Way through joint trenching and other arrangements. Grantee must pay all costs associated with any requirement of City in the exercise of its police powers to move its Cable System located in the Right-of-Way. 2.3 Term. The initial term ofthis Franchise and all its rights, privileges, obligations and restrictions shall be five (5) years from the effective date of the Franchise, with an automatic five (5) year extension, including fulfillment of the additional PEG capital support stipulated in Section 9.1. Should Grantee not wish to accept the Franchise extension, Grantee shall give City written notice at least twelve (12) months in advance of the end of the initial term. Such notice ORD# , Page 11 FHSRAC 4/25/06 Page 22 will not be given for the purpose of renegotiating the terms of this Franchise during the extension and such renegotiation will not occur. 2.4 Effective Date. (a) This Franchise and its rights, privileges, and the contractual relationship it establishes take effect from the effective date of this Franchise as specified in this section. (b) This Franchise and its terms and provisions must be unconditionally accepted by the Grantee by the submission of a written instrument, in substantially the form attached as Exhibit A, executed and sworn to by a corporate officer of the Grantee before a Notary Public, and filed with the City within sixty (60) days after the City's passage and approval of this Franchise. Such instrument shall evidence the unconditional acceptance ofthis Franchise and the promise to comply with and abide by all its provisions, terms, and conditions. (c) The grant ofthis Franchise has no effect on the Grantee's duty under the prior Franchise or any ordinance or agreement of the parties in effect prior to the effective date of this Franchise to indemnify or insure the City against acts and omissions occurring during the period that the prior Franchise was in effect. Nor does it have any effect upon liability to pay all Franchise Fees that were due and owed under prior Franchises and ordinances. 2.5 Franchise Non-Exclusive. This Franchise is non-exclusive and is subject to all prior rights, interests, agreements, permits, easements or licenses granted by City to any Person to use any property, Rights-of-Way, easement, right, interest, or license for any purpose. This includes the right of City to use same for any purpose it deems fit, including the same or similar purposes allowed Grantee. Subject to Section 2.6, City may at any time grant authorization to use the Rights-of-Way for any purpose not incompatible with Grantee's authority under this Franchise and for such additional Franchises for Cable Systems as City deems appropriate. ORD# , Page 12 FHSRAC 4/25/06 Page 23 _____ _n _ ______ ------------ --- -- 2.6 Grant of Other Franchises. If City enters into a Franchise, permit, license, authorization or any other agreement with any other Person or entity to enter into the City's Rights-of- W ay of Streets to construct or operate a Cable System or provide Cable Service to any part of the Franchise Area, the terms and conditions will not, taken together as a whole, be materially either more favorable or less burdensome than those of this Franchise, in order that one operator not be granted an unfair competitive advantage over another, and to provide all parties equal protection under the law. 2.7 Familiarity with Franchise. The Grantee acknowledges and warrants by acceptance of the rights, privileges. and agreement granted that it has carefully read and fully comprehends the terms and conditions of this Franchise. Grantee accepts all reasonable risks of the meaning of the provisions, terms and conditions. Grantee further acknowledges that it has fully studied and considered the requirements and provisions of this Franchise, and finds they are commercially practicable and consistent with all local, State and federal laws and regulations currently in effect, including the Cable Act. 2.8 Effect of Acceptance. By accepting this Franchise, the Grantee: (1) acknowledges and accepts the City's legal right to issue and enforce the Franchise; (2) agrees that it will not oppose the City's lawful intervention in any legal or regulatory proceeding affecting the Cable System; (3) accepts and agrees to comply with all provisions of this Franchise; and (4) agrees that the Franchise was granted under processes and procedures consistent with applicable law, and that it will not raise any claim to the contrary. 2.9 Police Powers. Grantee's rights are subject to the police powers of City to adopt and enforce ordinances necessary to the safety, health and welfare of the public. Grantee agrees to comply with all applicable laws, ordinances and regulations adopted under the police powers ORD# , Page 13 FHSRAC 4/25/06 Page 24 ------- --------- ---- -- -- -- of City. Any conflict between the provisions of this Franchise and any other present or future lawful exercise of City's police powers will be resolved in favor ofthe latter. 2.10 Renewal. Any renewal ofthis Franchise shall be governed by and comply with the provisions of Section 626 of the Cable Act, as amended. The five (5) year extension in Section 2.3 is not a renewal as defined herein. 2.11 Service Area. Grantee will provide the Cable Service authorized under this Franchise throughout the Franchise Area. 2.12 Annexation. Upon the addition or annexation for any area in which Grantee or an Affiliate owns or operates any facilities, such facilities will immediately be subject to this franchise, unless a conflict exists based on ownership by a legal entity other than Grantee. In the event of such conflict, all parties will meet to resolve in good faith. All administrative changes related to the annexation, including, but not limited to payment of franchise fees, billing, reporting, and recordkeeping, will be made by Grantee within one hundred twenty (120) days of the annexation or as mutually agreed upon by all parties. Section 3. Franchise Fee and Financial Controls 3.1 Franchise Fee. As compensation for the use of City's Rights-of-Way or Streets, Grantee will pay as a Franchise Fee to City throughout the duration of this Franchise an amount equal to five percent (5%) of Grantee's Gross Revenues. Accrual of such Franchise Fee begins on the effective date of this Franchise. Disputes concerning the provisions of this Section will be resolved under the dispute resolution procedures in Section 15. 3.2 Payments and Reports. Grantee's Franchise Fee payments to City will be computed at the end of each month and shall be due and payable for the preceding month no later than 30 (thirty) days after the last day of the preceding month. Each payment must be ORD# , Page 14 FHSRAC 4/25/06 Page 25 -- - -- -------~ --------- ---------- -- - -------- ----------- --- -- accompanied by a written report to Grantor, verified by Grantee and in a form reasonably acceptable to Grantor. 3.3 Acceptance ofPavrnent. Acceptance of any payment will not be construed as an accord by City that the amount paid is the correct amount. Acceptance of any payment will not be construed as a release of any claim City may have for further or additional sums payable, or for the performance of any other obligation of Grantee. 3.4 Annual Franchise Fee Reports. Grantee must, no later than one hundred twenty (120) days after the end of each calendar year, furnish to City an audited statement stating the total amount of Gross Revenues and all payments, deductions, and computations for the period covered by the payments. 3.5 Audits. On an annual basis, no more frequently than every twelve (12) months, and with thirty (30) days' prior written notice, City has the right to annually conduct an independent audit of Grantee's records related to this Franchise and to re-compute any amounts payable under this Franchise. Grantee must cooperate in making all relevant records available upon request as allowed under Section 7 of this Franchise. City will in good faith attempt to complete each audit within six (6) months. The audit period will not be longer than the previous three (3) years unless City has information relating to previous years that raises doubt as to the accuracy of previous payments, but in which case the audit period may be no longer than six (6) years. Any additional amounts due to City as a result ofthe audit must be paid within 60 (sixty) days following written notice to the Grantee that includes a copy of the audit findings. If the audit shows that Franchise Fees were underpaid by three percent (3%) or more in a calendar year, Grantee must pay the first $25,000 ofthe total cost of the audit. Disputes concerning the ORD# , Page 15 FHSRAC 4/25/06 Page 26 ----- -~--------- provisions of this Section will be resolved under the dispute resolution procedures in Section 15.1. 3.6 Financial Records. Grantee will meet with City upon request to review Grantee's method of record-keeping, financial reporting, the computing of Franchise Fee obligations and other procedures. This obligation applies to all information and understanding the City deems necessary for reviewing reports and records consistent with Section 7 of this Franchise. 3.7 Interest on Late Payments. If a Franchise Fee payment or other sum is not received by the City on or before the due date, or is underpaid, the Grantee must pay in addition to the payment, or sum due, interest from the due date at a rate of twelve percent (12%) per annum. 3.8 Additional Commitments Not Franchise Fees. No term or condition in this Franchise will in any way modify or affect Grantee's obligation to pay Franchise Fees, consistent with federal law. The total sum of Franchise Fee payments and additional commitments in this Franchise may total more than five percent (5%) of Grantee's Gross Revenues in any twelve (12) month period. Grantee agrees that the additional commitments are not Franchise Fees, nor will they be offset or credited against any Franchise Fee payments due to City. They do not represent an increase in Franchise Fees to be passed through to Subscribers under any federal law. Access Fees are not Franchise Fees and will not be offset against Franchise Fees. 3.9 Payment on Termination. If this Franchise terminates for any reason, Grantee must file with City within one hundred twenty (120) calendar days of the date ofthe termination a financial statement certified by an independent certified public accountant showing the Gross Revenues received by Grantee since the end of the previous period for which Franchise Fees were paid. Within sixty (60) days of the filing of that statement with the City, Grantee must pay ORD# , Page 16 FHSRAC 4/25/06 Page 27 ~------------- ---- -------------- -~----~----- any unpaid amounts. If Grantee fails to satisfy its remaining financial obligations required by this Franchise, City may use the funds available in security provided by the Grantee to satisfy those obligations. 3.10 Duty to Cooperate. City agrees to exercise prompt and diligent efforts to verify whether billing addresses are in or outside the Franchise Area upon the written request of Grantee. Section 4. Administration and Re~nllation 4.1 General Provisions. City has the power and right to administer and enforce the requirements of this Franchise, in accordance with the requirements of applicable law, including the Cable Act. City may delegate administrative responsibilities to any agent in its sole discretion and will provide notice to Grantee on any such delegation. 4.2 Changes in Law. The Grantee and City are entitled to all rights and are bound by all applicable changes in local, State, and federal law that occur subsequent to the effective date ofthis Franchise. However, if such changes in law substantially reduce Franchise Fees, modify Grantee's I-Net obligations, reduce Franchise Access support, or authorize any facilities-based entity to provide Cable Services or comparable video programming within the franchise area without a franchise granted by the City, the City and Grantee agree at the request of either party to enter into good faith negotiations for up to six (6) months to resolve the issues. If resolution is not reached within this period, and the period is not extended by mutual agreement, the extension term of this Franchise will be reduced by three (3) years and the parties will commence the renewal process in accordance with the Cable Act. 4.3 Rates and Charges. All Grantee rates and charges related to or regarding Cable Services are subject to regulation by City to the full extent authorized by applicable law. ORD# , Page 17 FHSRAC 4/25/06 Page 28 --- ---- -- ------ __________n______________ __ - ------------ ------------------------- 4.4 Rate Discrimination. All Grantee rates and charges must be published (in the form of a publicly-available rate card), made available to the public, and must be non- discriminatory as to all Persons of similar classes, under similar circumstances and conditions. Grantee must apply its rates in accordance with governing law. Grantee must permit Subscribers to make any in-residence connections the Subscriber chooses without additional charge and without penalizing the Subscriber. However, if any in-home connection requires service from Grantee due to signal quality, signal leakage or other factors, caused by improper installation of such in-home wiring or faulty materials of such in-home wiring, the Subscriber may be charged appropriate service charges by Grantee. This does not prohibit: (a) The temporary reduction or waiving of rates or charges in conjunction with valid promotional campaigns; (b) The offering of reasonable discounts to senior citizens and/or economically disadvantaged citizens; (c) The offering of bulk discounts for multiple Dwelling Units. 4.5 Filing of Rates and Charges. (a) Throughout the term of this Franchise, Grantee must provide every six (6) months, and upon request, an updated rate card to the City detailing applicable rates and charges for Cable Services provided under this Franchise. This does not require Grantee to file rates and charges under temporary reductions or waivers of rates and charges in conjunction with promotional campaigns. (b) Upon request, Grantee will provide a complete schedule of current rates and charges for all Leased Access Channels, or portions of such Channels, provided by Grantee and the terms and conditions for lease established by the Grantee. ORD# , Page 18 FHSRAC 4/25/06 Page 29 - ____n _____ --------------- --- -- - -- -- - -- -- ---------------- ------------ -- 4.6 Late Fees. Ifthe Grantee assesses any kind of penalty fee for late payment, such fee will comply with applicable law. 4.7 Time Limits Strictly Construed. Whenever this Franchise sets forth a time for any act to be performed by Grantee, such time is of the essence, and any failure of Grantee to perform within that time allows the City to initiate the enforcement procedures ofthis Franchise. Section 5. Financial and Insurance Requirements 5.1 Indemnification. (a) General Indemnification. Grantee must, at its own cost and expense, indemnify, hold harmless, and defend City and its officers, officials, boards, commissions, authorized agents and employees against any action or claim for injury, damage, loss, liability, cost or expense, including court and appeal costs and attorneys' fees and expenses, arising from any casualty or accident to Person or property. This includes without limitation copyright infringement, defamation, and all other damages in any way arising out of, or by reason of, any construction, excavation, operation, maintenance, reconstruction, or any other act done under this Franchise, by or for Grantee, its agents, or its employees, or by reason of any neglect or omission of Grantee its agents or its employees. Grantee will consult and cooperate with the City while conducting its defense of the City. (b) Duty to Give Notice and Tender Defense. If a claim or action arises, City or any other indemnified party will tender the defense of the claim to Grantee and the defense will be at Grantee's expense. City may participate in the defense of a claim. Grantee may not agree to any settlement of claims affecting City without City's written approval. The City will give the Grantee timely written notice of any claim or ofthe commencement of any action, suit or other proceeding covered by the indemnity in this section. City will cooperate fully. ORD# , Page 19 FHSRAC 4/25/06 Page 30 - --------- - - --------- -- -- (c) Non-waiver. The fact that Grantee carries out any activities under this Franchise through inqependent contractors does not constitute an avoidance of or defense to Grantee's duty of defense and indemnification under this Section. (d) If separate representation to fully protect the interests of both parties is necessary, such as a conflict of interest between the City and the Grantee, Grantee will pay expenses incurred by the City in defending itself. The City's expenses include all out-of-pocket expenses, such as consultants' fees. .5.2 Insurance Requirements. (a) General Requirement. Grantee must have adequate insurance during the entire term ofthis Franchise to protect the City against claims for injuries to Persons or damages to property which in any way relate to, arise from or are connected with this Franchise, or involve Grantee, its agents, representatives, contractors, subcontractors and their employees. (b) Initial Insurance Limits. Grantee must keep insurance in effect in accordance with the minimum insurance limits set by the City from time to time. The Grantee must obtain policies for the following initial minimum insurance limits: (1) Commercial General Liability: $5,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage, and for those policies with aggregate limits, a $5,000,000 aggregate. (2) Automobile Liability: $3,000,000 combined single limit per person for bodily injury and property damage and $5,000,000 aggregate in anyone (1) accident or occurrence; (3) Employer's Liability: $1,000,000; and (4) Worker's Compensation coverage consistent with State law. ORD# , Page 20 FHSRAC 4/25/06 Page 31 ------------- - (c) Endorsements. (1) All policies must contain, or be endorsed so that: (i) The City is designated as additional insured; (ii) As it relates to this Franchise, the Grantee's insurance coverage is the primary insurance with respect to the City, its officers, officials, boards, commissions, employees and duly authorized agents. Any insurance or self-insurance maintained by the City, its officers, officials, boards, commissions, employees and agents will be in excess of the Grantee's insurance and will not contribute to it; and (iii) Grantee's insurance must apply separately to each insured against whom a claim is made or lawsuit is brought, except with respect to the limits of the insurer's liability. (2) The insurance must provide that it may not be cancelled or materially altered so as to be out of compliance with the requirements of this section without 30 days' written notice first being given to City. (d) Acceptability of Insurers. The insurance obtained by Grantee must be placed with insurers with an A.M. Best's rating of no less than "A" and authorized to transact business within the State. (e) Verification of Coverage. The Grantee must furnish the City with certificates of insurance or a copy of the page of the policy reflecting blanket additional insured status. The certificates for each insurance policy are to be signed by a Person authorized by that insurer to bind coverage on its behalf. The certificates for each insurance policy are to be on standard forms or such forms as are consistent with standard industry practices, and are to be received by the City prior to the commencement of activities associated with this Franchise. ORD# , Page 21 FHSRAC 4/25/06 Page 32 ------~ ------ - 5.3 Performance Bond. (a) Within sixty (60) days of the Effective Date of this Franchise, Grantee will provide a performance bond to the City, in the total sum of $250,000.00 which will remain in effect for the term of this Franchise and which shall be in the form attached hereto as Exhibit B. The performance bond is to ensure the faithful performance of Grantee's obligations under the Franchise including the payment by the Grantee of any penalties, claims, liens, fees, or taxes due the City which arise by reason of the operation, maintenance, or construction of the Cable System within the Franchise Area, except as otherwise provided herein. In the event Grantee undertakes construction, the cost of which exceeds $100,000, the City shall have the option of requesting the Grantee provide and maintain, at its sole cost and expense, an additional performance bond. The amount of the bond shall be one-hundred twenty percent (120%) of the cost of the work or improvements covered by the bond based on estimated costs immediately following the expiration ofthe bond. Grantee will pay all premiums or other costs associated with maintaining the bond. The City may reduce the amount ofthe performance bond consistent with Grantee's performance of its responsibilities under this Franchise and applicable law. (b) The performance bond will be from a major financial institution or surety. The performance bond will not require the consent of the Grantee prior to the collection by the City of any amounts covered by the performance bond. The City will provide to Grantee reasonable written notice and opportunity to cure any alleged non-compliance of any provision of the Franchise or any penalties, claims, liens, fees or taxes due the City. (c) If the Franchise is terminated, or upon expiration or transfer ofthe Franchise, the City will return the original bond or sign the necessary documentation to release ORD# , Page 22 FHSRAC 4/25/06 Page 33 -- ---~-------- -----~----------- ------- -- --- ------------- -----------~---~---------------~---- -- --- ---- --- -------------- the bond promptly if Grantee does not owe funds to the City or is not in default of a material provision of the Franchise. Section 6. Customer Service City and Grantee recognize the importance of customer service in the grant of this Franchise. Grantee agrees to comply with all of the provisions in this Franchise, with FCC Customer Service Standards as they may be amended, and with any customer service rules adopted by City. 6.1 Subscriber Contracts. Grantee will not enter into a contract with any Subscriber that is in any way inconsistent with the terms of this Franchise. 6.2 Subscriber Privacy. Grantee will comply with privacy rights of Subscribers in accordance with applicable law. 6.3 Payment Center. Throughout the Franchise term, the Grantee must maintain, at a minimum, one payment center located in the Franchise Area It must be open during Normal Business Hours to allow Subscribers to return Subscriber equipment and to pay bills. 6.4 Telephone Answering Standards. (a) Trained company representatives will be available to respond to telephone inquiries during Normal Business Hours. Outside Normal Business Hours, the access line may be answered by a service or an automated response system, including an answering machine. A trained company representative must respond to inquiries that are received by Grantee's answering service or automated response system before the end of the next business day. (b) Under Normal Operating Conditions, telephone answer time by a customer representative including wait time, must not exceed thirty (30) seconds from when the connection is made. If the call needs to be transferred, transfer time must not exceed thirty (30) ORD# , Page 23 FHSRAC 4/25/06 Page 34 -- ---------------------- --- ----------~--------~------- seconds. These standards must be met for no less than ninety (90) percent of all calls under Normal Operating Conditions, measured quarterly. (c) Under Normal Operating Conditions, no more than three percent (3%) of all callers will receive a busy signal, measured quarterly. (d) Failure to meet these standards subjects Grantee to enforcement actions set forth in Section 15. 6.5 Service Calls, Installations, and Outages. (a) Service calls and response time. Under Normal Operating Conditions, each of the following standards will be met in no fewer than ninety-five percent (95%) of applicable events, as measured on a quarterly basis. For purposes of calculating compliance with and determining enforcement of these standards, each request for service or installation will be counted as one event: (1) Installations to locations that are located within one hundred twenty-five feet (125') ofthe existing distribution Cable System will be performed within seven (7) business days after an order has been placed. (2) Under Normal Operating Conditions, if Grantee cannot perform Installations within the times specified above, the Grantee shall offer the Subscriber a credit equal to the charge for a Standard Installation or other compensation of equal or greater value. (3) For installations to locations that are more than one hundred twenty-five feet (125') from the existing distribution Cable System, in accordance with Section 13.2, service must be provided within thirty (30) days ofthe date the Person requesting service agrees to pay the charges associated with the installation. The Grantee may charge for extending service in an area where the Grantee is required to provide service under Section 13.2. ORD# , Page 24 FHSRAC 4/25/06 Page 35 -------------------------~~--~ --------------------- -- ------------- -- (4) The "appointment window" alternatives for installations, service calls, and other installation activities will be either a specific time or, at maximum, a four (4) hour time block during Normal Business Hours. The Grantee may schedule service calls and other installation activities outside of Normal Business Hours for the express convenience ofthe customer. (5) Grantee may not cancel an appointment with a Person after the close of business on the business day prior to the scheduled appointment. (6) If Grantee's representative is running late for an appointment with a Subscriber and will not be able to keep the appointment as scheduled, Grantee will contact Subscriber. The appointment will be rescheduled at a time that is convenient for the Subscriber and as soon as practical. (7) Excluding conditions beyond the control of the Grantee, the Grantee will begin working on Service Interruptions promptly and in no event later than twenty- four (24) hours after the interruption becomes known to the Grantee. The Grantee must begin I actions to correct other service problems the next business day after notification ofthe service problem. (b) Service interruptions shall occur only during periods of minimal use of system and shall not occur except for good cause. Under Normal Operating conditions, if after twenty-four (24) hours service is not restored to a Subscriber, the Grantee shall provide a refund or credit or other compensation of equal or greater value. ORD# , Page 25 FHSRAC 4/25/06 Page 36 - - -- ------ -------------- - ~----- 6.6 Notice Requirements. (a) The Grantee will provide written information on each of the following areas at the time of installation of service, at least annually to all Subscribers, and at any time upon request: (1) Products and services offered; (2) Prices and options for programming services and conditions of subscription to programming and other services. To apprise Subscribers ofthe charges they may incur, Grantee must note that advertised rates are subject to additional taxes and fees; (3) Installation and service maintenance policies; (4) Instructions on how to use the Cable Service; (5) Channel positions of programming carried on the Cable System; (6) Billing and complaint procedures, including the City's address and telephone number. (b) Comcast shall provide copies of all such materials to the City concurrent with their distribution to Subscribers. (c) Failure to meet these standards subjects Grantee to enforcement action under Section 15. 6.7 Special Notice Procedures. (a) At any time a Person subscribes to any service, the Person must be specifically informed whether there will be a charge to drop the service. (b) Subscribers must be notified thirty (30) days in writing in advance of any changes in rates, programming services, or Channel positions unless otherwise expressly provided by federal law. ORD# , Page 26 FHSRAC 4/25/06 Page 37 ---~----~------- (c) The City must be notified of any change in rates, programming services, Channel position, or policy at least thirty (30) days in advance of such change by letter delivered to the City. When such notification is impossible because the change is beyond the control of Grantee or any Affiliate, the notice must be given as quickly as possible. The Grantee must make its best efforts to submit the content of notices to Subscribers regarding such changes to the City for review and comment at least ten (10) days prior to its printing. (d) Failure to meet these standards subjects Grantee to enforcement action under Section 15. 6.8 Billing. (a) Bills will be clear, concise and understandable. Bills must be fully itemized, including basic and Premium Service charges, and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, discounts, rebates and credits. (b) In case of a billing dispute, the Grantee must respond to a written complaint from a Subscriber within thirty (30) days. (c) 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 the equipment supplied by the Grantee if service is terminated. (d) Credits for service will be issued no later than the customer's next billing cycle following the determination that a credit is warranted. ORD# , Page 27 FHSRAC 4/25/06 Page 38 - - ----- -~----------- (e) For purposes of billing, a request for disconnection will be effective immediately upon the Subscriber's oral or written request. The Subscriber may not be charged for any service provided after the request, and is entitled to refunds on any prepaid period. (f) Subscriber bills from Grantee will include the name, address, and telephone number of the City's Management Information Systems department. (g) Failure to meet these standards will subject Grantee to enforcement actions under Section 15. 6.9 Rate Discounts. Grantee shall offer a discount to those low income subscribers, as determined by the City, consistent with Federal standards, for individuals permanently disabled or sixty-five (65) years of age or older who are the legal owner or lessee/tenant of their residence. Such discounts shall consist of a thirty percent (30%) reduction in the cost of the Basic Service tier or the Basic Service portion of Expanded Basic Service tier. Section 7. Reports and Records 7.1 Open Records. The City has the right to inspect books and records of Grantee, which are reasonably necessary to monitor Grantee's compliance with the provisions of Cable Services under this Franchise. Grantee may not deny City access to any of Grantee's records on the basis that Grantee's records are under the control of any parent corporation, Affiliated entity, or a third party. Within ten (10) days or a mutually agreeable date and time, of receiving written notice from the City to inspect the Grantee's books and records under this provision, the Grantee shall accommodate the City's request at the Grantee's local business office, during normal business hours, and without unreasonably interfering with Grantee's business operations. The City has the right to request a copy ofthe books and records that are not identified as proprietary ORD# , Page 28 FHSRAC 4/25/06 Page 39 -- -- ----------- ~----------------------------------------~-~---- ---- ---------- or confidential as described under Section 7.2. Ifthe requested books and records are voluminous or identified as proprietary and confidential or for security reasons cannot be copied or removed, then Grantee shall continue to make the books and records available at the Grantee's local business office until the City has completed their examination. 7.2 Proprietary and Confidential Records. Grantee shall not be required to disclose information that it reasonably deems to be proprietary or confidential in nature, nor disclose books and records of any affiliate of Grantee that is not providing Cable Service in the Franchise Area. In the event the Grantee asserts that certain information is proprietary or confidential in nature, the Grantee shall identify generally the information which it deems propriety and confidential and the reasons for its confidentiality in writing to the City. Grantee shall be required to show the documents to the appropriate City staff, but shall not be required to provide copies ofrecords or information it asserts are proprietary or confidential. Subject to the limits of Washington law, the City agrees to treat any information disclosed by the Grantee as confidential and only to disclose it to those employees, representatives, and agents ofthe City that have a need to know in order to enforce this Franchise and who agree to maintain the confidentiality of all such information. The Grantee shall not be required to provide Subscriber information in violation of Section 631 of the Cable Act or any other applicable federal or state privacy law. For purposes ofthis Section, the terms "proprietary or confidential" include, but are not limited to, information relating to the Cable System design, customer lists, marketing plans, financial information unrelated to the calculation of franchise fees or rates pursuant to FCC rules, or other information that is reasonably determined by the Grantee to be competitively sensitive. If City receives a demand from any Person for disclosure of any information designated by Grantee as confidential, City consistent with applicable law will advise Grantee and provide Grantee with a ORD# , Page 29 FHSRAC 4/25/06 Page 40 ------------------------------------- ~~--- -------------- copy of any written request by the party demanding access to such information. If Grantee believes that the disclosure of such documents by City would interfere with Grantee's rights under federal or State law, Grantee will institute an action in the King County Superior Court to prevent the disclosure by City of such documents. Grantee will join the Person requesting the documents to such an action. Grantee will defend, indemnify and hold City harmless from any claim or judgment including any penalties or costs under RCW 42.17. 7.3 File for Public Inspection. Throughout the term of this Franchise, the Grantee will maintain a file at its business office that is available for public inspection during normal business hours, including those documents required pursuant to the FCC's rules and regulation. 7.4 Records Available. Grantee must at all times maintain: (a) A route map that depicts the general location of the Cable System facilities placed in the Right-of-Ways. The route map shall identify Cable System facilities as aerial or underground and is not required to depict cable types, number of cables, electronic equipment, and service lines to individual Subscribers. The Grantee shall also provide the map, if requested, in electronic format ofthe aerial/underground facilities in relation to the Right-of-way centerline reference to allow the City to add this information to City's GIS program; (b) A copy of all FCC filings on behalf of Grantee, its parent corporations or Affiliates that relate to the operation of the Cable System in the Franchise Area; (c) A copy of Grantee's published rates and Channel line-up for Cable Service in the Franchise Area; (d) A summary report of all Complaints received and Grantee's actions in response to those complaints in a manner consistent with the privacy rights of Subscribers. ORD# , Page 30 FHSRAC 4/25/06 Page 41 - - -- - --- ------------------ -------- --- - 7.5 Annual Reports. Upon written request by the City, within ninety (90) days of receipt ofthe City's request, Grantee shall submit to the City a written report, which shall include the following information: (a) The most recently completed annual corporate report; (b) A gross revenue statement for the preceding year and all deductions and computations for the period. Such statement shall be reviewed by a certified public accountant, who may also be the chief financial officer or controller of Grantee, prior to submission to the City; (c) A summary ofthe previous year's activities regarding the development of the Cable System, including, but not limited to, beginning and ending plant miles constructed, any technological changes occurring in the Cable System; (d) A summary report of all Complaints received and Grantee's actions in response to those complaints in a manner consistent with the privacy rights of Subscribers. 7.6 Submittal of Documents. Upon written request, Grantee will provide City with copies of any pleading, notifications, communications and documents of any kind submitted by Grantee or its Affiliates to any federal, State, or local court, regulatory agency or other government agency if such documents relate to the operations of Grantee's Cable System within the Franchise Area. Grantee will submit such documents to City no later than thirty (30) days after receipt of City's request. Grantee will not claim confidential, privileged or proprietary rights to such documents unless under federal, State, or local law such documents have been determined to be confidential, privileged, or proprietary by a court of competent jurisdiction, or a federal or State agency. ORD# , Page 31 FHSRAC 4/25/06 Page 42 - - ----- -------------- 7.7 False Statements. Any intentional false or misleading statement or representation in any report required by this Franchise will be a material breach of this Franchise and may subject Grantee to all remedies available to City under this Franchise or otherwise. 7.8 Penalties for Noncompliance. The ability for City to obtain records and information from Grantee is critical to the administration of this Franchise. Therefore, Grantee's failure to comply with the requirements of this Section may result in enforcement action as prescribed in Section 15. 7.9 Report Expense. All reports and records required under this or any other Section must be furnished without cost to City. Section 8. Prol!ramminl! and Channel Capacity 8.1 Required Programming Categories. Grantee will provide broad categories of programming required in this Franchise, and under all federal, State, and local laws and regulations. Grantee will enable provision of at least the following initial broad categories of programming to the extent such categories are reasonably available: (a) News, weather and information programming; (b) Sports programming; (c) General entertainment programming; (d) Children, education, and family oriented programming; (e) Arts, culture and performing arts. (f) Science/documentary; (g) Programming for diverse ethnic and minority interests. 8.2 Obscenity. Grantee will not transmit or permit to be transmitted over any Channel subject to its editorial control any programming that is obscene. ORD# , Page 32 FHSRAC 4/25/06 Page 43 _____n_ _ 8.3 Parental Control Device. Upon request by any Subscriber, Grantee will make parental control or lockout device traps or filters available to enable a Subscriber to control access to both the audio and video portions of any or all Channels. Grantee reserves the right to charge the Subscriber a fee that does not exceed Grantee's actual costs. 8.4 Connection to Public Facilities. Upon request Grantee must provide without charge, a standard installation and one outlet of basic and Expanded Basic Service to public use buildings, as designated by the City. This shall include fire station(s), police station(s), libraries, School(s), etc., but portions of buildings housing prison/jail populations shall be excluded from this requirement. The recipient ofthe service will secure any necessary right of entry. The Cable Service will not be used for commercial purposes, and the outlets will not be located in areas open to the public excepting one outlet to be located in a public lobby in City Hall which will be used by the public for viewing City Council meeting broadcasts. The City will take reasonable precautions to prevent any use of the Grantee's Cable System in any manner that results in inappropriate use, loss or damage to the Cable System. The City will hold the Grantee harmless from any and all liability or claims arising out ofthe provision and use ofthe Cable Service required by this section. The Grantee is not required to provide service where a non-standard installation is required unless the City or other agency agrees to pay the incremental cost of any necessary Cable System extension or non-standard installation. If additional outlets of Cable Service are provided to such buildings, the building occupant will pay the usual installation and service fees. If a competing Cable System, including a Direct Broadcast Satellite provider, is providing complimentary cable video service, there is no obligation for Grantee to provide like services. ORD# , Page 33 FHSRAC 4/25/06 Page 44 ~____ n___ ____ n______ _____ ___________ --- ---- 8.5 Continuity of Service. (a) It is the right of all Subscribers to continue to receive Cable Service from Grantee insofar as their financial and other obligations to Grantee are satisfied. Subject to the force majeure provisions ofthis Franchise, Grantee will use its best efforts to ensure that all Subscribers receive continuous, uninterrupted Cable Service regardless ofthe circumstances. (b) In the event of a change in ownership, or in the event a new Cable Operator acquires the Cable System in accordance with this Franchise, Grantee will cooperate with City and such new Cable Operator in maintaining continuity of service to all Subscribers. Section 9. Public. Educational and Governmental Access 9.1 PEG Capital Support. (a) Not later than ninety (90) days from the effective date ofthis Franchise, the Grantee will remit to the City: (1) An initial capital contribution payment of $200,000. Grantee will recover the capital contribution from Subscribers at $0.35 per month per Subscriber. When Grantee has recovered the initial capital contribution, without discount for the time value of money, Grantee will remit to the City on a monthly basis an amount equal to $0.35 per Subscriber per month for the remaining initial term of the Franchise. (2) Unrestricted technology grant of$100,000, which the Grantee will not recover from Subscribers. (b) On the commencement of the extension term, Grantee will remit to the City: (1) An additional capital contribution payment of $200,000. Grantee will recover capital contribution from Subscribers at $0.35 per month per Subscriber, and when it ORD# , Page 34 FHSRAC 4/25/06 Page 45 -------- ~-------- ~----------------- ---~- ---~---- - --------- - is fully recovered, Grantee will remit to the City an amount equal to $0.35 per Subscriber per month for the remaining life of the Franchise; and (2) An umestricted technology grant of $100,000, which Grantee will not recover from Subscribers. (c) The City agrees that all capital contribution amounts, excluding technology grants, paid by the Grantee may be added to the price of Cable Services and collected from Subscribers as "external costs," as such term is used in 47 C.F.R. 976.922 on the date of this Franchise. 9.2 Access Reporting. Within one-hundred twenty (120) days of Grantee's written request, City will submit a report on the use of Access Channels and capital contribution. Grantee may review the records ofthe City regarding the use ofthe capital contribution after a written request is received by City. 9.3 Management and Control of Access Channels. (a) City may authorize Designated Access Providers to control, operate, and manage the use of all Access facilities provided by Grantee under this Franchise, including the operation of Access Channels. The City or its designee may formulate rules for the operation of the Access Channels consistent with this Franchise. The City may be a Designated Access Provider. (b) Grantee will cooperate with City in the use of the Cable System and for the provision of Access Channels. 9.4 Access Channels. (a) As ofthe effective date of this Franchise, the City is individually programming one (1) Government Access Channel, currently available on Channel 21. Two (2) ORD# , Page 35 FHSRAC 4/25/06 Page 46 ~~--------------------- - -- --- channels are available and being used for Educational and Public Access programming. (b) Under the terms of this Franchise, the Grantee shall continue to make . available a total of three (3) Access Channels to facilitate the City's needs for Access Programming. Notwithstanding anything to the contrary set forth herein, if City desires to program Government, Educational, or Public Access Channels above and beyond their existing Government Access Channel, the Grantee will implement the City's request within the existing Access Channels currently airing the local Educational and Public Access programming. (c) The City acknowledges that the Grantee's Cable System provides additional benefit to the City's Access Programming needs beyond the requirements listed above. This is accomplished through the inclusion of other regional Access programming within the regional Channel line-up that services the Franchise Area, for example the University of Washington TV and Community College educational programming. The Grantee will provide the Subscribers in the Franchise Area with the other regional Access Channels, so long as the programmers offer them for use on the Cable System. (d) The City may partner with other neighboring communities, serviced by the Grantee, to use the Government, Educational, or Public Access Channels for multi-jurisdictional government programming. (e) All assigned Access Channels can be used to transmit programming in any format that is technically compatible with the Cable System, including video, audio only, secondary audio or text (character generated) messages. (f) Grantee will facilitate the listing of City's Government Access programming on an interactive programming guide (such as TV GUIDE) on Tiers of service in which it is available. This requirement will only be enforceable so long as the service is ORD# , Page 36 FHSRAC 4/25/06 Page 47 ------ - - --- ----~--------~-- ------- - ---..--------- -- ------ available on Grantee's Cable System and City agrees to pay for all costs associated with the servIce. 9.5 Changes in Technology. If Grantee makes changes in Grantee's signal delivery technology that directly affects the signal quality or transmission of Access programming, Grantee will at its own expense take necessary technical steps and/or provide necessary technical assistance, including acquisition of all necessary equipment and full training of Access Center personnel, to ensure that the capabilities of Access Channels are not diminished or adversely affected by such change and shall match the standards ofthe rest of the Cable System. 9.6 Access Channels on Basic Service. All Access Channels provided to Subscribers under this Franchise must be included by Grantee as a part of it Basic Service. 9.7 Access Channel LocationlRelocation and Bill Insertions. (a) Grantee will carry City's programming on the Channel designated for local government programming on its regional Channel line-up, currently Channel 21, so that the City will receive the same benefits from such carriage as other jurisdictions in western Washington. Grantee will use reasonable efforts to minimize the movement of City-designated Access Channel assignments and maintain common Channel assignments for compatible Access programming. Grantee will provide 90 (ninety) days notice to the City prior to any relocation of City-designated Access Channels, and will reimburse the City for its costs incurred for any promoting, marketing, advertising, and notice ofthe Channel change up to $5,000 per channel. (b) Upon request by City, Grantee will provide City the opportunity to include one Access Channel bill insertion and one Access Channel bill message per year. Grantee will be responsible for the costs of printing its bill insertion or message, the cost of inserting the ORD# , Page 37 FHSRAC 4/25/06 Page 48 ----------- -~----- ---- -- - - - - ---- -- - information into Grantee's bills, and for any incremental postage costs. Bill insertions will conform to Grantee's reasonable mailing requirements. 9.8 Return Lines. (a) Grantee must at its expense continue providing, from its Headend or hub, a fiber connection to the City Hall at 33325 8th A venue South to enable the distribution of Access programming to Subscribers on the Access Channel(s) within the Franchise Area. (b) At the written request of the City, Grantee must construct and maintain fiber-optic return lines to the designated distributor's facilities from new or relocated Designated Access Providers delivering Public, Education, and Government Access programming for distribution on the Cable System in the Franchise Area. Any new or relocated return line construction costs shall be paid by the City and be completed within six (6) months after receiving a valid purchase order or check from the City. 9.9 Technical Quality. The Grantee must maintain Access Channels at the same or better level of technical quality and reliability required by this Franchise. The Grantee must provide routine maintenance and repair and replace as necessary all Grantee's transmission equipment. This includes fiber transmitters and receivers, Channel modulators, associated cable and equipment required to carry a quality signal to and from the City's Designated Access Providers' facilities and the Grantee's Headend or hub. 9.10 Access Channel Interconnections. (a) Grantee acknowledges that it is the City's goal to further the community's needs and interests by providing for the interconnection of Access Channels between the City and surrounding communities. Therefore, Grantee will implement Access Channel interconnections, at the cost ofthe City (such cost to be agreed upon by both parties prior to ORD# , Page 38 FHSRAC 4/25/06 Page 49 ----- ------ ----- -- --------~-------~-------- beginning of construction), and maintain existing interconnections which facilitate the sharing of Access programming between and among the City and surrounding (geographically adjacent, but not necessarily contiguous) communities that are served by the same Headend or hub. The City shall have the right to use any Access programming provided to it through an interconnection and approved for use by the interconnecting municipality. Notwithstanding anything to the contrary, the City shall not require Grantee to interconnect with a newly authorized Cable Operator or any facilities-based entity to provide Cable Services or comparable video programming within the franchise area without a franchise or other similar lawful authorization granted by the City. In those cases, the recently authorized Grantee shall be required to connect to the City access studio(s) to receive the City's Access programming for distribution on their Cable System. All interconnects in place as of the effective date of this Franchise will be maintained throughout its term. Any new interconnects will be completed and functioning within ninety (90) days from Acceptance of the Franchise by Grantee or from date of request. (b) Grantee will make the necessary modifications to allow the City to receive programming from Puget Sound Access, or its successor, upon request from the City and demonstration that City has the required permission to receive the programming. This programming will replace programming on the City's Public Access Channel. Section 10. Ri2ht-of-Wav and Construction Standards 10.1 Permitting. (a) Emergencies. (1) Emergency Blanket Permitting - The following work shall be allowed to take place under this permit in the following situations: ORD# , Page 39 FHSRAC 4/25/06 Page 50 -------------- (i) FCC-defined service interruptions that require the start of corrective action in less than twenty-four (24) hours when they are discovered through a field review or by notification by other Persons. (Such interruptions are when there is loss of picture or sound on one or more cable channels.); or (ii) Public safety related distribution line or equipment repairs requiring immediate response to correct when they are discovered through a field review or by notification by other Persons. (2) Notification of Emergencies - Comcast shall call the City's Public Works inspection line upon discovery to leave a message describing the applicable work area that is related to the emergency. The message shall include: specific address, ifknown, street crossing reference, and the type of traffic control that is anticipated. (3) Traffic Control- State Department of Transportation and Manual of Uniform Traffic Control Devices shall be used to determine specific control plans. (b) Maintenance Blanket Permit. The following non-emergency related activities shall be allowed to occur under this permit: (1) Aerial and underground system monitoring and testing, and (2) Power supply monitoring and testing. (c) Individual Construction Projects - Permitting. Individual Right-of-Way permits shall be required for the following activities: (1) Activities related to new construction; (2) Special projects related to Cable System rebuild or upgrade; (3) Cable System relocation projects; (4) Pole transfers; or ORD# , Page 40 FHSRAC 4/25/06 Page 51 -- --- - ------- --~--- ---- ------------ ------ -----------~---- --------- (5) Scheduled repair and splicing of existing plant. 10.2 Construction. (a) Subject to applicable laws, regulations and ordinances of City and provisions ofthis Franchise, Grantee may perform all construction necessary for the operation of its Cable System. All construction and maintenance of Grantee's facilities within Rights-of-Way remain Grantee's responsibility regardless of who performs the construction. (b) The Grantee shall be responsible for obtaining, at its own cost and expense, all permits, licenses, or other forms of approval or authorization necessary to construct, operate, maintain, or repair the Cable System, or any part thereof, prior to the commencement of any such activity. Grantee's application will include information required by City's Public Works Director or their designee including, but not limited to, construction schedules, traffic control, location information, and protection of public and pedestrian or vehicular traffic, etc. Prior to any construction, Grantee must provide City with a construction schedule for work in the Rights-of-Way. (c) Upon discovery, Grantee may initiate emergency repairs and, if any excavation in the Rights-of-Way is involved, the Grantee must apply for appropriate permits on the next business day. (d) When obtaining a permit, Grantee will inquire about other construction in progress, planned or proposed to investigate all opportunities for joint trenching or boring. Whenever it is possible and reasonably practicable to joint trench or share bores or cuts, Grantee must endeavor to work with other providers, licensees, permittees, and franchisees to reduce Rights-of- W ay cuts within the Franchise Area. ORD# , Page 41 FHSRAC 4/25/06 Page 52 --~ -------- (e) City has the right to inspect all construction or installation work performed within the Franchise Area as it deems necessary to ensure compliance with the terms of this Franchise and other provisions of law. (f) At the request of any Person holding a valid permit, with no less than ten (10) days' notice, Grantee must temporarily raise, lower, or remove its wires as necessary to permit the moving of a building, vehicle, equipment, or other item. The expense of such temporary changes must be paid by the permit holder. Grantee may require an estimated payment in advance. 10.3 Standards of Performance. (a) All work by Grantee must be done in a safe, thorough and workmanlike manner. The Grantee must comply with all federal, State, and local safety requirements and practices, and employ all necessary devices as required by applicable law during construction, operation, and repair of its Cable System. The Grantee must comply with the National Electric Code (NEC), National Electrical Safety Code (NESC), and Occupational Safety and Health Administration (OSHA) Standards. (b) In the maintenance and operation of its Cable System in Rights-of-Way, alleys, and other public places and during new construction or additions to its facilities, the Grantee must cause the least possible inconvenience to the general public. Any opening or obstruction in the Rights-of-Way or other public places by the Grantee must be guarded and protected at all times by the placement of adequate barriers, fences or boarding. The boundaries must be clearly designated by warning lights during periods of dusk and darkness. (c) All installations of equipment must be permanent, durable, and installed in accordance with good engineering practices. They must be of sufficient height to comply with ORD# , Page 42 FHSRAC 4/25/06 Page 53 ~______________n_ ___ n__ ____ _____ ____m____________ ________________ __n_______ _ all existing local and State laws and regulations, and not interfere with the rights of the public or individual property owners. They must not interfere with the travel and use of public places by the public during the construction, repair, operation, or removal, and must not obstruct or impede traffic. (d) Grantee will ensure that all cable drops are properly bonded to the electrical power ground at the home, consistent with applicable code requirements. All non- conforming or non-performing cable drops will be replaced by Grantee as necessary. (e) If the City relocates a Right-of-Way, raises or lowers a bridge, or makes any other changes requiring the removal of utility installations, the Grantee must remove or relocate its installations at no cost to the City. (t) The Grantee shall not excavate for a distance of more than one hundred feet (100') without immediately backfilling and compacting to surface grade and city standards unless otherwise approved by the City's Public Works Director or their designee. Backfilled trench areas within a driving lane must be either temporarily patched or plated, or permanently patched, before the end ofthe workday in which they have been opened. Trench areas within the right-of-way, but not within a driving lane, must also be patched within the time limits specified by the City's Public Works Director or their designee on the right-of-way use permit. Final surface restoration shall be completed within thirty (30) days or as authorized by the City's Public Works Director or their designee, and shall be equal to or better than the surface condition prior to permit issuance. (g) Any asphalt overlay completed within the Franchise Area during the five (5) year period immediately prior to the date of permit application shall not be open cut by Grantee unless required by an emergency. As reasonably determined by the Public Works ORD# , Page 43 FHSRAC 4/25/06 Page 54 --------- -- Director, Grantee shall install new asphalt overlay on any street that is open cut, whether in an emergency or otherwise, for a minimum of one (1) block (approximately 500 feet) in length in both directions from the open cut or pay a mitigation fee. (h) Within ninety (90) days of completion of any new or relocated installation of Grantee's facilities within the Franchise Area, Grantee shall submit amended plans to the Director, stamped by an engineer, showing the final "as built" locations of the facilities in cases where the actual location of facilities is different than the original permitted location as jointly determined by City and Grantee. 10.4 Maintenance and Workmanship. (a) Grantee's Cable System must be constructed and maintained so as not to interfere with sewers, water pipes, or any other property of City, or with any other pipes, wires, conduits, pedestals, structures, or other facilities in Rights-of-Way under the City's authority. (b) Grantee will provide and use any equipment and appliances necessary to control and carry Grantee's signals so as to prevent injury to City's property or property belonging to any Person. Grantee, at its own expense, will repair, renew, change, and improve its facilities to keep them in good repair and safe and presentable condition. If Grantee's facilities are determined by City to be in a state of disrepair, upon receipt of reasonable advanced notice, Grantee will correct the state of disrepair of those facilities within thirty (30) days at its own expense. In the event Grantee fails to repair the facilities within thirty (30) days, City may repair the facilities or cause them to be repaired at the expense of Grantee. (c) The Grantee's transmission and distribution system, wires, and appurtenances must be located, erected and maintained so as not to endanger or interfere with the lives of Persons, or to unnecessarily hinder or obstruct the free use of Rights-of-Way, alleys, ORD# , Page 44 FHSRAC 4/25/06 Page 55 -------------- -- ---- ----- ------- bridges, or other public property. The Grantee must, at its own cost. and expense, undertake all necessary and appropriate efforts to maintain its work sites in a safe manner in order to prevent accidents that may cause damage or injuries. All work undertaken on the Cable System shall be performed in substantial accordance with applicable FCC or other federal or state regulations. The Cable System shall not unreasonably endanger or interfere with the safety of Persons or property in the Rights-of-Way. All equipment enclosures shall be permanently marked to identify them as property of the Grantee. 10.5 Repair and Restoration of Rights-of-Way and City-Owned Property. (a) The Grantee must avoid damage to public and private property within the Rights-of-Way. (b) If public property is disturbed or damaged, the Grantee must restore the property to a condition as good as or better than its condition prior to the permit issuance. Rights-of- Way or other public property must be restored in a manner and within a time frame approved by the City's Public Works Director or their designee. Ifrestoration of Rights-of-Way or other public property is not satisfactorily performed within a reasonable time, the Public Works Director or their designee may cause the repairs to be made at the Grantee's expense and recover the cost from the Grantee. Within forty-five (45) days of receipt of those costs, including the costs oflabor, materials and equipm~nt, the Grantee must pay the City. Iflegal action is brought by City for Grantee's failure to pay for repair or restoration, the reasonable costs and expenses including attorneys fees will be paid as determined by the court. (c) If Grantee excavates the surface of any Rights-of-Way or City-owned property, Grantee is responsible for promptly refilling the opening and restoring to a condition as good as or better than its condition prior to the permit issuance. Such restoration must be in ORD# , Page 45 FHSRAC 4/25/06 Page 56 - - ------------ ------ --- ------ -- ------ ------------------------------~- accordance with state and local laws and Public Works Development Standards. City may, after notice to Grantee, refill or repave any opening made by Grantee and the expense must be paid by Grantee. City may after notice to Grantee remove and repair any work done by Grantee which, in the determination of City, does not conform to applicable regulations. All costs including the costs of inspection and supervision must be paid by Grantee. 10.6 Location of Facilities. Grantee must, at its expense, comply with the call before you dig program required under Chapter 19.122 RCW. 10.7 Relocation. City has the right to require Grantee to change the location of any part of Grantee's Cable System within the Rights-of Way consistent with the exercise of the City's police powers, and the expense will be paid by Grantee. Should Grantee fail to remove or relocate any such facilities by the date established by City, City may effect such removal or relocation, and the expense will be paid by Grantee, including all costs and expenses incurred by City due to Grantee's delay. If City requires Grantee to relocate its facilities located within the Streets, City will make a reasonable effort to provide Grantee with an alternate location within the Rights-of-Way. Grantee shall not be required to remove abandoned facilities or relocate its existing Cable System facilities at its expense for the benefit of private developers or other third party projects. However, in the event the City notifies the Grantee that the primary purpose for requiring such changes to or relocation of Grantee's Facilities by a third party is to cause or facilitate the construction of an Improvement Project to be owned by the City under the City's adopted Capital Investment Plan, including the Transportation Program, Surface Water Facilities Plan, or other adopted plans, then the Grantee shall change or otherwise relocate its facilities in accordance with the Franchise at Grantee's sole cost, expense, and risk. ORD# , Page 46 FHSRAC 4/25/06 Page 57 --~---------- ---~----~---~-------------~------ In the case of relocation projects where the City hires and designates an independent contractor to accommodate and coordinate the conversion of overhead utilities within a capital improvement project, if the City charges the Grantee for use of a provided trench, the Grantee shall participate in the joint trenching portion ofthe project and pay the City a portion of the trench costs, including but not limited to trench bedding, backfill, and traffic control, commensurate with Grantee's proportionate share of trench usage. To ensure reasonable and balanced bids by potential contractors within the bidding process, the City agrees to maintain Grantee's pipe and vault line-items as a separate schedule. 10.8 Undergrounding of Cable. (a) Where electric and telephone utility wiring is installed underground at the time of Cable System construction, or when such wiring is subsequently placed underground, all Cable System lines, wiring, and equipment must also be placed underground at no expense to the City. Related Cable System equipment, such as pedestals, must be placed in accordance with regulations as interpreted by the City's Director of Public Works or their designee. In areas where either electric or telephone utility wiring is aerial, the Grantee may install aerial cable except when a property owner or resident requests underground installation and agrees to pay the additional cost in excess of aerial installation. (b) The Grantee must utilize existing poles and conduit wherever possible. (c) This Franchise does not grant, give or convey to the Grantee the right or privilege to install its facilities in any manner on specific utility poles or equipment ofthe City or any other Person. (d) If the Grantee is constructing underground conduit for its own use, the City may require the Grantee to construct excess conduit capacity in the public Right-of-Way, ORD# , Page 47 FHSRAC 4/25/06 Page 58 ------------~ -------------- ----- ----- provided that the City enters into a contract with the Grantee consistent with RCW 80.36.150. The contract rates to be charged should recover the incremental costs of the Grantee, (calculated as the difference between what the Grantee would have paid for the construction of its conduit and the additional cost only of construction ofthe excess conduit). The City shall not require that the additional conduit space be connected to the access structure and vaults of the Grantee. The City will be responsible for maintaining its respective cable, conduit, and Fiber Optic cable buried in the Grantee's trenches and bores. (e) The City will not be required to obtain easements from or for the Grantee. (f) The Grantee shall cooperate with others to minimize adverse impacts on the Rights-of-Way in joint trench projects to relocate its overhead facilities underground and remove its overhead facilities in areas where all utilities are being converted to underground facilities. 10.9 Trimming of Trees and Shrubbery. Upon obtaining a written permit from City, if the City's Public Works Director or their designee determines that such a permit is required, Grantee shall have the authority to trim trees or other natural growth interfering with, damaging, or restricting access to, and any of its Cable System in the Rights-of-Way. All such trimming shall be done at the Grantee's sole cost and expense. The Grantee shall be responsible for any damage caused by such trimming. 10.10 Use of Poles. Whenever feasible, Grantee will use existing poles when the installation of facilities above-ground is permitted. If Grantee cannot obtain the necessary poles and related facilities by a pole attachment agreement, and only then, Grantee may make needed excavations in the Streets. This applies to the placing, erecting, laying, maintaining, repairing and removing of poles, conduits, supports for wires and conductors, and any other facility ORD# , Page 48 FHSAAC 4/25/06 Page 59 _________ _n____ __________ - - -- -- --- -----------------------~--~---- needed for the maintenance or extension of Grantee's Cable System. All poles of Grantee must be erected between the curb and the sidewalk unless otherwise designated by the City, and each pole will be set whenever practicable at an extension lot line. City may require Grantee to change the location of any pole, conduit, structure or other facility within Rights-of-Way when the City believes the public convenience requires such change. The expense of this change will be paid by Grantee. 10.11 Stop Work. On notice from City that any work is being conducted contrary to this Franchise, or in an unsafe or dangerous manner as determined by City, or in apparent violation of any permit, law, regulation, ordinance, or standard, the work may immediately be stopped by City. The stop work order will: (a) Be in writing; (b) Be given to the individual doing the work, or posted on the work site; (c) Be sent to Grantee by mail at the address given; (d) State the nature ofthe alleged violation or unsafe condition; and (e) Establish conditions under which work may be resumed. 10.12 Work of Contractors and Subcontractors. Grantee's contractors and subcontractors must be licensed and bonded in accordance with applicable ordinances, regulations, and requirements. Work by contractors and subcontractors are subject to the same restrictions, limitations, and conditions as ifthe work were performed by Grantee. Grantee is responsible for all work performed by its contractors and subcontractors and others performing work on its behalf as if the work were performed by it. Grantee must ensure that all such work is performed in compliance with this Franchise and other applicable law. Grantee is responsible to ensure that contractors, subcontractors, or other Persons performing work on Grantee's behalf ORD# , Page 49 FHSRAC 4/25/lJ6 Page 60 -- - ---------~ - -- -- ----- -- -- -- - - - - __ __ ___ ___ - ___________n________________ ______ __ are familiar with the requirements of this Franchise and other laws governing the work performed by them. 10.13 Acquisition of Facilities. Upon Grantee's acquisition of facilities in any public Rights-of-Way, Grantee will, upon request by City, submit a statement describing all facilities involved, whether authorized by Franchise, permit, license, or other prior right, and specifying the location of all such facilities, in accordance with Section 7.4(a) herein. Such facilities will immediately be subject to this Franchise 10.14 Reservation of City Rights-of-Way Use Rights. This Franchise does not prevent or limit the City or any public utility from constructing any public work or improvement. City is not liable for any damage to any portion of Grantee's Cable System. 10.15 Discontinuing Use of Facilities. Whenever Grantee intends to discontinue using any facility within the Rights-of-Way, Grantee must submit for City's approval a complete description of the facility and the date on which Grantee intends to discontinue its use. Grantee may remove the facility or request that City allow it to remain in place. City may require Grantee to remove the facility from the Rights-of-Way, or modify the facility to protect the public health, welfare, safety, or convenience. City may require Grantee to perform a combination of modification and removal of the facility. Grantee must complete removal or modification in accordance with a schedule set by City. Grantee remains responsible for all necessary repairs and relocations, maintenance of the Rights-of-Way and retains all liability until it removes the facility as directed by City, or the facility is accepted by another Person having authority to construct and maintain it. Grantee remains responsible in the same manner and degree as if the facility were in active use. If Grantee abandons its facilities, City may use such facilities for any purpose including Access Channel purposes. ORD# , Page 50 FHSRAC 4/25/06 Page 61 - -------- - 10.16 Street Vacation. If any Street or portion thereof used by Grantee is vacated by City during the term of this Franchise, unless City specifically reserves to Grantee the right to continue its installation in the vacated Street, Grantee will, without delay or expense to City, remove its facilities from such Street, and restore, repair, or reconstruct the Street where such removal has occurred, and place the Street in such condition as may be required by City. In the event of failure, neglect, or refusal of Grantee, after thirty (30) days' notice by City, to restore, repair, or reconstruct such Street, City may do such work or cause it to be done, and the reasonable cost thereof, as found and declared by City, will be paid by Grantee within thirty (30) days of receipt of an invoice and documentation, and failure to make such payment will be considered a material violation of this Franchise. Section 11. Cable System Desien and Capacity 11.1 Equal and Uniform Service. The Grantee must provide access to equal and uniform Cable Service throughout the Franchise Area. Grantee may provide additional Cable Services to Subscribers on a node by node basis during an upgrade of its Cable System. 11.2 Cable System Upgrade. Prior to the effective date of this Franchise, Grantee has upgraded its Cable System to a fiber-to-the-node system architecture. Fiber-optic cable was deployed from the Headend to the node and tying into a hybrid fiber-coaxial Cable System. Active and passive devices are capable of passing a minimum of750 MHz. The Cable System is capable of delivering high quality signals that meet or exceed FCC technical quality standards regardless of how the signal is transmitted. Grantee agrees to at least maintain these specifications throughout the term of this Franchise. 11.3 Technical Performance. The technical performance ofthe Cable System must comply with FCC rules, Part 76, Subpart K, Section 76.601 through 76.610, as set forth in and as ORD# , Page 51 FHSRAC 4/25/06 Page 62 ~ ~-~----------------- ~------- --------- may hereafter be amended by the FCC. City has the full authority permitted by applicable law to enforce compliance with these technical standards. 11.4. Inspection of Facilities. Upon reasonable prior written notice, and in the presence of the Grantee's employee, the City may review the Cable System's technical performance as necessary to monitor the Grantee's compliance with the provisions of this Franchise. All equipment testing under a technical performance review shall be conducted by the Grantee. 11.5 Cable System Performance Testing. (a) Grantee must at is own expense perform the following tests on its Cable System: (1) All tests required by the FCC; and (2) All other tests reasonably necessary to determine compliance with technical standards adopted by the FCC at any time during the term of this Franchise. (b) Grantee must maintain written records of all results of its Cable System tests performed by or for Grantee, for a period of five (5) years. Copies oftest results must be provided to City upon request. (c) The FCC semi-annual testing is conducted in January/February and July/August of each year. If City provides written notice to Grantee prior to December 15 or June 15 of each year, Grantee must allow and accommodate the City to have a representative present during the next testing. Grantee will cooperate in scheduling its testing so that the representative can be present. (d) Grantee must promptly take such corrective measures as are necessary to fully correct any performance deficiencies and prevent their recurrence as far as possible. ORD# , Page 52 FHSRAC 4/25/06 Page 63 --- --------------- -- --- Grantee's failure to correct deficiencies identified by testing is a material violation ofthis Franchise. Sites must be re-tested following correction. Section 12. Institutional Network 12.1 I-Net History. As ofthe effective date of this Franchise, the Grantee has constructed, terminated, and completed all I-Net commitments to the City under the "Institutional Network Agreement ("I-Net Agreement") between TCI Cablevision of Washington, Inc., Cable TV Puget Sound, Inc. and the City of Federal Way," predecessors in interest to Grantee, dated May 2,2000. The following are the active sites and spare splice points utilized by the City and other authorized users: - FCO 1 Federal Way Police/City Hall- 33325 8th Ave S (Active) - FC02 Old City Hall- 33530 First Way South (Active) - FC03 Steel Lake Park & Rec./ Maint.Facility - 31132 28th Ave S (Active) - FC04 Steel Lake Annex - 2645 S 312th St (Active) - FC06 Traffic Camera - 1100 S 320th St (Active) - FC07 Federal Way District Court - 33506 10th PI S (Splice) - FC08 South King County Multi-service Center - 1200 S 336th (Splice) - FC09 West Way Community Center - 33400 21st SW (Active) - FCI0 Fire Station #2 - 31617 First Ave S (Active) - FC 11 Fire Station #3 - 33414 21st Ave SW (Active) - FC12 Fire Station #8 - 1405 SW 312th (Active) - FC 13 Dumas Bay Center - 3200 SW Dash Point Rd (Active) - FC14 Klahanee Senior Center - 33901 9th Ave S (Active) - FC15 Fire Station #65 - 4966 S. 298th ST (Active) - FC16 Spare 4 Count - Splice CS-12 (Splice) - FC17 Spare 4 Count - Splice CS-27 (Splice) - FC18 Spare 4 Count - Splice CS-24 (Splice) - FC19 Spare 4 Count - Splice CS-16 (Splice) - FC20 Fire Station #4 - 3700 S 320th St (Active) - FC21 Celebration Park - 1406 S 330th St (Active) - FC22 Internet Academy - 32020 1st Way S (Splice) - FC23 Station #66 - 27010 15th Ave S (Des Moines) (Active) - FC24 Station #26 - 2238 S 223rd ST (Des Moines) (Active) - FC25 Station #62 - 31617 1 st Ave S (Active) - FC26 Station #61 - 3203 S. 360th ST (Active) ORD# , Page 53 FHSRAC 4/25/06 Page 64 ---- --~~---~--- --- -------------- -- - 12.2 I-Net Use. The City shall have an indefatigable, exclusive right of use of the 1- Net for non-commercial network communications, which right cannot be revoked by the Grantee, or successor companies, if any. However, the Grantee shall at all times own in fee the outside aerial and underground fiber optic cable and associated facilities and equipment up to said fiber termination points where physically connected to City-owned optronics. 12.3 I-Net Terms and Conditions. Both parties shall follow the terms and conditions listed in Exhibit C for the on-going I-Net operation, maintenance, relocation, and future construction activities. Section 13. Service Availability. 13.1 Service Request. Generally, Grantee must provide service within seven (7) days of a request by any Person for a standard installation within the Franchise Area. A request is made on the date of signing a service agreement, receipt of funds by Grantee, receipt of a written request by Grantee or receipt by Grantee of a verified verbal request. Grantee must provide such servIce: (a) At a non-discriminatory installation charge for a standard installation, consisting of a 125 foot drop connecting to an inside wall. Additional charges may be made for non-standard installations computed according to a non-discriminatory method adopted by Grantee and provided in writing to City. (b) At non-discriminatory monthly rates for all Subscribers except commercial customers, MDU bulk customers and other allowed exceptions to uniform pricing. 13.2 Service Extensions. (a) Service to new Subdivisions. The Grantee will deploy its cable system within new subdivisions at the same time as other utilities and provide Cable Services or within ORD# , Page 54 FHSRAC 4/25/06 Page 65 -- ------------- __________ n__ _________________ ----- ----------- - -- thirty (30) days of a request from a new resident. Grantee must provide such service at a nondiscriminatory installation charge for a standard installation, consisting of a drop no longer than one hundred twenty-five (125) feet, with additional charges for non-standard installations computed according to a nondiscriminatory time and material cost basis for that portion beyond one hundred twenty-five (125) feet. (b) Required Extensions of Service. Whenever the Grantee receives requests for service from at least eight (8) residences with a density of thirty-two (32) dwellings per mile and within 1,320 cable-bearing strand feet (one-quarter cable mile) of its trunk or distribution cable, it must extend its Cable System to such Customers. There will be no cost to them for other than the non-standard installation and usual connection fees for all Customers. Such extensions must be technically feasible, and not adversely affect the operation of the Cable System. The Grantee may elect to provide Cable Service to areas not meeting the above density standard and charge the requesting resident(s) for the line extension on a time and material cost basis. (c) Enforcement. Failure to meet these standards subjects Grantee to enforcement actions on a per Subscriber basis under Section 15. 13.3 Standard of Service. Grantee will update its Cable System during the term of the Franchise to meet future cable-related needs and interests of the community. Section 14. Standby Power and Emere:ency Alert System 14.1 Standby Power. Grantee must provide standby power generating capacity at the Cable System Headend capable of providing at least twelve (12) hours of emergency operation. Grantee must maintain standby power system supplies rated for at least two (2) hours duration throughout the trunk and distribution networks. ORD# , Page 55 FHSRAC 4/25/06 Page 66 --- - -- - ---- -- -- ----~ -- ----- -- --- - --- 14.2 Emergency Alert Service (EAS) Capability. (a) Grantee must activate and maintain BAS in accordance with FCC Regulations. Grantee must ensure that the EAS system properly functions at all times. It will test the EAS system periodically in accordance with FCC regulations. (b) Grantee will cooperate with the City and local emergency officials to develop practices and procedures for the use ofthe emergency broadcast capability within the Franchise Service Area. Section 15. Enforcement~ Termination of Franchise. 15.1 Informal Dispute Resolution. Before proceeding with the formal procedure for remedying Franchise violations as set forth below, City agrees to provide Grantee informal oral or electronic mail notice of any alleged material Franchise violation. Grantee will have a reasonable opportunity to cure the violation. If the alleged violation is investigated by Grantee and found valid, Grantee will exert good faith efforts to immediately resolve the matter. However, if Grantee believes the alleged violation is invalid or outside of Grantee's legal responsibilities, the Grantee must promptly advise the City. Grantee will exercise good faith efforts to expedite its investigation, determination and communications to City to facilitate the informal resolution process. If City believes that Grantee is unreasonably delaying the informal resolution process, City may commence the formal dispute resolution process. 15.2 Procedure for Remedying Franchise Violations. (a) Except for revocation matters addressed in Section 15.5, if City believes that Grantee has failed to perform any material obligation under this Franchise, or has failed to perform in a timely manner, City will notify Grantee in writing stating with reasonable ORD# , Page 56 FHSRAC 4/25/06 Page 67 ---- -------------- ----- - - --- -- -- specificity the nature of the alleged violation. Grantee will have thirty (30) days from the receipt of such notice to: (1) Respond to City contesting City's assertion that a default has occurred, and requesting a hearing in accordance with subsection (b); (2) Cure the violation; or (3) Notify City that Grantee cannot cure the violation within 30 days because ofthe nature ofthe violation. If the violation cannot be cured within 30 days, Grantee must promptly take all reasonable steps to cure the violation and notify City in writing and in detail as to the exact steps that will be taken and the projected completion date. City may set a hearing in accordance with subsection (b) to determine whether additional time is needed, and whether Grantee's proposed completion schedule and steps are reasonable. Upon five (5) business days' prior written notice, either City or Grantee may call an informal meeting to discuss the alleged violation. (b) If Grantee does not cure the alleged violation within thirty (30) days or by the projected completion date, denies the default and requests a hearing, or City orders a hearing, City must set a public hearing in front of City's designated hearing authority to investigate the alleged violation. City must notify Grantee of the hearing in writing and such hearing will take place no less than seven (7) days after Grantee's receipt of notice of the hearing. At the hearing Grantee will be provided an opportunity to present and question witnesses, and to present evidence in its defense. At any such hearing, City will not unreasonably limit Grantee's opportunity to make a record that may be reviewed by a court. The public hearing will be on the record and an audio recording will be available to the Grantee within ten (10) business days following Grantee's request. ORD# , Page 57 FHSRAC 4/25/06 Page 68 -- --- ------------ ,- - ______ n_ - ----~------- _n__ __._ __ _ ______ __ _ (c) If City determines after the public hearing that a violation exists, City will order Grantee to correct or remedy the violation or breach within fourteen (14) days or within such other time determined by City. If Grantee does not cure the violation to the City's satisfaction within the time set, City may: (1) Assess and collect liquidated damages in accordance with this Franchise; (2) Begin procedures to terminate this Franchise as specified in Section 15.5; or (3) Pursue any other legal or equitable remedy available under this Franchise or applicable law. (d) The determination as to whether a violation ofthis Franchise has occurred is within the sole discretion of the City or its designee. Any such determination by City must be in writing and must be based upon a record that includes Grantee's submissions. Any such final determination is subject to court review. 15.3 Alternative Remedies. (a) No provision of this Franchise affects the right of the either party to seek judicial relief from a violation of any provision of this Franchise, or any regulation or directive under this Franchise. The existence of other remedies under this Franchise does not limit the right of either party to recover monetary damages, or to seek judicial enforcement of obligations by specific performance, injunctive relief or mandate, or any other remedy at law or in equity. (b) The City does not waive any right, immunity, limitation or protection (including complete damage immunity) otherwise available to the City, its officers, officials, council, boards, commissions, agents, or employees under federal, State, or local law, including ORD# , Page 58 FHSRAC 4/25/06 Page 69 - - __ __ _n_ ______ ------~ ------~---- Section 635A. [47 U.S.c. 555a] of the Cable Act. The Grantee has no monetary recourse against the City, or its officers, officials, council, boards, commissions, agents, or employees for any loss, costs, expenses or damages arising out of any provision, requirement of this Franchise or its enforcement, except that no such requirement shall apply where such claims, suites, causes of action, proceedings, and judgments for damage are occasioned by the sole negligence or willful misconduct of the City or its officials, boards, commissions, agents, or employees while acting on behalf of the City. 15.4 Assessment of Liquidated Damages. (a) The City and the Grantee recognize the delays, expense and unique difficulties involved in proving in a legal proceeding, the actual loss suffered by the City as a result ofthe Grantee's violation ofthis Franchise. Because it may be difficult to calculate the harm to the City in the event of a breach of this Franchise by Grantee, the parties agree to liquidated damages as a reasonable estimation of the actual damages. To the extent that the City elects to assess liquidated damages as provided in this Franchise and such liquidated damages have been paid, such damages shall be the City's sole and exclusive remedy. Nothing in this Section is intended to preclude the City from exercising any other right or remedy with respect to a breach that continues past the time the City stops assessing liquidated damages for such breach. (b) Prior to assessing any liquidated damages, the City shall follow the enforcement procedures of Section 15.2 ofthis Franchise that provide the Grantee proper notice, right to cure, and due process to defend and refute the allegations of non-compliance. (c) The City shall not assess any liquidated damage if the Grantee has reasonably responded to the complaint or cured or commenced to cure, under the enforcement provisions of this Franchise. In the event Grantee fails to cure or commence to cure, or fails to ORD# , Page 59 FHSRAC 4/25/06 Page 70 ___m______ ---- ------------------- refute the alleged breach, the City may assess liquidated damages and shall inform Grantee in writing of the assessment. Grantee shall have forty-five (45) days to pay the damages. Such amounts are agreed by both parties to be a reasonable estimate of the actual damages the City would suffer from Grantee's Franchise violation, and are not intended as a penalty. (d) The first day for which liquidated damages may be assessed, ifthere has been no cure after the end ofthe applicable cure period, shall be the day after the end ofthe applicable cure period, including any extension of the cure period granted by the City. (e) Grantee may appeal (by pursuing judicial relief or other relief afforded by the City) any assessment ofliquidated damages within thirty (30) days of receiving written notice of the assessment. Grantee's obligation to pay the liquidated damages assessed shall not be stayed pending resolution of the appeal. (f) In no event will liquidated damages be assessed for a period exceeding one hundred twenty (120) days in a twelve (12) month period. (g) Pursuant to the requirements outlined herein, liquidated damages shall not exceed the following amounts: one-hundred dollars ($100.00) per day for material departure from the FCC technical performance standards; fifty dollars ($50.00) per day for failure to provide the Access channels or any equipment related thereto which is required hereunder; one- hundred dollars ($100.00) per day for each material violation of the Customer Service Standards; twenty five dollars for failure to provide reports or notices as required by this Franchise; and one hundred for any material breaches or defaults not enumerated herein. (h) Any assessment does not constitute a waiver by City of any other right or remedy it may have under this Franchise or applicable law. This includes its right to recover from Grantee any claims City might have to damages, losses, costs, and expenses. ORD# , Page 60 FHSRAC 4/25/06 Page 71 - --- ---- -- -- --------------------- - ------- -- 15.5 Revocation. (a) The City may revoke this Franchise and all associated rights and privileges if a Franchise violation is not cured under Section 15.2, or if: (1) Grantee fails to perform any material obligation under this Franchise; (2) Grantee attempts to evade any material provision of this Franchise or practices any fraud or deceit upon the City or Subscribers; (3) Grantee abandons the Cable System, or terminates the Cable System's operations; or (4) Grantee becomes insolvent, unable or unwilling to pay its debts, or files for bankruptcy, there is an assignment for the benefit of Grantee's creditors, or all or part of the Grantee's Cable System is sold to secure a debt and is not redeemed by Grantee within thirty (30) days ofthe sale. (b) Prior to revocation of the Franchise, the City shall give written notice to the Grantee of its intent to revoke the Franchise, setting forth the exact nature of the noncompliance. The Grantee shall have thirty (30) days' from such notice to object in writing and to state its reasons for such objection and provide any explanation. In the event the City has not received a timely and satisfactory response from the Grantee, it may then seek a revocation of the Franchise by the City Council as follows: (1) Any proceeding regarding revocation shall be conducted by the City Council and open to the public. The Grantee shall be afforded at least forty-five (45) days' prior written notice of such proceeding. ORD# , Page 61 FHSRAC 4/25/06 Page 72 - ----~ ---------- ---- - ________ n__ (2) At such proceeding, the Grantee shall be provided a fair opportunity for full participation, including the right to be represented by legal counsel, to introduce evidence. A complete verbatim record or video tape shall be made of such proceeding and the cost shall be shared equally between the parties. The City shall maintain a record of such proceeding consistent with its record retention policies. Nothing herein prohibits Grantee from paying to create a written transcript of the proceeding. The City Council shall hear any Persons interested in the revocation, and shall allow the Grantee, in particular, an opportunity to state its position on the matter. (3) Within ninety (90) days after the hearing, the City Council shall determine whether to revoke the Franchise; or if the breach at issue is capable of being cured by the Grantee, direct the Grantee to take appropriate remedial action within the time and in the manner and on the terms and conditions that the City Council determines are reasonable under the circumstances. If the City Council determines that the Franchise is to be revoked, the City Council shall issue a written decision and shall transmit a copy ofthe decision to the Grantee. The Grantee shall be bound by the City Council's decision to revoke the Franchise unless it appeals the decision to a court of competent jurisdiction within thirty (30) days of the date ofthe decision. (c) The Grantee shall be entitled to such relief as the court may deem appropriate. (d) The City Council may in its sole discretion take any lawful action that it deems appropriate to enforce the City's rights under the Franchise in lieu of revocation. ORD# , Page 62 FHSRAC 4/25/06 Page 73 -- ---- ----- ----------------------------- - --- ----- -- 15.6 Removal. (a) When there is a termination or expiration of this Franchise, and after all court reviews are concluded, City may order the removal of the Cable System facilities from the Franchise Area at Grantee's sole expense within a reasonable period oftime as determined by City. In removing its plant, structures, and equipment, Grantee must refill at its own expense any excavation it made and leave all Rights-of-Way, public places, and private property in as good a condition as prevailed prior to installation of Grantee's equipment. (b) If Grantee fails to complete any required removal to the City's satisfaction, City may cause work to be done. Grantee must reimburse City for the reasonable costs incurred within thirty (30) days receipt of an itemized list of City's expenses and costs. City may recover its expenses and costs from the security, or pursue any judicial remedies. Any expenses incurred in the collection by City will be included in the monies due City from Grantee, including reasonable attorney fees, court expenses and attributed expenses for work conducted by City's staff or agents. 15.7 Non-Enforcement by City. Grantee is not relieved of its obligation to comply with any of the provisions of this Franchise by reason of any failure of City to enforce prompt compliance. City's forbearance or failure to enforce any provision of this Franchise will not serve as a basis to stop any subsequent enforcement. The failure of the City on one or more occasions to exercise a right or to require compliance or performance under this Franchise does not constitute a waiver of such right or a waiver of compliance or performance, unless such right has been specifically waived in writing. Any waiver of a violation is not a waiver of any other violation, whether similar or different from that waived. ORD# , Page 63 FHSRAC 4/25/06 Page 74 __n____________ -- --------~---- -~----~- 15.8 Bankruptcy Procedures. Grantor may revoke this Franchise one hundred twenty (120) days after the appointment of a receiver or trustee to take over and conduct the business of the Grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding, unless: (a) The receivership or trusteeship is vacated within one hundred twenty (120) days of appointment; or (b) The receivers or trustees have, within one hundred twenty (120) days after their election or appointment, fully complied with all the material terms and provisions of this Franchise and have remedied all Franchise violations. The receivers or trustees must execute an agreement approved by the appointing court providing that the receiver or trustee assumes and is bound by the provisions of this Franchise. Section 16. Abandonment 16.1 Effect of Abandonment. If the Grantee abandons its Cable System or Institutional Network during the Franchise term, or fails to operate its Cable System or Institutional Network in accordance with its duty to provide continuous service, the City may operate the Cable System or designate another entity to operate the System. This operation may continue until the Grantee restores service under conditions acceptable to the City, or until the Franchise is revoked and a new Grantee is selected by the City. If the City operates or designates another entity to operate the Cable System, the Grantee must reimburse the City for all reasonable costs, expenses and damages incurred including reasonable attorney fees, court expenses and attributed expenses for work conducted by City's staff or agents. 16.2 What Constitutes Abandonment. The City is entitled to exercise its option and obtain any required injunctive relief if: ORD# , Page 64 FHSRAC 4/25/06 Page 75 --- ------------------------------~------- -----~--- ------ -- (a) The Grantee fails to provide Cable Service in accordance with this Franchise to the Franchise Area for ninety-six (96) consecutive hours, unless the City authorizes a longer interruption of service, except if such failure to provide service is due to a force majeure occurrence, as described in Section 19.17; or (b) The Grantee for any period willfully and without cause refuses to provide Cable Service in accordance with this Franchise. Section 17. Transfer of Ownership or Control (a) Neither the Cable System nor this Franchise may be sold, assigned, transferred, leased or disposed of, either in whole or in part, either by involuntary sale or by voluntary sale, merger or consolidation without the prior written consent of the City, except as otherwise specifically provided in (h) below. Neither the title, legal or equitable, nor any right, interest nor property may pass to or vest in any Person without the prior written consent of the City. Such consent may only be granted by City Council resolution. (b) The Grantee must promptly notify the City of any actual or proposed change in, or transfer of, or acquisition by any other Person of control ofthe Grantee. The word "control" is not limited to majority stockholders but includes actual working control in whatever manner exercised. Every change, transfer or acquisition of control of the Grantee makes this Franchise subject to cancellation unless and until the City Council consents by resolution. (c) The parties to any sale or transfer must make a written request to the City for its approval of a sale or transfer and furnish all information required by the City. (d) In seeking the City's consent to any change in ownership or control, the proposed transferee will state whether it: ORD# , Page 65 FHSRAC 4/25/06 Page 76 --- ------ --- ----------~-------- ------ ____ __________n_ (1) Has ever been convicted or held liable for acts involving deceit including any violation of federal, State, or local law or regulations, or is currently under an indictment, investigation or complaint charging such acts; (2) Has ever had a judgment in an action for fraud, deceit, or misrepresentation entered against the proposed transferee by any court; (3) Has pending any legal claim, lawsuit, or administrative proceeding arising out of or involving a Cable System; (4) Is financially solvent by submitting financial data including financial statements that are audited by an independent certified public accountant, along with any other data that the City may reasonably require; and (5) Has the financial, legal, and technical capability to enable it to maintain and operate the Cable System for the remaining term ofthe Franchise and to cure any existing performance deficiencies. (e) The City will act by resolution on the request within one hundred twenty (120) days ofthe request ifit has received all requested information. If the City fails to make a final decision on the request within one hundred twenty (120) days, the request will be deemed granted unless the requesting party and the City agree to an extension of time. (t) Within thirty (30) days of any transfer, sale or change of control, if approved or deemed granted by the City, Grantee must file with the City a copy ofthe deed, agreement, lease or other written instrument evidencing such sale or transfer of ownership or change of control. Such documents must be certified and sworn to as correct by Grantee and the transferee. The transferee must file its written acceptance agreeing to be bound by all of the provisions of this Franchise. If there is a change in control in which the Grantee is not replaced ORD# , Page 66 FHSRAC 4/25/06 Page 77 -------~---------- ------------- by another entity, the Grantee will continue to be bound by all of the provisions of the Franchise, and will not be required to file an additional written acceptance. (g) When reviewing a request for sale, transfer, or change of control, the City may inquire into the legal, technical and financial qualifications of the prospective controlling party or transferee. Grantee will assist the City with such inquires. The City may condition consent to a sale or transfer upon such terms and conditions as it deems appropriate. Any terms and conditions must be related to the legal, technical and financial qualifications of the prospective controlling party or transferee, and to the resolution of outstanding and unresolved issues of noncompliance with this Franchise by Grantee. (h) The prior approval of the City is not required for any sale, assignment or transfer of the Franchise or Cable System to an entity controlling, controlled by or under the same common control as Grantee. The proposed assignee or transferee must show financial responsibility as may be determined necessary by the City, and must agree in writing to comply with all of the provisions of this Franchise. Grantee may pledge the assets of the Cable System for the purpose of financing without the consent of the City. Any pledge of assets must not impair or mitigate Grantee's responsibilities and capabilities to meet all of its obligations under this Franchise. Section 18. Franchise Review 18.1 Performance Evaluation. (a) Upon thirty (30) days' written request of City, but no more than annually, a franchise review may be held. The City or its designee will conduct all such reviews. (b) All performance reviews will be open to the public and announced at least one week in advance in a newspaper of general circulation within the Franchise Area. ORD# , Page 67 FHSRAC 4/25/06 Page 78 ---- (c) During evaluations under this section, Grantee must fully cooperate with City and provide information and documents in accordance with Section 7 as required by City to perform the evaluation. 18.2 Topics to be Addressed at Performance Reviews. The City's review may include, but is not limited to, the following topics at any performance review: (a) Cable Service rate structures governed by federal law; (b) Franchise Fees; (c) PEG access support by the Grantee; (d) I-Net construction, functioning, and service; (e) Liquidated damages; (1) Free or discounted Cable Services; (g) Application of new technologies; (h) Video on Demand for local government programming; (i) Performance ofthe Cable System; (j) Parity ofthe Cable System with neighboring Cable Systems; (k) New technologies that, in the City's opinion, would enhance substantially the quality or quantity of programming available to Subscribers on the System; (1) Cable Services provided; (m) Programming; (n) Line extension policies; (0) Customer complaints; (P) Grantee's privacy practices; (q) Judicial or FCC rulings; ORD# , Page 6~ FHSRAC 4/25/06 Page 79 -------- _______n_____ _______________ - - ___n______________ (r) Grantee's Facilities and Services in light of reasonable City needs and interests, including identification of needed changes in Facilities and/or Services; and (s) Amendments to this Franchise. Nothing in this subsection requires either the City or the Grantee to agree to any amendment to this Franchise, and any amendments hereto must be formally accepted in writing by both parties. Section 19. Miscellaneous Provisions 19.1 Equal Employment Opportunity Requirements. Grantee must comply with all provisions of FCC rules concerning equal employment opportunity. 19.2 Notices. Throughout the term of this Franchise, each party will maintain and file with the other an address for the service of notices by mail. All notices will be sent to such respective address, and are effective upon the date of mailing. At the effective date of this Franchise: Grantee's address: Comcast ofPuget SOl;lnd, Inc. and Comcast of Washington IV, Inc. 4020 Auburn Way N Auburn, W A 98002 Attention: Director, Franchising and Government Affairs With a non-binding courtesy copy to: Comcast ofPuget Sound, Inc. and Comcast of Washington IV, Inc. P.O. Box 3042 Bothell, W A 98041-3042 Attention: Franchising and Government Affairs City's address: City of Federal Way City Manager 33325 8th A venue South P.O. Box 9718 Federal Way, Washington 98003-9718 ORD# , Page 69 FHSRAC 4/25/06 Page 80 --- --.--- ---.--- ....------- 19.3 Costs to be Borne by Grantee. Grantee must pay for all costs of publication of this Franchise, and all reasonable costs for public notices provided for in this Franchise. 19.4 Binding Effect. This Franchise is binding upon the parties, their consented successors and assigns. 19.5 Authority to Amend. This Franchise may be amended at any time by written agreement between the parties. 19.6 Venue. The venue for any dispute related to this Franchise will be with the United States District Court for the Western District of Washington or the King County Superior Court, Kent, Washington. 19.7 Governing Law. This Franchise is governed in all respects by the laws ofthe State of Washington. 19.8 Guarantee. Grantee is not required to maintain a guarantee for the term ofthe Franchise. However, the City reserves its right, in the case of a transfer under Section 17, to require a signed guarantee, in a form approved by the City, filed with the City contemporaneous with the controlling party or transferee's acceptance ofthe Franchise transfer. 19.9 Captions. The captions and headings of this Franchise are for convenience and reference purposes only and do not affect in any way the meaning or interpretation of the provisions of this Franchise. 19.10 Construction of Franchise. The provisions of this Franchise will be liberally construed to promote the public interest. 19.11 No Joint Venture. This Franchise does not create a joint venture or principal- agent relationship between the parties. Neither party is authorized to, nor will either party act ORD# , Page 70 FHSRAC 4/25/06 Page 81 ------~ - ------------------ toward third Persons or the public in any manner that would suggest such relationship with the other. 19.12 Waiver. The failure of either party at any time to require performance by the other of any provision of this Franchise will in no way affect the right of the other party to enforce the Franchise. The waiver by either party of any breach of any provision is not a waiver of any succeeding breach of such provision, or as a waiver of the provision itself or any other provIsIOn. 19.13. Severability. The provisions of this ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, subsection, provision or portion of this ordinance or the invalidity of the application thereof to any person or circumstance, will not affect the validity of the remainder of the ordinance, or the validity of its application to other persons or circumstances. 19.14 Entire Agreement. This Franchise and all exhibits are the entire understanding and agreement between the parties with respect to this subject matter and supersede all prior oral negotiations and written agreements between the parties. 19.15 Compliance with Federal, State, and Local Laws. The Grantee will comply with all federal, State, and local laws, rules, and regulations. 19.16 Force Maieure. The Grantee will not be held in violation under, or in noncompliance with, the provisions of this Franchise, nor suffer any enforcement or penalty relating to noncompliance or violation, where such noncompliance or alleged defaults occurred or were caused by circumstances reasonably beyond the ability of the Grantee to anticipate and control. This includes, for example, war, riots, civil disturbances, floods or other natural catastrophes, labor stoppages, or slow downs not attributable to City's employees, or power ORD# , Page 71 FHSRAC 4/25/06 Page 82 _ _______ _____________________m________________ outages exceeding back-up power supplies, work delays caused by waiting for utility providers to service or monitor their utility poles to which the Grantee's Cable System is attached. Section 20. Ratification Any act consistent with the authority and prior to the effective date ofthis ordinance is hereby ratified and affirmed. Section 21. Effective Date This ordinance shall take effect and be in force sixty (60) days from the time of its final passage, as provided by law. PASSED by the City Council of the City of Federal Way this _ day of , 2006. CITY OF FEDERAL WAY MAYOR, MIKE PARK ATTEST: CITY CLERK, LAURA HATHA WAY APPROVED AS TO FORM: CITY ATTORNEY, PATRICIA A. RICHARDSON FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO. ORD# , Page 72 FHSRAC 4/25/06 Page 83 ___________________ _n____________ -- --------- EXHIBIT A - ACCEPTANCE KNOW ALL MEN BY THESE PRESENTS: The City Council ofthe City of Federal Way, Washington, having duly passed and adopted Ordinance No. , titled AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, GRANTING A NON-EXCLUSIVE FRANCHISE TO COMCAST OF PUGET SOUND, INC. AND COMCAST OF WASHINGTON IV, INC. TO OCCupy RIGHTS-OF- WAY OF THE CITY OF FEDERAL WAY, WASHINGTON, WITHIN THE SPECIFIED FRANCHISE AREA FOR THE PURPOSES OF OPERATING AND MAINTAINING A CABLE COMMUNICATIONS SYSTEM, AND SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE and said Ordinance stating at Section 2.4 that the grant of franchise must be unconditionally accepted by the Grantee by the submission of a written instrument in substantially the form of this Exhibit A; NOW, THEREFORE, Comcast ofPuget Sound, Inc. and Comcast of Washington IV, Inc. do hereby unconditionally accept the terms and conditions of the Ordinance granting the said franchise, and do promise to comply with and abide by all its provisions, terms and conditions. ACCEPTED this day of , 2006. COMCAST OF PUGET SOUND, INC. COMCAST OF WASHINGTON IV, INC. By: By: Name: Name: Title: Title: Date: Date: STATE OF WASHINGTON) COUNTY OF ) ss. On this instrument was acknowledged before me by , a corporate officer of Comcast ofPuget Sound, Inc. and Comcast of Washington IV, Inc. NOTARY PUBLIC FOR WASHINGTON My Commission Expires: ORD# , Page 73 FHSRAC 4/25/06 Page 84 - --------------- ~-- EXHIBIT B - CITY BOND FORM CITY OF FEDERAL WAY PERFORMANCE/PAYMENT BOND KNOW ALL PEOPLE BY THESE PRESENTS: . We, the undersigned , ("Principal ") and , the undersigned corporation organized and existing under the laws of the State of and legally doing business in the State of Washington as a surety ("Surety"), are held and firmly bound unto the City of Federal Way, a Washington municipal corporation ("City") in the penal sum of Dollars and no/l 00 ($ ) for the payment of which we firmly bind ourselves and our legal representatives, heirs, successors and assigns, jointly and severally. This obligation is entered into pursuant to the statutes of the State of Washington and the ordinances, regulations, standards and policies of the City, as now existing or hereafter amended or adopted. The Principal has entered into an Agreement with the City dated , 200_ for NOW, THEREFORE, if the Principal shall perform all the provisions of the Agreement in the manner and within the time period prescribed by the City, or within such extensions of time as may be granted under the Agreement, and shall pay all laborers, mechanics, subcontractors and material men or women, and all persons who shall supply the Principal or subcontractors with provisions and supplies for the carrying on of said work, and shall hold the City, their officials, agents, employees and volunteers harmless from any loss or damage occasioned to any person or property by reason of any carelessness or negligence on the part of the Principal, or any subcontractor in the performance of said work, and shall indemnify and hold the City harmless from any damage or expense by reason of failure of performance as specified in the Agreement, or from defects appearing or developing in the material or workmanship provided or performed under the Agreement within a period of two (2) years after its final acceptance thereof by the City, then and in the event this obligation shall be void; but otherwise, it shall be and remain in full force and effect. And the Surety, for value received, hereby further stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligation on this bond, and it does hereby waive notice of any change, extension of time, alterations or additions to the terms of the Agreement or to the Work. The Surety hereby agrees that modifications and changes may be made in the terms and provisions of the Agreement without notice to Surety, and any such modifications or changes ORD# , Page 74 FHSRAC 4/25/06 Page 85 ------ increasing the total amount to be paid the Principal shall automatically increase the obligation of the Surety on this Performance Bond in a like amount, such increase, however, not to exceed twenty-five percent (25%) of the original amount of this bond without the consent of the Surety. Within forty-five (45) days of receiving notice that the Principal has defaulted on all or part of the terms of the Agreement, the Surety shall make a written commitment to the City that it will either: (a) cure the default itself within a reasonable time period, or (b) tender to the City, the amount necessary for the City to remedy the default, including legal fees incurred by the City, or (c) in the event that Surety's evaluation of the dispute is not complete or in the event the Surety disputes the City's claim of default, the Surety shall notify the City of its finding and its intent, if any, to interplead. The Surety shall then fulfill its obligations under this bond, according to the option it has elected. Should Surety elect option (a) to cure the default, the penal sum of the Bond shall be reduced in an amount equal to the costs actually incurred by the Surety in curing the default. If the Surety elects option (b), then upon completion of the necessary work, the City shall notify the Surety of its actual costs. The City shall return, without interest, any overpayment made by the Surety and the Surety shall pay to the City any actual costs which exceed the City estimate, limited to the bond amount. Should the Surety elect option (c), the Parties shall first complete participation in mediation, described in the below paragraph, prior to any interplead action. In the event a dispute should arise between the Parties to this Bond with respect to the City's declaration of default by the Principal, the Parties agree to participate in at least four hours of mediation in accordance with the mediation procedures of United States Arbitration and Mediation ("USA&M"). The Parties shall proportionately share in the cost of the mediation. The mediation shall be administered by the Seattle USA&M office, 4300 Two Union Square, 601 Union Street, Seattle, Washington 98101-2327. The Surety shall not interplead prior to completion of the mediation. DATED this _ day of ,20 . CORPORATE SEAL OF PRINCIPAL: [PRINCIPAL] By: (Name of Person Executing Bond) Its: (Title) (Address) (Phone ORD# , Page 75 FHSRAC 4/25/06 Page 86 -- -- - --------- CERTIFICATE AS TO CORPORATE SEAL I hereby certify that I am the (Assistant) Secretary of the Corporation named as Principal in the within bond; that , who signed the said bond on behalf of the Principal, was of the said Corporation; that I know his or her signature thereto is genuine, and that said bond was duly signed, sealed, and attested for and in behalf of said Corporation by authority of its governing body. Secretary or Assistant Secretary CORPORATE SEAL OF SURETY: Surety By: Attorney-in-Fact (Attach Power of Attorney) (Name of Person Executing Bond) (Address) (Phone) APPROVED AS TO FORM: Patricia A. Richardson, City Attorney ORD# , Page 76 FHSRAC 4/25/06 Page 87 --------------- -- ----------- ------------ EXHIBIT C - INSTITUTIONAL NETWORK AGREEMENT Section 1. Private Network Status. The I-Net is a private communication network governed by the Franchise, and the City will use the I-Net solely for Non-Commercial applications in accordance therewith. The Grantee reserves the right to inspect the City's Non-Commercial application of the network. Such inspection can only occur upon reasonable prior written notice by the Grantee, and in the presence of a City employee and shall not interfere with the operation ofthe network. The City may not lease, resell, or grant access privileges to I-Net fiber backbone capacity to a third party, other than public entities such as the Fire Departments, School Districts, and Utility Districts. The I-Net may be used for origination purposed for governmental, educational, and public use. Section 2. Maintenance and Repair of I-net Fiber Backbone. Routine maintenance and repair on the I-Net fiber backbone and associated facilities and equipment, will be conducted on the same schedule as routine maintenance and repairs of Grantee's Cable System. Any routine maintenance work performed effected upon the I-net fiber backbone and associated facilities and equipment shall be conducted by Grantee, with prior notice of at least five (5) business days to the City. In emergency conditions, such as a natural emergency resulting from a windstorm, Grantee will effect emergency repair work on the I-Net system, if any, in the course of conducting its own emergency repair work on its cable system, excepting where I-Net backbone fiber may not be co-located with Grantee system plant on a strand or in conduit in which case Grantee's fiber shall be repaired as a first priority and I-Net backbone fiber shall be repaired as a second priority in a continuous repair window. In such event, Grantee shall have no liability to City for a delay in I-Net service restoration. Grantee will make every reasonable effort to restore service on an expedited basis where the City advises Grantee that such service is a critical emergency communication need. Grantee shall perform maintenance on the I-Net fiber backbone at its own expense. In the case of needed repairs to the I-Net fiber backbone and associated facilities and equipment used exclusively by the City and other users shall be performed by the Grantee at a reasonable time and materials cost. The Grantee shall notify the City in writing of such needed repairs prior to conducting the work, together with an estimate of the cost ofthe work, and shall obtain the City's approval to perform the work. The City will timely reimburse the Grantee for its reasonable expenses on a time and material basis for conducting such repair. For the purposes of this section, repair shall include, without limitation, all labor, materials and equipment charges for restoration of outages caused by third-party plant damage, damage wrought by inclement weather, and fiber functionality testing and re-documentation following restoration. Section 3. Service Trouble Calls and Escalation. The City acknowledges that Grantee does not actively monitor the signal transmission upon City utilized I-Net fiber, and may have no notice of a service outage but for City-initiated notification. For any outages of City utilized 1- Net fiber as determined by the City, the City shall notify its information technology ("IT") representative, who shall in turn, contact the designated local Network Operations Center (NOC). Grantee shall respond on-site to any routine trouble calls within four (4) hours of receipt of notification at the NOC and shall actively begin working on the problem until it is resolved. ORD# , Page 77 FHSRAC 4/25/06 Page 88 ____n_______ ------------~-- ----- In order to document its work on the City-utilized I-Net fiber, Grantee will use its normal trouble ticket processes. In the event of an inability to initially resolve I-Net problems, Grantee shall follow its normal escalation procedures for correcting fiber outages. At the City's request, Grantee shall also notify the City and provide documentation ofthe I-Net problem resolution. Such documentation shall include, among other things, a description of the cause and resolution of the problem for each I-Net trouble ticket. Section 4. Administration, Maintenance and Management of the I-Net. The City shall be responsible for the ongoing administration, maintenance and management ofthe non-backbone 1- Net facilities and equipment located on the City side of the I-Net fiber termination panel located at each site, and the internal site network itself, unless it contracts with Grantee separately for a managed network. All such maintenance conducted by the City shall be performed in accordance with industry standards, and any equipment owned and used by the City shall comply in all respects with applicable governmental codes, laws, ordinances or regulations. Section 5. City I-Net Users to Provide Certain Electronics. Grantee shall be responsible for supplying and installing the I-Net fiber backbone and associated facilities and equipment, for the City's use, to the specified fiber termination panel locations only, thereby providing a pathway for I-Net communications between sites. Any "active" equipment or components, including but not limited to computers, network cards, optronics, electronics, and equipment racks, required for I-Net use shall be provided at the City's sole expense. The City shall coordinate with the Grantee to ensure that active equipment is compatible with I-Net backbone equipment. GRANTEE DISCLAIMS ANY WARRANTY, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANT ABILITY OR FITNESS FOR A PARTICULAR PURPOSE. GRANTEE SPECIF ALLY DISCLAIMS ANY RESPONSIBILITY FOR ANY DAMAGES SUFFERED BY THE CITY ARISING OUT OF ITS PERFORMANCE UNDER THIS EXHIBIT. IN NO EVENT SHALL GRANTEE BE LIABLE TO THE CITY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT FORESEEABLE. THE FORGOING DISCLAIMER APPLIES ONLY TO SUCH CITY, FIRE DEPARTMENT AND OTHER USERS PROVIDED "ACTIVE" EQUIPMENT OR COMPONENTS. Section 6. Equipment or Modifications. Neither the City nor the Grantee will attach any equipment or otherwise modify the I-Net in any way that will interfere with the signal quality and the normal operation of each other's systems. The City may not access any part of the backbone fiber and associated facilities and equipment outside the actual I-Net site fiber termination panel, and the City's permitted access shall in no event extend beyond the City's side of the fiber termination panel. Except as provided in this Exhibit, Grantee will not interfere with the signal quality and the normal operation ofthe I-Net. Section 7. Relocation. I-Net backbone fiber and associated equipment are subject to the aerial to underground relocation requirements governing the Grantee's Cable system under the Franchise. Such relocation shall be at the Grantee's expense, except should an increased cost differential arise because of Grantee's having to do additional splicing, increase the size of its ORD# , Page 78 FHSRAC 4/25/06 Page 89 conduit, vaults, or fiber sheath solely because of the I-Net fiber backbone and associated facilities and equipment. In such cases, then the City shall pay the reasonable incremental cost differential pertaining to the I-Net backbone fiber only. Section 8. Future I-Net Expansion and Modification. Grantee and the City shall cooperate in investigating and considering options for expansion or modification of the I-Net within current or future City limits. Upon request of the City, the Grantee shall investigate and provide the City a plan with a cost estimate based on the current I-Net configuration, a managed network or the most cost efficient connection utilizing current technology, such as Dense Wave Division Multiplexing, including the necessary equipment, to accommodate the City's I-Net needs for the proposed expansion or modification, at the City's option. After receiving a request for additional I-Net construction or modification, Grantee shall provide the City a plan, including an estimate of the construction costs, within ninety (90) days. The cost estimate shall include the fully allocated construction cost from the nearest Grantee identified fiber access location to the requested site, including, but not limited to, site construction, fiber, labor, materials and Grantee provided equipment. The City shall pay all of Grantee's design engineering costs associated with development of the requested plan and cost estifuate(s), if the City decides not to proceed with the construction. To approve the Grantee to perform the work, the City shall provide the Grantee with written authorization to complete the expansion or modification construction and a purchase order in the amount ofthe cost estimate. Any additional I-Net construction shall be performed and completed within six (6) months after the City authorizes that the work be performed, unless the parties agree in writing to a different completion date prior to commencement ofthe work in order to accommodate special considerations of the City. Section 9. Fiber Construction and Termination. Any new construction and termination ofI- Net fiber backbone and associated facilities and equipment will be completed in accordance with the Franchise and the Grantee's standard practices, including but not limited to practices concerning connectorization. The Grantee will be allowed to utilize City-owned conduit capacity at no charge for fiber construction if such conduit is available in the foreseeable future as determined by the City, and the City agrees to grant the Grantee all necessary rights of entry for the connections to the new sites. The Grantee agrees to obtain all necessary licenses and permits, and construct the I-net fiber backbone in a manner consistent with the Franchise. Any new fiber connection shall be terminated at an internal point of demarcation in Grantee's standard termination panel, unless the City provides another means oftermination, in which case the City shall provide all necessary termination equipment. At each termination location, the City shall provide wall mount backboards and a power source for the basic termination, or such equipment as chosen by the City as replacement. Section 10. Testing and Acceptance. For any new construction ofI-Net fiber backbone, the Grantee shall certify the integrity through testing in accordance with industry standards. Tests will be conducted from the demarcation point to termination point, example City Hall to the 1- Net site. Industry standards for loss and attenuation will determine the acceptable loss of a given link. A copy of the documentation shall be provided by the Grantee in an electronic format. The City or its designee shall have the option of attending any I-Net test conducted by Grantee and also have the option of conducting a physical inspection ofthe construction taking place in the ORD# , Page 79 FHSRAC 4/25/06 Page 90 ------------ ----- right-of-way or on City property or other property used by the City, provided that this inspection should not include touching, moving or manipulating the fiber, and provided further that this inspection is conducted prior to the date of Grantee's planned testing. ORD# , Page 80 FHSRAC 4/25/06 Page 91 ---- - ------------- ATTACHMENT C @omcast April 10, 2006 Mr. Derek Matheson City Manager (Int) City of Federal Way PO Box 9718 Federal Way, WA 98063-9718 Dear Mr. Matheson: A. FHSRAC 4/25/06 D-92 ------- --- ----------- ATTACHMENT C C. Comcast Modem Services to Schools: As part ofthe National Cable Television Association's Cable in the Classroom initiative, Comcast is proud of its voluntary commitment of providing complementary modem services to the K-12 accredited schools in the Washington Market. The program works by allowing teachers and students; within classrooms, libraries, or computer labs use of new technologies in curriculum and study programs. Since this service is for educational purposes only and is a complimentary service not eligible for networking and administrative purposes, each school district needs to assess potential conflicts with Internet connectivity E-funding requirements. Ifthe school district is interested in the program, the connection process for this voluntary service is available through Comcast's local franchising department, using the public facilities connection terms and process in the Franchise. Acknowledged and agreed to this _ day of ,2006. Comcast ofPuget Sound, Inc. and Comcast of Washington IV, Inc. By: Its: Date: City of Federal Way By: Its: Date: FHSRAC 4/25/06 D-93