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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 R � c is�`o -3�J 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 .. F--. . <r 4 7 eft I 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 c,.v. /0 q!, 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. R OE'iD -3v r TYOF �46/e �rz�nc.�i.s� l•� 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. - 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;,= r--d .,/ ,,, -./1 .,:i. ,..,,,,;., .,, Trip ,..:.v......',. I , „.,. sec„,,, 5 OR I I Lit Z tli, A:.0. 1 ,.1.. ''''..;(*•.Lo‘;. I .;,-;:.. ,, r ,......1 .... Nii1,111 ,, 1!giFA CT U 5,1•:5 .....` a 4.La g st... i Pl.es / ; l t i■ .,0., titan. I:: :.,w, m i 7 '2' 9.1..'r" El :co .....j I • IS , ..... A • IS ,f, !.--, % X, :''WO _,EL.<'.% L- „RE.KT S DR ,rs Rig . r „„G„,,,,,,, c„, ...1 s ,„. ,..1 , - g \,...1. xl.., i, zoo IligwiLii.3 .1!e.97,7,-,4 ••-.,..,Inzmi_0.0 r., DArsft E AR ,10,F..s , .4.,...‹,..:::A--_ „.. , \ `2, s' I in, .,, 1,„; ....1"1„---,--1.---;--------a:,,... ,, . ,v,-, , .,, \. .,..,.. . ,..\. . 1 , , i 1. iiii.,., .\ 11. cm 'um .d... u....ma ._iff.. 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