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HomeMy WebLinkAbout2015 02.03 City Council Regular Agenda Mk r`T ; City of Apache Junction, Arizona Meeting location' { City Council Chambers at City Hall ` t Agenda 300 E Superstition Blvd Apache Junction,AZ 85119 City Council Meeting www ajcity net Ph (480)982-8002 Tuesday,February 3,2015 7.00 PM City Council Chambers d . A. CALL TO ORDER B. INVOCATION AND PLEDGE OF ALLEGIANCE C. ROLL CALL D. CONSENT AGENDA The council may, at this time, take single action on any or all items listed as consent agenda items These may include, but are not limited to, acceptance of agenda, acceptance of minutes, appointments, acceptance of resignations and adoption of certain resolutions and other items which do not require a public heanng The consent agenda is a timesaving device of which the mayor and city council is to receive documentation on these items from the city manager for their review prior to the meeting Any member of the council may remove any item from the consent agenda for discussion and cause a separate vote on the matter later in the agenda 1 Consideration of acceptance of agenda 2. Consideration of approval of minutes of regular meeting of January 20, 2015 3. Consideration of approval of first amendment to the professional services agreement with East Valley Adult Resources, Inc and am. the City of Apache Junction for mileage reimbursement incentive program ("Ride Choice") At the November 18, 2014 meeting council gave direction to amend the Ride Choice program agreement to allow the use of remaining FY 14-15 funds for the senior van transportation program 4. Consideration of ED-15-01, award of bid to Breinholt Contracting Company, Inc for a contract amount of$29,900.00, plus unforeseen change orders in the amount of$5,000 00 for a total not to exceed $34,900.00 for the North Apache Trail Apartment Demolition project E. AWARDS, PRESENTATIONS AND PROCLAMATIONS Awards,presentations from other organizations,proclamations issued by the mayor, and acknowledgement of distinguished guests and visitors, and staff presentation of receipt of grant or donated funds are permitted at this time City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 City Council Meeting Agenda February 3,2015 5. Mayor Insalaco will introcude the newly elected Honorable President Delbert Ray and other honored guests from the Salt River Pima-Mancopa Indian Community 6. Presentation and discussion by Apache Junction Food Bank staff and new board president The board president will present the city council with a plaque of appreciation and invite the mayor and councilmembers to tour their facility 7. Presentation and discussion on pending or proposed state legislation with District 16 Representative Doug Coleman F. ANNOUNCEMENT OF CURRENT EVENTS The mayor or any member of council may at this time present a brief summary of current events However, no discussion shall take place on such items except for clarifying comments related to substance, time and location G. CITY MANAGER'S REPORT The city manager, members of city staff or those individuals designated by the manager may present information pertinent to items under consideration or information related to the operation of the city There shall however be no discussion at this time except for clarification inquiries 8. City manager's report Presentation H. PUBLIC HEARINGS Public heanngs required by applicable law shall be conducted by the council and any person shall be given the opportunity to speak All remarks shall be addressed to the council as a whole and not to any member thereof Such remarks shall be limited to five(5)minutes unless additional time is granted by the mayor This time limitation shall not apply to applicants and their agents appearing before the council 9. Consideration of Ordinance No 1413, amending Apache Junction City Code, Volume 1, by repealing Chapter 14, Cable Systems, and adopting by reference a new Chapter 14, Cable TV Systems, by adding to the city code a new Chapter 14, entitled "Apache Junction City Code, Volume 1, Chapter 14, Cable TV Systems"with the emergency clause 10. Consideration of Resolution No 15-01, declaring as public record that certain document filed with the city clerk amending Apache Junction City Code, Volume 1, by repealing Chapter 14, Cable Systems, and adopting by reference a new Chapter 14, Cable TV Systems, by adding to the city code a new Chapter 14, entitled "Apache Junction City Code, Volume 1, Chapter 14, Cable TV Systems"with the emergency clause City of Apache Junction,Arizona Page 2 Printed on 1/27/2015 City Council Meeting Agenda February 3,2015 11. Consideration of approval of license agreement for a non-exclusive cable TV system between the City of Apache Junction and Qwest Broadband Services, Inc , d/b/a CenturyLink, Inc OLD BUSINESS Amok The council shall consider any business that has been previously considered and which is still unfinished to include those items previously postponed or tabled No member of the public shall be permitted to speak on these items unless invited to do so by the mayor after first submitting a written request-to-speak form with the city clerk J. NEW BUSINESS The council shall consider any business not yet considered No member of the public shall be permitted to speak on these items unless invited to do so by the mayor after first submitting a written request-to-speak form with the city clerk K. COUNCIL DIRECTION TO STAFF This item allows the mayor and city council to direct staff on specifically listed matters L. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES 12. Executive Session at 5.45 P.M. and Work Session at 7 00 P M for Monday, February 16, 2015 is canceled due to the observation of Presidents' Day 13. Executive Session at 5 45 p m and Work Session at 7 00 p m will be held on Tuesday, February 17, 2015 Other meetings if necessary M. CALL TO PUBLIC At this time the public has the privilege to address the council with requests, communications, comments or suggestions relating to city business that are not listed on the agenda All speakers must have already submitted a written"Request to Speak"form to the city clerk no later than the conclusion of the city manager's report portion of the agenda If there is a group speaking on the same item, they should select a spokesperson All such remarks shall be addressed to the council as a whole and not to any member thereof The mayor is authorized to ask a speaker to stop speaking and leave the podium or to adjourn the meeting if anyone becomes disorderly, uncivil, makes personal attacks or continues to speak about items that are not within the jurisdiction of the city after being warned such issues are beyond the jurisdiction of the city to act The council may not answer questions of the speaker, discuss the matter with one another, but may, at the conclusion 1)respond to criticism by a speaker.2)ask the city manager to review a matter, 3)ask the city manager to place the matter on a future agenda Each speaker must approach the podium, speak into the microphone,provide their name and address There is a three(3)minute time limit per speaker City of Apache Junction,Arizona Page 3 Printed on 1/27/2015 City Council Meeting Agenda February 3,2015 N. ADJOURNMENT Copies of this agenda and additional information on any of the items listed above may be obtained from the City Clerk's office located at 300 E Superstition Blvd,Apache Junction, AZ 85119, Monday through Thursday from 7 00a-6 OOp, excluding holidays The City of Apache Junction invites and welcomes people of all abilities to use our programs, sites and facilities Specific requests may be made by contacting the Human Resources Office at(480)474-2617 .� or TDD(480)983-0095 r City of Apache Junction,Arizona Page 4 Printed on 1/27/2015 CITY COUNCIL REGULAR MEETING JANUARY 20, 2015 The regular meeting of the City Council of the City of Apache Junction, Arizona, was held on January 20, 2015, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Mayor Insalaco called the meeting to order at 7 : 00 p.m. INVOCATION Councilmember Wilson gave the Invocation. PLEDGE OF ALLEGIANCE Councilmember Serdy led the Pledge of Allegiance. ROLL CALL Councilmembers Present: Mayor Insalaco Vice Mayor Barker Councilmember Evans Councilmember Rizzi Councilmember Serdy Councilmember Waldron Councilmember Wilson Staff Present: City Manager George Hoffman Assistant City Manager Bryant Powell City Clerk Kathleen Connelly City Attorney Joel Stern Public Safety Director Tom Kelly Development Services Director Larry Kirch Assistant to the City Manager Matt Busby Others Present: Principle Economic Development REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 1 OF 14 Specialist Janine Solley ACCEPTANCE OF CONSENT AGENDA Vice Mayor Barker MOVED THAT THE CONSENT AGENDA BE ACCEPTED AS PRESENTED: AND THAT RESOLUTION NO. 15-06, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING SUBMISSION OF A GRANT APPLICATION TO THE VALLEY METRO REGIONAL PUBLIC TRANSPORTATION AUTHORITY FOR PARTICIPATION IN ITS FISCAL YEAR 2015 LOCAL TRANSPORTATION ASSISTANCE FUND II PROGRAM, BE APPROVED; AND THAT RESOLUTION NO 15-02, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, COMMITTING LOCAL FUNDS AS LEVERAGE FOR FY 2014 STATE SPECIAL PROJECTS ("SSP") APPLICATION (S) , BE APPROVED; AND THAT RESOLUTION NO. 15-03, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING THE SUBMISSION OF AN APPLICATION (S) FOR STATE HOUSING FUNDS, WHICH MAY INCLUDE FEDERAL FUNDING THROUGH THE HOME INVESTMENT PARTNERSHIP PROGRAM OF STATE HOUSING FUNDS, CERTIFYING THAT SAID APPLICATION (S) MEET THE COMMUNITY' S HOUSING AND COMMUNITY DEVELOPMENT NEEDS AND THE REQUIREMENTS FOR THE STATE HOUSING PROGRAMS, AND AUTHORIZING ACTIONS NECESSARY TO IMPLEMENT AND COMPLETE THE ACTIVITIES OUTLINED IN SAID APPLICATION (S) , BE APPROVED; AND THAT RESOLUTION NO. 15-04, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, COMMITTING LOCAL FUNDS AS LEVERAGE FOR AN FY 2014-15 STATE HOUSING FUND APPLICATION, BE APPROVED; AND THAT RESOLUTION NO. 15-05, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AUTHORIZING THE ADOPTION OF OWNER OCCUPIED HOUSING REHABILITATION GUIDELINES DATED FEBRUARY 1, 1994, AS AMENDED, IN RELATION TO A HOUSING REHABILITATION ACTIVITY, BE APPROVED. Councilmember Wilson SECONDED THE MOTION. REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 2 OF 14 VOTE: Unanimous. The motion carried. AWARDS, PRESENTATIONS AND PROCLAMATIONS None. ANNOUNCEMENT OF CURRENT EVENTS Councilmember Serdy announced the Apache Junction Chamber of Commerce will have a business fair on Saturday, January 31, from 10 a.m. to 2 p.m. in the high school auditorium. Admission is free. Different businesses will be there and they will have a drawing for a 32" television. Councilmember Wilson announced this coming weekend there will be a driving contest at the rodeo grounds with horses pulling various carts. It starts at 8 : 30 a.m. and is free. Councilmember Waldron announced they held a commissioning ceremony at VFW Post 7968 this past Saturday for Apache Junction Purple Heart Chapter No. 2560, the first new chapter in the state in ten years. The national commander and state commander were in attendance. Mayor Insalaco announced he and his wife attended the inauguration of the new Gila River Community governor last week. A number of mayors, a Phoenix council member, and Salt River Tribe President Delbert Rey were in attendance. The latter will be coming to our next meeting to introduce himself. He was glad to see they are putting their casino money in Sacaton with a new hospital and government center. CITY MANAGER' S REPORT Assistant City Manager Bryant Powell commented new school district board member Dena Kimble is in attendance and Janine Solley will be briefing the council on the marketing efforts. Principle Economic Development Specialist Janine Solley updated the council on a new strategy implemented to raise the bar on one of the economic development strategies, that of destination REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 3 OF 14 and tourism, through the Arizona Office of Tourism Marketing Cooperative. The strategy had been budgeted $15, 000. She thanked Matt McNulty for his hard work on all the artwork they were about to see. Pages to market the city were purchased in the 2015 Official State Visitors Guide, the Arizona Drive Guide, the annual publication of the Arizona RV Guide, Experience AZ Magazine, banner ads with ArizonaGuide. com, and ads at Sky Harbor Airport at Terminals 2, 3 and 4 . In the coming weeks they will be putting ads on billboards throughout the Greater Phoenix Region. She briefed the council on the laminate bags that were commissioned as a marketing tool . Councilmember Wilson commented he had seen laminate bags out in Queen Creek and saw what they were doing out there. He asked Janine to look into it and she took the ball and went on. He thinks they did a fantastic job with Matt' s design. It is real nice and very attractive. Principle Economic Development Specialist Janine Solley stated they do this to increase awareness of the area and get more people to come out and buy goods and services from the businesses. Councilmember Serdy commented he is thrilled to see them doing this and working with the Arizona Office of Tourism. This year they have more than 14 days straight with the Pro Bowl and Super Bowl back to back. There are a lot more opportunities to lure some people out here that are going to be longer than they ordinarily would. He commented he had talked to her earlier about using the logo. He asked if there is any way to get the logo out there more. He does some things with the chamber and there were some questions about how other organizations can use the logo. He wants to get it out there. Look at Las Vegas; they have a slogan and the whole city uses it. He does not want it to be reserved to the city. There is also the Apache Trail attractions group and the chamber. He asked how they could get that out there. Just the slow process of repetition would be getting everybody to use it. City Clerk Kathleen Connelly stated he needed to ask that of the city attorney. REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 4 OF 14 City Attorney Joel Stern stated when they first developed the symbol or logo they discussed that exact thing. He recalled talking about a license agreement with users and it was sent out for a trademark. They got a trademark on it and the question was what terms they wanted to attach to the use of the trademark. He does not think it went any further. He does not know if there was any interest at that point. He does not recall if the council said no. It was 3 or 4 years ago. Assistant City Manager Bryant Powell stated his recollection is the reason they came up with this slogan, "Surrounded by Legends", and the logo was so they could have it promulgated out in the community because they had had the situation with the city seal. It needs to be separate and set apart for staff to be able to identify official city effort. From his perspective, he has been encouraging the use of this slogan that is not the seal to other groups . For example, if they want to link themselves to that and it was a link electronically on here, it would go to our website and we could have those impressions as well. They have been working off of that for a couple of years now. Principle Economic Development Specialist Janine Solley stated the city does not have any formal rules for use. They certainly could put something in place. Bryant is right, we do want to get it out there. We want it to become recognizable. The question was what if someone put it on a T-shirt and tried to make money off of it. They have to set up some parameters for that. They have been trying to use it internally and with events. When the chamber holds their events they have probably seen the big banners with the logo on them. The new logo is on the bag. The new logo is on the new city street signs and there are banners downtown. They are trying to incorporate it out there. Mayor Insalaco commented it is still a trademark. Principle Economic Development Specialist Janine Solley stated it is a trademark. They can set up some rules for use. Sometimes there are stipulations where if it is made available to someone they would agree to not use it in a certain way or use it in a certain way, for profit or anything. REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 5 OF 14 Assistant City Manager Bryant Powell stated or change it up a certain way. Councilmember Serdy commented when you watch a National Football League game or major league baseball game they always give that disclaimer of any use of this without consent. But they want it out there if they are using it for the right reason. City Clerk Kathleen Connelly stated you do not want to see a political candidate use it or someone using it on their business card and misleading the public that they are associated with the city. There should be a laundry list of guidelines . Councilmember Wilson asked if that is something they need to pursue to do. City Attorney Joel Stern stated they did come up with a draft license agreement and he is not sure how it got taken off the plate. They did have the information and had outside counsel look at it to make sure the trademark and federal laws were all within the license agreement . He remembers doing that. Assistant City Manager Bryant Powell stated he thinks Matt McNulty from our staff is very familiar with this whole marketing effort and they need to get with him and get him going on it and bring it back for direction to staff on how the council wishes to proceed. Councilmember Rizzi asked if it would be possible for the chamber to utilize this and help us with branding on their marketing material . City Attorney Joel Stern stated they could, absolutely. They could have anybody use it with conditions. Councilmember Rizzi commented that was her understanding. That was part of the purpose, to get that branding out there and utilize it at the chamber as well. City Attorney Joel Stern stated the risk is if they did not have conditions, then anybody could use it so it could be for profit. He does not think they wanted to do that. Somehow it got taken off the shelf because of that. He thinks that was the concern REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 6 OF 14 at the time. But, no, it could be done. They would call it a license agreement. Principle Economic Development Specialist Janine Solley stated they do want to maintain an "as ours" that directs them to our website so people can use it but not direct to their website or for other purposes. Mayor Insalaco commented she needs to get together with Matt and work on it. PUBLIC HEARINGS SPECIAL EVENT LIQUOR LICENSE FOR CACTUS CANYON JUNIOR HIGH PTO FOR FEBRUARY 28, 2015 City Clerk Kathleen Connelly briefed the council on the item. Mayor Insalaco requested the applicant address the council. Ms. Dena Kimble of the Cactus Canyon Junior High PTO addressed the council to answer any questions. Mayor Insalaco asked what they were going to do with it. Ms. Dena Kimble stated hopefully make a lot of money. They are raising money for smart board projectors for the junior high. They have been doing that for the last two years. It is hard to have events at the school since it is a junior high. The junior high kids do not want the parents at the school so they decided to do something outside of the area where it would be for parents and adults and incorporate student activities as far as painting wine glasses. They are going to show what the students can do with the smart board. They would like to install at least 5 more projectors that cost about $3, 200 each. That is what the fundraiser is for. REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 7 OF 14 Councilmember Rizzi offered her congratulations and added her perseverance had paid off. Mayor Insalaco opened the public hearing on the item. There being no one wishing to speak, he closed the public hearing and reopened the item to council discussion. There being no further discussion, he called for a motion. Vice Mayor Barker MOVED THAT THE APPLICATION FOR A SPECIAL EVENT LIQUOR LICENSE FOR CACTUS CANYON JUNIOR HIGH SCHOOL PTO FOR FEBRUARY 28, 2015, SUBMITTED BY DENA KIMBLE, BE RECOMMENDED FOR APPROVAL TO THE ARIZONA DEPARTMENT OF LIQUOR LICENSES AND CONTROL. Councilmember Rizzi SECONDED THE MOTION. VOTE: Unanimous The motion carried. APPLICATION FOR A SPECIAL EVENT LIQUOR LICENSE FOR SUPERSTITION MOUNTAIN ROTARY CLUB FOR LOST DUTCHMAN DAYS ON FEBRUARY 27-MARCH 1, 2015 City Clerk Kathleen Connelly briefed the council on the item. Mayor Insalaco requested the — applicant address the council. Mr. Michael Cowan, 17844 E. Picana Court, Gold Canyon, addressed the council for any questions. He stated it is the 51st year for the rodeo and his second year of doing this. They made almost $7, 000 last year. He is aiming for $11, 000. It went smoothly last year and he is hoping it does again. Mayor Insalaco opened the public hearing on the item. There being no one wishing to speak, he closed the public hearing and called for council REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 8 OF 14 Oink discussion. There being no further discussion, he called for a motion. Councilmember Waldron MOVED THAT THE APPLICATION FOR A SPECIAL EVENT LIQUOR LICENSE FOR SUPERSTITION MOUNTAIN ROTARY CLUB FOR FEBRUARY 27-MARCH 1, 2015, SUBMITTED BY MICHAEL COWAN, BE RECOMMENDED FOR APPROVAL TO THE ARIZONA DEPARTMENT OF LIQUOR LICENSES AND CONTROL. Councilmember Rizzi SECONDED THE MOTION. VOTE: Unanimous. The motion carried. CHAPTER 14 CABLE SYSTEMS MODIFICATIONS Mayor Insalaco announced this item is a public hearing only this evening with no action at this time. City Attorney Joel Stern briefed the council on the item. Mayor Insalaco commented the public will be able to speak at the February 3 meeting. City Attorney Joel Stern stated the public can speak tonight and on that night, also. He continued with his briefing. Mayor Insalaco opened the public hearing on the item. There being no one wishing to speak, he closed the public hearing and reopened the item to council discussion. Assistant City Manager Bryant Powell stated this is an item they have been working on for many months. This is the process to allow for a television prism product to be in the city. The cable or television video products are changing tremendously. They have HULU and Netflix. He is not sure junior high kids will even know what cable REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 9 OF 14 television is as they view off the Internet . They learned last week there are two satellite providers, Dish and Direct . Dish will be providing a new product through the Internet called Fling. It is rapidly moving and changing. He thinks they need to provide as many opportunities for our residents to have the choice to choose. If they want it for their family then they should have that option. Prism will not be available to Apache Junction until after February. '^ DECEMBER 2014 CENTURYLINK CABLE TV LICENSE APPLICATION SUBMITTAL City Attorney Joel Stern briefed the council on the item. Mayor Insalaco commented the last three times they had the meeting at Apache Villa they heard about exposed cable in alleyways and cable draping over private residential property. City Attorney Joel Stern continued with his briefing. Mayor Insalaco commented they had the cables wrapped around the fence and going up and down the alley. City Attorney Joel Stern continued with his briefing. Councilmember Rizzi asked if he meant just in that area when he said that he was going to take care of all those issues. She has heard from citizens with the same issues in other areas. She asked if they are taking care of all the issues in the community or just Apache Villa. City Attorney Joel Stern stated from his email he believes he meant Apache Villa. If there are other people complaining, they need the location so Bryant can make the contact and get back to them. Assistant City Manager Bryant Powell asked that they be directed to his office. REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 10 OF 14 City Attorney Joel Stern continued his briefing. Mayor Insalaco commented it is nice they are going to offer three to five months service for the winter visitors . "` Vice Mayor Barker asked if they are going to offer classes to some of the antiquated folks on the Internet access point they drop here. City Attorney Joel Stern stated Bryant will surely ask them that. He continued with his briefing. Mayor Insalaco opened the public hearing. There being no one wishing to speak, he closed the public hearing and reopened the item to council discussion. There was general discussion on whether a motion was needed. Mayor Insalaco called for a motion. Councilmember Waldron MOVED THAT THE CENTURYLINK APPLICATION SUBMITTAL BE ACCEPTED. Vice Mayor Barker SECONDED THE MOTION. VOTE: Unanimous. The motion carried. OLD BUSINESS None. NEW BUSINESS CITY BUILDING CODE AND RELATED CITY CODE UPDATES REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 11 OF 14 Development Services Director Larry Kirch briefed the council on the item. Assistant City Manager Bryant Powell stated this is an item that is on the work plan. It is proposed towards the six month side of the equation. They are working hard to get a building official who will be the one to implement this. Councilmember Rizzi commented Larry' s presentation was really easy on the eyes. She appreciated the size of his font . This was a discussion item only with no action at this time. Mayor Insalaco closed the item and moved on to the next item. DIRECTION TO STAFF RECRUITMENT FOR CITY MANAGER POSITION City Clerk Kathleen Connelly briefed the council on the item. Mayor Insalaco called for any discussion. There being no discussion, he called for a motion. Vice Mayor Barker MOVED THAT THE FOLLOWING DIRECTION BE GIVEN TO STAFF REGARDING RECRUITMENT FOR THE CITY MANAGER POSITION. THAT STAFF BEGIN A TWO WEEK INTERNAL RECRUITMENT WITH AN OPENING DATE OF JANUARY 29, 2015. Ark, Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous. The motion carried. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES Vice Mayor Barker MOVED THAT AN EXECUTIVE SESSION AT 5: 45 P.M. AND A WORK SESSION AT 7 : 00 REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 12 OF 14 P.M BE HELD ON MONDAY, FEBRUARY 2, 2015, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS RESPECTIVELY; AND THAT AN EXECUTIVE SESSION AT 5: 45 P.M. BE HELD ON TUESDAY, FEBRUARY 3, 2015, IN THE CITY COUNCIL CONFERENCE ROOM. Councilmember Evans SECONDED THE MOTION. VOTE: Unanimous . The motion carried. CALL TO THE PUBLIC: Ms. Tess Nesser, 1511 S. Cactus, Apache Junction, addressed the council regarding the Renaissance Festival. Mr. Gary Gjerstad, 318 S. Crismon #28, Mesa, addressed the council regarding the Apache Junction Lions Club and their Country Western Show January 30 event at the Performing Arts Center at the high school with the proceeds going for student scholarships . ADJOURNMENT Mayor Insalaco adjourned the meeting at 8 : 00 p.m. Consent Agenda Items are as follows: ..•. 1. Acceptance of Agenda. 2 . Approval of Minutes of Regular Meeting of January 6, 2015. 3. Consideration of approval of Resolution No. 15-06, recommending the city' s Fiscal Year 2015 Local Transportation Assistance Fund II allocation be directed to the Apache Junction Active Adult Center (dba East Valley Adult Resources) for support of transportation services and authorizing the Mayor to sign a pass-through agreement . REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 13 OF 14 4 Consideration of approval of Resolution No. 15-02, committing local funds as leverage for a Fiscal Year 2014 State Special Project application. 5 . Consideration of approval of Resolution Nos. 15-03, (Authority to submit) , 15-04 (Commitment of local funds) , and 15-05 (Adoption of Housing Rehabilitation Guidelines) regarding the submission of a Fiscal Year 2014-15 State Housing Fund grant application. ACCEPTED THIS 3RD DAY OF FEBRUARY, 2015, BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS 3RD DAY OF FEBRUARY, 2015. JOHN S. INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk CITY COUNCIL MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular meeting of the City Council of the City of Apache Junction, Arizona, held on the 20th day of January, 2015. I further certify that the meeting was duly called and held and that a quorum was present . Dated this 22nd day of January, 2015 . �' - / / r, , I. KATHLEEN CONNELLY City Clerk REGULAR MEETING OF THE CITY COUNCIL JANUARY 20, 2015 PAGE 14 OF 14 r= . City of Apache Junction, Arizona 300E Superstition Boulevard t' Za Agenda Item Cover Sheet Apache Junction,AZ 85119 *OP, Agenda Item No.3 File ID: 14-671 Sponsor* Kathy Connelly Agenda Date 2/3/2015 Index*Outside Scope of Council Priorities In Control City Council Meeting Amok Consideration of approval of first amendment to the professional services agreement with East Valley Adult Resources, Inc and the City of Apache Junction for mileage reimbursement incentive program ("Ride Choice") At the November 18, 2014 meeting council gave direction to amend the Ride Choice program agreement to allow the use of remaining FY 14-15 funds for the senior van transportation program. Attachments* City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 City Council Meeting Meeting Minutes November 18,2014 some odor issues,but if they were able to come up with a plan and not have that problem she is not so sure that competition would have been a bad thing. For that reason she will say no Councilmember Serdy commented they now bring something in there that could be offensive to residents and what we are trying to do. This would have no real teeth, we are just asking them to look at this harder Assistant City Manager Bryant Powell stated it will not have teeth but be a letter only. City Attorney Joel Stem stated from the motion he heard,it would be a letter to the board of supervisors,they will figure out who should sign it,and it would concern the heavy industrial use in that area. Councilmember Wilson commented and any obnoxious types Councilmember Serdy commented he has no problem with heavy industrial use,just nice heavy industrial use that does not smell bad. He voted yes. The motion carried. J. NEW BUSINESS None. K COUNCIL DIRECTION TO STAFF 10 14-551 Direction to staff on Fiscal Year 14-15 human services funding recommendations If so directed, the contracts will be placed on the December 2 consent agenda at which time council can approve them or opt to continue them to another date Consideration and action. Yes• 6- Mayor Insalaco, Councilmember Evans,Counolmember Rizzi, Councilmember Serdy,Councilmember Waldron and Councilmember Wilson No. 0 City Clerk Kathleen Connelly briefed the council on the item. Mayor Insalaco called for any discussion. There being no discussion, he called for a motion. Councilmember Waldron MOVED THAT THE FOLLOWING DIRECTION BE GIVEN TO STAFF REGARDING THE FISCAL YEAR 14.15 HUMAN SERVICES FUNDING RECOMMENDATIONS THAT WE GO WITH THE RECOMMENDATIONS OUTLINED IN THE MEMO OF NOVEMBER 3,2014. Councilmember Evans SECONDED THE MOTION VOTE. Unanimous. The motion carried. 11. 14-556 Direction to staff on request from East Valley Adult Resources to redirect City of Apache Junction,Arizona Page 10 City Council Meeting Meeting Minutes November 18,2014 remaining funds from Fiscal Year 2014-15 Ride Choice program to the senior van transportation program and to do the same for future budget years. This item was discussed at the November 17 work session. If council wishes to redirect funds then direction must be given to staff to do so Discussion and direction. Yes: 6- Mayor Insalaco, Councilmember Evans, Councilmember Rizzi, Councilmember Serdy, Councilmember Waldron and Councilmember Wilson No. 0 City Clerk Kathleen Connelly briefed the council on the item. Councilmember Waldron commented he understands the problem East Valley Adult Resources has run into and the need for the money. He expressed concern last night that the people who are involved in the Ride Choice program now be talked to so they do not lose transportation they need. The other thing he would like to do is take out of the motion,at the end of it,where is says do the same for future budget years He would like to look at it on an annual basis and see if there are grant opportunities that come in where they can restore the funding to where it belongs. Mayor Insalaco called for any further discussion There being no discussion,he called for a motion. Councilmember Waldron MOVED THAT THE FOLLOWING DIRECTION BE GIVEN TO STAFF REGARDING THE REQUEST FROM EAST VALLEY ADULT RESOURCES TO REDIRECT REMAINING FUNDS FROM FISCAL YEAR 2014-15 RIDE CHOICE PROGRAM TO THE SENIOR VAN TRANSPORTATION PROGRAM AND THAT STAFF REWORK THE CONTRACT WITH EAST VALLEY ADULT RESOURCES,KEEPING IN MIND THE RIGHTS TO CURRENT RIDE CHOICE PARTICIPANTS,THAT THEY ARE HANDLED AND TAKEN CARE OF. Councilmember Wilson SECONDED THE MOTION VOTE: Unanimous. The motion carried L. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES Yes. 6- Mayor Insalaco, Councilmember Evans, Councilmember Rizzi,Councilmember Serdy, Councilmember Waldron and Councilmember Wilson No. 0 Councilmember Waldron MOVED THAT AN EXECUTIVE SESSION AT 5 45 P M AND A WORK SESSION AT 7.00 P.M.BE HELD ON MONDAY,DECEMBER 1,2014, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS RESPECTIVELY,AND THAT AN EXECUTIVE SESSION AT 5 45 P.M BE HELD ON TUESDAY, DECEMBER 2,2014,IN THE CITY COUNCIL CHAMBERS. Councilmember Evans SECONDED THE MOTION. City of Apache Junction,Arizona Page 11 FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH EAST VALLEY ADULT RESOURCES, INC. AND THE CITY OF APACHE JUNCTION FOR MILEAGE REIMBURSEMENT INCENTIVE PROGRAM ("RIDE CHOICE") T AMENDED AGREEMENT is entered into this day of , by and between the CITY OF APACHE JUNCTION, ARIZONA, an Arizona municipal corporation ("City") and EAST VALLEY ADULT RESOURCES, INC., a 501(c)(3) non-profit corporation ("EVAR"), collectively referred to herein as the "Parties" or Individually as a "Party". RECITALS A. On August 19, 2014, the Mayor and City Council approved the Professional Services Agreement with EVAR for a Mileage Reimbursement Incentive Program ("Ride Choice") pursuant to Health and Human Services funding for fiscal year ("FY") 2014-15 in the amount of$26,432.00. B. The first FY 2014-15 quarter use reimbursement (July through September 2014) was $5,522.52, leaving a balance of$20,909.48. C. Currently, the Apache Junction Center of EVAR operates four vehicles assisting city seniors (8,000 trips annually). The program is underfunded and now runs at a monthly deficit, which is projected at$24,872.00 this fiscal year. D. In November 2014, EVAR Chief Executive Officer Dan Taylor requested the city redirect the balance of the unused EVAR Ride Choice Program funds to EVAR's Van Transportation Program. E. On November 19, 2014, the Mayor and City Council directed staff to amend the Ride Choice Agreement by redirecting the remaining FY funding from the EVAR Ride Choice program to EVAR's Van Transportation Program. AGREEMENT NOW, THEREFORE, the Parties amend the August 19, 2014 Ride Choice Agreement, as follows: A. Section 1, CONTRACTOR'S DUTIES, is amended to read as follows: 1. Subsection A: In General: With the redirection of funds, Contractor shall work with each of the 27 active clients to determine their current transportation needs. EVAR will implement at least one of the following: 1 a) Register client for the Van Transportation Program which will provide access to the Center, grocery shopping, medical appointments, prescription pick-up and haircuts. b) Utilize EVAR's Assistance for Independent Living Volunteer Services to find volunteers to meet their transportation needs. In addition, the Outreach Specialist will contact current volunteers to see if they would continue without mileage reimbursement. c) Review other options and contacts that can be made to see what transportation alternatives might be available. 2. Subsection B: Certification/Marketinq and Subsection C, Staff Support, are deleted in their entirety. B. Section 2, COMPENSATION, is amended to reflect the transitional cost of $3,166.35 and the redirected dollar amount of $20,909.48, of which $17,743.13 will be the remaining balance from the unused Ride Choice Program funds. C. Section 4, CONTRACTOR'S BILLING, is amended as follows: 1. Maximum funding amount is $20,909.48, but with $17,743.13 redirected to the Van Transportation Program and $3,166.35 to remain toward the Ride Choice Program. D. All other terms and provisions of the Agreement executed by the parties on August 19, 2014 shall remain in full force and effect. IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of the day and year first written above. CONTRACTOR: By: DANIEL TAYL'OR Title: Chief Executive Director 2 CITY OF APACHE JUNCTION, an Arizona municipal corporation By: JOHN S. INSALACO Title: Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: t - 13- ►s RICHARD J. STERN City Attorney 3 City of Apache Junction, Arizona 300 E Superstition 44e Boulevard ► El Agenda Item Cover Sheet Apache Junction,AZ 85119 .rat. Agenda Item No.4. File ID: 14-642 Sponsor.Janine Solley Agenda Date 2/3/2015 Index Community Development In Control-City Council Meeting Consideration of ED-15-01, award of bid to Breinholt Contracting Company, Inc for a contract amount of$29,900 00, plus unforeseen change orders in the amount of$5,000 00 for a total not to exceed $34,900 00 for the North Apache Trail Apartment Demolition project Ten bids were received in response to the solicitation. Staff respectfully requests Council approval and award of this bid to Breinholt Contracting Company, Inc for a contract amount of$29,900 00, plus unforeseen change orders in the amount$5,000 00 for a total not to exceed $34,900 00 for the North Apache Trail Demolition project Attachments. City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 I DATE January 22, 2015 MEMORANDUM TO: The Honorable Mayor and City Councilmembers MEMORANDUM THROUGH Bryant Powell, Assistant City Manager MEMORANDUM FROM. Janine Solley, Principal Econ Development Specialist SUBJECT Award of Bid No ED-15-01, North Apache Trail Apartment Demolition On December 31, 2014, the City of Apache Junction closed escrow on parcels of land in downtown Apache Junction after successfully executing a Land Exchange agreement with WGG Partners, LLC The City now owns Lots 1 through 9, inclusive and Tract A, Trailway Apartments, according to Book 12 of Maps, Page 34, records of Pinal County, Arizona. Existing on the downtown parcels are two vacant and blighted apartment structures, each 3,264 square feet that were built in 1962. In order to move forward with planning and construction of a community public space in the heart of downtown, the two abandoned apartment buildings will be demolished. On January 8 and January 15, 2015, the City published a Notice Inviting Bids for the demolition of the apartment buildings on North Apache Trail (Bid No. ED-15-01) A non- mandatory pre-bid meeting was held on-site on January 16, 2015 And, on January 22, 2015, the sealed bids were opened The City received 10 bids for the project Staff respectfully recommends the contract be awarded to the lowest and most responsive bidder, Breinholt Contracting Company, Inc., for a contract amount of $29,900 00 to include all services in the Project Scope of Work (attached), plus $5,000 for unforeseen change orders, for a total not to exceed $34,900.00 If the bid award is approved on City Council's February 3, 2015 Consent Agenda, a Notice to Proceed will be issued by February 9, 2015, with project completion anticipated by mid- to-late March 2015 PROJECT SCOPE OF WORK FOR NORTH APACHE TRAIL APARTMENT DEMOLITION The City of Apache Junction is seeking bids to demolish two recently acquired two story four- plex apartment buildings located at 180& 184 N Apache Trail, Apache Junction, Arizona. Set forth below is the scope of work: Items requiring asbestos abatement prior to demolition: 180 N Apache Trail • Units A, C& D Kitchens and C Bath— 12"Ceramic Tile&Grout(mastic under grout)— MASTIC ONLY • Units A, C & D Kitchens and C Bath—Linoleum Flooring Under 12"Ceramic Tile— MASTIC ONLY • 420 square feet 1 84 N Apache Trail • Unit A Kitchen— 12"Ceramic Tile&Grout(mastic under grout)—MASTIC ONLY • Unit A Kitchen—Linoleum Flooring Under 12"Ceramic Tile—MASTIC ONLY • 160 square feet • All Pinal County Notifications& Inspection Fees Items to be demolished and removed off property: • Exposed swimming pool surround, plus the top two feet of the perimeter of the pool wall that is currently underground • All of the asphalt circular driveway and concrete gutter • All curbing and sidewalks • Two four-plex apartment buildings • Foundations of four-plex buildings • All Joshua trees and Palm trees • The saguaro south of the southern building which is fully infested • Water meter boxes and valves and water lines • Inactive telephone pedestals • Power pole to the northern four-plex • Residential lamp posts at front sidewalk entrances Items to be removed and relocated to other locations in the city: • North saguaro at location in the City TBD(within one mile of the site) • 13 large landscape rocks to Prospector Park materials yard(within two miles of the site) Items to be abandoned in place or capped but not necessarily removed • Gas line shut off and cap at property line • Cap the active sewer line in circular drive within 10 feet of the manhole, abandon line in place(manhole to remain) • Cap the water main at the property line Items that can remain: • Pool fill • The block wall at the rear of the property • Back and side yard shrubs and trees Final site condition: • Rough grade and dress site in area of disturbance Permits and fees • Obtain a no fee demolition permit from the City of Apache Junction The Proposed Agreement is attached here to. Bidders shall note any exceptions with their bid DEMOLITION AGREEMENT FOR NORTH APACHE TRAIL APARTMENTS BETWEEN CITY OF APACHE JUNCTION AND BREINHOLT CONTRACTING CO., INC. This Agreement made and entered into this 3rd day of February,2015,by and between Breinholt Contracting Co., Inc.,hereinafter designated as"CONTRACTOR",and the City of Apache Junction, an Arizona municipal corporation,hereinafter designated as "CITY", both of which may collectively be referred to as the"Parties"or individually as a"Party". CONTRACTOR AND CITY, FOR THE CONSIDERATION HEREINAFTER SET FORTH PROMISE, COVENANT AND AGREE AS FOLLOWS 1. Project Description: Contractor shall do and perform,or cause to be done and performed in accordance with this Contract, the Project entitled North Apache Trail Apartment Demolition,hereinafter referred to as"The Project"or"The Work,"as described in the Project Scope of Work for North Apache Trail Apartment Demolition and the included Bid Form, Bid Security, Performance Bond, Labor and Material Bond, and Addenda thereto,if any, hereinafter referred to as "Contract Documents,"all of which are incorporated herein by reference and made a part hereof as though set forth in full. 2. Performance Standard: The Work must be performed and completed in accordance with all requirements of law and no Work shall be undertaken until Contractor has been issued all required permits. "Completion"includes obtaining all certificates of occupancy or amendments of existing certificates, as the case may be. The Work must be performed in accordance with the best modern practice and with materials and workmanship of the highest quality. Contractor shall check and verify all dimensions,grades and levels before commencement of performance and whenever necessary during the progress thereof 3. Contract Time: Contractor hereby fixes the time for completion of all Work required to be within 34 days beginning with the day following the starting date specified in the NOTICE TO PROCEED,or by the February 9,2015 whichever is later. Upon failure to complete the Work within the time specified, Contractor shall pay the amount of$250.00 per day for each day the Work remains unfinished as and for liquidated damages incurred by the City for failure to complete the Work within the specified time The Parties agree this is a reasonable daily sum to compensate the City for damages for not timely completing the project 4. Subcontractors: The names of subcontractors submitted at the time of the submission of the bid proposal to the City shall be assumed to be the subcontractors which the Contractor shall use for Work required to be done under the Contract Documents The Contractor shall make no substitution for any subcontractor,person, or entity previously selected if the City makes a reasonable objection to such substitution Contractor shall not contract with -1- any subcontractor to whom City has made a reasonable objection. Contractor shall not be required to contract with anyone to whom he has made a reasonable objection. 5. Independent Contractor: Contractoi is an independent contractor and not an agent or employee of the City Contractor shall supervise and direct the Work to be done, using Contractor's best skill and attention. Contractor shall be solely responsible for all construction means,methods,techniques, sequences, procedures, and for coordinating all portions of the Work required by the Contract Documents. Contractor shall be responsible to the subcontractors and their agents and employees, and other persons performing any of the Work under the Contract Documents. 6 Labor and Materials: Contractor shall provide and pay and shall insure under the requisite laws and regulations all labor, materials,equipment, tools,construction equipment,machinery, water,heat,utilities,transportation, and other facilities and services necessary for the proper execution and completion of the Work,whether temporary or permanent and whether incorporated or to be incorporated in the Work. 7 Taxes: Contractor shall pay all license, privilege, sales,consumer, use and other similar taxes for the Work or portions thereof provided by the Contractor which are legally enacted at the time bids are received, whether effective or subsequently applicable due to acts of jurisdictions or bodies other than the City. 8. Permits and Fees: Contractor shall secure and pay for all permits, governmental fees, licenses and inspections necessary for the proper execution and completion of Work which are customarily secured after execution of the Contract and which are legally required Contractor shall give all notices and comply with all laws,ordinances,rules, regulations and lawful orders of any public authority bearing on the performance of the Work. This section also applies to business licenses and transaction privilege licenses for doing business in the City by Contractor and all subcontractors. 9. Bonds: Concurrently with the execution of the Contract,the Contractor shall furnish the City the following Bonds,which shall become binding upon the award of the Contract to the Contractor A Performance Bond in an amount equal to the full Contract amount conditioned upon the faithful performance of the Contract in accordance with Plans, Specifications and conditions thereof Such Bond shall be solely for the protection of the City A Payment Bond in an amount equal to the full Contract amount solely for the protection of the claimants supplying labor or materials to the Contractor or his subcontractors in the prosecution of the Work provided for in such Contract. -2- Each such Bond shall include a provision allowing the prevailing party in a suit on such Bond to recover as a part of this judgment such reasonable attorney's fees as may be fixed by a judge of the court. Each such bond shall be executed by a surety company or companies holding a certificate of authority to transact surety business in the State of Arizona issued by the Director of the Department of Insurance pursuant to Title 20, Chapter 2, Article l of the Arizona Revised Statutes and any amendments thereto. The Bonds shall be made payable and acceptable to the City. The Bonds shall be written or countersigned by an authorized representative of the surety who is either a resident of the State of Arizona or whose principal office is maintained in this State, and the Bonds shall have attached thereto a certified copy of the Power of Attorney of the signing official 10 Superintendent: Contractor shall employ a competent Project Superintendent and necessary assistants who shall be in attendance at the Project site during the progress of the Work. The Superintendent shall represent and be the agent of the Contractor and communications given to the Superintendent shall be as binding as if given to the Contractor Important communications shall be confirmed in writing. Other communications shall be so confirmed on written request in each case. 11 Progress Schedule: Contractor, immediately after entering into the Contract, shall provide City with any requested scheduling information and a proposed Progress Schedule for performance of the Work in a form acceptable to City providing for commencement and completion of the Work within the Contract Time. Contractor shall prosecute the Work in a prompt and diligent manner and without hindering or delaying the Work of other Contractors of Subcontractors on the Project. Said Progress Schedule shall be supplemented thereafter upon request. Work shall not commence until a written Notice to Proceed has been issued to the Contractor by City. The Notice to Proceed will be considered issued on the date it is sent to the Contractor by certified mail, email or delivered to him in person. 12 City's Right to Stop,Carry Out or Correct the Work: If at any time during the performance of the Work it appears to the City, in its sole discretion,that Contractor will not complete the Work within the Contract Time and pursuant to the Progress Schedule,or if the manner in which the Contractor carries out its obligations interferes with the ability of other contractors or workers to perform work on the same site, City shall have the sole and absolute right on seventy-two(72)hours written notice delivered to Contractor to replace Contractor by taking over the Work or procuring another to complete the Work Such taking over shall not constitute or be construed as a waiver by City of any action, claim or demand City may have against Contractor by reason of injury or damage resulting to City because of Contractor's failure of performance hereunder Contractor shall pay to City a sum equal to -3- City's total cost of completing such Work, and a sum for reasonable attorneys' fees and litigation expenses in taking over and completing such Work. In no event shall any delay in performance hereunder by Contractor be excused unless,and ten to the extent only, such delay is excused by City in writing 13 Indemnification: The Contractor and its Surety,their successors and assigns, shall defend, indemnify and hold harmless the City, members of the City Council, its officers, employees, agents,representatives, successors and assigns from and against all claims of any character or nature, demands, suits,actions,costs, including, but not limited to, costs of defense, attorney fees, witness fees of any type, losses, damages, expenses and liabilities, whether direct or indirect,and whether to any person or property, including natural resources, and asbestos removal arising out of the Work performed under the terms of the Contract Documents, or on account of any act or omission by the Contractor or its agents, employees or representatives,or from any claims or amounts arising or recovered under Workers' Compensation laws or any other law, bylaw, or ordinance,order or decree or any failure on the part of Contractor,its agents, employees or representatives,to fulfill Contractor's obligations under the Contract Documents. It is the intent of the parties to this Contract that the City shall, in all instances, be indemnified and defended against all liability losses, and damages of any nature whatsoever for or on account of any injuries to or death of persons or damages to or destruction of property belonging to any person arising out of or in any way connected with the performance of this Contract. The provisions of this paragraph shall survive termination of this Contract. 14. Insurance: The Contractor shall secure and maintain throughout the term of this Contract, the following insurance in the name of Contractor, naming the City its Mayor and Council and employees as additional insured parties with respect to claims which may arise out of or result from Contractor's acts, operations or negligence or those of its subcontractors,or anyone directly or indirectly employed by any of them including officers, employees,agents or representatives for matters related to this Contract The coverage shall be provided on an "occurrence"basis rather than a"claims made"basis, shall be provided without offset against the City's existing insurance and provide for a minimum of thirty(30)days notice to the City prior to cancellation, reduction in coverage or other substantial modification Contractor shall provide a Certificate of Insurance which sets forth the following minimum amounts and types of coverage. TYPE OF COVERAGE AMOUNT NOT LESS THAN Workers' Compensation Statutory -4- Employers Workers' Compensation $100,000 each accident Liability $100,000 disease each employee $500,000 disease aggregate Commercial General Liability(including $1,000,000 per occurrence contractual liability for this Contract; broad $2,000,000 aggregate combined single limit form property damage; completed operations; and explosion,collapse and underground coverage) Automobile Liability(including owned, $1,000,000 combined single limit hired and non-owned coverages) Builders"All-risk" Completed Value (at least 100% of the Contract) Contractor shall submit to the City proof of the required insurance upon executing this Contract. Contractor shall obtain the above-described insurance from insurance companies which are duly authorized to issue such policies in the State of Arizona and"Best Rated A"or better by the A M Best Company,or which are otherwise acceptable to the City. Contractor shall maintain such insurance coverage until all the Work has been completed and the Project has been accepted by the City. City shall not be obligated to review any of the Contractor's Certificates of Insurance, insurance policies or endorsements or to advise Contractor of any deficiencies in such documents and any receipt of copies or review by the City of such documents shall not relieve Contractor from or be deemed a waiver of the City's right to insist on strict fulfillment of Contractor's obligations under this paragraph 15 Change Orders: A change order is a written order to the Contractor signed by the City's Representative or other person designated in the Contract Documents, issued after execution of this Contract,authorizing a change in the Work or an adjustment in the Contract Sum or the Contract Time A change order signed by the Contractor indicates his agreement therewith City, without invalidating the Contract,may order changes in the Work, in the general scope of the Contract consisting of additions, deletions, or other revisions,the Contract Sum and the Contract Time being adjusted accordingly. All such changes in the Work shall be authorized by change order, and shall be performed under the applicable conditions of the Contract Documents The City's Representative shall have authority to order minor changes in the Work not involving an adjustment in the Contract Sum or extension of the Contract Time and not inconsistent with the intent of the Contract Documents. Such changes shall be effected -5- by written order, and shall be binding on the City and the Contractor. The Contractor shall carry out such written orders promptly Verbal information obtained from any officer,agent or employee of City or any other person shall not affect the obligations assumed by the Contractor or relieve the Contractor from complying with any of the terms of the Contract Documents. No additional changes will be made to the Contract without prior written authorization from City pursuant to approved change order. Any change in the terms of the Contract Documents shall only occur as a result of an approved change order or written modification or amendment approved by mutual consent of City and the Contractor. If Contractor claims that any changes ordered by City involve extra cost under the Contract Documents,he shall within forty-eight(48) hours after the receipt of such instructions,provide notice to City's Representative of such claim, and before proceeding to execute the Work. 16. Disputed Work: If,pursuant to Paragraph 18,Contractor claims changes ordered by City involve extra cost, Contractor shall nevertheless perform the same if directed to do so by City However,to preserve Contractor's right to claim extra compensation for the disputed Work,Contractor shall,prior to proceeding with the Work, notify the City in writing that Contractor is performing the same under protest. The same procedure shall prevail as to any dispute as to a deduction for omitted Work(or as the case may be,to sustain Contractor's contention as to the appropriate compensation for extra Work that is not disputed to be an "extra")--the notice in that circumstance to be given not later than ten(10)days after the tender of payment by the City to Contractor of the reduced amount(or amount for the nondisputed "extra")as computed by the City. Failing such written protest, it shall be deemed that Contractor has acquiesced to the City's contention that the Work is not extra but Contract Work or that the reduction (or amount of compensation for a nondisputed "extra") is correct,as the case may be The giving of the protest provided for above, and giving it timely, are express conditions precedent to maintaining any remedial procedure,whether arbitration or otherwise, pertaining to ,^ Contractor's claim 17. Payments and Completion: In consideration of the complete and timely performance of the Work, subject to changes as provided by an approved Change Order, City shall pay Contractor the Contract Sum of Twenty-Nine Thousand Nine Hundred Dollars ($29,900 00). If the Contract Documents contain an engineer's estimate of the quantities of material required for the Work and expressly provide for an adjustment to the Contract Sum for actual quantities, the final Contract Sum will be adjusted according to actual field measurements of installed materials multiplied by the Contractor's per unit prices. All such measurements are subject to confirmation by the City In all other cases,no adjustment will be made to the Contract Sum except by approved Change Order as noted above. The terms of this paragraph shall be governed by A.R.S. § 34-221 and any amendments thereto which is hereby incorporated by reference. Upon receipt of written notice that the Work is ready for final inspection and acceptance, the City's Representative shall promptly make a final inspection and, when the City's Representative finds the Work acceptable under the Contract Documents, he shall -6- Ask p promptly approve a certificate for payment stating that upon his knowledge,information and belief and on the basis of his observations and inspections, the Work has been completed in accordance with the terms and conditions of the Contract Documents and that the entire balance found to be due the Contractor is due and payable Neither the final payment nor the retained percentage determined under A.R.S. § 34-221 shall become due until the Contractor submits to the City all required data establishing payment or satisfaction of all Contractor's obligations 18. Protection of Persons and Property: Contractor at all times must take all reasonable precautions to protect the persons and property of others on or adjacent to the Project from damage, loss,or injury resulting from operations under this Contract by Contractor or any other party with whom Contractor has subcontracted. Contractor's obligation to protect shall include the duty to provide,place, and adequately maintain at or about the Project suitable and sufficient guards, lights, barricades, and enclosures Contractor shall not disturb nor displace any protection installed by others. Safety equipment such as masks and protective apparel shall be worn by all workers who may by handling asbestos material 19. Applicable Law and Venue: The terms and conditions of this Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona Any action at law or in equity brought by either party for the purpose of enforcing a right or rights provided for in this Agreement, shall be tried in a court of competent jurisdiction in Pinal County, State of Arizona. The Parties hereby waive all provisions of law providing for a change of venue in such proceeding to any other county In the event either party shall bring suit to enforce any term of this Agreement or to recover any damages for and on account of the breach of any term or condition in this Agreement, it is mutually agreed that the prevailing party in such action shall recover all costs including: all litigation and appeal expenses,collection expenses, reasonable attorneys' fees, necessary witness fees and court costs to be determined by the court in such action 20. Successors and Assigns: The City and the Contractor each binds himself, his partners,successors, assigns and legal representatives to the other party hereto and to the partners, successors, assigns and legal representatives of such other party in respect to all covenants,agreements and obligations contained in the Contract Documents Neither party to the Contract shall assign the Contract or sublet it as a whole without the written consent of the other,nor shall the Contractor assign any monies due or to become due to him hereunder without the previous written consent of the City 21 Service of Notice: All notices and demands required or permitted by this Contract shall be in writing and shall be deemed to have been given properly when(1) sent by Certified Mail with return receipt requested (postage fully prepaid)to the respective address below or to such other address as may be furnished by either party pursuant to this paragraph; (2) delivered personally to the parties to this Contract. -7- Notices to Contractor: Notices to City: ATTENTION: David Breinholt ATTENTION. Janine Solley President City's Representative Breinholt Contracting Co., Inc. City of Apache Junction 1955 W Commerce Avenue 300 East Superstition Boulevard Chandler, Arizona 85233 Apache Junction, Arizona 85119 22 Claims for Damages: Should either Party to the Contract suffer injury or damage to personal property because of any act or omission of the other Party or of his employees,agents for whose acts he is legally liable,claims shall be made in writing to such other Parties within a reasonable time after the first observance of such injury or damages. 23. Rights and Remedies: The duties and obligations imposed by the Contract Documents and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations,rights and remedies otherwise imposed or available by law. No action or failure to act by the City or Contractor shall constitute a waiver of any right or duty afforded any of them under the Contract, nor shall any action or failure to act constitute an approval of or acquiescence in any breach except as may be specifically agreed in writing 24 Time is of the Essence: All time limits stated in the Contract Documents are of the essence Contractor shall begin Work on the date specified in the Notice to Proceed and shall carry the Work forward expeditiously If Contractor is delayed at any time in the progress of the Work by any act or neglect of City or by any employee of City or by change orders in the Work or by labor disputes, fire,unusual delay in transportation, adverse weather conditions not reasonably anticipatable, unavoidable casualties, or any causes beyond the Contractor's control,or by delay caused by the City,or by any other cause which the City determines may justify the delay,then the Contract Time shall be extended by change order for such reasonable time as the City may determine. Any claim for extension of time shall be made in writing to the City Engineer not more than seven(7)days after the commencement of the delay; otherwise said claim shall be waived by Contractor. In the case of a continuing delay, only one claim is necessary Contractor shall provide an estimate of the probable effect of such delay on the progress of the Work. This paragraph does not exclude the recovery of damages for delay by either party under the provisions of the Contract Documents. -8- 25. Conflict of Interest: This Contract shall be subject to the cancellation provisions of A.R.S. § 38-511 and any amendments thereto. 26 Protection of Persons and Property: The Contractor shall adopt every practical means and comply with all laws,ordinances and regulations in order to minimize interferences to traffic and inconveniences,discomfort and damage to the public, including the provision of adequate dust control measures. All obstructions to traffic shall be guarded If an unsafe condition arises or exists during the progress of the Work,or if the City has reason to believe an unsafe condition exists, the Contractor shall suspend the Work wholly or in part for such period as may be necessary to correct the unsafe condition. Neither the Contractor nor any subcontractor shall trespass upon private property. The Contractor shall be responsible for all injury or damage to persons or property, directly or indirectly, resulting from operations of the Contractor or subcontractors completing this Work. The Contractor shall ensure that both the Contractor and subcontractors comply with the laws and regulations of the City, County and State relating to the safety of persons and property. The Contractor will be held responsible for any injury or damage to persons or property caused by the Contractor or subcontractors or any agent or employee of either during the progress of the Work and until its final acceptance The Contractor shall protect against injury or damage to pipes, sewer conduits, electrical conduits, lawns, gardens, shrubbery,trees, fences or other structures or property,public and/or private, encountered in this Work except as stipulated elsewhere herein. The Contractor shall be responsible and liable for any injury or damage to such pipes, structures and property. IN WITNESS WHEREOF,the parties hereto have caused this Contract to be executed, the day and year first herein written. AN Ilk CITY OF APACHE JUNCTION By: John S. Insalaco, Mayor ATTEST: Kathleen Connelly, City Clerk APPROVED AS TO FORM. B 112 715 R. Joel Stem, City Attorney -9- C , By leinmestak 1\5 Title 'ref.KY -1 0- PROJECT SCOPE OF WORK FOR NORTH APACHE TRAIL APARTMENT DEMOLITION The City of Apache Junction is seeking bids to demolish two recently acquired two story four- plex apartment buildings located at 180& 184 N Apache Trail,Apache Junction, Arizona Set forth below is the scope of work• Items requiring asbestos abatement prior to demolition: 180 N Apache Trail • Units A, C & D Kitchens and C Bath— 12"Ceramic Tile& Grout(mastic under grout)— MASTIC ONLY • Units A, C &D Kitchens and C Bath—Linoleum Flooring Under 12"Ceramic Tile— MASTIC ONLY • 420 square feet 184 N Apache Trail • Unit A Kitchen— 12"Ceramic Tile& Grout(mastic under grout)—MASTIC ONLY • Unit A Kitchen—Linoleum Flooring Under 12" Ceramic Tile—MASTIC ONLY • 160 square feet • All Pmal County Notifications& Inspection Fees Items to be demolished and removed off property. • Exposed swimming pool surround, plus the top two feet of the perimeter of the pool wall that is currently underground • All of the asphalt circular driveway and concrete gutter • All curbing and sidewalks • Two four-plex apartment buildings • Foundations of four-plex buildings • All Joshua trees and Palm trees • The saguaro south of the southern building which is fully infested • Water meter boxes and valves and water lines • Inactive telephone pedestals • Power pole to the northern four-plex • Residential lamp posts at front sidewalk entrances Items to be removed and relocated to other locations in the city: • North saguaro at location in the City TBD (within one mile of the site) • 13 large landscape rocks to Prospector Park materials yard(within two miles of the site) ..... ..... Items to be abandoned in place or capped but not necessarily removed: • Gas line shut off and cap at property line • Cap the active sewer line in circular drive within I 0 feet of the manhole,abandon line in place(manhole to remain) • Cap the water main at the property line Items that can remain. • Pool fill • The block wall at the rear of the property • Back and side yard shrubs and trees Final site condition • Rough grade and dress site in area of disturbance Permits and fees. • Obtain a no fee demolition permit from the City of Apache Junction The Proposed Agreement is attached here to. Bidders shall note any exceptions with their bid. Adak RU) FORM PROJEC I North Apache Trail Apartment Demolition .► FOR: CITY OF APACHE JUNCTION 30()East Superstition Boulevard Apache Junction, Arizona 851 19 I3id of TWENTY-NINE THOUSAND NINE HUNDRED($ 29900 Oq, CONTRACTOR'S l.,iccnsc No ROC 195804 A corporation organized and existing under the laws of the State of AZ or a partnership consisting of_ ......_____..---__._�.....__ ... ___. .,partners;or an individual conducting business as hereinafter called the Bidder. T0• City Clerk City of Apache Junction 300 East Superstition Boulevard Apache Junction, Arizona 85119 1 he undersigned acknowledges that he has received and familiarized himself with the following. Construction Contract Demolition Project Scope of Work ADDENDA No. dated , No dated I he undersigned further acknowledges that he has visited the site and has .•. famtlianzed hu»sclf with local conditions affecting the cost of the Work at the place where the Work is to be done. In submitting this Bid,the undersigned agrees' To f irrnish all material, labor,tools,expendable and construction equipment,and all utility and transportation services necessary to furnish and install, in a workmanlike manner,all Work at the Project listed herein in strict confor my with the Project Scope far the consideration hereinafter set firth. 2 To hold his Bid open for not less than sixty(60) Days after the receipt of Bids and to accept the provisions of the instructions to Bidders regarding disposition Of Bid Security. -Il- 3 To enter into and execute a Contract if awarded on the basis of this Bid within forty-eight(48)hours alter Award of the Bid,and to furnish a Performance Bond,a Labor &Material Payment Bond and certificates of insurance in accord with the General Conditions and General Requirements of this Contract and to deliver executed Bonds and insurance Certificates to the City's representative within seven(7) DAYS after Contractor has been notified that his bid had been recommended for acceptance 4 I o achieve Final Completion within the time period stated in the construction contract taken from the date of Notice to Proceed or the date otherwise ektablished for the commencement of Work. 5. The undersigned agrees that time is of the essence and the(:1TY will suffer financial damages due to the Contractor's failure to complete the Work within the Contract Time Reasonable liquidated damages shall he as follows as the Parties have so agreed for each calendar day beyond the Contract Time for which the Contractor shall fail to complete the Work: $250.00 per calendar day 6. l'hc undersigned has attached a certified check in the amount of 10%of the bid amount as Bid Security, and other items required in the Instructions to Bidders The Bid Security shall become the property of the City of Apache Junction,Arizona,as liquidated damages for the delay and additional Work caused thereby in the event the Contract and Bonds arc not executed within the time set forth above 7 Rid Schedule Bidder will complete the Work in accordance with the Bid Documents and accept in full payment for the Work items listed below, the following Unit Prices and/or Bid Prices,as applicable Bidder's Acknowledgement. Bidder hereby acknowledges the provisions of the Agreement as to the assignment of the procurement contract for procurement of goods and special services for wastewater pumping units Breinholt Contract, g Co , Inc Name C r pany) Authorized 0 i r. aturc January 23, 2015 Date _12_ Aill Ilk The undersigned has checked carefully all the above figures and understands that the City of Apache Junction, Arizona will not be responsible for arty errors or omissions on the part of the undersigned in making up this Bid. In submitting this Bid, it is understood that the right to reject any and all Bids and to waive irregularities in the Bidding has been reserved by the City. Dated this 23 day of January 20 15 Breinholt Contracting Co , Inc Name of BIDDER(Company) 1955 W. Commerce Avenue Address of BIDDER Chandler, Az. 85233 City, State,Zip Code 602-322-1100 Area Code/Telephone Number Devin Breinholt/resident Authorized Office itle Authorized Signature (I)(We), the undersigned(Corporate Secretary)(Partners), hereby certify that the above-named Officer is hereby authorized to execute all documents relative to the Award and/or administration of this hid for and on behalf of the Company y named above. ="j. A7-/--i---4.,1 or aj�Corporate Secretary(signature) Partner Signature _. Partner Signature ---- _13- [CONTRACT BOND] STATUTORY PERFORMANCE BOND PURSUANT TO TITLE 34, CHAPTER 2,ARTICLE 2, OF THE ARIZONA REVISED STATUTES (Penalty of this bond must be 100%of the CONTRACT amount) KNOW ALL MEN BY THESE PRESENTS: That, (hereinafter "Principal"), and , a corporation organized and existing under the laws of the State of ,duly licensed in and holding a certificate of authority to transact surety business in the State of Arizona issued by the Director of the department of Insurance pursuant to Title 20, Chapter 2, Article 1, (hereinafter"Surety"),as Surety are held and firmly bound unto the City of Apache Junction, County of Maricopa, State of Arizona in the amount of Dollars($ ), for the payment of which, the Principal and Surety bind themselves,and their heirs, administrators, executors, successors and assigns,jointly and severally, firmly by these presents. WHEREAS, the Principal has entered into a certain written CONTRACT with the City of Apache Junction, entitled NOW THEREFORE,THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal faithfully performs and fulfills all of the undertakings,covenants,terms, conditions and agreements of the CONTRACT during the original term of the CONTRACT and any extension of the CONTRACT with or without notice to the Surety, and during the life of the guaranty required under the CONTRACT,and also performs and fulfils all of the undertakings, covenants,terms,conditions and agreements of all duly authorized modifications of the CONTRACT that may hereinafter be made,notice of which modifications to the Surety being hereby waived, the above obligation is void Otherwise it remains in full force and effect PROVIDED, HOWEVER,that this Bond is executed pursuant to the provisions of Title 34, Chapter 2, Article 2,Arizona Revised Statutes,and all liabilities on this Bond shall be determined in accordance with the provisions of Title 34,Chapter 2,Article 2,Arizona Revised Statutes,to the extent as if it were copied at length in this Agreement. The prevailing party in a suit on this Bond shall recover as part of the judgment reasonable attorney fees that may be fixed by a judge of the court A-1 r. This Bond shall not be executed by an individual surety or sureties,even if the requirements of A R S Section 7-101 are satisfied. Witness our hands this _day of ,20 . PRINCIPAL SEAL By SURETY SEAL By Address of Surety: AGENT OF RECORD AGENT ADDRESS * attach Power of Attorney A-2 [LABOR AND MATERIALS BOND] STATUTORY PAYMENT BOND PURSUANT TO TITLE 34, CHAPTER 2,ARTICLE 2, OF THE ARIZONA REVISED STATUTES (Penalty of this bond must be 100%of the CONTRACT amount) KNOW ALL MEN BY THESE PRESENTS That, (hereinafter "Principal"), as Principal and a corporation organized and existing under the laws of the State of ,duly licensed in and holding a certificate of authority to transact surety business in the State of Arizona issued by the Director of the Department of Insurance pursuant to Title 20, Chapter 2,Article 1, (hereinafter "Surety"), as Surety are held and firmly bound unto the City of Apache Junction, County of Maricopa, State of Arizona in the amount of Dollars($ ), for the payment of which the Principal and Surety bind themselves, and their heirs, administrators, executors, successors and assigns,jointly and severally,firmly by these presents. WHEREAS, the Principal has entered into a certain written CONTRACT with the City of Apache Junction, entitled NOW THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal promptly pays all monies due to all persons supplying labor or MATERIALS to the Principal or the Principal's SUBCONTRACTORS in the prosecution of the WORK provided for in the CONTRACT, this obligation is void. Otherwise it remains in full force and effect. PROVIDED, HOWEVER,that this Bond is executed pursuant to the provisions of Title 34, Chapter 2,Article 2, Arizona Revised Statutes, and all liabilities on this Bond shall be determined in accordance with the provisions, conditions and limitations of Title 34,Chapter 2,Article 2, Arizona Revised Statutes,to the extent as if it were copied at length in this Agreement The prevailing party in a suit on this Bond shall recover as part of the judgment reasonable attorney fees that may be fixed by a judge of the court. This Bond shall not be executed by an individual surety or sureties, even if the requirements of A.R S Section 7-101 are satisfied. B-1 Witness our hands this day of ,20 PRINCIPAL SEAL By SURETY SEAL By Address of Surety. AGENT OF RECORD AGENT ADDRESS * Attach Power of Attorney B-2 ROLL CALL VOTE NOTES: \pJ ....... (P\V' t 7V ) I5 ITEM# I MEETING OF ti:/\., MOTION BY c6SECONDED BY /j1 YES NO ABSTAINED COUNCILMEMBER RIZZI I COUNCILMEMBER WILSON ✓/ VICE MAYOR BARKER ✓ COUNCILMEMBER SERDY V COUNCILMEMBER EVANS COUNCILMEMBER WALDRON MAYOR INSALACO J UNANIMOU IN FAVOR OPPOSED ABSTAINED TOTAL it i CONSENT AGENDA ITEM NOS. 1-4 I MOVE THAT THE CONSENT AGENDA BE ACCEPTED AS PRESENTED; AND THAT APPROVAL BE GIVEN TO THE FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT BETWEEN EAST VALLEY ADULT RESOURCES, INC AND THE CITY OF APACHE JUNCTION FOR THE MILEAGE REIMBURSEMENT INCENTIVE PROGRAM ("RIDE CHOICE); AND THAT AUTHORIZATION BE GIVEN FOR THE MAYOR TO SIGN THE AMENDMENT,AND THAT THE AWARD OF BID FOR ED-15-01,NORTH APACHE TRAIL DEMOLITION PROJECT, BE AWARDED TO BREINHOLT CONTRACTING COMPANY, INC IN THE AMOUNT OF $29,900 00 PLUS UNFORESEEN CHANGE ORDERS IN THE AMOUNT OF $5,000.00 FOR A TOTAL AMOUNT NOT TO EXCEED $34,900 00; AND THAT AUTHORIZATION BE GIVEN TO THE MAYOR TO SIGN THE CONTRACT Q R HE-4, City of Apache Junction, Arizona 300 E Superstition Boulevard Z. Agenda Item Cover Sheet Apache Junction,AZ 85119 'sr Agenda Item No 5 �rcia File ID: 14-663 Sponsor. John Insalaco Agenda Date. 2/3/2015 Index: In Control. City Council Meeting Mayor Insalaco will introduce the newly elected Honorable President Delbert Ray and other honored guests from the Salt River Pima-Maricopa Indian Community Attachments: City of Apache Junction,Arizona Page 1 Printed on 2/2/2015 Cityof Apache Junction, Arizona 300ESuperstition .V��: pac Boulevard Agenda Item Cover Sheet Apache Junction,AZ 85119 t Agenda Item No.6. Lx 1� File ID: 14-676 Sponsor: Bryant Powell Agenda Date:2/3/2015 Index- In Control.City Council Meeting Presentation and discussion by Apache Junction Food Bank staff and new board president The board president will present the city council with a plaque of appreciation and invite the mayor and councilmembers to tour their facility Attachments. City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 :I.1 City of Apache Junction, Arizona 300E Superstition 'r .•, Boulevard a Agenda Item Cover Sheet Apache Junction AZ 85119 Ighli by ., �..�; ~ a 1 Agenda Item No 7 z; F File ID: 14-678 Sponsor. Matt Busby Agenda Date• 2/3/2015 Index. In Control City Council Meeting Presentation and discussion on pending or proposed state legislation with District 16 Representative Doug Coleman. Attachments• City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 City of Apache Junction, Arizona 300 E Superstition Boulevard Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No 8 '�` File ID: 14-607 Sponsor- Bryant Powell Agenda Date:2/3/2015 Index In Control:City Council Meeting City manager's report Presentation. Attachments- City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 PUBLIC HEARING 1. For PROPOSED ORDINANCE NO. 1413, REPEALING AND ADOPTING BY REFERENCE A NEW CHAPTER 14, CABLE TV SYSTEMS. 2. Will CITY ATTORNEY JOEL STERN speak to the Council? 3. Will the applicant or spokesperson please speak to the Council on this item? 4. Is there anyone from the public who wishes to speak on this item? (Are there any "Request to Speak" forms?) 5. If not, this hearing is closed. 6. Is there any discussion? 7. Call for a motion. 8. Call for a second. 9. Roll call vote. tj` te r' City of Apache Junction, Arizona 300gouleaSuperstition rd Agenda Item Cover Sheet Apache Junction,AZ 85119 Agenda Item No.9. File ID: 14-665 Sponsor.Joel Stern Agenda Date 2/3/2015 Index. In Control. City Council Meeting Consideration of Ordinance No. 1413, amending Apache Junction City Code, Volume 1, by repealing Chapter 14, Cable Systems, and adopting by reference a new Chapter 14, Cable TV Systems, by adding to the city code a new Chapter 14, entitled "Apache Junction City Code, Volume 1, Chapter 14, Cable TV Systems"with the emergency clause Attachments. rr City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 ORDINANCE NO. 1413 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AMENDING APACHE JUNCTION CITY CODE, VOLUME 1, BY REPEALING CHAPTER 14, CABLE SYSTEMS, AND ADOPTING BY REFERENCE A NEW CHAPTER 14, CABLE TV SYSTEMS, BY ADDING TO THE CITY CODE A NEW CHAPTER 14, ENTITLED "APACHE JUNCTION CITY CODE, VOLUME 1, CHAPTER 14, CABLE TV SYSTEMS", REPEALING ANY CONFLICTING PROVISIONS; PROVIDING FOR SEVERABILITY; PROVIDING FOR PENALTIES; AND DECLARING AN EMERGENCY. WHEREAS, the Mayor and City Council on November 1, 1983, adopted Ordinance No. 222 which established Apache Junction City Code ("A J C C. ") , Volume 1, Chapter 14, Cable Systems, of the City of Apache Junction ("City") ; and WHEREAS, the Mayor and City Council on May 15, 1984, adopted Ordinance No. 281 which amended A.J.C.C. Volume 1, Chapter 14, Cable Systems, and WHEREAS, the Mayor and City Council on November 27, 1990, adopted Ordinance No. 758 which amended A J C C. Volume 1, Chapter 14, Cable Systems; and WHEREAS, the Mayor and City Council on April 21, 1993, adopted Ordinance No. 861 which amended A. J.C.C. Volume 1, Chapter 14, Cable Systems; and WHEREAS, the Mayor and City Council on August 3, 1999, adopted Ordinance No 1086 which amended A J.C.0 Volume 1, Chapter 14, Cable Systems; and WHEREAS, on January 6, 2015, the Mayor and City Council directed staff to update Chapter 14, Cable Systems, to more fully /~'4 meet federal statutory requirements; and WHEREAS, in order to meet the public notice requirements, a public hearing was held at City Hall for discussion on the proposed code change on February 3, 2015; and WHEREAS, A.R.S § 9-802 permits municipalities to enact the provisions of a code or public record theretofore in existence without setting forth such provisions in full text as long as the adopting ordinance is published in full text and at least three copies of the code or public record are filed in the office of the clerk of the municipality and are made available for public use and inspection; and ORDINANCE NO. 1413 1 OF 3 WHEREAS, pursuant to A. R.S. §§ 9-801 (1) and 9-802, codes which may be adopted by reference include those relating to cable TV systems; and WHEREAS, City staff has determined that for administrative efficiency, it is more appropriate to update the City Code Volume 1, Chapter 14 by repealing Chapter 14 of City Code Volume 1 in its entirety, and replacing it with an updated Chapter 14, to include the updated cable system provisions . BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AS FOLLOWS• SECTION I IN GENERAL 1 . That existing Apache Junction City Code, Volume I, Chapter 14, Cable Systems, is hereby repealed in its entirety. 2 . That certain document known as "Apache Junction City Code, Volume I, Chapter 1, Cable TV Systems", three copies of which are on file in the office of the City Clerk, which document was made a public record by Resolution No. 15-01 of the City of Apache Junction, is hereby referred to, adopted and made a part hereof as if fully set out in this ordinance, pursuant to A R. S § 9-802 . SECTION II REPEALING ANY CONFLICTING ORDINANCES All ordinances and parts of ordinances in conflict with the provisions of this ordinance or any part of the codes adopted herein by reference are hereby repealed. SECTION III PROVIDING FOR SEVERABILITY If any section, subsection, sentence, phrase, clause or portion of this ordinance or any part of the codes or regulations adopted herein by reference is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. SECTION IV PROVIDING FOR PENALTIES After the City exhausts all of its civil violation procedures as referenced in the adopted regulations, any violation of any provisions adopted herein, shall be punishable as a Class 1 Misdemeanor consistent with Apache Junction City Code, Volume I, Chapter 1, GENERAL, Article 1-8, PENALTY. ORDINANCE NO. 1413 2 OF 3 SECTION V DECLARING AN EMERGENCY The immediate operation of the provision of this Ordinance is necessary for the immediate preservation of the public peace, health or safety, and that an emergency is hereby declared to exist; and this Ordinance shall be in full force and effect from and after its passage, adoption and approval by the Mayor and City Council of the City of Apache Junction. __ APPROVED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION THIS DAY OF , 2015. SIGNED AND ATTESTED TO THIS DAY OF , 2015. JOHN S. INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: RICHARD J. STERN City Attorney Aimi ORDINANCE NO. 1413 3 OF 3 CHAPTER 14: CABLE TV SYSTEMS ARTICLE 14-1: CABLE TELEVISION Section 14-1-1 Title 14-1-2 Intent and purpose 14-1-3 Definitions 14-1-4 Authority to grant license; license required; non-exclusive license 14-1-5 Application procedures 14-1-6 Standards for granting or denying license applications 14-1-7 License agreement required 14-1-8 Operating requirements 14-1-9 Fees,bonds, letters of credit, liquidated damages and appeals 14-1-10 Termination and revocation 14-1-11 Renewal 14-1-12 Transfers and change of control 14-1-13 Indemnity and insurance 14-1-14 Administration 14-1-15 General provisions 14-1-16 Rights reserved to Council § 14-1-1 TITLE. This chapter shall be entitled"City of Apache Junction Cable TV Systems" § 14-1-2 INTENT AND PURPOSE. It is the intent of the city to promote the public health, safety and general welfare by providing for the grant of one or more licenses for the construction and operation of a cable TV system; to provide for the regulation of each cable TV system by the city; to provide for the payment of fees and other valuable consideration by a licensee to the city for the privilege of using the public rights- of-way for constructing and operating a cable TV system, to promote the widespread availability of cable TV service to city residents wherever economically feasible,including,but not limited to those who reside in multi-family buildings and m rural communities, to encourage the development of cable TV service as a means of communication between and among the members 1 of the public and public institutions, and to encourage the provision of diverse information to the community over cable TV. § 14-1-3 DEFINITIONS. For purposes of this chapter, the following words, abbreviations and their denvations shall have the meanings given herein.Words not defined are given the meaning in § 602 of the Cable Act,47 U.S.0 § 522, and, if none, their common and ordinary meaning When not mconsistent with the context,words used in the present tense include the future,words in the plural number include the singular number, and words in the singular number include the plural number. The words MUST and SHALL are mandatory and the word MAY is permissive ACCESS CHANNEL. Any channel set aside under the license agreement for public use, educational use or governmental use without a charge to the user by the licensee for channel usage. An ACCESS CHANNEL may be scheduled or may be operated so that any member of the general public may cablecast ACTIVATED CHANNELS. Those channels engineered at the headend of a cable TV system for the provision of services generally available to residential subscnbers of the cable TV system, regardless of whether those services actually are provided, including any channel designated for public, education or governmental use. ACTUAL COST. The actual cost to the licensee of matenals and labor necessary to perform installation, construction or maintenance of facilities AFFILIATE. Any person who owns or controls, is owned or controlled by, or is under common ownership or control with the licensee. APPLICANT. Any p applies that a lies for a license APPLICATION. A proposal to construct and operate a cable TV system within the city, transfer a license, renew a license or modify a license An application includes the initial proposal plus all subsequent amendments or supplements to the proposal and relevant correspondence. BASIC CABLE SERVICE. Any service tier that includes the retransmission of local television broadcast signals CABLE ACT. The Cable Communications Policy Act of 1984,47 U.S.C. §§ 521 et seq CABLE OPERATOR. Any person or group of persons that is issued a license by the licensing authonty to construct, operate and maintain a cable TV system in the public rights-of-way CABLE SERVICE. The one way transmission to subscnbers of video programming or other programming service and subscnber interaction,if any,that is required for the selection or use of the video programming or other programming service. CABLE TV SYSTEM or SYSTEM. Any facility consisting of a set of closed transmission paths and associated signal generation,reception and control equipment that is designed to provide cable 2 service that includes video programming and that is provided to multiple subscnbers within a community Cable television system does not include. (1)A facility that serves fewer than fifty subscnbers. (2)A facility that serves subscribers without using any public right-of-way. (3) A facility that serves only to retransmit the television signals of one or more television broadcast stations (4)A facility of a common carrier that is subject, in whole or in part,to 47 United States Code sections 201 through 276, except that the facility is considered a cable TV system, other than for purposes of 47 United States Code section 541(c), to the extent the facility is used in the transmission of video programming directly to subscribers, unless the extent of the use is solely to provide interactive on-demand services. (5)An open video system that complies with 47 United States Code section 573. (6)A facility of an electric utility that is used solely for operating its electric utility system. CHANNEL. A time or frequency slot or technical equivalent on the cable TV system in a specified format, discretely identified and capable of carrying full motion color video and audio, and may include other non-video subcarriers and digital information CHANNEL EQUIVALENT. The system capacity required to provide the transmission of a video signal, with accompanying audio, that is in digital format and capable of producing sound and picture of NTSC quality or better, based on the compression technology then in use in the cable TV system. CITY. The City of Apache Junction, an Arizona municipal corporation (also referred to the ("LICENSING AUTHORITY"), in its present boundaries, and its future boundaries as increased or decreased by law CITY MANAGER. The chief executive officer of the city or his or her designee COMPLAINT. A subscriber or citizen issue, presented in verbal or wntten form, to the licensee or the city relating to any regulatable aspect of the licensee's performance under this chapter CONSUMER PRICE INDEX or CPI. The annual average of the Consumer Price Index for all Urban Consumers ("CPI-U"), as published by the Bureau of Labor Statistics CONTROLLING INTEREST A business entity's operational authority, which is not limited to majority stock ownership,but also includes actual working and management(day-to-day) control in whatever manner exercised CONVERTER. A tuning device which converts transmitted signals to a frequency which permits their reception on a television set COUNCIL. The Council of the City of Apache Junction 3 DAY. Calendar day DWELLING UNIT. Any separate and distinct structure or part thereof which exists in finished form, occupied or capable of year-round occupation, and serves as a residence to one or more persons. Included in this definition,but not limited to are all single family homes, each apartment unit, each condominium unit,patio homes, guest quarters and similar type structures EASEMENT. Property interest which allows the erection,construction or maintenance of a cable /"N TVs sys tem,em, its structures, equipment or facilities. EXPANDED BASIC SERVICE. The next most highly penetrated tier of cable service programming above the Basic Service tier excluding premium or pay-per-view services FAIR MARKET VALUE. The pnce that a willing buyer would pay to a willing seller FCC. The Federal Communications Commission FEDERAL AGENCY. Any agency of the United States GROSS REVENUES. Amounts in whatever form and from all sources derived directly or indirectly by Licensee and/or an affiliate from the operation of licensee's cable system to provide cable services within a license area GROSS REVENUES include, by way of illustration and not limitation. (1) Fees for cable services, regardless of whether such cable services are provided to residential or commercial subscribers, including revenues denved from the provision of all cable services (including but not limited to pay or premium cable services, digital cable services, pay- per-view,pay-per-event, audio channels and video-on-demand cable services); (2) Installation, disconnection, reconnection, downgrade, upgrade, maintenance, repair, or similar charges associated with subscriber cable service, (3) Fees paid to licensee for channels designated for commercial/leased access use,which shall rIN be allocated on a pro rata basis using total cable service subscnbers within the license area, (4) Converter,remote control, and other cable service equipment rentals, leases, or sales, (5) Payments for pre-paid cable services and/or equipment, (6) Advertising Revenues as defined herein; (7) Fees mcludmg, but not limited to (1) late fees, convenience fees and administrative fees which shall be allocated on a pro rata basis using cable services revenue as a percentage of total Licensee revenues withm the license area; (2)License fees, (3) the FCC User Fee and(4)Public, Education and Government("PEG') fees if included on subscnber billing statements, (8) Revenues from program guides, and 4 (9) Commissions from home shopping channels and other cable service revenue shanng arrangements which shall be allocated on a pro rata basis using total cable service subscnbers within the license area. (10) GROSS REVENUES shall not be net of (1) any operating expense, (2) any accrual, including without limitation, any accrual for commissions to affiliates; or (3) any other expenditure, regardless of whether such expense, accrual, or expenditure reflects a cash payment GROSS REVENUES, however, shall not be double counted Revenues of both licensee and an affiliate that represent a transfer of funds between the licensee and the affiliate, and that would otherwise constitute GROSS REVENUES of both the licensee and the affiliate, shall be counted only once for purposes of determining GROSS REVENUES Similarly, operating expenses of the licensee which are payable from licensee's revenue to an affiliate and which may otherwise constitute revenue of the affiliate, shall not constitute additional GROSS REVENUES for the purpose of this license. GROSS REVENUES shall include amounts earned by affiliates only to the extent that licensee could, in concept, have earned such types of revenue m connection with the operation of licensee's cable TV system to provide cable services and recorded such types of revenue in its books and records directly,but for the existence of affiliates GROSS REVENUES shall not mclude sales taxes imposed by law on subscribers that the licensee is obligated to collect With the exception of recovered bad debt, GROSS REVENUES shall not include bad debt (a) "Advertising Revenues" shall mean amounts revenues denved from sales of advertising that are made available to licensee's cable system subscnbers within the license area and shall be allocated on a pro rata basis using total cable service subscnbers reached by the advertising Whenever licensee acts as the principal in advertising arrangements involving representation firms and/or advertising interconnects and/or other multichannel video providers, advertising revenues subject to license fees shall include the total amount from advertising that is sold, and not be reduced by any operating expenses(e g, "revenue offsets" and"contra expenses" and "administrative expenses" or similar expenses), or by fees, commissions, or other amounts paid to or retained by representation firms,other multichannel video providers,involved with sales 00\ of advertising on the cable system within the license area (b) GROSS REVENUES shall not include. (1)Actual cable services bad debt write-offs, except any portion which is subsequently collected which shall be allocated on a pro rata basis using cable services revenue as a percentage of total licensee revenues within the license area; (2) Any taxes and/or fees on services furnished by licensee imposed on subscribers by any municipality, state or other governmental unit, provided that the license fee, the FCC User fee and PEG fee shall not be regarded as such a tax or fee, (3)Launch fees and marketing co-op fees, and, (4)Revenues associated with the provision of managed network services provided under separate business contact 5 (5) Unaffiliated third party advertising sales agency fees which are reflected as a deduction from revenues, except when licensee acts as a principle as specified in paragraph (A) immediately above - (c)To the extent revenues are derived by licensee for the provision of a discounted bundle of services which includes cable services and non-cable services,licensee shall calculate revenues to be included in GROSS REVENUES using a methodology that allocates revenue on a pro rata basis when comparing the bundled service price and its components to the sum of the published rate card pnces for such components. Except as required by specific federal, state or local law, it is expressly understood that equipment may be subject to inclusion in the bundled price at full rate card value. This calculation shall be applied to every bundled service package containing cable service from which licensee denves revenues in the license area The city reserves its right to review and to challenge licensee's calculations. Example. Prior to any bundle-related price reduction, if cable service is valued at 50% of the total of the services to be offered in a bundle, then cable service is to be valued and reported as being no less than 50%of the pnce of the bundled service total. INSTALLATION. The connection of the cable TV system from a remote terminal to a subscriber's residence or place of business INTERACTIVE ON-DEMAND SERVICES. A service providing video programming to subscribers over switched networks on an on-demand, point-to-point basis, but does not include services providing video programming prescheduled by the programming provider LABOR COSTS. Actual cost to licensee of contract labor or hourly wages or apportioned salaries of licensee's employees plus fully loaded labor costs. LICENSE. An initial authorization, or renewal thereof(including a renewal of an authorization which has been granted subject to Title 47 U.S.C. § 546), issued by a licensing authority,whether such authorization is designated as a franchise,permit,resolution, contract, certificate,agreement or otherwise, which authorizes the construction or operation of a cable TV system. LICENSE AGREEMENT. A contract entered into in accordance with the provisions of this chapter between the city and a licensee that sets forth the terms and conditions under which the license will be exercised LICENSE AREA. The entire existmg territorial limits of the city and any area annexed thereto during the term of the license LICENSEE. Any person who has been granted a license by the city or any lawful transferee or successor interest. LICENSE FEE. As defined in Title VI of the Federal Communications Act of 1934, 47 U.S.C. § 542, as amended LICENSING AUTHORITY. The City of Apache Junction 6 LIVING UNIT. A distinct address in the network inventory system where the cable operator currently has,had m the past, or had planned to provide telephone or high-speed Internet service to a customer. This mcludes,but is not limited to, smgle family homes, multi-dwelling(e.g., apartment buildings and condominiums)units and business locations MATERIAL COSTS. Actual cost of material to licensee,including sales tax and freight paid,plus handling and processing charges equal to 3%of matenal costs. MULTICHANNEL VIDEO PROGRAMMING DISTRIBUTOR. A person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service or a television receive-only satellite program distnbutor,who makes available for purchase,by subscnbers or customers,multiple channels of video programming NORMAL BUSINESS HOURS. Those hours during which most similar businesses in the community are open to serve customers.In all cases,NORMAL BUSINESS HOURS must include some evening hours at least 1 night per week and/or some weekend hours. NORMAL OPERATING CONDITIONS. Those service conditions which are within the control of the cable operator Those conditions which are not within the control of the cable operator include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages and severe or unusual weather conditions Those conditions which are within the control of the cable operator include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand penods, and maintenance, upgrade or rebuild of the cable TV system. OTHER PROGRAMMING SERVICE. Information that a cable operator makes available to all subscribers generally PERSON. Any individual, corporation,partnership, association,joint venture or organization of any kind and the lawful trustee, successor, assignee, transferee or personal representative thereof. ookk PUBLIC RIGHTS-OF-WAY. The surface, the air space above the surface, and the area below the surface of any public street, highway, lane, path, alley, sidewalk, boulevard, dnve, bridge, tunnel,park,parkway,waterway,public utility easement or similar property now or hereafter held by the city, which, consistent with the purposes for which it was dedicated, may be used for the purpose of installing and maintaining the cable TV system No reference herein to PUBLIC RIGHTS-OF-WAY shall be deemed to be a representation or guarantee by the city that its interest or other nght to control the use of the property is sufficient to permit its use for those purposes, and a licensee shall be deemed to gain only those rights to use as are properly in the city and as the city may have the right and power to give. PUBLIC RIGHTS-OF-WAY, for the purpose of this chapter, do not include buildings, parks, poles, or similar facilities, or property owned by or leased to the city, including by way of example and not limitation, structures in the PUBLIC RIGHTS-OF-WAY, such as utility poles and light poles REMOTE TERMINAL. A "Digital Subscriber Line Access Multiplexer" ("DSLAM") capable of offering cable TV services to subscnbers 7 SCHOOL. Any public educatio nal institution, which is accredited bya nationally a y recognized institution, including pnmary and secondary schools,colleges and universities SERVICE INTERRUPTION. The loss of picture or sound on one or more cable channels or channel equivalents. SERVICE TIER. A category of cable service or other services provided by a cable operator and for which a separate rate is charged by the cable operator. STANDARD DROP. That cable connection which requires no more than 150-foot drop measured from the ground block on the subscnber's home or place of business to the nearest active tap on the cable TV system, (which cannot be more than 4000 feet from a Remote Terminal) involving only 1 outlet and standard materials and does not involve a wallfish In addition, a STANDARD DROP shall exclude custom installation work including specific subscnber requested work that requires nonstandard inventory or cable routing that requires construction methods exceeding reasonable underground or aerial work STATE. Any state or political subdivision,or agency thereof. SUBSCRIBER. Any individual or entity legally receiving, for any purpose, cable services of the licensee's cable TV system SYSTEM OUTAGE. A service interruption affecting more than 10 subscnbers SYSTEM REBUILD or REBUILD. A major improvement or enhancement in the technology or service capabilities made by the licensee to the cable TV system TWO-WAY CAPABILITY. The incorporation in a cable TV system of all appropriate design and engineenng characteristics so that 2-way transmission, including addressability, over the system can be implemented with a minimum of expense. The 2-way capability specifically includes, but is not limited to, services for Internet access and pay-per-view as well as emerging technologies. USABLE ACTIVATED CHANNELS. Activated channels of a cable TV system, except those channels whose use for the distnbution of broadcast signals would conflict with technical and safety regulations as determined by the FCC VIDEO PROGRAMMING. Programming provided by, or generally considered comparable to programmmg provided by, a television broadcast station § 14-1-4 AUTHORITY TO GRANT LICENSE; LICENSE REQUIRED; NON- EXCLUSIVE LICENSE. (A) Pursuant to A R S § 9-505, et seq., and as amended, the council has the authority to issue non-exclusive licenses to construct,install,maintain and operate cable TV systems within the city, and to regulate those cable operations The council's authority is also based in common law pursuant to the city's ownership of the fee simple title to the public nghts-of-way of the city as well as its legal interest in easements and licenses granted to it by property owners for the purposes of municipal use. 8 olok (B) No provision of this chapter shall be deemed or construed to require the granting of a license. (C) No person shall construct, install or maintain a cable TV system within the public rights- of-way in the city, or within any other public property of the city, unless a license agreement authonzmg such use of the public rights-of-way or property is m full force and effect. /IN (D) All licenses issued by the council shall be non-exclusive, and the council specifically reserves the right to grant such additional licenses for cable TV systems as the council deems appropriate. (E) Any terms and conditions of agreements between licensee and other entities or municipalities shall not effect any of the terms and conditions including but not limited to the rates, services and work schedules, set forth in a license agreement negotiated between the city and licensee. (F) A license shall not relieve the licensee of any obligation to obtain and comply with any necessary permit or other forms of authonzation required by the city code or other applicable laws and regulations and shall not convey rights other than as specified in this Chapter 14, or in the license agreement;no rights shall pass by implication. (G) Any license shall authorize the licensee to engage in the business of operating a cable TV system and providing cable service in the City,and may authorize non-cable service in the City to the extent not prohibited by state and federal law, and to erect, install, construct,prepare,replace, reconstruct, maintain and keep m any public nghts-of-way such poles, wire, cable, conductors, ducts, conduit,vaults,manholes,amplifiers, appliances,attachments and other facilities as may be necessary and appurtenant to the cable TV system In addition, any license shall authorize the licensee to use and operate such facilities rented or leased from other persons, including but not limited to any public utility or other licensee holding a valid license or permitted to do business in the city,provided,however, that. (1) the safety, functioning,and appearance of the public rights-of-way and the safety of other persons shall not be adversely affected by the installation, construction, operation or removal of such facilities necessary for a cable TV system, and (2) the cost of the installation, construction, operation or removal of such facilities shall be borne by the licensee. (H) Nothing m this Chapter 14 shall relieve the licensee of any obligation to obtain any authorizations or licenses from the city to use the public rights-of-way to provide non-cable service, or to comply with any city rules, regulations and standards with respect to the use of the public rights-of-way for theprovision of such non-cable service Theprovisions of this chapter P 14 are not a bar to the imposition of similar, different or additional city imposed rules,regulations and standards with respect to the use of the public rights-of-way in connection with the provision of non-cable service. In addition to other rights it has,the city may establish such rules,regulations 9 and standards related to the provision of such non-cable service, to the extent not prohibited by state and federal law, as required to protect the public interest. § 14-1-5 APPLICATION PROCEDURES. (A) Any person desiring to construct,install,maintain or operate a cable TV system within the city who is not lawfully the holder of a license to provide cable service in the city as of the effective date of this chapter shall submit an application to the council addressed to and filed with the city clerk. This application shall consist of a letter and proposed license agreement. All applications and proposals filed with the city clerk shall remain the property of the city and shall constitute a public record pursuant to state law The council reserves the right to issue a request for proposals for cable TV system services at any time. Applications submitted pursuant to a request for proposals may be returned as non-responsive if they do not comply with all requirements of the request (B) Applications for consent to transfer a license or an interest in a license must conform to the requirements of Vol I, § 14-1-12,while applications for renewal,must conform to Vol. I, § 14-1- 11. (C) An application for modification of a license agreement must at a minimum, include the following information. (1) The specific modification requested, (2) The justification for the requested modification, including the impact of the requested modification on subscribers and others, and the impact on the applicant if the modification is not approved, (3) A statement as to whether the modification sought is pursuant to 47 U S C. § 545,and, if so,a demonstration that the requested modification meets the legal standards of that section, and (4) Any other information necessary for the council to make a determination. 001 (D) To be acceptable for filing, an application must be submitted with any required filing fee, be properly executed on the forms prescribed by the council, and contain the information required by any required application form,this chapter and meet the requirements of any applicable request for proposals § 14-1-6 STANDARDS FOR GRANTING OR DENYING LICENSE APPLICATIONS. (A) All applications and proposals received shall be placed in a public file with the city clerk. The council shall publish notice of a public hearing date when the council will consider an application and the proposal in a newspaper of general circulation once a week for two consecutive weeks, the first notice being published at least fourteen (14) days before the public heanng takes place The notice shall indicate the following (1) The proposed service or changes in service (2) Proposed changes in ownership 10 (3) Where the application may be viewed, in person or online (4) The date and location of the public hearing (B) Notice of the hearing shall be published and held in accordance with the provision of A.R.S § 9-507(B) All mterested parties shall be afforded a reasonable opportunity to be heard. (C) The council shall give full consideration to each application and proposal. The following factors may be deemed appropriate and shall be considered. (1) The financial qualifications of the applicant and its ability to construct and operate the proposed system (2) The need for and quality of the service proposed,including rates to subscribers,whether or not rates are to be regulated (3) The technical, legal and character qualifications of the applicant, including applicant's willingness to abide by the limitations of this chapter (4) Technical and performance adequacy of the proposed system design, plant and equipment, including any specific knowledge or experience the Council may have with the applicant (5) Where an applicant proposes to overbuild an existing cable system, the economic and technical feasibility of multiple cable TV systems,the impact on the existing licensee's system and the public mterest if the application were to be granted (6) All other factors which may affect the public interest § 14-1-7 LICENSE AGREEMENT REQUIRED. (A) If council approves the application and proposal, the terms shall be set forth in a written license agreement which shall also be considered at the same public hearing The license agreement shall incorporate all terms and provisions of this chapter The licensee shall expressly and specifically agree to accept and be bound by the terms of this chapter (B) A license agreement shall have the minimum following characteristics, but the city and licensee may negotiate additional terms and conditions consistent with Vol 1, § 14-1-4, state and federal law. (1) It authorizes use of the public rights-of-way for mstallmg cables,wires,lines and other facilities to operate a cable TV system,but does not expressly or implicitly authorize the licensee to provide service to,or install cable,wires,lines or any other equipment or facilities upon property without owner consent(except for compatible easements or nghts-of-way pursuant to 47 U.S.C. § 541(a)(2)), or to use publicly or privately owned utility poles or conduits without a separate agreement with the owners. It also authorizes the licensee to so use, operate and provide similar facilities or properties rented, licensed or leased from other persons, firms or corporations, including but not limited to,any public utility or other licensee licensed or permitted to do business 11 in the city, provided,however,that neither the licensee nor the third party shall be relieved of any regulation or obligation as to its use of the facilities in the public rights-of-way (2) It is subject to the paramount right of use of the public rights-of-way by the council and the public for public purposes The council reserves the right to authorize use of public rights- of-way to other persons as it determines appropriate (3) It is nonexclusive and will not expressly or implicitly preclude the issuance of other es.) licenses to operate cable systems within the city (4) It conveys no property right to the licensee or right to renewal other than as may be required by state or federal law, and the agreement is not a franchise (5) It constitutes a legally binding contract between the licensee and the city once it is approved by the Council and executed by both parties. A licensee contractually commits itself to comply with the terms, conditions and provisions of the license agreement and with all applicable laws, ordinances,codes, rules,regulations and orders. (6) In no case shall the term of any license agreement exceed 15 years commencing on its effective date. A greater period of time is prohibited. (7) A licensee shall execute a hold harmless agreement as part of the license agreement which shall set forth the obligation of the licensee over and above the insurance requirements contained in the license and this chapter (8) A licensee shall be subject to all laws, rules and regulations of the State of Arizona and the United States Government (9) Any of the provisions of this chapter may be amended by the council at any time. This chapter and the amended provisions shall be applicable to all existing license agreements, provided, however, that this chapter and the amended provisions shall not be applicable to an existing agreement where it would contravene a contractual right of the licensee under the license agreement (10) All notices and communications from a licensee to the council pursuant to this chapter or a license agreement shall be sent to the city manager unless the licensee is otherwise directed. (11) Insofar as it is not inconsistent with or otherwise preempted by federal or state regulations,the license agreement shall grant the right and privilege to the licensee to provide non- cable communications services Insofar as it is not inconsistent with or otherwise preempted by federal or state regulations, the council shall retain all authority to regulate non-cable telecommunication services to the extent necessary to protect the public interest and to ensure compliance with all provisions of this chapter § 14-1-8 OPERATING REQUIREMENTS. A licensee shall conform to the following minimum standards relative to the construction, operation and maintenance of a cable TV system in the city It is not the intent of this article to 12 PIN prevent any licensee from providing more than the required minimum to meet the standards listed below. (A) Rights of individuals, subscribers and users (1) A cable TV system shall be operated in a manner consistent with the principles of fairness and equal accessibility of facilities, channels, studios and other services to all residents and other entities having a legitimate use of the system A licensee shall not discnmmate in terms of rates, terms of service or extension of service on the basis of age, race, creed, sex, religion, national origin or marital status Nor shall a licensee fail to extend service to any part of the city on the basis of the income of the residents This provision shall not restrict licensee's ability to provide senior citizen, other similar discounts, or seasonal service (2) A licensee shall maintain a business office open during normal business hours with listed local or toll-free telephone numbers to allow reasonable access by subscribers and members of the public The office shall be conveniently and centrally located but shall be no further than fifteen (15)miles from Meridian Road where such road marks the city's western boundary When the office is closed,an answering machine or service,capable of receiving complaints and inquiries must be employed The office shall be open to the public between the hours of 9 00 a m to 5 00 p m Mondays through Fridays, and 9 00 a.m to 12.00 noon on Saturdays, during such hours licensee will provide staff to field all subscriber questions, complaints, billing procedures and exchange of converter boxes (3) Licensee shall maintain a written record listing date of all complaints, identifying the subscnber or citizen, describing the nature of the complaint and when and what action has been taken by the licensee, if any,in response thereto; Such record shall be kept at the licensee's office and, subject to subscnber privacy laws, shall be available for inspection during normal business hours without further notice of demand of the city manager A summary of such records must be retained for not less than 1 year. The licensee shall notify each subscriber at the time of initial subscription of the procedure for reporting and resolving complaints. (4) A licensee shall establish procedures for the investigation and resolution of all complaints including, but not limited to, those regarding the quality of service and equipment malfunction.A copy of such procedures shall be provided to the city manager and/or council upon request. (5) A licensee must provide each subscriber at the time cable service is installed, the following (a) Written instructions for placing a service call, filing a complaint or requesting an adjustment, including the phone number and address of licensee's office (b) The telephone number of the city office responsible for administration of the cable license (c) A schedule of rates and charges for all available services 13 (d) Copies of the service contract, including disconnect and reconnect procedures and charges (e) A subscriber handbook and upon request any other written policies applicable to subscnbers (6) A licensee shall establish and conform to the following policy regarding refunds to subscnbers and users �-- (a) If the licensee collects a deposit or advance charge on any service or equipment requested by a subscnber or user, the licensee shall provide such service or equipment within 30 days of the collection of the deposit or charge or it shall refund the deposit or charge within 5 days thereafter upon request of the subscriber The subscriber must be advised of this right of refund at the time the order is placed, and (b) If any subscriber or user terminates any monthly service during a penod of time for which the subscnber or user has made an annual or other payment in advance,the appropnate pro rata portion of the payment shall be refunded by the licensee (7) The following requirements shall apply to disconnections. (a) There shall be no charge for total disconnection of cable service unless the charge was disclosed at the time the subscriber ordered service. All cable communications equipment shall be removed within a reasonable time from a subscnber's property at the subscnber's request, such time not to exceed 30 days from the date of the request, and (b) If any subscriber fails to pay a properly due monthly subscnber's fee or other charge, the licensee may disconnect the subscnber's service outlet; provided, however, that the disconnection shall not be effected until 30 days after the due date of the charges and shall include a prior written notice to the subscnber of the intent to disconnect After disconnection, upon payment in full of all proper charges or fees, including the payment of any reconnection charge, the licensee shall promptly reinstate the service The licensee may require a 60 day prepayment of services as a condition to reconnection (8) Other than testing of the EAS system, a licensee may interrupt service on the cable TV system only for good cause and for the shortest time possible No pnor notice shall be required for the performance of system maintenance work requiring a maximum of 1 hour between the hours of 2.00 a m and 6.00 a.m (9) A licensee shall at all times comply with subscriber privacy provisions of 47 U S C § 551. (10) No equipment shall be installed by the licensee for subscriber service without first securing a service request from the owner or resident of any pnvate property involved, except in public utility easements (11) A licensee shall not ongmate or knowingly permit subliminal transmission at any time for any purpose whatsoever. 14 (12) A licensee shall make available leased access channels as required under 47 U S C § 532. (13) A licensee shall strictly adhere to the equal employment opportunity requirements of the FCC, 47 U.S.0 § 554, state statutes and local regulations, and as the same may be amended from time to time. ,/`N (B) Cable system construction timetable (1) A cable system shall be constructed in accordance with the provision of the license agreement (2) It is the policy of the council to require construction of a cable system designed to serve subscribers in an area licensed by the council as rapidly and expeditiously as possible The licensee shall immediately upon granting of the license agreement diligently pursue and obtain all necessary permits from the appropnate governmental agencies, utility companies and others as necessary to comply with the provision of this chapter and other federal, state and city laws, codes and resolutions (3) The city manager may require a licensee to report on construction progress and provide information showing specifically whether the construction schedule is being met and the reasons for the delay The city manager shall determine the format to be used for the report and the frequency of reporting (4) Where appropnate and reasonable, a licensee shall schedule construction activities to coordinate with any city construction on streets so as to avoid unnecessary inconvenience to the public (C) Line extension policy. A licensee shall extend its cable TV system in accordance with the provisions of its license agreement (1) Upon reasonable request for service by any person located within any area of the city that meets density requirements of division(C)(2)below,the licensee shall,within 30 days,furnish the requested service to such person, unless prevented from providing the service due to factors outside licensee's control, such as permit restrictions,private easement considerations and the like. If the service has not been implemented within 60 days of the request,the city manager may impose liquidated damages for each day thereafter (2) The licensee must extend and make cable service available to every unserved living unit within 4,000 feet of a licensee's remote terminal or any area of the city reaching the minimum density of at least 25 dwelling units per mile of plant as measured from licensee's nearest activated feeder line, whether the existing plant is aerial or underground, except that the licensee shall not be required to install cable where another authorized licensee has already done so. (3) The licensee shall prevent unnecessary damage to streets and property by installing underground cable or conduit in all new subdivisions of 5 or more dwelling units within the license area at the same time, in the same trench as telephone, electric or similar services are installed. 15 eiN (4) In new residential developments in which all the electnc power and telephone utilities are underground, the city may, in its sole discretion, require that the following procedure apply with respect to access to and utilization of underground easements (a) The developer shall be responsible for contacting and surveying all licensees to ascertain which licensees desire (or, pursuant to the terms and provisions of this chapter and any license agreement, may be required) to provide cable service to that development. The developer may establish a reasonable deadline to receive responses from licensees The final development map shall indicate the licensees which have agreed to serve the development (b) If 1 or more licensees wish to provide service within all or part of the development, they shall be accommodated m the joint utilities trench on a nondiscnminatory shared basis. If fewer than 2 licensees indicate interest, the developer shall provide conduit to accommodate a minimum of 2 sets of cable television cables and dedicate to the city any initially unoccupied conduit (c) The developer shall provide at least 10 business days notice of the date that utility trenches will be open to the licensees that have agreed to serve the development When the trenches are open, such licensees shall have 2 business days to begin the installation of their cables, and 5 business days after beginning installation to complete installation (d) The final development map shall not be approved until the developer submits evidence that 1 It has notified each licensee that underground utility trenches are to open as of an estimated date, and that each licensee will be allowed access to such trenches, including trenches from proposed streets to individual homes or home sites, on specified nondiscriminatory terms and conditions, and 2 It has received a written notification from each licensee that the licensee intends to install its facilities during the open trench penod on the specified teens and conditions, or such other terms and conditions as are mutually agreeable to the developer and licensee,or has received no reply from a licensee within 10 days after its notification to such licensee, in which case the licensee will be deemed to have waived its opportunity to install facilities during the open trench period (e) Sharing the joint utilities trench shall be subject to compliance with state regulatory agency and utility standards. If the compliance is not possible, the developer shall provide a separate trench for the cable television cables, with the entire cost shared among the participating licensee(s) With the concurrence of the developer, the affected utilities and the licensee's alternative mstallation procedures, such as the use of deeper trenches, may be utilized, subject to the requirements of applicable laws. (f) Any licensee wishing to serve an area where the trenches have been closed shall be responsible for its own trenching and associated costs and shall repair all property to the condition which existed prior to such trenching 16 ON ON (5) The licensee must extend and make cable service available to any resident requesting connection within the licensee's authorized license area at the regular installation charge provided that division(C)(2)above is met. (D) Construction and technical standards. The following general requirements,which are not to be interpreted as imposing standards in excess of FCC imposed limits, apply to all licensees. ^ (1) In those areas and portions of the license area where the transmission and distribution facilities of the telephone company and the electric company are underground or later placed underground,the licensee shall likewise install its transmission facilities underground (2) In areas where facilities do not have to be underground, a licensee shall not erect any new poles along any street or public rights-of-way of the city except as maybe reasonably required or necessary to fill small gaps in the existing aerial utility systems and only then with the advance approval of the city manager. (3) All television signals transmitted on a cable TV system must include any closed captioning information for the hearing impaired Antennas, supportmg structures and outside plant used in the system must be designed to comply with the recommendations of the Electronics Industries Association and applicable federal and local regulations on tower structures and outside plant. (4) The licensee must perform at its expense any proof of performance tests designed to demonstrate compliance with the requirements of this chapter,the license agreement and the FCC The city manager may require periodic proof of performance tests to be performed at the expense of the licensee Upon request, the licensee must provide the test results promptly to the city manager (5) The licensee must advise the city manager a minimum of 30 days in advance when a proof of performance test pursuant to 47 C F.R 76 605(a)(4) (or subsequently renumbered) is scheduled The licensee must also advise the city manager of its anticipated schedule for any other FCC required testing a minimum of 30 days in advance of the testing (6) A licensee must not design,install or operate its facilities in a manner that will interfere with the signals of any FCC licensed service,mcludmg but not limited to television,radio,satellite, 2-way and paging services, the electrical or telephone system located in any portion of the city, the cable TV system of another licensee, or individual or master antennas used for receiving amateur radio television,radio or other FCC authorized signals (7) The system shall meet or exceed FCC requirements as set forth in 47 C.F.R. 76(K). If federal law is subsequently amended or minimum technical specifications are no longer mandated by the FCC,the technical specifications in effect at the time of adoption of the license agreement shall govern. (E) Maintenance specifications 17 'RN (1) The licensee shall construct,install and maintain its cable TV system in an orderly and workmanlike manner The safety of the general public,the licensee's employees,the employees of the utility companies and all nearby property owners shall be a pnmary concern. (2) All cables are to be installed,to the maximum extent possible,parallel with electric and telephone distribution facilities Licensee's multiple-cable configurations shall be arranged in parallel and bundled to the maximum extent possible (3) As between licensee and the city,the licensee shall be solely and completely responsible for the actions taken by any contractor or other agent employed to construct or install the licensee's facilities within the public rights-of-way as well as on other public or private property (4) A licensee shall have available at all hours personnel capable of responding to emergency conditions requiring immediate repair to its cable facilities The licensee shall be a member of the Blue Stake Center, or otherwise comply with state underground law, for its service area (5) In the event that licensee property or the facilities and equipment of unauthorized cable communication providers has been installed in a public rights-of-way without complying with the requirements of this chapter, or the license has been terminated,revoked or expired, or the use of any licensee property is discontinued for any reason for a continuous period of 2 months, licensee or any unauthorized cable communication provider, shall at its sole expense on the demand of the city manager remove promptly from the public rights-of-way all licensee or unauthorized cable communication provider property other than that which the city manager may permit to be abandoned in place absent any rights licensee has under state and federal law. Upon such removal of subject property,licensee or unauthorized cable communication provider shall promptly restore the public rights-of-way or other public places from which the subject property was removed to a condition as near as possible to its prior condition Subject property no longer in service may be left in place with the approval of and in a manner prescribed by the city manager Upon abandonment of the property in place, licensee or unauthorized cable communication provider shall deliver to the city manager an instrument transferring ownership of the subject abandoned property to the city Any cost arising from compliance with this provision shall be borne by the licensee or unauthorized cable communication provider (F) Use ofpublzc rights-of-way (1) A licensee must utilize, with the owner's permission, existing poles, conduits or such other facilities whenever possible (2) All transmission lines and other equipment must be installed and located to minimize interference with the rights and reasonable convenience of public and private property owners. The council reserves the right to issue the reasonable rules and regulations concerning the installation and maintenance of cable TV systems m the public rights-of-way,as may be consistent with this chapter, state and federal law In addition, licensee shall become a member of the Blue Stake Center, or its functional equivalent, within 30 days following the effective date of this agreement 18 /w\ (3) The licensee shall have at all times up-to-date route maps showing trunk and distribution lines.Licensee shall make all such maps available for review by the appropriate city personnel and shall be provided on at least a yearly basis Licensee shall, in addition to the paper maps, also provide the city with updated maps in a suitable electronic format determined by the city at least every 3 months if changes to the cable TV system have occurred during the 3-month period (4) All construction practices shall be in accordance with all applicable sections of the Occupational Safety and Health Act of 1970, 29 U S C §§ 651 et seq, as amended, as well as other applicable laws. (5) A licensee must remove, replace or modify at its own expense, any of its facilities within any public nghts-of-way or any federally patented easement when required to do so by the city manager to allow the city to change, maintain, repair, improve or eliminate a public thoroughfare. Nothing in this article shall prevent licensee from seeking and obtaining reimbursement from sources other than the city (6) In public rights-of-way where electrical and telephone utility wiring are located underground, either at the time of initial construction or subsequently, the cable must also be located underground at the licensee's expense Between the public right-of-way and subscriber's residence,the cable must be located underground if both electrical and telephone utility wiring are located underground If either electric or telephone are aerial, licensee may install aerial cable except where a property owner requests underground Installation at the sole cost of the licensee (7) A licensee must obtain any required permits before doing any excavation or causmg disturbance to public thoroughfares or private property as a result of its construction or operations and must restore to their former condition such private property and public thoroughfares,the latter in a manner consistent with all applicable rules,regulations and resolutions relative to construction, repair or maintenance in public rights-of-way If such restoration is not satisfactorily performed within a reasonable time in the opinion of the city manager, the city manager may, after prior notice to licensee, cause the repairs to be made at the expense of the licensee The city manager may inspect ongoing construction and require a licensee to halt construction where the city manager finds the construction to be in non-compliance with the requirements of this chapter,the license agreement or a permit (8) Pnor to commencement of underground construction, a licensee must have complied with the following requirements. (a) Have received a permit from the city for construction on public property or public rights-of-way; and (b) Have complied with Blue Stake requirements in the area of construction; (9) At the request of any person holding a valid building moving permit and upon sufficient notice, the licensee must temporarily raise, lower or cut its wires as necessary to facilitate such move upon not less than 72 hours advance notice. The direct expense of the temporary move must be paid by the permit holder,and the licensee may require payment in advance 19 (G) System services and capability (1) The following minimum requirements for facilities and services apply to licenses. The council may require that a licensee exceed these minimum requirements (a) Except as provided in a negotiated license agreement, a cable TV system must have a minimum analog capacity of 82 video channels available for immediate or potential use. Two-way capability shall be designed into the system Upon request, this minimum channel capacity may be modified by the council, provided the licensee demonstrates that it would be commercially impracticable to comply with the requirement A licensee shall have the burden of demonstrating, by clear and convincing evidence, that compliance with the minimum channel capacity would be commercially impracticable for its Apache Junction cable TV system (b) Standard installation and basic service to public buildings may be required without charge as set forth in the license agreement. Licensee may be required to make available, 1 service outlet to a conveniently accessible point in each city building or other facility or building located within the license area and used for public purposes as may be designated by the city manager The installation charge to each occupant, if any, would not exceed licensee's direct cost (time and matenal). (c) A licensee must design its system to allow the city manager to interrupt audio portions of the cable service in an emergency to deliver information to subscnbers (d) A licensee must provide standby power for the headend so as to be able to operate some channels dunng a power outage for a minimum of 48 hours or as provided for in the license agreement. (2) The following requirements apply to PEG access channels. (a) PEG channel capacity shall be made available to city and its designated PEG providers without charge within one hundred eighty(180)days after Licensee begins offenng cable service in the city, licensee will provide the city with up to two(2)public, educational, and governmental emiN access channels ("PEG channels") as determined in the city's sole discretion The two PEG channels shall be on the basic cable service tier of the system and two other channels of non- commercial government programming, at least one of which may be programmed by the federal government in the digital programming tier of the system,as provided for m A.R.S §9-506(D)(1) Channels shall be reserved for this capacity with a logo approved by the city. All costs associated with the obligations in this section to commence PEG signals at the point of ongination back to the headend and transmitted to subscnbers with the same quality, functionality and identification as other channels on the system, shall be borne by licensee Except as provided in this chapter Licensee shall have no responsibility for the management, operation or administration of PEG channels and shall have no editonal control pursuant to A R S. § 9-506(D)(1) (b) PEG channels located on the basic cable service tier shall be grouped together and located on the system in reasonable proximity to other commercial video channels on the system Licensee will deliver the PEG channels to subscnbers at the same visual and audio quality, same functionality and at the same bit rate as licensee delivers the primary signal of local television 20 network broadcast stations on its cable TV system ("Network TV"), such that the PEG channels are indistinguishable from Network TV in video and audio quality and functionality. Should licensee convert the basic cable service tier to digital format, subscribers must be able to contmue to receive PEG channels free of charge except for the standard rate applicable for the basic cable service tier PEG channels must be receivable by subscribers without special expense, other than the expense required to receive basic cable service or digital service,as applicable. Licensee must maintain PEG channels consistent with FCC technical standards If no FCC standards for PEG channels exist,licensee must maintain PEG channels using FCC technical standards for local over- the-air television channels The city recognizes that licensee is unable to improve the technical quality of PEG channels but licensee must not degrade the technical quality once it is received by licensee Licensee agrees not to encrypt PEG channels any differently than other commercial channels available on the system unless the city and licensee mutually agree in wnting to a non- traditional format that is not similar to those of broadcast channels. (c)Upon 180 day advance wntten notice to licensee,the city shall have the right to require that licensee carry one (1) of the PEG channels in both SD and HD format consistent with the manner and tier placement in which licensee delivers the primary signal of Network TV. City shall have the sole discretion to determine which of its PEG channels migrate to HD without the addition of mandates or content restrictions HD resolution will be the same resolution used in licensee's HD tier, such that the PEG HD channels are indistinguishable from Network TV in video and audio quality and functionality Licensee will continue to carry the city PEG channels in SD format in addition to HD format as long as there are SD channels in licensee's basic channel lineup (d) Licensee must permit the city to operate a production studio (the "Studio") located in city buildings at a site determined by the city Licensee, at its sole cost, will design build and maintain all PEG upstream feeds, connections and distnbution facilities between its video channel aggregation point and the Studio in a manner so that no degradation m signal quality or content as origmated by city shall occur. Licensee must furnish a new state-of-the-art digital fiber optic transmission system consisting of transmitters and receivers Transmitters and receivers must be of the type consistent and compatible with current industry standards for the application of continuous conversion of broadcast quality audio and video to date for transport over fiber optic cable. Licensee must interconnect at its sole cost the Studio to the headend or other main distribution point of the system for distnbution of the programming of the PEG channels with the above-mentioned fiber optic cable to a point designated by the city At the request of the city, licensee at licensee's cost shall provide timely and reliable advice regarding acquisition, maintenance and use of any Studio and production equipment that may be obtained for that purpose by the city (H) System physical design process Licensee shall provide city with detailed design maps defining the geographical and technical physical design of the system, showing all areas of the city to be served by each hub,as well as the construction and energization schedule by hub area for the upgraded systems Maps shall be provided at least 60 days pnor to the release for construction. The city may review the design and accompanying maps and submit comments to licensee for 21 review within 15 days of the date each map is provided to the city for review Licensee shall integrate and implement city's comments into the construction plan. (I) Interconnection.A licensee shall mterconnect its cable TV system with other systems located in the city,m nearby cities,or counties upon the request of the council,where the Apache Junction cable TV system and the adjacent system are both owned by the same cable operator, where the cable operator's share a common controlling parent or affiliate or where economically feasible (J) Local broadcast channels Each cable TV system shall carry as part of the basic local channels broadcast in its service area as required and defined in FCC regulations as amended. (K) Technology review and technical amendments (1) The city and licensee shall meet to discuss changes in cable TV system laws, regulations, technology, competing services, the needs of the community and other factors impacting cable systems As a result of these discussions, this license may be modified by the city and the licensee to respond to the change in laws,regulations,technology,competing services,the needs of the community or other factors impacting cable TV systems. (2) If any of the following conditions occur, and upon wntten request of either licensee or city, the city manager and licensee may agree to meet and discuss in good faith the terms of a mutually agreeable license amendment. (a) Cable service similar to cable service offered by licensee is provided by any entity using the public nghts-of-way, which is not subject to similar licensing requirements of the city (b) The cable act is amended to allow licensee to provide intrastate or interstate telecommunication and any regional communications company to provide cable service (c) Any other significant event occurs, including but not limited to a final non- appealable order or judgment by a court of competent jurisdiction, which either licensee or city believes may impact the current terms and conditions of the license (d) The purpose of the meeting and discussion is to use best efforts to reach mutually acceptable agreement for recommendation to the council for proposed council action within ninety days of such written request, on how to amend the license to relieve the city or the licensee from any commercial impracticability,which apses from the condition in question This provision shall not require that the license be amended,however it is intended to facilitate a process whereby the parties may reach a mutually acceptable agreement. (L) Conditions of public rights-of-way occupancy. (1) General construction practices Licensee's construction practices shall be in accordance with all applicable federal, state and local laws, rules and regulations, including but not limited to the federal Occupational Safety& Health Administration Regulations, as adopted by the State of Arizona All installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of applicable codes (2) General operational practices 22 Pik (a) The construction, operation and maintenance of licensee's system, including but not limited to the headend and distribution network, towers, house connections, structures,poles, wire,cable,coaxial cable, fixtures and practices, shall be performed by appropriately licensed and qualified maintenance and construction personnel (b) The system shall be kept m a safe and suitable condition and shall be in compliance with,maintained,repaired and constructed in accordance with the applicable standards,procedures /'iN and practices contained in the National Electnc Code and the National Electrical and Safety Code, as those codes may, from time to time,be amended, and shall additionally be mamtamed so as not to endanger or interfere with improvements the city may deem necessary,or to unlawfully interfere in any manner with the nghts of any property owner, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic on public rights-of-way. (3) Safety Licensee shall at all times employ the standard of care attendant to the risks involved and shall install and maintain in use commonly accepted methods and devices for preventing failure and accidents which are likely to cause damage,injury or nuisance to the public, including public employees (4) Testing of RF Radiation Cumulative Leakage Index("CLI"). Licensee shall at all times comply and perform all testing in accordance with FCC rules and regulations. Licensee shall have the right to discontinue its service to any premises where RF radiation which licensee cannot control is originating from inside the premises Once a year, licensee shall provide notice to the city of its schedule of RF leakage monitoring and testing Upon the city's request, licensee shall furnish the city with copies of the monitoring and testing data and results following licensee's performance of scheduled RF leakage monitoring and testing. (5) Underground In all areas of the city where the cables, wires and other like facilities (electric and telephone)of public utilities exist underground,or are required by the city to be placed underground, licensee shall also place its cables,wires or other facilities underground. /'k (6) Pole attachments. Licensee shall use the poles and other properties of the city pursuant to any pole attachment agreements or public utility companies operating within the city, and licensee shall not construct, erect or maintain any support poles or other properties in the public rights-of-way within the city for the operation of its system except upon the express permission of the city,which consent shall not be unreasonably withheld upon a showing of need by licensee In all areas of the city where the cables,wires and other facilities of licensee are attached to any city- owned utility poles, licensee shall maintain those attachments subject to payment to the city in an amount determined by written agreement between the city and licensee (M) Placement offacilities (1) This license agreement does not alter the city's governmental power to establish regulations of general applicability on the erection, construction or installation of any facilities which may be constructed, maintained or operated by a person authonzed to use and occupy the streets and other public rights-of-way, includmg a cable TV system operator. 23 (2) Licensee shall comply with those requirements, including obtammg permits prior to excavation and providing maps showing where construction or excavation is planned, and upon completion,providing maps showing actual construction if any changes are authorized. (3) The city retains the right to designate where licensee may place its facilities within the streets and other public rights-of-way (N) Relocation for public improvements, request of the city, governmental powers Whenever because of public necessity or the welfare of the public generally,the city shall elect to change the grade of any street, or to sell or vacate any street, easement, or other public rights-of-way, or to construct or reconstruct any water lines, sanitary or storm sewers,watercourses,drainage ditches, conduits, playgrounds, traffic control devices or other public improvements, licensee shall, after 30 days written request from the city, remove and relocate its poles, wires, cable, conduits and other fixtures at its own expense (0) Transaction privilege taxes (1) Licensee shall obtain a city business license,which will be the mechanism for assessing all transaction privilege taxes (2) Licensee shall pay all required taxes in a timely manner and shall allow access to its sales and construction records upon reasonable request of the city at the centrally located business office during regular business hours (3) If audited,licensee shall comply with all requests of the city,and shall pay all applicable arrearages and or fees. (4) Failure to pay the assessed tax or failure to make a timely appeal of such assessment pursuant to the city tax code is considered a violation of the terms and conditions of the license agreement, which may result in liquidated damages set forth herein. (5) A licensee must obtain a transaction privilege tax license to conduct business in the corporate limits of the city In addition, licensee shall notify the city clerk of any and all ^, construction agreements it has with any independent contractors and their subcontractors for any work to be performed within the city,who shall also be licensed in the State of Arizona and shall also obtain a transaction privilege tax license to conduct business within the city limits, Licensee is responsible for ensuring such tax license is obtamed by its independent contractor and subcontractors. § 14-1-9 FEES, BONDS, LETTERS OF CREDIT, LIQUIDATED DAMAGES AND APPEALS. (A) Application fee. Each application for a license to be granted under the authority of this chapter shall be accompanied by a non-refundable filing fee in the amount specified below, by certified or cashier's check made payable to the"City of Apache Junction" (1) For an initial license or renewal $2,500, 24 /'\ (a) An amount determined by the City to be used to offset all direct, reasonable costs incurred by the City in granting the license not defrayed from fees forthcoming from the provisions of subsection A of this section (2) For consent to transfer or change ownership. $2,000, and (3) For license modifications $2,500. eIN (B) License fee (1) In consideration of the fact the public right-of-ways of the city will be used by a licensee in the operation of its cable system within the boundaries of the city and the public rights- of-way are valuable properties acquired and maintained by the city at great expense to its taxpayers, and in consideration of the costs incurred by the city in regulating and administering each cable license,the licensee shall pay annually to the city 5%of the licensee's gross revenue (2) This payment shall be computed quarterly, for the preceding quarter, as of March 31, June 30, September 30 and December 31 of each year Each quarterly payment shall be due and payable no later than 30 days after the relevant computation date Each payment shall be accompanied by a financial report showing in detail the gross revenues of the licensee related to that quarter. (3) Except as provided in division (B)(8) below and subject to 47 U S C § 542, the payment required pursuant to this article shall be in addition to any other tax or payment owed to the city pursuant to any other applicable ordinance or chapter of the city code,regulation or law of the county, state or federal government (4) A license fee not received in full by the city within 30 days of its due date shall be deemed delinquent and subject to a late fee of 2%of the amount overdue plus interest at the prime rate as reported in the Wall Street Journal (5) Where the licensee fee is based on gross revenues, the licensee shall file, with each /'N license payment,a statement of the gross revenues for the period on which the fees are based Such a licensee must file within 3 months of the end of its fiscal year a statement of gross revenues for the preceding year, which is either audited or certified as accurate by an officer of the licensee Any payment of license fees to adjust for a shortfall in the quarterly payments for the precedmg year must be made not later than the filing date for the audited annual statement of gross revenues Adjustments for any overpayment will be credited to subsequent quarterly payments Interest and late charges (as specified above)will not be imposed for any payment necessary as a result of the yearly adjustment if the payment to correct the shortfall does not exceed 10%of the total payments made during the preceding year. In the event the payment exceeds 10%, the licensee is liable for interest and late charges for the entire amount due (6) The city manager shall have the nght, upon reasonable notice, to inspect or audit during normal busmess hours a licensee's records showing the gross revenues and other relevant underlying data and information Upon examination of the information, the city manager has the nght to recompute any and all amounts paid under a license Any additional amounts due the city 25 as a result of an audit shall be paid by the licensee within 30 days following wntten notice to the licensee by the council, which shall include a copy of the inspection or audit report. In the event that an inspection or audit results in additional monies owed the city in excess of 5% of the total paid,the licensee shall bear the total cost of the audit,and late charges and interest on the additional amount due (7) No acceptance by the council of any payment shall be construed as an accord that the amount paid is in fact the correct amount nor shall such acceptance of payment be construed as a release of any claim the council may have (8) There shall be allowed as an offset agamst the license fee due under this article any amounts licensee paid to the city dunng the prior quarter in pnvilege license (sales) taxes, provided, however, that there shall be no offset to the extent that licensee made payments of pnvilege license (sales) taxes of any gross income (within the meaning of the pnvilege license [sales]tax ordinance)which is not included in gross revenues under this chapter The license shall provide for suitable procedures and methods for audit of this offset. (C) Performance bond and irrevocable letter of credit generally. Licensee shall obtain and maintain dunng the entire term of the license, and any renewal or extensions thereof, a performance bond in the amount of$100,000 to ensure the licensee's faithful performance of its obligations under the cable law and this agreement, as well as an irrevocable letter of credit in the amount of$25,000,both being provided to the city attorney within 30 days after execution of the license agreement and pnor to any construction work in the public rights-of-way (D) Components of peiformance bond The performance bond shall provide the following. (1) There shall be recoverable by the city jointly and severally from the principal and surety, any and all fines and penalties due to the city, and any and all damages, losses, costs and expenses suffered or incurred by the city resulting from failure of the licensee after notice and opportunity to cure to faithfully comply with. (a) The material provisions of this agreement, the cable law and other applicable law (b) All orders,permits and directives of the city (c) Payment of fees due to the city (d) Payment of any claims or liens due to the city (2) (a) The losses, costs and expenses shall include but not be limited to attorney fees and other associated expenses. (b) The total amount of the performance bond shall be forfeited in favor of the city in the event the licensee abandons the system at any time dunng the term of the license or extension period. (3) The performance bond shall be issued by a surety licensed to do busmess in the State of Anzona and with an A+9 or better ratmg for financial conditions and financial performance in 26 Best's Key Rating Guide, Property/Casualty Edition, and shall be in a form approved by the city with the following endorsement "This bond may not be canceled or allowed to lapse,until 60 days after receipt by the city by certified mail,return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not renew " ^ (4) At such time as 95% of planned construction in the city is complete, as specified in license agreement,the council may,at licensee's request,reduce or eliminate the performance bond requirement. (5) The nghts reserved by the Council with respect to the bonds required are in addition to all other rights and remedies the Council may have under this chapter,the license agreement or any other law (E) Irrevocable letter of credit. Licensee shall provide an irrevocable letter of credit in the amount of$25,000 from a financial institution licensed to do business m the State of Anzona to secure its performance of all its obligations under this agreement and the cable law (1) (a) The form and content of the letter shall be approved by the city attorney and contain the following endorsements. "This letter of credit may not be canceled or allowed to lapse until 30 days after receipt by the city manager,by certified mail,return receipt requested, of a wntten notice from the issuer of the letter of credit of its intent to cancel or not to renew " (b) In the event the letter of credit is insufficient to pay the city for any compensation, damages, penalties, costs or expenses owed it pursuant to this chapter or the license agreement, the licensee's performance bond may be drawn upon by the city manager for any amount due the city over and above the amount of the letter of credit (2) The rights reserved to the city manager with respect to the letter of credit are in addition to all other rights it may have under this chapter,the license agreement and any other law (3) Failure to maintain the letter of credit as required shall constitute a violation of the provisions of this chapter. (4) The city may withdraw an appropriate amount from such funds including mterest and penalties as applied against the letter of credit amount if in compliance with division(H)below. (5) Within 15 days after the city gives notice that an amount has been withdrawn from the letter of credit amount, the licensee must deposit a sum of money equal to the amount withdrawn If licensee fails to deposit such amount, the entire letter of credit amount remaining shall be forfeited In addition, the failure may be grounds to revoke the license or take any other enforcement action (F) Liquidated damages Because licensee's failure to comply with the provisions of the license and this agreement will result in injury to the city, and because it will be difficult to estimate the extent of such injury, the licensee agrees to pay to the city liquidated damages for the following 27 ooN violations of the license which represent both parties'best estimate of the damages resulting from the specified violation.To maintain that estimate,the parties agree that liquidated damage amounts shall be increased each year in accordance with the CPI (1) Failure to provide government and economic development channels and failure to make PEG capacity available, failure to construct required links to PEG facilities; $1,000 per day for each day the violation continues,in addition to any monetary payment under this agreement or the cable law /11 (2) Failure to submit required plans indicating expected dates of installation of various parts of the system, and failure to supply information, reports or filings lawfully required under the license agreement or applicable law or by the city $400 per day for each day the violation continues. (3) Failure, unless such failure is beyond the licensee's control, of the EAS to perform in the event of a public emergency or vital information situation. $250 per occurrence (4) Failure to test,analyze and report on the performance of the system following a request from the city manager to do so, and failure to pay for consultant fees pursuant to this license agreement. $200 per day for each day the violation continues. (5) For a violation of customer service standards $200 per violation (6) Failure to render required payment for reimbursement of any license expenses, or liquidated damages or failure to pay any required taxes to city. $100 per day, in addition to any monetary payment due under this agreement or the cable law. (7) Failure to file, obtain or maintain any required performance bond or letter of credit amount. $100 per day. (8) Failure to restore damaged property $50 per day, in addition to the cost of the restoration as required elsewhere herein (9) For violation of technical standards established by the FCC• $50 per day. (10) For failure to comply with reasonable order of the city manager $50 per day. (11) Failure to properly install facilities (e g conduit at less than minimum depths, lines laying on top of ground, fences, and walls). $50 per day (12) For failure to remedy any other violation of this chapter or violation of the license agreement $50 per day (G) Remedies If the licensee violates any provision of law or of this license agreement,the city may have one or more of the following actions. (1) Impose liquidated damages provided herem, (2) Reduce the duration of the license period on any basis the city determines is reasonable and affords licensee reasonable due process, 28 (3) Require licensee to pay its subscribers or classes of subscribers in an amount and on a basis the city determines is necessary to cure the breach or default,or equitably compensates for the violation; or (4) Seek legal or equitable relief from a court of competent jurisdiction. (H) Procedure for correcting license violations (1) Notice of violation Should the city determine that licensee has violated one or more terms,conditions or provisions of this license agreement,a written notice shall be given to licensee informing it of an alleged violation(a "violation notice") The city manager shall set forth in such violation notice at a minimum, the following. (a) Amount to be assessed, (b) Factual basis for such assessment, and (c) Specific license provision alleged to have been violated 1 Licensee shall have 14 days from the date the violation notice is given to inform the city manager in wntmg of the action licensee will take to correct the violation (a "correction notice") and to begin corrective action, or to dispute that a violation has occurred (a "notice of dispute"). 2 If corrective action is undertaken, it shall be completed within 30 days of the date the violation notice is given, unless licensee's correction notice shows that the corrective action cannot be completed within 30 days with the exercise of all due speed or diligence,in which case licensee shall have a reasonable extension of time in which to complete the corrective action. 3 Any notice of dispute shall specify the matter disputed by licensee and shall stay the running of any performance or corrective deadlines pertaining to the matter in dispute, and shall stay any other action the city may be permitted to take under this license agreement or /'1 applicable law (2) Appeals (a) In the event that licensee contests the city manager's assessment of liquidated damages, or fails to respond to the above-mentioned notices,within 14 days the city manager shall convene an administrative hearing. (b) Licensee may pay the fine, proceed with this hearing or waive its rights to this administrative hearing and proceed directly to the public hearing before the council 1 There shall be an administrative hearing conducted by the city manager, and licensee shall be afforded procedural due process, including an opportunity to be heard and to present evidence Within 14 days after the conclusion of such administrative hearing, the city manager shall issue a determination In that determination the city manager may a. Find that licensee is not in violation of this chapter or the license agreement, 29 b Find that the licensee is in violation of this chapter or the license agreement,but that violation was with just cause and waive any penalty that might otherwise be imposed, c Find that licensee is in violation of this chapter or of the license agreement, assess liquidated damages,take corrective action and foreclose on all or any appropriate part of the letter of credit or performance bond provided for in this chapter; or d Find that licensee is in material violation of this chapter and the license agreement and recommend the council declare the licensee in violation and recommend termination of the license agreement to the council,provided the council may consider such action only after a public hearing as set forth below. 2 If a public hearing before the council is requested by licensee or is held otherwise, it shall be de novo and it shall convene within 30 days of the request thereof Licensee shall be afforded full due procedural process, including without limitation, an opportunity to be heard, to present evidence and to cross-examine witnesses The council's decision, which shall mclude findings of fact and conclusions, shall be made not later than 30 days after the conclusion of the hearing In that decision,the council may. a Find that licensee is not in violation of this chapter or the license agreement, b Find that licensee is in violation of this chapter or the license agreement, but that violation was with just cause and waive any penalty that might otherwise be imposed, c Find that licensee is in violation of this chapter or of the license agreement, assess liquidated damages,take corrective action and foreclose on all or any appropriate part of the letter of credit and/or performance bond provided for elsewhere in this chapter, or d Find that licensee is in material violation of this chapter and the license agreement and declare the licensee in violation and revoke the license agreement. (3) Licensee's options. (a) If after the hearing the disputed claim is upheld by the council, licensee shall have 30 ^ days from the date of the mailing of the decision to remedy the violation or failure, unless corrective action cannot be completed within 30 days with the exercise of all due speed and diligence, in which case licensee shall have a reasonable extension of time in which to complete corrective action (b) Alternatively, licensee retains its right to seek review of the disputed matter under applicable law. The submission of a matter to mediation or to a court of competent jurisdiction shall stay the running of the above-described correction period § 14-1-10 TERMINATION AND REVOCATION. (A) Termination The license shall terminate, upon the expiration of the term thereof, unless renewal is successfully applied per applicable laws. (B) Revocation. 30 Olk (1) If a licensee is in material violation of this chapter or in default of the terms of its license agreement, the city manager may make written demand that the licensee come into compliance with said requirements within a reasonable period of time, as specified in this chapter If, after the cure period provided for m this chapter has run, the licensee is unwilling or unable to do so, the city manager may recommend the revocation,alteration or suspension of the license to the council, specifying the reasons for such action (2) A copy of any such recommendations shall be served by certified mail, return receipt requested upon the licensee,and the licensee shall be given at least 14 days notice prior to the date of a public hearing before the council to consider such action, and the licensee will be given an opportunity to present evidence and make argument at such meeting. (3) The council shall consider the recommendations, the response of the licensee and hear from any other interested persons, and shall determine whether or not the licensee is in violation or default of its obligations and, if so, whether such failure was with just cause. (4) If the council finds that the failure by the licensee was with just cause, the council shall direct the licensee to comply with such time and manner and upon such terms and conditions as are reasonable (5) If the council determines that the licensee's failure was without just cause,the council may declare the license revoked, altered or suspended. The council may provide a specified period of time for the licensee to come mto compliance before the revocation takes effect. (6) A license may be revoked, altered or suspended by the council on the following grounds, among others, and taking into account any aggravating or mitigating circumstances (a) Fails to comply with any material provision of this chapter or the license agreement; (b) Makes willful and material false or misleading statements in any application; (c) Engages in the practice of any fraud or deceit upon the city or subscribers; (d) Fails to abide by the privacy provision of this chapter, (e) Fails to make timely payment of any monies due the city pursuant to this chapter; (f) Unless otherwise provided in the license agreement, fails to commence construction in the license area within 3 months and to commence basic service within 6 months from the effective date of the license agreement, (g) Fails to file and maintain the bonds, insurance, records, failure to pay license fees or assessed property taxes; (h) For repeated material failure to maintain service quality under the standards prescribed for which the licensee receives notice and fails to cure, or (i) Fails to restore service after 24 consecutive hours after notice to the licensee of interrupted service to the entire system, except when such interruption is beyond the control of the licensee 31 (C) System disposal (1) In the event of termination or revocation of a license,the licensee involved shall offer to sell the cable TV system, at the fair market value,to a new licensee or applicant for a license (2) The fair market value shall be determined in accordance with generally accepted appraisal procedures The original cost of all tangible and intangible property,as well as salvage value,book value,replacement cost,cash flow and other factors will be considered (3) Under no circumstances shall any valuation be made for any right or pnvilege granted by license Should the licensee fail to negotiate a sale, as descnbed above, the city may purchase the system at the fair market value for the purpose of leasing to qualified operator until a buyer can be found,pursuant to the provisions of A R.S. § 9-509 (D) Continuity of service (1) Licensee shall provide continuous service for the entire term of the license agreement to all subscribers and users in return for payment of the established rates, fees and charges (2) If licensee seeks to sell or transfer, or if the city revokes or fails to renew the license, licensee shall continue to operate the system as trustee for its successor in interest until an orderly and lawful change of operation is affected. (3) This period of operation shall not exceed 120 days from the occurrence of any of the above events Revenues accrued during that penod of time shall be received by the operator (4) During that time,the cable system shall be operated under terms and conditions consistent with the most recent license agreement and this chapter. (E) Revocation for cause In addition to all other rights, powers and remedies available to the city, the city shall have the additional, separate and distinct nght to revoke this license agreement and all rights, authonty, power, privileges and permissions granted licensee by this license agreement if licensee substantially fails to cure or correct a matenal violation of this license agreement within the applicable time periods following compliance within this agreement, absent licensee's pursuit of further remedies as provided for in this agreement or following a final decision of a court of competent junsdiction reviewing the disputed matter (F) Revocation by ordinance (1) Revocation of the license shall be accomplished by passage of an ordinance at a properly noticed public hearing (2) An ordinance revoking the license shall include the reason for the council to justify revocation. The effective date of the revocation shall be stated in the ordinance The license agreement shall terminate on the effective date of the revocation. (3) An ordinance revoking the license shall not be passed without 30 days written notice to licensee that an ordinance to revoke the license will be considered by the council Licensee shall 32 retain the privilege to be heard by the council or any council committee regarding the proposed revocation ordinance (4) Licensee may request a review of the revocation findings and conclusions pursuant to applicable law and shall retain any other remedy which may be available to it under law. (G) Continuance of service after revocation.The city may require licensee to continue operating its system after revocation until operation of the system can be transferred to a new owner or the city exercises its rights herein (H) Removal after revocation (1) Upon revocation of the license and after a review of the revocation findings and/or conclusions by a court of competent jurisdiction, if review is sought by licensee, the city may require licensee to remove, at licensee's expense,any above-ground portion of its system from any street or other public right-of-way. (2) In removing its underground system,licensee shall refill and compact,at its own expense, any excavation that shall be made, and shall leave all streets and other public rights-of-way, and private property, in reasonable condition, and without affecting, altering or disturbing in any way electric, telephone, gas, steam or water utilities or other cable system operator cables, wires or attachments (3) The insurance, indemnity and damage provisions of this license agreement shall remain in full force and effect during the entire term of removal. (I) Failure to remove system. If licensee fails to commence removal of its system, or the part that was designated,in accordance with this section,within 60 days after written notice of the city's demand for removal is given, or if licensee fails to complete removal without 1 year after removal has begun,the city shall have the right to exercise one of the following options. (1) Assumption of ownership. (a) Declare all right, title and interest to the system to be in the city or its designee with all right of ownership including, but not limited to, the right to operate the system or transfer the system to another for operation. (b) Upon that declaration by the city, licensee shall be entitled to receive an equitable price from the city for the value of the system (2) Abandonment of the system. Declare the system abandoned and cause the system, or that portion designated by the city, to be removed. The cost of the removal shall be recoverable pursuant to the insurance and indemnity provisions of this license agreement, or from licensee directly (J) Additional duty to remove property The city may require licensee to remove any above- ground portion of the system if licensee ceases to use that part of the system m the city for a continuous period of 12 months. 33 § 14-1-11 RENEWAL. The procedures for renewal of any cable license shall be governed by federal and state law, as of the time the license is in effect. However, should there be no active renewal provisions, council may amend this chapter with renewal procedures which shall govern all licenses in effect or thereafter granted by city § 14-1-12 TRANSFERS AND CHANGE OF CONTROL. (A) General restrictions No sale, transfer, assignment or lease of the license, or sale, transfer, assignment,lease or fundamental corporate change of or in licensee, including,but not limited to, a fundamental corporate change in licensee's parent corporation or any entity having a controlling interest in licensee,the sale of a controlling interest m the licensee's assets,a merger,including the merger of a subsidiary and parent entity, consolidation, or the creation of a subsidiary or affiliate entity, shall take place until a written request has been filed with city requesting approval of the sale,transfer or corporate change and such approval has been granted or deemed granted,provided, however, that the approval shall not be required where licensee grants a security interest in its license and/or assets to secure an indebtedness. (B) Controlling interest restrictions. (1) Any sale, transfer, exchange or assignment of stock in licensee, or licensee's parent corporation or any other entity having a controlling interest in licensee, so as to create a new controlling interest therein, shall be subject to the requirements of this section (2) The term controlling interest as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised (3) In any event, as used herein, a new controlling interest shall be deemed to be created upon the acquisition through any transaction or group of transactions of a legal or beneficial interest of 15% or more by 1 person Acquisition by 1 person of an interest of 5% or more in a single transaction shall require written notice to city (C) Filing requirements The licensee shall file, in addition to all documents, forms and information required to be filed by applicable law,the following. (1) All contracts, agreements or other documents that constitute the proposed transaction and all exhibits, attachments or other documents referred to therein which are necessary m order to understand the terms thereof, (2) A list detailing all documents filed with any state or federal agency related to the transaction including,but not limited to,the PUC,the FCC,the FTC,the FEC,the SEC or any applicable state agency Upon request,licensee shall provide city with a complete copy of any such document, and (3) Any other documents or information related to the transaction as may be specifically requested by the city (D) Time limit City shall have such time as is permitted by federal law in which to review a transfer request. 34 (E) Costs and filing fees The licensee shall reimburse city for all legal, administrative and consulting costs and fees associated with city's review of any request to transfer Nothing herein shall prevent licensee from negotiating partial or complete payment of such costs and fees by the transferee Licensee may not itemize any such reimbursement on subscriber bills,but may recover such expenses m its subscriber rates. Licensee shall also pay a $2,000 fee for a sales, transfer, assignment or lease request pursuant to section § 14-1-9 (A)(2). /'S (F) Guarantees. In no event shall a sale,transfer,corporate change or assignment of ownership or control pursuant to this section be approved without the transferee becoming a signatory to this license and assuming all rights and obligations thereunder, and assuming all other rights and obligations of the current licensee to the city including,but not limited to,any adequate guarantees or other security instruments provided by the license. (G) City's right to purchase (1) In the event of any proposed sale, transfer, corporate change or assignment pursuant to this chapter, city shall have the right to purchase the system for the value of the consideration proposed m such transaction. (2) City's right to purchase shall arise upon city's receipt of notice of the material terms of an offer or proposal for sale, transfer, corporate change or assignment, which licensee has accepted Notice of such offer or proposal must be conveyed to city in writing and separate from any general announcement of the transaction (H) Waiver of rights by city. City shall be deemed to have waived its nght to purchase the system pursuant to this section only m the following circumstances. (1) If city does not indicate to licensee in writing, within 60 days of receipt of written notice of a proposed sale, transfer, corporate change or assignment as contemplated above, its intent to exercise its right of purchase, or (2) It approves the assignment or sale of the license as provided within this section. (I) City right of refusal. No license may be transferred if city determines licensee is in noncompliance of the license unless an acceptable compliance program has been approved by city The approval of any transfer or ownership pursuant to this section shall not be deemed to waive any rights of city to subsequently enforce noncompliance issues relatmg to this license even if such issues predated the approval,whether known or unknown to city. § 14-1-13 INDEMNITY AND INSURANCE. (A) Indemnification of city officials Licensee shall mdemnify, defend and hold harmless the city, the members of the council, including the mayor, and all other officials, employees and agents,boards or commissions,when acting in their capacity as municipal officials, employees or agents,boards or commissions,from and against any and all claims, suits and actions,liability and judgment for damages or otherwise- 35 erns es, (1) Damage to person or property. For actual or alleged injury or death to individuals, or damage to property, in any way arising out of or through,or alleged to arise out of or through,any act or omission of licensee or its officers, agents, employees or contractors, or to which licensee or its officers, agents, employees or contractors acts or omissions in any way contribute, (2) Violation of rights or interests Arising out of or alleged to arise out of any claim for damages, with respect to licensee's operation of a cable TV system, for invasion of the nght of pnvacy, defamation of any person, or the violation or infringement of any copyright, trademark, trade name, service mark or patent or any other right of any person, or (3) Statutory violations Arising out of or alleged to arise out of licensee's failure to comply with the provisions of any statute,regulation or ordinance of the United States,the State of Arizona or the city. (B) Defense of actions (1) Nothing in this license agreement shall prevent a party indemnified and held harmless by another from participating in the defense of any litigation by its own counsel at its sole expense. (2) That participation shall not under any circumstances relieve the indemnifying party from its duty defending against liability or paying any judgment entered against that party. (C) City's negligence or willful misconduct Notwithstanding anything to the contrary contained in this section, the city shall not be indemnified or reimbursed m relation to any matter, in any action, suit or proceeding. (1) Arising out of the operation, use or distribution of programming or services over the Government, Economic Development and PEG Channels facilities or access funding, or (2) In which the city,its officials, employees or agents,is negligent in the performance of its obligations under this license agreement, or has engaged in willful misconduct or criminal acts, provided, however, that licensee shall provide a defense even though, in good faith, it believes at the commencement of any action, that the city may have engaged in that conduct. If the city, its officials, employees or agents, is found to have engaged in that conduct, licensee shall be reimbursed by the city for all amounts paid and expenses incurred by licensee in connection with that action, suit or proceeding, including reasonable attorney fees (D) Indemnity for construction, maintenance and operation (1) The licensee shall at its sole cost and expense, indemnify, hold harmless and defend the city, its officials, boards, commissions, agents and employees by providing immediate defense with counsel approved by the council, against any and all claims, suits, causes of action, proceedings and judgments for damages arising out of construction, maintenance or operation of the cable TV system (2) City shall provide 30 days'notice of any claim or potential claim and shall provide copies of any summons and complaint 36 ANN (E) Required insurance The licensee, upon acceptance of the license agreement, shall provide the city with and maintain in full force throughout the term of the license agreement, insurance issued by a company duly authorized to do business in the State of Anzona, msunng with respect to the installation,construction, operation and maintenance of the system as follows. (1) Comprehensive general and automobile liability coverage including, but not limited to, blanket contractual liability,completed operations liability,broad form property damage including /N but not limited to coverage for explosion, collapse, underground hazard and automobile non- ownership liability This insurance shall be written m the following minimum amounts. (a) Comprehensive general liability- $2,000,000 combined single limit, bodily injury and property damage, (b) Comprehensive automobile liability. $2,000,000 combined single limit, bodily injury and property damage; and (c) Excess umbrella liability, covering all the above mentioned hazards, in the minimum amount of$5,000,000 (2) Workers' compensation coverage as required by the laws and regulations of the State of Anzona (3) All insurance policies required herein shall include the city as a named insured party (4) Licensee shall be solely responsible for all premiums due and payable for insurance required herein. Licensee shall provide to the city a certificate of insurance evidencing compliance with the coverage requirements listed above. (5) All insurance policies required herein shall be in a form approved by the City Attorney and shall include a 60 day notice of cancellation or modifying endorsement. (F) Self insurance. The provisions of this article, in the discretion of the city, may be satisfied by proof of self insurance. § 14-1-14 ADMINISTRATION. (A) Inspection of records The council reserves the right during the term of the license agreement and during normal business hours and upon the giving of reasonable notice to examine,audit and review licensee's contracts,engineering plans,accounting,financial data and,subject to subscriber pnvacy laws,service records relating to the property and operations of the licensee and to all other records required to be kept pursuant to this chapter. The records shall be treated as confidential by city and shall not be released, either orally or in any written form whatsoever,without the express written permission of the licensee, provided however that release shall be permitted in order for city to comply with the Arizona Public Records Act pursuant to A R S §§ 39-101 et seq and as amended (B) Licensee rules and regulations Copies of the rules, regulations, teens and conditions adopted by the licensee for the conduct of its business shall be provided to the city manager,upon request of the city manager. 37 # 1 t1 (C) City Manager (1) The city manager or his or her designee shall have responsibility for the day-to-day administration of cable operations within the city as governed by this chapter and the applicable license agreements (2) The city manager shall be empowered to take all administrative actions on behalf of the council except those actions specified herem which are reserved to the council or another city office or officer § 14-1-15 GENERAL PROVISIONS. (A) Non-discrimination Licensee shall not deny service, access or otherwise discriminate agamst subscribers, users or residents of the city. Licensee shall comply at all times with all applicable federal, state and city laws, rules and regulations, executive and administrative orders relating to non-discrimination and equal employment opportunities and requirements (B) Laws and codes Licensee shall comply fully with all applicable local, county, state and federal laws, codes,ordinances,rules and regulations. (C) Cumulative rights and remedies. Except as specified herein, all rights and remedies of the city manager and the council in this chapter are cumulative and may be exercised smgly or cumulatively at the discretion of the city manager or the council § 14-1-16 RIGHTS RESERVED TO COUNCIL. Without limitation upon the rights which the council may otherwise have,the council does hereby expressly reserve the right to amend any article or provision of this chapter for any reason determined to be desirable by the council including,but not limited to (A) New developments in the state of technology of cable systems; and (B) Any changes in federal or state laws,rules or regulations 38 ROLL CALL VOTE NOTES: f ç1) �1 rA \.11 yld) ,... I ITEM# MEETING O )1 I 7f MOTION BY: (4V SECONDED BY. APAi /YES NO ABSTAINED COUNCILMEMBER WILSON COUNCILMEMBER SERDY V COUNCILMEMBER WALDRON COUNCILMEMBER RIZZI VICE MAYOR BARKER I/ i COUNCLMEMBER EVANS MAYOR INSALACO V ..t UNANIM1IS IN FAVOR OPPOSED ABSTAINED TOTAL ROLL CALL VOTE NOTES Nii 0c) 1` A 71) i ITEM # MEETING OF, MOTION BY: cE4Ani\j SECONDED BY YES NO ABSTAINED COUNCILMEMBER EVANSJ/ VICE MAYOR BARKER , COUNCILMEMBER RIZZI I COUNCILMEMBER WALDRON V` COUNCILMEMBER SERDY COUNCILMEMBER WILSON /' MAYOR INSALACO UNANIMOUS IN FAVOR OPPOSED ABSTAINED TOTAL ITEM NO. 9 I MOVE THAT ORDINANCE NO 1413 BE READ BY TITLE ONLY WITH THE EMERGENCY CLAUSE AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. (Call upon the city clerk to read Ordinance No. 1413 by title only Majority vote required) I MOVE THAT ORDINANCE NO. 1413, AS READ BY THE CITY CLERK, (BE APPROVED AND ADOPTED) OR(BE DENIED). I MOVE THAT ORDINANCE NO 1413, AS READ BY THE CITY CLERK, BE APPROVED AND ADOPTED WITH THE FOLLOWING AMENDMENTS. PUBLIC HEARING 1. For PROPOSED RESOLUTION NO. 15-01, DECLARING NEW CHAPTER 14, CABLE TV SYSTEMS, A PUBLIC RECORD. 2. Will CITY ATTORNEY JOEL STERN speak to the Council? 3. Will the applicant or spokesperson please speak to the Council on this item? 4. Is there anyone from the public who wishes to speak on this item? (Are there any "Request to Speak" forms?) 5. If not, this hearing is closed. 6. Is there any discussion? 7. Call for a motion. 8. Call for a second. 9. Roll call vote. - City of Apache Junction, Arizona 300E Superstition Kf Boulevard Agenda Item Cover Sheet Apache Junction,AZ 85119 10-°. Agenda Item No. 10. File ID: 14-666 Sponsor: Joel Stern Agenda Date. 2/3/2015 Index: In Control. City Council Meeting Consideration of Resolution No 15-01, declaring as public record that certain document filed with the city clerk amending Apache Junction City Code, Volume 1, by repealing Chapter 14, Cable Systems, and adopting by reference a new Chapter 14, Cable TV Systems, by adding to the city code a new Chapter 14, entitled "Apache Junction City Code, Volume 1, Chapter 14, Cable TV Systems"with the emergency clause Attachments City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 ems oms RESOLUTION NO. 15-01 A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING AS A PUBLIC RECORD THAT CERTAIN DOCUMENT FILED WITH THE CITY CLERK AND ENTITLED "APACHE JUNCTION CITY CODE, VOLUME I, CHAPTER 14, CABLE TV SYSTEMS", AND DECLARING AN EMERGENCY. WHEREAS, Arizona Revised Statutes Annotated (hereinafter "A R S ") § 9-802 permits municipalities to enact the provisions of a code or public record in existence without setting forth such provisions in full text as long as the adopting ordinance is published in full text and at least three copies of the code or public record are filed in the office of the clerk of the municipality and are made available for public use and inspection; and WHEREAS, pursuant to A.R. S §§ 9-801 (1) and 9-802, such codes include cable system provisions, and WHEREAS, City staff has identified such provisions herein, and it is the intent of the City to declare such documents and compilations as public records, on file in the office of the City Clerk. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA AS FOLLOWS: SECTION I IN GENERAL 1 . That certain document entitled "Apache Junction City Code, egiN Volume I, Chapter 14, Cable TV Systems, " three copies of which are on file in the office of the City Clerk of the City of Apache Junction, Arizona, is hereby declared to be a public record, shall be made available for public use and inspection, and shall remain on file with the City Clerk SECTION II DECLARING AN EMERGENCY The immediate operation of the provision of this Resolution is necessary for the immediate preservation of the public peace, health or safety, and that an emergency is hereby declared to exist; and this Resolution shall be in full force and effect RESOLUTION NO. 15-01 PAGE 1 OF 2 elak oak from and after its passage, adoption and approval by the Mayor and City Council of the City of Apache Junction. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, THIS DAY OF , 2015. SIGNED AND ATTESTED TO THIS DAY OF , 2015. Ask JOHN S. INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: iim'` RICHARD J. STERN City Attorney RESOLUTION NO. 15-01 PAGE 2 OF 2 ROLL CALL VOTE NOTES (/0 l � ITEM# I MEETING 0 OaN& MOTION BY SECONDED BY • YES NO ABSTAINED COUNCILMEMBER WALDRON J COUNCILMEMBER EVANS COUNCILMEMBER SERDY VICE MAYOR BARKER COUNCILMEMBER WILSON COUNCILMEMBER RIZZI ✓ ) MAYOR INSALACO ✓ UNANIM0JS IN FAVOR OPPOSED ABSTAINED TOTAL r� ITEM NO. 10 I MOVE THAT RESOLUTION NO. 15-01, A RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, DECLARING AS A PUBLIC RECORD THAT CERTAIN DOCUMENT FILED WITH THE CITY CLERK AND ENTITLED "APACHE JUNCTION CITY CODE, VOLUME I, CHAPTER 14, CABLE TV SYSTEMS"; AND DECLARING AN EMERGENCY, (BE APPROVED) OR(BE DENIED) PUBLIC HEARING 1. For APPROVAL OF LICENSE AGREEMENT FOR A NON-EXCLUSIVE CABLE TV SYSTEM WITH QWEST BROADBAND SERVICES, INC., d/b/a CENTURYLINK, INC. 2. Will CITY ATTORNEY JOEL STERN speak to the Council? 3. Will the applicant or spokesperson please speak to the Council on this item? 4. Is there anyone from the public who wishes to speak on this item? (Are there any "Request to Speak" forms?) 5. If not, this hearing is closed. 6. Is there any discussion? 7. Call for a motion. 8. Call for a second. 9. Roll call vote. ,�c a, City of Apache Junction, Arizona 300 E Superstition Boulevard f. o: Agenda Item Cover Sheet Apache Junction,AZ 85119 yam. Agenda Item No 11 File ID: 14-667 Sponsor Joel Stern Agenda Date:2/3/2015 Index In Control. City Council Meeting Consideration of approval of license agreement for a non-exclusive cable TV system between the City of Apache Junction and Qwest Broadband Services, Inc , d/b/a CenturyLink, Inc Attachments: City of Apache Junction,Arizona Page 1 Printed on 1/27/2015 LICENSE AGREEMENT FOR A NON-EXCLUSIVE CABLE SYSTEM BETWEEN THE CITY OF APACHE JUNCTION AND QWEST BROADBAND SERVICES, INC., D/B/A CENTURYLINK, INC. THIS AGREEMENT, executed this day of , 2015, by and between the City of Apache Junction, an Arizona municipal corporation (the "City"), and Qwest Broadband Services, Inc. d/b/a CenturyLink, Inc., a Delaware Corporation (the "Licensee" or "CenturyLink"), hereinafter individually and collectively referred to as a "Party" or the "Parties". RECITALS A. The City is authorized to grant one or more non-exclusive licenses pursuant to Arizona Revised Statutes ("A.R.S.") §§ 9-501 et seq., and the Apache Junction City Code ("A J C C ") Volume I, Chapter 14, for operating and maintaining cable communications systems within the corporate boundaries of the City. B. CenturyLink has filed an application with the City for a cable license agreement (the "Agreement" or "License Agreement") and has paid the mandatory $2,500.00 application fee and the City Council has accepted the application for full consideration. C The City has undertaken an extensive review of cable service in the City, including but not limited to a review of the Licensee, its record of service, its facilities, the cable-related community needs of the City for both the present and future, and the Licensee's ability to carry out its commitments, and its overall financial, legal and technical qualifications to hold a City issued cable TV license. D. At the time of the grant of this Agreement, the City has found Licensee to be financially, technically and legally qualified to operate the Cable System. E. Licensee agrees to be bound by all the terms of this license, pursuant to A.J.C.C., Vol. I, Chapter 14, Cable Systems, as amended. F. The City has determined that the grant of a non-exclusive license to Licensee is consistent with the public interest. G. Pursuant to A.R S § 9-507(B), the City has held a public hearing affording the public the opportunity to comment on this license. 1 H. The City and Licensee have reached agreement on the terms and conditions set forth herein and the Parties have agreed to be bound by those terms and conditions. AGREEMENT 1. DEFINITIONS Except as provided below, all terms used herein have the definitions as set forth herein or in A.J.C.C., Vol. I, Chapter 14, Cable Systems and as set forth in this Agreement: A. "Remote Terminal" means a "Digital Subscriber Line Access Multiplexer" ("DSLAM") capable of offering Cable Services to Subscribers. B. "Easement", unless the context otherwise indicates, means those public rights-of-way owned by the City, the terms, conditions or limitations upon which are not inconsistent with the erection, construction or maintenance of a Cable System, its structures or equipment. C. "Expanded Basic Service" means the next most highly penetrated tier of cable service programming above the Basic Service tier excluding premium or pay-per-view services. D. "Installation" means the connection of the Cable System from a remote terminal to a subscriber's residence or place of business. E. "QC" means Qwest Corporation, an affiliate of Qwest Broadband Services, Inc. ("QBSI") and an indirect wholly-owned subsidiary of CenturyLink, Inc. F. "Living Unit" means a distinct address in the QC network inventory system where QC currently has, had in the past, or had planned to provide telephone or high-speed internet service to a customer. This includes, but is not limited to, single family homes, multi- dwelling (e.g., apartment buildings and condominiums) units and business locations. The Parties reserve the right to add additional definitions to this Agreement at any time in the future when both Parties agree additional definitions are needed to clarify the Agreement. Any additional definitions shall be treated in the same manner as any other amendment to the Agreement. 2 2. GRANT OF AUTHORITY A. License Granted. The City hereby grants a cable license to Licensee for the privilege to use the public rights-of-way for installing cables, wires, lines and other facilities to operate a cable system. This license grant does not expressly or implicitly authorize the Licensee to provide service to, or install cable, wires, lines or any other equipment or facilities upon property without owner consent (except for compatible easements or rights-of-way pursuant to 47 U.S.C. § 541(a)(2)) or to use publicly or privately owned utility poles or conduits without a separate agreement with the owners. This license grant authorizes the Licensee to so use, operate and provide similar facilities or properties rented, licensed or leased from other persons, firms or corporations, including but not limited to, any public utility or other licensee licensed or permitted to do business in the City; provided, however, that neither the Licensee nor the third party shall be relieved of any regulation or obligation as to its use of the facilities in the streets. This License Agreement is not a "franchise" under Arizona law (A.R.S. § 9-501). B. Non-Exclusive Grant Licensee's right to occupy and use streets and public rights-of-way is not exclusive, and may not be sold, transferred or assigned other than as set forth in the Cable Regulations in A.J.C.C., Vol. I, Chapter 14. The City may grant similar licenses for other cable systems and may permit others to use its streets and public rights-of-way for other purposes as it deems fit. Any privilege claimed under this License by the Licensee in any public street or other public property are subordinate to any prior or subsequent lawful occupancy or use thereof by the City or any other governmental entity, are subordinate to any prior lawful occupancy or use thereof by any other person, and are subordinate to any prior Easements therein, provided however, that nothing herein shall extinguish or otherwise interfere with property rights established independently of this Agreement. C. Effect of Competition. The City desires competition in cable services within its corporate limits and believes competition will benefit the residents of the City. Further, the City believes that competition can develop without substantial injury to Licensee or Licensee's ability to perform its promises in this Agreement. Licensee has entered into this Agreement with a full understanding that the City encourages and will facilitate development of competition with licensing terms and conditions no more favorable or less burdensome between cable operators as determined in City's sole discretion. 3 D. Term. 1. This License and the rights, privileges and authority granted hereunder shall take effect on March 1, 2015 (the "Effective Date") and shall terminate on March 1, 2020 unless terminated sooner as hereinafter provided. If, at the end of the third year Term after the Effective Date, Grantee offers Cable Services to 20% of the Living Units in the City, the Grantee, at its option, may elect to extend the Term of the License for an additional two (2) years to March 1, 2022. If, at the end of the fifth year Term after the Effective Date, Grantee offers Cable Services to 50% of the Living Units in the City, the Grantee, at its option, may elect to extend the Term of the License for an additional three (3) years to March 1, 2025. As of September 30, 2014, there were 26,505 Living Units in the City. E. Licensee's Acceptance Acceptance of this Agreement and all of the terms herein shall be reflected by the execution of this Agreement by Licensee. This Agreement must be accepted by Licensee within thirty (30) calendar days after passage of the ordinance granting this License, provided that all bonds, letters of credit and insurance certificates are also provided to the City by that date. F. Licensee's Acknowledgements. Licensee acknowledges that it has not been induced to enter into this Agreement by any understanding or promise or other statement, whether verbal or written, by or on behalf of the City or by any other third person concerning any term or condition of this Agreement not expressed herein. G. Compliance with Zoning and Construction Codes. Licensee must comply with the terms of all zoning, building and other ordinances, regulations, codes, guidelines and laws controlling the location or construction of its system, including without limitation towers, poles, cables, amplifiers, conduits, Remote Terminals, and all other facilities owned, leased and otherwise used by Licensee for a Cable System. This obligation includes requirements to obtain applicable permits and to pay applicable plan review, permit and inspection fees. H. Application of Apache Junction City Code, Chapter 14. This License is subject to and shall be governed by all terms, conditions and provisions of Chapter 14 of the A.J.C.C., Volume I, currently in effect and as amended, provided, however, that such amendments shall be reasonable and not materially modify the terms of this 4 License. Licensee agrees to be in compliance with all of these provisions at all times during the License Term set forth in Section 2(D) above. In the event of a conflict between the terms, conditions and provisions of Chapter 14 of the A.J.C.C., Volume I, and the terms, conditions and provisions of this Agreement refer to Section 12 (N) herein. Applicable Law. This License is subject to and governed by all requirements of the Cable Communications Policy Act of 1984, 47 U.S.C. Section 521, etseq , and any amendments thereto; A.R.S. §§ 9-505 through 9-510 and unless exempted by the terms thereof; and other federal and state laws and regulations and local laws ordinances and regulations governing cable service. In the event of a conflict between the terms and conditions of this License and the terms and conditions on which the City can grant a License, the federal and state law or statutory requirements of both shall control. J. Ownership of Facilities in Rights-of-Way Licensee promises and guarantees, as a condition of exercising the privileges granted by this License, that any Affiliate of the Licensee directly involved in the offering of Cable Services in the City or directly involved in the management or operation of the Cable System in the City, will also comply with the obligations of this License. However, the Parties acknowledge that QC will pull permits and be primarily responsible for the construction and installation of the facilities in the public right-of-way, which will be utilized by Licensee to provide Cable Services and QC will own, operate and maintain all such facilities. So long as QC does not provide Cable Services to Subscribers in the City, QC will not be subject to terms and conditions contained in this License pertaining to the delivery of Cable Services. QC's installation and maintenance of facilities in the public right-of-way are governed by applicable law. The Parties also acknowledge that if and when QC does provide Cable Services to Subscribers, QC must first obtain a separate license from the City. To the extent Licensee constructs and installs facilities in the public right-of-way, such installation will be subject to the terms and conditions of this License. 3. SYSTEM FACILITIES, EQUIPMENT AND SERVICES A. Guidelines for System Facilities, Equipment, and Services. The following performance guidelines shall serve as the initial minimum guidelines for the design, installation, maintenance and operation of the System: 5 1. Compliance with FCC Rules. All designs for, installations on, and maintenance performed on the System by the Licensee must be in accordance with ("FCC") rules and regulations governing technical performance and operating standards, currently in effect or hereinafter amended. 2. Continuous 24-Hour Operation. The System must be designed and capable of continuous 24-hour daily operation without material degradation of signal except during extremely inclement weather, and immediately following extraordinary storms which adversely affect utility services or which damage major System components. Any general testing of the System which causes any interruption to any subscriber's service must be completed between the hours of 1:00 a.m. and 5:30 a.m. Arizona Time, and Licensee must make reasonable efforts to notify subscribers within thirty (30) calendar days of such testing and possible interruption. 3. Specifications of System. a. General Requirements. Within ninety (90) calendar days after obtaining the necessary permits, licenses and authorizations, Licensee shall commence whatever construction and/or installation is necessary to begin providing cable services to the City and Subscribers. Licensee is under no obligation to activate a Remote Terminal, but Licensee may not, without permission of the City deactivate a Remote Terminal. b. General Description. The System is intended to provide cable services to Licensee's customers. c. Underground Facilities. Licensee's new cable, wires, and other equipment must be placed underground unless technologically impossible for such equipment to function properly. If the City in the future so requires, for all or any portion of the City, that all the utilities in such area place their lines underground, then Licensee shall in a reasonable period of time set by the City place its existing cable, wires, or other equipment in such area underground without charge, expense or liability therefore to the City. d. Technical Specifications. The System must at a minimum meet FCC requirements as set forth in 47 C.F.R. § 76, et seq. If federal laws or regulations are 6 subsequently amended, or minimum technical specifications are no longer mandated by the FCC, the FCC's technical specifications in effect at the time of adoption of the Agreement shall govern and remain enforceable under this Agreement unless specifically preempted by state or federal law. e. Picture and Sound Quality. The System must be capable of relaying without distortion to every Subscriber: (1) All picture and picture information, including, but not limited to color, teletext, closed-captioning information and other information displayed on a Subscriber's normally operating television screen; and (2) All sound and sound elements, including but not limited to stereo, second audio channel and all subcarriers and or otherwise modulated information reproduced by a Subscriber's normally operating television audio system. 4. FCC Technical Standards. Should the FCC promulgate amended technical standards which exceed these performance guidelines set forth within this Agreement, Licensee must operate its System so that it is capable of operating according to such FCC standards. 5. Blue Stake Center. Licensee must, if not already a member, become a member of the Blue Stake Center, or its equivalent, within thirty (30) calendar days following the Effective Date. 6. Stand-by Power. Licensee must provide stand-by power generating capacity at the headend and at all nodes. Licensee must maintain motorized or battery stand-by generators capable of at least forty-eight (48) hours' duration at the headend, and battery back-up power capability of at least forty-eight (48) hours' duration for all System nodes with automatic dialer response systems to alert the System headend when commercial power is interrupted. The Licensee must test the headend generator and provide all test results to City when the City deems such tests appropriate to ensure the system can be operated during a local commercial power outage. 7. Service for the Disabled. For hearing impaired Subscribers, Licensee must provide information concerning the cost and availability of equipment to facilitate the reception of the closed caption signal. In addition, the Licensee must have functional Telecommunication Device for the Deaf/Teletype ("TDD/TYY") (or equivalent) equipment at its call center and use such TDD/TYY equipment as required to communicate with the public using such equipment to communicate with Licensee. 8. Periodic Evaluation. The field of cable communications is rapidly changing and may see many regulatory, technical, financial, marketing and legal changes during the term of this Agreement. Therefore, in order to provide for a maximum degree of flexibility in this Agreement, and to help achieve a continued advanced and modern System, the following apply: a. City may require evaluation sessions at any time during the Term of this Agreement, upon sixty (60) calendar days' written notice to Licensee. b. Topics which may be discussed at any evaluation session may include, but are not limited to, application of new technologies, System performance, programming offered, access channels, facilities and support, municipal uses of cable, customer complaints, amendments to this License, judicial rulings, FCC rulings and any other topics City and Licensee deem relevant. c. As a result of a periodic review or evaluation session, City and Licensee shall meet and may develop such changes and modifications to the terms and conditions of this Agreement, as are mutually agreed upon and which are both economically and technically feasible. 9. Technical Changes and Modification Costs. Licensee agrees that it must not apply or seek to apply or make any claim that all or any part of the technical changes and modifications costs set forth in this Section 3(A)(9) are Licensee Fee Payments under 47 U.S.C. § 542 and/or applicable state law nor are the technical changes and modifications costs to be considered other payments or contributions to be made by Licensee to the City pursuant to this Agreement. Licensee must not deduct any technical changes and modifications 8 costs from, or offset such expenses against, any taxes, fees or assessments levied or imposed by the City on Licensee. 10. Acknowledgement and Waiver of Claims. Licensee acknowledges that it has had an opportunity to review the terms and conditions of this Agreement and that under current law Licensee believes that said terms and conditions are not unreasonable, arbitrary, and that Licensee has voluntarily entered into this Agreement and that Licensee believes City has the power to require the terms and conditions contained in this Agreement. Licensee agrees that it will not, at any time, set up against City in any claim or proceeding, any condition or term of the this Agreement as unreasonable, arbitrary, void as of the Effective Date of this Agreement or that City had no power or authority to require such term or condition 11. Design. Licensee's video network shall be fully integrated with its telephone network and shall use an Ethernet-based, switched digital video service (not a QAM-based broadcast system). The Cable System shall have a fully activated capability to provide broadcast quality of equal quality to those provided over a traditional 750 MHz or higher hybrid fiber coaxial cable system. Licensee shall make available high definition ("HD") capability to all Subscribers. 12. Digital Capability. The Licensee must design the System so that channel capacity may be readily expanded and digital programming delivered to Subscribers through digital video compression or similar appropriate technology without compromising signal or service quality or requiring alterations, upgrading or reconstruction. 13. System and Institutional Network Build Schedule. a. Licensee must install and thereafter maintain the functionality and access of the System and is responsible for all malfunctions of such System, including without limitation the repairing of damaged cables, conduit facilities, and any other portion of the System at Licensee's cost, regardless of how such damage occurred, unless it was caused by the negligence of City, in which case Licensee is still responsible for repair but may seek reimbursement of actual costs (without markup) from City. 9 b. Failure to commence and diligently pursue the above requirements in this subsection and to complete each of the matters set forth above, shall be grounds for liquidated damages or termination of the License. c. The City Council, in its discretion, may extend the time for the commencement and completion of construction and installation for additional periods if the Licensee acting in good faith experiences delays by reason of circumstances beyond its control. Such extension shall be considered in a public hearing with both Parties executing a written extension agreement after a vote of the Mayor and City Council. 14. System Acceptance Schedule. The procedure set for acceptance of the system for purposes of Term renewal is set forth in section 2(D). 15. Emergency Alert System and Audio Emergency Override. Licensee must install and thereafter maintain for use by the City, an Emergency Alert System ("EAS"), as required by FCC rules and regulations currently in effect and hereinafter amended. As a component of the EAS required by FCC rules, if and when it is technically feasible for local government to have EAS override capability, the Licensee must also provide a secure audio emergency override system to permit City Officials to interrupt the audio portion of all channels for the purpose of transmitting public safety, health, and welfare messages to all Subscribers. In the event that both systems are simultaneously activated, the Emergency Alert System shall take priority over the Audio Emergency Override System. 16. Public Service Drops. a. Public Buildings. Licensee must provide, free of charge and not subject to offset against the License Fee, throughout the term of this Agreement, one (1) service drop, two (2) outlets and two (2) converter units if necessary, and Basic Service and Expanded Basic Service (i.e. together the equivalent of sixty (60) or more Channels of programming) or the future analog or digital equivalent of such service tiers offered by Licensee in the City ("Complimentary Service") to all to all governmental or educational buildings in the City and such other public institutions subsequently 10 designated by the City as determined in the City's sole discretion including but not limited to: City Hall, the Multi-generational Center, the Library, the Public Works Department, Animal Control Division, the Police Department, and the Parks and Recreation Department Buildings (former City Attorney, City Court, and current Parks and Recreation Administration office buildings) ("Public Buildings") provided however, that such Public Buildings are within four thousand (4,000) cable feet of an activated Remote Terminal. Subject to the City providing all required Easements to Licensee if not already granted, all standard drops must be completed within thirty (30) calendar days of the request of such service drop. b. Designated Representative. For purposes of this Section, the term "Designated Representative" shall include anyone designated by the local governing body responsible for the Public Building in question. The Designated Representative may request complimentary service to Public Buildings which shall be made in writing. Licensee is solely responsible for all costs of extension for any installation which is less than 4,000 copper loop-feet Licensee's activated Remote Terminal. c. The City acknowledges and agrees that Licensee shall have no obligation to provide complimentary service to any private person or entity which is occupying space in a Public Building. 17. Residential and Commercial Service Drops Licensee must make Cable Service available to any residential dwelling unit or any commercial establishment within the City at the standard connection charge if the connection requires a Standard Drop. Such service must also be completed within seven (7) calendar days from such date of request, subject to Licensee's diligent efforts to obtain any required Easements or permits and for payment for any additional facilities 18. Interconnection. Licensee must design the System so that it may be interconnected with all of the other cable systems or similar communications systems in the City. Interconnection of systems may be made by any appropriate methods that ensure no material degradation of signal or service occurs between the connected systems. 11 19. Provision of Cable Service in General. Licensee must make cable service available to each residential dwelling unit in the City located within four thousand (4,000) cable feet of a Remote Terminal. 20. Annual Meeting. At a minimum, each year this License is in effect, Licensee must meet with the City in the first quarter of the calendar year and provide a detailed report to the City the Licensee's construction schedule for the next year, including mapping. Additional meetings may be coordinated by either Party throughout the year, if necessary 21. Seasonal Service. For Subscribers desiring only seasonal service, Licensee shall either offer seasonal service at a reduction from its standard rates or shall offer a reduced prescheduled seasonal installation and disconnection charge. 4. OPERATION AND MAINTENANCE PROVISONS A. Customer Service Standards. Licensee must furnish, render and sell Cable Service to its subscribers in a manner which, at a minimum, conforms to the FCC Customer Service Standards pursuant to 47 C.F.R. 76.309 and 47 C.F.R. 76.1601-1603, as amended from time to time and so long as those standards exist. Notwithstanding Licensee's obligation to comply with the above FCC Customer Service Standards, Licensee must at all times comply with the following specific standards: 1 System Office Hours and Telephone Availability. a. Licensee must establish and maintain at least one (1) publicly listed local telephone number or toll-free telephone number which is available to cable Subscribers and the public twenty-four (24) hours a day, seven (7) days a week. (i) Trained representatives of Licensee must be available to respond to Subscriber telephone inquiries during normal business hours. (ii) After normal business hours, an access line will be available to be answered by a service or an automated response system, including a phone answering system. Inquiries received after 12 normal business hours must be responded to by a trained representative of Licensee on the next business date. (iii) Telephone equipment must be made available to permit persons with hearing impairments to communicate with the Licensee. b. Under normal operating conditions, where "normal operating conditions" has the same meaning as in the FCC Customer Service Standards, each of the following four (4) standards must met not less than ninety percent (90%) of the time, as measured by Licensee on a quarterly basis: (i) Telephone answer time by a customer representative, including waiting time, will not exceed thirty (30) seconds from when the connection is made. (ii) If the call needs to be transferred, transfer time will not exceed thirty (30) seconds. (iii) Subscribers will receive a busy signal less than five percent(5%) of the time. (iv) No more than five percent (5%) of Licensee's calls from subscribers, measured monthly for the prior three (3) months, shall be abandoned, meaning a caller hangs up while on hold for a customer representative. c. Licensee must maintain at least one (1) physical office located no more than fifteen miles distance from Meridian Drive, Apache Junction, Arizona The physical office(s) must be a place(s) conveniently located where subscribers may pay their bills, register complaints and have them resolved, schedule installations and service calls, process new service requests, obtain assistance on technical problems, obtain and return converter boxes or other equipment, remotes and other customer premises equipment, and receive information on Licensee and its services. Such office must be open at least those hours during which similar businesses in the service area are open to serve customers, Monday through Friday, and must include evening and weekend 13 hours to meet the needs of residents of the City. In addition, Licensee must make available a direct contact telephone number of local personnel available to City staff in order to facilitate timely responses for questions and concerns of cable television customers who have contacted the City directly. Licensee agrees that it shall not apply or seek to apply or make any claim that all or any part of costs associated with the requirements of this Section 4(A)(1) ("Local Office Costs") are Licensee Fee Payments under 47 U.S.C. § 542 and/or applicable state law nor are the Local Office Costs to be considered other payments or contributions to be made by Licensee to the City pursuant to this Agreement. Licensee must not deduct any Local Office Costs from, or offset such Local Office Costs against, any taxes, fees or assessments levied or imposed by the City on Licensee. d. It is customary for Licensee to pick up and deliver equipment directly to subscribers. However, in addition to the physical office requirement noted above Licensee shall provide five (5) locations conveniently located within the City limits for, paying bills, ordering service, and other cable TV administrative services. 2. Installations, Outages and Service Calls. a. Under normal operating conditions, each of the following standards will be met no less than ninety-five percent (95%) of the time, as measured by Licensee on a quarterly basis: (i) Standard installations will be performed within seven (7) business days after an order has been placed. "Standard" installations are those that are located within four thousand (4,000) cable feet of a Remote Terminal. (ii) Excluding conditions beyond its control, Licensee will begin working on service interruptions, as defined herein, promptly and in no event later than twenty-four (24) hours after the interruption becomes known to Licensee. Licensee will begin actions to correct other service problems within twenty-four (24) hours after notification of the service problem. 14 b. Licensee must not cancel an appointment with a subscriber after the close of business on the business day prior to the scheduled appointment. The appointment may be rescheduled as is necessary, but must not be canceled unless by subscriber request. c. As soon as Licensee is or should be aware that Licensee is behind schedule for an appointment with a subscriber and will not be able to keep the appointment as scheduled, the Licensee must contact the subscriber by telephone unless the subscriber does not have a telephone number or refuses to provide such telephone number to Licensee. The appointment will be rescheduled, as necessary, at a time which is convenient for the subscriber. d Service calls must be performed during a four (4) hour window that has been communicated to the subscriber at least five (5) calendar days in advance of such service call, unless otherwise requested by a subscriber. The convenience of Subscribers shall always be the primary accommodation goal of Licensee. 3. Communications Between Licensee and Subscribers. a Notifications to subscribers: (I) Licensee must provide written information on each of the following areas at the time of installation of Cable Service, at least annually to all Subscribers, and at any time upon the request of a Subscriber: (a) Products and Cable Service offered; (b) Prices and options for Cable Service and conditions of subscription; (c) Installation and service maintenance policies; (d) Instructions on how to use the Cable Service; (e) Channel positions of programming carried on the System, 15 (f) Billing and complaint procedures, including the address and telephone number of the cable office. Subscribers will be notified of any changes in rates, programming services or channel positions as soon as practicable through announcements on the System and in writing. Licensee must notify Subscribers and the City a minimum of thirty (30) calendar days in advance of such changes if the changes are within the control of Licensee. In addition, Licensee must notify Subscribers thirty (30) calendar days in advance of any significant changes and any other information required by the preceding paragraph. (ii) Billing: a) Bills will be clear, concise and understandable. Bills will be fully itemized, with itemizations including, but not limited to, basic service, premium service, and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits. b) In case of a billing dispute, Licensee will respond to a written complaint from a Subscriber within thirty (30) calendar days from receipt of the complaint. c) Refund checks will be issued promptly, but no later than either: (i) the Subscriber's next billing cycle following resolution of the request or thirty (30) calendar days, whichever is earlier, or (ii) the return of the equipment supplied by Licensee if Cable Service is terminated. If for any reason any Subscriber terminates any monthly service prior to the end of a prepaid period, a prorated portion of any prepaid Subscriber service fee, using the number of days within the billing period as a basis, must be credited to the Subscriber's account by Licensee. 16 d) Credits for service will be issued no later than the Subscriber's next billing cycle following the determination that a credit is warranted. e) Residential billing statements must include the local address and local phone number of the local Licensee office. B. Maintenance and Complaints. 1. Repair Force. Licensee must maintain a sufficient repair force of technicians that must respond to Subscriber complaints, loss of service or requests for repair. 2. Resolution of Complaints. Licensee must use its best efforts to resolve complaints as soon as practicable after the date complaints are received. 3. Prorated Billing Credit for Service Interruption Upon a Subscriber's notification to Licensee of a Service Interruption, that Subscriber's account must be credited a prorated share of the monthly charge for the service if the Subscriber is without service for any reason, except Subscriber-inflicted damages to Licensee's equipment, for a period exceeding twenty-four (24) hours. 4. Complaints Received by the City. All Subscribers and residents may direct complaints and inquiries regarding Licensee's service or performance to the City. The City will promptly submit those complaints and inquiries to Licensee on a form upon which both parties agree. 5. Relocation of the System. Licensee must, at its expense, protect, support, disconnect, relocate, or remove any of its property when required by the City Manager (or designee) by reason of traffic conditions, public safety or welfare; street vacation; freeway or street construction or repair; change or establishment of street grade; installation of sewers, drains, water pipes, power lines, signal lines, transportation facilities, tracks, or any other types of structure or improvements by public agencies. The City may disconnect, remove or relocate any of Licensee's facilities, which have not been disconnected, removed or relocated within a reasonable period of time after a request from the City and Licensee must reimburse the City for its actual costs in 17 disconnecting, removing, or relocating Licensee's facilities. Neither the City nor any agent, contractor or employee thereof shall be liable to Licensee, its customers or third parties for any damages caused them or the System due to any activities described in the preceding two sentences, except in the case of willful misconduct or gross negligence. The City shall use reasonable efforts to treat all occupants of public rights-of-way in a non-discriminatory manner with respect to activities and obligations described herein, taking into account its reasonable ability to act given the differing regulatory regimes for, laws applicable to and claimed rights of different providers. 6. Discontinuance, Abandonment, and Removal of the System. Upon the revocation; termination, or expiration of this License, by (a) mutual agreement of the City and Licensee, (b) Licensee's acquiescence or failure to challenge same, or (c) a final order of a court which Licensee either does not appeal or from which there is no further right of appeal, then the following must occur: Licensee shall immediately discontinue the provision of Cable Services and all rights of Licensee to use the Streets shall cease. Licensee, at the direction of the City, must remove its System, including all supporting structures, transmission and distribution portions of the System that is owned by Licensee, and other appurtenances, fixtures or property from the Streets, in, over, under, along, or through which they are installed within six (6) months of the revocation, termination, or expiration of this License except that (a) Licensee may abandon its facilities in place with the City's consent, and (b) Licensee must not remove underground facilities without the City's consent in advance, which shall not be unreasonably withheld or delayed. Prior to any removal, Licensee must notify the City and persons owning property abutting streets where removal will occur. Licensee must also restore all property it disturbs, public or private, to the condition in which the property existed prior to the installation, erection, removal, or construction of the System, including any improvements made to such property subsequent to the construction of its System. Restoration of streets and City property must be in accordance with the directions and specifications of the City, and all applicable laws, ordinances and regulations, at Licensee's sole expense. If such removal and restoration is not completed within six (6) months after the later of (i) revocation, termination, or expiration of the License and (ii) 18 the receipt of any necessary consents from the City or any other parties, all of Licensee's property remaining in the affected streets must, at the option of the City, be deemed abandoned and shall, at the option of the City, become its property or the City may obtain a court order compelling Licensee to remove same. In the event Licensee fails or refuses to remove its System or to satisfactorily restore all areas to the condition in which they existed prior to the original construction of the System, the City, at its option, may perform such work and if such work is performed within one (1) year of the revocation, termination or expiration of this License collect the costs thereof from Licensee. No letter of credit must be released (during this one year period) until the City has certified to Licensee in writing that the System has been dismantled, removed, and all other property restored, to the satisfaction of the City. C. Discrimination. Licensee agrees that it will not discriminate among Subscribers and the public with regard to rates and charges or the provision of any service based on considerations of race, color, creed, sex, marital or economic status, national origin, political party, mental or physical disability or neighborhood of residence; and must comply with all non-discrimination requirements of applicable federal, state and local laws. 5. RESIDENT, PROPERTY OWNER, OR TENANT REQUEST FOR ASSISTANCE PROCEDURE A. "Request for Assistance" means a written request for assistance delivered by the City via fax or e-mail to Licensee resulting from a concern received by the City from a resident, property owner, or tenant related to the construction, installation, operation or maintenance of Licensee's System. B. Upon receipt of a Request for Assistance from the City, Licensee must take action as described below: 1. Licensee must make every reasonable attempt to contact the resident, property owner, or tenant cited in the Request for Assistance in an attempt to resolve the issue causing the resident, property owner, or tenant's concern, the same day it is received. In no case shall the attempt occur later than the next business day. 19 2. Licensee must respond to the City, via fax, or e-mail within two (2) business days indicating when and what action(s) Licensee took in response to the Request for Assistance. 3. Licensee must maintain an accurate and complete log of the information contained and resulting from each Request for Assistance: the identity of the resident, property owner, or tenant and his/her concern, street address and telephone number, and when and what action(s) Licensee took in response thereto. The City may examine the log upon request. 4. Licensee must provide, in writing, upon request of the City, a detailed description of actions taken in response to a Request for Assistance. 5. Licensee must provide each Subscriber annually with a written statement describing in full the process for submitting a service request or Subscriber complaint. 6. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ("PEG") CHANNELS A. Required Access Channels. Within one hundred eighty (180) days after Licensee begins offering Cable Service in the City, Licensee will provide the City with up to two (2) public, educational, and governmental access channels ("PEG Channels") as determined in the City's sole discretion. The two PEG Channels shall be on the Basic Cable Service Tier of the System and two other channels of non-commercial government programming, at least one of which may be programmed by the federal government in the digital programming tier of the system, as provided for in A.R.S. § 9- 506(D)(1). Channel 11 and 99 shall be reserved for this capacity with a logo approved by the City. All costs associated with the obligations in this Section to commence PEG signals at the point of origination back to the headend and transmitted to subscribers with the same quality, functionality and identification as other channels on the system, shall be borne by Licensee. Except as provided in this Section, Licensee shall have no responsibility for the management, operation or administration of PEG Channels and shall have no editorial control pursuant to A.R.S. § 9-506(D)(1). B. Quality and Subscription Fees. PEG Channels located on the Basic Cable Service Tier shall be grouped together and located on the System in reasonable proximity to other commercial video channels on the System. Licensee will deliver the PEG Channels to Subscribers at the same visual and audio quality, same functionality 20 and at the same bit rate as Licensee delivers the primary signal of local television network broadcast stations on its Cable System ("Network TV"), such that the PEG channels are indistinguishable from Network TV in video and audio quality and functionality. Should Licensee convert the Basic Cable Service Tier to digital format, Subscribers must be able to continue to receive PEG Channels free of charge except for the standard rate applicable for the Basic Cable Service Tier. PEG Channels must be receivable by Subscribers without special expense, other than the expense required to receive Basic Cable Service or digital service, as applicable. Licensee must maintain PEG channels consistent with FCC technical standards. If no FCC standards for PEG Channels exist, Licensee must maintain PEG channels using FCC technical standards for local over-the-air television channels The City recognizes that Licensee is unable to improve the technical quality of PEG Channels but Licensee must not degrade the technical quality once it is received by Licensee. Licensee agrees not to encrypt PEG channels any differently than other commercial channels available on the System unless the City and Licensee mutually agree in writing to a non-traditional format that is not similar to those of broadcast channels. C High Definition Transition of PEG Programming. Upon 180 day advance written notice to Licensee the City shall have the right to require that Licensee carry one (1) of the PEG Channels in both SD and HD format consistent with the manner and tier placement in which Licensee delivers the primary signal of Network TV. City shall have the sole discretion to determine which of its PEG Channels migrate to HD without the addition of mandates or content restrictions. HD resolution will be the same resolution used in Licensee's HD tier, such that the PEG HD channels are indistinguishable from Network TV in video and audio quality and functionality. Licensee will continue to carry the City PEG channels in SD format in addition to HD format as long as there are SD channels in Licensee's basic channel lineup D. Obligations of Licensee. Licensee must permit the City to operate a production studio (the "Studio") located in City Hall as identified as above in Section 3, subsection 16, at a site determined by the City Licensee, at its sole cost, will design build and maintain all PEG upstream feeds, connections and distribution facilities between its video channel aggregation point and the Studio in a manner so that no degradation in signal quality or content as originated by City shall occur. Licensee must furnish a new state-of-the-art digital fiber optic transmission system consisting of transmitters and receivers. Transmitters and receivers must be of the type 21 consistent and compatible with current industry standards for the application of continuous conversion of broadcast quality audio and video to date for transport over fiber optic cable. Licensee must interconnect at its sole cost the Studio to the headend or other main distribution point of the System for distribution of the programming of the PEG Channels with the above-mentioned fiber optic cable to a point designated by the City. At the request of the City, Licensee at Licensee's cost shall provide timely and reliable advice regarding acquisition, maintenance and use of any Studio and production equipment that may be obtained for that purpose by the City. 7. LICENSE FEE A. Payment to the City. 1. Use of Streets/Cost of Regulation. In consideration of the rights, powers and privileges, permission and authority granted by this Agreement, for use of the City's streets and other public rights-of-way, Licensee must pay to the City an amount equal to five percent (5%) of its Gross Revenues as defined in A.R.S. § 9-505 (6) as amended from time to time, received from the operation of the System in the City ("License Fee"). 2. Payment of Fee. Payment of the License Fee shall be in lieu of all occupational, encroachment permits, pole attachment or other license fees or charges imposed by the City, other than generally applicable business license fees and any fees or charges imposed by the City as a condition of issuing construction permits. 3. Revenue Not From Operation of Cable System. This Agreement does not excuse the payment of any occupational license fee, charge or tax relating to any business endeavor for which Licensee is not obligated to pay a Licensee fee, subject to applicable federal and state law. 4. Taxes of General Applicability. This Agreement does not prohibit the City from imposing on Licensee, as part of a group of businesses or activities, any tax, fee or assessment of general applicability that is not unduly discriminatory against operators of cable systems or their subscribers, subject to 47 U.S.C. § 542. 5. Quarterly Payments. License fee payments must be delivered to the City within forty-five (45) calendar days after the 22 expiration of each quarter year ending December 31, March 31, June 30, and September 30. Each payment must be accompanied by a detailed statement of Gross Revenues by category received for the quarter in connection with the operation of the System in the City, and a report showing the computation of the fees. Each such detailed statement shall be signed by an authorized corporate officer of Licensee attesting to the accuracy of the detailed statement. 6. Acceptance of Payment Not Accord or Release. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall acceptance of payment be construed as a release of any claim the City may have for further or additional sums payable under the provisions of this Agreement. All amounts paid by Licensee shall be subject to audit by the City, at the City's expense. 7. Late Payment. All amounts paid by Licensee shall be subject to audit by the City, at the City's expense. Any Access Support fees owing pursuant to this Agreement which remain unpaid more than thirty (30) calendar days after the dates specified herein shall be delinquent and shall thereafter accrue interest at the maximum allowable rate under state law. Interest shall begin to accrue immediately whether the City provides notice of nonpayment or not. 8. Early Termination of Agreement. In the event the Agreement is terminated for any reason before its normal termination date, the License fee shall be prorated to reflect the time elapsed since the last payment was made to the City. Licensee must pay to the City not later than thirty (30) calendar days following termination of the license the required percentage of Gross Revenues. B. Annual Financial Report. Licensee must deliver an annual report to the City Manager no later than ninety (90) calendar days after the close of Licensee's fiscal year which must include full audited financial statements for the previous year, including income statement, balance sheet, cash flow statement and appropriate explanatory footnotes, for Licensee or for its parent company. "Parent company" means CenturyLink Inc., which owns one hundred percent (100%) of Licensee. Financial statements must be audited by an independent certified public accountant. If the parent company is a public company and the audited financial report of the parent company has not been published by the date 23 due under this Section, then the audited financial report shall be deemed submitted on time if delivered to City within thirty (30) calendar days after publication. C. Annual Local Operations Report. Licensee must deliver an annual local operations report to the City Manager no later than ninety (90) calendar days after the close of the Licensee's fiscal year which shall be deemed submitted on time if delivered to City within thirty (30) calendar days after publication of the corresponding audited report in Section 7(B) above. Said report shall be specific to the City and to Licensee's operation of its System in the City, separate and apart from any corporate annual report compiled and provided by Licensee or its parent company, shall be certified as being correct by an authorized corporate officer of the Licensee, and shall include at a minimum: 1. A statement of revenues for the previous calendar or fiscal year, including Total Gross Revenues. 2. A summary of the previous year's activities including, but not limited to: services begun and/or dropped, Subscribers gained and/or lost and year-end totals, service area at beginning and end of year (map and text), revenues collected, License Fees paid to the City, plant miles constructed, plant miles activated, changes in local management and staff, rate structure and changes during the year, new services offered, programming changes, changes in service policies and/or procedures, and System technical changes. 3. At the times and in the form prescribed, such additional reports with respect to Licensee's operation, affairs, transactions, or property as may be reasonably necessary and appropriate for the evaluation of Licensee's performance under the License. D. Audit. The City, either by itself or in combination with other municipalities served by Licensee, may arrange for and conduct audits of the necessary financial records of Licensee for the purpose of verifying License fees. Audits may be conducted by any person designated by the City. The City shall notify Licensee at least seven (7) calendar days prior to the date it will begin reviewing Licensee's records. All records reasonably necessary for such audit must be made available by Licensee at a location in the City limits. Any additional amount due the City must be paid within thirty (30) days of the City's submitting an invoice for such sum, and if such sum shall exceed three percent (3%) of the total 24 License Fee which the audit determines should have been paid for any calendar year, Licensee must pay the City's cost of auditing that calendar year as well. Notwithstanding the above, if Licensee or Licensee's auditor disagrees with the City's determination that the additional amount due exceeds three percent (3%), the City's auditor and Licensee's auditor shall choose a neutral auditor who shall make a determination, which is final and binding on both parties as to whether the three percent (3%) amount was exceeded. The cost of the neutral auditor shall be borne equally by the Parties. E. Access to Records. In addition to access to the records of Licensee for financial audits, Licensee must make available to the City, upon seven (7) calendar days written notice to Licensee, and the City shall have the right to inspect, such books, records, maps and other materials of Licensee that are necessary to verify compliance with the terms of this Agreement, at Licensee's closest office where such records are normally maintained, during normal business hours and on a non-disruptive basis. The records subject to inspection must include, but not necessarily be limited to, all public records required to be kept by Licensee in a public file pursuant to the rules and regulations of the FCC. The location of the records to be inspected shall be no farther than 50 air miles from City Hall in Apache Junction, Arizona. 8. RATE REGULATION A. All Rights Reserved. The City reserves all of its rights to regulate the Licensee's rates to the maximum extent permitted by law. 9. INDEMNIFICATION, LIABILITY INSURANCE, AND BONDS AND LETTERS OF CREDIT A. Disclaimer of Liability. The City shall not at any time be required to pay from its own funds for injury or damage occurring to any person or property from any cause whatsoever arising out of Licensee's construction, reconstruction, maintenance, repair, use, operation, condition or dismantling of the System or Licensee's provision of Cable Services. B. Indemnification. To the fullest extent permitted by law, Licensee must, at its sole cost and expense, indemnify, defend and hold harmless the City and all associated, affiliated, allied and subsidiary entities of the City, now existing or hereinafter created, and it's Mayor and City Council, officers, appointees, boards, commissions, 25 employees, agents, attorneys, contractors, and volunteers (hereinafter referred to as "Indemnitees") from and against: 1. Any and all liabilities, obligations, damages, penalties, claims, liens, costs, charges, losses and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses and consultants), which may be imposed upon, incurred by or be asserted against the Indemnitees by reason of: any act or omission of Licensee, its personnel, employees, agents, contractors or subcontractors, resulting in economic harm, personal injury; bodily injury, sickness, disease or death to any person or damage to, loss of or destruction of tangible or intangible property, libel, slander, invasion of privacy and unauthorized use of any trademark, trade name, copyright, patent, service mark or any other right of any person, firm or corporation; and any challenge to this agreement based on unequal competition which may arise out of or be in any way connected with Licensee's construction, reconstruction, installation, operation, maintenance or condition of the System and any other facilities authorized by or permitted due to the issuance of this License, including those arising from any matter contained in or resulting from the transmission of programming over the System, but excluding any programming provided by lndemnitees which is transmitted over the System; the provision of Cable Services or other services authorized by or permitted due to the issuance of this Agreement; the release of Hazardous Substances, or; the failure to comply with any Federal, state or local statute, ordinance or regulation. 2. Any and all liabilities, obligations, damages, penalties, claims, liens, costs, charges, losses and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses and other consultants), which are imposed upon, incurred by or asserted against the Indemnitees by reason of any claim or lien arising out of work, labor, materials or supplies provided or supplied to Licensee, its contractors or subcontractors, for the installation, construction, reconstruction, operation or maintenance of the System and any other facilities authorized by or permitted due to the issuance of this License or the provision of Cable Services or other services authorized by or permitted due to the issuance of this Agreement. 26 3. Any and all liabilities, obligations, damages, penalties, claims, liens, costs, charges, losses and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses and consultants), which may be imposed upon, incurred by or be asserted against the Indemnitees by reason of any financing or securities offering by Licensee or its Affiliates for violations of the common law or any laws, _. statutes, or regulations of the State of Arizona or the United States, including those of the Federal Securities and Exchange Commission, whether by Licensee or otherwise. 4. Licensee's obligation to indemnify Indemnitees under this License must extend to claims, losses, and other matters covered in this Agreement that are caused or contributed to by the negligence of one or more lndemnitees. However, in such case, the obligation to indemnify shall be reduced in proportion to the negligence of the Indemnitees. C. Assumption of Risk. Licensee undertakes and assumes for its officers, agents, contractors and subcontractors and employees (collectively "Licensee" for the purpose of this Section), all risk of dangerous conditions, if any, on or about any City-owned or controlled property or public rights-of-way, and Licensee hereby agrees to indemnify and hold harmless the Indemnitees against and from any claim asserted or liability imposed upon the Indemnitees for personal injury or property damage to any person, other than from Indemnitees' gross negligence, arising out of Licensee's installation, operation, maintenance or condition of the System or other facilities or Licensee's failure to comply with any Federal, state or local statute, ordinance, or regulation. D. Defense of Indemnitees. In the event any action or proceeding shall be brought against the Indemnitees by reason of any matter for which the Indemnitees are indemnified hereunder, Licensee shall, upon notice from any of the Indemnitees, at Licensee's sole cost and expense, resist and defend the same with legal counsel selected by Licensee and consented to by the City, such consent not to be unreasonably withheld; provided, however, that Licensee shall not admit liability in any such matter on behalf of the Indemnitees without their written consent and provided further that Indemnitees shall not admit liability for, nor enter into any compromise or settlement of, any claim for which they are indemnified hereunder, without the prior written consent of Licensee. 27 E. Notice, Cooperation and Expenses. The Indemnitees shall give Licensee prompt notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the provisions of this Section. Nothing herein shall be deemed to prevent the Indemnitees at their own expense from cooperating with Licensee and participating in the defense of any litigation by their own counsel. F. Insurance. During the Term of the License and any extensions thereto, Licensee must maintain, or cause to be maintained, in full force and effect and at its sole cost and expense, the following types and limits of insurance: 1. Worker's compensation insurance meeting Arizona statutory requirements and employer's liability insurance with minimum limits of Two Million Dollars ($2,000,000) for each accident. 2. Comprehensive commercial general liability insurance with minimum limits of Ten Million Dollars ($10,000,000) or less as may be determined in the sole discretion of the City as the combined single limit for each occurrence of bodily injury, personal injury and property damage. The policy shall include coverage for: products and completed operations liability; independent contractor's liability; and coverage for property damage from perils of explosion, collapse or damage to underground utilities, commonly known as explosion, collapse and underground ("XCU") coverage. 3. Broadcaster's liability coverage for loss or damage arising out of publications or utterances in the course of or related to advertising, broadcasting, telecasting or other communication activities conducted by or on behalf of Licensee with minimum limits of Ten Million Dollars ($10,000,000) or less as may be determined in the sole discretion of the City as the combined single limit for each occurrence. 4. Automobile liability insurance covering all owned, hired, and non-owned vehicles in use by Licensee, its employees and agents, with personal protection insurance and property protection insurance to comply with the provisions of the Arizona No-Fault Insurance Law, with minimum limits of Two Million Dollars ($2,000,000) as the combined single limit for each occurrence for bodily injury and property damage. 28 5. The policies required by this Agreement shall contain a waiver of transfer rights of recovery (subrogation) against City, its Mayor and City Council, agents, appointees, representatives, directors, officials, officers, employees, and volunteers for any claims arising out of the work of any of Licensee's contractors or subcontractors. 6 All insurance policies other than those for worker's compensation and pollution legal liability insurance shall be written on an occurrence and not on claims made basis. 7. The coverage amounts set forth above may be met by a combination of underlying primary and umbrella policies so long as in combination the limits equal or exceed those stated. 8. All policies of insurance shall contain a waiver of subrogation clause consistent, however, with Section 9(B)(3) above. 9. All insurance policies shall be written with a zero dollar deductible (no deductible). 10. As between the City and/or Additional Insureds on the one hand, and Licensee on the other hand, if more than one policy of insurance does or may apply to a given claim or matter, then the policy maintained by Licensee pursuant to this License shall be deemed the primary policy, and that policy shall contain a provision that states that it is the primary policy as opposed to any other policy of insurance that may apply to the City and/or Additional Insureds on any given claim or matter. The term "policy of insurance" as applied to the City/Additional Insureds shall include any self-insurance program, self-insured retention or deductible or risk pooling program, or an indemnification, defense or other similar program purchased or maintained by the City/Additional Insureds. 11. All coverages specified in this Section F shall automatically increase by ten percent (10%) on every fifth (5t'') anniversary date of this Agreement. G. Performance Bond. Licensee agrees to the construction requirements set forth in this Agreement, and shall comply with Chapter 14 of the A.J.C.C. regarding insurance, bonds, and letters of credit by obtaining a corporate performance bond and an irrevocable letter of credit solely for the purpose of guaranteeing 29 the construction of the System and safeguarding the private property during construction. Licensee shall maintain a performance bond in the amount of One Hundred Thousand Dollars ($100,000), and an irrevocable letter of credit in the amount of Twenty Five Thousand Dollars ($25,000), both being provided to the City Attorney within thirty (30) calendar days after execution of this Agreement and prior to any construction work in the public rights- of-way. Where any portion of any required bond is drawn down by the City, Licensee shall immediately cause the full amount of the drawn down bond to be reinstated to the stated amount herein. 10. LIQUIDATED DAMAGES A. Licensee understands and agrees that failure to comply with any time and performance requirements in this License or Chapter 14 of the A.J.C.C., will result in damage to the City, and that it is and will be impracticable to determine the actual amount of such damage in the event of delay or nonperformance; therefore, the Parties hereby agree to the liquidated damages specified in Chapter 14 of the A.J.C.C., incorporated by reference herein. B. Prior to assessing any of the liquidated damages set forth in this License and Chapter 14 of the A.J.C.C., the City Manager shall give licensee seven days written notice of its intention to assess damages. If the City Manager concludes that Licensee is in fact liable for liquidated damages pursuant to this Section 10, the City Manager shall issue to Licensee by certified mail a Notice of Intention to Assess Liquidated Damages. The Notice shall set forth the nature of the violation and the amount of the proposed assessment. Licensee must, within thirty (30) calendar days of receipt of such notice. 1. Respond to the City in writing, contesting the City's assertion of violation and providing such information or documentation as may be necessary to support Licensees position; or 2. Cure any such violation (and provide written evidence of the same), or, in the event that, by the nature of the violation, such violation cannot be cured within such thirty (30) calendar day period, take reasonable steps to cure said violation and diligently continue such efforts until said violation is cured. Licensee shall report to the City, in writing, at 30-day intervals as to Licensee's efforts, indicating the steps taken by Licensee to cure said violation and reporting Licensee's progress until such violation is cured. 30 C. In the event that Licensee contests the City's assertion of violation or fails to respond to the City's notice of intent to assess liquidated damages, within fourteen (14) calendar days the City shall schedule and then conduct a hearing in accordance with the procedures set forth in Article 14 of the A.J.C.C. At the public hearing the City may affirm or deny the violation in whole or in part. To the extent the City affirms the violation, it may fashion and enforce any appropriate remedy therefore including up to revocation of this Agreement. The City's decision shall be reduced to writing and delivered to Licensee. If the appropriate remedy is revocation of this Agreement, then such revocation shall not take effect until at least thirty (30) calendar days following delivery of the City's written decision to Licensee. 11. TRANSFERS AND ASSIGNMENTS A. Transfer of License. This License shall not be sold, assigned, or transferred, either in whole or in part, or leased, sublet (except as provided in 11(H) below), nor shall title thereto, either legal or equitable or any right, interest or property therein, pass to or vest in any person, without the prior written consent of the City, which consent shall not be unreasonably withheld. The sale or transfer of the License to an Affiliate of Licensee in all cases requires at least sixty (60) calendar days prior written notice to City, but does not require prior approval of the City as long as: (i) the sale or transfer of the existing or newly created equity interest in the Licensee does not result, directly or indirectly, in a transfer of Control of the Licensee; and (ii) the transferee already holds an ownership interest in the Licensee of twenty-five percent (25%) or more. Such consent shall not be required for a transfer in trust, mortgage, or other hypothecation in whole or in part to secure an indebtedness. The proposed assignee must show the transfer will not cause any increased risks of nonperformance of the License or any loss to the City of it's bargained for consideration in this License. The assignee's showings must at a minimum detail facts sufficient to show the assignee's technical ability, financial capability, legal qualifications, and general character qualifications and such other qualifications as reasonably determined by the City and the assignee must agree to comply with all provisions of this Agreement. B. Transfer of Control. No change, transfer, or acquisition of control of Licensee shall occur without the prior written consent of the City, which consent shall not be unreasonably withheld. Any sale or transfer of stock in Grantee so as to create a new controlling interest in the System shall be subject to the requirements of this 31 Section 11. The term "controlling interest" as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised. C. Notification: Licensee shall notify the City in writing no less than sixty (60) calendar days in advance of any actual or proposed change in, or transfer to, or acquisition by any other party, of control of Licensee. The sale or transfer of this License to an Affiliate of Licensee does not require prior approval of the City as long as: (i) the sale or transfer of the existing or newly created equity interest in the Licensee does not result, directly or indirectly, in a transfer of control of the Licensee; and (ii) the transferee already holds an ownership interest in the Licensee of twenty-five percent (25%) or more. D. Rebuttable Presumption: A rebuttable presumption that a transfer of control has occurred shall arise upon the acquisition or accumulation by any person, or group of persons (other than an Affiliate of Licensee), of more than twenty-five percent (25%) of the voting interest of the Licensee or of the person exercising management authority over the Licensee. The burden is on the Licensee to rebut this presumption. E. Hearing: Except in the case of an assignment of this License to an affiliate of Licensee as described above, upon written notification by the Licensee to the City of a proposed assignment of this License, or transfer of control or ownership of the Licensee, the City Manager shall issue his or her written notice fixing and setting forth the day, hour, and place certain when and where any persons having any interest therein may appear and be heard for a hearing. The City Manager shall cause such notice to be published in a newspaper of general circulation within the City. The City Manager also shall cause a copy of such notice to be mailed to the Licensee at least ten (10) calendar days prior to the date specified for the hearing. At the time set for such hearing, or at any adjournment thereof, the City Manager shall proceed to hear the matter. Following the close of such hearing, the City Manager shall prepare and file with the City Council his or her report of the hearing, his or her findings, and an opinion containing his or her recommendations to the City Council and the reasons therefore. If after the expiration of ten (10) calendar days following receipt of the City Manager's report and opinion, the City Council shall find that the assignment of this License or transfer of control or ownership of Licensee will not be detrimental or injurious to the best interests and welfare of the subscribers and users, and of the City, then the City Council by resolution shall consent to the assignment of the License or transfer 32 of control or ownership of the Licensee. Such resolution shall there upon become and shall be a part of this Agreement. F. Not a Waiver of Rights: The consent or approval of the City Council to any transfer of this License shall not constitute a waiver or release of the rights of the City in and to the public rights-of-way, and any transfer shall, by its terms, be expressly subordinate to the terms and conditions of this Agreement. G. Payment of Fees: Notwithstanding any other requirement of this License, each applicant for a transfer or assignment must furnish with its request a nonrefundable filing fee in the amount established by the City Council, by cash, certified or cashier's check, wire transfer, or in any other manner acceptable to the City Manager made payable to the City. No proposal for a transfer or assignment of a License shall be considered without receipt of said fee. The fee will be used for the purpose of covering the City's cost in consideration of a transfer or assignment of this License. H. Signature Required: In no event shall a transfer of ownership be approved or effective without the successor-in-interest first becoming a signatory to this Agreement. Grant, Rent or Lease of Systems: As long as a grant, rent, or lease does not amount to a transfer and is made in the ordinary course of business with prior notice to the City, Licensee in the normal course of providing Cable Services may grant, rent, or lease use of its System to other persons. Any such use shall be restricted to and consistent with such uses as the Licensee is authorized in this License or under other applicable law. Any such use shall be in compliance with applicable Federal and state law. Any such grants, lease, or rent by the Licensee shall not, however, thereby relieve Licensee of any requirement or obligation under this License as to its use of the Streets, and any such grant, rent, or lease shall require that such other person comply with the appropriate provisions of the City Code, and the License as such use warrants. The grant, lease, or rent shall expressly provide for the authority of the City under applicable law to regulate the use provided by the grant, lease, or rent (including but not limited to the authority to protect the public welfare, safety, and health) and to enforce compliance with any applicable standards established by the City Code or this License. J. Void Ab /nitio: Any attempted transfer or assignment action by Licensee that does not in all ways comply with this Section 11 shall be void ab initio. 33 K. Novation Prohibited: Except as provided in this Section 11, no other substitution of Licensee creating a novation shall occur without the prior written consent of the City which may be withheld at the sole discretion of the City. 12. MISCELLANEOUS PROVISIONS A. Time of the Essence. Whenever this Agreement sets forth any time for any action to be performed by, or on behalf of, Licensee, that time shall be deemed of the essence. B. Subsequent Action by State or Federal Bodies. 1. Complete Agreement. It is the intent of the City and Licensee that the terms, conditions and obligations set forth in this Agreement govern their relationship for the full term of the Agreement. With the exception of Sections 3(A)(9), 4(A)(1) and 5(E), in the event that any court, agency, commission, or other authority of competent jurisdiction declares this Agreement invalid, in whole or in part, or requires Licensee either to: (a) perform any act which is inconsistent with any provision of this Agreement, or (b) cease performing any act required by any provision of this Agreement, then Licensee shall not be required to comply with any term declared invalid and shall comply with any requirements of the court. 2. Clarification of Law. Unless otherwise set forth in this Agreement, either Party may seek a ruling about the applicability to the terms of this Agreement of any court determination, federal or state law or regulation rendered, issued, approved, adopted or enacted after the execution of this Agreement. C. Non-enforcement by the City. Licensee shall not be relieved of its obligation to comply with any of the provisions of this Agreement by reason of any failure of the City to enforce prompt compliance. D. Delays and Failures Beyond Control of Licensee or the City. Neither City nor Licensee, as the case may be, shall be considered not to have performed its obligations under this Agreement in the event of enforced delay (an "Enforced Delay") due to causes beyond its control and without its fault or negligence or failure to comply with all applicable laws, including, but not restricted to, acts of God, fires, floods, epidemics, pandemics, quarantine, restrictions, embargoes, labor disputes, and unusually severe weather. 34 E Conflicts of Interest. The provisions of A.R.S. § 38-511 relating to cancellation of contracts due to conflicts of interest shall apply to this Agreement. F Severability. The City and Licensee each believe that the execution, delivery and performance of this Agreement are in compliance with all applicable laws. However, with the exception of Sections 3(A)(9), 4(A)(1) and 5(E), in the unlikely event that any provision of this Agreement is declared void or unenforceable (or is construed as requiring the City to do any act in violation of any applicable laws, including any constitutional provision, law, regulation, or City Code), such provision shall be deemed severed from this Agreement and this Agreement shall otherwise remain in full force and effect; provided that this Agreement shall retroactively be deemed reformed to the extent reasonably possible in such a manner so that the reformed agreement (and any related agreements effective as of the same date) provide essentially the same rights and benefits (economic and otherwise) to the Parties as if such severance and reformation were not required. Unless prohibited by applicable laws, the Parties further shall perform all acts and execute, acknowledge and/or deliver all amendments, instruments and consents necessary to accomplish and to give effect to the purposes of this Agreement, as reformed. G. Written Notice. All notices, reports or demands required to be given in writing under this Agreement shall be deemed to be given when delivered personally to Licensee or to the City or when three (3) business days have elapsed after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given. The addresses may be changed by either party upon notice to the other party given as provided in this Section. At the time of this continuation of this Agreement by the City Council, the addresses of the parties are as follows: City of Apache Junction: City of Apache Junction 300 E. Superstition Blvd. Apache Junction, AZ 85119 Attention: City Manager 35 With a non-binding courtesy copy to: City of Apache Junction 300 E. Superstition Blvd. Apache Junction, AZ 85119 Attention: City Attorney Licensee: Qwest Broadband Services, Inc. d/b/a CenturyLink 1801 California St., 10th Fl. Denver, CO 80202 Attn: Public Policy With a non-binding courtesy copy to: CenturyLink 20 E. Thomas St. Phoenix, AZ 85012 Attention: Public Policy No notices, reports or demands to the City shall be deemed delivered unless a true and complete copy of each such notice, report or demand is simultaneously delivered to the following, which is only an administrative notice, and does not by itself constitute written notice: City of Apache Junction 300 E. Superstition Blvd. Apache Junction, AZ 85119 Attn: City Attorney Licensee and City may from time-to-time substitute new service addresses and served parties by giving the other no less than thirty (30) days written notice to the other. H. Titles. Titles to sections and subsections of this Agreement are provided for ease of locating information within the Agreement. A title shall not be deemed to change or alter the meaning of any section or subsection. The language of each section and subsection shall control its interpretation. I. Modification. Except as otherwise provided in this Agreement, or by applicable law, no provision of this Agreement shall be amended or otherwise modified (by passage of a subsequent ordinance or code 36 or otherwise), in whole or in part, except by an instrument in writing duly executed by the City and Licensee. J. Governing Law, Venue and Attorney Fees. The terms and conditions of this Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona. Any action at law or in equity brought by either Party for the purpose of enforcing a right or rights provided for in this Agreement, shall be tried only in a state court of competent jurisdiction in Pinal County, State of Arizona. The Parties hereby unconditionally waive all provisions of law providing for a change of venue in such proceeding to any other county or for removal to federal court. In the event either Party shall bring suit to enforce any term of this Agreement or to recover any damages for and on account of the breach of any term or condition in this Agreement, it is mutually agreed that the prevailing party in such final and non-appealable action to the percentage it prevails may recover its costs including: all litigation and appeal expenses, collection expenses, reasonable attorneys' fees, necessary witness fees and court costs to be determined by the court in such action only as may be awarded by the Court. For purposes of this provision, reasonable attorney fees must be calculated as the average of all independent legal counsel practicing in the City of Apache Junction, Arizona. K. No Third Party Beneficiaries. By entering into this Agreement, the Parties expressly do not intend to create any obligations or liabilities, or promise any performance to, any third party, nor have the Parties created for any third party any right to enforce the terms of this Agreement. L. Relationship between the Parties. Nothing contained in this Agreement shall be construed as creating an association, trust, partnership, joint venture, or agency relationship of any kind between the Parties. Each Party shall be individually liable for its own duties, obligations and liabilities under this Agreement. M. Mutual Representations and Warranties of Authority. The Parties each represent and warrant that they have full authority to enter into and to perform under this Agreement, and that no further approvals, licenses or actions by a governmental agency are required by either Party to execute and enter into this Agreement. N. Conflict Between Ordinance and Agreement. In the event of any conflict between the terms and conditions of this Agreement and the provisions of the Ordinance, the provisions of this Agreement shall control. Licensee expressly acknowledges and agrees that 37 the City hereby retains all of its police powers and the City may unilaterally amend the Ordinance in the exercise of its police powers and Licensee shall comply with said Ordinance as may be amended. By executing this Agreement both the City and Licensee acknowledge and agree that neither is aware of any conflicts between this Agreement and the Ordinance. O. Business License and Privilege License Tax Applicability. Licensee represents and warrants that any license necessary to perform the work under this Agreement is current and valid. Licensee understands that the activity described herein constitutes "doing business in the City of Apache Junction" and Licensee agrees to obtain a business license pursuant to Article 8 of the Apache Junction City Code and a privilege license to the extent the Apache Junction City Tax Code is applicable and keep such licenses current during the term of this Agreement. Any activity by subcontractors within the corporate City limits, will invoke the same business and tax regulations on any subcontractors, and Licensee ensures its subcontractors will obtain any required licenses. All contractors and subcontractors shall also provide proof of insurance for all right-of-way work as dictated by the Public Works Department Director. JOHN S. INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: RICHARD J. STERN City Attorney 38 WRITTEN ACCEPTANCE OF LICENSE AGREEMENT Accepted and approved without changes or modifications: Qwest Broadband Services, Inc. d/b/a CenturyLink, Inc. By: Title: Date: APPROVED AS TO FORM: Counsel for CenturyLink, Inc. STATE OF ARIZONA ) ) ss. COUNTY OF ) The foregoing was acknowledged before me this day of , 20 , by John S. Insalaco, as Mayor of the City of Apache Junction, Arizona, an Arizona municipal corporation. Notary Public My Commission Expires: STATE OF ) ) ss. County of ) The foregoing was acknowledged before me this day of , 20 , by as of Qwest Broadband Services, Inc. d/b/a CenturyLink, Inc. a Delaware corporation. Notary Public My Commission Expires: 39 ROLL CALL VOTE NOTES: tl Jl < ITEM# MEETING OF MOTION BY SECONDED BY YES NO ABSTAINED COUNCILMEMBER SERDY ✓ COUNCILMEMBER RIZZI COUNCILMEMBER EVANS J/ COUNCILMEMBER WILSON COUNCILMEMBER WALDRON W VICE MAYOR BARKER J MAYOR INSALACO J UNANIM US IN FAVOR OPPOSED ABSTAINED TOTAL .� .... ITEM NO. 11 I MOVE THAT APPROVAL BE GIVEN FOR THE LICENSE AGREEMENT BETWEEN QWEST BROADBAND SERVICES, INC. DBA CENTURYLINK, INC. AND THE CITY OF APACHE JUNCTION FOR A NON-EXCLUSIVE CABLE TV SYSTEM, AND THAT AUTHORIZATION BE GIVEN TO THE MAYOR TO SIGN THE AGREEMENT.. ROLL CALL VOTE NOTES: (?)\(' 5)1, ITEM # Di* MEETING OF tAaJ MOTION BY: _SECONDED BY: r`1 YES NO ABSTAINED VICE MAYOR BARKER J COUNCILMEMBER WALDRON ✓ COUNCILMEMBER WILSON J COUNCILMEMBER EVANS U COUNCILMEMBER RIZZI J COUNCILMEMBER SERDY ✓ MAYOR INSALACO UNANIMOUS IN FAVOR OPPOSED ABSTAINED TOTAL ITEM NOS. 12-13 THE EXECUTIVE SESSION AND WORK SESSION SCHEDULED FOR FEBRUARY 16, 2015 WILL BE CANCELED DUE TO THE OBSERVATION OF PRESIDENTS' DAY. I MOVE THAT AN EXECUTIVE SESSION AT 5.45 P M , AND A WORK SESSION AT 7.00 P M , BE HELD ON TUESDAY, FEBRUARY 17, 2015, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS RESPECTIVELY ADJOURNMENT: t I MOVE THAT THE MEETING BE ADJOURNED AT P.M. ROLL CALL i WS: . I REG: 4 5 SPEC: CITY COUNCIL: P / A P / A P / A MAYOR INSALACO VICE MAYOR BARKER ' COUNCILMEMBER EVANS // COUNCILMEMBER RIZZI I COUNCILMEMBER SERDY COUNCILMEMBER WALDRON 1// COUNCILMEMBER WILSON V V TOTAL ' j 7 CITY STAFF: City Manager George Hoffman i Assistant City Manager Bryant Powell V City Clerk Kathleen Connelly City Attorney Joel Stern ,1 Public Safety Director Tom Kelly ✓ I,i Public Works Director Giao f Pham Parks & Recreation Director Jeff Bell Library Director Spencer Paden Finance Director Donna Meinerts City Engineer Emile Schmid Development Svcs Director Larry Kirch Human Resources Director Liz Riley Assistant to the City Manager V` Matt Busby ✓Oirvt4";/ OTHERS: