HomeMy WebLinkAboutSeptember 21, 1999iA N N O T A T E D •
A G E N D A
Arcadia City Council
and
Redevelopment Agency
Meeting
September 21, 1999
6:OOp.m.
Council Chamber Conference Room
r MEN
of W
ACTION
For lack of a quorum the 6:00 p.m. meeting adjourned to 6:30 -p.m. this date.
ROLL CALL: Council Members Harbicht, Kovacic, Marshall, Roncelli and Chandler Excused Council -
member Kovacic
1. TIME RESERVED FOR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS
THE CITY COUNCIL (NON- PUBLIC HEARINGIFIVE MINUTE TIME LIMIT PER
PERSON) RE: 6:OOP.M. SESSION No one spoke
2. CLOSED SESSION
a. Pursuant to Government Code Section 54956.9(b) to discuss significant At 6:33 p.m. the
exposure to litigation (one potential case). Council RECESSED
to Closed Session
RECONVENED in the
7:00p.m. Council Chambers
Council Chamber at 7:00 p.m.
INVOCATION First Counselor, P. Thomas Crawford, Church of Jesus Christ of Latter Day Saints
PLEDGE OF ALLEGIANCE Donald Penman, City Manager Pro tem /Director of ,Development Services
ROLL CALL: Council Members Harbicht, Kovacic; Marshall, Roncelli and Chandler Kovacic Excused
(Arrived at 7:38)
3. SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS See Minutes
MOTION: Read all Ordinances and Resolutions by title only and waive Adopted 4 -0
reading in full.
4. PRESENTATION to Amber Bogue for outstanding service to the community.
6. PRESENTATION to George Weckerle for outs tanding.service,to the, community..
6. PRESENTATION to California Gold soccer team.
Agenda Item lla. Recommendation to adopt Resolution No. 6141 (See Pg. 3) _Adopted 4 -0
7. TIME RESERVED FCR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS
THE CITY COUNCIL (NON- PUBLIC HEARING/FIVE MINUTE TIME LIMIT PER
PERSON) None
. . .. t
i
ACTION
8. MATTERS FROM ELECTED OFFICIALS
City Council Reports/ Announcements /Statements /Future Agenda items see Minutes
RECESS CITY COUNCIL
9. MEETING OF THE ARCADIA REDEVELOPMENT AGENCY
ROLL CALL: Agency Members Harbicht, Kovacic, Marshall, Roncelli and Chandler All Present
a. Minutes of the September 7, 1999 Regular Meeting. - _AQproved 5 -0
ADJOURN the Redevelopment Agency to October 5, 1999 at 6:00 p.m.
RECONVENE CITY COUNCIL
10. CONSENT
a. . Minutes of the September 7, 1999 regular meeting. Approved 5 -0
b. Recommendation to award a one (1) year contract with annual contract Approved 5 -0
extensions (subject to City Council approval), in the amount of $276,228.00
to CLS Landscape Management, Inc. for the maintenance and care of
landscaped areas.
C. Recommendation to approve street closure for the Arcadia Festival of Approved:.5 -0
Bands to be held on Saturday, November 20, 1999.
d. Recommendation to award a bid in the amount of $60,569.92 to Studio Approved 5 -0
Spectrum, Inc. for the purchase of new audio /video production equipment
for the City's cable channel.
e. Recommendation to award a contract to Special T Fire Equipment, Inc. in Approved 5 -0
the amount of $34,998.00 for the purchase of five (5) self- contained
breathing apparatus units, 55 voice communication units and 28 air
cylinders for the Fire Department.
f. Recommendation to approve the Police Records Intern Program for a Approved 5 -0
one -year trial period and appropriate $26,000.00 from the Asset Seizure
Account to implement the program.
g'. Recommendation to Adopt Resolution No. 6142, A Resolution of the Adopted 5 -0
City Council of the City of Arcadia, California, establishing compensation
and related benefits for employees represented by the Arcadia Police
Officers Association (APOA) for July 1, 1999 - June 30. 2001.
2
Consent continued • ACTION
Recommendation to accept a dedication for street purposes for Parcel Approved 5 -0
Map 25110 for a four -unit condominium project at 505 S. Second Avenue.
li il!d III CAi4 /_1: ETC] =1N
a. Recommendation to Adopt Resolution No. 6141, A Resolution of the Adopted 4 -0
City Council of the City of Arcadia, California, approving the transfer of
ownership and control of the cable television franchise from Century -TCI
California, L.P. (Transferor) to Adelphia Communications Corporation
(Transferee).
b. Recommendation to provide direction on a request from the Arcadia Girls Approved 5 -0
Senior Softball Team for a contribution of $500.00 to help defray the cost
of traveling to the Western Regional Tournament in Boise, Idaho.
12. CITY ATTORNEY
a. Recommendation to Adopt Ordinance No. 2116, An Ordinance of the Adopted 5 -0
City Council of the City of Arcadia, California, approving zone change
Z -99 -004 from R -1 (Single - Family Residential 0 -6 du /ac) to R -3 (Multiple
Family 24 du /ac) maximum at 615 W. Duarte Road,
ADJOURN CITY COUNCIL to October 5, 1999 at 6:00 p.m. in memory of Dolly Cordano ADJOURNED at
and Alyce Jones. 8:00 p.m. in
Memory of
Dolly Cordano &
Alyce Jones
STAFF REPORT
POLICE DEPARTMENT
DATE: September 21, 1999
TO: Mayor and Members of the City Council
FROM: David H. Hinig, Chief of Police ®
By: Nancy Chik, Management Anlyst,12
SUBJECT: Report and Recommendation to Approve Street Closures for the Arcadia
Festival of Bands to be held on Saturday, November 20, 1999.
SUMMARY
This report requests the City Council approve the closure of specific City streets for the
Arcadia High School Music Club's 46th Annual Festival of Bands on Saturday, November
20, 1999.
DISCUSSION
Forty-four of the top California high school bands have been invited to attend and
participate in the 46th Annual Festival of Bands. We have confirmed with the City Attorney
that the appropriate insurance binders have been issued to properly protect the City.
The proposed route will have the bands exit Gate 1 from the Racetrack onto westbound
Huntington Drive, southbound on Baldwin Avenue to eastbound Camino Real Avenue. At
this point, the bands board their buses on the residential streets between Duarte Road and
Norman Avenue and are taken to Arcadia High School. Parade awards are given at the
High School and then the bands move to Citrus College in Glendora for the Field
Competition.
Arrangements have been made for the temporary posting of "no parking" signs in the
staging and ending areas of the parade. Posting will occur the evening before the event.
The Police Department provides parade route security for the event and Maintenance
Services supplies barricades and assistance in preparation for street closure and traffic
diversion.
IMPACT AREA
The request covers the closure of Baldwin Avenue from Huntington Drive to Camino Real
Avenue, the residential streets bordered by Duarte Road and Norman Avenue, and Holly
LASER IMAGED
e,9 -'V io -�
Avenue and Baldwin. The closure in west Arcadia will be from 8:30 a.m. to approximately
1:00 p.m. Closure of Campus Drive is required from 1:00 p.m. until 4:00 p.m.
The Arcadia High School Music Club will notify the business community as well as the
affected residential area by delivering letters to all who are impacted by this event.
FISCAL IMPACT
The police budget allows for an expenditure of $5,000 to cover Police Department overtime
expenses for this activity. The actual cost cannot be determined until the event is complete,
as salaries differ from employee to employee, but the expense should not exceed the
budgeted amount.
RECOMMENDATIONS
It is recommended the City Council approve the closure of certain City streets for the
46th Annual Festival of Bands on Saturday, November 20,1999.
Approved:
William R. Kelly, City Manager
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STAFF REPORT
OFFICE OF THE CITY MANAGER
DATE: September 21, 1999
TO: Mayor and City Council
FROM: William R. Kelly, City Managerw``
SUBJECT: RECOMMENDATION TO PROVIDE DIRECTION ON A REQUEST FROM
THE ARCADIA GIRLS SENIOR SOFTBALL TEAM FOR A
CONTRIBUTION OF $500.00 TO HELP DEFRAY THE COST
OF TRAVELING TO THE WESTERN REGIONAL TOURNAMENT IN
BOISE, IDAHO
SUMMARY
At the September 7, 1999 City Council meeting, the City Council directed staff to place on a future
agenda the matter of providing a contribution of $500.00 to the Arcadia Girls Senior Softball Team
to help defray some of the costs they incurred to travel to the Little League Western Regional
Tournament.
DISCUSSION
Under the direction of Rick Beaston, Gary Bohonus and Steve Jones, the Arcadia Girls Senior
Softball Team accomplished something that no other San Gabriel Valley team has done, at least
since the 1960's. The team worked their way through Section I and Division III tournaments and
won the right to travel to Boise, Idaho to compete in the 1999 Little League Western Regional
Tournament where they won the State Title and finished second in the Western Region.
Through Mayor Pro Tern Harbicht, the team has requested a contribution of $500.00 from the City
to help defray their costs to travel to Boise. The City Council has traditionally been very supportive
of youth activities, both in sports and academics. In fact, on several occasions the City has made a
monetary contribution to the Arcadia High School Constitution Team to assist with their travel
expenses to the State and /or natio.ial level of the "We The People, the Citizen and the
Constitution" competition. Thus, there s some precedent for providing financial assistance to local
youth groups who must travel a signifi; ant distance to participate in a higher level of competition.
FISCAL IMPACT
Approval of this contribution will require an appropriation from the General Fund.
RECOMMENDATION
It is recommend that the City Council provide direction to staff concerning the proposal to
contribute $500.00 to the Arcadia Girls Senior Softball Team. If the contribution is approved, the
Council should also authorize an appropriation of the same amount from the General Fund.
aj � LASLR IMAGED
C. /,n. i 16.
STAFF REPORT
ADMINISTRATIVE SERVICES DEPARTMENT
SEPTEMBER 21, 1999
TO: MAYOR AND CITY COUNCIL
FROM: JAMES DALE, ADMINISTRATIVE SERVICE DIRECTOR
PREPARED BY CAROL A. PRZYBYCIEN, HUMAN RESOURCES
AND RISK MANAGER
SUBJECT: RECOMMENDATION TO ADOPT RESOLUTION NO. 6142
ESTABLISHING COMPENSATION AND RELATED BENEFITS
FOR EMPLOYEES REPRESENTED BY THE ARCADIA POLICE
OFFICER ASSOCIATION (APOA) FOR JULY 1, 1999 — JUNE 30,
2001
SUMMARY
Resolution No. 6142 establishes terms of employment and compensation for City
employees represented by the Arcadia Police Officer Association (APOA).
Pursuant to the Meyers - Milias -Brown Act, the City has met and conferred in good
faith concerning wages, benefits and working conditions with the APOA. City
Council ratification of the agreed upon addendum to the Memorandum of
Understanding (MOU) is required.
DISCUSSION
City staff and the labor negotiator representing the City Council have completed
discussions with the negotiating committee of the APOA. The Resolution
presented for ratification reflects a continuation of past compensation of benefits
and three new compensation items of agreement. Other issues not presented
below shall remain in full force and effect as set forth in the existing
Memorandum of Understanding. The proposed term of the agreement is through
June 30, 2001. The conditions of the agreement were approved by the APOA on
August 24, 1999.
The City conducted a classification and compensation study which was
competed by Personnel Concepts, Inc. in March, 1999. The MOU reflects the
implementation of that study. This is accomplished by the placement of
employees on the step of the new 10 step salary schedule which is closest to
a LASER NAGED
C 0 .4/. 16 011
September 21, 1999
Recommendation to approve resolution No. 6142
Page 2
that individual's base rate. As described in the MOU, employees on E step of the
current salary schedule shall advance to J step on the 10 step salary schedule.
Effective January 2, 2000, the salary schedule shall be improved by 2.5 %.
Effective July 2, 2000, the salary schedule will be improved 3.0% for the
represented employees.
The City will contract with PERS to provide for the option permitting employees to
purchase service credit for military service.
The City will provide for reimbursement of clothing expenses for represented
employees in specific assignments.
FISCAL IMPACT
Sufficient funds are available to implement the salary changes detailed in the
Memorandum of Understanding.
RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 6142 a
Resolution of the City Council of the City of Arcadia, California, approving
Memoranda of Understanding for Employees represented by Arcadia Police
Officer Association (APOA) for July 1, 1999 — June 30, 2001.
AP,P�RnOOVE
William R. Kelly, City Manager
` *OPit pORAT69' STAFF REPORT
FIRE DEPARTMENT
DATE:
TO:
FROM:
SUBJECT:
SUMMARY
September 21, 1999
Mayor and City Council
Pete Bonano, Fire Chief
Prepared by: Richard Brown, attalion
Reviewed by: Jan Steese, Purchasing
REPORT AND RECOMMENDATION
SPECIAL T FIRE EQUIPMENT, INC.,
FOR THE PURCHASE OF FIVE
APPARATUS UNITS, FIFTY -FIVE
AND TWENTY -EIGHT AIR CYLINDER
Chief
Office
TO AWARD A CONTRACT TO
IN THE AMOUNT OF $34,998.00
SELF CONTAINED BREATHING
OICE COMMUNICATION UNITS
S FOR THE FIRE DEPARTMENT
This purchase is phase II of the Fire Department's SCBA upgrade. It is recommended
that the City Council award a contract for the purchase of Self Contained Breathing
Apparatus units to Special T Fire Equipment, Inc., in the amount of $34,998.00. Funds
have been previously budgeted in the Equipment Replacement Fund in Fiscal Year
1999 -2000 for this acquisition.
DISCUSSION
In Fiscal Year 1998 -1999, the Fire Department purchased thirty -five self contained
breathing apparatus units (SCBA's) in the amount of $88,000.00. This purchase was
phase one of a two -phase acquisition to replace and upgrade the department's SCBA
units. A sole source contract was awarded to Special T Fire Equipment for this
purchase. To complete the upgrade, staff recommends the purchase of five complete
SCBA units, fifty -five voice communication units, and twenty -eight high - pressure air
cylinders. With this purchase, the Fire Department will have state -of- the -art breathing
apparatus to protect the firefighters when working in toxic environments.
FISCAL IMPACT
Funds for the purchase of the self contained breathing apparatus units have been
budgeted in FY 1999 -2000 in the amount of $35,500.00, in the Equipment Replacement
Fund (projects 4122020 & 8122010). Included in this bid is a trade -in allowance of
$7,365.00 for the old SCBA units the Fire Department will not use following the
transition to the new units.
1
M
Mayor and City Council
September 21, 1999
RECOMMENDATION
E5
It is recommended that the City Council: Award a sole source contract for the
purchase of five self contained breathing apparatus units, twenty -eight high
pressure air cylinders and fifty -five voice communicators to Special T Fire
Equipment, Inc., in the amount of $34,998.00, from the Equipment Replacement
Fund, and authorize the City Manager to execute said contract in a form approved
by the City Attorney.
Approved By: '—wrDw
William R. Kelly, City Manager
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4.R„zs9-se STAFF REPORT
OFFICE OF THE CITY MANAGER
DATE: September 21, 1999
TO: Mayor and City Council
FROM: William R. Kelly, City Manager —
Linda Garcia, Special Projects Manager ,J •
By: Jason E. Corona, Video Technician/Office Assistant ty6.
SUBJECT: RECOMMENDATION TO AWARD A BID IN THE AMOUNT OF
OF $60,569.92 TO STUDIO SPECTRUM, INC. FOR THE
PURCHASE OF NEW AUDIONIDEO PRODUCTION EQUIPMENT
FOR THE CITY'S CABLE CHANNEL
SUMMARY
As part of the cable franchise, the City has received $393,000 for the purpose of
"community needs". Staff is proposing to use $60,569.92 of this money to replace the
City's outdated audio/video production equipment.
BACKGROUND
As part of the franchise agreement with TCI Cablevision, Inc., the City received a grant
to pay for the purchase and installation of equipment to broadcast City Council
meetings. The City was also given a designated channel to use for government access
• purposes (channel 20). Since that time, channel 20 has broadcast City Council
meetings on a regular basis and has filled the remainder of the time by airing
informational videos, educational programs and a Community Bulletin Board. Over time,
channel 20 has become a popular vehicle to disseminate information to the community.
The Community Bulletin Board in particular receives strong support from the public, as
has the airing of City Council meetings.
Since the purchase of this equipment in 1994, audio/video production has changed
considerably from film and videotapes to computers and digital systems. Most of the
existing equipment has become obsolete or is simply incompatible with the new
technology. We have experienced many problems with the existing equipment due to
malfunctions because of age and use. The Community Bulletin Board has run for 24
hours a day for almost five (5) years. In fact, we frequently run out of memory storage
space on the Bulletin Board resulting in less information provided to the community.
�G AA/- /0 G/,
Mayor and City Council
September 21, 1999
Page 2
•
The new equipment will allow for the Community Bulletin Board to be expanded, more
current and have a nicer appearance. This equipment will increase our efficiency,
quantity, as well as quality of work. Because of the improved editing capability we will
be able to air more programs on a daily basis and the time between filming and
broadcast will be lessened. Staff recommends that we purchase this equipment so that
we can keep up with new technology and avoid any further malfunctions.
DISCUSSION
Channel 20 is an informational and educational tool. However, until receiving the grant
referenced above, the budget has not been sufficient to purchase replacement
equipment to meet community-programming needs.
Bids were solicited bids from three (3) companies who specialize in audio/video
production equipment. Sealed bids were opened and read publicly with the following
results:
Bidders/Company Name Total Amount
Band Pro FilmNideo Inc. No Bid
Hoffman Video Products $78,346.10
Studio Spectrum Inc. $60,569.92
Studio Spectrum Inc., the company that installed our current equipment, submitted the
lowest responsive bid. Included in their bid is computer hardware and software, support
programs with custom configuration and optimization, full on-site installation, minimum
of four (4) hours of in-service training of at least two (2) City of Arcadia employees, one-
year of software upgrade packages and technical phone support. All equipment will be
compatible with the City's existing equipment and will be rewired to interface with such
equipment in the control room at no additional charge.
Staff has reviewed the bid submitted by Studio Spectrum Inc. and determined it to be
satisfactory. It is recommended that the City Council award the bid for the purchase of
new audio/video cable equipment to Studio Spectrum, Inc.
.
Mayor and City Council
September 21, 1999
Page 3
•
FISCAL IMPACT
There is no fiscal impact to the General Fund. The funds used for the purchase of this
equipment can only be used for "community needs" relative to cable television.
RECOMMENDATION
Staff recommends that the City Council award a bid in the amount of $60,569.92
to Studio Spectrum, Inc. for the purchase of new audio/video production
equipment for the City's cable channel.
s i
_° STAFF REPORT
OFFICE OF THE CITY MANAGER
DATE: September 21, 1999
TO: Mayor and City Council
FROM: William R. Kelly, City Manager --
Linda Garcia, Special Projects Manager '.
By: Jason E. Corona, Video Technician/Office Assistant C/ C
SUBJECT: RECOMMENDATION TO AWARD A BID IN THE AMOUNT OF
OF $60,569.92 TO STUDIO SPECTRUM, INC. FOR THE
PURCHASE OF NEW AUDIONIDEO PRODUCTION EQUIPMENT
FOR THE CITY'S CABLE CHANNEL
SUMMARY
As part of the cable franchise, the City has received $393,000 for the purpose of
"community needs". Staff is proposing to use $60,569.92 of this money to replace the
City's outdated audio/video production equipment.
BACKGROUND
As part of the franchise agreement with TCI Cablevision, Inc., the City received a grant
to pay for the purchase and installation of equipment to broadcast City Council
meetings. The City was also given a designated channel to use for government access
purposes (channel 20). Since that time, channel 20 has broadcast City Council
meetings on a regular basis and has filled the remainder of the time by airing
informational videos, educational programs and a Community Bulletin Board. Over time,
channel 20 has become a popular vehicle to disseminate information to the community.
The Community Bulletin Board in particular receives strong support from the public, as
has the airing of City Council meetings.
Since the purchase of this equipment in 1994, audio/video production has changed
considerably from film and videotapes to computers and digital systems. Most of the
existing equipment has become obsolete or is simply incompatible with the new
technology. We have experienced many problems with the existing equipment due to
malfunctions because of age and use. The Community Bulletin Board has run for 24
hours a day for almost five (5) years. In fact, we frequently run out of memory storage
space on the Bulletin Board resulting in less information provided to the community.
1
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Mayor and City Council
September 21, 1999
Page 2
The new equipment will allow for the Community Bulletin Board to be expanded, more
current and have a nicer appearance. This equipment will increase our efficiency,
quantity, as well as quality of work. Because of the improved editing capability we will
be able to air more programs on a daily basis and the time between filming and
broadcast will be lessened. Staff recommends that we purchase this equipment so that
we can keep up with new technology and avoid any further malfunctions.
DISCUSSION
Channel 20 is an informational and educational tool. However, until receiving the grant
referenced above, the budget has not been sufficient to purchase replacement
equipment to meet community-programming needs.
Bids were solicited bids from three (3) companies who specialize in audio/video
production equipment. Sealed bids were opened and read publicly with the following
results:
Bidders/Company Name Total Amount
Band Pro Film/Video Inc. No Bid
Hoffman Video Products $78,346.10
Studio Spectrum Inc. $60,569.92
Studio Spectrum Inc., the company that installed our current equipment, submitted the
lowest responsive bid. Included in their bid is computer hardware and software, support
programs with custom configuration and optimization, full on-site installation, minimum
of four (4) hours of in-service training of at least two (2) City of Arcadia employees, one-
year of software upgrade packages and technical phone support. All equipment will be
compatible with the City's existing equipment and will be rewired to interface with such
equipment in the control room at no additional charge.
Staff has reviewed the bid submitted by Studio Spectrum Inc. and determined it to be
satisfactory. It is recommended that the City Council award the bid for the purchase of
new audio/video cable equipment to Studio Spectrum, Inc.
4 1.
Mayor and City Council
September 21, 1999
Page 3
FISCAL IMPACT
There is no fiscal impact to the General Fund. The funds used for the purchase of this
equipment can only be used for "community needs" relative to cable television.
RECOMMENDATION
Staff recommends that the City Council award a bid in the amount of $60,569.92
to Studio Spectrum, Inc. for the purchase of new audio/video production
equipment for the City's cable channel.
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71VP
ter STAFF REPORT
September 21, 1999 OFFICE OF THE CITY MANAGER
TO: MAYOR AND CITY COUNCIL
FROM: WIWAM R. KELLY, CITY MANAGER 4_16
PREPARED BY: CINDY ROWE, MANAGEMENT SERVICES C-
OFFICER AND JOHN RISK, COM M UNCATIONS SUPPORT
GROUP
SUBJECT: REPORT AND RECOMMENDATION TO ADOPT RESOLUTION
NO. 6141, APPROVING THE TRANSFER OF OWNERSHIP AND
CONTROL OF THE CABLE TELEVISION FRANCHISE FROM
CENTURY-TCI CALIFORNIA, LP. (TRANSFEROR) TO ADELPHIA
COMMUNICATIONS CORPORATION (TRANSFEREE)
BACKGROUND
The City Charter provides that there shall be no assignment of a Franchise, in
whole or in part, or change in control without the prior express written approval of
\\\, the City. Century Communications Corp.'s ("Century") submission of the Form
394 complies with the City's requirement that the Licensee petition in writing for
the City's written consent for such a proposed assignment.
The City may approve the transfer subject to such reasonable conditions as the
City may require. This gives the City the power to require information it deems
relevant to determine the qualifications of Adelphia Communications Corporation
("Adelphia") to own and operate the franchise and to require that the system be in
good working order. It also may allow the City to request that the system meet
current industry standards and to revisit the PEG access and equipment issues.
The City's approval or denial of the transfer is consistent with Federal law, which
allows the City 120 days for review.
The City's current franchisee, Cablevision of Arcadia/Sierra Madre, Inc.
("Cablevision"), submitted a Federal Communication Commission Form 394 to the
City in February, 1999, requesting approval of a transfer of the City's cable
franchise to Century-TCI California, L.P. ("Partnership"), and that transfer request
was considered and approved at the City Council meeting of August 17, 1999.
The Partnership, upon closing of the transfer, will operate the City's cable
franchise. Century Communications Corp. ("Century") will be the majority owner
of and will operate the Partnership and the Franchise.
C74/,. /f .
Century/Adelphia Merv;_..
September 21 , 1999
Page two
BACKGROUND (continued)
On March 5, 1999, Century and Adelphia Communications Corporation
("Adelphia") signed an agreement pursuant to which Century will be acquired by
and merge into Adelphia. This was followed by submission to the City on April
26, 1999 of a new Form 394 requesting the City's approval of the transfer of
control.
Adelphia, a Delaware corporation, was formed July 1 , 1986 and is headquartered
in Coudersport, PA. Adelphia was founded by its current Chairman, President and
Chief Executive Officer, John J. Rigas, who is also a Director. Mr. Rigas has
owned and operated cable television systems since 1952. Adelphia is controlled
by Mr. Rigas and members of his family. Mr. Rigas' three sons are Directors and
Officers of Adelphia.
Adelphia owns cable systems in twelve states. It also manages other cable
systems for certain partnerships owned substantially by Mr. Rigas and his family.
As of December 31 , 1998, systems owned or managed passed 3,252,830 homes
and served 2,304,325 basic subscribers. Digital video is available to 85% of .
customers by leasing or buying a converter.
Through its subsidiary Hyperion Telecommunications, Inc. ("Hyperion"), Adelphia
owns and operates one of the largest facilities based Competitive Local Exchange
Carriers in the U.S. based on route miles and buildings connected. Hyperion
designs, constructs, operates and manages state-of-the-art, fiber optic networks
and facilities, offering switched services, including local dial tone, in most of its
markets. Hyperion is a 49.9% limited partner in a partnership that won an FCC
auction of 232 31-Ghz Local Multipoint Distribution Service licenses for an area in
the eastern half of the U.S. which includes 90 million-plus population, or 38%+ /-
of the U.S. population. This service is expected to be used to deploy wireless local
loop, high-speed data transfer and video broadcasting services and to complement
Hyperion's fiber-based systems.
Power Link is Adelphia's high-speed data service to residential, institutional &
business customers. Adelphia is a full service Internet provider, offering high speed
one-way and two-way Internet access through Power Link, traditional telephone
access as an ISP, paging services, long distance service and various other voice
and data services.
All of Adelphia's operations currently are in the eastern U.S. Its cable systems
there are being upgraded. When finished, the system will average 1 fiber optic
node for 2 system plant miles (1 node/180 homes passed + /- vs. industry
standard of 500-1000 homes passed). Although Adelphia's annual report
furnished with the Form 394 states that 75%+ /- of the system will be upgraded
to 750. MHZ, 25% will remain at 550 MHZ and that 50%+ /- of Adelphia
customers are to be served by 2 way plant by the end of fiscal 1999, recent
correspondence from Adelphia's legal counsel indicates that Adelphia is in the
Century/Adelphia Merger
September 21 , 1999
Page three
BACKGROUND (continued)
process of rebuilding its entire system to 750 MHZ.
Adelphia states that its strategy is to construct and operate a broadband network,
build on its cable provider expertise and become a provider of bundled
communications services, combining cable television service with high speed data,
Internet access, paging and telephony services.
As of the fiscal year ending March 31 , 1998, Adelphia had revenues of
$528,442,000 and a net loss applicable to common stockholders of
$192,729,000. Because of acquisition costs, depreciation, amortization and
interest costs associated with continuing system upgrades and acquisitions,
Adelphia anticipates continuing losses for several years. Adelphia had 3895 full-
time employees on June 6, 1998.
Adelphia has formed Adelphia Acquisition Subsidiary, Inc. ("Subsidiary"), to merge
Century into, and Adelphia will own the Subsidiary. Century stockholders will
receive cash and stock in Adelphia for their stock in Century.
DISCUSSION
Based on a review of information submitted with the Transferor's application and
supplemental information supplied by Transferee's legal counsel, City staff and
consultant find that Adelphia possesses the legal, technical and financial
qualifications to operate the System and perform under the Franchise. A complete
listing of findings can be found in Attachment A.
The 1992 Cable Act and the associated FCC rules provide a municipality with 120
days to act on an application for consent to a transfer, otherwise the transfer is
automatically deemed approved. The 120-day period starts with the delivery to
the municipality of a complete FCC Form 394 Application for Franchise Authority
Consent to Assignment or Transfer of Control of Cable Television Franchise and
attachments that provide information on the transaction and purchaser/transferee.
The Century Form 394 package was received by the City on April 28, 1999. The
previous deadline was August 26, 1999, however this has been extended to
September 22, 1999, through mutual agreement between the City, Century and
Adelphia.
Century/Adelphia Merger
September 21 , 1999
Page four
CONDITIONS OF TRANSFER/RESERVATION OF RIGHTS
CENTURY/TCI PARTNERSHIP TO ADELPHIA
The following compliance and transfer issues remain outstanding:
1) Transferor's predecessor has underpaid Transferor's predecessor's "fee on
fee" obligations to City by $28,402.41 from April 1 , 1995 through
September 22, 1997. Transferor's predecessor and Transferor have agreed
to pay City a total of $28,402.41 to be included in the last quarterly
payment of 1999, due and payable by 2/15/2000. Upon timely payment of
such amount, Transferor's predecessor and Transferor will be in full
satisfaction of Transferor's predecessor's "fee on fee" obligation for the
period from April 1 , 1995 through August 17, 1999.
2) Transferee agrees to pay franchise fees on franchise fees, commencing on
the date of Transfer.
3) Transferee affirms its commitment pursuant to Ordinance 2084 (the
"Ordinance") to within two (2) years from the effective date of the
Ordinance transmit no less than seventy-seven (77) 6-megahertz (analog
video channels) through the utilization of no less than a 550 megahertz
activated cable plant.
4) Transferee affirms its commitment to activate capability 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 services within two (2) years from
the effective date of the Ordinance.
5) In approving this transfer, City reserves any rights it may have to impose
conditions regarding access by third parties to Transferee's cable system for
the delivery of Internet access service, and City's approval of the transfer
shall not be deemed to have waived any such rights it may have to impose
such conditions at a later date, regardless of whether a transfer or renewal
is pending at that time. Transferee likewise does not waive any right it may
have with respect to the imposition of such a condition. Prior to the
enactment or enforcement of any such requirement, Transferee shall be
provided with reasonable notice, an opportunity to be heard, and an
opportunity to present evidence on any findings made or required to be
made with respect to such a requirement.
6) Transferee acknowledges the construction schedule for the.Cable System
upgrade set forth in a letter dated June 3, 1999 to City from Kurt Taylor,
General Manager, TCI of California Los Angeles County System, as attached
to the Agreement as Exhibit B.
Century/Adelphia Merger
September 21 , 1999
Page five
7) If not already provided, Transferor and Transferee commit, pursuant to
Section 15(e) of the Ordinance, to provide.modulation and standby
powering at the following locations within 30 days for the date of this
agreement:
(a) City Hall, 240 W. Huntington Drive
(b) Police Department Headquarters, 250 W. Huntington Drive
and upon completion of the system upgrade to:
(c) Fire Department Headquarters, 710 N. Santa Anita Avenue
(d) Maintenance Service Center, 11800 Goldring Road
(e) Public Library, 20 W. Duarte Road
8) If not already provided, Transferee will install, activate, and maintain an
emergency audio override system, which by design, is not shared with any
other jurisdiction, and which permits the City to deliver audio override
programming on every channel of the System by October 1 , 1999, pursuant
to Section 15(f) of the Ordinance.
9) Transferee agrees that it will abide by the Federal privacy provisions set
forth in 47 U.S.C. [551 and applicable FCC regulations, as well as any
applicable state and local privacy regulations.
10) Transferee and Century represent and warrant that City is included in the
"Master Roll-Out Plan" attached as Exhibit C to the @Home Network
Distribution Agreement dated as of May 1 , 1998, between At Home
Corporation and CCC listing the "Service Areas" where "@Home Services"
are planned to be offered, and/or in an amendment thereto, that the
anticipated "Final Completion Date" set forth therein is on or before June 9,
2000, and that a "Service Area Plan" will be executed for implementation of
"@Home Services" in City (all terms in quotes are terms defined in the
@Home Network Distribution Agreement).
11) Transferee shall provide City within 30 days of close of the Transfer
certificates evidencing liability, automobile and workers compensation
insurance naming City as an additional insured, in accordance with Section
8 of the Ordinance, with policies meeting all requirements of Section 8 of
the Ordinance.
Century/Adelphia Merger
September 21 , 1999
Page six
Conditions (continued)
12) Transferee shall provide new Letter of Credit to City consistent with the
terms of Section 9(2) of the Ordinance, within 30 days of the close of the
Transfer.
13) Prior to commencement of any construction, Transferee shall provide
construction bond to City in an amount and form acceptable to City, per
Section 9 of the Ordinance.
14) If not already provided, Transferor and Transferee agree to provide free
basic tier service to the following public building by December 31 , 1999,
per Sections 24(c)(1) and 24(c)(2) of the Ordinance:
(a) Maintenance Service Center = 11800 Goldring Road.
15) Transferee shall maintain a local customer service center within City limits
per Section 21(c)(1 ) of the Ordinance.
16) Transferor and Transferee agree not to pass through or otherwise surcharge
any reimbursement paid to the City related to the City's review of the
Transfer in any subscriber rate.
17) Transferor shall reimburse City its reasonable administrative, consulting,
accounting and legal costs incurred in processing the application for
approval of the Transfer within thirty (30) days of receiving an invoice from
City. Notwithstanding anything to the contrary in the transfer resolution,
Transferor shall reimburse City said costs regardless of whether the Transfer
closes, in an amount not to exceed $10,000, provided approval occurs on
9/21/99.
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FINANCIAL IMPACT
Section 28 of the City's current franchise, "Costs to be Borne by Grantee", states,
in subsection (c):
The Grantee shall reimburse the City for any and all "reasonable cost"
associated with the City's administrative review and approval of transfer or
assignment of ownership, up to an amount of ten thousand dollars
($10,000). Grantor and Grantee reserve the right to increase this amount
by mutual consent.
A provision of the attached transfer agreement and condition #17 above require
reimbursement of all reasonable costs from Century with respect to the City's
transfer proceeding. Adelphia also has stated that it will reimburse the City for
Century/Adelphia Merger
September 21 , 1999
Page seven
FINANCIAL IMPACT (continued)
reasonable costs incurred in the transfer process up to $10,000. Costs are
estimated at slightly over $9,000.
RECOM M ENDATION
It is recommended that the City Council adopt Resolution No. 6141, approving the
transfer of ownership and control of the cable television franchise from Century-
TCI California, L P. (Transferor) to Adelphia Communications Corporation
(Transferee), with the conditions set forth in the Transfer Agreement and staff
report.
ATTACHMENT A
1 . Service and Operations
Neither the current terms and conditions of service nor the operations in the
system serving the City are expected to change as a result of the merger.
Adelphia will assess this once the merger is complete.
2. Personnel
Adelphia intends to retain the current Century personnel. Bill Rosendahl and
Lee Perron will be the City's principal management contacts. Engineering
issues will be handled by Dave Randolph.
3. System Upgrade/Internet and Telephony
Adelphia has not assessed the Internet and telephony situation in Arcadia,
but plans to introduce Internet and telephony as soon as it is economically
and technically feasible to do so.
4. Franchise Name/Operator
The franchise will operate under the "Adelphia" name, rather than the
Century or Century-TCI partnership name. However, the Century-TCI
partnership will continue to own and operate the system.
5. Telephone Service Regulation
Adelphia plans to provide phone service over the cable system and will
obtain local approval if required to do so.
6. Closing Date of Merger
The draft Proxy Statement/Prospectus states that the merger is expected to
be complete either by September,1999 or early in the fourth calendar
quarter. The acquisition agreement calls for an outside closing date of June
5, 2000.
7. Operating Costs
Adelphia does not anticipate any significant change in costs of operating the
Arcadia system upon assuming control.
8. System Records
Copies of the City's system records are to be retained at the system. The
balance of the records will be maintained at Adelphia's Coudersport, PA
headquarters.
•
9. Financial Information
(a) Century's projections for the Century/TCI Partnership operation,
which include the City's system, assume a cash flow margin of 45%.
The Century/TCI Partnership Five Year Operating Plan received in
connection with the Century/TCI transfer request projects operating
cash flow margins for the entire L.A. County/Arcadia system for the
year ended December 31 at 45.1% for 1999, 46.7% for 2000,
48.0% for 2001 , 49.5% for 2002 and 51 .2% for 2003.. Revenue
projections include new revenues from sales of Internet access and
pay-per-view. High speed data (Internet) penetration for the L.A.
County/Arcadia system is projected at 0.0% for 1999, 0.5% for
2000. 2.0% for 2001 , 3.0% for 2002 and 5.0% for 2003.
(b) Leonard Tow, one of the founders and principal shareholders of
Century, will buy Century's interest in Citizens Utility Company from
Adelphia at a price of $7.75 per share, the closing price on March 5,
1999. Century owns 4,647,392 shares, which were selling for
$11 .9375 on August 12, 1999. Therefore, Mr. Tow has gained
approximately $19,460,954.00 since March 5, 1999.
(c) Adelphia's assumption of Century's Employment Benefit
Arrangements is expected to cost approximately $6,000 per
employee, or an aggregate of $20,000,000.00.
(d) Adelphia believes that the City's system will benefit by Adelphia's
recent growth and system rebuilding program, notwithstanding the
cost of such acquisitions and system upgrades. Adelphia has the
ability to borrow large sums at lower interest costs and to sell enough
preferred and common stock to decrease its leverage. In addition, the
new services which will be made possible by system upgrades will
add to the revenue and cash flow of Adelphia.
(e) According to Adelphia's Form 10-K for the period April 1 , 1998
through December 31 , 1998, its revenues for the nine months ended
December 31 , 1998 were $507,155,000 and it had operating income
before depreciation and amortization of $231 ,943,000, or 45.8% of
revenues. However, interest expense and preferred stock dividends,
associated with the cost of system acquisitions and upgrades,
aggregated $233, 847,000, resulting in a net loss. After other
adjustments, Adelphia had a net loss applicable to common
stockholders of $135,848,000 and has had a net loss for the past
several years. Because of continuing acquisitions, system upgrades
and interest costs associated with these, as well as the high level of
depreciation and amortization associated with acquisitions, Adelphia
anticipates continuing net losses for the next several years.
(f) Adelphia believes that its cash and cash equivalents, internally
generated funds, borrowings under existing credit facilities and future
financing sources will be sufficient to meet its short-term and long-
term liquidity and capital requirements. Adelphia presently has
between $3 and $3.5 billion in liquidity, as illustrated in the post-
merger pro forma financial statements provided in its April 19, 1999
Form 8-K.
(g) Adelphia has provided a pro forma operating statement showing that,
as of the year ended March 31 , 1998, had its already acquired
Century and other systems it has agreed to buy and had certain other
financing transactions occurred, its revenues would have almost
tripled, while its losses would have increased approximately 2.38
times. Thus, it is gaining a significant earnings ratio advantage with
its current mergers. Although it continues to expect losses for the
foreseeable future, projections supplied by Salomon Smith Barney Inc.
to Adelphia project positive earnings before interest, taxes,
depreciation and amortization, and positive cash flow for 1999, 2001 ,
2002 and 2003.
(h) A pro forma balance sheet as of the year ended March 31 , 1999
reflecting the acquisitions and financing shows Adelphia's total assets
at $14,320,632,000, total liabilities at $10,013,183,000 and
stockholders' equity of $3,814,546,000. Appended to this
Attachment are copies of Adelphia's "Selected Pro Forma Condensed
Consolidated Financial Information" provided in its draft Proxy
Statement/Prospectus.
(i) As of March 31 , 1999, Adelphia owed approximately $3.6 billion,
which was borrowed to purchase and expand its cable systems and
other operations and, to a lesser extent, for investments and loans to
its affiliates. In addition, the Adelphia Parent Company had
approximately $148 million and a subsidiary approximately $236
million in stock that had payment obligations similar to the debt
obligations. Had all current acquisitions occurred by March 31 , 1999,
Adelphia would have had approximately $7.9 billion in debt plus $384
million in stock obligations similar to debt. This would have produced
a debt-to-equity ratio of about 2.07:1 , rising to 2.17:1 including the
debt-type stock obligations.
(j) Approximately $2.0 billion in Century debt will become part of
Adelphia's total indebtedness. Adelphia needs to obtain certain
lender consents to the merger and may need to refinance this debt.
(k) Adelphia expects to incur potentially significant integration costs in
connection with the merger, including costs for employee severance,
facilities closures and relocation and disposition of excess equipment.
(I) After acquisitions and mergers, Adelphia will have over 4.9 million
basic subscribers. Adelphia will become the sixth largest cable
operator in the U.S. with a market capitalization in excess of $7
billion.
(m) Adelphia's Class A common stock rose from $5.38 per share on
March 31 , 1997 to $56.00 per share on August 12, 1999.
(n) Adelphia will issue approximately 48.7 million shares of its Class A
common stock and pay approximately $826 million in cash for
Century.
(o) Adelphia will purchase the 50% interest in the Citizens-Century Cable
Television Joint Venture owned by Citizens Cable Company for
approximately $157.5 million, comprised of approximately $27.7
million in cash, approximately 1.85 million shares of Adelphia Class A
common stock and assumption of indebtedness. After the purchase,
Adelphia will own 100% of the Citizens-Century Cable Television
Joint Venture and, as a result, its interest in the Century/TCI
partnership will increase to 75%.
(p) Adelphia has agreed to exchange certain cable systems with Comcast
Corporation and Jones Intercable, Inc. Adelphia will receive
approximately 440,000 subscribers in Los Angeles, CA and West
Palm/Fort Pierce, Florida and will transfer systems with approximately
464,000 subscribers in other locations to Comcast Corporation and
Jones Intercable, Inc..
•
•
•
RESOLUTION NO. 6141
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA,
APPROVING THE TRANSFER OF OWNERSHIP AND CONTROL OF THE CABLE
TELEVISION FRANCHISE FROM CENTURY-TCI CALIFORNIA, L.P. (TRANSFEROR)
TO ADELPHIA COMMUNICATIONS CORPORATIONITRANSFEREE)
WHEREAS, the City s-` authorized to grant, renew and deny Franchises for the
installation, operation andmaintenance�' f cable television systems and other
services within the City' boundaries by virtue of federal and state
communications Y
statutes, by the City's rolice powers, by is authority over its public rights of way and by
other City Powers and authority; and
WHEREAS, on lay 5, 1998, the ity Council of the City approved the renewal
of a cable television franchise (the 'Fra, chise") pursuant to Ordinance 2084 for a term
of seven (7) years plus aconditional th ee year extension within the City (the
"System"); and
on Februa- 2, 19,1 9 the City Council of the City adopted
WHEREAS, � Y
Resolution No. 6088 approving he transfer of control of the Franchise to AT&T; and
WHEREAS, on August 17, 1%9, the City Council of the City adopted Resolution
No. 6134 approving the transfer of control of the Franchise to Transferor; and
WHEREAS, Transferor h s filed a written application with the City (the
"Application"), wherein it has re'uested the consent of the City to the transfer of
ownership and control of the Franchise to Transfereee(the "Transfer"); and
WHEREAS, upon completion and closing of the Transfer, including approvals by
the respective owners of Transferor and Transferee, and governmental entities (the
City, the Federal Communications Commission and the Department of Justice) as
defined herein, ownership and control of the Franchise and the System will be held by
Transferee; and
•
^
the one presented to tl ,amity of Arcadia in the transfer reqi dated April 19, 1999. If ' • '
this condition is not met for any reason, any prior approval by the City shall
automatically be null and void.
SECTION 3. The City's approval of any change of ownership and control is subject to
the further condition that Transferor, Transferee and Guarantor execute a Transfer
Agreement and Acceptance and Guarantee in form approved by the City. If this
condition is not met for any reason any-prior approval by the City shall automatically
be null and void. /
SECTION 4. This Resolutio shall be in full force and effect from and after its passage, ,-
as provided by law.
SECTION 5. The City Cler shall certify to the adoption of this Resolution.
r
Passed, approved an. adopted this2lst, day of September, 1999.
i/I Mayor
i
ATTEST: I
, \
City Clerk / ,
APPROVED AS TO FORM: N
City Attorney
-3-
•
AGREEMENT RELATING TO THE CONSENT OF THE CITY OF ARCADIA, CALIFORNIA
TO THE TRANSFER OF OWNERSHIP AND CONTROL OF THE FRANCHISE
AGREEMENT GRANTED TO CENTURY-TCI CALIFORNIA, L.P. TO ADELPHIA
COMMUNICATIONS CORPORATION
This Agreement (the 'Transfer Agreement") entered into this day of
September, 1999, between and among the City of ARCADIA, California ("City"),
CENTURY-TCI CALIFORNIA, L.P. ('Transferor"), ADELPHIA COMMUNICATIONS
CORPORATION ('Transferee"), and CENTURY COMMUNICATIONS CORP. ("CCC").
WHEREAS, City is authorized to grant, renew and deny Franchises for the
installation, operation and maintenance of cable television systems and other
communications services within City's boundaries by virtue of federal and state statutes, by
City's police powers, by its authority over its public rights of way and by other City Powers
and authority; and
WHEREAS, on May 6, 1998, the City Council of City approved the renewal of a
cable television franchise (the "Franchise") in favor of Transferor's predecessor,
Cablevision of Arcadia/Sierra Madre, Inc. ("Cablevision"), pursuant to Ordinance 2084 (the
"Ordinance") for a term of seven (7) years plus a conditional three year extension within
City (the"System"); and
WHEREAS, on March 1, 1999, City, Cablevision and AT&T entered into a "Change
of Control Agreement" wherein AT&T and Cablevision agreed to certain conditions on the
transfer of control of Cablevision as part of City's approval of the change of control; and
WHEREAS, on August 17, 1999, the City Council of City adopted Resolution No.
6134 approving the transfer of control of the Franchise to Transferor; and
•
WHEREAS, Trar iror has filed a written application City (the "Application");
wherein_it has requested the consent of City to the transfer of ownership and control of the
Franchise to Transferee (the'Transfer"); and
WHEREAS, upon completion and closing of the Transfer, including approvals by the
respective owners of Transferor and Transferee, and governmental entities (City, Federal
Communications Commission and Department of Justice) as defined herein, ownership and
control of the Franchise and the System will be held by Transferee; and
WHEREAS, CCC is a parent of the majority owner of Transferor and therefore is
willing to guarantee the obligations of Transferor and Transferee; and
WHEREAS, it is the intent of City to approve the transaction whereby the Franchise
and the System shall be ultimately held by Transferee; and
WHEREAS, the City Council of City has reviewed the Transfer as well as. all
relevant documents, staff reports and recommendations; and
WHEREAS, pursuant to the Ordinance, the Transfer is subject to written consent of
City; and
WHEREAS, pursuant to the Ordinance, City may, as set forth herein, condition the
transfer upon terms and conditions as reasonably determined by the City Council of City if
City deems it necessary to assure compliance with the terms of the Franchise, which are
enumerated below; and
WHEREAS, Section 11(h) of the Ordinance requires before an assignment is
approved by City, the proposed assignee, transferee or buyer shall execute an affidavit
acknowledging that it has read, understood and will abide by the Franchise, subject to
applicable law; and
2
•
• . WHEREAS, bm `'I upon the evidence presented the City Council, it has
determined that it.would be in the public interest to approve the Transfer as provided
herein.
NOW, THEREFORE, it is agreed by and between the parties as follows:
Section 1
A The City Council of City hereby gives its consent and approval to the Transfer
provided that Transferee assumes control of the Franchise and indirectly all of the
applicable conditions and obligations outlined in the Franchise, including any and all
conditions contained in this Transfer Agreement.
B. The granting of this consent to the Transfer does not render void or waive the right
of City to approve any subsequent change in the ownership of the Franchise or the
ownership or legal or operating control of Transferee in accordance with the terms of the
Franchise and applicable law. Consent given in this Transfer Agreement is made without
prejudice to or waiver of City's right to fully investigate and consider Transferee's financial,
technical and legal qualifications and any other relevant considerations during any future
Franchise renewal or transfer process. City waives none of its rights with respect to
Transferor's compliance with the terms, conditions, requirements and obligations set forth in
the Franchise, the Ordinance, the Change of Control Agreement and Resolution 6134,
including City's right to compel Transferor and Transferee to comply with the Franchise.
Transferee assumes responsibility for any and all disclosed and undisclosed preexisting
breaches. City's approval of the Transfer shall in no way be deemed a representation by
City that Transferor is in compliance with its obligations under the Franchise.
•
3
C. There shall be 'further material change, amendrt or modification of the
ownership ratio of Transferee without further written consent of the City Council consistent
with the franchise and applicable law.
D. By executing this Transfer Agreement, Transferee agrees and acknowledges that
under Section 625 of the Cable Act, the term "commercially impracticable" means, with
respect to a cable operator, that it is commercially impracticable for the operator to comply
with such requirement as a result of a change in conditions which is beyond the control of
the operator and the nonoccurrence of which was a basic assumption on which the
requirement was based. Transferee agrees that in judging whether particular obligations
are commercially impracticable, or whether any rate or equipment or other charge subject
to the jurisdiction of City is justified, neither the parties nor any reviewing court or agency
will consider the economic burden of debt service, debt service coverage, or equity
requirements incurred directly or indirectly to fund the Transfer to the extent such debt
service, debt service coverage, or equity requirement exceeds the.debt service, debt
service coverage, or equity requirements of Transferor, or any related entity, as they
existed prior to the Transfer.
E. By executing this Transfer Agreement, Transferee hereby accepts all the terms and
conditions of the Franchise, including, but not limited to, the Ordinance, the Change of
Control Agreement dated March 1, 1999, and Resolution 6134, and Transferee represents
and warrants that it has examined the requirements of the Franchise, the Ordinance, the
Change of Control Agreement dated March 1, 1999, Resolution 6134 and this Transfer
Agreement, and agrees to abide by all the terms and conditions thereof, as well as the
applicable federal, state, or local laws and regulations.
4
. - • F. Transferee and 2;C agree and acknowledge that the gave found the Franchise,
the Ordinance, the Change of Control Agreement dated March 1, 1999, Resolution 6134
and the other documents specified herein to be legally enforceable, valid, and binding and
accept the same without condition or reservation unless specifically preempted by federal,
state, or court order.
Section 2
Transferor and Transferee hereby covenant, represent and warrant to City, and the
parties to this Transfer Agreement agree, as partial consideration for City's approval of the
Transfer and this Transfer Agreement, as follows:
A. Cablevision has underpaid Cablevision's "fee on fee" obligations to City by
$28,402.41 from April 1, 1995 through September 22, 1997. Cablevision and Transferor
have agreed to pay City a total of$28,402.41 to be included in the last quarterly payment of
• 1999, due and payable by 2/15/2000. Upon timely payment of such amount, Cablevision
and Transferor will be in full satisfaction of Cablevision's "fee on fee" obligation for the
period from April 1, 1995 through September 22, 1997. Transferor and Transferee are
entitled to pass through said amounts to subscribers. Transferor and/or Transferee shall
pass through amounts over a period not less than 12 months. Notwithstanding anything to
the contrary herein, Transferor and/or Transferee shall pay City the aforementioned amount
pursuant to the terms set forth herein and in Resolution 6134 in the event that Cablevision
does not pay said amounts and/or in the event that the transaction fails to close.
B. Transferor agrees to timely remit, as a separate payment, all franchise fees payable
on franchise fees for the period from the date of transfer of the Franchise to Transferor
pursuant to Resolution 6134 to the date of Transfer hereunder.
5
C. . Transferee agre- o pay franchise fees on franchise f( commencing on the date . '
of Transfer. In the event the Transfer does not close, Transferor agrees to continue to pay
franchise fees on franchise fees.
D. Transferee agrees to comply with Section 15(a) of the Ordinance regarding an
obligation to transmit no less than seventy-seven (77)6-megahertz(analog video channels)
through the utilization.of no less than a 550 megahertz activated cable plant no later than
June, 2000.
E. Transferee agrees to comply with Section 15(a) of the. Ordinance to have activated
capability 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 intemet access services no later than June, 2000. Transferee and CCC represent
and warrant that Transferee will seek all necessary licenses to enable the effective roll out
of whichever high speed Internet access provider Transferee chooses to use.
F. In approving this transfer, City reserves any rights it may have to impose conditions
regarding access by third parties to Transferee's cable system for the delivery of Internet
access service, and City's approval of the Transfer shall not be deemed to have waived any
such rights it may have to impose such conditions at a later date, regardless of whether a
transfer or renewal is pending at that time. Transferee likewise does not waive any right it
may have with respect to the imposition of such a condition. Prior to the enactment or
enforcement of any such requirement, Transferee shall be provided with reasonable notice,
an opportunity to be heard, and an opportunity to present evidence on any findings made or
required to be made with respect to such a requirement. In the event that Transferee offers
open access to other high speed internet service providers in any other franchise area in
California, then Transferee will offer the same access within ninety (90) days thereafter in
6
"Arcadia. The term "hi _)speed" shall be as determined fr: time to time by industry
standards, based on then-existing technology.
G. Transferee acknowledges the construction schedule for the Cable System upgrade
set forth in a letter dated June 3, 1999 to City from Kurt Taylor, General Manager, TCI of
California Los Angeles County System, which letter is attached hereto as Exhibit "B".
Transferee will provide to City a quarterly construction report due fifteen (15) days after the
close of the quarter.
H. City acknowledges receipt of modulation and standby powering equipment at the
City Hall, Police Department, Library and Fire Department. Transferor and Transferee
agree to deliver additional modulation and standby powering equipment to the Maintenance
Service Center, 11800 Goldring Road, by October 1, 1999. If not already provided, within
30 days of this Agreement Transferor and Transferee agree, pursuant to Section 15(e) of
the Ordinance, to activate said equipment at the Police Department for the purpose of
reverse feed to the node that is to result in the ability to transmit video messages from that
facility to Channel 20. Transferor and Transferee further agree, upon completion of the
system upgrade, that the three remaining locations,' Library, Fire Department and
Maintenance Service Center, will be activated for similar purposes
I. If not already provided, Transferor and Transferee agree to comply, on or before
October 1, 1999, with Section 15(f) of the Ordinance regarding an obligation to install,
activate, and maintain an emergency audio override system, which by design, is not shared
with any other jurisdiction, and which permits the City to deliver audio override
programming on every channel of the System.
J. Transferee agrees that it will abide by the Federal privacy provisions set forth in 47
U.S.C. §551 and applicable FCC regulations, as well as any applicable state and local
privacy regulations.
7
K Transferee agreL., Rio make reasonable and good fai ;;fforts not to relocate the
City's two primary PEG channels from their existing channel locations for the life of the
Franchise. However, in the event channel repositioning becomes necessary, Transferee
agrees to pay City, without offset, recoupment or pass-through, $4,000 per channel for
reasonable costs incurred by City in creating, promoting and implementing new respective
channel identities. Transferee also agrees to provide City at least one hundred thirty (130)
days notice of any proposed repositioning of PEG channels.
L. Transferee agrees to provide City, within 30 days of close of the Transfer,
certificates evidencing liability, automobile and workers compensation insurance naming
City as an additional insured, in accordance with Section 8 of the Ordinance, with policies
meeting all requirements of Section 8 of the Ordinance.
M. Transferee agrees to provide new Letter of Credit to City consistent with the terms of
Section 9(2) of the Ordinance, within 30 days of the close of the Transfer.
N. Prior to commencement of any construction, Transferee shall provide construction
bond to City in an amount and form acceptable to City, per Section 9 of the Ordinance.
0. If not already provided, Transferor and Transferee agree to provide, on or before
December 31, 1999, free basic tier service to the following public buildings per Sections
24(c)(1) and 24(c)(2) of the Ordinance:
(a) Maintenance Service Center- 11800 Goldring Road.
P. If not already provided, pursuant to Section 24(a) of the Ordinance, Transferor and
Transferee agree to provide two channels for Education and/or Government access
programming and two additional channels upon completion of the system upgrade. "
Q. Transferee shall maintain a local customer service center within City limits per
Section 21(c)(1) of the Ordinance.
8
. • • R. Pursuant to SE 21(e)(2) of the Ordinance, Trar, ree shall provide not less
than thirty (30) days direct notice to subscribers of changes in (i) format of bills, (ii) channel
lineups, and (iii) rates.
S. In the event the billing system is to change or channel lineup is to change
Transferee agrees to provide adequate staffing and support necessary to field inquiries and
problems which may arise as a result of these changes.
T. Transferee agrees to comply with Federal, State and Local ordinances regarding
customer service provisions throughout the transition period.
U. Transferor and Transferee agree not to pass through or otherwise surcharge or
offset against franchise fees any reimbursement paid to City related to City's review of the
Transfer in any subscriber rate, consistent with Section 28(c) of the Ordinance.
V. Transferor shall reimburse City its reasonable administrative, consulting, accounting
and legal costs incurred in processing the Application within thirty (30) days of receiving an
invoice from City. Notwithstanding anything to the contrary herein, Transferor shall
reimburse City said costs regardless of whether the Transfer closes, in an amount not to
exceed $10,000, provided approval of this Agreement occurs on September 21, 1999.
Section 3
As between Transferee and City, Transferee shall, among other things, assume any and all
rate refund liability and franchise fee liability, of Transferor, for a period up to 36 months
from the effective date of this Transfer Agreement.
Section 4
Transferor, Transferee and CCC agree to defend, indemnify and hold City harmless against
any loss, claim, damage, liability and/or expenses (including, without limitation, reasonable
attorneys' fees) arising out of this Transfer Agreement and/or incurred as a result of any
representation or warranty made by Transferor, Transferee or CCC herein or in the
9
Application or in connec, l with City's review of the Transfer l :h proves to be untrue or
inaccurate in any material respect. In the event City receives any such notice of a loss,
claim, damage, liability or expense, City shall promptly notify Transferor, Transferee and
CCC, which shall, at the sole discretion of City, assume sole and direct responsibility for
defending against any such loss, claim, damage, liability or expense.
Section 5
A. Transferor, Transferee and CCC represent and warrant that this Transfer
Agreement is a valid and binding contract.
B. Execution of this Transfer Agreement by Transferor, Transferee and CCC shall
constitute their acknowledgment that City's execution of this Transfer Agreement is an
express non-waiver and reservation of City's rights to fully exercise all applicable legal
rights and authority, including levying fines or instituting litigation for trespass and
ejectment, against Transferee in connection with any unauthorized use of City rights of way
by Transferee; and an express non-waiver and reservation of City's rights and authority
against Transferor and CCC for any material franchise violations that may exist in
connection with any unauthorized use of Transferor's facilities by Transferee.
C. City hereby gives Transferee notice that the grant or Transfer of control of the
Franchise may create a taxable possessory interest upon which Transferee may be liable
for the payment of certain property taxes. Transferee hereby acknowledges that it has
received actual notice as provided by Revenue and Taxation Code Section 107.6.
D. Failure of Transferee to comply with any provision of the Franchise, the Ordinance,
the Change of Control Agreement dated March 1, 1999, or this Transfer Agreement, as
applicable, shall be deemed to be a violation of the Franchise and grounds for City to
invoke any of City's remedies under and in accordance with the Franchise.
10
• E. Transferor, Trar,/ jree and CCC shall, within ten (10; ys of the adoption of this
Transfer Agreement, file in the office of the City Clerk a written Acceptance and Guarantee
of this Transfer Agreement executed by Transferor, Transferee and CCC in the form of
Exhibit "A" attached hereto. By executing and filing the Acceptance and Guarantee,
Transferor, Transferee and CCC accept their respective obligations hereunder, Transferor
and CCC guarantee performance of all obligations hereunder, and Transferor, Transferee
and CCC agree to perform the obligations imposed upon them pursuant to the terms and
conditions of this Transfer Agreement. The Acceptance and Guarantee shall be notarized
so as to indicate that the persons executing the Acceptance and Guarantee on behalf of
Transferor, Transferee and CCC have the authority to bind Transferor, Transferee and
CCC. Failure of Transferor, Transferee and CCC to timely file the Acceptance and
Guarantee shall void the approval of the Transfer.
F. The provisions of this Transfer Agreement which are to be performed or otherwise
apply to actions occurring or to occur prior to the Transfer shall be deemed effective upon
the date of adoption of Resolution No. 6141. The balance of the terms of this Transfer
Agreement shall be deemed effective upon the closing of the Transfer. Transferee shall
provide City with written notice of the closing date within ten (10) days of the closing.
Notwithstanding the foregoing, should the Transfer fail to close by March 31, 2000, then
this Transfer Agreement shall be null and void and of no effect, except as to Sections 1.B.,
1.D., 1.F., 2.A., 2.B., 2.C., 2.G., 2.H., 2.1., 2.0., 2.P., 2.U., 2.V., 3, 4 and 5, and City's
approval of the Transfer shall lapse and expire.
G. City's approval of this transfer is subject to the condition that the shareholders,
partners and other owners, and any other outside reviewers (e.g., lenders, the Federal
Communications Commission and the Department of Justice) ultimately approve a transfer
11
not materially different, n the one presented to City in the' 'insfer request dated April
19, 1999. If this condition is not met for any reason, any prior approval by City shall
automatically be null and void.
H. This Transfer Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument. The
parties agree that this Transfer Agreement will be considered signed when the signature of
a party is delivered by facsimile transmission. Such facsimile signature shall be treated in
all respects as having the same effect as an original signature.
I. The City Manager and the City Attorney, or their designees, are hereby authorized
and empowered to execute any documents necessary, in their discretion, to implement the
approvals contained herein.
J. The parties to this Transfer Agreement agree that they will cooperate in preparing
and executing additional documentation, if any, that may reasonably be deemed necessary
by a party to effectuate the intent of this Transfer Agreement.
K This Transfer Agreement constitutes the entire agreement of the parties and may
not be' amended or modified except by written agreement of all parties affected by such
amendment or modification.
L. Except as expressly agreed to herein, each party hereto retains any rights and
obligations that it may have under federal, state or City law, resolutions or regulations. This
Transfer Agreement shall be construed in accordance with, and governed by the laws of
the State of California.
Executed this day of . 1999.
Mayor, City of Arcadia,
California
12
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
TRANSFEROR:
CENTURY TCI CALIFORNIA, L.P.
BY: CENTURY EXCHANGE, LLC,
GENERAL PARTNER
By:
Name
Title:
BY: TCI CALIFORNIA HOLDINGS, LLC,
GENERAL PARTNER
By:
Name:
Title:
TRANSFEREE:
ADELPHIA COMMUNICATIONS
CORPORATION, A DELAWARE
CORPORATION
By:
Name:
•Title:
CCC:
CENTURY COMMUNICATIONS CORP.,
A TEXAS CORPORATION
By:
Name
Title:
13
EXHIBIT A
ACCEPTANCE AND GUARANTEE OF
TRANSFER OF FRANCHISE
Subject to, and effective upon the closing of the Transfer, as defined in
Resolution No. 6141, Adelphia Communications Corporation ("Adelphia") hereby
accepts each and every term of said Resolution of the City of Arcadia, entitled:
•
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, APPROVING THE
TRANSFER OF A CABLE TELEVISION FRANCHISE FROM
CENTURY-TCI CALIFORNIA, L.P. TO ADELPHIA
COMMUNICATIONS CORPORATION
•
Dated: , 1999 ADELPHIA COMMUNICATIONS CORPORATION '
A DELAWARE CORPORATION
By:
Name:
Title:
State of )
) ss.
County of )
This Acceptance and Guarantee was acknowledged before me on the day
of • , 1999, by as
, a duly authorized officer of Adelphia
Communications Corporation, a Delaware corporation.
Notary Public for
My Commission Expires
•
14
•
CENTURY-TCI California, L.P. hereby accepts each and every term of
Resolution No. 6141 of the City of Arcadia, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, APPROVING THE
TRANSFER OF A CABLE TELEVISION FRANCHISE FROM
CENTURY-TCI CALIFORNIA, L.P. TO ADELPHIA
COMMUNICATIONS CORPORATION
•
Dated: ,1999 CENTURY-TCI CALIFORNIA, L.P.
BY: CENTURY EXCHANGE, LLC,
GENERAL PARTNER •
By:
Name:
Title:
State of )
) ss.
County of )
This Acceptance and Guarantee was acknowledged before me on the day
of , 1999, by as •
, a duly authorized of Century
Exchange, LLC, a General Partner of Century-TCI California, L.P.
Notary Public for
My Commission Expires
15
Dated: 1999 CENTURY-TCI CALIF NIA, L.P.
BY: TCI CALIFORNIA HOLDINGS, LLC,
GENERAL PARTNER
By:
Name:
Title:
State of • )
ss.
County of )
This Acceptance and Guarantee was acknowledged before me on the day
of , 1999, by as
a duly authorized of TCI California
Holdings, LLC, a General Partner of Century-TCI California, L.P..
Notary Public for
My Commission Expires
•
•
16
•
Century Communications Corp. hereby accepts each and every term applicable to it
and to Adelphia Communications Corporation and Century-TCI California, L.P. of
Resolution No. 6141 of the City of Arcadia, entitled:
•
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, APPROVING THE
TRANSFER OF A CABLE TELEVISION FRANCHISE FROM
CENTURY-TCI CALIFORNIA, L.P. TO ADELPHIA
COMMUNICATIONS CORPORATION
Dated: ,1999 CENTURY COMMUNICATIONS CORP.,
A TEXAS CORPORATION
•
By:
Name:
Title:
State of
) ss.
County of )
This Acceptance and Guarantee was acknowledged before me on the day
of , 1999, by as
, a duly authorized officer of Century
Communications Corp., a Texas corporation.
Notary Public for
My Commission Expires
17
Subject to, and effective upon the closing of the Transfer, as defined in
Resolution No. 6141, CENTURY COMMUNICATIONS CORP. ("CCC") hereby
unconditionally guarantees each and every term applicable to Adelphia
Communications Corporation, Century Partnership Holdings, Inc. and CCC of
Resolution No. 6141 of the City of Arcadia, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, APPROVING THE
TRANSFER OF A CABLE TELEVISION FRANCHISE FROM
CENTURY-TCI CALIFORNIA, L.P. TO ADELPHIA
• COMMUNICATIONS CORPORATION
CCC waives any right to require the City to proceed first against Adelphia
Communications Corporation or Century-TCI California, L.P., or pursue any other
remedy in City's power.
Dated: , 1999 CENTURY COMMUNICATIONS CORP.,
A TEXAS CORPORATION
By:
•
Name:
Title:
State of )
) ss.
County of )
This Acceptance and Guarantee was acknowledged before me on the day
of , 1999, by as •
, a duly authorized officer of Century
Communications Corp., a Texas corporation.
•
Notary Public for
•
My Commission Expires
18
. Attachment A
Selected Pro Forma Condensed Consolidated Financial Information
(Dollars in thousands except per share amounts)
In the table below, Adelphia provides you with unaudited selected pro forma condensed consolidated
financial information as if the merger, the acquisitions of FrontierVision,Harron and Telesat's interests in
Olympus and various financing transactions had been completed on April 1, 1998 for statement of operations
purposes and as of March 31, 1999 for balance sheet purposes.
This unaudited selected pro forma condensed consolidated financial information should be read in
conjunction with the separate historical financial statements and accompanying notes of Adelphia and Century -
that are incorporated by reference in this joint proxy statement/prospectus. It is also important that you read the
unaudited pro forma condensed consolidated financial information and accompanying discussion included in
this joint proxy statement/prospectus starting on page 84 under "Unaudited Pro Forma Condensed
Consolidated Financial Information." You should not rely on the unaudited selected pro forma condensed
consolidated financial information as an indication of the results of operations or financial position that would
have been achieved if the merger, the pending acquisitions of FrontierVision, Harron and Telesat's interests in
Olympus and the financing transactions had taken place earlier or of the results of operations or financial
position of Adelphia after the completion of such transactions.
Statement of Operations Data:
Nine Months Three Months
Ended Ended
December 31,1998 March 31,1999
Revenues $1,435,988 $ 540,962
Operating expenses:
Direct operating and programming 515,460 195,732
Selling, general and administrative 295,030 116,883
• Depreciation and amortization 486,479 179,329
Operating income 139,019 49,018
Interest expense—net (491,850) (174,008)
Equity in income (loss) of other joint ventures 114 (988)
Equity in loss of Hyperion joint ventures (9,580) (3,803)
Minority interest in losses of subsidiaries 16,438 10,044
Hyperion preferred stock dividends (21,536) (7,619)
Gain on sale of assets 12,401 2,315
Other (633) 1,145
Loss before income taxes and extraordinary loss (355,627) (123,896)
Income tax benefit 91,114 28,104
Loss from continuing operations (264,513) (95,792)
Dividend requirements applicable to preferred stock (44,437) (14,406)
Loss applicable to common stockholders from continuing operations $ (308,950) $(110,198)
Basic and diluted loss from continuing operations per weighted
average share of common stock $ (2.63) $ (0.91)
Weighted average shares of common stock outstanding (in thousands) 117,619 120,755
15
•
Balance Sheet Data:
March 31,
1999
Assets: .
Property, plant and equipment—net $ 3,842,500
Intangible assets—net 9,551,010
Cash and cash equivalents 172,456
•
Other assets—net 754,666
Total assets $14,320,632
Liabilities, Redeemable Preferred Stock and Stockholders' Equity (Deficiency):
Subsidiary debt $ 5,493,175
Parent debt 2,405,917
Deferred income taxes 1,612,923
Other liabilities 501,168
Total liabilities 10,013,183
Minority interests 108,376
Hyperion Redeemable Exchangeable Preferred Stock 236,293
Series A Cumulative Redeemable Exchangeable Preferred Stock 148,234
Stockholders' equity (deficiency):
Convertible preferred stock 30
Common stock 1,241
Additional paid-in capital 5,823,247
Accumulated deficit (1,802,660)
Class A Common Stock held in escrow (58,099)
Treasury stock at cost and other (149,213)
Stockholders' equity (deficiency) 3,814,546
Total $14,320,632
•
16
MkEXHIBIT B RECEIVED
TC I CITY OF ARCADIA
JUN 0 7 1999
June 3, 1999 CITY Y COUNCIL •
Ms. Cindy Rowe
City of Arcadia
240 W.Huntington Drive
Arcadia, Ca.91066-6021
Re: Franchise Agreement
Dear Cindy,
This letter is in response to the request for a construction schedule for the cable television -
system upgrade in Arcadia. TCI is planning to upgrade the physical cable television system
to a bandwidth capability of 550mhz,and is committed to meeting the deadline requirement
of June,2000. •
Attached is a phase map,with node boundaries highlighted in yellow and monthly
production phases highlighted in red. Below is a timeline showing dates and the mileage
projected to be completed in order to meet the deadline. We feel that this timeline is the
most realistic that can be developed at this time,prior to the actual design phase and prior
to the drawing up of the actual bill-of-materials.
July-August Walk-out and Engineering Assessment
Sept-December Design,BOM,Order Materials,Make Ready,Permitting -
(utility,and city permits will be pulled during this phase)
. January Complete Make Ready, Customer Notification
February Phase 1, 20 Miles
March Phase 2, 37.1 Miles
April-June Phase 3,4,5 33 Miles Each
We look forward to the project and are eager to complete the design and system upgrade.
Should you have any questions,please feel free to contact me at any time.
Sincerely,
L
! /
•
Kurt Taylor
General Manager
TCI of California
Los Angeles County System'.
15255 Salt Lake Avenue
City of Industry,CA 91745
Office: (626)961-3622•_t4;_;,"
FAX: (626)855-3385_";-
An Equal Opportunity Employer;,=
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