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012616CompleteAgenda SPECIAL CITY COUNCIL WORKSESSION RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM JANUARY 26, 2016 5:45 PM Call to order 1. Discussion regarding Service Line Warranty Program(Council Memo No.7) Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. SPECIAL CONCURRENT CITY COUNCIL, HOUSING AND REDEVELOPMENT AUTHORITYAND PLANNING COMMISSION WORKSESSION RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM JANUARY 26, 2016 6:00 PM Call to order 1. Discussion regarding Cedar Corridor Master Plan Update(Council Memo No.8/HRA Memo No.3) Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. REGULAR CITY COUNCIL MEETING RICHFIELD MUNICIPAL CENTER, COUNCIL CHAMBERS JANUARY 26, 2016 7:00 PM INTRODUCTORY PROCEEDINGS Call to order Open forum(15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda.Individuals who wish to address the Council must have registered prior to the meeting. Pledge of Allegiance Approval of the minutes of the (1)Regular City Council Meeting of December 8,2015; (2)Special City Council Worksession of January 12,2016; (3)Regular City Council Meeting of January 12,2016;and (4)Special City Council Meeting of January 16,2016. COUNCIL DISCUSSION 1. Hats Off to Hometown Hits AGENDAAPPROVAL 2. Approval of the agenda. 3. Consent Calendar contains several separate items,which are acted upon by the City Council in one motion.Once the Consent Calendar has been approved,the individual items and recommended actions have also been approved.No further Council action on these items is necessary.However,any Council Member may request that an item be removed from the Consent Calendar and placed on the regular agenda for Council discussion and action.All items listed on the Consent Calendar are recommended for approval. A. Consideration of the approval of a resolution modifying the Health Care Savings Plan for the Mayor and Council Members. Staff Report No. 17 B. Consideration of the approval of a Construction and Maintenance Agreement with Richfield-Bloomington Honda that defines ownership and maintenance responsibilities for certain features constructed at 501 West 77th Street. Staff Report No. 18 C. Consideration of the approval of a revision to Work Order No.60 from Short Elliott Hendrickson, Inc. (SEH) for engineering services to design the City's sanitary and watermain utilities as part of the 66th Street Reconstruction Project between 16th Avenue and Xerxes Avenue. Staff Report No. 19 4. Consideration of items, if any, removed from Consent Calendar PUBLIC HEARINGS 5. Continued public hearing and consideration of the second reading of an ordinance regarding the granting of a cable communications franchise with CenturyLink for the City of Richfield and resolution approving summary publication of the ordinance. Staff Report No.20 PROPOSED ORDINANCES 6. Consideration of a second reading and resolution for summary publication of an ordinance to allow beekeeping in the City of Richfield. Staff Report No.21 OTHER BUSINESS 7. Consideration of agreements with non-profit organizations to provide social services to the City of Richfield and authorization of the City Manager to execute the agreements for services with those agencies. Staff Report No.22 8. Consideration of authorizing a capital improvement to upgrade the municipal liquor store at 6600 Cedar Avenue South. Staff Report No.23 9. Consideration of the appointments to City advisory commissions. Staff Report No.24 CITY MANAGER'S REPORT 10. City Manager's Report CLAIMS AND PAYROLLS 11. Claims and payrolls • Mayor's request for flight reimbursement to China. Open forum(15 minutes maximum) Each speaker is to keep their comment period to three minutes to allow sufficient time for others. Comments are to be an opportunity to address the Council on items not on the agenda.Individuals who wish to address the Council must have registered prior to the meeting. 12. Adjournment Auxiliary aids for individuals with disabilities are available upon request.Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. CITY OF RICHFIELD, MINNESOTA Office of City Manager January 21, 2016 Council Memorandum No. 7 The Honorable Mayor and Members of the City Council Subject: Service Line Warranty Program Discussion (Worksession Agenda Item No. 1) Council Members: At the January 26 worksession, Ashley Shiwarski of Utility Service Partners, Inc., the administrator for the National League of Cities Service Line Warranty Program, will discuss their sewer and water line repair warranty program. The National League of Cities endorses this program as an "affordable home protection solution that helps your residents save thousands of dollars on the high cost of repairing broken or leaking water or sewer lines." Please contact Kristin Asher, Director of Public Works, at 612-861-9795 for further discussion. Wi , Steven City Manager SLD:jjv Email: Assistant City Manager Department Directors CITY OF RICHFIELD, MINNESOTA Office of City Manager January 21, 2016 Council Memorandum No. 8 HRA Memorandum No. 3 Housing and Redevelopment The Honorable Mayor Authority Commissioners and City of Richfield Members of the City Council Subject: Cedar Corridor Master Plan Update (Worksession Agenda Item No. 1) Council Members & HRA Commissioners: At the January 26, 2016 joint work session of the City Council, Housing and Redevelopment Authority and Planning Commission, representatives from JLG Architects will be presenting a preliminary draft of the updated Cedar Corridor Master Plan for your review, comments and feedback. WRespectfully subfitted, r^ �t�ven L�De li City Manager SLD:kcb Email: Assistant City Manager Department Directors Planning Commission CITY COUNCIL MEETING MINUTES Richfield, Minnesota Regular Meeting December 8, 2015 CALL TO ORDER The meeting was called to order by Mayor Goettel at 7:00 p.m. in the Council Chambers. Council Members Debbie Goettel, Mayor; Edwina Garcia, Tom Fitzhenry; Pat Elliott; and Present: Michael Howard. Staff Present: Steven L. Devich, City Manager; John Stark, Community Development Director; Jay Henthorne, Public Safety Director/Police Chief; Jim Topitzhofer, Recreation Services Director; Kristin Asher, Public Works Director; Pam Dmytrenko, Assistant City Manager/HR Manager; Chris Regis, Finance Manager; Jeff Pearson, City Engineer; Mary Tietjen, City Attorney; and Cheryl Krumholz, Executive Coordinator. OPEN FORUM The following individuals expressed their concerns regarding the lack of Section 8 and Group Residential Housing resulting from the renovations and transition at Crossroads at Penn to Concierge Apartments: Quaintance Clark, 7720 Penn Avenue, #30 Donna Goodwin, 7720 Penn Avenue #C126 Linda Lee Soderstrom, 7720 Penn Avenue, #C322 Sue Watlov Phillips, Executive Director, MICAH Eric Herge, HOME Line Melissa Melnick, 7525 Oliver Avenue City Manager Devich explained that through the City's efforts, Concierge has made several concessions regarding the changeover at Crossroads. Community Development Director Stark stated that the Concierge owners would take ownership of the resource event inviting social service providers and housing advocates and the City would provide assistance. He provided an update on the outcome of discussions with the owners regarding accepting Section 8, GRH, and income-based requirements for tenants. City Attorney Tietjen explained there are federal regulations and the City does not have legal authority to force property owners to accept Section 8. City Manager Devich further explained that when a project does not include using public funds, the City has no authority because it is a private transaction. PLEDGE OF ALLEGIANCE Council Meeting Minutes -2- December 8,2015 Mayor Goettel led the audience in the Pledge of Allegiance. APPROVAL OF MINUTES M/Garcia, S/Howard to approve the minutes of the (1) Special City Council Worksession of November 24, 2015; (2) Regular City Council Meeting of November 24, 2015; and (2) Special City Council Meeting of December 1, 2015. Motion carried 5-0. Item #1 RICHFIELD FOUNDATION AWARDING OF GRANTS Richfield Foundation representatives presented the grants. Item #2 PRESENTATION BY VFW REPRESENTATIVES OF PATRIOT'S PENN AWARD VFW representatives presented the awards. Item #3 COUNCIL DISCUSSION • Schedule City advisory commission interviews • Schedule annual City Council and staff goalsetting session • Schedule meeting with local legislators • Hats Off to Hometown Hits The City Council consensus was to schedule the following: • City advisory commission interviews — Saturday, January 16, 2016 • Annual City Council and staff goalsetting session —Thursday evening, March 3, 2016 • Meeting with local legislators—Thursday morning, February 11, 2016 Item #4 COUNCIL APPROVAL OF AGENDA M/Elliott, S/Howard to approve the agenda. Motion carried 5-0. Item #5 CONSENT CALENDAR A. Consideration of the approval of a resolution allowing the acceptance of monetary donations received by the Police Department in support of Safety Day, Nite to Unite, Heroes and Helpers and the Bullet Proof Vest fund. S.R. No. 194 RESOLUTION NO. 11143 RESOLUTION AUTHORIZING RICHFIELD PUBLIC SAFETY/POLICE DEPARTMENT TO ACCEPT DONATIONS FROM THE LISTED AGENCIES, BUSINESSES AND PRIVATE INDIVIDUALS FOR DESIGNATED USES Council Meeting Minutes -3- December 8,2015 This resolution appears as Resolution No. 11143. B. Consideration of the approval of the purchase of four 2016 Ford Police Interceptor vehicles for Public Safety from Nelson Auto Center for$111,707.80, plus tax, title, and license fees.S.R. No. 195 C. Consideration of the approval of a resolution regarding site plan approval and variances to allow the partial demolition of an existing building and construction of an accessory parking lot at 6232 Lyndale Avenue. S.R. No. 196 RESOLUTION NO. 11144 RESOLUTION GRANTING APPROVAL OF A SITE PLAN AND VARIANCES AT 6232 LYNDALE AVENUE This resolution appears as Resolution No. 11144. D. Consideration of the approval of a resolution authorizing acceptance of a grant for $4,000 to the City of Richfield from the Statewide Health Improvement Program Grant (administered by Bloomington Public Health)for funding of a Bike Rack Cost Share Program. S.R. No. 197 RESOLUTION NO. 11145 RESOLUTION AUTHORIZING ACCEPTANCE OF GRANTS RECEIVED BY THE CITY OF RICHFIELD-COMMUNITY DEVELOPMENT DEPARTMENT AND TO AUTHORIZE THE CITY TO ADMINISTER THE FUNDS IN ACCORDANCE WITH GRANT AGREEMENTS AND TERMS PRESCRIBED BY DONORS This resolution appears as Resolution No. 11145. E. Consideration of the approval of a resolution appointing Raj Bhakta, Adam Selby, and Katie Haunz to the Richfield Tourism Promotion Board to each serve a three-year term ending December 31, 2018 or until a successor has been chosen, whichever is Iater.S.R. No. 198 RESOLUTION NO. 11146 RESOLUTION APPOINTING REPRESENTATIVES TO THE BOARD OF DIRECTORS OF THE RICHFIELD TOURISM PROMOTION BOARD, INC. This resolution appears as Resolution No. 11146. F. Consideration of the approval of the renewal of the 2016 licenses for On-Sale 3.2 Percent Malt Liquor, Off-Sale 3.2 Percent Malt Liquor and taxi companies doing business in Richfield. S.R. No. 199 Licenses to Operate in Richfield Licenses to sell 3.2 Percent Malt Liquor Gold Star Taxi - 27 vehicles Portland Food Mart - Off-Sale 10-10 Taxi - 10 vehicles Rainbow Foods - Off-Sale Airport Taxi - 6 vehicles Richfield Minnoco (Gas station 67th& Penn) - Off-Sale Short Stop Supperette - Off-Sale SuperAmerica #4186 - Off-Sale SuperAmerica 44188 - Off-Sale SuperAmerica #4191 - Off-Sale Council Meeting Minutes -4- December 8,2015 SuperAmerica 44615 - Off-Sale Target Corporation - Off-Sale Sandy's Tavern - On-Sale Vina Restaurant - On-Sale M/Goettel, S/Fitzhenry to approve the Consent Calendar. Motion carried 5-0. Item #6 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR None. Items PUBLIC HEARINGS REGARDING THE 2016 PAWNBROKER AND #7 & 8 SECONDHAND GOODS DEALER LICENSE RENEWALS: 7. METRO PAWN & GUN, INC., 7529 LYNDALE AVENUE S.R. NO. 200 8. UNIVERSITY CASH COMPANY, INC., D/B/A AVI'S PAWN AND JEWELRY, 6414 NICOLLET AVENUE S.R. NO. 201 Mayor Goettel presented Staff Report Nos. 200 and 201. Mark Nichols, Metro Pawn, was available to answer questions. M/Goettel, S/Fitzhenry to close public hearing. Motion carried 5-0. M/Goettel, S/Fitzhenry to approve the renewal of the following 2016 Pawnbroker and Secondhand Goods Dealer Licenses: • Metro Pawn & Gun, Inc., 7529 Lyndale Avenue; • University Cash Company, LLC d/b/a Avi's Pawn and Jewelry, 6414 Nicollet Avenue. Motion carried 5-0. Items PUBLIC HEARINGS REGARDING THE 2016 CLUB ON-SALE INTOXICATING #9 & 10 AND SUNDAY LIQUOR LICENSE RENEWALS: 9. FRED BABCOCK V.F.W. POST NO. 5555, INC. D/B/A FOUR NICKELS FOOD & DRINK; 6715 LAKE SHORE DRIVE S.R. NO. 202 10. MINNEAPOLIS-RICHFIELD AMERICAN LEGION POST 435, 6501 PORTLAND AVENUE S.R. NO. 203 Council Member Garcia presented Staff Reports Nos. 202 and 203. M/Goettel, S/Howard to close public hearing. Motion carried 5-0. M/Garcia, S/Fitzhenry to approve the renewal of the following 2016 club on-sale intoxicating and Sunday liquor licenses: Council Meeting Minutes -5- December 8,2015 • Fred Babcock V.F.W. Post No. 5555 d/b/a Four Nickels Food and Drink, 6715 Lakeshore Drive; • Minneapolis-Richfield American Legion Post 435, 6501 Portland Avenue. Motion carried 5-0. Items PUBLIC HEARINGS REGARDING 2016 ON-SALE WINE AND 3.2 PERCENT #11-18 MALT LIQUOR LICENSE RENEWALS: 11. CHIPOTLE MEXICAN GRILL OF COLORADO, LLC, D/B/A CHIPOTLE MEXICAN GRILL, 7644 LYNDALE AVENUE S.R. NO. 204 12. PATRICK'S FRENCH BAKERY, INC., D/B/A PATRICK'S BAKERY & CAFE, 2928 WEST 66TH STREET S.R. NO. 205 13. JOY'S PATTAYA THAI RESTAURANT, LLC, D/B/A JOY'S PATTAYA THAI RESTAURANT, 7545 LYNDALE AVENUE S.R. NO. 206 14. THE NOODLE SHOP CO.-COLORADO, INC., D/B/A NOODLES & COMPANY, 1732 EAST 66TH STREET S.R. NO. 207 15. THE NOODLE SHOP CO.-COLORADO, INC., D/B/A NOODLES & COMPANY, 7630 LYNDALE AVENUE S.R. NO. 208 16. HENRY THOU, D/B/A RED PEPPER CHINESE RESTAURANT, 2910 66TH STREET WEST S.R. NO. 209 17. DAVANNI'S INC., D/B/A DAVANNI'S PIZZA AND HOT HOAGIES, 6345 PENN AVENUE SOUTH S.R. NO. 210 18. MY BURGER OPERATIONS, LLC D/B/A MY BURGER, 6555 LYNDALE AVENUE SOUTH S.R. NO. 211 Council Member Elliott presented Staff Report Nos. 204 through 211. M/Elliott, S/Goettel to close the public hearing. Motion carried 5-0. M/Elliott, S/Howard to approve the renewal of the following 2016 on-sale wine and 3.2 percent malt liquor licenses: • Chipotle Mexican Grill of Colorado, LLC, d/b/a Chipotle Mexican Grill, 7644 Lyndale Avenue; • Patrick's French Bakery, Inc., d/b/a Patrick's Bakery & Cafe, 2928 West 66th Street; • Joy's Pattaya Thai Restaurant, LLC, d/b/a Joy's Pattaya Thai Restaurant, 7545 Lyndale Avenue; • The Noodle Shop Co.-Colorado, Inc., d/b/a Noodles & Company, 1732 East 66�" Street; • The Noodle Shop Co.-Colorado, Inc., d/b/a Noodles & Company, 7630 Lyndale Avenue ; • Henry Thou, d/b/a Red Pepper Chinese Restaurant, 2910 66 Street West; • Davanni's Inc., d/b/a Davanni's Pizza and Hot Hoagies, 6345 Penn Avenue South; • My Burger Operations, LLC d/b/a My Burger, 6555 Lyndale Avenue South. Motion carried 5-0. Items PUBLIC HEARINGS REGARDING 2016 ON-SALE INTOXICATING AND SUNDAY #19-28 LIQUOR LICENSE RENEWALS: 19. FRENCHMAN'S PUB, INC. D/B/A FRENCHMAN'S, WITH OPTIONAL 2 A.M. CLOSING, 1400 EAST 66TH STREET S.R. NO. 212 20. THOMPSON'S FIRESIDE PIZZA, INC. D/B/A FIRESIDE FOUNDRY, WITH OUTSIDE SERVICE, 6736 PENN AVENUE SOUTH S.R. NO. 213 21. PAISAN INCORPORATED, D/B/A KHAN'S MONGOLIAN BARBEQUE, Council Meeting Minutes -6- December 8,2015 500 EAST 78TH STREET S.R. NO. 214 22. PIZZA LUCE VII, INC. D/B/A PIZZA LUCE, WITH OUTSIDE SERVICE AND WITH OPTIONAL 2 A.M. CLOSING, 800 66TH STREET WEST S.R. NO. 215 23. LAST CALL OPERATING CO. II, D/B/A CHAMPPS AMERICANA, WITH OPTIONAL 2 A.M. CLOSING AND OUTSIDE SERVICE, 790 WEST 66TH STREET S.R. NO. 216 24. GM RICHFIELD, LLC D/B/A FOUR POINTS BY SHERATON MINNEAPOLIS AIRPORT, 7745 LYNDALE AVENUE SOUTH S.R. NO. 217 25.WILTSHIRE RESTAURANTS, LLC D/B/A HOULIHAN'S RESTAURANT & BAR, WITH OUTSIDE SERVICE, 6601 LYNDALE AVENUE SOUTH S.R. NO. 218 26. EL TEJABAN MEXICAN RESTAURANT, LLC D/B/A EL TEJABAN MEXICAN GRILL WITH OPTIONAL 2 A.M. CLOSING, 6519 LYNDALE AVENUE SOUTH S.R. NO. 219 27. DON PABLO'S OPERATIONS, LLC D/B/A DON PABLO'S, 980 78TH STREET WEST S.R. NO. 220 28. LYN 65, LLC D/B/A LYN 65 KITCHEN & BAR, 6439 LYNDALE AVENUE SOUTH S.R. NO. 221 Council Member Howard presented Staff Report Nos. 212 through 221. M/Goettel, S/Howard to close the public hearing. Motion carried 5-0. M/Howard, S/Goettel to approve the renewal of the following 2016 on-sale intoxicating and Sunday liquor licenses: • Frenchman's Pub, Inc. d/b/a Frenchman's, with optional 2 a.m. closing, 1400 East 66th Street; • Thompson's Fireside Pizza, Inc. d/b/a Fireside Foundry, with outside service, 6736 Penn Avenue South; • Paisan Incorporated, d/b/a Khan's Mongolian Barbeque, 500 East 78th Street; • Pizza Luce VII, Inc. d/b/a Pizza Luce, with outside service and with optional 2 a.m. closing, 800 66 Street West; • Last Call Operating Co. II, d/b/a Champps Americana, with optional 2 a.m. closing and outside service, 790 West 66 Street; • GM Richfield, LLC d/b/a Four Points by Sheraton Minneapolis Airport, 7745 Lyndale Avenue South; • Wiltshire Restaurants, LLC d/b/a Houlihan's Restaurant & Bar, with outside service, 6601 Lyndale Avenue South; • EI Telaban Mexican Restaurant, LLC d/b/a EI Telaban Mexican Grill with optional 2 a.m. closing, 6519 Lyndale Avenue South; • Don Pablo's Operations, LLC d/b/a Don Pablo's, 980 78th Street West; • Lvn 65, LLC d/b/a Lvn 65 Kitchen & Bar, 6439 Lyndale Avenue South. Motion carried 5-0. Item #29 PUBLIC HEARING REGARDING AN APPLICATION FOR A NOISE ORDINANCE VARIANCE TO THE METROPOLITAN COUNCIL TO ALLOW OPERATION OF TEMPORARY CONVEYANCE SYSTEMS AND CURED IN- PLACE PIPE (CIPP) LINER CURING EQUIPMENT DURING OVERNIGHT HOURS RELATED TO THE 66TH STREET RECONSTRUCTION PROJECT S.R. NO. 222 Mayor Goettel presented Staff Report No. 222. Council Meeting Minutes -7- December 8,2015 City Engineer Pearson provided a summary of the sewer rehabilitation work. Jeff Schwarz, Metropolitan Council, also discussed the project. M/Goettel, S/Fitzhenry to close the public hearing. Motion carried. 5-0. M/Goettel, S/Fitzhenry to approve an application for a noise ordinance variance to the Metropolitan Council to allow operation of temporary convevance systems and cured in-plaice pipe (CIPP) liner curing equipment during overnight hours related to the 66 Street Reconstruction Pro'ect. Motion carried 5-0. Item #30 CONSIDERATION OF THE SECOND READING OF AN ORDINANCE CREATING A NEW CITY CODE SECTION REQUIRING PERMITS FOR MOTION PICTURE AND COMMERCIAL PHOTOGRAPHY EVENTS AND ADOPTING A RESOLUTION APPROVING SUMMARY PUBLICATION OF THE ORDINANCE S.R. NO. 223 Council Member Elliott presented Staff Report No. 223. M/Elliott, S/Fitzhenry that this constitutes the second reading of Bill No. 2015-16, amending the Richfield City Code by creating a new City Code Section 1197 requiring permits for motion picture and commercial photography events, that it be published in the official newspaper, and that it be made part of these minutes, and that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 11147 RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE ADOPTING A NEW SECTION 1197 REQUIRING PERMITS FOR MOTION PICTURE AND COMMERCIAL PHOTOGRAPHY EVENTS Motion carried 5-0. This resolution appears as Resolution No. 11147. Item #31 CONSIDERATION OF THE SECOND READING OF AN ORDINANCE AMENDING SECTION 305 OF THE CITY CODE TO CODIFY REQUIREMENTS PERTAINING TO CITY COMMISSIONS, THE ADOPTION OF A RESOLUTION APPROVING SUMMARY PUBLICATION OF THE ORDINANCE AND THE ADOPTION OF A RESOLUTION REPEALING RESOLUTIONS 7718, 7983, 8344, 8142, 8933, 9282 AMD DIRECTING CITY COMMISSIONS TO AMEND THEIR RESPECTIVE BYLAWS TO BE IN COMPLIANCE WITH THE NEW CITY CODE REQUIREMENTS S.R. NO. 224 Council Member Howard presented Staff Report No. 224. He stated he was going to make a motion to table this item to allow more time to review feedback from the commissions. Mayor Goettel requested language to guide and uniformly address attendance and the removal process and that it not be included in the City Code. Council Member Elliott stated that he believed there was consensus in the feedback that was received regarding attendance. He added the Council liaison to the commission could bring an attendance issue before the City Council. Council Meeting Minutes -8- December 8,2015 Council Member Fitzhenry agreed with Council Member Elliott. He added tonight was approving the City Code and a policy addressing attendance and removal could be presented to the City Council later. Council Member Howard stated the proposed City Code amendments do reflect the issues facing commissions. M/Howard, S/Fitzhenry that this constitutes the second reading of Bill No. 2015-17, amending Section 305 of the City Code to codify requirements pertaining to city commissions, that it be published in the official newspaper, and that it be made part of these minutes, and directing city commissions to amend their respective bylaws to be in compliance with the new city code requirements and that the following resolutions be adopted and that they be made part of these minutes: RESOLUTION NO. 11148 RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE AMENDING SECTION 305 OF THE CITY CODE CODIFYING REQUIREMENTS PERTAINING TO CITY COMMISSIONS This resolution appears as Resolution No. 11148. RESOLUTION NO. 11149 RESOLUTION REPEALING CERTAIN RESOLUTIONS RELATING TO THE TERMS, RESIDENCY REQUIREMENTS AND YOUTH APPOINTMENTS FOR CITY COMMISSIONS AND REPEALING THE RESOLUTION ESTABLISHING A CITY CELEBRATIONS COMMISSION This resolution appears as Resolution No. 11149. Motion carried 5-0. Item #32 CONSIDERATION OF THE SECOND READING OF AN ORDINANCE AUTHORIZING THE CONVEYANCE OF PROPERTY OWNED BY THE CITY OF RICHFIELD TO THE RICHFIELD HRA S.R. NO. 225 Council Member Fitzhenry presented Staff Report No. 225. Community Development Director Stark explained the background related to the conveyance. M/Fitzhenry, S/Howard to Fitzhenry that this constitutes the second reading of Bill No. 2015-18, Transitory Ordinance No. 19.00, amending the Richfield City Code by authorizing the conveyance of property owned by the City of Richfield to the Richfield Housing and Redevelopment Authority, that it be published in the official newspaper, and that it be made part of these minutes. Motion carried 5-0. Item #33 CONSIDERATION OF A RIGHT-OF-WAY AGREEMENT WITH HENNEPIN COUNTY FOR THE 66TH STREET RECONSTRUCTION PROJECT S.R. NO. 226 Council Member Garcia presented Staff Report No. 226. Council Meeting Minutes -9- December 8,2015 M/Garcia, S/Fitzhenry to approve a right-of-way agreement with Hennepin County for the 66th Street Reconstruction Prosect. Motion carried 5-0. Item #34 CONSIDERATION OF THE ADOPTION OF RESOLUTION SUPPORTING AN ADDITIONAL MEDIAN DESIGN FOR 66TH STREET AT JAMES AVENUE S.R. NO. 227 Council Member Fitzhenry presented Staff Report No. 227. City Engineer Pearson explained the median design to enhance the crossing for Monroe Park. M/Fitzhenry, S/Howard that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 11150 RESOLUTION SUPPORTING HENNEPIN COUNTY TO INCLUDE A FULL MEDIAN WITH AN ENHANCED PEDESTRIAN CROSSING AT JAMES AVENUE FOR THE DESIGN OF COUNTY STATE AID HIGHWAY (CSAH) 53 HENNEPIN COUNTY PROJECT NO. 1011 Motion carried 5-0. This resolution appears as Resolution No. 11150. Item #35 CONSIDERATION OF THE RESOLUTIONS APPROVING THE 2015 REVISED/2016 PROPOSED BUDGET AND TAX LEVY AND RELATED RESOLUTIONS S.R. NO. 228 Mayor Goettel presented Staff Report No. 228. City Manager Devich explained the Truth in Taxation (TNT) notices received from Hennepin County do not include the impact of the two passed Richfield School District referendum levies. The notices, prepared before the results of the referenda were known, do indicate the school taxes may increase based on the outcome of the referenda. M/Goettel, S/Howard that the following resolutions be adopted and that they be made part of these minutes: RESOLUTION NO. 11151 RESOLUTION ADOPTING A PROPOSED BUDGET AND TAX LEVY FOR THE YEAR 2016 This resolution appears as Resolution No. 11151. RESOLUTION NO. 11152 RESOLUTION AUTHORIZING BUDGET REVISIONS This resolution appears as Resolution No. 11152. Council Meeting Minutes -10- December 8,2015 RESOLUTION NO. 11153 RESOLUTION AUTHORIZING REVISION OF 2015 BUDGET OF VARIOUS DEPARTMENTS This resolution appears as Resolution No. 11153. RESOLUTION NO. 11154 RESOLUTION AUTHORIZING ADJUSTMENT TO CITY'S MILEAGE REIMBURSEMENT RATE TO CONFORM TO INTERNAL REVENUE SERVICE STATUTORY MILEAGE REIMBURSEMENT RATE This resolution appears as Resolution No. 11154. RESOLUTION NO. 11155 RESOLUTION ADOPTING THE 2016 CAPITAL IMPROVEMENT BUDGET This resolution appears as Resolution No. 11155. RESOLUTION NO. 11156 RESOLUTION ADOPTING THE 2017-2020 CAPITAL IMPROVEMENT PROGRAM This resolution appears as Resolution No. 11156. RESOLUTION NO. 11157 RESOLUTION RELATING TO PURCHASING PRACTICES IN THE CITY OF RICHFIELD AMENDING RESOLUTION NO. 11023 This resolution appears as Resolution No. 11157. RESOLUTION NO. 11158 RESOLUTION ESTABLISHING WASTEWATER SERVICE RATES AND CHARGES, WATER RATES AND CHARGES, SPECIAL WATER SERVICE CHARGES, STORM SEWER RATES AND CHARGES, STREET LIGHT RATES AND CHARGES, AND 6.5% PENALTY ON PAST DUE ACCOUNTS This resolution appears as Resolution No. 11158. RESOLUTION NO. 11159 RESOLUTION ESTABLISHING A PUBLIC WORKS ON-CALL COMPENSATION POLICY This resolution appears as Resolution No. 11159. RESOLUTION NO. 11160 RESOLUTION APPROVING THE PUBLIC PURPOSE EXPENDITURES POLICY FOR FISCAL YEAR 2016 This resolution appears as Resolution No. 11160. Council Meeting Minutes -11- December 8,2015 RESOLUTION NO. 11161 RESOLUTION REESTABLISHING A CAR ALLOWANCE REIMBURSEMENT POLICY This resolution appears as Resolution No. 11161. RESOLUTION NO. 11162 RESOLUTION RELATING TO THE 2016 GENERAL SERVICES SALARY COMPENSATION PLAN This resolution appears as Resolution No. 11162. RESOLUTION NO. 11163 RESOLUTION RELATING TO THE 2016 MANAGEMENT SALARY COMPENSATION PLAN This resolution appears as Resolution No. 11163. RESOLUTION NO. 11164 RESOLUTION RELATING TO THE 2016 SPECIALIZED PAY PLAN This resolution appears as Resolution No. 11164. RESOLUTION NO. 11165 RESOLUTION ESTABLISHING 2016 LICENSE, PERMIT AND MISCELLANEOUS FEES PURSUANT TO THE PROVISIONS OF APPENDIX D OF THE ORDINANCE CODE OF THE CITY OF RICHFIELD RESCINDING RESOLUTION NO. 11031 This resolution appears as Resolution No. 11165. Motion carried 5-0. Item #36 CITY MANAGER'S REPORT Assistant City Manager/HR Manager Dmytrenko provided an update on the Paid Parental Leave Policy effective in January 2016. City Manager Devich discussed the possible renovation of the Cedar and Penn Avenue Municipal Liquor Stores. Item #37 CLAIMS AND PAYROLLS M/Fitzhenry, S/Howard that the following claims and payrolls be approved: U.S. Bank 12/08/15 A/P Checks: 245962-246243 873,835.70 Payroll: 115130-115453 42444-42445 $ 553,343.93 TOTAL $ 1,427,170.63 Motion carried 5-0. Council Meeting Minutes -12- December 8,2015 OPEN FORUM None. Item #38 ADJOURNMENT The City Council Meeting was adjourned by unanimous consent at 9:23 p.m. Date Approved: January 26, 2016 Debbie Goettel Mayor Cheryl Krumholz Steven L. Devich Executive Coordinator City Manager CITY COUNCIL MINUTES Richfield, Minnesota �✓ J Special City Council Worksession January 12, 2016 CALL TO ORDER The meeting was called to order by Mayor Goettel at 5:45 p.m. in the Bartholomew Room. Council Members Debbie Goettel, Mayor; Pat Elliott; Edwina Garcia; Tom Fitzhenry; and Present: Michael Howard Staff Present: Steven L. Devich, City Manager; Kristin Asher, Public Works Director; Jim Topitzhofer, Recreation Services Director; Pam Dmytrenko, Assistant City Manager/HR Manager; Jeff Pearson, City Engineer; and Cheryl Krumholz, Executive Coordinator. Mayor Goettel recognized the attendance of Boy Scout Troop 262 from Oak Grove Lutheran Church who is earning their Citizenship Community Badge. Item #1 DISCUSSION REGARDING 66TH STREET RECONSTRUCTION STAGING MEDIAN DESIGN (COUNCIL MEMO NO. 2) Maury Hooper, Hennepin County Project Manager, discussed construction staging for the 66`h Street Reconstruction project. He reviewed Hennepin County's refined construction staging during the final design development process, including potential changes related to full closures and field changes. Item #2 MAYOR GOETTEL'S SUMMARY AND DISCUSSION OF HER RECENT TRIP TO CHINA Mayor Goettel summarized the purpose of her recent trip to China to further develop a relationship between Richfield and Shouyang County, China and explained how this will benefit Richfield and Shouyang. Chinese investors and business officials are interested in investing, business exchange and developing a sister city relationship at the government level. This trip was an exploratory visit by the invitation of the Chinese government. Mayor Goettel reviewed the itinerary of the trip. She explained that a Memorandum of Understanding was signed to pursue a Sister City agreement and asked the City Council to consider a resolution to consider a Sister City relationship. The City Council consensus was to review the information provided by the Mayor before pursuing a Sister City relationship. Item #3 DISCUSSION REGARDING THE RICHFIELD BAND SHELL (COUNCIL MEMO NO. 3) Special Worksession Minutes -2- January 12, 2016 Recreation Services Director Topitzhofer discussed the plan to move the band shell project forward, including funding options and reductions in construction costs. Three ways to reduce costs were suggested including conducting exploratory borings to find a site where soils will allow a less expensive foundation, hiring a construction manager instead of a general contractor, and reducing the size of the ban shell. Council Member Garcia stated a construction manager is a reasonable way to handle the project. Mayor Goettel stated exploratory borings are cost effective. Council Member Fitzhenry stated he would not support this project because it appears to continue to have issues. Council Member Elliott stated he is against providing any additional City funding over what was already committed. Council Member Howard stated that within the already approved City funding, he supported the exploratory borings to make sure this location worked. Mr. Topitzhofer explained the differences between a construction manager and general contractor. He also explained the process to change the location of the band shell. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:58 p.m. Date Approved: January 26, 2016 Debbie Goettel Mayor Cheryl Krumholz Steven L. Devich Executive Coordinator City Manager CITY COUNCIL MEETING MINUTES Richfield, Minnesota Regular Meeting January 12, 2016 CALL TO ORDER The meeting was called to order by Mayor Goettel at 7:00 p.m. in the Council Chambers. Council Members Debbie Goettel, Mayor; Edwina Garcia, Tom Fitzhenry; Pat Elliott; and Present: Michael Howard. Staff Present: Steven L. Devich, City Manager; John Stark, Community Development Director; Chris Regis, Finance Manager; Pam Dmytrenko, Assistant City Manager/HR Manager; Mary Tietjen, City Attorney; and Cheryl Krumholz, Executive Coordinator. OPEN FORUM Mayor Goettel acknowledged the attendance of Boy Scout Troop 262 from Oak Grove Lutheran Church. PLEDGE OF ALLEGIANCE Boy Scout Troop 262 led the audience in the Pledge of Allegiance. APPROVAL OF MINUTES The minutes were not approved at this meeting. Item #1 COUNCIL DISCUSSION • Hats Off to Hometown Hits Council Member Fitzhenry reported on the restrictions related to flying drones. M/Goettel, S/Elliott to direct staff to prepare a resolution for City Council consideration on January 26, 2016 to increase the City Council's Health Care Savings Plan contribution by $25 per Pay period. Motion carried 5-0. Council Meeting Minutes -2- January 12,2016 Item #2 COUNCIL APPROVAL OF AGENDA M/Fitzhenry, S/Garcia to approve the agenda. Motion carried 5-0. Item #3 CONSENT CALENDAR A. Consideration of the approval of a designation of an Acting City Manager for 2016. S.R. No. 1 B. Consideration of the approval of a resolution designating an official newspaper for 2016. S.R. No. 2 RESOLUTION NO. 11166 RESOLUTION DESIGNATING AN OFFICIAL NEWSPAPER FOR 2016 This resolution appears as Resolution No. 11166. C. Consideration of the approval of the resolution authorizing the use of credit cards by City employees otherwise authorized to make purchases on behalf of the City. S.R. No. 3 RESOLUTION NO. 11167 RESOLUTION AUTHORIZING THE USE OF CREDIT CARDS BY CITY EMPLOYEES OTHERWISE AUTHORIZED TO MAKE PURCHASES ON BEHALF OF THE CITY OF RICHFIELD FOR THE YEAR 2016 This resolution appears as Resolution No. 11167. D. Consideration of the approval of the resolutions designating official depositories for the City of Richfield for 2016, including the approval of collateral. S.R. No. 4 RESOLUTION NO. 11168 RESOLUTION DESIGNATING U.S. BANK A DEPOSITORY OF FUNDS OF THE CITY OF RICHFIELD FOR THE YEAR 2016 This resolution appears as Resolution No. 11168. RESOLUTION NO. 11169 RESOLUTION DESIGNATING CERTAIN SAVING AND LOAN ASSOCIATIONS, BANKS AND CREDIT UNIONS AS DEPOSITORIES FOR THE DEPOSIT AND INVESTMENT OF CITY FUNDS IN 2016 This resolution appears as Resolution No. 11169. RESOLUTION NO. 11170 RESOLUTION DESIGNATING CERTAIN FINANCIAL INSTITUTIONS AS DEPOSITORIES FOR THE INVESTMENT OF CITY OF RICHFIELD FUNDS IN 2016 Council Meeting Minutes -3- January 12,2016 This resolution appears as Resolution No. 11170. E. Consideration of a resolution granting site plan approval and variances to allow a fitness studio in an existing building at 6722 Penn Avenue. S.R. No. 5 RESOLUTION NO. 11171 RESOLUTION GRANTING APPROVAL OF A SITE PLAN AND VARIANCES AT 6722 PENN AVENUE This resolution appears as Resolution No. 11171. F. Consideration of the approval of the first reading of an ordinance to allow beekeeping in the City of Richfield. S.R. No. 6 G. Consideration of the approval of the Continuing Agreement for 2016 between the Hennepin County Human Services and Public Health Department and the City of Richfield Police Department for continuing funds for a Police Cadet and/or Community Service Officer position and Joint Community Police Partnership (JCPP) training. The funds available for 2016 will be $20,000. S.R. No. 7 H. Consideration of the approval of the continuation of the agreement with the City of Bloomington for the provision of public health services for the City of Richfield for the year 2016. S.R. No. 8 M/Goettel, S/Elliott to approve the Consent Calendar. Motion carried 5-0. Item #4 CONSIDERATION OF ITEMS, IF ANY, REMOVED FROM THE CONSENT CALENDAR None. Item #5 PUBLIC HEARING REGARDING THE CONSIDERATION OF A RESOLUTION AND THE FIRST READING OF AN ORDINANCE REGARDING THE GRANTING OF A CABLE COMMUNICATION S FRANCHISE WITH CENTURYLINK FOR THE CITY FOR RICHFIELD S.R. NO. 9 Council Member Elliott presented Staff Report No. 9. Brian Grogan, Southwest Suburban Cable Commission legal counsel, made a presentation regarding the terms of the proposed CenturyLink franchise, including franchise negotiations, system build out, mosaic channel, PEG channels, free service to public buildings and indemnification. He stated the SWSCC recommendation is to grant the cable franchise to CenturyLink. Pat Haggerty, CenturyLink, expressed excitement for CenturyLink being in Richfield. City Manager Devich explained he has authorized the City Clerk to pre-publish the summary resolution so, if the ordinance is approved on January 26, 2016, it can be effective March 1, 2016. M/Elliott, S/Fitzhenry to continue the public hearing to January 26, 2016; approve the resolution granting of a cable communications franchise with CenturyLink for the City of Richfield; Council Meeting Minutes -4- January 12,2016 approve the first reading of an ordinance granting a cable television franchise to Qwest Broadband Services, Inc. d/b/a CenturyLink: and schedule second reading of the ordinance for January 26, 2016. RESOLUTION NO. 11172 RESOLUTION REGARDING AN ORDINANCE GRANTING A COMPETITIVE CABLE FRANCHISE FOR QWEST BROADBAND SERVICES, INC., D/B/A CENTURYLINK Motion carried 5-0. This resolution appears as Resolution No. 11172. Items #6 CONSIDERATION OF A RESOLUTION AUTHORIZING THE IMPLEMENTATION OF PAID PARENTAL LEAVE FOR BENEFIT-ELIGIBLE EMPLOYEES OF THE CITY OF RICHFIELD S.R. NO. 10 Council Member Howard presented Staff Report No. 10. M/Howard, S/ Goettel that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 11173 RESOLUTION AUTHORIZING IMPLEMENTATION OF PAID PARENTAL LEAVE FOR BENEFIT-ELIGIBLE EMPLOYEES OF THE CITY OF RICHFIELD Motion carried 5-0. This resolution appears as Resolution No. 11173. Items #7 CONSIDERATION OF THE RESOLUTION AMENDING THE 2015-2016 LABOR AGREEMENT WITH THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 49 S.R. NO. 11 Council Member Garcia presented Staff Report No. 11. M/Garcia, S/Howard that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 11174 RESOLUTION DESIGNATING CITY'S CONTRIBUTION TOWARDS HEALTH AND DENTAL INSURANCE PREMIUMS FOR EMPLOYEES COVERED BY THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 49 Motion carried 5-0. This resolution appears as Resolution No. 11174. Item #8 CONSIDERATION OF THE RESOLUTION APPROVING THE CONTRACT WITH THE POLICE SUPERVISORS LELS LOCAL 162 FOR THE CONTRACT PERIOD JANUARY 1, 2016 THROUGH DECEMBER 31, 2017 AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE AGREEMENT S.R. NO. 12 Council Member Fitzhenry presented Staff Report No. 12. M/Fitzhenry, S/Garcia that the following resolution be adopted and that it be made part of these minutes: Council Meeting Minutes -5- January 12,2016 RESOLUTION NO. 11175 RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY OF RICHFIELD AND LAW ENFORCEMENT LABOR SERVICES (LELS), LOCAL 162 BARGAINING UNIT FOR YEARS 2016 - 2017 Motion carried 5-0. This resolution appears as Resolution No. 11175. Item #9 CONSIDERATION OF A RESOLUTION APPROVING THE CONTRACT WITH THE POLICE OFFICERS AND DETECTIVES LELS LOCAL 123 FOR THE CONTRACT PERIOD JANUARY 1, 2016 THROUGH DECEMBER 31, 2017 AND AUTHORIZE THE CITY MANAGER TO EXECUTE THE AGREEMENT S.R. NO. 13 Council Member Fitzhenry presented Staff Report No. 13. M/Fitzhenry, S/Howard that the following resolution be adopted and that it be made part of these minutes: RESOLUTION NO. 11176 RESOLUTION APPROVING LABOR AGREEMENT BETWEEN THE CITY OF RICHFIELD AND LAW ENFORCEMENT LABOR SERVICES (LELS), LOCAL 123 BARGAINING UNIT FOR THE YEARS 2016 AND 2017 Motion carried 5-0. This resolution appears as Resolution No. 11176. Item #10 DISCUSSION REGARDING THE CITY COUNCIL ATTENDANCE AT THE 2016 NATIONAL LEAGUE OF CITIES (NLC) CONFERENCES S.R. NO. 14 Mayor Goettel presented Staff Report No. 14. M/Goettel, S/Elliott to designate the Mayor and City Council Members to attend the National League of Conferences in March and November, 2016. Motion carried 5-0. Item #11 CONSIDERATION OF DESIGNATING REPRESENTATIVES TO SERVE AS THE 2016 LIAISONS TO VARIOUS METROPOLITAN AGENCIES AND CITY COMMISSION S.R. NO. 15 Mayor Goettel presented Staff Report No. 25. M/Goettel, S/Garcia to designate the Council liaison appointments to various metropolitan agencies and city advisory commissions for 2016. Motion carried 5-0. Item #12 CONSIDERATION OF THE DESIGNATION OF A MAYOR PRO TEMPORE FOR 2016 S.R. NO. 16 Mayor Goettel presented Staff Report No. 16. Council Meeting Minutes -6- January 12,2016 M/Goettel, S/Fitzhenry to designate Council Member At-large Michael Howard as Mayor Pro Tempore for 2016. Motion carried 5-0. Item #13 CITY MANAGER'S REPORT City Manager Devich reminded the City Council of the following meetings: City advisory commission interviews — January 16, 2016 at 8:30 a.m. • Meeting with local legislators— February 11, 2016 at 7:30 a.m. • Annual City Council and staff goalsetting session — March 3, 2016 at 5 p.m. Mr. Devich also reported on a recent meeting with HUD officials regarding the City's legal action against the Metropolitan Council and MFHA regarding affordable housing. Item #14 CLAIMS AND PAYROLLS M/Fitzhenry, S/Howard that the following claims and payrolls be approved: U.S. Bank 1/12/16 A/P Checks: 246644-247024 1,634,378.21 Payroll: 115779-116094 $ 597,483.65 TOTAL $ 2,231,861.86 Motion carried 5-0. OPEN FORUM None. Item #15 ADJOURNMENT The City Council Meeting was adjourned by unanimous consent at 8:12 p.m. Date Approved: January 26, 2016 Debbie Goettel Mayor Cheryl Krumholz Steven L. Devich Executive Coordinator City Manager CITY COUNCIL MEETING MINUTES Richfield, Minnesota Special City Council Meeting I!! ' Advisory Board/Commission Applicant Interviews January 16, 2016 CALL TO ORDER The meeting was called to order by Mayor Goettel at 8:30 a.m. in the Babcock Room. ROLL CALL MEMBERS PRESENT: Debbie Goettel, Mayor; Pat Elliott, Michael Howard; Edwina Garcia; and Tom Fitzhenry. INTERVIEW OF APPLICANTS The City Council conducted interviews of the following applicants for appointment to City Advisory Boards and Commissions: Ahmad Ansari Emma Nollenber er Logan Schultz Alex Dahl Hannia Sharon Ame ee Rori Coleman-Woods Ben Sunderlin Jeffrey Walz Steven Hurvitz Brynn Hausz Ken Severson Susan Rosenberg Daniel Kitzberger Kidist Kika Yesinia Salazar Deborah Eng Kristine Klos Derek Eiden Lisa Rudolph ADJOURNMENT The meeting was adjourned by unanimous consent at 11:58 a.m. Date Approved: January 26, 2016. Debbie Goettel Mayor Cheryl Krumholz Steven L. Devich Executive Coordinator City Manager AGENDA SEC-10N: CONSENT CALENDAR AGENDA ITEM# 3.A. STAFF REPORT NO. 17 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: Jesse Swenson,Assistant HR Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich 1/21/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a resolution modifying the Health Care Savings Plan for the Mayor and Council Members. EXECUTIVE SUMMARY: A post-employment Health Care Savings Plan (HCSP), offered and administered by the Minnesota State Retirement System (MSRS) to eligible government employees, was established by the City Council for the Mayor and Council Members on March 28, 2006. Under the terms of the current plan, $50 of the member's base biweekly wage is deposited into their HCSP. Since the establishment of the plan in March 2006, the plan has been modified once, in 2009, and plan terms may be changed once every two years. The Mayor has requested that this item be brought before the Council for discussion and possible action to increase the biweekly contribution to$75. If a majority of the City Council wishes to make an adjustment to the contribution formula, either by increasing the flat rate amount or allocating a percentage of biweekly salary, it can do so via the attached resolution. Any adjustment must be approved by a majority of the City Council and will be mandatory for all Council Members. RECOMMENDED ACTION: By Motion: Adopt a resolution modifying the Health Care Savings Plan for the Mayor and Council Members. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT In 2001 the Minnesota legislature granted authority to the Minnesota State Retirement System(MSRS) to offer a post employment health care savings plan to eligible employees of the State of Minnesota and other governmental subdivisions. MSRS was authorized to administer these plans after they were adopted by governmental subdivisions throughout the state. A post employment health care savings plan (HCSP) is an employer-sponsored program that allows employees to save money to pay medical expenses and/or health insurance premiums after termination of public service. Employees are able to choose among different investment options provided by the State Board of Investment. Assets contributed into the program are tax-free, accumulate tax free, and if used for medical expenses, remain tax-free. Legal authority to establish such plans is provided through Minn. Stat. 352.98 and Internal Revenue Service rulings. The establishment of each plan, including the contribution formula, must be negotiated when dealing with a collective bargaining unit, or adopted as a personnel policy where non-union employees are involved. Once established, the plan must be filed with the MSRS to initiate the program and any subsequent changes must be filed with and implemented by the MSRS. B. POLICIES(resolutions,ordinances,regulations,statutes,etch • The state statutes have been amended to provide the opportunity for a very valuable benefit to city employees. The City of Richfield has pursued this benefit with employee groups that are interested in such a mandatory plan. • Approval by the City Council of the attached resolution will provide the City authority to proceed with this modified program for Richfield City Council members who are not represented by a collective bargaining unit. C. CRITICAL TIMING ISSUES: • There is no time critical issue pertaining to the implementation of this plan. • After City Council approval, the modified plan must be submitted to MSRS for filing and implementation. • Once the plan has been modified, no further changes can be made for two years. D. FINANCIAL IMPACT: • There is no cost to the City in this version of the plan since the City makes no contribution. In fact there is a cost savings to the City in that wages and severance pay that the employee contributes to the Health Care Savings plan are not subject to Social Security or Medicare contributions. • The plan provides a great tax savings to the participating employees and provides a tax mechanism to fund post retirement/post employment medical costs. E. LEGAL CONSIDERATION: There is legal authority for this plan in Minnesota Statutes and IRS Code. ALTERNATIVE RECOMMENDATION(Sl: The City Council could decide not to approve any plan change. If so, the current plan would remain in effect. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type ❑ HCSP Resolution Resolution Letter RESOLUTION NO. RESOLUTION AMENDING THE CITY COUNCIL POST EMPLOYMENT HEALTH CARE SAVINGS PLAN WHEREAS, Laws of Minnesota 2001, chapter 352.98, authorizes the Minnesota State Retirement System (MSRS) to offer a Post Retirement Health Care Savings Plan (Plan) program to state employees, as well as other governmental subdivisions; and WHEREAS, the Internal Revenue Service Code provides for such Plans; and WHEREAS, the City of Richfield is interested in offering the Plan to eligible City employees as a tax free method for employees to set aside money to cover the ever increasing costs of health insurance and medical costs after termination of public employment; and WHEREAS, such plans must be established by the employee group, either through a collective bargaining agreement for union employees or a personnel policy for employees not covered by a collective bargaining agreement; and WHEREAS, modifications to the provisions of an established Plan for the Richfield City Council have been agreed to by the members of the City Council. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Richfield hereby approves amending the Personnel Policy establishing a Health Care Savings Plan for the City Council employees. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of January 2016. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk AGENDA SEC-10N: CONSENT CALENDAR AGENDA ITEM# 3.13. STAFF REPORT NO. 18 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: Jeff Pearson,City Engineer DEPARTMENT DIRECTOR REVIEW: Kristin Asher, Public Works Director 1/20/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a Construction and Maintenance Agreement with Richfield- Bloomington Honda that defines ownership and maintenance responsibilities for certain features constructed at 501 West 77th Street. EXECUTIVE SUMMARY: The properties at 501 West 77th Street were redeveloped to construct two new auto dealerships. The construction included site improvements on both public and private property. The City has worked with the Developer to draft a Construction and Maintenance Agreement that defines ownership and maintenance responsibilities for the site and boulevard improvements constructed during the redevelopment project. These improvements and responsibilities include: • Sidewalk • Landscaping and Irrigation • Boulevard Trees • Street and Sidewalk Lighting • Public Utilities within Easements • Environmental Manholes (Sump Manhole) RECOMMENDED ACTION: By Motion: Approve the Construction and Maintenance Agreement with Richfield-Bloomington Honda for the site at 501 West 77th Street. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT • Harriet Avenue was vacated as part of the redevelopment and easements were created for public utilities within the private drive areas. • The City required sump manholes to provide water quality treatment before storm water enters the City system. Sump manholes are designed to remove sand, gravel, and other particles from the storm water passing through the structure before making it's way to Wood Lake. • The Agreement provides direction on the annual inspection and maintenance of the sump manhole as well as the utilities and public items within private property. B. POLICIES(resolutions,ordinances,regulations,statutes,etcy • The City requires a Construction and Maintenance Agreement for redevelopment projects containing boulevard improvements and/or sump manholes. C. CRITICAL TIMING ISSUES: • No critical timing issues are identified. D. FINANCIAL IMPACT: • The Agreement requires the property owner to reimburse the City for the costs of the sump manhole inspection, cleaning, and maintenance. • Financial responsibilities of other items varies per the agreement. E. LEGAL CONSIDERATION: • The City Attorney was consulted during the negotiations of terms and has reviewed the agreement. • The City Attorney will be available to answer questions. ALTERNATIVE RECOMMENDATION(B)LI • The Council may choose to not approve the drafted agreement and instruct staff on how to proceed. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type D RB Honda C&M Agreement Contract/Agreement if( i CONSTRUCTI®N AND MAINTENANCE AGREEMENT This Agreement, made and entered into as of the day of , 2015 by and between Richfield-Bloomington Honda ("Developer") and the City of Richfield, Minnesota, a Minnesota municipal corporation ("City"). Recitals 1. Developer is the owner of a certain tract and parcel of land lying within the City on land legally described in the attached Exhibit A("Property"). 2. The Developer has undertaken the construction of a building and related site improvements("Site Improvements") on the Property. 3. The City has granted approval to Developer to construct a parking lot and related storm drainage improvements on the Property, which drainage improvements drain into the City's storm sewer system("City System"). 4. The drainage improvements include Richfield Environmental Manholes ("Sump Manholes")to be constructed by Developer that will treat storm water before it enters the City System, The Sump Manholes are designed to remove sand, gravel and other particles from the storm water passing through the Property prior to entry into the City System. The plans and specifications for the Sump Manholes, and a site plan showing their location on the Property are contained in the attached Exhibit B ("Sump Manhole Plans"). 5. In order for the Sump Manholes to function as designed, they must be inspected and cleaned from time to time. 6. In conjunction with the construction of the Site Improvements, certain "Public Area Improvements" are to be constructed on portions of the City right-of-way and public easements abutting the Property (collectively, the "Public Areas"). The Public 1 454479v5 MDT RC1604 i G I i Area Improvements are described and located on the site plan attached as Exhibit C-1 ("Public Area Site Plans") 7. The parties are desirous of entering into this Agreement for the purpose of providing the basis for the design, construction, repair, replacement and maintenance of the Sump Manholes, the Public Area Improvements on or in the Public Areas and setting forth the remedies for failure to comply with the provisions of this Agreement. Agreement For good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows: 1. Sump Manholes. Design and Construction. The Developer shall construct and pay for the cost of construction of the Sump Manholes. Plans and Specifications for the Sump Manholes will be reviewed and approved by the City prior to commencement of construction. The City may reject the plans, specifications or the final construction if they do not meet the City standards. 2. Sump Manholes. Inspection and Cleaning. The City shall be responsible for inspecting and cleaning the Sump Manholes at intervals of once every 12 months, and more often as requested by either party. The Developer shall reimburse the City for the cost of all such inspections and cleanings, based upon the City's normal charge for such services, within thirty(30) days following receipt of an invoice showing the cost of such work. 3. Sump Manholes. Repair and Replacement. The City shall be responsible for the repair or replacement of the Sump Manholes in all instances in which the estimated cost of the work is $7,500 or less. The Developer shall reimburse the City for the cost of all such work within thirty (30) days following receipt of an invoice showing the cost of such work. If the estimated cost of such work exceeds $7,500, the Developer shall have 15 days from the date the City notifies it of the nature of the needed work and the estimated cost to secure performance of the work by a third party. The City shall still have the authority to inspect and approve or reject the work, or to direct corrections to the work. All costs incurred by the City in performing those activities will be reimbursed by the Developer within thirty (30) days following the receipt of an invoice for such activities from the City. 4. Sump Manholes. Right of Access. The Developer grants to the City, its agents and employees, the right to enter onto the Property at reasonable times to conduct the inspections, cleanings, repairs, and replacements authorized by paragraphs 2 and 3 of this Agreement. The City agrees that it will not unreasonably interfere with the use of the Property. At the request of the Developer, the area affected by this right of access shall be legally described and recorded as a supplemental agreement at the sole cost of the Developer. 2 454479v5 MDT RC160-4 `r i f I 5. Public Area Improvements Construction, Installation, Maintenance, Repair and Replacement. a. The parties agree to undertake the responsibilities for the construction, installation, maintenance, repair and replacement of the Public Area Improvements, and the intervals for the doing of such work are all as described in Exhibit C. The City will have a reasonable time to review and approve, reject or require modifications to the plans and specifications for all work done within the Public Areas by Developer. Within thirty(30) days following the receipt of an invoice, the Developer will reimburse the City for all costs incurred by the City in performing those activities. The City will provide basic snow removal on the public sidewalks in the Public Areas. If the Developer desires additional removal or treatment, it may provide these services at its own expense. Any such additional removal is subject to the requirements of Paragraphs 6 and 8b. Sidewalk damage, or damage to adjacent areas, due to the use of heavy equipment, excessive salt/chemical, and/or any other damage caused by the Developer will be repaired by Developer at the Developer's cost, and such work is subject to the provisions of Paragraphs 6 and 8b, and the cure provisions contained in Paragraph 8c. 6. Public Area Improvements. Right of Access. Subject to compliance with any preconditions contained in the City Code, the City grants to the Developer, its agents and employees, the right to enter onto the Public Areas to perform the work required to be performed by the Developer pursuant to Paragraph 5 and Exhibit C. The Developer agrees that it will not interfere with the public use of the Public Areas. The Developer will notify the City and any other agency having jurisdiction over, or an interest in, the Public Areas or abutting streets and highways at least 48 hours in advance of any scheduled work. The Developer will comply with any requirements of the City, or other agencies, governing signage and other regulations governing work in the Public Areas, including, without limitation, obtaining any additional permits, licenses or approvals needed for the work. 7. Public Area Improvements. Ownership. Exhibit C designates the Public Area Improvements that are to be constructed by Developer and conveyed to the City following the City inspection of the work and notification to the Developer that it will accept conveyance. The conveyance shall be by bill of sale and will be warranted by Developer to be free and clear of any liens or encumbrances. Any warranties available as a result of construction of such Public Area Improvements will be assigned to the City, and, to the extent available,will be utilized to offset Developer's maintenance obligations hereunder. 8. Miscellaneous Provisions. a. Maintenance, repair and replacement obligation. The party having the maintenance, repair or replacement obligation shall have the affirmative obligation of assuring the item to which the obligation attaches is always kept in good, safe, operable and presentable condition and shall be responsible for determining the present condition of the item on an ongoing basis. If the City 3 4W790 MDT RC1604 t i i a becomes aware of a condition of an item for which the Developer is responsible, it shall notify the Developer in writing whereupon the Developer shall promptly inspect, and as needed, maintain, repair or replace the item within 30 days of the date of such notification by the City. b. Insurance, Indemnity. The Developer will, during the term of this Agreement, maintain coverages from insurance companies acceptable to the City, at levels acceptable to the City insuring against claims for injury, death or property damage caused by any activities conducted by Developer, its officers, agents or employees, within the Public Areas and the failure of Developer, as obligated hereunder, to properly maintain, repair, or replace Public Area Improvements. The Developer also agrees to indemnify, hold harmless and defend the City, its officers, agents and employees, from any claims or causes of action occasioned by or arising out of the Developer's activities or failure to perform activities under this Agreement. The Developer's obligation shall not extend to claims that are the result of the negligence or the willful misconduct of the City, its officers, agents or employees. C. Default. If either party defaults in any of its obligations hereunder, after notice of such default and failure to cure within 30 days following such notification, unless extended upon mutual agreement of the parties, the non- defaulting party may pursue whatever remedies are available to it in at law or in equity. The non-defaulting party may also terminate this Agreement following such notice and the failure to cure, except that the Developer's obligation to construct, repair, maintain and reconstruct the Sump Manhole shall survive such termination. In addition to such remedies, if the Developer is the defaulting party, and the default relates to activities within the Public Areas, the City may, after such notice and cure period perform the work and recover the entire cost of such work against the Developer through a lien against the Property to be collected as a special assessment. The Developer agrees and stipulates that any such work will be for the betterment of the Property, and that the value of the Property will be increased by at least the cost of the work. The Developer for itself and its successors and assigns, waives any challenge to the amount of the assessment for such work, and waives its right to a hearing or to challenge the assessment. In addition to placing an assessment lien against the Property, the City may also seek to impose and collect a lien pursuant to Minnesota Statutes, Section 514.67. d. Term. Unless earlier terminated as provided in Paragraph IOC above,this Agreement shall remain in full force and effect until terminated by the mutual written agreement of the parties. 4 454479v5 MDT RC160-4 1 3 S I i i i E e. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Developer will secure the joinder or consent of any holders of liens or encumbrances on the Property and certifies and represents to the City that there are no liens or encumbrances affecting the Property for which consents or waivers have not been obtained. f. Other Approvals. This Agreement shall not relieve Developer from the need to obtain all licenses,permits and approvals that are required by the City and other permitting and licensing authorities to allow for the development of the Property. Nor shall this Agreement be deemed a waiver of the City's discretion to grant any such licenses, permits or approvals. Additionally, no structure or improvement that is the subject of this Agreement may be constructed until any necessary land use approvals and variances have first been obtained. g. No Interest in Land. Neither the provisions of this Agreement nor its recording among the land records shall be deemed to create any interest of the Developer in the Public Areas, This Agreement only gives the Developer the permission to occupy and utilize the Public Areas consistent with the provisions and limitations of this Agreement. h. Notices. City: City of Richfield 6700 Portland Avenue S. Richfield,MN 55423 Attn: City Engineer Developer: Richfield-Bloomington Honda 501 West 77th Street Richfield,MN 55423 Attn: Kevin A. Cauble, Director of Administrative Services i. Severability. If any provision of this Agreement is invalid or unenforceable, such provision, if feasible, shall be deemed to be modified to be within the limits of enforceability or validity; if, however, the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. j. Entire Agreement, Amendment. This Agreement, including the exhibits, contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter. This Agreement shall not be modified, amended, supplemented or revised, except by a written document signed by the parties. 5 4544790 MDT RC1604 i I i i k. Exhibits. All exhibits referred to in and attached to this Agreement are incorporated and made a part of this Agreement. 1. Counterpart Si agn tures. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed original, and all of which shall constitute one and the same instrument. 6 454479v5 MDT RC160-4 i I i i CITY: CITY OF RICHFIELD, A municipal corporation By: Debbie Goettel Its Mayor By: Steven L. Devich Its City Manager The foregoing instrument was acknowledged before me this day of , 2015, by Debbie Goettel and Steven L. Devich, the Mayor and City Manager respectively, of the City of Richfield, a Minnesota municipal corporation, on behalf of the municipal corporation. Notary Public 7 454479v5 MDT RC160-4 i i i E DEVELOPER: E RICHFIELD-BLOOMINGTON HONDA A Minnesota r By: Cy Kevin A. Cauble Its Director of Administrative Services The foregoing instrument was acknowledged before me this 3rd day of December, 2015, by Kevin A. Cauble, the Director of Administrative Services of Richfield- Bloomington Honda, a Minnesota Corporation, on behalf of the shareholders. Notary Public [Insert signature lines and acknowledgment] ANNETTE K BUTLER SEAL Notary Public, state of Indiana My Commission Expires Aprll 28, 2021 4433260 MDT RC 160-4 i 1 I I i I I C LEGAL DESCRIPTION: LOT 1 BLOCK 1 WOOD MINNESOTA RE ADDITION W 77TH STREET 501 W 771{I RICHFIELD.iM 56/23 i168,284 SF TOT FACILITY I II 1 I I II � I II I I 1 I 0 I II 9 0 I \ I I I I RFFT I INTERSTATE HWY NO 494 1 EXHIBIT A: overview of site w/legal description SCALE 1" 100' 1 INSEEL- 0 26 60 100 200 i f k i i I 1 SUMP MANHOLE SUMP MANHOLE W 77TH STREET A Pi�RJSEll l ., S HONDA $01 W 77TH ST, PICHFTEMMNS5428 �r 166,284 SF TOTAL FACILITY i if7,644 bF MeigR l � jt 1� 4epSSFIXTFYi{OR..�sr.nx, l fr /f ""-, A n ® LL _ n n n I � H- � 4 9 0 i W 78TH STREET � _. ` Q 0 INTERSTATE HWY NO 494 9 EXHIBIT B: location of sumD manholes 0 25 50 100 200 { t I t I EXHIBIT C (Public Area Ilnprovements ® attached) 501 77th Street W. Richfield®Bloomington Honda Public Area Improvements Public Area Ownership Construction Maintenance, Responsible for Inspection& Feature and Repair, the Cost of Maintenance Installation Replacement Operation& Cycle Responsibility Responsibility Maintenance Sidewalk City Developer City City Annually Sidewalk Snow City NIA See Paragraph 5 See Paragraph 5 As needed Removal Landscaping Developer Developer Developer Developer As needed Private Irrigation Developer Developer Developer Developer As needed Public Utilities(Storm, City Developer City City As needed Sewer,Water Environmental Manhole Developer Developer City Developer Annually (Sump Manhole Pedestrian Sidewalk City Developer City Developer As needed Lighting Street Lighting City Developer City City As needed Boulevard Trees City Developer City City As needed Public ROW City Developer tDi t Cit As needed Easements City Developerveloper Developer As needed t utilities onl Cit utilities only) 4544790 MDT RC1604 i s i { i 1.2FT NEW PUBLIC R.O.W. 5FT EASEMENT W 77TH STREET — P I r � PnoPoI �tl - HON11 5o wrrM sr. I RICKFEeo.W 55423 1 . IS@,MUT0T FACUTY r I i tvussr►rr �rr� rr ,��.,r I I A I F— II W W h I � I � w W w ij I I 'y LU I I '' CJ < Co cc B W II F_„�-LO J m I I W II I L-L � i I I o I I I I d I IV >arySrR � I 60FT EASEMENT = _ 5FT EASEMENT INTERSTATE HWY NO 494 MX'=loo101T C-1: location of ROW and easement areas (public areas) 1 sale r 0 25 SO 10D 200 I I i AGENDA SEC-10N: CONSENT CALENDAR AGENDA ITEM# 3.C. STAFF REPORT NO. 19 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: Jeff Pearson,City Engineer DEPARTMENT DIRECTOR REVIEW: Kristin Asher, Public Works Director 1/20/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of the approval of a revision to Work Order No. 60 from Short Elliott Hendrickson, Inc. (SEH) for engineering services to design the City's sanitary and watermain utilities as part of the 66th Street Reconstruction Project between 16th Avenue and Xerxes Avenue. EXECUTIVE SUMMARY: Short Elliott Hendrickson, Inc. (SEH), the consultant designing the City's sanitary and watermain utilities for the 66th Street Reconstruction Project, has requested a revision to their Work Order No. 60. The revision would increase the "not to exceed" contract amount by $65,000, changing the total from$180,000 to $245,000. Primary reasons for this increase in scope were unforeseen items, including: 1. Additional watermain modeling outside the original scope of work at the following locations: • Woodlake Drive to Lyndale Avenue • 1st to 16th Avenues • 35W water main crossing operational redundancies 2. Preparation of cost alternatives for sanitary sewer improvements along the MCES corridor including: • New City sewer main • Open cut services • Trenchless services 3. Additional agency coordination o Bloomington concrete pipe watermain improvements that were not anticipated Staff has discussed the increased costs with SEH and finds the proposed work order revision acceptable. RECOMMENDED ACTION: By Motion: Approve the revision to Work Order No. 60 for SEH, Inc. to provide engineering services for the design of sanitary and watermain utilities as part of the 66th Street Reconstruction Project increasing the not to exceed amount by $65,000, from $180,000 to $245,000. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT 66th Street Reconstruction • Hennepin County was awarded the federal funds for the reconstruction of 66th Street from 16th Avenue to Xerxes Avenue and will be the lead agency for preliminary design, final design of the roadway elements, and construction. • If the City desires to replace the underground utilities (sewer and water) the City is responsible for providing final design plans to Hennepin County. • The Council approved the hiring of SEH to complete the city utility design for the 66th Street Project on May 13, 2014. • The project is scheduled to start construction in 2017 and be substantially completed by the end of 2018. B. POLICIES(resolutions,ordinances,regulations,statutes,etch • The reconstruction of 66th Street is identified in the City's Comprehensive Plan (Transportation). • Council approval is required for revisions to expenditures over$100,000. C. CRITICAL TIMING ISSUES: • The City needs to complete design and provide final plans for the utilities to Hennepin County by February 2016. D. FINANCIAL IMPACT: • There are project funds available to cover this work order increase. • The anticipated funding source for reconstruction is Street Reconstruction Bonds. • Alternatively or additionally, the work could be funded using Utility Funds. E. LEGAL CONSIDERATION: • The City Attorney will be available to answer questions. ALTERNATIVE RECOMMENDATION(B)LI • The Council may choose not to approve the revision to the work proposal at this time and direct staff on how to proceed. PRINCIPAL PARTIES EXPECTED AT MEETING: None anticipated. ATTACHMENTS: Description Type ❑ SEH Request Letter Backup Material SEH Building a Better World for All of Use January 11, 2016 RE: City of Richfield 66th Utility Reconstruction SEH No. RICHF 128508 10.00 14.00 Jeff Pearson, PE City Engineer City of Richfield 1901 East 66th Street Richfield, MN 55423-2599 Dear Mr. Pearson: In accordance with paragraph 3.1 of the Agreement for Professional Services between the City of Richfield and Short Elliott Hendrickson, Inc. dated February 22, 2011, we respectfully request an increase to Work Order No. 60 of$65,000 from $180,000 to $245,000. As you can see from the attached earned value charts (EVC), we are tracking behind budget for the 6611 Street Utility Reconstruction Project. The three lines represent the revenue limit (our budget, in blue), revenue spent (in red), and our opinion of the amount of the project that is complete (green) all projected along a time line from the end of May 2014 to the end of August 2016. 1. EVC labelled Exhibit A shows we are tracking behind budget by$26,964 through the month of December 2015. 2. EVC labelled Exhibit B shows we are projecting our final engineering fee to be$235,000 at the conclusion of August 2016. Reasons for the additional $65,000 were discussed at meeting on December 15, 2015 with Liz Finnegan and Robert Hintgen and are: 1. Our proposed not to exceed fee of$180,000 reported in our April 30, 2014 proposal was based on a $3.14M estimated reconstruction cost. Our current estimated reconstruction cost is near$3.75M. 2. Water main modeling outside our scope of work at the following locations. a. Woodlake Drive to Lyndale Avenue b. 1st to 16th Avenues c. 35W water main crossing operational redundancies. 3. Preparing cost alternatives for sanitary sewer improvements along the MCES corridor. a. New City sewer main b. Open cut services Engineers 1 Architects I Planners I Scientists Short Elliott Hendrickson Inc., 10901 Red Circle Drive,Suite 300,Minnetonka,MN 55343-9302 SEH is 100%employee-owned I sehinc.com 1 952.912.2600 1 800.734.6757 1 888.908.8166 fax Jeff Pearson, PE January 11, 2016 Page 2 c. Trenchless services 4. Additional agency coordination a. Bloomington PCCP improvements not anticipated. 5. Additional City Meetings The fee increase assumes: 1. No further modification to the alignment of the sanitary sewer or water main. 2. A maximum of 48 hours per month or 12 hours per week after February 29, 2016. Thank you for considering our request. Please contact me with any questions or comments. Sincerely, SHORT ELLIOTT HENDRICKSON INC. Aaron Ditzler, PE Project Manager atd Attachments c: Kristin Asher, City of Richfield Liz Finnegan, City of Richfield Robert Hintgen, City of Richfield Miles Jensen, SEH pApt\r\richt\128508\1-genl\10-setup-contract\03-proposal\66th street additional service Ietter.docx AGENDA SEC-10N: PUBLIC HEARINGS AGENDA ITEM# 5. STAFF REPORT NO. 20 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: Steven L. Devich, City Manager DEPARTMENT DIRECTOR REVIEW: Steven L. Devich 1/21/2016 OTHER DEPARTMENT REVIEW: Mary Tietjen, City Attorney CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Continued public hearing and consideration of the second reading of an ordinance regarding the granting of a cable communications franchise with CenturyLink for the City of Richfield and resolution approving summary publication of the ordinance. EXECUTIVE SUMMARY: In the spring of 2015, the City or Richfield, along with the other member cities of the Southwest Suburban Cable Commission (SWSCC), received an application from CenturyLink to provide cable communications services to the City of Richfield. The City, in conjunction with the SWSCC, followed all applicable law in accepting and processing the application. Through that process it was found that CenturyLink was legally, technically and financially qualified to provide cable communications services to the City. Furthermore, staff of the SWSCC was directed to enter into negotiations with Century Link to ascertain if mutually agreeable terms for such a franchise could be reached. Those negotiations have been completed and resulted in a proposed franchise agreement between the cities of the SWSCC and CenturyLink. In addition, on October 28, 2015, the SWSCC voted on the terms of the tentative franchise agreement with CenturyLink and approved the agreement by a unanimous vote. On January 12, 2016, the City Council opened and continued a Public Hearing, had first reading consideration of a Cable Franchising Ordinance and adopted a resolution Regarding an Ordinance Granting a Competitive Cable Franchise for Qwest Broadband Services, Inc., d/b/a CenturyLink. This evening, the City Council will continue and close the Public Hearing, give second reading consideration of the Competitive Cable Franchise Ordinance for CenturyLink and if passed, adopt a resolution approving Summary Publication of the ordinance. Brian Grogan, who is the legal counsel and administrator of the SWSCC, will be available to answer any questions that Council Members or the public may have concerning this matter. An attached memo from Mr. Grogan dated December 21, 2015 further details this application process and the action under consideration. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: • Approve the second reading of an ordinance granting a cable television franchise to Qwest Broadband Services, Inc. d/b/a CenturyLink; and • Adopt a resolution approving summary publication of the ordinance. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT On March 24, 2015, the City Council considered a request from CenturyLink to grant a cable communications franchise to provide such services to the City. Pursuant to this request, the City initiated the process proscribed by Minnesota Statutes 238.081 by publishing a Notice of Intent to Franchise in the Sun Current and mailed the Notice directly to the existing provider Comcast and the prospective applicant CenturyLink. The process followed in consideration of this application is outlined in the Executive Summary. B. POLICIES(resolutions,ordinances,regulations,statutes,etch The cable franchising process in Minnesota is provided for in MN Statutes Section 238.081. The City must follow the procedures and timelines as stated in the Statute. C. CRITICAL TIMING ISSUES: All of the procedural and legal considerations preliminary to consideration of granting this proposed franchise have been completed and the decision to grant or deny the franchise for Richfield now rests with the City Council. D. FINANCIAL IMPACT: None. CenturyLink has submitted a check for$10,000 to the City to cover the costs incurred by the City for this application process. E. LEGAL CONSIDERATION: Brian Grogan, the attorney for the SWSCC, has outlined the process to be followed in responding to this franchise request and has guided the City in this process according to all applicable law. ALTERNATIVE RECOMMENDATION(B)LI None. PRINCIPAL PARTIES EXPECTED AT MEETING: Brian Grogan, Attorney for the SWSCC ATTACHMENTS: Description Type ❑ Franchise Ordinance Cover Memo ❑ Resolution for summary publication Resolution Letter ❑ Resolution No. 11172 Backup Material ❑ SWSS Memo and Findings of Fact Backup Material City of Richfield, Minnesota Ordinance Granting a Cable Television Franchise to Qwest Broadband Services,Inc. d/b/a CenturyLink January 12, 2016 Prepared by: BRIAN T. GROGAN, ESQ. Moss & Barnett A Professional Association 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 (612) 877-5340 3056874v1 TABLE OF CONTENTS SECTION1 DEFINITIONS....................................................................................................... 1 SECTION2 FRANCHISE ......................................................................................................... 6 SECTION 3 OPERATION IN STREETS AND RIGHTS-OF-WAY..................................... 12 SECTION 4 REMOVAL OR ABANDONMENT OF SYSTEM............................................ 16 SECTION 5 SYSTEM DESIGN AND CAPACITY ............................................................... 17 SECTION 6 PROGRAMMING AND SERVICES.................................................................. 20 SECTION 7 PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS .................... 21 SECTION 8 REGULATORY PROVISIONS.......................................................................... 29 SECTION9 BOND .................................................................................................................. 30 SECTION 10 SECURITY FUND.............................................................................................. 30 SECTION11 DEFAULT ........................................................................................................... 33 SECTION 12 FORECLOSURE AND RECEIVERSHIP.......................................................... 35 SECTION 13 REPORTING REQUIREMENTS....................................................................... 36 SECTION 14 CUSTOMER SERVICE POLICIES.................................................................... 37 SECTION 15 SUBSCRIBER PRACTICES............................................................................... 43 SECTION 16 COMPENSATION AND FINANCIAL PROVISIONS ..................................... 44 SECTION 17 MISCELLANEOUS PROVISIONS.................................................................... 47 EXHIBIT A FREE CABLE SERVICE TO PUBLIC BUILDINGS......................................A-1 EXHIBIT B FRANCHISE FEE PAYMENT WORKSHEET............................................... B-1 EXHIBIT C INDEMNITY AGREEMENT........................................................................... C-1 i 3056874v1 ORDINANCE NO. AN ORDINANCE GRANTING A FRANCHISE TO QWEST BROADBAND SERVICES, INC., D/B/A CENTURYLINK TO OPERATE AND MAINTAIN A CABLE SYSTEM AND PROVIDE CABLE SERVICES IN THE CITY OF RICHFIELD; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE; PROVIDING FOR CITY REGULATION AND ADMINISTRATION OF THE CABLE SYSTEM AND CABLE SERVICES. RECITALS The City of Richfield, Minnesota ("City")pursuant to applicable federal and state law is authorized to grant one or more nonexclusive cable television franchises to construct, operate, maintain and reconstruct cable television systems within the City limits. Qwest Broadband Services, Inc., d/b/a CenturyLink ("Grantee") seeks a competitive cable television franchise with the City. Negotiations between Grantee and the City have been completed in accordance with the guidelines established by the City Code, Minnesota Statutes Chapter 238 and the Cable Act(47 U.S.C. Section 546). The City reviewed the legal, technical and financial qualifications of Grantee and, after a properly noticed public hearing, determined that it is in the best interest of the City and its residents to grant this competitive cable television franchise to Grantee. NOW, THEREFORE, THE CITY OF RICHFIELD DOES ORDAIN that a franchise is hereby granted to Qwest Broadband Services, Inc. to operate and maintain a Cable System and provide Cable Services in the City upon the following terms and conditions: SECTION 1 DEFINITIONS For the purpose of this Franchise, the following, terms, phrases, words, derivations and their derivations shall have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number and words in the singular number include the plural number. In the event the meaning of any word or phrase not defined herein is uncertain, the definitions contained in applicable local, State or Federal law shall apply. "Access Channels"means any channel or portion of a channel utilized for public, educational or governmental programming. "Affiliate" shall mean any Person controlling, controlled by or under common control of Grantee. 1 3056874v1 "Applicable Laws"means any law, statute, charter, ordinance, rule, regulation, code, license, certificate, franchise, permit, writ, ruling, award, executive order, directive, requirement, injunction (whether temporary,preliminary or permanent),judgment, decree or other order issued, executed, entered or deemed applicable to Grantee by any governmental authority of competent jurisdiction. "Basic Cable Service"means any service tier which includes the lawful retransmission of local television broadcast and shall include the public, educational and governmental access channels. Basic Cable Service as defined herein shall be the definition set forth in 47 U.S.C. § 522(3). "Cable Act"means the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 et seq., as amended by the Cable Television Consumer Protection and Competition Act of 1992, as further amended by the Telecommunications Act of 1996, as further amended from time to time. "Cable Service" shall mean (a) the one-way transmission to Subscribers of(i)Video Programming or (ii) Other Programming Service, and b) Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service. For the purposes of this definition, "video programming" is programming provided by, or generally considered comparable to programming provided by a television broadcast station; and, "other programming service" is information that a cable operator makes available to all Subscribers generally. "Cable System" or"System" shall have the meaning specified for"Cable System" in the Cable Act. Unless otherwise specified, it shall in this document refer to the Cable System utilized by the Grantee in the City under this Franchise. "Channel"means a portion of the electromagnetic frequency spectrum which is used in a Cable System and which is capable of delivering a television channel as defined by the FCC by regulation. "City" shall mean the City of Richfield, a municipal corporation in the State of Minnesota. "City Code"means the Municipal Code of the City of Richfield, Minnesota, as may be amended from time to time. "Commission"means the Southwest Suburban Cable Communications Commission consisting of the cities of Edina, Eden Prairie, Hopkins, Minnetonka and Richfield, Minnesota. "Connection"means the attachment of the Drop to the television set or Set Top Box of the Subscriber. "Council" shall mean the governing body of the City. 2 3056874v1 "Day"unless otherwise specified shall mean a calendar day. "Drop" shall mean the cable that connects the Subscriber terminal to the nearest feeder cable of the cable. "Effective Date" shall mean March 1, 2016. "Expanded Basic Service"means all Subscriber services other than Basic Cable Service provided by the Grantee covered by a regular monthly charge, but not including optional programming offered on a pay-per-channel or pay-per-view basis. "FCC" means the Federal Communications Commission, or a designated representative. "Franchise" shall mean the right granted by this Ordinance and conditioned as set forth herein. "Franchise Area"means the entire geographic area within the City as it is now constituted or may in the future be constituted. "Franchise Fee" shall mean the fee assessed by the City to Grantee, in consideration of Grantee's right to operate the Cable System within the City's Streets and rights of way, determined in amount as a percentage of Grantee's Gross Revenues and limited to the maximum percentage allowed for such assessment by federal law. The term Franchise Fee does not include the exceptions noted in 47 U.S.C. §542(g)(2)(A-E). "GAAP"means generally accepted accounting principles as promulgated and defined by the Financial Accounting Standards Board("FASB"), Emerging Issues Task Force ("EITF") and/or the U.S. Securities and Exchange Commission ("SEC"). "Grantee"means Qwest Broadband Services, Inc., d/b/a CenturyLink. "Gross Revenues"means any and all compensation in whatever form, from any source, directly or indirectly earned by Grantee or any Affiliate of Grantee or any other Person who would constitute a cable operator of the Cable System under the Cable Act, derived from the operation of the Cable System to provide Cable Service within the City. Gross Revenues include, by way of illustration and not limitation, monthly fees charged Subscribers for Cable Services including Basic Cable Service, any expanded tiers of Cable Service, optional premium or digital services; pay-per-view services; Pay Services, installation, disconnection, reconnection and change-in-service fees, Leased Access Channel fees, all Cable Service lease payments from the Cable System to provide Cable Services in the City, late fees and administrative fees,payments or other consideration received by Grantee from programmers for carriage of programming on the Cable System and accounted for as revenue under GAAP; revenues from rentals or sales of Set Top Boxes or other Cable System equipment; advertising sales revenues booked in accordance with Applicable Law and GAAP; revenues from program guides and electronic guides, additional outlet fees, Franchise Fees required by this Franchise, revenue from Interactive Services to the extent they are considered Cable Services under Applicable Law; 3 3056874v1 revenue from the sale or carriage of other Cable Services, revenues from home shopping and other revenue-sharing arrangements. Copyright fees or other license fees paid by Grantee shall not be subtracted from Gross Revenues for purposes of calculating Franchise Fees. Gross Revenues shall include revenue received by any entity other than Grantee where necessary to prevent evasion or avoidance of the obligation under this Franchise to pay the Franchise Fees. Gross Revenues shall not include any taxes on services furnished by Grantee, which taxes are imposed directly on a Subscriber or user by a city, county, state or other governmental unit, and collected by Grantee for such entity. The Franchise Fee is not such a tax. Gross Revenues shall not include amounts which cannot be collected by Grantee and are identified as bad debt; provided that if amounts previously representing bad debt are collected, then those amounts shall be included in Gross Revenues for the period in which they are collected. Gross Revenues shall not include payments for PEG Access capital support. The City acknowledges and accepts that Grantee shall maintain its books and records in accordance with GAAP. "Interactive Services" are those services provided to Subscribers whereby the Subscriber either(a)both receives information consisting of either television or other signal and transmits signals generated by the Subscriber or equipment under his/her control for the purpose of selecting what information shall be transmitted to the Subscriber or for any other purpose or (b) transmits signals to any other location for any purpose. "Living Unit"means a distinct address as tracked in the QC network inventory, used by CenturyLink to identify existing or potential Subscribers. This includes, but is not limited to, single family homes, multi-dwelling units (e.g., apartment buildings and condominiums) and business locations. "Minnesota Cable Communications Act"means the provisions of Minnesota law governing the requirements for a cable television franchise as set forth in Minn. Stat. § 238, et. seq., as amended. "Mosaic Channel"means a channel which displays miniaturized media screens and related information for a particular group of Channels with common themes. The Mosaic Channel serves as a navigation tool for Subscribers, which displays the group of Access Channels on a single Channel screen and also provides for easy navigation to a chosen Access Channel. "Normal Business Hours"means those hours during which most similar businesses in City are open to serve customers. In all cases, "Normal Business Hours" must include some evening hours, at least one (1) night per week and/or some weekend hours. "Normal Operating Conditions" means those Service conditions which are within the control of Grantee. Those conditions which are not within the control of Grantee 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 ordinarily within the control of Grantee include, but are not limited to, special promotions, pay-per-view events, rate 4 3056874v1 increases, regular peak or seasonal demand periods, and maintenance or upgrade of the Cable System. "Pay Service"means programming (such as certain on-demand movie channels or pay- per-view programs) offered individually to Subscribers on a per-channel, per-program or per- event basis. "PEG"means public, educational and governmental. "Person"means any natural person and all domestic and foreign corporations, closely- held corporations, associations, syndicates,joint stock corporations, partnerships of every kind, clubs, businesses, common law trusts, societies and/or any other legal entity. "QC"means Qwest Corporation, wholly owned subsidiary of CenturyLink, Inc. and an Affiliate of Grantee. "Qualified Living Unit"means a Living Unit which meets the minimum technical qualifications defined by Grantee for the provision of Cable Service. A Living Unit receiving a minimum of 25Mbps downstream will generally be capable of receiving Cable Service subject to Grantee performing certain network grooming and conditioning. "Set Top Box"means an electronic device, which converts signals to a frequency not susceptible to interference within the television receiver of a Subscriber, and by an appropriate Channel selector also permits a Subscriber to view all signals included in the Basic Cable Service tier delivered at designated converter dial locations. "Street" shall mean the surface of and the space above and below any public Street, road, highway, freeway, lane, path,public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held by City which shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to the use thereof for the purpose of installing or transmitting over poles, wires, cables, conductors, ducts, conduits, vaults, man- holes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a Cable System. "Subscriber"means a Person who lawfully receives Cable Service from Grantee. "Wireline MVPD"means a multichannel video programming distributor that utilizes the Streets to install cable or fiber and is engaged in the business of making available for purchase, by Subscribers, multiple Channels of video programming in the City. 5 3056874v1 SECTION 2 FRANCHISE 2.1 Grant of Franchise. (a) The City hereby authorizes Grantee to occupy or use the City's Streets subject to: 1) the provisions of this non-exclusive Franchise to provide Cable Service within the City; and 2) all applicable provisions of the City Code. Said Franchise shall constitute both a right and an obligation to provide Cable Services as required by the provisions of this Franchise. Nothing in this Franchise shall be construed to prohibit Grantee from: (1)providing services other than Cable Services to the extent not prohibited by Applicable Law; or(2) challenging any exercise of the City's legislative or regulatory authority in an appropriate forum. The City hereby reserves all of its rights to regulate such other services to the extent not prohibited by Applicable Law and no provision herein shall be construed to limit or give up any right to regulate. (b) Grantee promises and guarantees, as a condition of exercising the privileges granted by this Franchise, that any Affiliated Entity of the Grantee involved in the offering of Cable Service in the City, or directly involved in the ownership, management or operation of the Cable System in the City, shall also comply with all obligations of this Franchise. However, the City and Grantee acknowledge that QC will be primarily responsible for the construction and installation of the facilities in the Rights-of-Way which will be utilized by Grantee to provide Cable Services. So long as QC does not provide Cable Service to Subscribers in the City, QC will not be subject to the terms and conditions contained in this Franchise. QC's installation and maintenance of facilities in the Rights-of-Way is governed by applicable local, state and federal law. To the extent Grantee constructs and installs facilities in the Rights-of-Way, such installation will be subject to the terms and conditions contained in this Franchise. Grantee is responsible for all provisions in this Franchise related to: 1) its offering of Cable Services in the City; and 2) the operation of the Cable System regardless of what entity owns or constructs the facilities used to provide the Cable Service. The City and Grantee agree that to the extent QC violates any applicable federal, state, or local laws, rules, and regulations, the City shall first seek compliance directly from QC. In the event, the City cannot resolve these violations or disputes with QC, then the City may look to Grantee to ensure such compliance. Failure by Grantee to ensure QC's or any other Affiliate's compliance with Applicable Laws, rules, and regulations, shall be deemed a material breach of this Franchise by Grantee. 2.2 Reservation of Authority. The Grantee specifically agrees to comply with the lawful provisions of the City Code and applicable regulations of the City. Subject to the police power exception below, in the event of a conflict between A) the lawful provisions of the City Code or applicable regulations of the City and B) this Franchise, the express provisions of this Franchise shall govern. Subject to express federal and state preemption, the material terms and conditions contained in this Franchise may not be unilaterally altered by the City through subsequent amendments to the City Code, ordinances or any regulation of City, except in the lawful exercise of City's police power. Grantee acknowledges that the City may modify its 6 3056874v1 regulatory policies by lawful exercise of the City's police powers throughout the term of this Franchise. Grantee agrees to comply with such lawful modifications to the City Code; however, Grantee reserves all rights it may have to challenge such modifications to the City Code whether arising in contract or at law. The City reserves all of its rights and defenses to such challenges whether arising in contract or at law. Nothing in this Franchise shall (A) abrogate the right of the City to perform any public works or public improvements of any description, (B)be construed as a waiver of any codes or ordinances of general applicability promulgated by the City, or(C)be construed as a waiver or release of the rights of the City in and to the Streets. 2.3 Franchise Term. This Franchise shall be in effect for a term of five (5) years from the date of acceptance by Grantee, unless terminated sooner as hereinafter provided. Six (6) months prior to the expiration of the initial five (5) year term, if City determines that Grantee is in compliance with all other material terms of this Franchise including the build out obligations set forth in this Franchise as required by Applicable Law, the City shall have the unilateral right to extend the Franchise for an additional term of no less than five (5) years and no more than ten (10) years. 2.4 Franchise Area. The Grantee is hereby authorized to provide Cable Services over a Cable System within the jurisdictional boundaries of the City, including any areas annexed by the City during the term of this Franchise. The parties acknowledge that Grantee is not the first entrant into the wireline video market in the City. The Grantee acknowledges that the City desires wireline competition throughout the entire City so all residents may receive the benefits of competitive Cable Services. Grantee aspires to provide Cable Service to all households within the City by the end of the five year(5) term of this Franchise. Grantee agrees that its deployment of Cable Service in the City will be geographically dispersed throughout the City, and shall be made available to diverse residential neighborhoods of the City without discrimination. 2.5 Franchise Nonexclusive. The Franchise granted herein shall be nonexclusive. The City specifically reserves the right to grant, at any time, such additional franchises for a Cable System as it deems appropriate provided, however, such additional grants shall not operate to materially modify, revoke, or terminate any rights previously granted to Grantee other than as described in Section 17.17. The grant of any additional franchise shall not of itself be deemed to constitute a modification, revocation, or termination of rights previously granted to Grantee. Any additional cable franchise grants shall comply with Minn. Stat. Section 238.08 and any other applicable federal level playing field requirements. 2.6 Build Out. (a) Initial build out. No later than the second anniversary of the Effective Date of this Franchise, Grantee shall be capable of serving a minimum of fifteen percent (15%) of the City's households with Cable Service;provided,however, Grantee will make its best efforts to complete such deployment within a shorter period of time. Grantee agrees that this initial minimum build-out commitment shall include a significant number of households below the median income in the City. City shall, upon written request of Grantee, provide detailed maps of such areas. Nothing in this Franchise shall restrict Grantee from serving additional households in the City with Cable Service. 7 3056874v1 (b) Quarterly Meetings. In order to permit the Commission to monitor and enforce the provisions of this section and other provisions of this Franchise, the Grantee shall, upon demand, promptly make available to the Commission maps and other documentation showing exactly where within the City the Grantee is currently providing Cable Service. Grantee shall meet with the Commission, not less than once quarterly, to demonstrate Grantee's compliance with the provisions of this section concerning the deployment of Cable Services in the City including,by way of example, the provision of this section in which Grantee commits that a significant portion of its initial investment will be targeted to areas below the median income within the City, and the provisions of this section that prohibit discrimination in the deployment of Cable Services. In order to permit the Commission and the City to monitor and enforce the provisions of this section and other provisions of this Franchise, the Grantee shall, commencing April 15, 2016, and continuing throughout the term of this Franchise, meet quarterly with the Commission and make available to the Commission the following information: (i) The total number of Living Units throughout the City; (ii) The geographic area within the City where the Grantee is capable of delivering Cable Service through either a FTTH or FTTN method of service delivery which shall include sufficient detail to allow the City to determine the availability of Cable Services at commercially-zoned parcels; (iii) The actual number of Qualified Living Units capable of receiving Cable Service from Grantee through FTTH and FTTN; and (iv) A list of the public buildings and educational institutions capable of receiving Cable Service from the Grantee (see list attached hereto as Exhibit A). (c) Additional build out based on Market Success. If, at any quarterly meeting, including any quarterly meeting prior to the second anniversary of the Effective Date of this Franchise as referenced in Section 2.6(a) herein, Grantee is actually serving twenty seven and one-half percent(27.5%) of the households capable of receiving Cable Service, then Grantee agrees the minimum build-out commitment shall increase to include all of the households then capable of receiving Cable Service plus an additional fifteen (15%) of the total households in the City, which Grantee agrees to serve within two (2) years from the quarterly meeting; provided, however, the Grantee shall make its best efforts to complete such deployment within a shorter period of time. For example, if, at a quarterly meeting with the Commission, Grantee shows that it is capable of serving sixty percent (60%) of the households in the City with Cable Service and is actually serving thirty percent (30%) of those households with Cable Service, then Grantee will agree to serve an additional fifteen percent (15%) of the total households in the City no later than two (2) years after that quarterly meeting (a total of seventy-five percent (75%) of the total households). This additional build-out based on market success shall continue until every household in the City is served. 8 3056874v1 (d) Nondiscrimination. Grantee shall provide Cable Service under non- discriminatory rates and reasonable terms and conditions to all Subscribers who reside in Living Units in any location where the Grantee is capable of providing Cable Service. Grantee shall not arbitrarily refuse to provide Cable Services to any Person or in any location where the Grantee is capable of providing Cable Service. Any Qualified Living Unit should also include Commercially-Zoned Parcels. "Commercially-Zoned Parcels" mean any Street address or municipally identified lot or parcel of real estate with a building. Grantee shall not deny Cable Services to any group of Subscribers or potential residential Subscribers based upon the income level of residents of the local area in which such group resides, nor shall Grantee base decisions about construction or maintenance of its Cable System or facilities based upon the income level of residents of the local area in which such group resides. Grantee shall provide such service at non-discriminatory monthly rates for residential Subscribers, consistent with Applicable Law. Grantee shall not discriminate between or among any individuals in the availability of Cable Service based upon income in accordance and consistent with 47 U.S.C. Section 541(a)(3), or based upon race or ethnicity. (e) Standard Installation. Grantee shall provide Cable Services at its standard installation within seven (7) days of a request by any Person in a Qualified Living Unit. A request shall be deemed made on the date of signing a service agreement, receipt of funds by Grantee or receipt by Grantee of a verified verbal or written request. (f) Multiple Dwelling Units. The Grantee shall offer the individual units of a multiple dwelling unit all Cable Services offered to other Dwelling Units in the City. Grantee shall, upon request, individually wire units upon request of the property owner or renter who has been given written authorization by the owner. Such offering is conditioned upon the Grantee having legal access to said unit and any payment (for Grantee's reasonable costs of internal wiring) as applicable. The City acknowledges that the Grantee cannot control the dissemination of particular Cable Services beyond the point of demarcation at a multiple dwelling unit. 2.7 Periodic Public Review of Franchise. Within sixty(60) Days of the third anniversary of the Effective Date of this Franchise or third annual anniversary of any extension of the Franchise term, the City may conduct a public review of the Franchise. The purpose of any such review shall be to ensure, with the benefit of full opportunity for public comment, that the Grantee continues to effectively serve the public in the light of new developments in cable law and regulation, cable technology, cable company performance with the requirements of this Franchise, local regulatory environment, community needs and interests, and other such factors. Both the City and Grantee agree to make a full and good faith effort to participate in the review. So long as Grantee receives reasonable notice, Grantee shall participate in the review process and shall fully cooperate. The review shall not operate to modify or change any provision of this Franchise without mutual written consent in accordance with Section 17.6 of this Franchise. 9 3056874v1 2.8 Transfer of Ownership. (a) No sale, transfer, assignment or"fundamental corporate change", as defined in Minn. Stat. § 238.083, of this Franchise shall take place until the parties to the sale, transfer, or fundamental corporate change files a written request with City for its approval, provided, however, that said approval shall not be required where Grantee grants a security interest in its Franchise and assets to secure an indebtedness. (b) City shall have thirty(30) Days from the time of the request to reply in writing and indicate approval of the request or its determination that a public hearing is necessary due to potential adverse affect on Grantee's Subscribers resulting from the sale or transfer. Such approval or determination shall be expressed in writing within thirty (30) Days of receipt of said request, or the request shall be deemed approved as a matter of law. (c) If a public hearing is deemed necessary pursuant to (b) above, such hearing shall be commenced within thirty(30) Days of such determination and notice of any such hearing shall be given in accordance with local law or fourteen (14) Days prior to the hearing by publishing notice thereof once in a newspaper of general circulation in City. The notice shall contain the date, time and place of the hearing and shall briefly state the substance of the action to be considered by City. (d) Within thirty(30) Days after the closing of the public hearing, City shall approve or deny in writing the sale or transfer request. City shall set forth in writing with particularity its reason(s) for denying approval. City shall not unreasonably withhold its approval. (e) The parties to the sale or transfer of the Franchise only, without the inclusion of the System in which substantial construction has commenced, shall establish that the sale or transfer of only the Franchise will be in the public interest. (f) 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 Section 2.8. The term "controlling interest" as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised. (g) In no event shall a transfer or assignment of ownership or control be approved without the transferee becoming a signatory to this Franchise and assuming all rights and obligations thereunder, and assuming all other rights and obligations of the transferor to the City. (h) In the event of any proposed sale or assignment pursuant to paragraph (a) of this section, City shall have the right of first refusal of any bona fide offer to purchase only the Cable System. Bona fide offer, as used in this section, means an offer received by the Grantee which it intends to accept subject to City's rights under this section. This written offer must be conveyed to City along with the Grantee's written acceptance of the to 3056874v1 offer contingent upon the rights of City provided for in this section. City shall be deemed to have waived its rights under this paragraph (h) in the following circumstances: (i) If it does not indicate to Grantee in writing, within thirty(30) Days of notice of a proposed sale or assignment, its intention to exercise its right of purchase; or (ii) It approves the assignment or sale of the Franchise as provided within this section (i) A transfer of the Franchise shall not include a transfer of ownership or other interest in Grantee to the parent of Grantee or to another Affiliate of Grantee; transfer of an interest in the Franchise or the rights held by Grantee under the Franchise to the parent of Grantee or to another Affiliate of Grantee; any action which is the result of a merger of the parent of Grantee; or any action which is the result of a merger of another Affiliate of Grantee. Nothing in this Section 2.8 (i) shall be read to serve as a waiver of Grantee's obligation to obtain the City's advance written consent to any proposed transfer that constitutes a change in the "controlling interest" of the Grantee as set forth in 2.8 (f)herein and Minn. Stat. Section 238.083. 2.9 Expiration. Upon expiration of the Franchise, the City shall have the right at its own election and subject to Grantee's rights under Section 626 of the Cable Act to: (a) extend the Franchise, though nothing in this provision shall be construed to require such extension; (b) renew the Franchise, in accordance with Applicable Laws; (c) invite additional franchise applications or proposals; (d) terminate the Franchise subject to any rights Grantee has under Section 626 of the Cable Act; or (e) take such other action as the City deems appropriate. 2.10 Right to Require Removal of Property. At the expiration of the term for which the Franchise is granted provided no renewal is granted, or upon its forfeiture or revocation as provided for herein, the City shall have the right to require Grantee to remove at Grantee's own expense all or any part of the Cable System, used exclusively to provide Cable Service, from all Streets and public ways within the Franchise Area within a reasonable time. If Grantee fails to do so, the City may perform the work and collect the cost thereof from Grantee. 2.11 Continuity of Service Mandatory. It shall be the right of all Subscribers to receive all available services insofar as their financial and other obligations to Grantee are honored. In the event that Grantee elects to overbuild, rebuild, modify, or sell the system, or the City revokes or fails to renew the Franchise, Grantee shall make its best effort to ensure that all Subscribers receive continuous uninterrupted service, regardless of the circumstances, during the 11 3056874v1 lifetime of the Franchise. In the event of expiration, purchase, lease-purchase, condemnation, acquisition, taking over or holding of plant and equipment, sale, lease, or other transfer to any other Person, including any other grantee of a cable communications franchise, the current Grantee shall cooperate fully to operate the system in accordance with the terms and conditions of this Franchise for a temporary period sufficient in length to maintain continuity of service to all Subscribers. SECTION 3 OPERATION IN STREETS AND RIGHTS-OF-WAY 3.1 Use of Streets. (a) Grantee may, subject to the terms of this Franchise, erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the Streets within the City such lines, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary and appurtenant to the operation of a Cable System within the City. Without limiting the foregoing and subject to Section 2.l(b) herein, Grantee expressly agrees that it will construct, operate and maintain its Cable System in compliance with, and subject to, the requirements of the City Code, including by way of example and not limitation, those requirements governing the placement of Grantee's Cable System; and with other applicable City Codes, and will obtain and maintain all permits and bonds required by the City Code in addition to those required in this Franchise. (b) All wires, conduits, cable and other property and facilities of Grantee shall be so located, constructed, installed and maintained as not to endanger or unnecessarily interfere with the usual and customary trade, traffic and travel upon, or other use of, the Streets of City. Grantee shall keep and maintain all of its property in good condition, order and repair so that the same shall not menace or endanger the life or property of any Person. Grantee shall keep accurate maps and records of all of its wires, conduits, cables and other property and facilities located, constructed and maintained in the City. (c) All wires, conduits, cables and other property and facilities of Grantee, shall be constructed and installed in an orderly and workmanlike manner. All wires, conduits and cables shall be installed, where possible, parallel with electric and telephone lines. Multiple cable configurations shall be arranged in parallel and bundled with due respect for engineering considerations. 3.2 Construction or Alteration. Subject to Section 2.1(b)herein, Grantee shall in all cases comply with the City Code, City resolutions and City regulations regarding the acquisition of permits and/or such other items as may be reasonably required in order to construct, alter or maintain the Cable System. Grantee shall, upon request, provide information to the City regarding its progress in completing or altering the Cable System. 3.3 Non-Interference. Grantee shall exert its best efforts to construct and maintain a Cable System so as not to interfere with other use of Streets. Grantee shall, where possible in the 12 3056874v1 case of above ground lines, make use of existing poles and other facilities available to Grantee. When residents receiving underground service or who will be receiving underground service will be affected by proposed construction or alteration, Grantee shall provide such notice as set forth in the permit or in City Code of the same to such affected residents. 3.4 Consistency with Designated Use. Notwithstanding the above grant to use Streets, no Street shall be used by Grantee if the City, in its sole opinion, determines that such use is inconsistent with the terms, conditions or provisions by which such Street was created or dedicated, or presently used under Applicable Laws. 3.5 Undergrounding. Grantee shall place underground all of its transmission lines which are located or are to be located above or within the Streets of the City in the following cases: (a) all other existing utilities are required to be placed underground by statute, resolution, policy or other Applicable Law; (b) Grantee is unable to get pole clearance; (c) underground easements are obtained from developers of new residential areas; or (d) utilities are overhead but residents prefer underground(service provided at cost). If an ordinance is passed which involves placing underground certain utilities including Grantee's cable plant which is then located overhead, Grantee shall participate in such underground project and shall remove poles, cables and overhead wires if requested to do so and place facilities underground. Nothing herein shall mandate that City provide reimbursement to Grantee for the costs of such relocation and removal. However, if the City makes available funds for the cost of placing facilities underground, nothing herein shall preclude the Grantee from participating in such funding to the extent consistent with the City Code or Applicable Laws. Grantee shall use conduit or its functional equivalent to the greatest extent possible for undergrounding, except for Drops from pedestals to Subscribers' homes and for cable on other private property where the owner requests that conduit not be used. Cable and conduit shall be utilized which meets the highest industry standards for electronic performance and resistance to interference or damage from environmental factors. Grantee shall use, in conjunction with other utility companies or providers, common trenches for underground construction wherever available. 3.6 Maintenance and Restoration. (a) Restoration. In case of disturbance of any Street,public way, paved area or public improvement by Grantee, Grantee shall, at its own cost and expense and in accordance with the requirements of Applicable Law, restore such Street, public way, 13 3056874v1 paved area or public improvement to substantially the same condition as existed before the work involving such disturbance took place. All restoration occurring in private easements or on other private property shall be performed in accordance with the City Code. Grantee shall perform all restoration work within a reasonable time and with due regard to seasonal working conditions. If Grantee fails, neglects or refuses to make restorations as required under this section, then the City may do such work or cause it to be done, and the cost thereof to the City shall be paid by Grantee. If Grantee causes any damage to private property in the process of restoring facilities, Grantee shall repair such damage. (b) Maintenance. Grantee shall maintain all above ground improvements that it places on City right-of-way pursuant to the City Code and any permit issued by the City. In order to avoid interference with the City's ability to maintain the right-of-way, Grantee shall provide such clearance as is required by the City Code and any permit issued by the City. If Grantee fails to comply with this provision and by its failure property is damaged, Grantee shall be responsible for all damages caused thereby. (c) Disputes. In any dispute over the adequacy of restoration or maintenance relative to this section, final determination shall be the prerogative of the City, Department of Public Works and consistent with the City Code and any permit issued by the City. 3.7 Work on Private Property. Grantee, with the consent of property owners, shall have the authority,pursuant to the City Code, to trim trees upon and overhanging Streets, alleys, sidewalks, and public ways so as to prevent the branches of such trees from coming in contact with the wires and cables of Grantee, except that at the option of the City, such trimming may be done by it or under its supervision and direction at the reasonable expense of Grantee. 3.8 Relocation. (a) City Property. If, during the term of the Franchise, the City or any government entity elects or requires a third party to alter, repair, realign, abandon, improve, vacate, reroute or change the grade of any Street, public way or other public property; or to construct, maintain or repair any public improvement; or to replace, repair install, maintain, or otherwise alter any cable, wire conduit, pipe, line, pole, wire-holding structure, structure, or other facility, including a facility used for the provision of utility or other services or transportation of drainage, sewage or other liquids, for any public purpose, Grantee shall, upon request, except as otherwise hereinafter provided, at its sole expense remove or relocate as necessary its poles, wires, cables, underground conduits, vaults, pedestals, manholes and any other facilities which it has installed. Nothing herein shall mandate that City provide reimbursement to Grantee for the costs of such relocation and removal. However, if the City makes available funds for the cost of placing facilities underground, nothing herein shall preclude the Grantee from participating in such funding to the extent consistent with the City Code or Applicable Laws. (b) Utilities and Other Franchisees. If, during the term of the Franchise, another entity which holds a franchise or any utility requests Grantee to remove or 14 3056874v1 relocate such facilities to accommodate the construction, maintenance or repair of the requesting party's facilities, or their more efficient use, or to "make ready" the requesting party's facilities for use by others, or because Grantee is using a facility which the requesting party has a right or duty to remove, Grantee shall do so. The companies involved may decide among themselves who is to bear the cost of removal or relocation, pursuant to City Code, and provided that the City shall not be liable for such costs. (c) Notice to Remove or Relocate. Any Person requesting Grantee to remove or relocate its facilities shall give Grantee no less than forty-five (45) Days' advance written notice to Grantee advising Grantee of the date or dates removal or relocation is to be undertaken; provided, that no advance written notice shall be required in emergencies or in cases where public health and safety or property is endangered. (d) Failure by Grantee to Remove or Relocate. If Grantee fails, neglects or refuses to remove or relocate its facilities as directed by the City; or in emergencies or where public health and safety or property is endangered, the City may do such work or cause it to be done, and the cost thereof to the City shall be paid by Grantee. If Grantee fails, neglects or refuses to remove or relocate its facilities as directed by another franchisee or utility, that franchisee or utility may do such work or cause it to be done, and if Grantee would have been liable for the cost of performing such work, the cost thereof to the party performing the work or having the work performed shall be paid by Grantee. (e) Procedure for Removal of Cable. Grantee shall not remove any underground cable or conduit which requires trenching or other opening of the Streets along the extension of cable to be removed, except as hereinafter provided. Grantee may remove any underground cable from the Streets which has been installed in such a manner that it can be removed without trenching or other opening of the Streets along the extension of cable to be removed. Subject to Applicable Law, Grantee shall remove, at its sole cost and expense, any underground cable or conduit by trenching or opening of the Streets along the extension thereof or otherwise which is ordered to be removed by the City based upon a determination, in the sole discretion of the City, that removal is required in order to eliminate or prevent a hazardous condition. Underground cable and conduit in the Streets which is not removed shall be deemed abandoned and title thereto shall be vested in the City. (f) Movement of Buildings. Grantee shall, upon request by any Person holding a building moving permit, franchise or other approval issued by the City, temporarily remove, raise or lower its wire to permit the movement of buildings. The expense of such removal, raising or lowering shall be paid by the Person requesting same, and Grantee shall be authorized to require such payment in advance. The City shall require all building movers to provide not less than fifteen (15) Days' notice to the cable company to arrange for such temporary wire changes. 15 3056874v1 SECTION 4 REMOVAL OR ABANDONMENT OF SYSTEM 4.1 Removal of Cable System. In the event that: (1) the use of the Cable System is discontinued for any reason for a continuous period of twelve (12) months; or (2) the Cable System has been installed in a Street without complying with the requirements of this Franchise, Grantee, at its expense shall, at the demand of the City remove promptly from the Streets all of the Cable System, used only to provide Cable Service, other than any which the City may permit to be abandoned in place. In the event of any such removal Grantee shall promptly restore to a condition as nearly as possible to its prior condition the Street or other public places in the City from which the System has been removed. 4.2 Abandonment of Cable System. In the event of Grantee's abandonment of the Cable System, used only to provide Cable Service, City shall have the right to require Grantee to conform to the state right-of-way rules, Minn. Rules, Chapter 7819. The Cable System to be abandoned in place shall be abandoned in the manner prescribed by the City. Grantee may not abandon any portion of the System without having first given three (3) months written notice to the City. Grantee may not abandon any portion of the System without compensating the City for damages resulting from the abandonment. 4.3 Removal after Abandonment or Termination. if Grantee has failed to commence removal of System, used only to provide Cable Service, or such part thereof as was designated by City, within thirty(30) days after written notice of City's demand for removal consistent with Minn. Rules, Ch. 7819, is given, or if Grantee has failed to complete such removal within twelve (12) months after written notice of City's demand for removal is given, City shall have the right to apply funds secured by the letter of credit and performance bond toward removal and/or declare all right, title, and interest to the Cable System to be in City with all rights of ownership including, but not limited to, the right to operate the Cable System or transfer the Cable System to another for operation by it. 4.4 City Options for Failure to Remove Cable System. If Grantee has failed to complete such removal within the time given after written notice of the City's demand for removal is given, the City shall have the right to exercise one of the following options: (a) Declare all right, title and interest to the System, used only to provide Cable Service, to be in the City or its designee with all rights of ownership including, but not limited to, the right to operate the System or transfer the System to another for operation by it; or (b) Declare the System abandoned and cause the System, if used only to provide Cable Service, or such part thereof as the City shall designate, to be removed at no cost to the City. The cost of said removal shall be recoverable from the security fund, indemnity and penalty section provided for in this Franchise or from Grantee directly. (c) Upon termination of service to any Subscriber, Grantee shall promptly remove all its facilities and equipment from within the dwelling of a Subscriber who owns such dwelling upon his or her written request, except as provided by Applicable 16 3056874v1 Law. Such Subscribers shall be responsible for any costs incurred by Grantee in removing the facilities and equipment. 4.5 System Construction and Equipment Standards. The Cable System shall be installed and maintained in accordance with standard good engineering practices and shall conform, when applicable, with the National Electrical Safety Code, the National Electrical Code and the FCC's Rules and Regulations. 4.6 System Maps and Layout. To the extent not otherwise provided for in Section 2.6(b), Grantee, or an affiliate, shall maintain complete and accurate records, maps and diagrams of the location of all its facilities used to provide Cable Services and the Cable System maintained by QC in the Streets and make them available to the City upon request. SECTION 5 SYSTEM DESIGN AND CAPACITY 5.1 Availability of Signals and Equipment. (a) The Cable System shall have a bandwidth capable of providing the equivalent of a typical 750 MHz Cable System. Recognizing that the City has limited authority under federal law to designate the technical method by which Grantee provides Cable Service, as of the Effective Date of this Franchise, Grantee provides its Cable Service utilizing two (2) different methods. First, using a PON platform, the Grantee provides Cable Service to some Qualified Living Units by connecting fiber directly to the household("FTTP"). Second, the Grantee provides Cable Service to some Qualified Living Units by deploying fiber further into the neighborhoods and using the existing copper infrastructure to increase broadband speeds ("FTTN"). Generally speaking, when Grantee deploys FTTN, households located within four thousand(4,000) cable feet of a remote terminal shall receive broadband speeds capable of providing Cable Service. In both the FTTP and FTTN footprint, a household receiving a minimum of 25 Mbps downstream will generally be capable of receiving Cable Service after Grantee performs certain network grooming and conditioning. (b) The Grantee shall comply with all FCC regulations regarding carriage of digital and HDTV transmissions. (c) Grantee agrees to maintain the Cable System in a manner consistent with, or in excess of the specifications in Section 5.1 (a) and(b) throughout the term of the Franchise with sufficient capability and technical quality to enable the implementation and performance of all the requirements of this Franchise, including the exhibits hereto, and in a manner which meets or exceeds FCC technical quality standards at 47 C.F.R. § 76 Subpart K, regardless of the particular format in which a signal is transmitted. 5.2 Free Cable Service to Public Buildings. (a) As part of its support for PEG use of the System, the Grantee shall provide a fiee drop to the Subscriber network and free Basic Cable Service and Expanded Basic 17 3056874v1 Cable Service to all of the sites listed on Exhibit A attached hereto, and to such other public institutions as the City may reasonably request from time to time provided such location is a Qualified Living Unit and not currently receiving service from another provider. However, City may determine to disconnect the other cable provider and require Grantee to meet the free service obligation, as determined in City's sole discretion. (b) The Grantee is only required to provide a single free drop to the Subscriber network, to a single outlet at a point within the location selected by that location. However, the location may extend the drop to multiple outlets and receive free Basic and Expanded Basic Cable Service at each outlet so long as such extension does not result in any violations of applicable leakage standards which the Grantee is obligated to meet. A location that wishes to install multiple outlets may do so itself, or may contract with the Grantee to do so. Grantee shall provide up to three (3) additional Set Top Boxes to each new location free of charge so that the services can be received and individually tuned by each receiver connected to the drop at a location. If an institution physically moves locations, such institution may move existing Set Top Boxes to the new locations with a free drop, and the moved Set Top Box will not count against the three (3) additional Set Top Boxes. Grantee will replace and maintain Set Top Boxes it provides or that it had provided as necessary so that locations may continue to view the free services Grantee is required to provide. Provided such location is a Qualified Living Unit and not currently receiving service from another provider. However, City may determine to disconnect the other cable provider and require Grantee to meet the free service obligation, as determined in City's sole discretion. (c) Outlets of Basic and Expanded Basic Cable Service provided in accordance with this section may be used to distribute Cable Services throughout such buildings; provided such distribution can be accomplished without causing Cable System disruption and general technical standards are maintained. Such outlets may only be used for lawful purposes. Grantee agrees that if any broadband service is required in order to receive the free service obligation set forth in this section, Grantee will provide such broadband service free of charge for the sole purpose of facilitating the provision of free Cable Service required by this section. Grantee agrees that it will not offset, deduct or reduce its payment of past, present or future Franchise Fees required as a result of its obligation to connections or services to public facilities. 5.3 System Specifications. (a) System Maintenance. In all its construction and service provision activities, Grantee shall meet or exceed the construction, technical performance, extension and service requirements set forth in this Franchise. (b) Emergency Alert Capability. At all times during the term of this Franchise, Grantee shall provide and maintain an Emergency Alert System (EAS) consistent with applicable federal law and regulations including 47 C.F.R., Part 11, and any Minnesota State Emergency Alert System requirements. The City may identify 18 3056874v1 authorized emergency officials for activating the EAS consistent with the Minnesota State Emergency Statewide Plan ("EAS Plan"). The City may also develop a local plan containing methods of EAS message distribution, subject to Applicable Laws and the EAS Plan. Nothing in this section is intended to expand Grantee's obligations beyond that which is required by the EAS Plan and Applicable Law. (c) Standby Power. Grantee shall provide standby power generating capacity at the Cable System control center. Grantee shall maintain standby power system supplies,rated at least at two (2)hours' duration, throughout the trunk and distribution networks. In addition, Grantee shall have in place throughout the Franchise term a plan, and all resources necessary for implementation of the plan, for dealing with outages of more than two (2) hours. (d) Technical Standards. The technical standards used in the operation of the Cable System shall comply, at minimum, with the applicable technical standards promulgated by the FCC relating to Cable Systems pursuant to Title 47, Section 76, Subpart K of the Code of Federal Regulations, as may be amended or modified from time to time, which regulations are expressly incorporated herein by reference. The Cable System shall be installed and maintained in accordance with standard good engineering practices and shall conform with the National Electrical Safety Code and all other Applicable Laws governing the construction of the Cable System. 5.4 Performance Testing. Grantee shall perform all applicable system tests at the intervals required by the FCC, and all other tests reasonably necessary to determine compliance with technical standards required by this Franchise. These tests shall include, at a minimum: (a) Initial proof of performance for any construction; (b) Semi-annual compliance tests; (c) Tests in response to Subscriber complaints; (d) Tests requested by the City to demonstrate franchise compliance; and (e) Written records of all system test results performed by or for Grantee shall be maintained, and shall be available for City inspection upon request. 5.5 Special Testing. (a) Throughout the term of this Franchise, City shall have the right to inspect all construction or installation work performed pursuant to the provisions of the Franchise. In addition, City may require special testing of a location or locations within the System if there is a particular matter of controversy or unresolved complaints regarding such construction or installation work or pertaining to such location(s). Demand for such special tests may be made on the basis of complaints received or other evidence indicating an unresolved controversy or noncompliance. Such tests shall be limited to the particular matter in controversy or unresolved complaints. City shall 19 3056874v1 endeavor to so arrange its request for such special testing so as to minimize hardship or inconvenience to Grantee or to the Subscribers caused by such testing. (b) Before ordering such tests, Grantee shall be afforded thirty(30) Days following receipt of written notice to investigate and, if necessary, correct problems or complaints upon which tests were ordered. City shall meet with Grantee prior to requiring special tests to discuss the need for such and, if possible, visually inspect those locations which are the focus of concern. If, after such meetings and inspections, City wishes to commence special tests and the thirty (30) Days have elapsed without correction of the matter in controversy or unresolved complaints, the tests shall be conducted at Grantee's expense by Grantee's qualified engineer. The City shall have a right to participate in such testing by having an engineer of City's choosing, and at City's expense, observe and monitor said testing. SECTION 6 PROGRAMMING AND SERVICES 6.1 Categories of Programming Service. Grantee shall provide video programming services in at least the following broad categories: Local Broadcast (subject to federal carriage requirements) Public Broadcast News and Information Sports General Entertainment Arts/Performance/Humanities Science/Technology Chi ldren/Fami ly/Seniors Foreign Language/Ethnic Programming Public, Educational and Governmental Access Programming (to the extent required by the Franchise) Movies Leased Access 6.2 Changes in Programming Services. Grantee shall not delete or so limit as to effectively delete any broad category of programming within its control without the City's consent. Further, Grantee shall provide at least thirty(30) Days' prior written notice to Subscribers and to the City of Grantee's request to effectively delete any broad category of programming or any Channel within its control, including all proposed changes in bandwidth or Channel allocation and any assignments including any new equipment requirements that may occur as a result of these changes. 6.3 Parental Control Device. Upon request by any Subscriber, Grantee shall make available for sale or lease a parental control or lockout device that will enable the Subscriber to block all access to any and all Channels without affecting those not blocked. Grantee shall 20 3056874v1 inform Subscribers of the availability of the lockout device at the time of original subscription and annually thereafter. 6.4 FCC Reports. The results of any tests required to be filed by Grantee with the FCC shall also be copied to City within ten (10) Days of the conduct of the date of the tests. 6.5 Annexation. Unless otherwise provided by Applicable Law, including the City Code, upon the annexation of any additional land area by City, the annexed area shall thereafter be subject to all the terms of this Franchise upon sixty(60) Days written notification to Grantee of the annexation by City. Unless otherwise required by Applicable Laws, nothing herein shall require the Grantee to expand its Cable System to serve, or to offer Cable Service to any area annexed by the City if such area is then served by another Wireline MVPD franchised to provide multichannel video programming. 6.6 Line Extension. Grantee shall not have a line extension obligation until the first date by which Grantee is providing Cable Service to more than fifty percent (50%) of all Subscribers receiving facilities based Cable Service from both the Grantee and any other provider(s) of Cable Service within the City. At that time, the City, in its reasonable discretion and after meeting with Grantee, shall determine the timeframe to complete deployment to the remaining households in the City, including a density requirement that is the same or similar to the requirement of the incumbent franchised cable operator. 6.7 Nonvoice Return Capability. Grantee is required to use cable and associated electronics having the technical capacity for nonvoice return communications. SECTION 7 PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS 7.1 Number of PEG Access Channels. Within one hundred eighty(180) days of the Effective Date, Grantee will make available three (3)PEG Access Channels. 7.2 Digital and High Definition PEG Carriage Requirements. While the parties recognize that while the primary signals of local broadcast stations are simulcast in standard definition ("SD") and high definition ("HD") formats, the Grantee's obligation with respect to carriage of PEG in HD and SD formats shall be as follows: (a) Grantee agrees to carry all PEG Access Channels in HD provided the entity originating the signal provides the Grantee an HD signal. Further, Grantee will downconvert any such signal to an SD format so that Subscribers who choose not to subscribe to an HD package may receive said signal in an SD format. (b) Grantee is not required to convert a signal delivered in a lower quality format to a higher quality format. The City shall have no obligation to provide a signal to the Grantee in a HD format. (c) All PEG Access Channels must be receivable by Subscribers without special expense in addition to the expense paid to receive commercial services the 21 3056874v1 Subscriber receives. City acknowledges that HD programming may require the viewer to have special viewer equipment (such as an HDTV and an HD-capable digital device/receiver),but any Subscriber who can view an HD signal delivered via the Cable System at a receiver shall also be able to view the HD Access Channels at that receiver, without additional charges or equipment. By agreeing to make PEG available in HD format, Grantee is not agreeing to provide free HD equipment to Subscribers including complimentary municipal and educational accounts, or to modify its equipment or pricing policies in any manner. City acknowledges that not every Subscriber may be able to view HD PEG programming (for example, because they do not have an HDTV in their home or have chosen not to take an HD-capable receiving device from Grantee or other equipment provider) or on every television in the home. (d) The Grantee, upon request of the City, will provide technical assistance or diagnostic services to determine whether or not the problem with the PEG signals is the result of matters for which the Grantee is responsible, and if so the Grantee will take prompt corrective actions. (e) The Grantee will provide any PEG Access Channels on the Basic Cable Service tier throughout the life of the Franchise, or if there is no Basic Cable Service tier, shall provide the PEG Access Channels to any Person who subscribes to any level of cable video programming service, and otherwise in accordance with Applicable Laws. To the extent technically feasible, Grantee shall, upon request from the City, provide City with quarterly viewership numbers for each of the PEG Access Channels carried on Grantee's Cable System. (f) Grantee shall facilitate carriage of PEG Access Channel program listings on its interactive programming guide, at no cost to the City provided that the City shall hold Grantee harmless should the City or PEG providers fail to provide correct or timely information to the interactive guide programmers. (g) If Channels are selected through menu systems, the PEG Access Channels shall be displayed in the same manner as other Channels, and with equivalent information regarding the programming on the Channel. To the extent that any menu system is controlled by a third party, Grantee shall ensure that the Grantee will provide PEG listings on that menu system, if it is provided with the programming information by the City. 7.3 Control of PEG Channels. The control and administration of the Access Channels shall rest with the City and the City may delegate, from time to time over the term of this Franchise, such control and administration to various entities as determined in City's sole discretion. 7.4 Transmission of Access Channels. Access Channels may be used for transmission of non-video signals in compliance with Applicable Laws. This may include downstream transmission of data using a protocol such as TCP/IP or current industry standards. Should Grantee develop the capability to provide bi-directional data transmission, spectrum capacity shall be sufficient to allow Subscribers to transmit data to PEG facilities. 22 3056874v1 7.5 Access Channel Locations. (a) Grantee shall provide the City's government access channel in both HD and SD. The government access channel will be located on Channel 239 and shall at all times be located in the Channel neighborhood offering news/public affairs programming on Grantee's Cable System channel lineup. The government access channel shall have video and audio signal strength, signal quality, and functionality equivalent to the highest quality broadcast and commercial cable/satellite Channels carried by the Grantee on its Cable System. (i) Grantee shall carry the remaining public and educational Channels (PE Channels) on Channel 26 in its Channel lineup as a means to provide ease of access by Subscribers to the group of PE Channels placed consecutively on Channel numbers significantly higher in the Channel lineup. This use of one (1) Channel to access the group of PE Channels required under this Franchise shall be referred to as a"Mosaic Channel." The Mosaic Channel shall display the group of PE Channels on a single Channel screen and serve as a navigation tool for Subscribers. The Mosaic Channel shall allow Subscribers to navigate directly from Channel 26 to any of the PE Channels requested in a single operation without any intermediate steps to a chosen PE Channel in the group. (ii) Grantee shall use Channel 26 as a Mosaic Channel to access the PE Channels required under this Franchise. The group of consecutive PE channels residing at higher Channel numbers will retain Channel names and identity for marketing purposes, unless approved by the City. Grantee shall not include any other programming or Channels on the Commission's PE Mosaic Channel unless the City provides advance written consent. (iii) When using the Mosaic Channel, Subscribers shall be directed to the requested PE Channel in an HD format if appropriate to the Subscriber's level of service; otherwise, the Subscriber shall be directed to the SD PE Channel. The Mosaic Channel mechanism shall allow Subscribers to navigate directly from Channel 26 to the requested Commission Access Channels which shall be located on Channel numbers 81 10 (educational access) and 81 1 1 (public access). (iv) Grantee shall consult with the City(or City's designee) to determine the PE Channel information displayed on the Mosaic Channel. However, the information shall have video and audio signal strength, signal quality, and functionality equivalent to the highest quality broadcast and commercial cable/satellite channels carried by the Grantee on its Cable System in a Mosaic format. (v) The Mosaic Channel assigned for use by the City shall be used to navigate to the group of City PE Channels and will be placed near other PEG Mosaic Channels 23 3056874v1 (vi) If through technology changes or innovation in the future, the Grantee discontinues the use of Mosaic presentations, then Grantee shall provide the PE Channels to Subscribers at equivalent visual and audio quality and equivalent functionality as Grantee delivers the highest quality broadcast stations and highest quality commercial cable/satellite channels on its Cable System with no degradation. (b) The Grantee shall not charge for use of the PEG Access Channels, equipment, facilities or services. (c) In no event shall any Access Channel reallocations be made prior to ninety (90) Days written notice to the City by Grantee, except for circumstances beyond Grantee's reasonable control. The Access Channels will be located within reasonable proximity to other commercial video or broadcast Channels, excluding pay-per-view programming offered by Grantee in the City. (d) Grantee agrees not to encrypt the Access Channels differently than other commercial Channels available on the Cable System. (e) In conjunction with any occurrence of any Access Channel(s)relocation, as may be permitted by this Franchise, Grantee shall provide a minimum of Nine Thousand Dollars ($9,000) of in-kind air time per event on advertiser supported Channels (e.g. USA, TNT, TBS, Discovery Channel, or other comparable Channels) for the purpose of airing City's, or its designees', pre-produced thirty(30) second announcement explaining the change in location, or if Grantee does not have air time capabilities a mutually agreed equivalent shall be provided. 7.6 Navigation to Access Channels. Grantee agrees that if it utilizes a visual interface under its control on its Cable System for all Channels, the Access Channels shall be treated in a non-discriminatory fashion consistent with Applicable Laws so that Subscribers will have ready access to Access Channels. This shall not be construed to require Grantee to pay any third party fees that may result from this obligation. 7.7 Ownership of Access Channels. Grantee does not relinquish its ownership of or ultimate right of control over a Channel by designating it for PEG use. A PEG access user— whether an individual, educational or governmental user—acquires no property or other interest by virtue of the use of a Channel position so designated. Grantee shall not exercise editorial control over any public, educational, or governmental use of a Channel position, except Grantee may refuse to transmit any public access program or portion of a public access program that contains obscenity, indecency, or nudity in violation of Applicable Law. 7.8 Noncommercial Use of PEG. Permitted noncommercial uses of the Access Channels shall include by way of example and not limitation: (1) the identification of financial supporters similar to what is provided on public broadcasting stations; or (2) the solicitation of financial support for the provision of PEG programming by the City or third party users for charitable, educational or governmental purposes; or (3)programming offered by accredited, 24 3056874v1 non-profit, educational institutions which may, for example, offer telecourses over a Access Channel. 7.9 Dedicated Fiber Return Lines. (a) Grantee shall provide and maintain, free of charge with no transport costs or other fees or costs imposed, a direct fiber connection and necessary equipment to transmit PEG programming from the City Hall control room racks to the Grantee headend ("PEG Origination Connection"). (b) In addition to the PEG Origination Connection, the Grantee shall, free of charge, construct a direct connection and necessary equipment to the programming origination site located at Edina City Hall where PEG programming is originated by the Commission. (c) Grantee shall at all times provide and maintain, free of charge, a drop to the Cable System, required Set-Top Box and free Basic Cable Service and Expanded Basic Service to the City Hall and the location from which PEG programming is originated(currently the playback facility at the Edina City Hall), to allow these facilities to view (live) the downstream PEG programming Channels on Grantee's Cable System so they can monitor the PEG signals and make certain that PEG programming is being properly received (picture and sound)by Subscribers. 7.10 Interconnection. To the extent technically feasible and permitted under Applicable Laws, Grantee will allow necessary interconnection with any newly constructed City and school fiber for noncommercial programming to be promoted and administered by the City as allowed under Applicable Laws and at no additional cost to the City or schools. This may be accomplished through a patch panel or other similar facility and each party will be responsible for the fiber on their respective sides of the demarcation point. Grantee reserves its right to review on a case-by-case basis the technical feasibility of the proposed interconnection. Based on this review Grantee may condition the interconnection on the reasonable reimbursement of Grantee's incremental costs, with no markup for profit, to recoup Grantee's construction costs only. In no event will Grantee impose any type of recurring fee for said interconnection. 7.11 Ancillary Equipment. Any ancillary equipment operated by Grantee for the benefit of PEG Access Channels on Grantee's fiber paths or Cable System, whether referred to switchers, routers or other equipment, will be maintained by Grantee, at no cost to the City or schools for the life of the Franchise. Grantee is responsible for any ancillary equipment on its side of the demarcation point and the City or school is responsible for all other production/playback equipment. 7.12 Future Fiber Return Lines for PEG. At such time that the City determines: (a) that the City desires the capacity to allow Subscribers in the City to receive PEG programming (video or character generated)which may originate from schools, City facilities, other government facilities or other designated facilities (other than those indicated in paragraph 10); or 25 3056874v1 (b) that the City desires to establish or change a location from which PEG programming is originated; or (c) that the City desires to upgrade the Connection to Grantee from an existing signal point of origination, the City will give Grantee written notice detailing the point of origination and the capability sought by the City. Grantee agrees to submit a cost estimate to implement the City's plan within a reasonable period of time but not later than September I"in the year preceding the request for any costs exceeding Twenty-five Thousand and No/100 Dollars ($25,000). The cost estimate will be on a time and materials basis with no additional markup. After an agreement to reimburse Grantee for Grantee's out of pocket time and material costs, Grantee will implement any necessary Cable System changes within a reasonable period of time. Nothing herein prevents the City, or a private contractor retained by the City, from constructing said return fiber. 7.13 Access Channel Carriage. (a) Any and all costs associated with any modification of the Access Channels or signals after the Access Channels/signals leave the City's designated playback facilities, or any designated playback center authorized by the City shall be borne entirely by Grantee. Grantee shall not cause any programming to override PEG programming on any Access Channel, except by oral or written permission from the City, with the exception of emergency alert signals. (b) The City may request and Grantee shall provide an additional Access Channel when the cumulative time on all the existing Access Channels combined meets the following standard: whenever one of the Access Channels in use during eighty percent (80%) of the weekdays, Monday through Friday, for eighty percent (80%) of the time during a consecutive three (3) hour period for six (6)weeks running, and there is a demand for use of an additional Channel for the same purpose, the Grantee has six (6) months in which to provide a new, Access Channel for the same purpose; provided that, the provision of the additional Channel or Channels does not require the Cable System to install Converters. (c) The VHF spectrum shall be used for one (1) of the public, educational, or governmental specially designated Access Channels. (d) Subject to the terms of this Franchise, the City or its designee shall be responsible for developing, implementing, interpreting and enforcing rules for PEG Access Channel use. (e) The Grantee shall monitor the Access Channels for technical quality to ensure that they meet FCC technical standards including those applicable to the carriage of Access Channels, provided however, that the Grantee is not responsible for the production quality of PEG programming productions. The City, or its designee, shall be responsible for the production and quality of all PEG access programming. Grantee shall carry all components of the standard definition of Access Channel including, but not 26 3056874v1 limited to, closed captioning, stereo audio and other elements associated with the programming. 7.14 Access Channel Support. (a) Upon the Effective Date of this Franchise, Grantee shall collect and remit to the City Sixty cents (60¢)per Subscriber per month in support of PEG capital ("PEG Fee"). (b) On August 1, 2017,the City, at its discretion, and upon ninety(90) Days advance written notice to Grantee, may require Grantee to increase the PEG Fee to Sixty- five cents (65¢)per Subscriber per month for the remaining term of the Franchise. The PEG Fee shall be used by City in its sole discretion to fund PEG access capital expenditures. In no event shall the PEG Fee be assessed in an amount different from that imposed upon the incumbent cable provider. In the event the incumbent cable provider agrees to a higher or lower PEG Fee, Grantee will increase or decrease its PEG Fee upon ninety(90) Days written notice from the City. (c) The PEG Fee is not intended to represent part of the Franchise Fee and is intended to fall within one (1) or more of the exceptions in 47 U.S.C. § 542. The PEG Fee may be categorized, itemized, and passed through to Subscribers as permissible, in accordance with 47 U.S.C. §542 or other Applicable Laws. Grantee shall pay the PEG Fee to the City quarterly at the same time as the payment of Franchise Fees under Section 16.1 of the Franchise. Grantee agrees that it will not offset or reduce its payment of past, present or future Franchise Fees required as a result of its obligation to remit the PEG Fee. (d) Any PEG Fee amounts owing pursuant to this Franchise which remain unpaid more than twenty-five (25) Days after the date the payment is due shall be delinquent and shall thereafter accrue interest at twelve percent (12%)per annum or the prime lending rate published by the Wall Street Journal on the Day the payment was due plus two percent (2%), whichever is greater. 7.15 PEG Technical Quality. (a) Grantee shall not be required to carry a PEG Access Channel in a higher quality format than that of the Channel Signal delivered to Grantee, but Grantee shall not implement a change in the method of delivery of Access Channels that results in a material degradation of signal quality or impairment of viewer reception of Access Channels, provided that this requirement shall not prohibit Grantee from implementing new technologies also utilized for commercial Channels carried on its Cable System. Grantee shall meet FCC signal quality standards when offering Access Channels on its Cable System and shall continue to comply with closed captioning pass-through requirements. There shall be no significant deterioration in an Access Channels signal from the point of origination upstream to the point of reception downstream on the Cable System. 27 3056874v1 (b) Within twenty-four (24) hours of a written request from City to the Grantee identifying a technical problem with a Access Channel and requesting assistance, Grantee will provide technical assistance or diagnostic services to determine whether or not a problem with a PEG signal is the result of matters for which Grantee is responsible and if so, Grantee will take prompt corrective action. If the problem persists and there is a dispute about the cause, then the parties shall meet with engineering representation from Grantee and the City in order to determine the course of action to remedy the problem. 7.16 Access Channel Promotion. Grantee shall allow the City to print and mail a post card for promoting a designated entity's service or generally promoting community programming to households in the City subscribing to Grantee's Cable Service at a cost to the City not to exceed Grantee's out of pocket cost, no less frequently than twice per year, or at such time as a Access Channel is moved or relocated, upon the written request of the City. The post card shall be designed by the City and shall conform to the Grantee's standards and policies for size and weight. Any post card denigrating the Grantee, its service or its programming is not permitted. The City agrees to pay Grantee in advance for the actual cost of such post card. 7.17 Change in Technology. In the event Grantee makes any change in the Cable System and related equipment and facilities or in its signal delivery technology, which requires the City to obtain new equipment in order to be compatible with such change for purposes of transport and delivery of the Access Channels, Grantee shall, at its own expense and free of charge to City or its designated entities, purchase such equipment as may be necessary to facilitate the cablecasting of the Access Channels in accordance with the requirements of the Franchise. 7.18 Relocation of Grantee's Headend. In the event Grantee relocates its headend, Grantee will be responsible for replacing or restoring the existing dedicated fiber connections at Grantee's cost so that all the functions and capacity remain available, operate reliably and satisfy all applicable technical standards and related obligations of the Franchise free of charge to the City or its designated entities. 7.19 Regional Channel Six. Grantee shall make available Regional Channel Six as long as it is required to do so by the State of Minnesota. 7.20 Government Access Channel Functionality. Grantee agrees to provide the capability such that the City, from its City Hall, can switch its government Access Channel in the following ways: (a) Insert live Council meetings from City Hall; (b) Replay government access programming from City Hall; and (c) Transmit character generated programming. (d) Schedule for Grantee to replay City-provided tapes in pre-arranged time slot on the government Access Channel; and 28 3056874v1 (e) Switch to other available programming where the City has legal authority. 7.21 Compliance with Minnesota Statutes Chapter 238. In addition to the requirements contained in this Section 7 of this Franchise, Grantee and City shall comply with the PEG requirements mandated by Minn. Stat. 238.084. SECTION 8 REGULATORY PROVISIONS. 8.1 Intent. The City shall have the right to administer and regulate activities under the Franchise up to the full extent permitted by Applicable Law. 8.2 Delegation of Authority to Regulate. The City reserves the right to delegate its regulatory authority wholly or in part to agents of the City, including, but not limited to, an agency which may be formed to regulate several franchises in the region in a manner consistent with Applicable Laws. This may include but shall not be limited to the Commission or other entity as City may determine in its sole discretion. Any existing delegation in place at the time of the grant of this Franchise shall remain intact unless expressly modified by City. 8.3 Areas of Administrative Authority. In addition to any other regulatory authority granted to the City by law or franchise, the City shall have administrative authority in the following areas: (a) Administering and enforcing the provisions of this Franchise, including the adoption of administrative rules and regulations to carry out this responsibility. (b) Coordinating the operation of Access Channels. (c) Formulating and recommending long-range cable communications policy for the Franchise Area. (d) Disbursing and utilizing Franchise revenues paid to the City. (e) Administering the regulation of rates, to the extent permitted by Applicable Law. (f) All other regulatory authority permitted under Applicable Law. The City or its designee shall have continuing regulatory jurisdiction and supervision over the System and the Grantee's operations under the Franchise to the extent allowed by Applicable Law. 8.4 Regulation of Rates and Charges. (a) Right to Regulate. The City reserves the right to regulate rates or charges for any Cable Service within the limits of Applicable Law, to enforce rate regulations prescribed by the FCC, and to establish procedures for said regulation or enforcement. 29 3056874v1 (b) Notice of Change in Rates and Charges. Throughout the term of this Franchise, Grantee shall give the City and all Subscribers within the City at least thirty (30) Days' notice of any intended modifications or additions to Subscriber rates or charges. Nothing in this Subsection shall be construed to prohibit the reduction or waiving of rates or charges in conjunction with promotional campaigns for the purpose of attracting Subscribers or users. (c) Rate Discrimination Prohibited. Within any category of Subscribers, Grantee shall not discriminate among Subscribers with regard to rates and charges made for any service based on considerations of race, color, creed, sex, marital or economic status, national origin, sexual preference, or(except as allowed by Applicable Law) neighborhood of residence, except as otherwise provided herein; and for purposes of setting rates and charges, no categorization of Subscribers shall be made by Grantee on the basis of those considerations. Nevertheless, Grantee shall be permitted to establish (1) discounted rates and charges for providing Cable Service to low-income, handicapped, or low-income elderly Subscribers, (2)promotional rates, and (3)bulk rate and package discount pricing. SECTION 9 BOND. 9.1 Performance Bond. Upon the Effective Date of this Franchise and at all times thereafter Grantee shall maintain with City a bond in the sum of One Hundred Thousand Dollars ($100,000.00) in such form and with such sureties as shall be acceptable to City, conditioned upon the faithful performance by Grantee of this Franchise and the acceptance hereof given by City and upon the further condition that in the event Grantee shall fail to comply with any law, ordinance or regulation, there shall be recoverable jointly and severally from the principal and surety of the bond, any damages or losses suffered by City as a result, including the full amount of any compensation, indemnification or cost of removal of any property of Grantee, including a reasonable allowance for attorneys' fees and costs (with interest at two percent(2%) in excess of the then prime rate), up to the full amount of the bond, and which bond shall further guarantee payment by Grantee of all claims and liens against City or any, public property, and taxes due to City, which arise by reason of the construction, operation, maintenance or use of the Cable System. The City shall provide Grantee reasonable advanced notice of not less than ten (10) Days prior to any draw by the City on the performance bond required under this Section 9. 9.2 Rights. The rights reserved by City with respect to the bond are in addition to all other rights the City may have under this Franchise or any other law. 9.3 Reduction of Bond Amount. City may, in its sole discretion, reduce the amount of the bond. SECTION 10 SECURITY FUND 10.1 Security Fund. If there is an uncured breach by Grantee of a material provision of this Franchise or a pattern of repeated violations of any provision(s) of this Franchise, then 30 3056874v1 Grantee shall, upon written request, establish and provide to the City, as security for the faithful performance by Grantee of all of the provisions of this Franchise, a letter of credit from a financial institution satisfactory to the City in the amount of Twenty Thousand and No/100 Dollars ($20,000.00). In no event shall Grantee fail to post a Twenty Thousand and No/100 Dollar($20,000.00) letter of credit within thirty(30) days receipt of a notice of franchise violation pursuant to this Section 10.1. Failure to post said letter of credit shall constitute a separate material violation of this Franchise, unless the breach is cured within such thirty(30) Day period or longer period allowed under the Franchise. The letter of credit shall serve as a common security fund for the faithful performance by Grantee of all the provisions of this Franchise and compliance with all orders, permits and directions of the City and the payment by Grantee of any claim, liens, costs, expenses and taxes due the City which arise by reason of the construction, operation or maintenance of the Cable System. Interest on this deposit shall be paid to Grantee by the bank on an annual basis. The security may be terminated by the Grantee upon the resolution of the alleged noncompliance. The obligation to establish the security fund required by this paragraph is unconditional. The fund must be established in those circumstances where Grantee disputes the allegation that it is not in compliance, and maintained for the duration of the dispute. If Grantee fails to establish the security fund as required, the City may take whatever action is appropriate to require the establishment of that fund and may recover its costs, reasonable attorneys' fees, and an additional penalty of Two Thousand Dollars ($2,000) in that action. 10.2 Withdrawal of Funds. Provision shall be made to permit the City to withdraw funds from the security fund. Grantee shall not use the security fund for other purposes and shall not assign, pledge or otherwise use this security fund as security for any purpose. 10.3 Restoration of Funds. Within ten (10) Days after notice to it that any amount has been withdrawn by the City from the security fund pursuant to 10.4 of this section, Grantee shall deposit a sum of money sufficient to restore such security fund to the required amount. 10.4 Liquidated Damages. In addition to recovery of any monies owed by Grantee to City or damages to City as a result of any acts or omissions by Grantee pursuant to the Franchise, City in its sole discretion may charge to and collect from the security fund the following liquidated damages: (a) For failure to provide data, documents, reports or information or to cooperate with City during an application process or System review, the liquidated damage shall be One Hundred Dollars ($100.00) per Day for each Day, or part thereof, such failure occurs or continues. (b) For failure to comply with any of the provisions of this Franchise for which a penalty is not otherwise specifically provided pursuant to this Paragraph 10.4, the liquidated damage shall be One Hundred Fifty Dollars ($150.00)per Day for each Day, or part thereof, such failure occurs or continues. (c) For failure to test, analyze and report on the performance of the System following a request by City, the liquidated damage shall be Two Hundred Fifty Dollars ($250.00)per Day for each Day, or part thereof, such failure occurs or continues. 31 3056874v1 (d) Forty-five Days following notice from City of a failure of Grantee to comply with construction, operation or maintenance standards, the liquidated damage shall be Two Hundred Dollars ($200.00) per Day for each Day, or part thereof, such failure occurs or continues. (e) For failure to provide the services Grantee has proposed, including but not limited to the implementation and the utilization of the Access Channels the liquidated damage shall be One Hundred Fifty ($150.00)per Day for each Day, or part thereof, such failure occurs or continues. 10.5 Each Violation a Separate Violation. Each violation of any provision of this Franchise shall be considered a separate violation for which separate liquidated damages can be imposed. 10.6 Maximum 120 Days. Any liquidated damages for any given violation shall be imposed upon Grantee for a maximum of one hundred twenty(120) Days. If after that amount of time Grantee has not cured or commenced to cure the alleged breach to the satisfaction of the City, the City may pursue al I other remedies. 10.7 Withdrawal of Funds to Pay Taxes. If Grantee fails to pay to the City any taxes due and unpaid; or fails to repay to the City, any damages, costs or expenses which the City shall be compelled to pay by reason of any act or default of the Grantee in connection with this Franchise; or fails, after thirty(30) Days notice of such failure by the City to comply with any provision of the Franchise which the City reasonably determines can be remedied by an expenditure of the security, the City may then withdraw such funds from the security fund. Payments are not Franchise Fees as defined in Section 16 of this Franchise. 10.8 Procedure for Draw on Security Fund. Whenever the City finds that Grantee has allegedly violated one (1) or more terms, conditions or provisions of this Franchise, a written notice shall be given to Grantee. The written notice shall describe in reasonable detail the alleged violation so as to afford Grantee an opportunity to remedy the violation. Grantee shall have thirty (30) Days subsequent to receipt of the notice in which to correct the violation before the City may require Grantee to make payment of damages, and further to enforce payment of damages through the security fund. Grantee may, within ten (10) Days of receipt of notice, notify the City that there is a dispute as to whether a violation or failure has, in fact, occurred. Such notice by Grantee shall specify with particularity the matters disputed by Grantee and shall stay the running of the above-described time. (a) City shall hear Grantee's dispute at the next regularly scheduled or specially scheduled Council meeting. Grantee shall have the right to speak and introduce evidence. The City shall determine if Grantee has committed a violation and shall make written findings of fact relative to its determination. If a violation is found, Grantee may petition for reconsideration. (b) If after hearing the dispute, the claim is upheld by the City, then Grantee shall have thirty (30) Days within which to remedy the violation before the City may require payment of all liquidated damages due it. 32 3056874v1 10.9 Time for Correction of Violation. The time for Grantee to correct any alleged violation may be extended by the City if the necessary action to collect the alleged violation is of such a nature or character as to require more than thirty(30) Days within which to perform provided Grantee commences corrective action within fifteen (15) Days and thereafter uses reasonable diligence, as determined by the City, to correct the violation. 10.10 Grantee's Right to Pay Prior to Security Fund Draw. Grantee shall have the opportunity to make prompt payment of any assessed liquidated damages and if Grantee fails to promptly remit payment to the City, the City may resort to a draw from the security fund in accordance with the terms of this Section 10 of the Franchise. 10.11 Failure to so Replenish Security Fund. If any security fund is not so replaced, City may draw on said security fund for the whole amount thereof and hold the proceeds, without interest, and use the proceeds to pay costs incurred by City in performing and paying for any or all of the obligations, duties and responsibilities of Grantee under this Franchise that are not performed or paid for by Grantee pursuant hereto, including attorneys' fees incurred by the City in so performing and paying. The failure to so replace any security fund may also, at the option of City, be deemed a default by Grantee under this Franchise. The drawing on the security fund by City, and use of the money so obtained for payment or performance of the obligations, duties and responsibilities of Grantee which are in default, shall not be a waiver or release of such default. 10.12 Collection of Funds Not Exclusive Remedy. The collection by City of any damages or monies from the security fund shall not affect any other right or remedy available to City, nor shall any act, or failure to act, by City pursuant to the security fund, be deemed a waiver of any right of City pursuant to this Franchise or otherwise. Notwithstanding this section, however, should the City elect to impose liquidated damages that remedy shall remain the City's exclusive remedy for the one hundred twenty (120) Day period set forth in Section 10.6. SECTION 11 DEFAULT 11.1 Basis for Default. City shall give written notice of default to Grantee if City, in its sole discretion, determines that Grantee has: (a) Violated any material provision of this Franchise or the acceptance hereto or any rule, order, regulation or determination of the City, state or federal government, not in conflict with this Franchise; (b) Attempted to evade any provision of this Franchise or the acceptance hereof, (c) Practiced any fraud or deceit upon City or Subscribers; or (d) Made a material misrepresentation of fact in the application for or negotiation of this Franchise. 33 3056874v1 11.2 Default Procedure. If Grantee fails to cure such default within thirty(30) Days after the giving of such notice (or if such default is of such a character as to require more than thirty(30) Days within which to cure the same, and Grantee fails to commence to cure the same within said thirty(30) Day period and thereafter fails to use reasonable diligence, in City's sole opinion, to cure such default as soon as possible), then, and in any event, such default shall be a substantial breach and City may elect to terminate the Franchise. The City may place the issue of revocation and termination of this Franchise before the governing body of City at a regular meeting. If City decides there is cause or reason to terminate, the following procedure shall be followed: (a) City shall provide Grantee with a written notice of the reason or cause for proposed termination and shall allow Grantee a minimum of thirty(30) Days subsequent to receipt of the notice in which to correct the default. (b) Grantee shall be provided with an opportunity to be heard at a public hearing prior to any decision to terminate this Franchise. (c) If, after notice is given and an opportunity to cure, at Grantee's option, a public hearing is held, and the City determines there was a violation, breach, failure, refusal or neglect, the City may declare by resolution the Franchise revoked and of no further force and effect unless there is compliance within such period as the City may fix, such period may not be less than thirty(30) Days provided no opportunity for compliance need be granted for fraud or misrepresentation. 11.3 Mediation. If the Grantee and City are unable to resolve a dispute through informal negotiations during the period of thirty (30) Days following the submission of the claim giving rise to the dispute by one (1)party to the other, then unless that claim has been waived as provided in the Franchise, such claim may be subject to mediation if jointly agreed upon by both parties. Unless the Grantee and City mutually agree otherwise, such mediation shall be in accordance with the rules of the American Arbitration Association currently in effect at the time of the mediation. A party seeking mediation shall file a request for mediation with the other party to the Franchise and with the American Arbitration Association. The request may be made simultaneously with the filing of a complaint, but, in such event, mediation shall proceed in advance of legal proceedings only if the other party agrees to participate in mediation. Mutually agreed upon Mediation shall stay other enforcement remedies of the parties for a period of ninety (90) days from the date of filing, unless stayed for a longer period by agreement of the Grantee and City. The Grantee and City shall each pay one-half of the mediator's fee and any filing fees. The mediation shall be held in the City unless another location is mutually agreed upon. Agreements reached in mediation shall be enforceable as a settlement agreement in any court having jurisdiction thereof. Nothing herein shall serve to modify or on any way delay the franchise enforcement process set forth in Section 10 of this Franchise. 11.4 Failure to Enforce. Grantee shall not be relieved of any of its obligations to comply promptly with any provision of the Franchise by reason of any failure of the City to enforce prompt compliance, and City's failure to enforce shall not constitute a waiver of rights or acquiescence in Grantee's conduct. 34 3056874v1 11.5 Compliance with the Laws. (a) If any federal or state law or regulation shall require or permit City or Grantee to perform any service or act or shall prohibit City or Grantee from performing any service or act which may be in conflict with the terms of this Franchise, then as soon as possible following knowledge thereof, either party shall notify the other of the point in conflict believed to exist between such law or regulation. Grantee and City shall conform to state laws and rules regarding cable communications not later than one (1) year after they become effective, unless otherwise stated, and shall conform to federal laws and regulations regarding cable as they become effective. (b) If any term, condition or provision of this Franchise or the application thereof to any Person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder hereof and the application of such term, condition or provision to Persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Franchise and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and complied with provided the loss of the invalid or unenforceable clause does not substantially alter the agreement between the parties. In the event such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on Grantee and City. SECTION 12 FORECLOSURE AND RECEIVERSHIP 12.1 Foreclosure. Upon the foreclosure or other judicial sale of the Cable System, Grantee shall notify the City of such fact and such notification shall be treated as a notification that a change in control of Grantee has taken place, and the provisions of this Franchise governing the consent to transfer or change in ownership shall apply without regard to how such transfer or change in ownership occurred. 12.2 Receivership. The City shall have the right to cancel this Franchise subject to any applicable provisions of state law, including the Bankruptcy Act, one hundred twenty(120) Days after the appointment of a receiver or trustee to take over and conduct the business of Grantee, whether in receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty(120) Days, or unless: (a) Within one hundred twenty(120) Days after his election or appointment, such receiver or trustee shall have fully complied with all the provisions of this Franchise and remedied all defaults thereunder; and, (b) Such receiver or trustee, within said one hundred twenty (120) Days, shall have executed an agreement, duly approved by the Court having jurisdiction in the 35 3056874v1 premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this Franchise. SECTION 13 REPORTING REQUIREMENTS 13.1 Quarterly Reports. Within forty-five (45) calendar days after the end of each calendar quarter, Grantee shall submit to the City along with its Franchise Fee payment a report showing the basis for computation of such fees prepared by an officer, or designee of Grantee showing the basis for the computation of the Franchise Fees paid during that period in a form and substance substantially equivalent to Exhibit B attached hereto. This report shall separately indicate revenues received by Grantee within the City including, but not limited to such items as listed in the definition of"Gross Revenues" at Section 1 of this Franchise. 13.2 Monitoring and Compliance Reports. Upon request, but no more than once a year, Grantee shall provide a written report of any and all applicable FCC technical performance tests for the residential network required in FCC Rules and Regulations as now or hereinafter constituted. In addition, Grantee shal I provide City with copies of reports of the semi-annual test and compliance procedures applicable to Grantee and established by this Franchise no later than thirty(30) Days after the completion of each series of tests. 13.3 Reports. Upon request of the City and in no event later than thirty(30) Days from the date of receipt of such request, Grantee shall, free of charge, prepare and furnish to the City, at the times and in the form prescribed that Grantee is technically capable of producing, such additional reports with respect to its operation, affairs, transactions, or property, as may be reasonably necessary to ensure compliance with the terms of this Franchise. Grantee and City may in good faith agree upon taking into consideration Grantee's need for the continuing confidentiality as prescribed herein. Neither City nor Grantee shall unreasonably demand or withhold information requested pursuant with the terms of this Franchise. 13.4 Communications with Regulatory Agencies. (a) Upon written request, Grantee shall submit to City copies of any pleading, applications, notifications, communications and documents of any kind, submitted by Grantee or its Affiliates to any federal, State or local courts, regulatory agencies and other government bodies if such documents directly relate to the operations of Grantee `s Cable System within the Franchise Area. Grantee shall submit such documents to City no later than thirty(30) Days after receipt of City's request. Grantee shall not claim confidential, privileged or proprietary rights to such documents unless under federal, State, or local law such documents have been determined to be confidential by a court of competent jurisdiction, or a federal or State agency. With respect to all other reports, documents and notifications provided to any federal, State or local regulatory agency as a routine matter in the due course of operating Grantee `s Cable System within the Franchise Area, Grantee shall make such documents available to City upon City's written request. (b) In addition, Grantee and its Affiliates shall within ten (10) Days of any communication to or from any judicial or regulatory agency regarding any alleged or 36 3056874v1 actual violation of this Franchise, City regulation or other requirement relating to the System, use its best efforts to provide the City a copy of the communication, whether specifically requested by the City to do so or not. SECTION 14 CUSTOMER SERVICE POLICIES 14.1 Response to Customers and Cooperation with City. Grantee shall promptly respond to all requests for service, repair, installation and information from Subscribers. Grantee acknowledges the City's interest in the prompt resolution of all cable complaints and shall work in close cooperation with the City to resolve complaints. 14.2 Definition of"Complaint." For the purposes of Section 14, with the exception of Subsection 14.5, a"complaint" shall mean any communication to Grantee or to the City by a Subscriber or a Person who has requested Cable Service; a Person expressing dissatisfaction with any service, performance, or lack thereof, by Grantee under the obligations of this Franchise. 14.3 Customer Service Agreement and Written Information. Grantee shall provide to Subscribers a comprehensive service agreement and information in writing for use in establishing Subscriber service. Written information shall, at a minimum, contain the following information: (a) Services to be provided and rates for such services. (b) Bi I ling procedures. (c) Service termination procedure. (d) Change in service notifications. (e) Liability specifications. (f) Set Top Boxes/Subscriber terminal equipment policy. (g) How complaints are handled including Grantee's procedure for investigation and resolution of Subscriber complaints. (h) The name, address, and phone number of the Person identified by the City as responsible for handling cable questions and complaints for the City. This information shall be prominently displayed and Grantee shall submit the information to the City for review and approval as to its content and placement on Subscriber billing statements. (i) A copy of the written information shall be provided to each Subscriber at the time of initial Connection and any subsequent reconnection. 37 3056874v1 14.4 Reporting Complaints. (a) The requirements of this Section 14.4 shall be subject to federal law regarding Subscriber privacy. Grantee shall maintain all Subscriber data available for City inspection. Subscriber data shall include the date, name, address, telephone number of Subscriber complaints as well as the subject of the complaint, date and type of action taken to resolve the complaint, any additional action taken by Grantee or the Subscriber. The data shall be maintained in a way that allows for simplified access of the data by the City. (b) Subject to federal law and upon reasonable request by the City, Grantee shall, within a reasonable amount of time, provide City with such Subscriber data for its review. 14.5 Customer Service Standards. The City hereby adopts the customer service standards set forth in Part 76, §76.309 of the FCC's rules and regulations, as amended. Grantee shall, upon request, which request shall include the reason for the request (such as complaints received or other reasonable evidence of concern), provide City with information which shall describe in detail Grantee's compliance with each and every term and provision of this Section 14.5. Grantee shall comply in all respects with the customer service requirements established by the FCC and those set forth herein. To the extent that this Franchise imposes requirements greater than those established by the FCC, Grantee reserves whatever rights it may have to recover the costs associated with compliance in any manner consistent with Applicable Law. 14.6 Local Office. During the term of the Franchise the Grantee shall comply with one of the following requirements: (a) Grantee shall maintain a convenient local customer service and bill payment location for matters such as receiving Subscriber payments, handling billing questions, equipment replacement and customer service information. Grantee shall comply with the standards and requirements for customer service set forth below during the term of this Franchise. (b) Grantee shall maintain convenient local Subscriber service and bill payment locations for the purpose of receiving Subscriber payments or equipment returns. Unless otherwise requested by the Subscriber, Grantee shall deliver replacement equipment directly to the Subscriber at no cost to the Subscriber. The Grantee shall maintain a business office or offices for the purpose of receiving and resolving all complaints regarding the quality of service, equipment malfunctions, billings disputes and similar matters. The office must be reachable by a local, toll-free telephone call, and Grantee shall provide the City with the name, address and telephone number of an office that will act as the Grantee's agent to receive complaints, regarding quality of service, equipment malfunctions,billings, and similar matters. At a minimum Grantee shall also provide the following: (i) Subscribers can remit payments at multiple third party commercial locations within the City(such as grocery stores or the Western Union). 38 3056874v1 (ii) Grantee will provide a service technician to any Qualified Living Unit in the City, free of charge to the Subscriber, where necessary to install, replace or troubleshoot equipment issues. (iii) Subscribers shall be able to return and receive equipment, free of charge, via national overnight courier service (such as Fed Ex or UPS) if a service technician is not required to visit the Subscriber's Qualified Living Unit. (iv) In the event Grantee provides Cable Service to a minimum of thirty percent (30%) of the total number of Cable Service Subscribers in the City served by cable operators franchised by the City, the Grantee shall then be required to also comply with the requirements of Section 14.6 (a) above. 14.7 Cable System office hours and telephone availability. (a) Grantee will maintain a local, toll-free or collect call telephone access line which will be available to its Subscribers twenty-four(24) hours a Day, seven (7) Days a week. (i) Trained Grantee representatives will be available to respond to customer telephone inquiries during Normal Business Hours. (ii) After Normal Business Hours, the access line may be answered by a service or an automated response system, including an answering machine. Inquiries received after Normal Business Hours must be responded to by a trained Grantee representative on the next business Day. (b) Under Normal Operating Conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty(30) seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty(30) seconds. These standards shall be met no less than ninety percent (90%) of the time under Normal Operating Conditions, measured on a quarterly basis. (c) Grantee shall not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply. (d) Under Normal Operating Conditions, the customer wi I I receive a busy signal less than three percent(3%) of the time. (e) Customer service center and bill payment locations will be open at least during Normal Business Hours and will be conveniently located. 14.8 Installations, Outages and Service Calls. Under Normal Operating Conditions, each of the following standards will be met no less than ninety-five percent (95%) of the time measured on a quarterly basis: 39 3056874v1 (a) Standard Installations will be performed within seven (7)business days after an order has been placed. "Standard" Installations are those to a Qualified Living Unit. (b) Excluding conditions beyond the control of Grantee, Grantee will begin working on "Service Interruptions"promptly and in no event later than twenty-four(24) hours after the interruption becomes known. Grantee must begin actions to correct other Service problems the next business Day after notification of the Service problem. (c) The "appointment window" alternatives for Installations, Service calls, and other Installation activities will be either a specific time or, at maximum, a four(4) hour time block during Normal Business Hours. (Grantee may schedule Service calls and other Installation activities outside of Normal Business Hours for the express convenience of the customer.) (d) Grantee may not cancel an appointment with a customer after the close of business on the business Day prior to the scheduled appointment. (e) If Grantee's representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the customer will be contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for the customer. 14.9 Communications between Grantee and Subscribers. (a) Refunds. Refund checks will be issued promptly, but no later than either: (i) The customer's next billing cycle following resolution of the request or thirty(30) Days, whichever is earlier, or (ii) The return of the equipment supplied by Grantee if Cable Service is terminated. (b) Credits. Credits for Cable Service will be issued no later than the customer's next billing cycle following the determination that a credit is warranted. 14.10 Billing. (a) Consistent with 47 C.F.R. § 76.1619,bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, Basic Cable Service and premium Cable Service charges 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, Grantee must respond to a written complaint from a Subscriber within thirty(30) Days. 40 3056874v1 14.11 Subscriber Information. Grantee will provide written information on each of the following areas at the time of Installation of Service, at least annually to all Subscribers, and at any time upon request: (a) Products and Services offered; (b) Prices and options for programming services and conditions of subscription to programming and other services; (c) Installation and Service maintenance policies; (d) Instructions on how to use the Cable Service; (e) Channel positions of programming carried on the System; and (f) Billing and complaint procedures, including the address and telephone number of the City's cable office. Subscribers shall be advised of the procedures for resolution of complaints about the quality of the television signal delivered by Grantee, including the address of the responsible officer of the City. Subscribers will be notified of any changes in rates, programming services or Channel positions as soon as possible in writing. Notice must be given to Subscribers a minimum of thirty(30) Days in advance of such changes if the change is within the control of Grantee. In addition, Grantee shall notify Subscribers thirty(30) Days in advance of any significant changes in the information required by this Section 14.11. 14.12 Notice or Rate Programming Change. In addition to the requirement of this Section 14.12 regarding advance notification to Subscribers of any changes in rates, programming services or Channel positions, Grantee shall give thirty(30) Days written notice to both Subscribers and the City before implementing any rate or Service change. If required by Applicable Law, such notice shall state the precise amount of any rate change and briefly explain in readily understandable fashion the cause of the rate change (e.g., inflation, change in external costs or the addition/deletion of Channels). When the change involves the addition or deletion of Channels, each Channel added or deleted must be separately identified. For purposes of the carriage of digital broadcast signals, Grantee need only identify for Subscribers, the television signal added and not whether that signal may be multiplexed during certain dayparts. 14.13 Subscriber Contracts. Grantee shall, upon written request,provide the City with any standard form residential Subscriber contract utilized by Grantee. If no such written contract exists, Grantee shall file with the City a document completely and concisely stating the length and terms of the Subscriber contract offered to customers. The length and terms of any standard form Subscriber contract(s) shall be available for public inspection during Normal Business Hours. A list of Grantee's current Subscriber rates and charges for Cable Service shall be maintained on file with City and shall be available for public inspection. 14.14 Refund Policy. If a Subscriber's Cable Service is interrupted or discontinued, without cause, for twenty-four(24) or more consecutive hours, Grantee shall, upon request by 41 3056874v1 the Subscriber, credit such Subscriber pro rata for such interruption. For this purpose, every month will be assumed to have thirty(30) Days. 14.15 Late Fees. Grantee shall comply with all applicable state and federal laws with respect to any assessment, charge, cost, fee or sum, however characterized, that Grantee imposes upon a Subscriber for late payment of a bill. The City reserves the right to enforce Grantee's compliance with all Applicable Laws to the maximum extent legally permissible. 14.16 Disputes. All Subscribers and members of the general public may direct complaints, regarding Grantee's Service or performance to the chief administrative officer of the City or the chief administrative officer's designee, which may be a board or Commission of the City. 14.17 Customer Bills. Customer bills shall be designed in such a way as to present the information contained therein clearly and comprehensibly to Customers, and in a way that(A) is not misleading and (B) does not omit material information. Notwithstanding anything to the contrary in Section 14.10, above, Grantee may, in its sole discretion, consolidate costs on Customer bills as may otherwise be permitted by Section 622(c) of the Cable Act (47 U.S.C. §542(c)). 14.18 Failure to Resolve Complaints. Grantee must investigate and act upon any service complaint promptly and in no event later than twenty-four(24) hours after the problem becomes known. Grantee must address, and if feasible, resolve service complaints within three (3) calendar days. 14.19 Maintain a Complaint Phone Line. Grantee shall maintain a local or toll-free telephone Subscriber complaint line, available to its Subscribers twenty-four(24) hours per Day, seven (7) Days a week. 14.20 Notification of Complaint Procedure. Grantee shall have printed clearly and prominently on each Subscriber bill and in the customer service agreement provided for in Section 14.3, the twenty-four(24) hour Grantee phone number for Subscriber complaints. Additionally, Grantee shall provide information to customers concerning the procedures to follow when they are unsatisfied with measures taken by Grantee to remedy their complaint. This information will include the phone number of the City office or Person designated to handle complaints. Additionally, where possible Grantee shall state that complaints should be made to Grantee prior to contacting the City. 14.21 Subscriber Privacy. (a) To the extent required by Minn. Stat. §238.084 Subd. 1(s) Grantee shall comply with the following: No signals including signals of a Class IV Channel may be transmitted from a Subscriber terminal for purposes of monitoring individual viewing patterns or practices without the express written permission of the Subscriber. The request for permission must be contained in a separate document with a prominent statement that the Subscriber is authorizing the permission in full knowledge of its provisions. Such written permission shall be for a limited period of time not to exceed 42 3056874v1 one (1) year which may be renewed at the option of the Subscriber. No penalty shall be invoked for a Subscriber's failure to provide or renew such permission. The permission shall be revocable at any time by the Subscriber without penalty of any kind whatsoever. (b) No information or data obtained by monitoring transmission of a signal from a Subscriber terminal, including but not limited to lists of the names and addresses of Subscribers or any lists that identify the viewing habits of Subscribers shall be sold or otherwise made available to any party other than to Grantee or its agents for Grantee's business use, and also to the Subscriber subject of that information, unless Grantee has received specific written permission from the Subscriber to make such data available. The request for permission must be contained in a separate document with a prominent statement that the Subscriber is authorizing the permission in full knowledge of its provisions. Such written permission shall be for a limited period of time not to exceed one (1) year which may be renewed at the option of the Subscriber. No penalty shall be invoked for a Subscriber's failure to provide or renew such permission. The permission shall be revocable at any time by the Subscriber without penalty of any kind whatsoever. (c) Written permission from the Subscriber shall not be required for the conducting of system wide or individually addressed electronic sweeps for the purpose of verifying System integrity or monitoring for the purpose of billing. Confidentiality of such information shall be subject to the provision set forth in subparagraph (b) of this section. 14.22 Grantee Identification. Grantee shall provide all customer service technicians and all other Grantee employees entering private property with appropriate picture identification so that Grantee employees may be easily identified by the property owners and Subscribers. SECTION 15 SUBSCRIBER PRACTICES 15.1 Subscriber Rates. There shall be no charge for disconnection of any installation or outlet. If any Subscriber fails to pay a properly due monthly Subscriber fee, or any other properly due fee or charge, Grantee may disconnect the Subscriber's service outlet,provided, however, that such disconnection shall not be effected until after the later of. (i) forty-five (45) Days after the original due date of said delinquent fee or charge; or (ii) ten (10) Days after delivery to Subscriber of written notice of the intent to disconnect. If a Subscriber pays before expiration of the later of(i) or(ii), Grantee shall not disconnect. After disconnection, upon payment in full of the delinquent fee or charge and the payment of a reconnection charge, Grantee shall promptly reinstate the Subscriber's Cable Service. 15.2 Refunds to Subscribers shall be made or determined in the following manner: (a) If Grantee fails, upon request by a Subscriber, to provide any service then being offered, Grantee shall promptly refund all deposits or advance charges paid for the service in question by said Subscriber. This provision does not alter Grantee's responsibility to Subscribers under any separate contractual agreement or relieve Grantee of any other liability. 43 3056874v1 (b) If any Subscriber terminates any monthly service because of failure of Grantee to render the service in accordance with this Franchise, Grantee shall refund to such Subscriber the proportionate share of the charges paid by the Subscriber for the services not received. This provision does not relieve Grantee of liability established in other provisions of this Franchise. (c) If any Subscriber terminates any monthly service prior to the end of a prepaid period, a proportionate amount of any prepaid Subscriber service fee, using the number of days as a basis, shall be refunded to the Subscriber by Grantee. SECTION 16 COMPENSATION AND FINANCIAL PROVISIONS. 16.1 Franchise Fees. During the term of the Franchise, Grantee shall pay to the City a Franchise Fee of five percent (5%) of Gross Revenues. If any such law, regulation or valid rule alters the five percent(5%) Franchise Fee ceiling enacted by the Cable Act, then the City shall have the authority to (but shall not be required to) increase the Franchise Fee accordingly, provided such increase is for purposes not inconsistent with Applicable Law. In the event Grantee bundles or combines Cable Services (which are subject to the Franchise Fee) with non- Cable Services (which are not subject to the Franchise Fee) so that Subscribers pay a single fee for more than one (1) class of service resulting in a discount on Cable Services, Grantee agrees that for the purpose of calculation of the Franchise Fee, it shall allocate to Cable Service revenue no less than a pro rata share of the revenue received for the bundled or combined services. The pro rata share shall be computed on the basis of the published charge for each service in the bundled or combined classes of services when purchased separately. (a) Franchise Fees shall be paid quarterly not later than forty-five (45) Days following the end of a given quarter. In accordance with Section 16 of this Franchise, Grantee shall file with the City a Franchise Fee payment worksheet, attached as Exhibit B, signed by an authorized representative of Grantee, which identifies Gross Revenues earned by Grantee during the period for which payment is made. No acceptance 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 which the City may have for further-or additional sums payable under the provisions of this section. (b) Neither current nor previously paid Franchise Fees shall be subtracted from the Gross Revenue amount upon which Franchise Fees are calculated and due for any period, unless otherwise required by Applicable Law. (c) Any Franchise Fees owing pursuant to this Franchise which remain unpaid more than forty-five (45) Days after the dates specified herein shall be delinquent and shall thereafter accrue interest at twelve percent(12%)per annum or two percent (2%) above prime lending rate as quoted by the Wall Street Journal, whichever is greater. (d) In no event shall the Grantee be required to pay a Franchise Fee percentage in excess of that paid by incumbent cable provider. 44 3056874v1 16.2 Auditing and Financial Records. Throughout the term of this Franchise, the Grantee agrees that the City, upon reasonable prior written notice of not less than twenty (20) Days to the Grantee, may review such of the Grantee's books and records regarding the operation of the Cable System and the provision of Cable Service in the Franchise Area which are reasonably necessary to monitor and enforce Grantee's compliance with the provisions of this Franchise. Grantee shall provide such requested information as soon as possible and in no event more than thirty(30) Days after the notice unless Grantee explains that it is not feasible to meet this timeline and provides a written explanation for the delay and an estimated reasonable date for when such information will be provided. All such documents pertaining to financial matters that may be the subject of an inspection by the City shall be retained by the Grantee for a minimum period of six (6) years,pursuant to Minnesota Statutes Section 541.05. The Grantee shall not deny the City access to any of the Grantee's records on the basis that the Grantee's records are under the control of any parent corporation, Affiliated entity or a third party. The City may request in writing copies of any such records or books that are reasonably necessary, and the Grantee shall provide such copies within thirty(30) Days of the receipt of such request. One (1) copy of all reports and records required under this or any other section shall be furnished to the City at the sole expense of the Grantee. If the requested books and records are too voluminous, or for security reasons cannot be copied or removed, then the Grantee may request, in writing within ten (10) Days of receipt of such request, that the City inspect them at the Grantee's local offices or at one of Grantee's offices more convenient to City or its duly authorized agent. If any books or records of the Grantee are not kept in such office and not made available in copies to the City upon written request as set forth above, and if the City determines that an examination of such records is necessary for the enforcement of this Franchise, then all reasonable travel expenses incurred in making such examination shall be paid by the Grantee. 16.3 Review of Record Keeping Methodology. Grantee agrees to meet with representative of the City upon request to review its methodology of record-keeping, financial reporting, computing Franchise Fee obligations, and other procedures the understanding of which the City deems necessary for understanding the meaning of reports and records related to the Franchise. 16.4 Audit of Records. The City or its authorized agent may at any time and at the City's own expense conduct an independent audit of the revenues of Grantee in order to verify the accuracy of Franchise Fees paid to the City. Grantee shall cooperate fully in the conduct of such audit and shall produce all necessary records related to the provision of Cable Services regardless of which corporate entity controls such records. In the event it is determined through such audit that Grantee has underpaid Franchise Fees in an amount of five percent (5%) or more than was due the City, then Grantee shall reimburse the City for the entire reasonable cost of the audit within thirty(30) days of the completion and acceptance of the audit by the City. 16.5 Records to be reviewed. The City agrees to request access to only those books and records, in exercising its rights under this section, which it deems reasonably necessary for the enforcement and administration of the Franchise. 45 3056874v1 16.6 Indemnification by Grantee. (a) Grantee shall, at its sole expense, fully indemnify, defend and hold harmless the City, and in their capacity as such, the officers and employees thereof, from and against any and all claims, suits, actions, liability and judgments for damage or otherwise except those arising wholly from negligence on the part of the City or its employees; for actual or alleged injury to persons or property, including loss of use of property due to an occurrence, whether or not such property is physically damaged or destroyed, in any way arising out of or through or alleged to arise out of or through the acts or omissions of Grantee or its officers, agents, employees, or contractors or to which Grantee's or its officers, agents, employees or contractors acts or omissions in any way contribute, and whether or not such acts or omissions were authorized or contemplated by this Franchise or Applicable Law; arising out of. or alleged to arise out of any claim for damages for Grantee's invasion of the right of privacy, defamation of any Person, firm or corporation, or the violation of infringement of any copyright, trademark, trade name, service mark or patent, or of any other right of any Person, firm or corporation; arising out of or alleged to arise out of Grantee's failure to comply with the provisions of any Applicable Law. Nothing herein shall be deemed to prevent the City, its officers, or its employees from participating in the defense of any litigation by their own counsel at such parties' expense. Such participation shall not under any circumstances relieve Grantee from its duty of defense against liability or of paying any judgment entered against the City, its officers, or its employees. (b) Grantee shall contemporaneously with this Franchise execute an Indemnity Agreement in a form acceptable to the City attached hereto as Exhibit C, which shall indemnify, defend and hold the City harmless for any claim for injury, damage, loss, liability, cost or expense, including court and appeal costs and reasonable attorneys' fees or reasonable expenses arising out of the actions of the City in granting this Franchise. This obligation includes any claims by another franchised cable operator against the City that the terms and conditions of this Franchise are less burdensome than another franchise granted by the City or that this Franchise does not satisfy the requirements of Applicable Law(s). 16.7 Grantee Insurance. Upon the Effective Date, Grantee shall, at its sole expense take out and maintain during the term of this Franchise public liability insurance with a company licensed to do business in the state of Minnesota with a rating by A.M. Best & Co. of not less than"A-" that shall protect the Grantee, City and its officials, officers, directors, employees and agents from claims which may arise from operations under this Franchise, whether such operations be by the Grantee, its officials, officers, directors, employees and agents or any subcontractors of Grantee. This liability insurance shall include,but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property, resulting from Grantee's vehicles,products and operations. The amount of insurance for single limit coverage applying to bodily and personal injury and property damage shall not be less than Three Million Dollars ($3,000,000). The liability policy shall include: (a) The policy shall provide coverage on an "occurrence"basis. 46 3056874v1 (b) The policy shall cover personal injury as well as bodily injury. (c) The policy shall cover blanket contractual liability subject to the standard universal exclusions of contractual liability included in the carrier's standard endorsement as to bodily injuries, personal injuries and property damage. (d) Broad form property damage liability shall be afforded. (e) City shall be named as an additional insured on the policy. (f) An endorsement shall be provided which states that the coverage is primary insurance with respect to claims arising from Grantee's operations under this Franchise and that no other insurance maintained by the Grantor will be called upon to contribute to a loss under this coverage. (g) Standard form of cross-liability shall be afforded. (h) An endorsement stating that the policy shall not be canceled without thirty (30) Days notice of such cancellation given to City (i) City reserves the right to adjust the insurance limit coverage requirements of this Franchise no more than once every three (3) years. Any such adjustment by City will be no greater than the increase in the State of Minnesota Consumer Price Index (all consumers) for such three (3) year period. 0) Upon the Effective Date, Grantee shall submit to City a certificate documenting the required insurance, as well as any necessary properly executed endorsements. The certificate and documents evidencing insurance shall be in a form acceptable to City and shall provide satisfactory evidence that Grantee has complied with all insurance requirements. Renewal certificates shall be provided to City prior to the expiration date of any of the required policies. City will not be obligated, however, to review such endorsements or certificates or other evidence of insurance, or to advise Grantee of any deficiencies in such documents and receipt thereof shall not relieve Grantee from, nor be deemed a waiver of, City's right to enforce the terms of Grantee's obligations hereunder. City reserves the right to examine any policy provided for under this paragraph or to require further documentation reasonably necessary to form an opinion regarding the adequacy of Grantee's insurance coverage. SECTION 17 MISCELLANEOUS PROVISIONS. 17.1 Posting and Publication. Grantee shall assume the cost of posting and publication of this Franchise as such posting and publication is required by law and such is payable upon Grantee's filing of acceptance of this Franchise. 17.2 Guarantee of Performance. Grantee agrees that it enters into this Franchise voluntarily in order to secure and in consideration of the grant from the City of a five (5) year 47 3056874v1 Franchise. Performance pursuant to the terms and conditions of this Franchise is guaranteed by Grantee. 17.3 Entire Agreement. This Franchise contains the entire agreement between the parties, supersedes all prior agreements or proposals except as specifically set forth herein, and cannot be changed orally but only by an instrument in writing executed by the parties. This Franchise is made pursuant to Minnesota Statutes Chapter 238 and is intended to comply with all requirements set forth therein. 17.4 Consent. Wherever the consent or approval of either Grantee or the City is specifically required in this agreement, such consent or approval shall not be unreasonably withheld. 17.5 Franchise Acceptance. No later than forty-five (45) Days following City Council approval of this Franchise, Grantee shall execute and return to the City three (3) original franchise agreements. The executed agreements shall be returned to the City accompanied by performance bonds, and evidence of insurance, all as provided in this Franchise. The City's "Notice of Intent to Consider an Application for a Franchise" ("Notice")provided, consistent with Minn. Stat. 238.081 subd. 8, that applicants would be required to reimburse the City for all necessary costs of processing a cable communications franchise. Grantee submitted an application fee with its application to the City. The Notice further provided that any unused portion of the application fee would be returned and any additional fees required to process the application and franchise,beyond the application fee, would be assessed to the successful applicant. The Grantee shall therefore submit to the City at the time of acceptance of this Franchise, a check made payable to the City of Richfield, Minnesota for all additional fees and costs incurred by the City. Within thirty(30) days of City Council approval, the City shall provide Grantee with a letter specifying such additional costs following approval of this Franchise by the City Council. In the event Grantee fails to accept this Franchise, or fails to provide the required documents and payments, this Franchise shall be null and void. The Grantee agrees that despite the fact that its written acceptance may occur after the Effective Date, the obligations of this Franchise shall become effective on the Effective Date. 17.6 Amendment of Franchise. Grantee and City may agree, from time to time, to amend this Franchise. Such written amendments may be made subsequent to a review session pursuant to Section 2.7 or at any other time if City and Grantee agree that such an amendment will be in the public interest or if such an amendment is required due to changes in federal, state or local laws; provided, however, nothing herein shall restrict City's exercise of its police powers. 17.7 Notice. Any notification that requires a response or action from a party to this Franchise, within a specific time-frame or would trigger a timeline that would affect one or both parties' rights under this Franchise, shall be made in writing and shall be sufficiently given and served upon the other party by hand delivery, first class mail, registered or certified, return receipt requested,postage prepaid, or by reputable overnight courier service and addressed as follows: 48 3056874v1 To the City: City Manager, City of Richfield 6700 Portland Avenue Richfield, MN 55423 Courtesy Copy to: Southwest Suburban Cable Commission c/o Moss &Barnett (BTG) 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 To the Grantee: CenturyLink Attn: Public Policy 1801 California Street, 10`h Floor Denver, Colorado 80202 Courtesy Copy to: Qwest Broadband Services, Inc. Attn: Public Policy 200 South Fifth Street, 21s'Floor Minneapolis, MN 55402 Recognizing the widespread usage and acceptance of electronic forms of communication, emails will be acceptable as formal notification related to the conduct of general business amongst the parties to this contract, including but not limited to programming and price adjustment communications. Such communication should be addressed and directed to the Person of record as specified above. 17.8 Force Majeure. In the event that either party is prevented or delayed in the performance of any of its obligations, under this Franchise by reason of acts of God, floods, fire, hurricanes, tornadoes, earthquakes, or other unavoidable casualties, insurrection, war, riot, vandalism, strikes, delays in receiving permits where it is not the fault of Grantee,public easements, sabotage, acts or omissions of the other party, or any other similar event beyond the reasonable control of that party, it shall have a reasonable time under the circumstances to perform such obligation under this Franchise, or to procure a substitute for such obligation to the reasonable satisfaction of the other party. 17.9 Work of Contractors and Subcontractors. Work by contractors and subcontractors are subject to the same restrictions, limitations and conditions as if the work were performed by Grantee. Grantee shall be responsible for all work performed by its contractors and subcontractors, and others performing work on its behalf as if the work were performed by it and shall ensure that all such work is performed in compliance with this Franchise, the City Code and other Applicable Law, and shall be jointly and severally liable for all damages and correcting all damage caused by them. It is Grantee's responsibility to ensure that contractors, subcontractors or other Persons performing work on Grantee's behalf are familiar with the requirements of this Franchise, the City Code and other Applicable Laws governing the work performed by them. 49 3056874v1 17.10 Abandonment of System. Grantee may not abandon the System or any portion thereof used exclusively for Cable Services, without having first given three (3)months written notice to City and conforming to the City Code, as well as the state right-of-way rules, Minn. Rules, Chapter 7819. To the extent required by Minn. Stat. §238.084 Subd. 1 (w), Grantee shall compensate City for damages resulting from the abandonment. 17.11 Removal After Abandonment. In the event of Grantee's abandonment of the System used exclusively for Cable Services, City shall have the right to require Grantee to conform to the City Code, as well as the state right-of-way rules, Minn. Rules, Chapter 7819. If Grantee has failed to commence removal of System, or such part thereof as was designated by City, within thirty(30) Days after written notice of City's demand for removal consistent with City Code and Minn. Rules, Ch. 7819, is given, or if Grantee has failed to complete such removal within twelve (12)months after written notice of City's demand for removal is given City shall have the right to apply funds secured by the performance bond toward removal and/or declare all right, title, and interest to the System to be in City with all rights of ownership including, but not limited to, the right to operate the System or transfer the System to another for operation by it. 17.12 Governing Law. This Franchise shall be deemed to be executed in the State of Minnesota, and shall be governed in all respects, including validity, interpretation and effect, and construed in accordance with, the laws of the State of Minnesota, as applicable to contracts entered into and performed entirely within the State. 17.13 Nonenforcement by City. Grantee shall not be relieved of its obligation to comply with any of the provisions of this Franchise by reason of any failure of the City or to enforce prompt compliance. 17.14 Captions. The paragraph captions and headings in this Franchise are for convenience and reference purposes only and shall not affect in any way the meaning of interpretation of this Franchise. 17.15 Calculation of Time. Where the performance or doing of any act, duty, matter, payment or thing is required hereunder and the period of time or duration for the performance is prescribed and fixed herein, the time shall be computed so as to exclude the first and include the last Day of the prescribed or fixed period or duration of time. When the last Day of the period falls on Saturday, Sunday or a legal holiday that Day shall be omitted from the computation and the next business Day shall be the last Day of the period. 17.16 Survival of Terms. Upon the termination or forfeiture of the Franchise, Grantee shall no longer have the right to occupy the Streets for the purpose of providing Cable Service. However, Grantee's obligations to the City(other than the obligation to provide service to Subscribers) shall survive according to their terms. 17.17 Competitive Equity. If any other Wireline MVPD enters into any agreement with the City to provide multi channel video programming or its equivalent to residents in the City, the City, upon written request of the Grantee, shall permit the Grantee to construct and/or operate its Cable System and provide multi channel video programming or its equivalent to Subscribers 50 3056874v1 in the City under the same agreement as applicable to the new MVPD. Within one hundred twenty(120) Days after the Grantee submits a written request to the City, the Grantee and the City shall enter into an agreement or other appropriate authorization (if necessary) containing the same terms and conditions as are applicable to the new Wireline MVPD. Passed and adopted this day of 201_ ATTEST CITY OF RICHFIELD, MINNESOTA By: By: Its: City Clerk Its: Mayor 51 3056874v1 ACCEPTED: This Franchise is accepted, and we agree to be bound by its terms and conditions. QWEST BROADBAND SERVICES, INC., D/B/A CENTURYLINK Date: By: Its: SWORN TO BEFORE ME this day of 1201. NOTARY PUBLIC 52 3056874v1 Exhibit A Free Cable Service to Public Buildings 1. ADMIN SERV DEPT,RICHFIELD 6700 PORTLAND AVE APT ASD 2. ELEMENTARY,SHERIDAN 6400 SHERIDAN AVE S 3. FIRE STATION 2,RICHFIELD 6401 PENN AVE S 4. LUTHERAN SCHOOL,MT CALVRY 6541 16TH AVE S 5. SCHOOL,HOLY ANGELS 6600 NICOLLET AVE 6. CITY HALL,RICHFIELD 6700 PORTLAND AVE APT HALL 7. FIRE STATION,RICHFIELD 6700 PORTLAND AVE APT 1 S. PUB SAFETY,RICHFIELD 6700 PORTLAND AVE APT EOC 9. ICE ARENA,RICHFIELD 636 E 66TH ST 10. HIGH SCHOOL,RICHFIELD 7001 HARRIET AVE 11. COMMUNITY CENTER,RICHFIELD 7000 NICOLLET AVE 12. LIBRARY,AUGSBERG 7100 NICOLLET AVE 13. STEM,RICHFIELD 7020 12TH AVE S 14. RDLS DUAL LAN,RICHFIELD ED 7001 ELLIOT AVE S 15. ELEM SCHOOL,CENTENNIAL 7315 BLOOMINGTON AVE 16. JUNIOR HIGH,RICHFIELD 7461 OLIVER AVE S 17. EXTENDED CAMPUS,SEC 7450 PENN AVE S 18. SCHOOL,BLESSED T CATHOLIC 7540 PENN AVE S 19. SCHOOL GARAGE,RICHFIELD 300 W 72ND ST 20. ACADEMY,ZOE 7101 NICOLLET AVE 21. MAINT FACILITY,RICHFIELD 1901 E 66TH ST 22. SPECIAL ED,CENTRAL SCHOOL 7145 HARRIET AVE A-1 3056874v1 Exhibit B Franchise Fee Payment Worksheet TRADE SECRET— CONFIDENTIAL Month/Year Month/Year Month/Year Total A la Carte Video Services Audio Services Basic Cable Service Installation Charge Bulk Revenue Expanded Basic Cable Service Pay Service Pay-per-view Guide Revenue Franchise Fee Revenue Advertising Revenue Home Shopping Revenue Digital Services Inside Wiring Other Revenue Equipment Rental Processing Fees PEG Fee FCC Fees Bad Debt Late Fees REVENUE Fee Calculated Fee Factor: 5% B-1 3056874v1 Exhibit C Indemnity Agreement INDEMNITY AGREEMENT made this day of 120 by and between Qwest Broadband Services, Inc., a Delaware Corporation, party of the first part, hereinafter called"CenturyLink," and the City of Richfield, a Minnesota Municipal Corporation, party of the second part, hereinafter called"City." WITNESSETH: WHEREAS, the City of Richfield has awarded to Qwest Broadband Services, Inc. a franchise for the operation of a cable communications system in the City of Richfield; and WHEREAS, the City has required, as a condition of its award of a cable communications franchise, that it be indemnified with respect to all claims and actions arising from the award of said franchise, NOW THEREFORE, in consideration of the foregoing promises and the mutual promises contained in this agreement and in consideration of entering into a cable television franchise agreement and other good and valuable consideration, receipt of which is hereby acknowledged, CenturyLink hereby agrees, at its sole cost and expense, to fully indemnify, defend and hold harmless the City, its officers,boards, commissions, employees and agents against any and all claims, suits, actions, liabilities and judgments for damages, cost or expense (including, but not limited to, court and appeal costs and reasonable attorneys' fees and disbursements assumed or incurred by the City in connection therewith) arising out of the actions of the City in granting a franchise to CenturyLink. This includes any claims by another franchised cable operator against the City that the terms and conditions of the CenturyLink franchise are less burdensome than another franchise granted by the City or that the CenturyLink Franchise does not satisfy the requirements of applicable federal, state, or local law(s). The indemnification provided for herein shall not extend or apply to any acts of the City constituting a violation or breach by the City of the contractual provisions of the franchise ordinance, unless such acts are the result of a change in applicable law, the order of a court or administrative agency, or are caused by the acts of CenturyLink. The City shall give CenturyLink reasonable notice of the making of any claim or the commencement of any action, suit or other proceeding covered by this agreement. The City shall cooperate with CenturyLink in the defense of any such action, suit or other proceeding at the request of CenturyLink. The City may participate in the defense of a claim, but if CenturyLink provides a defense at CenturyLink's expense then CenturyLink shall not be liable for any attorneys' fees, expenses or other costs that City may incur if it chooses to participate in the defense of a claim, unless and until separate representation is required. If separate representation to fully protect the interests of both parties is or becomes necessary, such as a conflict of interest, in accordance with the Minnesota Rules of Professional Conduct, between the City and the counsel selected by CenturyLink to represent the City, CenturyLink shall pay, from the date such separate representation is required forward, all reasonable expenses incurred by the City in defending itself with regard to any action, suit or proceeding indemnified by CenturyLink. Provided, however, that in the event that such separate representation is or becomes necessary, C-1 3056874v1 and City desires to hire counsel or any other outside experts or consultants and desires CenturyLink to pay those expenses, then City shall be required to obtain CenturyLink's consent to the engagement of such counsel, experts or consultants, such consent not to be unreasonably withheld. Notwithstanding the foregoing, the parties agree that the City may utilize at any time, at its own cost and expense, its own City Attorney or outside counsel with respect to any claim brought by another franchised cable operator as described in this agreement. The provisions of this agreement shall not be construed to constitute an amendment of the cable communications franchise ordinance or any portion thereof, but shall be in addition to and independent of any other similar provisions contained in the cable communications franchise ordinance or any other agreement of the parties hereto. The provisions of this agreement shall not be dependent or conditioned upon the validity of the cable communications franchise ordinance or the validity of any of the procedures or agreements involved in the award or acceptance of the franchise, but shall be and remain a binding obligation of the parties hereto even if the cable communications franchise ordinance or the grant of the franchise is declared null and void in a legal or administrative proceeding. It is the purpose of this agreement to provide maximum indemnification to City under the terms set out herein and, in the event of a dispute as to the meaning of this Indemnity Agreement, it shall be construed, to the greatest extent permitted by law, to provide for the indemnification of the City by CenturyLink. This agreement shall be a binding obligation of and shall inure to the benefit of, the parties hereto and their successor's and assigns, if any. QWEST BROADBAND SERVICES, INC. Dated: , 20 By: Its: STATE OF LOUISIANA ) ) SS The foregoing instrument was acknowledged before me this day of 20 , by , the of Qwest Broadband Services, Inc., a Delaware Corporation, on behalf of the corporation. Notary Public Commission Expires CITY OF RICHFIELD, MINNESOTA By Its C-2 3056874v1 RESOLUTION NO. RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE GRANTING A CABLE COMMUNICATIONS FRANCHISE WITH CENTURYLINK FOR THE CITY OF RICHFIELD WHEREAS, the City has adopted the above-referenced ordinance; and WHEREAS, the verbatim text of the ordinance is cumbersome, and the expense of publication of the complete text is not justified; and WHEREAS, the following summary clearly informs the public of the intent and effect of the ordinance. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield that the following summary is hereby approved for official publication: SUMMARY PUBLICATION BILL NO. 2016- AN ORDINANCE GRANTING A CABLE COMMUNICATIONS FRANCHISE WITH CENTURYLINK FOR THE CITY OF RICHFIELD On January 26, 2016, the Richfield City Council adopted an ordinance designated as Bill No. , the title of which is stated above. This summary of the Ordinance is published pursuant to Section 3.12 of the Richfield City Charter. The Ordinance approves a cable communications franchise with CenturyLink to provide cable communications services to the City of Richfield. BE IT FURTHER RESOLVED, that the City Clerk is directed to keep a copy of the Ordinance in her office at City Hall for public inspection and to post a full copy of the Ordinance in a public place in the City for a period of two weeks. Copies of the Ordinance are also available upon request by calling 612-861-9738. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of January, 2016. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. 11172 REGARDING AN ORDINANCE GRANTING A COMPETITIVE CABLE FRANCHISE FOR QWEST BROADBAND SERVICES,INC.,D/B/A CENTURYLINK RECITALS: WHEREAS,the City of Richfield, Minnesota makes the following FINDINGS OF FACT: 1. In October 2014, Qwest Broadband Services, Inc., d/b/a CenturyLink, Inc. ("CenturyLink") requested that the City of Richfield, Minnesota ("City") initiate proceedings to consider awarding it a franchise to provide cable communications services in the City ("Service Territory"). 2. Comcast of Arkansas/Florida/Louisiana/Minnesota/Mississippi/Tennessee, Inc. ("Comcast") holds a non-exclusive cable communications franchise for the Service Territory ("Comcast Franchise"). 3. The Comcast Franchise, which the City last renewed in August 2012, is currently the only cable communications franchise for the Service Territory. 4. The monopoly held by a sole cable communication provider in a particular market is a barrier to entry for additional providers, which does not have a captive market but must instead"win" every subscriber.i 5. The presence of a second cable operator in a market improves the quality of service offerings and drives down prices by approximately 15%.2 6. On April 2 and April 9, 2015, the City published a Notice of Intent to Franchise a Cable Communications System ("Notice") in the Sun Current, a newspaper of general circulation in the Service Territory. 7. The Notice indicated that the City was soliciting franchise applications and provided information regarding the application process, including that applications were required to be submitted on or before April 24, 2015 and that a public hearing to hear proposals from applicants would be held May 12, 2015 at 7:00 PM. 8. The City also mailed copies of the Notice and application materials to CenturyLink and Comcast.3 In the Matter of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992, Report and Order and Further Notice of Proposed Rulemaking,MB Docket No. 05-311,at¶ 138(Rel. Mar. 5,2007)("621 Order"). 2 Id. at¶¶2, 50. 1 9. On April 24, 2015, the City received an application from CenturyLink (the "CenturyLink Application"). The City did not receive any other applications. 10. As provided by the Notice, on May 12, 2015 the City held a public hearing during the City Council's regularly scheduled meeting to consider CenturyLink's application and qualifications. 11. On May 4, 2015, Comcast submitted a letter to the City setting forth its position regarding the CenturyLink Application("Comcast Letter").4 12. The Comcast Letter expresses concern about how CenturyLink's proposal compared to particular provisions of the existing Comcast Franchise.5 13. The Comcast Letter also summarizes Comcast's position regarding build-out requirements and other proposed terms related to competition in the cable industry.6 14. During the hearing, CenturyLink presented its proposal and all other interested parties were provided an opportunity to speak and present information to the City Council regarding the CenturyLink Application. 15. Following the hearing, the law firm of Moss & Barnett, a Professional Association prepared a report, dated June 1, 2015 ("Franchise Report"), reviewing and analyzing the City's franchising procedures, the CenturyLink Application and other information provided by CenturyLink in connection with the May 18, 2015 public hearing.7 16. The Franchise Report identifies and discusses federal and state legal requirements relevant to the City's consideration of the CenturyLink Application, including laws pertaining to franchising procedures and competition between providers.8 17. The Franchise Report also analyzes information provided by CenturyLink to establish its qualifications to operate a cable communications franchise in the Service Territory.9 18. At its meeting on October 28, 2015, the Southwest Suburban Cable Commission ("Commission") considered the Franchise Report along with the information and documentation it had received regarding the CenturyLink Application, and adopted Resolution 2015-1 finding and concluding that the CenturyLink Application complied with the requirements of Minn. Stat. § 238.081 and that CenturyLink is legally, 3 Notice by the City of Richfield,Minnesota of Its Intent to Consider An Application for a Franchise and Request for Proposals-Official Application Form 4See May 4, 2015 letter from Emmett Coleman to Brian Grogan, Franchise Administrator of the Southwest Suburban Cable Commission regarding CenturyLink Video Franchise Application. 5 Id. at 2. 'Id. at 1-2. Report to the Southwest Suburban Cable Commission Regarding Qwest Broadband Services, Inc. d/b/a/ CenturyLink—Proposal for a Cable Communication Franchise,June 1,2015. $Franchise Report at 2-9. 9 Id. at 11-12. 2 technically, and financially qualified to operate a cable communications system within the Service Territory. 19. In Minnesota, both State and federal law govern the terms and conditions of an additional cable communications franchise in an already-franchised service area.10 20. The franchising authority may not grant an exclusive franchise or unreasonably refuse to award an additional competitive franchise.)" 21. The franchising authority must allow an applicant reasonable time to become capable of providing cable service to all households in the service area.12 22. The franchising authority may grant an additional franchise in an already-franchised service area if the terms and conditions of the additional franchise are not "more favorable or less burdensome than those in the existing franchise" regarding the area served, the PEG access requirements, and franchise fees.' 23. The additional franchise must also include, among other things, "a schedule showing . . . that the construction throughout the authorized franchise area must be substantially completed within five years of the granting of the franchise."14 24. In order to ensure that any additional franchise granted to CenturyLink would contain substantially similar service area, PEG access requirements, and franchise fees to the Comcast Franchise, the City used the Comcast Franchise as the base document for its negotiations. 25. On December 31, 2015, the City Council gave notice that it intended to introduce an ordinance granting a cable communications franchise to CenturyLink. 26. On January 12, 2016, the City Council introduced Ordinance No. , an Ordinance of the City of Richfield Granting a Cable Communications Franchise to Qwest Broadband Services, Inc. d/b/a CenturyLink("CenturyLink Franchise"). 27. Copies of the CenturyLink Franchise were made available to the public, including Comcast, on December 22, 2015. 28. The CenturyLink Franchise encompasses the same Service Territory encompassed by the Comcast Franchise.15 29. The franchise fees required by the CenturyLink Franchise are identical to those required by the Comcast Franchise. 16 10 See 47 U.S.C. § 541(a)(1);Minn. Stat. §§238.08, .084;see also Franchise Report at 2-8. " 47 U.S.C. § 541(a)(1). 12 47 U.S.C. § 541(a)(4). "Minn. Stat. § 238.08,subd. 1(b). 14 Minn. Stat. § 23 8.84,subd. 1(m). 15 CenturyLink Franchise § 2.4;Comcast Franchise § 2.4. 3 30. The PEG access requirements in the CenturyLink Franchise mandate certain obligations, such as HD channel capacity for all PEG channels that go beyond the commitments made in the Comcast franchise.17 31. The City recognizes that CenturyLink, which currently offers no cable communications services in the Service Territory, cannot justify a large initial deployment because it "realistically cannot count on acquiring a share of the market similar to Comcast's share . . . [and] must begin offering service within a smaller area to determine whether it can reasonably ensure a return on its investment before expanding."18 32. The CenturyLink Franchise therefore requires CenturyLink's initial deployment to be capable of serving at least 15% of the living units in the Service Territory within two years. 33. The CenturyLink Franchise permits the City to monitor CenturyLink's progress and compliance with build-out requirements via quarterly meeting and accelerates the build- out schedule if CenturyLink has market success, with the goal and expectation that build- out will be substantially complete before the CenturyLink Franchise's five-year term expires.19 34. During its regularly scheduled meeting on January 12, 2016, the City Council will hold a public hearing at which all interested parties are provided an opportunity to speak and present information regarding the proposed CenturyLink Franchise. WHEREAS, the City has considered these facts and the cable-related needs and interests of the community: NOW THEREFORE, the City Council for the City of Richfield, Minnesota hereby resolves as follows: 1. The foregoing findings ate adopted as the official findings of the City Council and made a part of the official record. 2. The City has authority to adopt an ordinance granting a cable communications franchise to CenturyLink for the Service Territory. 3. The City may not unreasonably refuse to award a competitive cable communications franchise to CenturyLink. 4. The City and its residents will benefit from adoption of the CenturyLink Franchise, which will introduce facilities-based competition into the cable communications market in the Service Territory and thereby reduce costs to consumers and increase the quality and availability of services. 16 CenturyLink Franchise § 16.1; Comcast Franchise § 16.1. 17 CenturyLink Franchise§7;Comcast Franchise §7. is 621 Order at¶35. 19 CenturyLink Franchise §2.6. 4 5. CenturyLink is legally, technically, and financially qualified to operate a cable communications system in the Service Territory and has complied with all application requirements. 6. The City has complied with all franchise application requirements imposed by State and federal law, including those identified herein or in the Franchise Report. 7. The terms and conditions of the CenturyLink Franchise pertaining to service area, a PEG access requirement, and franchise fees are not more favorable or less burdensome than the corollary terms of the Comcast Franchise. 8. The CenturyLink Franchise's initial deployment requirement of 15% within two years and 5-year timeline for substantially completing build-out provides a reasonable period of time for CenturyLink to become capable of reaching full deployment and is therefore consistent with both State and federal law. 9. The Ordinance Granting a Cable Communications Franchise for Qwest Broadband Services, Inc., d/b/a CenturyLink is formally and finally adopted. 10. The City finds and concludes that its actions are appropriate, reasonable, and consistent in all respects,with the mandates set forth in Chapter 238 of Minnesota Statutes and applicable provisions of federal law, including 47 U.S.C. § 541(a). PASSED AND ADOPTED in regular session of the City_ Council of the_City of Richfield,- Minnesota this 12th day of January 2016. Debbie Goettel, Mayor of the City of Richfield ATTE T: Elizabeth VanHoose, City Clerk 5 ♦***i Moss & Barnett MEMORANDUM To: City Council of the City of Richfield, Minnesota From: Brian Grogan Date: December 21, 2015 Re: Competition in Cable Communications Franchising Executive Summary The City of Richfield, Minnesota ("City's is considering granting a competitive cable franchise to Qwest Broadband Services, Inc., d/b/a CenturyLink ("CenturyLink' in a service area for which Comcast holds an existing franchise. This memorandum is intended to assist the City Council ("Council's in its consideration of the proposed Ordinance Granting a Competitive Cable Franchise for Qwest Broadband Services, Inc., d/b/a CenturyLink ("CenturyLink Franchise's by summarizing the legal issues surrounding its terms that relate to competition in the cable communications industry. Details The Southwest Suburban Cable Commission ("Commission's adopted Resolution No. 2015-1 enclosed as Exhibit 1 finding CenturyLink to be legally, technically, and financially qualified to provide cable communications services to residents of the City. In connection with that finding, the Commission authorized City staff to negotiate with CenturyLink to determine if mutually agreeable terms for such a franchise could be reached. Those negotiations are now complete and have resulted in the proposed CenturyLink Franchise enclosed as Exhibit 2. City staff has also prepared for the Council's review and consideration, written "findings of fact," enclosed as Exhibit 3, setting forth the factual and legal basis for the grant of the CenturyLink 150 South Fifth Street I Suite 1200 Minneapolis, MN 55402 P:612-877-5000 F:612-877-5999 W:LawMoss.com City Council of the City of Richfield, Minnesota December 4, 2015 Page 2 Franchise and the impact of relevant State and federal competitive cable franchise laws and regulations. Build-out To help promote competition in and minimize unnecessary regulatory burdens on the cable communications industry, the Cable Communications Policy Act of 1984, as amended by the Cable Consumer Protection and Competition Act of 1992 and Telecommunications Act of 1996 (the "Cable Act's prohibits local franchising authorities from granting exclusive cable communications franchises or unreasonably refusing to award an additional franchise to a qualified applicant.' The Federal Communications Commission ("FCC's, which administers the Cable Act, addressed competitive cable franchising in its 2007 Report and Order and Further Notice of Rulemaking (generally referred to as the "621 Order" after its subject, Section 621 of the legislation that became the Cable Act). The 621 Order explained that an unreasonable refusal in contravention of the Cable Act could occur not only by outright denial of a franchise application, but also by creating conditions that operate as de facto denials. One variety of de facto denial addressed by the 621 Order is the imposition of unreasonable build out requirements that act as a barrier for an additional cable provider to enter a market with an existing franchise: Build-out requirements deter market entry because a new entrant generally must take customers from the incumbent cable operator . . . . Because the second provider realistically cannot count on acquiring a share of the market similar to the incumbent's share, the second entrant cannot justify a large initial deployment. Rather, a new entrant must begin offering service within a smaller area to determine whether it can reasonably ensure a return on its investment before expanding.2 ' 47 U.S.C. § 541(a)(1). 2 621 Order at¶ 35. City Council of the City of Richfield, Minnesota December 4, 2015 Page 3 The 621 Order did not prohibit all build out requirements, but instead provided examples of unreasonable build out requirements—and of reasonable ones, such as a small initial deployment and required expansion triggered by market success.3 Minnesota Statutes Chapter 238, which establishes statewide cable communications requirements, also addresses build out by requiring "a provision in initial franchises identifying . . . a schedule showing: . . . that construction throughout the authorized franchise area must be substantially completed within five years of the granting of the franchise." CenturyLink takes the position that Minnesota's five-year build out requirement is unreasonable under the 621 Order and is therefore preempted by the federal law. Comcast disagrees and points to the FCC's recent reaffirmation that the 621 Order's rulings "were intended to apply only to the local franchising process and not to franchising laws and decisions at the state level."' The CenturyLink Franchise addresses this issue by requiring a modest initial deployment (at least 15% of the service area within two years) and linking build out requirements to market-success benchmarks that CenturyLink must use its best efforts to meet, but granting the City sole discretion to determine, at the end of five years, whether CenturyLink has fulfilled its build out obligations to qualify for renewal of the franchise.6 Competitive Equity The Minnesota cable communications statutes also contain a general level-playing-field (i.e., "competitive equity's provision that requires that an additional franchise include no terms or conditions"more favorable or less burdensome than those in the existing franchise pertaining to: (1) the area served; (2) public, educational, or governmental access requirements; or 3 Id. at $ 89-90. 4 Minn. Stat. § 238.084, subd. 1(m). 5 621 Order at $ 7, cited in letter dated May 4, 2015 6 CenturyLink Franchise §2.6. City Council of the City of Richfield, Minnesota December 4, 2015 Page 4 (3) franchise fees."7 Minnesota courts have interpreted this provision as requiring "substantially similar"rather than identical—terms.$ Several attempts have been made to ensure that the CenturyLink Franchise is substantially similar to Comcast's existing franchise: first, the Comcast franchise served as the base document for negotiation of the CenturyLink Franchise; second, the franchise fees required by the CenturyLink Franchise are identical to those required by Comcast's franchise; third, the geographic area (after complete build-out) of the CenturyLink Franchise matches the area specified in Comcast's franchise; and fourth, the CenturyLink Franchise requires CenturyLink to require substantially similar—if not greater—public, educational, and governmental access. Findings of Fact As previously indicated, whether the Council ultimately grants or denies the proposed CenturyLink Franchise, it must examine all of the evidence presented to it, weigh the facts, and apply the correct legal standards. Enclosed as Exhibit 3 are draft findings of fact generally supporting a decision to approve the CenturyLink Franchise. With the caveat that best practices dictate that the final findings of fact should respond to any evidence or argument against approval, the attached findings of fact may serve as a useful starting point if the Council elects to grant CenturyLink the franchise it seeks. 3056876v1 7 Minn. Stat. § 238.08, subd. 1(b). s See WH Link, LLC v. City of Otsego, 664 N.W.2d 390, 396 (Minn. Ct. App. 2003). EXHIBIT 1 Southwest Suburban Cable Commission Resolution 2015-1 Exhibit 1 EXHIBIT 2 CenturyLink Franchise Exhibit 2 EXHIBIT 3 Findings of Fact Exhibit 3 CITY OF RICHFIELD, MINNESOTA RESOLUTION NO. Regarding an Ordinance Granting a Competitive Cable Franchise for Qwest Broadband Services, Inc., d/b/a CenturyLink RECITALS: WHEREAS, the City of Richfield, Minnesota makes the following FINDINGS OF FACT: 1. In October 2014, Qwest Broadband Services, Inc., d/b/a CenturyLink, Inc. ("CenturyLink") requested that the City of Richfield, Minnesota ("City") initiate proceedings to consider awarding it a franchise to provide cable communications services in the City("Service Territory"). 2. Comcast of Arkansas/Florida/Loutsiana/Minnesota/Mississippi/Tennessee, Inc. ("Comcast") holds a non-exclusive cable communications franchise for the Service Territory("Comcast Franchise"). 3. The Comcast Franchise, which the City last renewed in August 2012, is currently the only cable communications franchise for the Service Territory. 4. The monopoly held by a sole cable communication provider in a particular market is a barrier to entry for additional providers, which does not have a captive market but must instead"win" every subscriber.' 5. The presence of a second cable operator in a market improves the quality of service offerings and drives down prices by approximately 15%.2 6. On April 2 and April 9, 2015, the City published a Notice of Intent to Franchise a Cable Communications System ("Notice") in the Sun Current, a newspaper of general circulation in the Service Territory. 7. The Notice indicated that the City was soliciting franchise applications and provided information regarding the application process, including that applications were required to be submitted on or before April 24, 2015 and that a public hearing to hear proposals from applicants would be held May 12, 2015 at 7:00 PM. 8. The City also mailed copies of the Notice and application materials to CenturyLink and Comcast.' 1 In the Matter of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992, Report and Order and Further Notice of Proposed Rulemaking,MB Docket No. 05-31 I, at¶ 138 (Rel. Mar. 5, 2007)("621 Order"). 2 Id. at¶T 2, 50. 1 9. On April 24, 2015, the City received an application from CenturyLink (the "CenturyLink Application"). The City did not receive any other applications. 10. As provided by the Notice, on May 12, 2015 the City held a public hearing during the City Council's regularly scheduled meeting to consider CenturyLink's application and qualifications. 11. On May 4, 2015, Comcast submitted a letter to the City setting forth its position regarding the CenturyLink Application ("Comcast Letter").4 12. The Comcast Letter expresses concern about how CenturyLink's proposal compared to particular provisions of the existing Comcast Franchise.5 13. The Comcast Letter also summarizes Comcast's position regarding build-out requirements and other proposed terms related to competition in the cable industry. 14. During the hearing, CenturyLink presented its proposal and all other interested parties were provided an opportunity to speak and present information to the City Council regarding the CenturyLink Application. 15. Following the hearing, the law firm of Moss & Barnett, a Professional Association prepared a report, dated June 1, 2015 ("Franchise Report"), reviewing and analyzing the City's franchising procedures, the CenturyLink Application and other information provided by CenturyLink in connection with the May 18, 2015 public hearing.7 16. The Franchise Report identifies and discusses federal and state legal requirements relevant to the City's consideration of the CenturyLink Application, including laws pertaining to franchising procedures and competition between providers.' 17. The Franchise Report also analyzes information provided by CenturyLink to establish its qualifications to operate a cable communications franchise in the Service Territory.9 18. At its meeting on October 28, 2015, the Southwest Suburban Cable Commission ("Commission") considered the Franchise Report along with the information and documentation it had received regarding the CenturyLink Application, and adopted Resolution 2015-1 finding and concluding that the CenturyLink Application complied with the requirements of Minn. Stat. § 238.081 and that CenturyLink is legally, s Notice by the City of Richfield,Minnesota of Its Intent to Consider An Application for a Franchise and Request for Proposals-Official Application Form 4See May 4, 2015 letter from Emmett Coleman to Brian Grogan, Franchise Administrator of the Southwest Suburban Cable Commission regarding CenturyLink Video Franchise Application. Id. at 2. a Id. at 1-2. 7 Report to the Southwest Suburban Cable Commission Regarding Qwest Broadband Services, Inc. d/b/a/ CenturyLink—Proposal for a Cable Communication Franchise,June 1,2015. s Franchise Report at 2-9. 9 Id. at 1 1-12. 2 technically, and financially qualified to operate a cable communications system within the Service Territory. 19. In Minnesota, both State and federal law govern the terms and conditions of an additional cable communications franchise in an already-franchised service area.10 20. The franchising authority may not grant an exclusive franchise or unreasonably refuse to award an additional competitive franchise.11 21. The franchising authority must allow an applicant reasonable time to become capable of providing cable service to all households in the service area.12 22. The franchising authority may grant an additional franchise in an already-franchised service area if the terms and conditions of the additional franchise are not "more favorable or less burdensome than those in the existing franchise" regarding the area served, the PEG access requirements, and franchise fees.13 23. The additional franchise must also include, among other things, "a schedule showing . . . that the construction throughout the authorized franchise area must be substantially completed within five years of the granting of the franchise."14 24. In order to ensure that any additional franchise granted to CenturyLink would contain substantially similar service area, PEG access requirements, and franchise fees to the Comcast Franchise, the City used the Comcast Franchise as the base document for its negotiations. 25. On [_date_], the City Council gave notice that it intended to introduce an ordinance granting a cable communications franchise to CenturyLink. 26. On [_date_], the City Council introduced Ordinance No. , an Ordinance of the City of Richfield Granting a Cable Communications Franchise to Qwest Broadband Services, Inc. d/b/a CenturyLink("CenturyLink Franchise"). 27. Copies of the CenturyLink Franchise were made available to the public, including Comcast, on [_date_]. 28. The CenturyLink Franchise encompasses the same Service Territory encompassed by the Comcast Franchise.15 29. The franchise fees required by the CenturyLink Franchise are identical to those required-- by equiredby the Comcast Franchise. 16 10 See 47 U.S.C. § 541(a)(1);Minn. Stat. §§ 238.08, .084;see also Franchise Report at 2-8. " 47 U.S.C. § 541(a)(1). 12 47 U.S.C. § 541(a)(4). "Minn. Stat. §238.08, subd. 1(b). 14 Minn. Stat. § 238.84, subd. 1(m). 15 CenturyLink Franchise § 2.4;Comcast Franchise § 2.4. 3 30. The PEG access requirements in the CenturyLink Franchise mandate certain obligations, such as HD channel capacity for all PEG channels that go beyond the commitments made in the Comcast franchise.17 31. The City recognizes that CenturyLink, which currently offers no cable communications services in the Service Territory, cannot justify a large initial deployment because it "realistically cannot count on acquiring a share of the market similar to Comcast's share . . . [and] must begin offering service within a smaller area to determine whether it can reasonably ensure a return on its investment before expanding."'8 32. The CenturyLink Franchise therefore requires CenturyLink's initial deployment to be capable of serving at least 15% of the living units in the Service Territory within two years. 33. The CenturyLink Franchise permits the City to monitor CenturyLink's progress and compliance with build-out requirements via quarterly meeting and accelerates the build- out schedule if CenturyLink has market success, with the goal and expectation that build- out will be substantially complete before the CenturyLink Franchise's five-year term 19 expires. 34. During its regularly scheduled meeting on January 12, 2016, the City Council will hold a public hearing at which all interested parties are provided an opportunity to speak and present information regarding the proposed CenturyLink Franchise. WHEREAS, the City has considered these facts and the cable-related needs and interests of the community: NOW THEREFORE, the City Council for the City of Richfield, Minnesota hereby resolves as follows: 1. The foregoing findings are adopted as the official findings of the City Council and made a part of the official record. 2. The City has authority to adopt an ordinance granting a cable communications franchise to CenturyLink for the Service Territory. 3. The City may not unreasonably refuse to award a competitive cable communications franchise to CenturyLink. 4. The City and its residents will benefit from adoption of the CenturyLink Franchise, which will introduce facilities-based competition into the cable communications market in the Service Territory and thereby reduce costs to consumers and increase the quality and availability of services. 'G CenturyLink Franchise § 16.1; Comcast Franchise § 16.1. 17 CenturyLink Franchise § 7; Comcast Franchise § 7. is 621 Order at¶35. 19 CenturyLink Franchise § 2.6. 4 5. CenturyLink is legally, technically, and financially qualified to operate a cable communications system in the Service Territory and has complied with all application requirements. 6. The City has complied with all franchise application requirements imposed by State and federal law, including those identified herein or in the Franchise Report. 7. The terms and conditions of the CentuiyLink Franchise pertaining to service area, a PEG access requirement, and franchise fees are not more favorable or less burdensome than the corollary terms of the Comcast Franchise. 8. The CenturyLink Franchise's initial deployment requirement of 15% within two years and 5-year timeline for substantially completing build-out provides a reasonable period of time for CenturyLink to become capable of reaching full deployment and is therefore consistent with both State and federal law. 9. The Ordinance Granting a Cable Communications Franchise for Qwest Broadband Services, Inc., d/b/a CenturyLink is formally and finally adopted. 10. The City finds and concludes that its actions are appropriate, reasonable, and consistent in all respects with the mandates set forth in Chapter 238 of Minnesota Statutes and applicable provisions of federal law, including 47 U.S.C. § 541(a). PASSED AND ADOPTED in regular session of the City Council of the City of Richfield, Minnesota this day of , 2016. Mayor of the City of Richfield ATTEST: City Clerk 5 AGENDA SECTION: PROPOSED ORDINANCES AGENDA ITEM# 6. STAFF REPORT NO. 21 .. ° ". CITY COUNCIL MEETING 1/26/2016 REPORT PREPARED BY: Betsy Osborn,Support Services Manager DEPARTMENT DIRECTOR REVIEW: Jay Henthorne, Public Safety Director 1/20/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of a second reading and resolution for summary publication of an ordinance to allow beekeeping in the City of Richfield. EXECUTIVE SUMMARY: The City Code currently prohibits beekeeping within the City. Beekeeping has become an accepted use throughout the metro area. The City has received several requests to allow beekeeping and after staff research and discussions the attached ordinance is being offered for consideration. The City has never addressed beekeeping and since it's a new code, extensive discussions have occurred between Community Development, Recreation and Public Safety staff with assistance and review from the City Attorney's office concerning the contents of the code being recommended. Wood Lake Nature Center staff are well versed on beekeeping issues and will be our technical experts should issues arise. Planning Commission suggestions have been considered in the final version of the ordinance. Afirst reading of this ordinance occurred at the January 12, 2016 Council Meeting. RECOMMENDED ACTION: By motion: Approve the second reading and resolution for summary publication of an ordinance allowing beekeeping within the City. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT Bees are currently a prohibited animal, for the purpose of keeping, under City Code. Beekeeping was not an allowed use in the city but a public hearing was held on this ordinance at the December 14, 2015 Planning Commission Meeting and the Planning Commission approved the zoning changes. B. POLICIES(resolutions,ordinances,regulations,statutes,etch The attached draft of the beekeeping ordinance has been reviewed internally by many staff members to include persons in Zoning, Recreation (Wood Lake Nature Center), Building Inspection and Public Safety staff. C. CRITICAL TIMING ISSUES: There are no critical timing issues. D. FINANCIAL IMPACT: There is no financial impact. E. LEGAL CONSIDERATION: The City Attorney, with staff, has drafted the ordinance and will be available for legal questions. The City Attorney approves of its contents. ALTERNATIVE RECOMMENDATION(Sl: The Council could leave the ordinances as they currently are which would mean that beekeeping would be prohibited. PRINCIPAL PARTIES EXPECTED AT MEETING: None ATTACHMENTS: Description Type D Beekeeping Ordinance Ordinance D Beekeeping Summary Publication Resolution Resolution Letter BILL NO. AN ORDINANCE AMENDING CHAPTER IX OF THE RICHFIELD CODE OF ORDINANCES BY ADDING A NEW SECTION RELATING TO BEEKEEPING AND AMENDING ZONING PROVISIONS RELATING TO THE SAME THE CITY OF RICHFIELD DOES ORDAIN: Section 1. Subsection 509.21 of the Richfield Zoning Code relating to home occupations and prohibited activites, is amended as follows: Subd. 11. Specific activities prohibited. The following activities shall not be allowed as home occupations: a) The repair, whether for consideration or not, of motor vehicles which are not registered to a resident of the dwelling on the property where the repair is made, or to a son or daughter, sibling, parent, grandparent, or grandchild of a resident of the property; b) Adult business establishments regulated under Section 1196 of the city code; C) The practice of medical, dental, chiropractic, psychiatric, or other similar treatment or therapy, including acupuncture, where the person(s) providing such treatment or therapy is not licensed by the State of Minnesota to administer such treatment or therapy; or in the case of massage therapy, where the person(s)providing such treatment is not certified by the "National Certification Board for Therapy Massage and Bodywork" or by the "Massage and Bodywork Licensing Examination;" d) Businesses, educational programs, or similar gatherings which meet on a regular basis, having more than six (6)nonresident adults in attendance at one (1) time; e) Pet grooming or pet care facilities, except those legally existing on or before June 1, 1995; f) Gun or ammunition sales/repair, except those legally existing on or before June 1, 1995; g) Music instruction, unless conducted within a single-family(detached dwelling; h) Tattoo businesses... and i) Sale of honey produced by hives located within the city regulated under section 906 of thecity code. Section 2. Subsection 512.03 of the Richfield Zoning Code relating to permitted uses, is amended as follows: 512.03 Permitted uses in all districts. a) Public streets and highways; 1 b) Underground public utilities; C) Parks and related recreational facilities owned by a governmental unit; d) Solar equipment as an accessory use, e) Horticulture/community gardens as an accessory to an established institutional use (school, church,park),provided that plants and related materials are maintained in a clean and orderly manner and that waste is disposed of appropriately..-; and f) beekeeping subject to the inspection and licensing requirements and limitations outlined in Section 906. Section 3. Subsection 514.15 of the Richfield City Code relating to Additional Regulations in the Single-Family Residential District (R) is amended by adding a new subdivision 7 as follows: Subd. 7. Beekeebing. Any property seekingto bees must comply with the additional requirements of Section 906 of this Code. Section 4. Subsection 905.41 of the Richfield City Code relating to the maintenance of nondomestic animals, amphibians, reptiles and insects, is amended as follows: Subd. 2. Maintenance of non-domestic creatures prohibited. Except as allowed in Section 906, Aall other living creatures not enumerated or covered in subdivision 1 are considered non-domestic creatures and the maintenance thereof is considered a nuisance and punishable pursuant to this part. Section 5. A new Section 906 is inserted into the Richfield City Code as follows: SECTION 906—BEEKEEPING 906.01.—Definitions. Subdivision 1. "Accredited institution" means an educational institution holding accredited status which has been licensed or registered by the Minnesota Office of Higher Education at the time the registrant obtained their certificate. Subd. 2. "Apiary" means the AP assembly of one or more colonies of bees on a single lot. Subd. 3. "Apiary site" means the lot upon which an apiary is located. Subd. 4. "Beekeeper" means a person who owns or has charge of one or more colonies of honeybees or a person who owns or controls a lot on which a colony is located whether or not the person is intentionally keeping honeybees. 2 Subd. 5. "Beekeeping equipment" means anything used in the operation of an apiary, such as hive bodies, supers, frames, top and bottom boards and extractors. Subd. 6. "Colony" means an aggregate of honey bees consisting principally of workers, but having, when perfect, one queen and at times drones, brood, combs and honey. Subd. 7. "Flyway barrier" means a barrier that raises the flight path of bees above six feet from the ground as they come and go from a hive. Subd. S. "Hive"means the receptacle inhabited by a colony. Subd. 9. "Honey bee" means all life stages of the common domestic honey bee, apis mellifera. This definition does not include wasps, hornets, African subspecies or Africanized hybrids. Subd. 10. "Nucleus colony" means a small quantity of honey bees with a queen housed in a smaller than usual hive box designed for a particular purpose, and containing no supers. Subd. 11. "Registrant" means any registered beekeeper and any person who has applied for approval of a beekeeping registration. Subd. 12. "Rooftop" means the uppermost section of a primary or accessory structure of at least one full story and at least twelve feet in height. Areas including but not limited to decks, patios and balconies shall not be considered a rooftop. Subd. 13. "Super" means a box that holds the frames where bees will store the honey. Subd. 14. "Swarming" means the process where a queen bee leaves a colony with a large group of worker bees in order to form a new honey bee colony. Subd. 15. "Unusual aggressive behavior" means any instance in which unusual aggressive characteristics such as stinging or attacking without provocation occurs. Provocation is an act that an adult could reasonably expect may cause a bee to sting or attack. 906.03.—Purpose. The purpose and intent of this Section is to permit and establish requirements for the keeping of honey bee colonies, hives, and equipment within the City and to ensure compliance with the requirements of this section. The City of Richfield recognizes that honey bees are an asset to our community, important in the pollination of plants and in the production of honey and other products. 3 906.05.—Beekeeping Limited. No person shall keep, harbor, maintain or allow to be kept any hive or other facility for the housing of honeybees on or in any property within the City of Richfield without an approved registration unless otherwise exempted by subsection 906.09 or 906.13. 906.07.—Colony Location. Subdivision 1. Hives cannot be located in the front yard and must be located a minimum of ten (10) feet from the rear or side property lines and 20 feet from public rights-of-way unless further restricted elsewhere in this Code. A corner lot shall be considered to have two front yards. Subd. 2. Hives must be located a minimum of ten feet from any dwelling unit. Subd. 3. Except as otherwise provided in this Section, in each instance where any part of a hive is kept within twenty-five feet of a lot line of the apiary site, a flyway barrier of at least six feet in height must be constructed and must comply with the following: (a) The flyway barrier may consist of a wall, fence, dense vegetation or a combination there of, such that honey bees will fly over rather than through the material to reach the colony. (b) If a flyway barrier of dense vegetation is used, the initial planting may be four feet in height, so long as the vegetation reaches a height of at least six feet within two years of installation. Vegetation must be maintained so that it thrives and continues to meet these standards. If the vegetation dies or is not maintained so that it will comply, the vegetation must be replaced. (c) If the flyway barrier consists of a wall or fence, the materials must be decay resistant, and maintained in good condition. (d) The flyway barrier must continue parallel to the lot line of the apiary site for ten feet in both directions from the hive, or contain the hive or hives in an enclosure at least six feet in height. (e) A flyway barrier is not required if the hive is located on a rooftop. (f) Flyway barriers are subject to all other applicable City regulations, including,but not limited to, fence height limitations. Subd. 4. Hives located on any rooftop are subject to annual inspection and permitting by the City. No colony shall be placed upon a rooftop until the Building Inspector or their designee has determined that the location poses 4 no health or safety risks and that it is structurally sound to hold a hive and associated equipment and activities. If the Building Inspector at any time determines that the hive and/or building conditions pose a risk to public health or safety, the deficiency must be repaired or removed by the Registrant within ten (10) days' written notice. If the deficiency is not repaired or removed, the hive must be removed, at the Registrant's sole expense, within fifteen (15) days of notice from the building inspector of the unsafe condition. 906.09.—Colony Density. Subdivision 1. Every lot or parcel of land in the City shall be limited to the following number of colonies based on the size of the apiary site: (a) One half acre or smaller is allowed one colony; (b) More than one half acre to three quarters of an acre is allowed two colonies; (c) More than three quarter of an acre to one acre is allowed three colonies; (d) More than one acre to five acres is allowed four colonies; (e) More than five acres, there is no restriction on the number of colonies. Subd. 2. If any beekeeper serves the community by removing a swarm or swarms of honeybees from locations where they are not desired, that person shall not be considered in violation of the colony density restrictions in this section if the following conditions are met: (a) The person temporarily houses the honeybees at an apiary site of a beekeeper registered with the City, (b) The bees are not kept for more than thirty days, and (c) The site remains in compliance with the other provisions of this section. 906.011.—Required Conditions. Subdivision 1. Honey bee colonies shall be kept in hives with removable frames, which shall be kept in sound and useable condition. Subd. 2. Each colony on the apiary site shall be provided with a convenient source of water which must be located within ten feet of each active colony. 5 Subd. 3. Materials from a hive such as wax combs or other materials that might encourage robbing by other bees shall be promptly disposed of in a sealed container or placed within a building or other bee and vermin proof enclosure. Subd. 4. For each colony permitted to be maintained, there may also be maintained upon the same apiary lot, one nucleus colony in a hive structure not to exceed one standard nine and five-eights (9-5/8) inch depth box, ten frame hive body with no supers. Subd. 5. Beekeeping equipment must be maintained in good condition, including keeping the hives free of chipped and peeling paint if painted, and any unused equipment must be stored in an enclosed structure. Subd. 6. Hives shall be continuously managed to provide adequate living space for their resident honeybees in order to prevent swarming. Subd. 7. In any instance in which a colony exhibits unusual aggressive behavior, it shall be the duty of the beekeeper to promptly re-queen the colony. 906.13.—Registration Required. Subdivision 1. The application for registration must be upon a form provided by the City. All required information must be complete. Subd. 2. Each apiary site must apply for registration and receive approval prior to bringing any honeybees into the City. Subd. 3. If the beekeeper relocates a hive or colony to a new apiary site, the beekeeper shall apply for an updated registration, prior to the relocation, on the form provided by the City. Subd. 4. The beekeeping registration shall be valid until March 31 of each calendar year following initial issuance and must be renewed by the registrant prior to expiration each year by submitting a renewal form to the City on the form it provides. Subd. 5. Upon receipt of an application for an initial or renewal registration, the City will send notice to all property owners within 100 feet of the property line of the parcel upon which the apiary site(s) is located. Any property owner who objects to the registration must submit objections in writing to the City Manager within ten (10) days of the date of the notice. If the City Manager receives any written objections relating to an application, the City Manager will act on the application. If a written objection relating to an initial registration application includes evidence that a property owner, or a person residing at the property, within the 100-foot notice area, has a verifiable, documented medical allergy to bees, the City Manager shall deny the application. Such basis for denial shall not apply to objections submitted related to a renewal application. 6 Subd. 6. Beekeeping training and education is required for the beekeeper prior to the issuance of the initial beekeeping permit by the City. At the time of application for registration, the beekeeper must submit a certificate of completion of a honeybee keeping course from an accredited Minnesota institution. Subd. 7. The fees for the registration will be determined by the City Council in the City's fee schedule (Appendix D). Subd. 8. The property must be in compliance with all other applicable City regulations in order to receive approval and renewal. Subd. 9. If the required conditions outlined in section 906.11 are not maintained subsequent to issuance of a beekeeping permit, the permit may be revoked by the City Manager. Subd. 10. Beekeepers operating in the City prior to the effective date of this Section will have until March 1, 2016 to apply for registration. Subd. 11. The registration requirement under this subsection does not apply to The Woodlake Nature Center. 906.15.—Inspection. Subdivision 1. Upon initial registration, annual renewal or any updated registration, each beekeeper must allow for an inspection of the site. Subd. 2. Upon prior notice to the owner of the apiary site, City staff shall have the right to inspect any apiary. Subd. 3. In the case of a complaint regarding the apiary, the apiary site may be inspected upon reasonable notice to the property owner and/or registered beekeeper. 906.17.—Appeal and Hearing Procedure. Subdivision 1. Notice of denial, revocation or non-renewal must be made in writing to the registrant specifying the reason(s) for the action. The registrant may request, in writing, a hearing within fourteen (14) days of the date of the notification letter. Subd 2. A hearing officer shall hold hearings on contested denials, revocations, and non-renewals. The hearing officer shall be a person appointed by the City. At the hearing, the applicant may speak on his or her behalf and may present witnesses and other evidence he or she deems necessary. Upon the conclusion of the hearing, the hearing officer shall issue a written decision that includes findings of fact. The City shall provide the registrant with a copy of the hearing officer's decision. The registrant may 7 appeal the hearing officer's decision to the Minnesota Court of Appeals by writ of certiorari. Section 6. Effective Date. This Ordinance is effective as provided by Section 3.09 of the Richfield City Charter. Adopted by the City Council of the City of Richfield, Minnesota this day of , 2016. By: Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk 8 RESOLUTION NO. RESOLUTION APPROVING SUMMARY PUBLICATION OF AN ORDINANCE PERTAINING TO BEEKEEPING IN THE CITY OF RICHFIELD WHEREAS, the City has adopted the above referenced ordinance; and WHEREAS, the verbatim text of the ordinance is cumbersome, and the expense of publication of the complete text is not justified; and WHEREAS, the following summary clearly informs the public of the intent and effect of the ordinance. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield that the following summary is hereby approved for official publication: SUMMARY PUBLICATION BILL NO. AN ORDINANCE SECTION 906 OF THE CITY CODE PERTAINING TO BEEKEEPING WITHIN THE CITY OF RICHFIELD On January 26th, 2016, the Richfield City Council adopted an ordinance designated as Bill No. , the title of which is stated above. This summary of the ordinance is published pursuant to Section 3.12 of the Richfield City Charter. The ordinance amends the Zoning code to allow for beekeeping as an allowed use on properties within the city under the regulations created in a new section (906) of the city code. The Ordinance permits the City of Richfield to issue permits, inspect and regulate beekeeping within the city. The ordinance prohibits home sales of honey from allowed hives. BE IT FURTHER RESOLVED, that the City Clerk is directed to keep a copy of the Ordinance in her office at City Hall for public inspection and to post a full copy of the Ordinance in a public place in the City for a period of two weeks. Copies of the Ordinance are also available upon request by calling 612-861-9738. Adopted by the City Council of the City of Richfield, Minnesota this 26th day of January, 2016. Debbie Goettel, Mayor ATTEST: Elizabeth VanHoose, City Clerk AGENDA SECTON: OTHER BUSINESS AGENDA ITEM# 7. r ■. r STAFF REPORT NO. 22 CITY COUNCIL MEETING 1/26/2016 REPORT PREPARED BY Karen Barton,Community Development Assistant Director DEPARTMENT DIRECTOR REVIEW: John Stark,Community Development Director 1/19/2016 OTHER DEPARTMENT REVIEW: None CITYMANAGER REVIEW: Steven L.Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of agreements with non-profit organizations to provide social services to the City of Richfield and authorization of the City Manager to execute the agreements for services with those agencies. EXECUTIVE SUMMARY: Consistent with prior years,the 2016 City Budget includes funding for organizations that provide social services that are deemed to be of benefit to the City and the community in general. The 2016 Budget includes$70,480 for this purpose. In November of 2015 staff distributed a Request For Proposals for Social Services to non-profit agencies serving the City of Richfield, for services to be provided in 2016. A total of eleven proposals were received from the following agencies: Headway Emotional Health(The Storefront Group), Cornerstone Advocacy Services,Advocates for Intentional Living, Community Involvement Programs, Transportation Resources to Aid Independent Living(TRAIL), Volunteers Enlisted to Assist People(VEAP), Loaves and Fishes, Richfield R.E.A.D.Y, The Family Partnership, Senior Community Services, and Modulo De Informacion De Recursos Y Apoyo(MIRA). The proposals represent a wide variety of social services offered to Richfield residents. Of the eleven proposals, only Advocates for Intentional Living had not submitted a proposal in previous years. Advocates for Intentional Living is proposing to provide counseling services to clients of the City of Richfield's Kids@Home program. Clients of the Kids@Home program are required to participate in counseling services to assist them in overcoming barriers to financial and housing stability. A complete overview of all services to be provided by the various organizations is attached. Based on Council input from last year, Council Member Garcia and two Richfield residents assisted in the review of proposals and subsequent funding recommendations. As a result, it is recommended that the City enter into agreements for services with the following non-profit agencies in the amounts indicated in the table below: Organization 2016 Proposal Request 2016 Recommendation Headway/Storefront $15,000 $8,000 Cornerstone $15,000 $11,000 Advocates for Intentional Living $5,000 $5,000 Community Involvement Program $8,140 $4,000 RAIL $3,000 $3,000 EAP $25,000 $16,000 Loaves and Fishes $7,500 $6,000 Richfield R.E.A.D.Y. $3,000 $1,500 The Family Partnership $12,000 $6,980 Senior Community Services $10,000 $6,000 MI RA $15,000 $3,000 TOTAL $118,640 $70,480 RECOMMENDED ACTION: By Motion: 1)Approve agreements between the recommended non-profit organizations and the City of Richfield; and 2) authorize the City Manager to execute agreements for services with those agencies. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT • The City of Richfield has historically allocated funds on an annual basis to social service agencies serving the Richfield community. In 2012 the City was required to make changes to its funding practices due to independent audit findings, resulting in the discontinuation of grant funding to social service type agencies beginning in 2013. • The City is not authorized to provide grant funding to social service agencies. However, it has been determined that the City can enter into agreements for services with agencies for specific services that are compatible with City activities. • The 2016 recommendations are based on the following criteria: • Demonstrated need of the proposed service for the targeted population. • Compatibility with City functions/activities. • Partnership and/or assistance with various City services(i.e., public safety). • Efforts to serve low-income persons of all races/cultures/ethnicity. • Demonstrated value to the community. • Past performance. • Cost of services and number of persons served. • Certified Non-Profit agency. • The following chart provides a five-year history of the City of Richfield Social Service funding to the responding agencies: Organization 2011 2012 2013 2014 2015 2016 Proposed Headway $14,100 $15,500 $12,000 $10,930 $8,000 $8,000 Cornerstone $13,250 $12,825 $12,000 $10,000 $12,000 $11,000 Adv.for Intentional Living $5,000 Comm. Involve. Program $5,000 $6,475 $5,00q $3,000 $4,000 $4,000 RAIL $2,125 $1,55C $1,550 $2,000 $3,000 EAP $14,000 $15,500 $15,OOC $18,000 $18,000 $16,000 Loaves and Fishes $4,000 $3,900 $5,00 $5,000 $7,480 $7,500 Richfield R.E.A.D.Y $2,500 $2,325 $1,500 Family Partnership $11,0001 $11,6251 $10,00 $7,000 $6,000 $6,980 Senior Comm. Services $9,0001 1 $7,00 $7,000 $6,000 $6,000 MIRA $9,5001 $11,6251 $9,00 $8,000 $7,000 $3,000 TOTAL $82,3501 $81,9001 $76,55 $70,480 $70,480 $70,480 B. POLICIES(resolutions,ordinances,regulations,statutes,etch To partner with other agencies as warranted and practical, and to assist in the delivery of services to City residents. C. CRITICAL TIMING ISSUES: Services to be provided in the calendar year 2016. D. FINANCIAL IMPACT: • A City Council/Administration 2016 allocation of$70,480 is budgeted for social services. • The proposals exceeded the City's available funding by$48,160.00. E. LEGAL CONSIDERATION: The City Attorney has reviewed the Agreements. ALTERNATIVE RECOMMENDATION(S): • Approve the recommendations with revised allocations. • Do not approve the recommendations. PRINCIPAL PARTIES EXPECTED AT MEETING: Representatives of the Social Service Agencies may be in attendance. ATTACHMENTS: Description Type ❑ Social Service Funding Request For Proposals Backup Material ❑ Description of Services Backup Material CITY OF RICHFIELD REQUEST FOR PROPOSALS FOR SOCIAL SERVICES 2016 The City of Richfield is seeking proposals for social services from non-profit agencies serving the City of Richfield. Funding parameters and priority goals for the purpose of making the best use of funds are as follows: Funding Parameters • Any non-profit organization is eligible to apply. • Projects must serve Richfield residents. • Services must be compatible with City functions and activities. Priority Goals Projects must address at least one of the following areas: • Services for vulnerable senior residents. • Services for individuals, families, teens and/or children at risk. • Housing support services for low-income persons and persons at risk. Award Criteria Proposals must meet one or more of the following criteria: • Demonstrated need of the proposed service for the targeted population. • Compatibility with City functions/activities. • Partnership and/or assistance with various City services (i.e., public safety). • Efforts to serve low-income persons of all races/cultures/ethnicities. • Demonstrated value to the community. • Certified Non-Profit agency. Proposal's must be submitted by 4:30 p.m. December 30, 2015 LATE PROPOSALS WILL NOT BE ACCEPTED Proposals must be submitted by 4:30 p.m. December 30, 2015 LATE PROPOSALS WILL NOT BE ACCEPTED PROPOSAL SUBMISSION INSTRUCTIONS The information requested in the attached Request for Proposals must be addressed in your proposal. Submit 1 electronic copy of your agencies proposal by 4:30 p.m. December 30, 2015 (LATE PROPOSALS WILL NOT BE ACCEPTED) to: Lynnette Chambers City of Richfield 6700 Portland Avenue Richfield, MN 55423 Ichamberscityofrichfield.org Applicants may be asked to respond in writing to additional questions. The Richfield City Council will tentatively award contracts for services in January 2016. Agencies awarded contracts will be required to sign a service agreement for calendar year 2016 and submit semi-annual reports on service outcomes. Please contact Lynnette Chambers at 612-861-9773 or Ichambers(a-)-cityofrichfield.or_g with any questions. Proposals must be submitted by 4:30 p.m. December 30, 2015 LATE PROPOSALS WILL NOT BE ACCEPTED CITY OF RICHFIELD 2016 REQUEST FOR PROPOSALS FOR SOCIAL SERVICE ASSISTANCE Proposals for social services must include the following: PROPOSAL HEADING 1. Agency name, address, contact person, and phone/fax/email 2. Amount of request 3. Brief description of service(s) provided 4. Identify priority area(s) you are addressing: a) Services for vulnerable senior residents b) Services for individuals, families, teens and/or children at risk c) Housing support services for low-income persons and persons at risk d) Other: Please Specify 5. Explain how the services you are proposing to provide will benefit the City of Richfield. 6. Explain any formal or informal partnership you have with the City of Richfield (i.e., assisting Public Safety through the services you provide, etc.) ADMINISTRATION 1. Provide a mission statement for your agency. 2. Provide verification of your organization's non-profit legal status. 3. Indicate your total agency budget for 2016. 4. Indicate your proposed project budget for 2016. Itemize proposed expenses and describe as applicable. Indicate both proposed City funds and other funds to support the project. PROGRAM 1. Describe service to be funded, including: a) Brief statement detailing the service and how it is provided b) Target population(s); estimated number of unduplicated individuals you plan to serve residing in the City of Richfield c) Eligibility criteria and process d) How clients are involved in the planning process for service e) Desired client outcomes and methods of evaluating and measuring client progress (use attached "Proposed Outcome/Evaluation Methods" form) 3. Demonstrate the need for the proposed service. 4. Describe outreach efforts to target populations, including immigrant and low-income individuals. 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STAFF REPORT NO. 23 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: William F. Fillmore, Liquor Operations Director DEPARTMENT DIRECTOR REVIEW: William F. Fillmore, Liquor Operations Director 1/21/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of authorizing a capital improvement to upgrade the municipal liquor store at 6600 Cedar Avenue South. EXECUTIVE SUMMARY: At the August 24, 2015 City Council/Staff budget review, the City Manager indicated the need to upgrade the municipal liquor store at 6600 Cedar Avenue South. This liquor store has not seen any significant renovation since it was built in the late 1980s. For the past 12 to 15 years, the Cedar Avenue store has been the leading store in terms of sales. However, the store is starting to look dated and is in need of upgrade and repairs. Liquor staff and the City's Building Superintendent have identified several areas in need of replacement or upgrading at the Cedar Avenue location: • Roof Replacement • Concrete Sidewalk Replacement • Bituminous Mill and Overlay for Parking Area • Pneumatic Entry/Exit Door Replacement • Product Refrigeration Equipment(Compressor, Fans, Doors, Product Shelving) • Numerous interior appointments (ceiling, flooring, HVAC vents) • Restroom and office relocation • Sales floor Product Shelving • Wall Graphics and Isle Product Identification Signage • Exterior Signage • Point of Sale Counters • Exterior Canopy replacement over entry way In addition to the work needed on the store facility, other significant reasons to enhance this store relate to the recent added competition of Total Wine and Spirits to the Twin Cities area and the new redevelopment in the Cedar Point area that is scheduled to begin in 2016. Having a refurbished store ready by the summer of 2016 would be a strategic move to help Richfield maintain its retail sales market. The estimated cost of the project is$825,000 and architectural/engineering fees of$48,000. The project would take place in early April with an interruption of business of six weeks. As with previous liquor operations projects, Cedar Avenue customers will be directed to patronize one of the City's other municipal liquor stores via various media. RECOMMENDED ACTION: By Motion: Authorize a capital improvement and direct staff to proceed with upgrading the municipal liquor store at 6600 Cedar Avenue South. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT With pending redevelopment on Richfield's east side and sale of the Cedar Point retail center, it would be a good opportunity to upgrade the current facility prior to the significant changes in the area. Staff took advantage of a similar situation in 2013 when the liquor store located at 6444 Lyndale Avenue South was upgraded. This liquor store is still experiencing customer and sales growth, primarily due to the refined look of the retail operations. B. POLICIES(resolutions,ordinances,regulations,statutes,etcy N/A C. CRITICAL TIMING ISSUES: • Staff will proceed with specifications and advertisement for bids immediately after authorization from City Council. • Staff would like to begin construction in early April 2016. • Staff would like the store to be completed for the Memorial Day weekend. D. FINANCIAL IMPACT: • Staff and Wold Architects estimate a project cost of$825,000 and design costs of$48,000. • Resources to fund the upgrade are available within the liquor operations financial portfolio. E. LEGAL CONSIDERATION: N/A ALTERNATIVE RECOMMENDATION(S): Delay the decision to a meeting at a later date or do not approve the renovation of the Cedar Avenue store. PRINCIPAL PARTIES EXPECTED AT MEETING: A Representative from Wold Architects will be invited to attend. AGENDA SECTION: OTHER BUSINESS AGENDA ITEM# 9. STAFF REPORT NO. 24 ..;f _.f_.. ..{ CITY COUNCIL MEETING VN 1/26/2016 REPORT PREPARED BY: Theresa Schyma, Deputy City Clerk DEPARTMENT DIRECTOR REVIEW: Steven L. Devich 1/21/2016 OTHER DEPARTMENT REVIEW: N/A CITY MANAGER REVIEW: Steven L. Devich 1/21/2016 ITEM FOR COUNCIL CONSIDERATION: Consideration of the appointments to City advisory commissions. EXECUTIVE SUMMARY: Several terms of City advisory commission members expire on January 31, 2016. In addition, there are mid-term vacancies due to resignations that should be filled. Advisory commission terms are for three years and they are staggered. The City Council directs the City Manager's office to conduct an annual recruitment seeking applicants to fill the vacancies. This recruitment includes an item in the Richfield Sun-Current and information on the City's website. Most applicants were interviewed at a Special City Council Meeting on January 16, 2016. To ensure a quorum at future advisory commission meetings, the City Council should make advisory commission appointments at the January 26, 2016 City Council meeting. RECOMMENDED ACTION: By Motion: Appoint persons to fill the expiring or vacant terms on City advisory commissions. BASIS OF RECOMMENDATION: A. HISTORICAL CONTEXT This information is contained in the Executive Summary. B. POLICIES(resolutions,ordinances,regulations,statutes,etch City advisory commissions were established by City ordinance or resolution. C. CRITICAL TIMING ISSUES: • Several terms of City advisory commission members expire on January 31, 2016. • To ensure a quorum at future advisory commission meetings, the City Council should make appointments at the January 26, 2016 City Council meeting. D. FINANCIAL IMPACT: N/A E. LEGAL CONSIDERATION: The January 16, 2016 Special City Council meeting was posted in accordance with the open meeting law requirements. ALTERNATIVE RECOMMENDATION(B)LI The City Council could defer the appointments to a future City Council meeting. PRINCIPAL PARTIES EXPECTED AT MEETING: None. 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