§ 30-19. Purchase of cable system by city; transfer of ownership; transition period.

(a)

Conditions of sale.

(1)

If a renewal of a franchise held by a cable operator is legally denied and the city acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be:

a.

At fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the franchise itself; or

b.

In the case of any franchise existing on November 15, 1994, at a price determined in accordance with the franchise if such franchise contains provisions applicable to such an acquisition or transfer.

(2)

If a franchise held by a cable operator is terminated for cause and the city acquires ownership of the cable system or effects a transfer of ownership of the system to another person, any such acquisition or transfer shall be at an equitable price, or, in the case of any franchise existing on November 15, 1994, at a price determined in accordance with the franchise if such franchise contains provisions applicable to such an acquisition or transfer.

(3)

The grantee and the city shall have the power to mutually agree at any time to allow the purchase of the grantee's cable system by the city, provided that grantee and the city can mutually agree on the terms and conditions of such purchase.

(b)

Date of valuation. The date of valuation shall be no earlier than the day following the date of expiration or termination and no later than the date the city makes a fair and reasonable offer for the system, or the date of transfer of ownership, whichever occurs first.

(c)

Transfer of possession and title to property. Upon payment of the purchase price for the cable system by the city, the grantee shall immediately transfer to the city possession and title to all facilities and property, real and personal, of the cable system. The property will be free from any and all liens and encumbrances not agreed to be assumed by the city. The grantee shall execute such warranty deeds or other instruments of conveyance to the city as shall be necessary for this purpose.

(d)

Arbitration of value and costs.

(1)

In the event the city and grantee cannot agree upon the value of the cable system after the grantee's franchise has been terminated for cause, an appraisal process will occur: the city selects one (1) appraiser; the grantee selects another appraiser; these two (2) appraisers jointly select a third appraiser; the three (3) appraisers come to one (1) decision on the value of the cable system. The appraisers each must be experienced in the valuation of cable systems.

(2)

If the city or grantee does not accept the appraisers' valuation, either party may give notice of a demand to the other for arbitration.

(3)

Arbitration shall commence and proceed according to the Texas General Arbitration Act, V.A.C.S. article 224 et seq., except as follows:

a.

The parties, within fifteen (15) days, shall each appoint one (1) arbitrator. Arbitrators shall agree upon the selection of a third arbitrator within fifteen (15) days. The three (3) arbitrators will be referred to as the board of arbitrators.

b.

Within thirty (30) days after appointment of all arbitrators and upon ten (10) days' written notice to parties, the board of arbitrators shall commence a hearing on the issue of valuation.

c.

The hearing shall be recorded and transcribed at the request of either party. All hearing proceedings and debate shall be open to the public, and held at such times and places as contained in the notice; however, at the request of either party, the public may be excluded from the proceedings. Testimony at the hearing should include appraisal information.

d.

Within thirty (30) days of the close of the hearings, the board of arbitrators shall prepare findings and a decision agreed upon by a majority of the board of arbitrators will be filed with the city and served by mail upon the grantee. Unless the parties extend by mutual agreement the time that the board has to make a decision, the proceedings shall become null and shall be started anew after thirty (30) days.

e.

Either party may appeal the decision of the board of arbitrators to a court of competent jurisdiction.

f.

A party wishing to appeal the decision of the board of arbitrators must file such appeal with a court of competent jurisdiction within fifteen (15) days from the date that such party receives the decision of the board of arbitrators.

g.

Each side shall pay its own costs for arbitration(s). Neither side shall be responsible for the costs and attorney's fees paid by the other side, regardless of the outcome of the arbitration(s) and/or appeals to district court or any other court.

(e)

Transfer of contracts, leases, etc.; transition period.

(1)

Upon payment of the purchase price, the grantee shall immediately transfer to the city all contracts, leases, licenses, permits and any other assignable rights necessary to maintain continuity of service to the public if such transfers or assignments of interest are allowed under the relevant contract. The grantee will transfer possession and title to all facilities and property, real and personal, related to its system free from any and all liens and encumbrances not agreed to be assumed by the city.

(2)

Until such time as the grantee transfers to the city or to a new grantee possession and title to all assets, real and personal, related to its system, the grantee, as trustee for its successor, shall continue to operate the system under the terms and conditions of this chapter and the franchise. The grantee will continue to provide the basic cable service and any and all of the services that it provided on the date of valuation. During such interim period, the grantee shall not sell any of the system assets nor shall the grantee make any physical, material, administrative or operational change that would:

a.

Degrade the quality of service to the subscribers;

b.

Decrease income; or

c.

Materially increase expenses without the express permission, in writing, of the city and/or the grantee's assignee, if applicable.

The city shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

(3)

The city further agrees that, during such period of time, it shall authorize the grantee to continue to operate pursuant to the terms of the franchise for up to twelve (12) months. If the grantee or the city unnecessarily delays the transfer of ownership past the twelve-month window, both reserve their rights to seek legal recourse and stipulate that harm will be irreparable with no adequate remedy of law; therefore, injunctive relief in a court of competent jurisdiction would be appropriate.

(Ord. No. 5344, § 1, 11-15-94)