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HomeMy WebLinkAboutFEBRUARY 20,2001 I I I " ROLL CALL 1. 1a Ollil ' '/(1 2. ROLL CALL 2a AGENCYTAX Al.l.OCA 110N BOND (APPROVED IN CONCEP1) r:;6f( .1'~ O(tO ',:, J.' ~()(1t 43:0035 L'_ CITY COUNCIL PROCEEDiNGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK MINUTES CITY COUNCIL OF THE CITY OF ARCADIA REGULAR MEETING February 20, 2001 The City Council of the City of Arcadia met in a Regular Meeting on Tuesday, February 20, 2001 at 4:35 p.m. in the Administrative Conference Room of the City Hall. PRESENT: Council members Chang, Marshall, Segal and Kovacic ABSENT: Council member Chandler It was MOVED by Council member Marshall, seconded by Councilmember Chang and CARRIED to EXCUSE the absence of Councilmember Chandier. AUDIENCE PARTICIPATION None. AI 4:38 p.m. the Arcadia City Council RECESSED to the Closed Session. CLOSED SESSION Pursuant to Government Code Section 54957 - City Manager Annual Performance Evaluation. The Regular Meeting RECONVENED at 5:40 p.m. in the Council Chambers Ccnference Room. STUDY SESSION CITY COUNCIL AND REDEVELOPMENT AGENCY AYES: ABSENT: Council/Agency Members Chang, Marshall, Segal anc Kovacic Council/Agency Members Chandler It was MOVED by Agency Member Marshall, seconded by Agency Member Chang and CARRIED 10 EXCUSE the absence of Councilmember Chandier. . AUDIENCE PARTICIPATION None. Don Penman, De;lu:y Executive Director and Assistant City Manager/Development Services Director, presented an overview of the new pollee station financing related to the $8 million General Obligation Bond Issue and a possible the Tax A1iocation Bond Issue. Mr. Penman and introduced the consultant team, Kurt Yeager of Stradling, Yocca, Carlson and Rauth, the Agency and City bond counsel and Tim Schaefer of Fieldman Rolapp,' the Agency and City Financial Advisor for the $8 million bond issue, who were present to respond to Council/Agency Members questions. In his presentation Mr. Penman stated, in part, that the City Council plans to issue $8 million in General Obiigatlon Bonds to pay part of the cost of the $16 million Police Station. The City will 1 2/20/01 OG,()-h INVOCATION 43:0036 contribute $4 miliion from its Capital Construction Fund and the Redevelopment' Agency will contribute $4 million. To date, the Agency has contributed $1.5 million In cash. 'The Agency I contribution always included cash and some Agency bond proceeds. Since the Agency does not have the cash on hand to fund the full $4 milJlon contribution, the $2.5 million balance will be required from a Tax Ailocalion Bond Issue. In response to a Councii question, staff stated in part, that the General Obligation Bond Issue was authorized and approved by the voters, and wouid be assessed against the property tax roll, and sold by the City. Pursuant to State law, the Agency established January 1, 2004 as the time that it can incur debt and January 25, 2004 the final date to payoff Its debt. There is an exception for the issuance of debt for the provision of low-moderate income housing. As a result, the Agency is facing a deadline, relative to possibly using redevelopment bond proceeds, to Implement larger projects requiring significant initial capital such as, the Foulger Ford property, Fifth/Santa Clara, South Arcadia Amendment Area and potentially other projects. Further, Mr. Penman reviewed the Agency's current fiilancial status set forth in the February 20, 2001 staff report, which included: the Agency's debt - $10,995,000, and annual deductions and budget from Agency Tax Increment Revenues (2000-2001) - gross revenue - $2,813,000; expenditure transfers - $2,276,000 for a total balance of $537,000 remaining funds. With regard to the possible Agency Tax Allocation Bond Sale Proceeds, staff recommended . maximum bond proceeds of $21,400,000; less Debt Service Reserve - $1,630,000; Costs of Issuance - $820,000; and, Refunding of 1989 bond Issue - $2,950,000 with a net available for projects, programs, activities - $16,000,000. It was also noted that the Agency could contribute all or a reasonable share of the cost for the tax exempt projects. Tax exempt means that the proceeds can only be used on public projects such as this, Poiice Facility, Fire Station, I repayment of City loan and Public Capital Improvements, and must be spend within three (3) years of any bond sale. The current tax exempt interest rate is 5.0%. Considerable discussion ensued. Tim Schaeffer, Fieldman, Rolapp, the Agency's financiai advisor stated that the Agency can achieve a gross savings of $808,500 (net present value - $240,000) through the iife of the bond issue, until 2015, by refunding the bonds, even after deductions for underwriter's discount and costs of issuance. There would be no prepayment penalty cost. Further, Mr. Schaeffer noted that there are two types of refunding under federal tax law, current and advance refunding. He suggested the use of the current refunding in order to preserve the option for more refunding in future. Mayor Kovacic commented that the Council/Agency needs to be very conservative with tax payers money and a Tax Ailocation Bond sale Is a very conservation way to approach that goal. Following the discussion it was MOVED by Agency Member Segal, seconded by Agency Member Chang and CARRIED on roil call vote as follows to APPROVE in concept, the Tax Allocation Bond sale proceeds of $21.4 million. AYES: NOES: ABSENT: Agency Members Chang, Marshall, Segal and Kovacic None Agency Member Chandler , - The City Councii and Redevelopment Agency RECESSED at 6:50 p.m. and RECONVENED in the Council Chamber for the Regular Meeting at 7:00 p.m. Monsignor Norman Priebe, Holy Angels Catholic Church I" ," ,,, 2,. 2/20/01 I I .1 PLEDGE OF ALLEGIANCE ROLL CALL . . 3. ORD. & RES. READ BY TITLE ONLY J. ." 4. RED CROSS MONTH MARCH 2001 5. HOLY ANGELS SCOUT PACK 114. JR GIRL SCOUT TROOP 723 & BROWNIE TROOP 274 6. MAYOR'S SENIOR SVC. AWARD (Englert) . 43:0037 Brownies Rachel Yelinek, and Anna Losorelli and Cub Scout Nicholas Bielec " , PRESENT: ABSENT: Councilmembers Chang, Marshall, Segal and Kovacic Councilmcmber Chandler (Arrived at 7:30 p.m.) ,. It was MOVED by Councilmember Chang, seconded by Mayor Pro tern Segal and CARRIED to EXCUSE the absence of Councilmember Chandler. City Attorney Deitsch reported the subject discussed at the Study Session with regard to the General Obligation Bond Issue and a possible Agency Tax Allocation Bond Issue. The Agency Board and the City Council conceptually approved entering into up to two financings. Further, City Attorney Deitsch announced the subject discussed at the Closed Session. No reportable action was taken. SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS City Manager Kelly requested the addition of the following letters, which came in after the preparation of the Agenda, to the staff report. A letter from the Arcadia Historical Society, endorsing the City Council's efforts for an historical buildings survey; and, a letter from the Highland Homeowners Association relative to internet capabilities in the City as well as Adelphia Services. It was MOVED by Councilmember Chang, seconded by Councilmember Marshall and CARRIED that ordinances and resolutions be read by title only and that the reading in full be WAIVED. PRESENTATIONS Mayor Kovacic presented a proclamation declaring March 2001, as Arcadia Red Cross month to JoAnn Scott. Ms. Scott invited everyone to support the Arcadia Red Cross by attending the Arcadia Chamber of Commerce Mixer, March 1, 2001, the Child Identification Program, March 2, 2001 from 11 :00 a.m. to 2:00 p.m. at Westfield ShoppingTown Santa Anita, and the Tax Saving Seminar, March 8, 2001. Ms. Scott presented a Red Cross Flag, to be flown over City Hall during the month of March, to Mayor Kovacic and Red Cross Pins to the City Council. Mayor Kovacic presented the Mayor's Certificate of Commendation to Holy Angels Scout Pack 114, Junior Girl Scout Troop 723 and Brownie Troop 274, for outstanding service to the community. On Saturday January 6, 2001 about 40 scouts and 20 parents volunteered 180 hours to help clean' up Wilderness Park. Mayor Kovacic presented the February, 2001 Mayor's Senior Service Award to Ruth Englert and thanked her for all her volunteer efforts. Ruth Englert has provid.ed a variety of services to the City of Arcadia, Recreation and Community Services Department, Senior Citizens Division, for the past 10 years. She has contributed almost 3,000 hours of voluntary service. Ruth is a retired Secretary and she began offering her office skills to Arcadia seniors when the Community Center was first opened in Juiy of 1991, and becarne a part of the Information and Referral front desk team. Ruth became a Telephone Reassurance Volunteer five years ago when she realized she could no longer drive due to her eye condition and turned her disability into an ability to help others. 3 . 2/20/01 -. 43:0038 7. . . . :~ MAYOR'S Mayor Kovacic presented the February, 2001 Mayor's Employee Recognition Award to Denise I EMPL YEE Weaver, Administrative Assistant, Public Works Services, stating in part, Denise is one of those RECOGNITION people who can always be counted on for assistance. She has an excellent understanding of AWARD each of the Department's street, utility and maintenance functions. . Denise has always taken (Weaver) great pride in her work. She continually receives compliments from homeowners, contractors and other City employees about her positive attitude, knowledge of Departmental procedures and her helpfulness in resolving problems. Mayor Kovacic thanked Denise Weaver for doing such an outstanding job. 8. MAYOR'S Mayor Kovacic presented the February, 2001 Mayor's Business Recognition Award to Matt BUSINESS McSweeny from Matt Denny's for being a good corporate citizen of Arcadia. They opened their RECOGNITION doors to the public in January of 1999, but not before totally rehabilitating the property on AWARD Huntington Drive where the old Better Gardens Nursery once stood. This is a business that had (Matt Denny's) confidence in Arcadia's Downtown Project Area and was willing to take on the challenge - spending a large amount of money renovating a location that had been vacant for 9 years. Aside from the many hours that Matt spent turning Matt Denny's into a successful business, he is also constantly involved in the community. Mayor Kovacic thanked Matt McSweeny for his commitment to Arcadia. 9. PUBLIC HEARING (TRANSCRIPT PREPARED) 9a. () , I"' CABLE TV FRANCHISE (Two-way High Speed Internet Access) (CONTINUED TO 3-20-01) ,:J As part of the cable television franchise renewal process, in 1995 a needs assessment was performed by Communications Support Group, which clearly indicated that high speed internet access was a priority among Arcadia cable subscribers and that interactive services of high speed capacity were needed by institutional users in the community. Based on that information, the cable system rebuild included in the cable franchise renewal with TCI in May, 1998, required the company to have the capacity to provide two-way, high speed internet access, to have it activated and made available to the community by June 18, 2000. I Due to a network infrastructure delay, and in exchange for providing free modem service at fifteen (15) city and school district facilities, on September 5, 2000, the City Council granted Adelphia additional time to December 1, 2000, to complete, market and launch this internet service. Between December 1, 2000 and January 31, 2001, City staff and the City's cable consultant made numerous attempts to ascertain whether Adelphia had launched two-way, high speed internet service throughout the City as required by the Franchise Agreement. The Transfer ,Agreement and the oral agreement. It was not until February 1, 2001, that a City representative was told this service could be installed at his home. City correspondence to Adelphia requested that Adelphia show proof that it had instituted two-way, high speed Internet service. Nothing to date has been provided to the City by Adelphia. Staff noted that if it is determined that Adelphia breached its obligation under the terms of the Franchise Agreement, the City Council may order that the City recover liquidated damages in the amount of $1,000 per day of Adelphia's default, commencing December 1, 2000. Also, the City may, for each month of delay past September 2, 2000, reduce the term of the Franchise Agreement by four (4) months or by four days for each day beyond December 1, 2000. Adelphia's breaches also entitle the City to disapprove the three-year extension of the franchise term or terminate the Franchise Agreement. Following the staff presentation Mayor Kovacic OPENED the Public Hearing. Lee Perron, Vice-President of Corporate Affairs, Adelphia Communication described in detail the I steps that Adelphia has taken after purchasing the system in late 1999, stating in part, that TCr ., had done nothing to begin to rebuild the system and it was an inferior system to 55.0 Megahertz, 4 2/20/01 I , ' i. I -.' , , , . , . , < 1 r_ ," '0"'". "::oj "'. ~ . , . .' ~. 11!....!;.."f'n{;w. , " " .'~ .~-, IfV":~ ',1 ''''1"[ , "I 43:0039 and inferior architecture. Adelphia completely redesigned the system with much higher reliability and a greater platform but missed the June 8 target by two weeks. Subsequent to the completion of the rebuild, the City's consulting engineer tested the system and pointed out that the system significantly exceeded FCC standards and measurements for system performance and is two- way interactive. Both the downstream and the upstream were active and functional but the cable modem service was not available at that time. Further, Mr. Perron noted that Adelphia began installation of cable modem service in the City in December, 2000. Unfortunately, because of confusion, Arcadia residents phone calls requesting two-way high speed Internet access were going to the @Home customer support or to the local office instead of the National Customer Care Center for the PowerLink@Home product. During the'month of January, Adelphia actually did go to a full market launch and delivered 21,728 pieces of mall to customers, notifying them of the availability of the two-way high speed Internet access. Mr. Perron apologized for the lateness of the response to the City Attorney's letter and requested an opportunity to have a meeting with City staff and resolve any of the outstanding issues. ~ohn Risk, President, Communications Support Group, stated in part, that the Arcadia School District's 1993 survey showed a significantly high number of personal computers in the homes of Arcadia. That led the City to send a letter to the TCI General Manager early in 1994 stating that Arcadia be a test site for the @Home product. Soon after the General Manager left the company and that issue was no longer pursued. Further, in the transfers between the TCI-Century partnership and Adelphia, the City's franchise renewal negotiator discussed the rebuild of the system as the number one priority and Internet access as a priority also. . . . In response to Mayor Kovacic's question on whether the two-way high speed Intemet access was available to Arcadia residents in December of 2000, Mr. Risk stated that it was not. The subscribers were not told that the service was available until February 1, 2001. , " .' City Attorney Deitsch referred to his letter to Adelphia dated December 22, 2000, requesting that Adelphia provide certain documentation and information to the City, and also requesting that Adelphia demonstrate 100% carriage at all test points within the City, to which, Adelphia has not responded to-date. Dave Flvnn, Owner, Oxford VUE, noted that he has been using the Internet connection in his business since mid-November. It is fast and the installation was very easy. City Attorney Deitsch noted that the Municipal Code requires that any documents submitted be formally introduced and marked as an Exhibit before closing the public hearing. The followings lists the submitted documents: 1. Exhibit 12 - Items 1 through 11, correspondence related to Adelphia Public Hearing; 2. Exhibit 13 - Series of e-mails among City, staff regarding the availability of two-way high speed Internet service through Adelphia at certain City facilities; 3. Exhibit 14 - A letter from the Highlands Homeowners Association dated February 16, 2001, addressed to the City Manager Kelly, with attachments; and, 4. Adelphia Exhibit A - A letter from Mr. Witthauer, Acting Assistant General Counsel for Adelphia, dated February 19, 2001, together with attachments that purportedly support Adelphia's position in this hearing. It was MOVED by Mayor Pro tem Segal, seconded by Council member Marshall and CARRIED to close the Public Hearing. City Attorney Deitsch recommended that consideration of this item be continued to the Marcil 20, 2001 Council Meeting, to give an opportunity to Adelphia to meet with the City, 2nd submit better 5'. 2/20/01 10. I }' 11. SEGAL (POW/MIA Flag) (Hoherd) 43:0040 evidence regarding default of Section 15(b) of the Cable Television Franchise between the City and Adelphia Communication Corporation, with regard to two-way Internet access.. . I In response to Council's question Mr. Deitsch 5tated in part, that the original compliance date for providing two-way high speed Internet access was June 18, 2000, however, the City is willing to live with the extended deadline of December 'j, 2000. 1\1r. Deitsch further pointed out, Section 27 of the agreement provides the proof that Adelphia is' required to submit without the City even asking, that such service is available, and the City did ask repeatedly and Adelphia has failed to provide that access. ' Council member Chandler suggested allowing a continuance so that further information can be provided by Adelphia. He felt this would be the prudent thing to do. It was MOVED by Councilmember Chandler, seconded by Mayor Pro tem Segal and CARRIED on roll call vote as follows to CONTINUE consideration of whether Adelphia Communications Corporation is in default of Section 15 (b) of the Cable Television Franchise Agreement between the City of Arcadia and Adelphia Communications Corporation regarding two-way high speed internet access, to the March 20, 2001 City Council Meeting. AYES: NOES: ABSENT: Councilmembers Chandler, Chang, Marshall, Segal and Kovacic None None AUDIENCE PARTICIPATION Bob Hoherd, thanked City Manager Kelly for his prompt response to fix a street condition at Second and California Street. Further, Mr. Hoherd referred to the study session held earlier this evening with regard to the bond issue for construction of a new police station and stated, when I the voters voted for the bond issue the intent was up to $8 million dollars and not necessarily $8 million dollars, He agreed with Mayor Pro tem Segal's suggestion to put part of the bond money in a "callable", therefore if we did not need all the money then we could call those bonds earlier rather that paying off for thirty years. With regard to the $3.7 million surplus, Mr. Hoherd felt, that it could be used for construction of the new police station in order to reduce the amount of the bond issue. Finally Mr. Hoherd expressed concerns regarding construction of multi-family dwellings and population grow1h. In response to Mayor Kovacic's query, City Manager Kelly briefly explained the City's General Plan, stating in part, that the infrastructure is being sized to refiect the theoretical build out of the City. Street, water sewer and storm drains are predicated upon General Plan grow1h and the grow1h is based upon land use. Further, he noted that the net number of new dwellings in the past seven years is 270 Citywide. Lee Shimmin, President, Arcadia Chamber of Commerce, reported the addition of 102 new members to the Chamber of Commerce, which brings the membership to 800 plus. Mr. Shimmin thanked everyone for their particip'1tion. MATTERS FROM ELECTED OFFICIALS Mayor Pro tem Segal thanked Mrs. Marshall tor being the guiding force behind the ceremony and celebration of the POW/MIA flag. POW/MIA flags are currently flying at seven City facilities. Mr. Segal thanked Mr. Hoherd for raising some interesting issues during the audience participation part of tonight's meeting on how the budget surplus could be used. I 6 2/20/01 I I I (Mardi Gras Celebration) (AHS Golf Tournament) MARSHALL (POW/MIA Flag) ~'\~ ';r-;-':'l . q "',"" ,;.-,.' 43:0041 Mr. Segal announced that the Methodist Hospital Fat Tuesday, Mardi Gras Fundraising Celebration, will be held on Tuesday. February 27 at 6:00 p.m., at the Arboretum. Mr. Segal encouraged ever/one to participate in the Arcadia, High School Golf Tournament on March 19, 2001. . Councllmember Marshall thanked Mayor Pro tem Segal for his kind words, and expressed appreciation to everyone who supported and helped her with the flag ceremony and celebration. .\ (Mrs. Niedecken) Mrs. Marshall expressed condolences to Roger and Jane Chandler and their family on the passing of Jane's mother. (Mardi Gras Celebration) (Community Services) (Quote) CHANG (POW/MIA) Council member Marshall thanked everyone who supported the Mardi Gras celebration by donating food. Ms. Marshall suggested the use of high school students who are looking for community service, for City volunteer jobs. In response to Councilmember Marshail's suggestion, City Manager Kelly noted that the Fire Department, in conjunction with the Police Department, is studying a PR program to solicit funds from the community, as well as making state and federal grant requests, in order to fund the purchase of defibrillatcrs for eClch police car. Councilmember Marshall shared a saying by George Carlin, "have you ever noticed anyone going slower than you is an idiot and anyone going faster than you is a maniac. Council member Chang thanked Councilmember Marshall for her efforts in making the POW/MIA ceremony a successful event. (Mayor's Award Dr. Chang congratulated the recipients of the Mayor's Awards this evening, He also felt that the .Recipients) City should promote volunteerism. (Mrs. Niedecken) Council member Chang expressed condolences to Roger and Jane Chandler on the passing of Jane's mother, Mrs. Patricia Faye Niedecken. CHANDLER ALFORD (Mrs. Niedecken) (POW/MIA Flag) KOVACIC (Mrs. Niedecken) Council member Chandler ihanked the Councilmembers and City staff for the lovely flower arrangement. City Clerk, June Alford expressed condolences to Roger and Jane Chandler. Ms. Alford thanked Ms. Marshall for today's wonderful program and tribute to the POW/MIA. She felt it is important to remember the price that was paid for our freedom Mayor Kovacic expressed condolences to Roger and Jane Chandler. (Cert. Of Mayor Kovacic noted receiving a Certificate ~f Commendation from the County of Los Angeles Commendation) for flying the POW/MIA flag. (AHS Constitution Mayor Kovacic congratulated the Arcadia High School Constitution Team for coming in third :ream) . place at the State Finals in Sacramento. (Events) Mayer Kovacic invited everycne to attend the "Bike Ride With the Mayor" on March 17th; the Annual State of the Ci~/ Address on March 29th; and, the 27'" Annual Mayor's Prayer Breakfast, April 13'" at the Los Angeles County Arboretum. 7-' 2/20/01 43:0042 (Land Use Regulations) With regard to iand use issues, Mayor Kovacic addressed some concerns at the last Council meeting ,relative to where we are going as a City. Mr. Hoherd echoed' some of those cQncerns 1 and the Mayor asked staff for information as to any benefit the City may have derived from tt.e latest set of building restrictions Council imposed approximately one year ago. In response to Mayor Kovacic's question staff stated in part that, at this time staff is still seeing projects that fall under the old regulations and some built under the new requirements. It is too soon to determine if the new regulations are effective. It is staff's opinion that in most cases the regulations on corner lots and set backs comply with code requirements. Mayor Kovacic suggested that staff provide the Council with a few examples of construction under the old and new codes. He felt it would give Council a sense. of whether the code is working or not. 12. THE CITY COUNCIL RECESSED TO ACT AS THE ARCADIA REDEVELOPMENT AGENCY ROLL CALL PRESENT: Agency Members Chandler, Chang, Marshall, Segal and Kovacic ABSENT: None AUDIENCE PARTICIPATION None. 13. CONSENT ITEM 13a. It was MOVED by Agency Member Chandler, seconded by Agency Member Chang and I' GENERAL CARRIED on roll call vote as follows to AUTHORIZE the Executive Director to EXECUTE OBLIGATION & contracts with Hdl Coren and Cone (property tax analysis) - $16,000 (includes contingency in the ARA TAX event additional work is requested by the rating agencies); McGladrey alld Pullen, LLP ALLOCATION (Verification Analysis) - $2,400; BNY Western Trust (Fiscal Agent/Trustee) - $4,000, Annual - BONDS - $2,000; and, Best Best and Krieger LLP (Issuer's Counsel) - $10,000 for various services in SALE connection with the proposed sale of'Redevelopment Agency Tax Allocation Bonds, subject \0 06 10 '1 ~ . approval as to form by the Agency Attorney. AYES: NOES: ABSENT: Agency Members Chandler, Chang, Marshall, Segal and Kovacic None None ADJOURNMENT The meeting of the Arcadia Redevelopment Agency ADJOURNED to March 6, 2001 at 5:00 ;.m. THE CITY COUNCIL RECONVENED 14. CONSENT ITEMS 14a. MINUTES (Jan. 30 and Feb 6, 2001 ) 14b. FINAL TR, MAP APPROVED the Final Map of Tract No. 53163 for a five-unit residential condominium subdivision NO. 53163 at 45-49 California Street. . .,... (45-49 California) I O:{ (, () '4'-,!) APPROVED the Minutes of the January 30,2001 Joint City Council/School Board Meeting <'lnd the February 6, 2001 Regular Meeting. 8 2/20/01 -. I .,' '14c. . . . ,.AWARD' ; CONTRACT (HVAC Dust Cleaning) 14d. PROF. SVC. AGREEMENT (Historic ResourCBS . Study) o ~~.fJ. () ..J <I 43 :0043 See Page 10. ,.. ~ AUTHORIZED the City Manager to enter into a Professional Services Agreement with Cultural Resources Management (CRM) not to exceed $45,000 including reimbursable expenses subject to approval as to form by the City Attorney, for a historic resources study throughout the City. In response to Mayor Kovacic, staff noted that as part of the proposal, the consultant divided the City into eight (8) distinct districts. The first phase of the study will involve conducting an investigation of five (5) of these districts. After completion of the first phase, the Council may wish to consider contracting for the second phase which would involve a survey of the Lower Rancho and Village areas. At this point in time the City would not save any money by including the survey of these areas into Phase One. 14e. .)'f rfl)_ ','. l Rt=SOLUTION ADOPTED RESOLUTION NO. 6212 entitled: "A RESOLUTION OF THE CITY COUNCIL OF NO. 6212 THE CITY OF ARCADIA, CALIFORNIA, DECLARING THAT WEEDS GROWING UPON AND (2000-2001 IN FRONT OF, AND BRUSH, RUBBISH, REFUSE AND DIRT UPON AND iN FRONT OF Weed r.ERTAIN PRIVATE PROPERTY IN THE CITY ARE A PUBLIC NUISANCE, AND DECLARING Abatement ITS INTENTION TO PROVIDE FOR THE ABATEMENT THEREOF (PUBLIC HEARING MARCH Prcg.) 6,2001)." :~-I- ., . ..::.'14f.OI'70 : " RESOLUTION NO. 6210 (Trash . ;.. Maximum . . :x ,Qaily Loads) ~,ii .... .". . . ~"::..:.- '. rJ'c 1 ADOPTED RESOLUTION NO. 6210 entitled: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AUTHORIZING THE FILING OF A PETITION TO THE STATE WATER RESOURCES CONTROL BOARD CONTESTING ACTIONS TAKEN BY THE CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD, LOS ANGELES REGION, IN CONNECTION WITH THE TRASH TOTAL MAXIMUM DAILY LOADS FOR THE LOS ANGELES RIVIER WATERSHED (JANUARY 25,2001) AND AUTHORIZING THE FILING OF A CHALLENGE RELATED TO THE FAILURE OF THE REGIONAL BOARD TO COMPLY WITH CEQA." . 14g. ACCEPT See Page 10. WORK (Cons!. Refuse/ Recyclable Bin/ Brick Dust Enclosures Various City Fac.) 14h. 0'$'" .~ FUNDS RELEASE (JAIBG) I"';' . AUTHORIZED the City of Arcadia to release funds in the amount of $11,393.00 from the Juvenile Accountability Incentive Block Grant (JAIBG) Program to be expended by the Los Angeles County District Attorney for Juvenile Prosecution Services. . . .14i 0 N:-o-:ss' . . . j .~ '. ... -- 4 . RESOLUTION ADOPTED RESOLUTION NO. 6211 entitled: "A RESOLUTION OF THE CITY COUNCIL OF NO. 6211 THE CITY OF ARCADIA, CALIFORNIA, DESIGNATING THE CITY MANAGER AS THE (Groundwater AUTHORIZED REPRESENTATIVE TO FILE AN APPLICATION FOR A GROUNDWATER Storage STORAGE FEASIBILITY STUDY AND PILOT PROJECT WITH THE CALIFORNIA 1 9:. 2/20/01 Feasibility) 14j. PROF. SERVICE. AGREEMENT (Cons!. Mgmn!. SVcs - PD) " I ]1) ~\() 14k. SERVICE AGREEMENT (GeneraIOblig. & ARA Tax Allocation Bonds) ('2(,/'; '1~- 14c. AWARD CONTRACT (HVAC Duct Cleaning) (APPROVED) o 7_~()rf() 43:0044 DEPARTMENT OF WATER RESOURCES." AUTHORIZED the City Manager to enter into a Professional ,Services Agreement with Construction Controls Group to serve as construction manager for the new Arcadia Police facility project at a cost not to exceed $465,500, in a form approved by the City Attorney. I In response to a Council question Don Penman, Assistant City Manager/Development Services Director, stated in part, that the maximum amount for the life of the project would be $465,500. This amount will come from the $16 million budget that was previously established by the City Council. AUTHORIZED the City Manager to EXECUTE contracts with BNY Western Trust Co. (Paying Agent) - $750; and Best Best and Krieger LLP (Issuer's Counsel) - $10,000, for various services in connection with the proposed sale of City General Obligation Bonds and Redevelopment Agency Tax Allocation Bonds, subject to approval as to form by the City Attorney. THE PRECEDING CONSENT ITEMS 14a, b, d, e, f, h, i, j and k APPROVED ON MOTION BY C;OUNCILMEMBER CHANG, SECONDED BY COUNCILMEMBER CHANDLER AND CARRIED ON ROLL CALL VOTE AS FOLLOWS: AYES: _ NOES: . ABSENT: Councllmembers Chandler, Chang, Marshall, Segal and Kovacic None None Consideration of the report and recommendation to award a contract in the amount of $32,000.00 to Air Management Industries for HVAC duct cieaning at various City facilities. I In response to a Council question, Pat Malloy, Public Works Services Director stated that Air Management Industries (AMI) is properly licensed and has satisfactorily completed several similar construction projects for other cities. It is staff's opinion that should the City re-bid the project, the results would probably not change. However, due to the low bid submitted and comments received from other contractors and staff's previous experience with this type of work, staff is preparing to enter into a contract with an outside inspection service to monitor all work and to ensure complete conformance with the contract specifications. It was MOVED by Councilmember Marshall, seconded by Mayor Pro tem Segal and CARRIED on roll call vote as fOllOWS to AWARD a contract to Air Management Industries Inc. in the amount of $42,400.00 for HVAC duct cleaning at various City facilities; and, AUTHORIZE the City Manager and City Clerk to EXECUTE a contract in a form approved by the City Attorney. AYES: NOES: ABSENT: Councilmembers Chandler, Chang, Marshall, Segal and Kovacic None None 14g. 0130 ,'/0 ACCEPT Consideration of the report and recommendation to accept all work performed by M. W. Loyd, WORK Inc. for construction of refuse/recyclable bin and brick dust enclosures at various City facilities a~ (Cons!. Refuse/ complete and, authorize the final payment to be made in accordance with the contract Recyclable Bin/ documents subject to a retention of $9,484.00. I Brick Dust Enclosures 10 2/20/01 I I 1 Various City Fcc.) (APPROVED) 15. 43:00~5 In response to a Council question, Pat Malloy, 'Public Works Services Director, stated }hat the enclosure for the Chamber of Commerce was designed for a bin and was built to meet the needs of the facility for whatever it is used for. However, the Chamber, at their option chose to use smaller bins and have more frequent service; . It was MOVED Councilmember Chang, seconded by Mayor Pro tem.Segal to ACCEPT all work performed by M. W. Loyd, Inc. for construction of refuse/recycling bin and brick dust enclosures at various City facilities as complete; and, AUTHORIZE the final payment to be made in accordance with the contract documents subject to a retention of $9,484.00. AYES: NOES: ABSENT: Councilmembers Chandler, Chang, Marshall, Segal and Kovacic None None CITY ATTORNEY 15a. or(l() '\ ORDINANCE City Attorney Deitsch presented for ADOPTION and read the title of ORDINANCE NO. 2134 NO. 2134 entitled: "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, (Highland HOA ADDING SECTION 4912.7 TO ARTICLE IV, CHAPTER 9.2 OF THE ARCADIA MUNICIPAL Welcome Sign) CODE REGARDING THE PLACEMENT OF PERMANENT HOMEOWNERS' ASSOCIATION (ADOPTED) IDENTIFICATION SIGNS WITHIN PUBLIC RIGHTS OF WAY WITHIN THE CITY OF ARCADIA." ADJOURNMENT (In Memory of Juanita Gilbert Morgan) {) I.! 'I ~ ADJOURNMENT (Patricia Faye Niedecken) I"~ !) I ,.\ ,I j' . ..J) ~ of ~ .1., . It was MOVED by Councilmember Chang, seconded by Council member Marshall and CARRIED on roll call vote as follows that ORDINANCE NO. 2134 be and it is hereby ADOPTED. AYES: NOES: ABSENT: Councllmembers Chandler, Chang, Marshall, Segal and Kovacic None None Mayor Kovacic adjourned the meeting in memory of Juanita, Gilbert Morgan, a 40-year volunteer with the Assistance League of Arcadia and a runner-up in a Miss America pageant in the mid- 1920s, died February 9th after a brief illness at age 92. She was born in Weatherford, Texas. where she grew up with lifelong friend and Broadway star Mary Martin. She married Octavius W. "Ox" Morgan in 1940, and they settled in Arcadia in 1952 an.d she began volunteering for the Arcadia Assistance League in 1960. Over her 40 years of service she became something of an institution at the league's "Bargain Box" thrift store and worked there to the week of her death. Morgan became known as the "Doll Lady" for restoring thousands of dolls for the shop's annuai Christmas sale. Morgan was named the Arcadia Chapter's "Woman of the Year" in the mid- 1960's and received the National Assistance League's Ada Edward Laughlin Award in 1990 for outstanding service behind the scenes. Morgan is survived by her husband, three children, her sister, six grandchildren and three great-grand children. Memorial donations may be made to the Juanita Morgan Memorial Fund, 'Assistance League of Arcadia, 100 South Santa Anita Avenue, Arcadia 91006". Councilmember Chandler adjourned the meeting in memory of Patricia Faye Niedecken. "I would like to close in memory of my mother-in-law, Patricia Faye Niedecken. She was born on September 4, 1926 in the small city of Falls City, Nebraska. She was born to Harry and Vera Tilley, she was youngest of five children. Patricia graduated from Sacred Heart High School in Falls City where she met John Niedecken, her husband to be and her life long love. Patricia and .John were married on September 29, 1945 in Kingston, North Carolina, shortly after John returned from his duty in the Marine Corps in the South Pacific. He was one of the fortunate survivors of the Marine Corp battle of Helillou. Patricia and John moved to California in 1951 and after a successful carrier John and Patricia moved to their dream retirement house, a beautiful home on a golf course in Arizona. In 1997 they returned to Arcadia to be with their family. 11 2/20/01 I 43:0046 Patricia is survived by John, her husband of 55 years, and daughters Jane Chandler and Roger, and Christine Wiegand and Rob, and five grandsons, Greg and Jeff Chandler, Nicholas, Scott I and Mathew Wiegand, all of Arcadia, she is also survived by brother William Tilley and his wife Mary of Carson City, Nevada. She has many other nieces and nephews. Pat passed away at home, actually for the last threc and half years Pat and John have lived with us at our home in Arcadia. She passed away at her home with her family by her side after a lengthy illness just this past Sunday, and we just had the Rosary tonight, and Patricia is on the screen and we already miss her". ADJOURNMENT At 9:45 p.m. the City Council Regular Meeting ADJOURNED to March 6, 2001 at 5:00 p.m. in the (March 6, 2001) Conference Room of the Council Chambers for a Regular Meeting to conduct the business of the City Council and Redevelopment Agency and any Closed Session necessary to discuss personnel, litigation matters or evaluation of properties. 1* ATTEST: Q ,J ~Alford, C' "" I J ~ . I 12 2./20/01 I I I TRAN SCRIPT (Insofar as decipherable) RELATING TO AGENDA ITEM 9a. A PUBLIC HEARING FEBRUARY 20,2001 CITY COUNCIL MEETING To consider whether Adelphia Communications Corporation is in default of Section 15(b) of the Cable Television Franchise between the City of Arcadia and Adelphia Communications Corporation regarding two-way High Speed Internet Access. City Manager William Kelly: Mayor and City Council. This is a public hearing relative to issues dealing with Adelphia Communications Corporation. Cindy Rowe, from the City staff, will make the initial presentation. We will also have our special cable consultant, John Risk, here in conjunction with the City Attorney. There will be a multifaceted presentation. Cindy? Cindy Rowe, Management Services Officer: Honorable Mayor and City Council. You have received the staff report on this issue, and we have provided you with a packet of supplementary correspondence which should be entered into the record this evening as well. This is a public hearing, and was duly published in the Arcadia Weekly on Pebruary 8. Por the benefit of the audience, I would like to briefly review the background information. As part ofthe television cable franchise renewal process in 1995, a needs assessment was performed by the city's cable consultant, Communications Support Group, which clearly indicated that high speed Internet access was a priority among Arcadia cable subscribers. Based on that information, the cable system rebuild included in the cable franchise renewal in 1998, required the company to have the capacity to provide two-way high speed Internet access, to have it activated and made available to the community by June 18, 2000. Due to a network infrastructure delay, and in exchange for providing free modem service at 15 City and School District facilities, on September 5, 2000, the City Council granted Adelphia additional time, to December 1,2000, to complete, market and launch this Internet service. This was based on oral assurances by Adelphia that the service would indeed be available by that date. Between December 1,2000 and January 31,2001, City staff and the City's cable consultant made numerous attempts to determine whether or not that service had been launched in Arcadia, and were not able to determine that that was done. Repeated phone calls to customer service reps went unanswered in terms of whether or not this service was available. We were put Page 1 I I I I I I off and told that it was not yet available in Arcadia. It was not until February I, when a City representative was told that the service would be installed in his home. City correspondence to Adelphia on December 22, 2000, requested that Adelphia show proof that it had instituted two-way high speed Internet service throughout, submission of sweep results, and system testing documentation, or to-work orders, marketing materials, billing statements or similar verification. Nothing to date has been provided to the City. If it is determined that Adelphia breached its obligation under the terms of the franchise agreement, the City Council may order that the City recover liquidated damages in the amount of $1,000 per day of Adelphia's default, commencing December I, 2000. Also, the City may, for each month delay past December 28,2000, reduce the term of the franchise agreement by four months, and reduce the term of the franchise agreement by four days for each day beyond December 1,2000. Adelphia's breach has also entitled the City to disapprove the three-year extension ofthe franchise term that is permitted in the franchise agreement. The City also has the option of terminating the franchise agreement. It is also anticipated that the availability of high speed Internet service will increase the number of cable subscribers, thus increasing franchise fees for Adelphia. Consequently, if the service is not available, or is available but subscribers have not been made aware of it, the City is not benefiting from the additional percentage of franchise fees. It is recommended that the City Council hold the public hearing, listen to testimony, and take whatever action you determine after that. This is the end of the staff report. The cable consultant, as the City Manager said, is present this evening and Mr. Lee Perron and Mr. Kurt Taylor from Adelphia are present to answer questions, as am I. Page 2 Mayor Gary Kovacic: Great. Any questions at this point? Let's open the public hearing and first hear from Adelphia, if you have anything to say. Lee Perron, Vice President of Corporate Affairs, Adelphia Communications: Good evening, My name is Lee Perron. I'm the Vice President of Corporate Affairs for Adelphia Communications, in Southern California. I think I'd like to just go through a bit of a series of events that led up to where we are, and clear up some unfortunate confusion in regards to the availability ofthis service in this city, and the type of service we are providing in the City of Arcadia. Adelphia actually purchased the system for Arcadia in very late 1999. And at that point in time, we realized immediately that TCI had done really nothing to begin the rebuild of the system. We also realized that there was a date of June 8 when the system had to be completely rebuilt. That was a daunting task in the sense of one very particular item, and that is, that in the current franchise that you have, the requirement that TCI agreed to, was to rebuild the system to 550 Megahertz_ When Adelphia looked at that, we thought that was an incredibly inferior system and inferior architecture, and that the City of Arcadia deserved much better, especially in an effort to not only roll out new technology products such as high speed cable, but other products such as video on demand and eventually a local telephone service, other services that we would like to provide, and also the architecture that Adelphia was building at that time was much smaller node sizes, much more fiber rich, had a much higher system reliability and really was a much greater platform for deploying services. So we completely redesigned the system to 860 with node sizes of approximately 150 to 200 homes, versus the 550 with node sizes of approximately 1200 homes that was earlier proposed. Page 3 I I I I You know, the technology changes rapidly these days. I don't think there was any time, or any way at the time that the City renegotiated this new franchise to know that 860 would be the new J architecture, because it moved from 550 to 750 to 860 very rapidly in a short period of time. So we completely redesigned the system, which took us some time and we worked feverishly to get the system rebuilt. In mid-May, we realized that we were probably going to miss the June 8 target by a couple of weeks, Not a huge amount of time, but we knew that June 8 would be very difficult to meet. So we came and we met with the City Manager's office and explained that to him, it looks like we would be a couple of weeks late. We knew, at that time, that most likely what would happen is we would be notified that if we didn't meet June 8, that we would have a 30-day cure period, and if we did not complete it successfully within the 30-day cure period, then Adelphia would I absolutely be subject to any ofthe liquidated damages or any recourse that the City could take. What actually happened is that we stayed on target, and we did get the system rebuilt, and we were about two weeks late, and it was within the 30-day cure period. At that time, what I had done, because we knew that the City waS very, very concerned about this, and the City Council was very concerned about this very important issue: is that I had written letters to the City. In addition to pointing out some of the reasons we thought we would be a little late, but felt that Wt; would get the project done in a reasonable time frame, we made an offer to the City that if they would like us, when we began to deploy cable modem service, to offer free modem service to the. schools and the library at no charge, that we would be happy to do that. Subsequent to that point, Staff has been very, very diligent in regards to making sure we were aware of all the issues if we missed the target. And we continued our conversations, both in ' I person and on the phone. Subsequent to the completion of the rebuild, our notification to the Page 4 city, they had a consulting engineer that came out and took a look at the system. And they did a I very, very in-depth testing of the system. Out of the 116 nodes we have in the City, during a two-day period, along with our Vice President of Engineering for Southern California, went to 50 out of those 116 nodes in the City. The good news is that the end result was that the report from the consulting engineer and also from John Risk pointed out that the system, in fact, was not only rebuilt above and beyond, significantly above and beyond the 550 to 860 two-way, but in addition to that, is that after going through all the test points, that we significantly exceeded FCC standards and measurements for system performance. In addition to that, it was also noted that the system was actually two-way interactive at that time, both the downstream and the upstream were active and functional. The issue was that cable modem service was not available yet. And I don't want to split hairs I with regard to the actual language of the franchise stating that the system needed to be modem- capable and that there wasn't at least, in our reading of the franchise documents, any date certain that cable modem service should be required to be launched in the City. We very much understood completely that that was a very, very important issue to the City. We recognized Page 5 I I when you are taking a look at legal documents and contracts, discussions can become a little bit more formalized. But during this process, I really felt that our working relationship with the City, both with Staff and with the customers, has been very, very good. A couple of things that were in the letter that was sent September 26 that I was asked to sign and send back was outlined that agreement that was proposed back to you on September 5 that we would launch cable service, excuse me, modem service in December, we would provide the free modem service to those locations, and there were some other items in there, you know, regarding some of the testing, etc., associated with showing proof of that, product being delivered. One of the things I'd like to point out is that when I went to speak with the Unified School District, I spoke with Rob Leary from the Unified School District here in Arcadia, and I mentioned to him about how we had come up with an agreement with the City, our willingness to supply !hat service. By the way, one of the things I do want to say is that modem service for 15 locations, if you take a look at the retail rate of $39.95 a month, and you take a look at that for the remaining months of the franchise, was really a commitment on the part of Adelphia, that if you want to put a monetary sort of check mark next to that, is in excess of $50,000 in service that was our commitment. When I contacted Rob Leary from the School District, Rob informed me that, well, that is a tremendous and a very generous offer, but he mentioned to me at that time that the Unified School District in Arcadia already had a Local Area Network, and just about all their buildings were already connected with T -1 service, and so the cable modem service might be somewhat superfluous. So I asked Mr. Leary, well, what can we do for you? He mentioned to me, well, you know, you've got all our campuses wired for cable service, which we provide at no charge; there are three buildings on three different campus sites that we just couldn't get a I wire to, and they are not connected to our Local Area Network. Could you figure out a way to Page 6 get a cable line to those three locations? And then subsequent to that, at their request, we could supply three cable modems, and then that would allow them to have key communications between those buildings and the rest of the buildings that were connected to their Local Area Network. Now, there was never any discussion about this requirement. It was nothing we had talked about before with City Staff, but we noted that that was important to the Unified School District so we felt that would be important to the City. So we went out and did the site surveys and the engineering and we built cable lines and have activated service to those three additional buildings. What happened after that is that in the letter, because it says, I specifically, I, meaning Adelphia, will specifically provide cable modem service to these I I school sites by the end ofthe year, and that was part of the requirements that I would have to meet in this letter, I really felt that we need to go back and revise this letter. So there is no written communication, but in oral communication, myself via phone with the City Manager's Office, I spoke with him saying, this particular element is probably no longer accurate since we need to change that aspect of the schools? And what I did receive back was a request saying, well, if the Unified School District is only going to use three out of the I I modems that you have offered, could we use the remaining eight modems at locations that the City would like to use them at, and we said of course, that's not a problem, because we made a commitment of 15 modems and if the City would like to see additional modems in another location in the building, with that added benefit to the City in some way, we would be happy to do that. I had actually expected maybe a revised letter that outlined that change, based on my conversations with the Unified School District and building the cable lines there and the fewer cable modems. Unfortunately, what happened is that, and I'm not sure if this is due to a Page 7 I I I I I I miscommunication, but we did receive another letter on December 22, saying that we were still not in compliance with providing cable modem service. Now I would like to point out is that we started hooking up cable modem service in December in the City. And in fact, we had spoken with the City in regards to whether they wanted us to begin installations there, and where would they like them? And we did hear at that time is that they really needed to spend a little more time to decide where they would want the cable modems located, and we're working through that. Now since then, we have installed one cable modem at the library. That was done on January 10th. It's up and operational. We have one cable modem that was installed in the Arcadia Rec Room on January lOth as well. And we do have one cable modem currently working in City Hall as of February 9th . One of the things that happened, and I will take the ownership of the fact that there was confusion with this, it was truly unfortunate, but what you see that's being marketed, and we really started full-blown marketing in January, after we had completed our testing and node certification, was simply that, originally what we had talked about, and this was well over a year ago, is providing @Home service to Arcadia. That was the branded service that had been launched in the Southern Califomia market. But we made a decision in the fall of 2000 that we would launch a product called PowerLink. Now you may see it marketed at PowerLink@Home, and I'll explain that. But PowerLink is a very special product. Adelphia is only one of two companies, cable television companies, in the entire United States that doesn't work through a third party to provide cable modem service. What.! mean by that is that the @Home services that have been launched in other locations (End afTape 1, Side A) Page 8 (Beginning afTape 1, Side B) the phone calls go to @Home for at least what we call Tier 2, or customer support, and really it's a third party arrangement that actually many of the cable companies in the United States use. Much like Roadrunner, which is Time Warner's particular product that they have a third party relationship with. The PowerLink product is a product that is completely built and managed by Adelphia, and we think it's a superior product. And the reason is because we're not asking a third party to manage the traffic once it leaves the City of Arcadia, and goes through long-haul networks onto the Internet. We're not asking a third party to answer our phone calls for sales or for customer support, and we think because of that, that we can offer a superior product, not only in regards to the network management ofthe product and the quality and the throughput speeds, but we also firmly believe that we have entire ownership of the customer support content and also the customer support resources. Mayor Kovacic: Mr. Perron, can I interrupt you for a second. I don't mean to take too much time away from your presentation, but I want to get focused on the issue here, And I'd like to ask Cindy Rowe to come back up for just a second. Is the issue before us, merely whether this two-way high speed Internet access was available for Arcadia residents? Ms. Rowe: On December first. Mayor Kovacic: And you're saying it wasn't. Is that the only alleged breach that staff is asserting at this point? Ms. Rowe: Yes. Mayor Kovacic: OK. So Mr. Perron, if maybe you can focus on that issue, which is, was two- way high speed Internet access available to Arcadia residents as of, what's the date, Cindy? Ms. Rowe: December first. Page 9 I I I I I I Mayor Kovacic: December 1,2000. Mr. Perron: Absolutely. In fact, we actually performed an installation on December 1, 2000. And as a matter of public record, and a matter of fact, I will attest to that. What I was leading up to, and excuse me ifI was taking a little too long, Mr. Mayor, was the fact that during the month of December, I know that there were several phone calls that were made in an effort to see if cable modem service was available in the City. Unfortunately, because of confusion, the phone calls were going to the @Home customer support, or going to the local office. The phone calls should actually have been going to the National Customer Care Center for the PowerLink@Home product, which is located in Coudersport, Pennsylvania. Now that was unfortunate that the way to be able to test to see if service was available, that phone calls were being made, but I have to tell you, even as of this evening, in speaking with one of the consultants, I had to reaffirm that the product available since December 1, in the City of Arcadia, is the PowerLink@Home product. It's our PowerLink network product, our customer support. The only thing that @Home has to do with it, is that there's a CD that gives you an upfront content page that the customer may use, because we think it has a lot of added value and information for the product. But the phone calls do not go to @Home. I know that there \yas a time when the web page for @Home was checked to see when the service would be available. Well, you have to understand that in our relationship with @Home, there's been a difference of opinion on the product that would be launched in Arcadia. They would have loved to have launched their product here, but we launched our PowerLink product. That's a contractual issue that we have with @Home that is our own issue, but it hasn't in any way. deferred the availability of the service. Page 10 Mayor Kovacic: Is it your position, then, that had an Arcadia resident called the right telephone number in December, they would have been able to receive two-way high speed Internet access? Mr. Perron: Absolutely. And the only thing we hadn't done, is we had the service available, is that we had not gone to a full-blown'market launch. We were still in the process of making sure that our own internal customer service lines, our fulfillment of the product, which is very complicated and sophisticated, going to a customer's horne, opening their PC, installing a network interface card, installing the software to interact with our cable modern and access to the Internet, and making sure that we can fulfill that product when the customer calls and gets a work order, we show up on time, on the day that they want the service, and to make sure that if there are any issues or questions, that they've got a customer support group they can calL They're incredibly important, we were testing all those issues during December, but we were installing people. Now during the month of January, we actually did go to a full market launch. We actually delivered 21,728 mail pieces in January to customer homes. We used a company called Turtle Ridge, they're a direct delivery. It was not in the maiL They take them right to the house and put them at the door. If we had a gated community or an apartment complex with security, we might not have had access, and then we'll use a number of other resources, such as direct mail, and outbound telemarketing to reach those people. One of the things that we did, recognizing the very high Asian ethnicity, demographically in the community, is we actually used a Chinese New Year's piece with the Year of the Dragon. It has a special offer on it, these 21,000 that were delivered in the City. The special offer that we're doing right now, and it's still available, is for free installation and a free month's service, and the number inside the mail piece is I 88adelnet, A-D-E-L-N-E-T. And that number is, 1-888-233-5638. And for anyone here this Page 11 I I I I I I evening, or anyone watching us on cable television this evening, if you'd like to make that phone call or contact us for that offer, we'd be more than happy to do that. Now, in closing, I will say that I know that. the Council is taking a look at a particular action tonight. We take it very seriously.. We really feel that there's been a misunderstanding, that we'd like the opportunity to clear up. We were a little late of providing information to the City Attorney. Some of that didn't even get to him that he would like to see and review until this moming. So with that being said, we do apologize for the lateness of the response. But I will say that we honor our commitments, we very much want to be a very, very positive part of the Arcadia community and a service provider. And I think the only thing that I would ask, after hearing what I presented, is just simply that I think a face-to- face meeting would be in order, and if the Council would, after listening to the information that they have before them tonight, would decide to defer action until we could have that face-to-face meeting, I would like to have that, because I honestly have to tell you is that . over about the last 30 days, I was instructed by corporate counsel to allow them to simply correspond back and forth by mail. I haven't made contact with the City Manager's office because of that. That's not the way I work. That's not the way Adelphia likes to work. And I really think that bringing the atmosphere and pressure down a little bit, having a face-to-face meeting, I think we could resolve any of the outstanding issues we have. Mayor Kovacic: Thank you, Mr. Perron. Any questions? Dr. Chang. CounciImember Dr. Sheng Chang: I have a question for Cindy. Ms. Rowe: Yes, sir. Dr. Chang: What is this two-way high speed Internet service setup? Exactly what is that? Page 12 Ms. Rowe: I think I'll let Mr. Risk respond to that, ifI may. The technical setup of the system, you mean? Dr. Chang: OK, I try to get to the point, OK. Is that the service that would be installed in each customer? Ms. Rowe: Yes, you could have a modem that would provide the Internet service instead of through your telephone line. Is that correct, John? Mr. John Risk, President, Communications Support Group: Yes. Dr. Chang: OK. Mr. Risk: It would be a broad-band modem, and it's capable of speeds in excess of 1.5 megabytes per second. So it's significantly faster than dial-up service. Dr. Chang: OK. Mr. Risk: It would be outfitted in a network card that would go into your computer and through the USB port on your computer. Dr. Chang: OK, and this kind of service, according to our contract, should be automatically installed by Adelphia to our customer, to the customers? Mr. Risk: Right, directly. Dr. Chang: That means we dial the customer calling Adelphia for it. Mr. Kovavic: Now he said automatically. Does that have to be done on request? Mr. Risk: Oh, no. Meaning that the subscriber has to ask for the service, just as though a subscriber would ask for HBO or any other service. Dr. Chang: OK, just like HBO and other services. They have to call Adelphia for the services. Mr. Risk: Right. I I r I Page 13 I Dr. Chang: So according to what he presented, he said that the service is available, it is just waiting for the customer to call. Is that correct? Mr. Risk: Well, that's what Mr. Perron said, Mayor Kovacic: Mr. Risk, before you get started. No, I'm not going to cut you off. I just want you to identify yourself. Mr. Risk: Sure. OK, is this the time for me or do you have questions? Mayor Kovacic: We're taking testimony and Dr. Chang had a question. Mr. Risk: OK, I'm John Risk. I'm President ofConununications Support Group, and our company has been the cable consultant to the City since 1993. And the issue here is, in fact, whether the service is available and two, whether the public's been notified that it's available. And I'll just go on to say that I work for a number of cities all over , I the state, and this City, more than any of my clients, have advocated for high speed modem service the longest. Since 1993, this City has been on record, following an interesting survey that the Arcadia Unified School District did in 1993, which showed a significantly'high number ofPCs in the homes of Arcadia. It was significantly higher than the LA average. And the School District wanted to make a point of that to us as we were negotiating the cable TV franchise, that they considered high-speed modem service an important thing. And that their public, because of dissemination of school materials to the public over the School District's web page, and through students having access to the Internet at high speeds, their "educational opportunities would be facilitated with Internet access, So that led the City, in fact, to send a letter in 1993, early 1994, to the General Manager of TCI at the time, Juan Herrera, stating that ifTCI had just purchased @Home, please ask your I cotporate officers to make Arcadia a test site for the @Home product. And that was urged. But Page 14 shortly after that letter was sent, that General Manager left the company or was transported to a different, actually, he was transported to Japan. He left the entire area. And when his replacement came, that issue was not, no longer pursued, because they felt that the Arcadia system lacked the technical integrity to support @Home, which was a true fact. So in 1995, during the needs assessment phase of the cable TV renewal, more than 260 residents, in responding to a survey that the City sent out via the cable bills and via the City newsletter, stated affirmatively that they would like to see interactive information services as part of the new cable system. In 1996, institutional users queried by the City including City Departments indicated high speed Internet access to be a significant need. And speed was the number one concern of them. Speed, Internet access speed. In 1998 the cable franchise expressly identifies in section 15(b), which is there, you know the title of that section is "Two-Way Services, High Speed Internet Access." It stands out very boldly. Next sentence: "Within two years." And as a negotiator of that franchise renewal, we worked hard with TCI on this issue, TCI was reluctant to offer service here, for whatever reason. We saw Pasadena with Charter Cable, we saw Cox Cable down in Irvine, we saw Comcast Cable in Orange County, offering modem service, and we were wondering why TCI was not wanting it here. So we fought hard for this language. In the transfers between TCI and Century, between the TCI-Century partnership and Adelphia, we discussed Internet access as the number-one priority, as a priority, not number one. The rebuild ofthe system was number one, two was high speed access. They were reminded countlessly during that process that this was important. Therefore, we're partners here. We advocate the product. We're the first to have been happy, to have been pleased, to have seen modem service widely disseminated and available on December first here. Page 15 I I I I I I But what had happened was, City Staff started making phone calls, I started making phone calls. If you look at Tab 5 oftbis packet, you'll see calls to the local office. Where does the subscriber call first? They call the phone number on their bill. We called that number. We identified ourselves as someone interested in moving to Arcadia. We were given another number to call after several attempts and we were put on hold a few times, not to mention that. But we were asked, then, to cal1 @Home, which the Adelphia CSR told us to do, We cal1ed @Home at their 888 number, waited several minutes, gave the street, gave the zip code, came back and said it would be available in one month. And we said, well, is there any other way we can get modem service here? And the @Home person said, cal1 Adelphia PowerLink. Gave us the phone number, 888-233-5638. The same number that Lee Perron just stated, We got voice maiL Someone there said to us, Wal1y was his name, "Modem service is not available in Arcadia. It is available, however, in West Hol1ywood and La Habra." When, we asked him, can we expect it in Arcadia, he said affinnatively, "Probably six months to one year. Try calling Adelphia in Arcadia. " We did the same exercise on December 4th. Same result. So was that enough? No. I said let's go to the Internet. Certainly the Internet is going to help us find this out. So on January 30 and on February 13, we logged on to the Internet. Went to @Home, because up until then we were told it's PowerLink or@Home, so we went to @Home first. On their web page we plugged in a zip code in Arcadia, we plugged a local street address, we were told it is not available in Arcadia. . Mayor Kovacic: I don't mean to stop you, but I just don't want to get too far off target here. The question we're being asked to decide tonight is whether there was a breach of the contract, Page 16 and that comes down to the issue of whether two-way high speed Internet access was available to Arcadia residents in December of 2000. Do you understand that to be the issue? Mr. Risk: Well, I think the issue is modified in that the issue is what the settlement agreement spoke to. Not exactly what the franchise agreement states. The franchise agreement was the provision that was being negotiated up until the September public hearing the City Council had. Mayor Kovacic: What do you think the issue is as far as deciding whether there is a breach or not? Mr. Risk: I think the issue was, the service would be launched as of December first. Mayor Kovacic: So the question is whether it was launched or not? Mr. Risk: Yes. Mayor Kovacic: And what is you opinion? Mr. Risk: I would say it was not, because subscribers were not told it was available. When attempts by subscribers or persons representing themselves as subscribers directly asked for the service, they were told it was not available. Until February first, when Roger Chandler made a phone call, or his wife made a phone call, and found... Mayor Kovacic: Are you aware of any other breaches? Mr. Risk: No. Mayor Kovacic: OK. Mr. Risk: Other than the fact that several letters were sent and several phone calls were made and no substantive responses were given. We made efforts to ascertain this through a normal channel of communications, and that channel was not effective. Mayor Kovacic: OK. Thank you. Mr. Risk: You're welcome. Page 17 I I I I I Mayor Kovacic: Would anyone else like to address the City Council on this? Mr. Perron, do you want to respond in any way to what's been said, or your position remains, which is that you had launched this service by December of2000? Mr. Petron:. I just simply want to state that I know there's one City resident here, tonight, who has cable modem service in Arcadia. And also another resident who couldn't be here tonight, a Mike Menerey at 2311 South 8th Street, who's a cable modem service customer, who's been a cable modem service customer in Arcadia as well. And the unfortunate thing is that during the process of trying to contact various people, with the idea that we're someone moving into Arcadia, which wasn't actually the case, but at any time, if a phone call had simply been made to Kurt Taylor, the General Manager ofthe system, or myself, it was available to the City at any time to discuss this matter and ensure that the right phone numbers, that.people had the right information, we would have been happy to do that at any time. And I think that's just Par\ of why I think a face-to-face meeting would be a good idea, because I think we have to clear up what I would like to think is some misunderstanding in regard to where we actually sit today. Mayor Kovacic: OK. Mr. City Attorney, did you have some questions? Mr. Stephen Deitsch, City Attorney: Mr. Perron, if you would, I would like to ask a couple of questions, if you could remain at the mic. Mr. Perron, I know you are aware'of my December 22, 2000, correspondence to Mr. Witthauer regarding this hearing tonight and regarding the issues which relate to it. .. Mr. Petron: Yes. Mr. Deitsch: I believe you are aware that in the correspondence the City Attorney requested that Adelphia provide certain documentation to the City, are you not? I Mr. Perron: That's correct. Page 18 Mr. Deitsch: One of the things the City asked for was submission by Adelphia of sweep results at a test location at the end of each trunk run, to confirm signal capability. Have you provided such test results to the City? Mr. Perron: The only results that I'm aware of at this particular time are results that were provided to the City in the late summer of2000. At the end of the actual construction, the actual consulting engineer for the City actually conducted tests, that the test results have been submitted and affirmatively showed not only did we meet all of the requirements, but the upstream, or reverse capability ofthe system was, in fact, operational. Mr. Deitsch: And were they conducted at each trunk line termination point, at the end of each trunk line? Mr. Perron: They were conducted at a number of trunk lines that were picked at random and determined by the consulting engineer, and so the testing results were simply at the choice of the test results that the consulting engineer chose. Mr. Deitsch: In this December 22 correspondence, the City Attorney also asked Adelphia to demonstrate 100% carriage at all test points within the City. Has Adelphia provided that information to the City? Mr. Perron: We haven't provided it at this particular time, but 1 would be happy to say if that's something we need to provide, we're more than happy to do that. To me, if the real issue was, is cable modem service available to the City, I think the fact that we were installing in the City, I think, really was proof in and of itself that the service was available in the City. Mr. Deitsch: Is there any reason why Adelphia could not have provided this information following its receipt of the December 22nd letter? After all, today is February 20th. Page 19 I I I I I I Mr. Perron: I'll have to check into that. I'll be more than happy to discuss that with our Engineering Department. I do know that there was quite a bit of information that was submitted to the City. I recognized early on, that that submission of that information was late, and I apologize to the City for that. But I'm hoping that in review of that information that's been submitted, that I would strongly believe that answers the questions that the City has of us. And if we need to provide additional information, we'd be more than happy to do that. Mr. Deitsch: Will you provide all the information requested in the December 22nd letter from the City Attorney to Adelphia? Mr. Perron: I don't see any problem with that. If what I'm hearing is that, if the City wants in addition to the test points that were actually measured and submitted to the City by the consulting engineer of the City, if we need to provide additional information, we're more than happy to work with that. I can tell you, that I stand before you on the public record, without any hesitancy at all, to say that if we took a third party and went out to every single test point, and every single location in the City, and tested to see if cable modem service was operational and was working, the answer would be yes. Ifwe did that a month ago, the answer would be yes. Mr. Deitsch: So I take it, your answer is yes, you will provide all the informatjon requested in the December 22nd letter? Mr. Perron: I don't, well, I don't see a problem with that. Because you know what? .I'm not a lawyer, and so I don't know if there's something in there that troubles our corporate counsel? . But I will say that I read the letter. In a palms-up gesture to the City, I don't think there was anything that was asked in there that creates any issues whatsoever for Ade]phi~? Mr. Deitsch: You feel it was a reasonable request? Page 20 Mr. Perron: I felt that testing every single test point, does that prove that cable modem service I is available in the City? No, it doesn't. It doesn't do anything. Mr. Deitsch: What else would? Mr. Perron: Actually going out and taking a look at cable modems being installed in different nodes in the City to make sure what you have is synch-block, or block-synch. That means that you get lights on a modem that show you have both forward and reverse capability in the system plan, and that the cable modem is not only communicating with the head-end equipment that is located in our network system, but is communicating outside of our network system, outside of Arcadia, and to the Internet. That would show that cable modem service is working and available in the City. Simply going to every single test point in the City and making a measurement would do nothing except say, you can, you've got downstream signal to this test point, and that you could send a signal back saying I have upstream signal from this test point back to the head end. Would that show there is cable modem service available in the City? Absolutely not. And in fact, it has no bearing whatsoever, other than to show that the system is capable of modem service. Mr. Deits'ch: Your proposed testing, now, when could that be performed, and would it indicate I whether two-way Internet access is available throughout the City? All points? Mr. Perron: Well, I'm sharing with you that testing endpoints does not prove in any way. Mr. Deitsch: No, no. You proposed a different test, if I understood correctly. When could that be fully performed in your opinion? Mr. Perron: I think if, my feeling would be, is that just when we worked with the City's engineering consultant, out of 116 nodes, he said let me pick 50. Any 50 I want. And I'm going to go and see if the plant is actually built to construction as you said it did. We went through that I Page 21 I I I process, no problem at all. If the City would like us, and if the City would like to pick X nwnber of nodes that you think would show good faith on the part of the company, to have us go out and install cable modem services at test points within X nwnber of nodes, we'd be happy to do that. And depending on the nwnber of nodes that you pick, that would probably determine the time that it would take it. But it's not an exhaustive performance testing, but in fact, that is the only performance testing that would show that cable modem service is available throughout the City. Mr. Deitsch: What time frame would you suggest to demonstrate that through your proposed test? Mr. Perron: My feeling would be immediately. And if you wanted to pick 20,30,50 node locations such as the consulting engineer did, depending on the nwnber that you pick, r would imagine that we could very easily do somewhere between two and three a day, as far as the test points go, which means that, it would seem to me, that in less than 30 days we could work through the process. Mr. Deitsch: And if, instead, the City preferred to obtain from you the information requested in the December 22nd letter, by what deadline could Adelphia provide that information? Mr. Perron: We would absolutely be able to provide that within 30 days, as well. The only point, and maybe one of the reasons why you didn't receive that information, and we'd rather have a discussion, is,.r think r made the point, in regards to that particular testing, really doesn't prove modem service exists in the City of Arcadia. Mr. Deitsch: How many customers does Adelphia presently have for two-way high speed Internet service, in Arcadia? Page 22 Mr. Perron: In Arcadia, we have approximately 40 customers today, and I forget the number of pending customers. I could check that and give you the information. We're doing installs daily, and we have a pending demand of installs that we're doing. Mr. Deitsch: And it's your opinion that the two-way Internet high speed service is available throughout the City? There is not one home in the City that would not have this capability if it desired such service, and contracted with Adelphia? Mr. Perron: Once again, I stand before you on the public record an~ I say, absolutely. The only thing that would provide an issue is that if you went, let's say, to an apartment complex and you went to install the cable modem service and didn't receive connectivity right away, that most likely would mean there's nothing wrong with the network or the two-way system, but there could be some work that needs to be done on the individual drop wiring that would be located in that apartment complex, of which we would make arrangements with the customer to provide any repairs necessary to insure that they could have service. Mr. Deitsch: Mayor, I do have a question for Mr. Risk, but if there are any other questions in the meantime for Mr. Perron? Mayor Kovacic: Mr. Perron, while you are still here. Two questions, really. First of all, if somebody wants this access, what is the number that they call to get the right person? Mr. Perron: They call, let me get it again. We have, Mr. Risk, a free. installation offer, by the way. It's l-88adel, A-D-E-L, net, N-E-T. And that number is 1-888-232-5638. And if anyone I I working for the City or is a resident of the City calls to get service, and for any reason if there are any issues with the Customer. Service Department there, if there's any confusion about whether the service is available or not, or they seem that they got the wrong information, I would encourage them to immediately call Kurt Taylor, the General Manager of the system, or feel free I Page 23 I I to call me at my office, at the Regional Office in Santa Monica, by the way that number is 1-310- 264-8043, and for anyone. watching, it's 310-264-8043. That is my direct line number. And with that being said, if there's any issue or confusion, I would be more than happy to make sure that they get an installation date, and once again, that they get a free installation and one month free. Mayor Kovacic: And finally, why is it that a lot of people, including people living at my house, complain about the reception for 2, 4, and whatever VH -1 is on, 96, whatever it is? Mr. Perron: Well, I haven't heard that and I apologize. I will say, Mr. Mayor, if you have a service call at your house, have one of our technicians come out? Mayor Kovacic: Well, I don't want to receive any special treatment. I'm receiving these complaints from a lot of people. So what you're saying is, if somebody is getting fuzzy or snowy reception for 2, 4, or any other channel, they call who? Mr. Perron: They call our local Customer Service Department in the City of Industry. That number is located on your bill. As a matter of fact, each month. Mayor Kovacic: And as far as you know, every channel on the cable system should be clear? Mr. Perron: Absolutely! And what you described is .often, that is local broadcast stations, or in the low band, and often that is very indicative of what we. call "ingress," which usually means there is.a loose connection somewhere in the house. Either right outside, at .the ground block, where the cable enters into the house, or inside the house, especially if you have multiple outlets, including if you have an outlet in your house without a cable and a television connected to it? That's an open outlet and could be receiving inteiference, and we can actually put a terminator on there to cap that. . I Mayor Kovacic: OK. Any other questions? . , Page 24 Dr. Chang: Yes, I have a question. Mayor Kovacic: Dr. Chang. Dr. Chang: Mr. Perron. Are you replacing the box? Mr. Perron: Excuse me, Dr. Chang? Dr. Chang: Are you replacing the box, the remote control, the control box? Mr. Perron: Yes, absolutely. Dr. Chang: You are replacing now? Mr. Perron: Yes. One of the things that we're doing is that we're swapping out all the analog converters that exist in our markets across Southern California. Weare placing digital receivers into those homes. With our new pricing structure, what's happening for most customers that have Premium Services, their price is actually going down, and they're actually receiving more product. Dr. Chang: Because, about 10 days ago, one of your people called my home and said that they would come the next day at 9 o'clock to replace the box. And my wife waited four days, and nobody showed up. Mr. Perron: Well, we have a big problem. If that's the case that's happened, but I think Mr, Taylor can follow up on that, and we'll make sure that that gets taken care of, at your convenience. We hate to have missed appointments. Dr..Chang: Ijust want to, Mr. Perron, Ijust want to read to you, part of the letter subrnitted by Mr. Jeff Bowen, President of the Highland'HOA. He said that a special note, reception of basic channels, such as 2 and 4, in fact one person said Adelphia told him to run his television through his VCR to clean up the show and lines in the picture. Do you have any comments? I I I Page 25 I I Mr. Perron: Well, once again, any time we've got a customer that has a problem, we want to run a service call and make sure that's corrected. And by the way, we run service calls not only. 7 days a week, but 24 hours a day. If a customer calls us at 2 in the morning on Wednesday, anq they say, my cable picture is out, I want you to come and fix it. We're not going to tell you, you have to wait until we have reports of an outage in your area. We will actually dispatch a technician and roll the truck and come at 2 in the morning. And I want to make sure that when we do have an appointment, we keep the appointment. Ifwe don't keep the appointment, and we miss one, once again, we still have what we call our on-time guarantee. And because, I can teU you right now, if we miss a service call, or if we're even late, we put a $20 credit on the customer's bill. If we miss an installation appointment or even late, then we make sure it's free installation for that service. So we have a big incentive not to be missing appointments, and not even being late for appointments. And our approach is, not to make the customer ask. But if we show up and we're 15 minutes late, we apologize for the inconvenience, that we respect the fact that time is valuable to our customers, and we let them know what the offer is. So we make sure that we honor that offer, Dr. Chang. Mayor Kovacic: Mayor Pro Tern Segal. Mayor Pro Tern Segal: Mr. Perron, I hate to be the bearer of bad news of service. But to use myself as an example, I've had somebody at my house four times regarding these lines on the screen. And each of the four times the service person came out, it was fixed for a day. And <;lach of the four times, the next day, it was not fixed.' The last time they came out, they said, well, what you need is a digital cable box;which,.I kind ofresearched that myself, and that's just ' another dart throw at a problem that they just really haven't fixed. So I guess my question, my I concern would be, the letter you got there, along with personal experiences and people Page 26 complaining, you know, other people in the City complaining about this issue that the Mayor raised, and this issue oflines on the screens on these channels isn't going away. And certainly isn't making any friends in this town for Adelphia. And I would truly hope that there would be a much bigger concerted effort to fix that problem in the very near future before it becomes a problem that all of us are going to have to deal with our constituents who aren't very happy about the service. Mr. Perron: I appreciate the comments, Councilman Segal. I apologize that you are having any kind of reoccurring problem. But I know that the General Manager, Kurt Taylor, is here this evening. After spending literally millions of dollars upgrading this to a fiber-optic network, it's absolutely unreasonable that we would have any ongoing issues with the type of system that we've built. So, hearing what you've said, I take that to heart. I do encourage people that if you've got a problem, ask for a service call, but what I'm hearing today, it sounds like there may be a couple of different issues that need to be addressed on some of these lower channels, and we'll make sure that gets taken care of. Mayor Kovacic: That's why I wanted to make sure that we're focusing on the areas of the alleged breach. And I think that we're going to have to get some guidance from our City Attorney, but, you know, hwnan nature being what it is, we obviously, in our business, receive more complaints than compliments. But I can honestly say, as far as the cable television service is concerned, I get no compliments and a lot of complaints. So, somebody isn't doing their job right, and at least this hearing tonight has provided us all with a forum to kind of air our frustration about the state of cable television in Arcadia. And so, anyway, you say you're going to take it to heart and I'll take you at your word. Mr. Deitsch, do you have any more questions? Page 27 I I I I Mr. Deitsch: I do, Mayor, thank you for your indulgence. Mr. Perron, I'm looking at Section 27(a) (Ia) of the franchise agreement with Adelphia. And I'm still troubled by Adelphia's failure to provide test results, which, arguably, are required under the franchise agreement. Now, we were talking moments ago about the City Attorney's December 22nd letter to Adelphia, requesting test results, and I described the results that were sought, correct? That wasn't the fust time the City Attorney or the City had requested Adelphia for those test results, was it? Mr. Perron: You're speaking of the December 22nd request for results? Mr. Deitsch: Yes, correct. Mr. Perron: That's the first time I recall. I Mr. Deitsch: Well, are you familiar with the letter of July 21, from the City Attorney's office to Mr. Rob Witthauer, who is the Acting Assistant General Counsel of Adelphia? Mr. Perron: I don't recall the letter. Mr. Deitsch: The letter shows that you were copied on it, along with the City Manager, John Risk, our consultant, and Kurt Taylor, the General Manager of Adelphia. Mr. Perron: I'm only stating, sir, in the course of business and the number of letters that I read every day, that I simply don't recall the letter, but I'd be more than happy to go back and take a look at that letter and speak with our counsel. Mr. Deitsch: All right, in that July 21 letter, now that's what, probably, seven months ago at " least now,. the City Attorney's office indicated to Adelphia, "More important for the purposes of this stage ofthe proceedings is the fact that Section 27 (a) (la) requiresAdelphia to correct.any deficiencies and retest, in the event that Adelphia is not in compliance with the franchise. agreement. .Moreover, Section 27 (a) (Ia) requires Adelphia to demonstrate 100% carriage at all I test points within 30 days of the scheduled completion date." The letter went on to state the Page 28 following: "Therefore, unless Adelphia presents test results supporting its contention that I Adelphia has cured the heretofore referenced defaults on or before Wednesday, July 26,5 ~ . o'clock Pacific Standard Time, the City will hold Adelphia responsible for any and all costs incurred," etc. Mr. Perron: I think what happened after that, Mr. City Attorney, was that on July 27th and 28th, the City's con$ulting engineer actually went through and selected 50 of the 116 i1o~es, and those are the test results that are included in the engineering consulting report that was sent back to the City. I'm in receipt of an e-mail that was sent to our Vice President of Corporate Affairs in August, and it included a copy of that report, in fact, showing the test results that ~ere made on July 27th and 28th. So if that's the test results that were requested by the City, 1 felt that we not only fulfilled the requirement in regards to the City consulting engineer, acting on behalf of the City, went through and actually tested himself, along with our Vice President of Engineering, I test points in the City. And those test results were submitted back to the City. So if those are the test results we're speaking of, I'm quite confident that they have been completed and submitted back to the City, as requested by the City's consulting engineer. Mr. Deitsch: But didn't that letter, and for that matter, doesn't the agreement state that test results at a test location at the end of each front line run, confirming signal capability are required? Mr. Perron: I'm simply repeating back to you documentation that was sent by the City's consultant and had an attachment by the City's consulting engineer, that they saw fit in fulfilling their responsibilities on behalf of the City, that was what was requested. Now, they could have requested us to go to 116 nodes, and 116 test points. But we went to 50 nodes. And typically, you know, test points are a determined amount, depending on the number of trunk runs that you I Page 29 I I have. You usually do an end of trunk run, so the number of test points, depending on the market size, could be 1,2, 10,20,30,50. It varies greatly by not only the architecture that's built, but also by the actual mileage that's been constructed within the geographic footprint. So I'm not being evasive, I'm simply saying that if that's what you're responding to, we worked with the City's consultant. They walked through, with us, exactly what they sought in their professional expertise as a consulting engineer, what would be requested to fulfill the obligation to actually show good faith on the part of the company in regards to statistical data, that was empirical and non-ambiguous in regards to measuring the performance of the system in its operation. Mr. Deitsch: And even though five months later, the City Attorney requested test results at the end of each trunk line again, is it fair to say, then, that Adelphia nonetheless decided on its own that what the City Attorney was asking for, would not be responded to, was not reasonable, perhaps? Mr. Perron: I think the only point that I am making is that, I have not spoken with any ofthe City staff, nor the City Attorney, nor the consultant, nor been contacted by anyone on that particular issue of that letter of December 22nd. And the only point that I made, and the only reason I suggested that we have a face-to-face meeting was, that information, if requested, was to fulfill verification of the availability of cable modem service in the City of Arcadia. I'm just sharing with you, very honestly, is that those measurements have absolutely nothing to do with the verification of modem service. Yet, I'm absolutely offering a way to do that, and that we would be more than happy to work with the City t9 comply with that, if they would like us to do that. This is not an act of civil disobedience on the part of Adelphia. We are not an adversarial company. We abhor having philosophical differences of opinion that lead to legal counsel I having to write very serious letters back and forth. . We much more prefer a very open, palms-up Page 30 type of relationship. If there's an issue, let's identifY what it is, and let's resolve it. And if I Adelphia has done anything at all wrong, we'll be the first ones to own up to it and whatever the . I consequences of our actions that are wrongful, then we will take ownership of those and acknowledge them. That's the only point I'm trying to mak,e this evening. Mr. Deitsch: Well, Mr. Perron, the agreement says that you are to provide test res,ults at a , location at the end of each trunk line. And two letters, one in July and one in December, reiterated that that was the requirement then, to the agreement. Yet you haven't provided them, I even as you stand before the Council tonight. Aren't you in default of the agreement, in particular, Section 27 (a) (Ia)? Mr. Perron: I think at this particular point in time, I don't want to belabor the point, if the conversation is a technical trip wire that I'm supposed to set off some type of an event, then I don't think that's fair. I'm not in a deposition at this particular point in time, and I've answered I your question very honestly, that the City made a request and then hired an outside consultant to fulfill that request, and we worked diligently with the City's consultant and fulfilled what they, on behalf of the City, requested that we do. If the consultant said, these are the test points that I want, and these are the test points that shall be required, then you have to understand, we, at least, had some fairly good level of confidence that the City and the consulting engineer were talking, and that the consulting engineer was sharing with the City exactly what they were going to do, what their methodology was, based on the request from the City, being aware of that, and then asking the company to comply with what the City was requesting. And that's all we did. We worked' with the City's consulting engineer to do that. If, in fact, there was not compliance, I'mjust simply puzzled by the consulting report,-saying that we were in compliance, and that we never really heard back from the City subsequent to that time that there was any issue, that there I Page 31 I I I was any question with the test points and the number of test points or the measurements at the test points. We never heard any of those concerns until tonight. All I'm saying is ifthere are concerns like that, we would love to address them. Mayor Kovacic: We obviously didn't restrict who you could bring with you to provide any expertise that you don't have. But it's our fact-finding mission to listen to the testimony and then make certain fact determinations, and probably Mr. Perron's opinion about whether he's in breach or not is kind of irrelevant. Does anybody else have any other questions? Mr. Deitsch: Mayor, with your indulgence, a brief line of questioning a little bit different from where we are. You've indicated that two-way Internet service was made available to customers in Arcadia as of December 1. Mr. Perron: Yes.' Mr. Deitsch: How many customers did you have for such service on December I? Mr. Perron: I think we had one. We would have had two, actually, because I think what we did, we tried to install a cable modem service at City Hall on December 1, but at that time, the person; at least, that the installer and the engineer spoke to said, they really weren't sure exactly where the cable modem should go. You know, often, we... Mr. Deitsch: Mr, Perron, how did that customer come to you and seek such service? Are you aware? Was it advertised? Or how did that? Mr. Perron: No, we sought the customer out. That was part of our own efforts in making sure we were testing.the network and the network was working, and that we were double-checking all aspects of the fulfillment process, so that when we did go to full market, that we could successfully fulfill the product. I guess the only analogy I make, is that when you open up a new Page 32 grocery store in the city, you don't put Grand Opening on the door on day one. You stay open for at least a few weeks and then from there you have a marketing effort. Mr. Deitsch: When did Adelphia go citywide in an effort to see if, to where the Internet was available, to actual customers? Mr. Perron: In January, the week of January 23rd, as a matter of fact. Mr. DeItsch: That was the first time? Mr. Perron: That was our first marketing effort. Mr. DeItsch: Why did you wait until then? Mr. Perron: We felt that the system was ready at that point for our marketing efforts. We feIt that we could take the full demand of customer requests, answering the calls, providing the installations, providing good customer support, at a macro level, regardless of the demand that we got. Mr. Deitsch: You were not ready to do that on December I? Mr. Perron: We were ready to do that on December 1. We were ready to make installations and show that the service was available. That's one of the main reasons we went to City Hall, because, we actually wanted to show by having the cable modem up and working, connected to a PC in City Hall, that it works. It's here. Mr. Deitsch: That's all I have, Mayor. Thank you. Mayor Kovacic: OK, any other questions? Thank you, Mr. Perron: (Beginning of Tape 2, Side A) Mayor Kovacic: Ms. Marshall, do you have a question? Ms. Marshall: I just wanted to ask him if they thought about making their phone numbers on their bills and on their information a little clearer, so people know where they're supposed to Page 33 I I I I I I call? Seems like there is confusion as to phone numbers and whom you call for what and stuff. Sounds like you need to make a clarification on that. Councilmember Roger Chandler: Ms. Marshall, the phone number for complaints is 574- 7171. I have it memorized, as I do the Police Department's number, which is 5150. 574-7171. I might add, I've been calling that number going way, way back through several cable companies. It seems to be an occupational problem, transmission difficulties. Mayor Kovacic: We're still having a public hearing, although it doesn't look like it. Does anyone else want to address the City Council on this matter? Mr. Dave Flynn: Mr, Mayor and City Council, I'd just like to state my experience with the modem. Mayor Kovacic: Could you give your name, please? Mr. Flynn: My name is Dave Flynn, and I have a small business in Arcadia, Oxford VUE. And about midsummer, I noticed that they were physically installing the cable on the pole, and I started making phone calls, tracking down, OK, I want a connection. And I didn't take no for an answer. I kept calling until I found the right person. And I've had the Internet connection now for several months, since mid-November, I think. And it's fast. It's really nice. And as far as installation, it was a matter of just take the modem out of the box and plug it in. I like it. It's literally two orders of magnitude faster than dial-up. I get 220 Kbytes per second. Mayor Kovacic: So what you're saying is, you got the connection from Adelphia in November? Mr. Flynn: I think it was mid-November or beginning of December, yeah. Mayor Kovacic: How's your Channel2? Page 34 Mr. Flynn: We don't have any television, I don't know, I couldn't get GTE to move, I could not get an Internet connection from GTE at all. I was just, anybody who wil1 give me Internet, I wil1 go with. Mayor Kovacic: OK, thank you, Mr. Flynn. Would anyone else like to address the City I Council? Is there any motion to close the public hearing? Mr. Deitsch: Mayor, before the public hearing is closed, a formality, if! may. The Municipal Code requires that any documents be introduced formally by way of evidence and marked and submitted actually to the City Clerk for such purposes. I'd like to do that after the hearing, but at least mention the documents that would be part ofthe written record. Mayor Kovacic: Please. Mr. Deitsch: The Council has items 1 through II as part of its agenda report. Of course, the Staff report, as well, should be part of the record. That should be marked Exhibit 12. Something that should be marked Exhibit 13, which I'd like to formally introduce as part of the written I record here, is a series of e-mails among City Staff regarding the availability of two-way high speed Internet service through Adelphia at certain City facilities. And another document to be marked Exhibit 14 would, I believe it's reasonable, be the letter from Highlands Homeowners Association dated February 16, addressed to the City Manager Bil1 Kelly, with attachments. In introducing that, I note it's for the Council to weigh evidence and determine relevancy, and it's arguable that that letter doesn't pertain to compliance with Section l5(b) of the franchise agreement. However, it has been submitted to the City and therefore should be marked as an exhibit for this heaTing. And then finally, at the request of Mr. Robert Witthauer, Acting Assistant General Counsel for Adelphia, which request he made to me over the phone today and I Page 35 I I .,' ~ then faxed documents in support of his request. He has asked me to submit into the record a series of documents which Adelphia wishes to offer, and I believe we should mark that Adelphia Exhibit A, which is cover fax sheet dated February 19, 2001, that's yesterday at 4:30 p.m., which was actually faxed to me at City Hall today. And attached to it is a letter dated February 19, 2001, from Mr. Witthauer to me as City Attorney, together with attachments that support purportedly Adelphia's position in this hearing. Thank you, Mayor, Mayor Kovacic: Thank you, and seeing no objections, we'll submit those documents as part of. the record, or receive those documents as part of the record. Would anyone else like to address the City Council on this matter? Is there a motion to close the public hearing? Mayor Pro Tem Segal: So moved. Ms. Marshall: Second. Mayor Kovacic: OK, we have a motion by Segal, second by MarshalL Seeing no objection, the public hearing is closed. Time for discussion. Mr. Deitsch, I'd like you to kind of help us with this. What is it, exactly, we're trying to establish or not establish by the evidence presented tonight? And if you have an opinion one way or the other, as far as whether a breach was committed, I'd like to receive that opinion, as well. Mr. Deitsch: Mayor, in question is Section 15(b) of the franchise agreement, which requires Adelphia, within two years of the entry into the franchise agreement, Adelphia has indicated tonight they believe that date was June 8, I believe it's June 18, actually, in the sense willing to give Adelpjlia a ten-day break on that, that Adelphia has to have activated capabijity throughout the entire cable system to transmit cable services in two directions simultaneously, with the 'addition of return modules, and shall be capable of supporting high speed Internet access I services. The City has had reason to believe, and therefore we had this hean.ng tonight, that Page 36 Adelphia failed to do that by June 18. But beyond that, the City entered into a series of communications, mainly by letters from the City Attorney's office to Adelphia, between June 21st and December 22nd, in which the City said the City believes Adelphia has not complied with Section l5(b), and requested that Adelphia provide evidence supporting that it had complied.' . And it is the City's position that Adelphia has totally failed to provide any evidence. And you I heard a certain line of questioning and answering tonight about that between the City Attorney and Mr. Perron. But in short, the question is whether Adelphia has built that two-way high speed Internet access, and the City's willing to live by a December I deadline for having done so, based on what the City is willing, for purposes of this proceeding, anyway, to say was the extended deadline: December 1 for the completion of that, and the launching of that, two-way high speed Internet access. I Mayor Kovacic: And what is your opinion on the compliance date? Mr. Deitsch: Well, I think that's a very generous compliance date. Whether or not compliance has been achieved, I think, is open to question. And my recommendation tonight, as your City Attorney, would be to continue this item. You've already closed the public hearing and that's fine and sufficient. But continue this item until at least the very next Council meeting or perhaps two Council meetings from now, within which time perhaps the City might wish to accept Mr. Perron's suggestion that there be a meeting, and perhaps with the opportunity for Mr. Perron to bring with him better evidence, perhaps the evidence requested repeatedly by the City, regarding compliance by Adelphia with Section 15(b). Mayor Kovacic: "OK, and just for my own clarification, why the confusion about the . compliance date between June 18 and December I? Is it because ofa series of letters that went I Page 37 I I back and forth between Staff and Adelphia? Those letters may have served to amend the contract as far as compliance? M;r. Deitsch: Wel1, that's true. There is no confusion, in my opinion. It was simply a matter of ongoing negotiation. Mayor Kovacic: So, in your opinion, what is the compliance date? June 18? Mr. Deitsch: Although that was the original compliance date, the City is willing to live with the extended deadline of December I as the compliance date for purposes of your determination. Mayor Kovacic: So the issue facing the City Council is whether they provided this two-way high speed Internet access by December I, 2000. Mr. Deitsch: Correct. Mayor Kovacic: Questions? Mr. Chandler. Mr. Chandler: For the City Attorney, probably. What is it we're, it says in here that we could recover costs. It seems to me that probably the biggest concern with Adelphia cable is reception and things like that, you know, that are at-home interference. And it's quite apparent that the agreement is in question as to whether they hita deadline. What is it we're seeking? .Clearly they have this service available now. I, myself, made a cal1 in February and while I needed to get a return call, I did get a return call, and they were ready to install on February I st. So clearly, and we have some testimony that people are receiving that service now. So what are we, do we want to break the contract with them? Do we want to fine them? Do.we want them to give us money? Do we want them to refund customers? What do we want from this? I mean,. they're giving this service now. And it's perhaps later than we'd agreed, Mr. Deitsch: Mayor, first, it's important to remember that Adelphia has the obligation to I provide that service citywide, not just to one home or not one quadrant in the City, by way of Page 38 example, but citywide. And as I pointed out, Section 27 of the agreement actually provides the proof that Adelphia is required to submit without the City even asking that such service is available, and the City did ask repeatedly and Adelphia admittedly tonight, through Mr. Perron's testimony, has failed to provide that. So that's by way of background. This hearing tonight also deals not with TV reception, but with two-way Internet access, So the City Attorney has to advise the Council that in rendering a decision tonight, the hearing is limited to the issue of compliance with two-way,high speed Internet access construction. Finally, you've touched upon remedies that are available if you find there's a default. And I think they're spelled out pretty well in the staff report, and Ms. Rowe testified to that earlier through her rendition of the staff report. And the penalties include such things as, and they're cumulative, by the way, you could choose one or more if you find they are in default. On the other hand, you can find that they're not in default and penalties, of course, don't apply. But, for example, Adelphia has submitted as required by law a deposit with the City. And if you find there's a default you can draw down on that deposit, which I believe is in the amount of $50,000, $30,000, that amount of the deposit that you feel is reasonable and sufficient to make up for the default of Adelphia in complying with 15(b) if you find there is a default. Liquidated damages in the amount of $1 ,000 per day, commencing with December I, may be imposed by the City Council. In addition, the Council could immediately terminate the franchise agreement if you wish. Or, you could impose a penalty of non-renewal, right now, even though there's a provision in the agreement that provides that it is renewable for a term ofthree years. Or you can reduce the current term of the franchise by four months, and reduce the term of the franchise agreement in addition by four days for each day beyond December I, that Adelphia may have Page 39 I I I I failed to comply with 15(b) of the agreement. These are all the remedies that are available to you, if you find there's a default, Mr. Chandler: OK, some pretty heavy stuff. Now their attorney has requested a two-week stay so that he can argue with you and staff, or provide more information. It seems to me that would be a prudent thing to do, and before further discussion occurs, I would like to suggest to the rest of the Council that we do allow that, two weeks, excuse me, four weeks. It seems that the issues are pretty serious here. On the face of things, it doesn't seem too serious, what's the big deal, a couple of months? Because I'm sure that not everybody in town was asking for this service, or even knew that it was available. But clearly, there's an issue about the contract. So I would, you know, it's my turn to talk, I would suggest to Council, or make a motion, that we do, indeed, allow a continuance for further information to be provided by Adelphia. Four weeks, five weeks, I whatever the staff would recommend. Mayor Kovacic: I think our City Attorney suggested two meetings. So that would be four weeks. March 20th? OK, we have a motion. Is there a second? Mayor Pro Tern Segal: I'll second. Mayor Kovacic: OK, it's been moved by Chandler and second by Segal to continue this, determination of this matter to March 20th. Is there any further discussion. I have one question before we vote, Are we satisfied, is staff satisfied, is our consultant satisp.ed, is the City Attorney satisfied that they are now in compliance with the contract, ,and we're only talking . . about a delay in compliance? Or is it staff s position that they are still not in compliance with the contract? Ms. Rowe: Mr. Mayor, we wouldn't be here.at all tonight if we had received the information, I the proof that we requested. We're here as a watchdog for our commwlity, and I think that our Page 40 residents went through a very long and painful rebuild. They were very patient. And this was part of that that was supposed to happen for them based on a needs assessment. And had we received the information, as I said, we wouldn't be here before you this evening. Mayor Kovacic: OK, and there's still information you haven't received? OK. Any further discussion? Hopefully this four-week period will allow that information to come forward, and maybe Adelphia to come up with some creative solutions. Roll call, please. Roll Call: Ayes: Chandler, Chang, Marshall, Segal and Kovacic. Noes: None Absent: None Mayor Kovacic:, Yes. OK, thank you, staff and public. I I I Page 41