No preview available
HomeMy WebLinkAboutFebruary 20, 2001' 1-'_~.' ~ A N N 0 T A T E D • " A G E N D A Arcadia City Council ~' and >o~„s,9..~°' Redevelopment Agency Meeting Februa y 20, 2001 4:~ p.m. Administrative Conference Room ACTION CLOSED SESSION ROLL CALL: Council Members Chandler, Chang, Marshall, Segal and KovaciC Combr. Chandler Excused TIME RESERVED FOR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS THE CITY COUNCIUREDEVELOPMENT AGENCY (NON-PUBLIC HEARING/FIVE-MINUTE TIME LIMIT PER PERSON) No one spoke a. Pursuant to Government Code Section 54957 - City Manager Annual Performance EV31UdtI01l. RECESSED to Closed Session at RECONVENED in Council 4 Chambers Conference Room, 5:40 p.m 5:$0 p.m. Council Chambers Conference Room 2. STUDY SESSION - CITY COUNCIL AND REDEVELOPMENT AGENCY ROLL CALL: Council/Agency Members Chandler, Chang, Marshall, Se~al and Kovacic coun~i~/ag~} ember Chandler Excused TIME RESERVED FOR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS THE CITY COUNCIUREDEVELOPMENT AGENCY (NON-PUBLIC HEARING/FIVE MINUTE TIME LIMIT PER PERSON) RE: 6:00 P.M. SESSION No one spoke a. Request for direction regarding expenditure of proceeds for a possible Agency Tax Allocation Bond Issue and discussion regarding General Obligation Bond Issue. Approved, in concept, the bond proceeds sale of $21.4 million - 4-0 RECESS CITY COUNCIL AND REDEVELOPMENT AGENCY RECESSED at 6:50 p.m. RECONVENED in Council Chambers at 7:00 p.m. 7:OOp.m. Council Chambers INVOCATI~NMonsignorNorman Priebe, Holy Angels Catholic Church PLEDGE OF ALLEGIANCE ROLL CALL: Council Members Chandler, Chang, Marshall, S2g81 lfld KOVBCIC Chandler Excused (Arrived at 7:30) . City Attorney announced the subjects discussed at the Study Session and Closed Session. No reportable action taken atthe Closed Session. Gary A. Kovacic, Mayor • Mickey Segal, Mayor Protempore • Roger Chandler, Dc Sheng Chang, Gail A. Marshall, Councrl Mem6ers William R. Kelly, City Manager June D. Alford. Cifv C/erk i .: • • ACTION '.. 3. SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS See Minutes MOTION: Read all Ordinances and Resolutions by title only and waive reading in full Approved 4-0 4. PRESENTATION of Proclamation declaring March Red Cross Month. Joann scocc 5. PRESENTATION to Holy Angels Scout Pack 114, Junior Girl Scout Troop 723, and Brownie Troop 274. 6. FRESENTATION of Mayor's Senior Service Award to Ruth Englert. 7. PRESENTATION of Mayor's Employee Recognition Award to Denise Weaver. 8. PRESENTATION of Mayor's Business Recognition Award to Matt Denny'S. Patrick Sweeney 9. PUBLIC HEARING All interested persons are invited to appear at the Public Hearrng and to provide evidence or testimony concerning the proposed item of consideration. You are hereby advised that should you desire to legally cha!lenge any action taken by the Ciry Council wrth respect to ~he proposed item 9a. you may be limited to rarsing only those issues and ob%ections which you or someone else raised at or prior to the time of the public hearing. Pub. Hrg. Closed a. Consideration of whether Adelphia Communications Corporation is in ('ont~n ~ a ~ default of Section 15 (b) of the Cable Television Franchise Agreement Sa~rch 20th Mtg. between the City of Arcadia and Adelphia Communications Corporation regarding two-way high speed internet access. 10. TIME RESERVED FOR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS THE CITY COUNCIL (NON-PUBLIC HEARING/FIVE-MINUTE TIME LIMIT PER PERSON) Bob Hoherd Lee Shimmin 11. MATTERS FROM ELECTED OFFICIALS City Council Reports/Announcements/Statements/Future Agenda Items see Minuces RECESS CITY COUNCIL 12. MEETING OF THE ARCADIA REDEVELOPMENT AGENCY ROLL CALL: Agency Members Chandler, Chang, Marshall, Segal and Kovacic nii Presenc TIME RESERVED FOR THOSE lN THE AUDIENCE WHO WISH TO ADDRESS THE REDEVELOPMENT AGENCY (NON-PUBLIC HEARING/FIVE-MINUTE TIME LIMIT PER PERSON) No one spoke 2 . ~ . ~ ~ ACTION 13: CONSENT a. Recommendation to retain HdL Coren and Cone; McGladrey and Pullen, LLP; BNY Western Trust Co.; and Best Best and Krieger LLP for various services in connection with the proposed sale of City General Obligation Bonds and Redevelopment Agency Tax Allocation Bonds. appro~ea 5-0 ADJOURN to March 6, 2001 at 5:OOp.m. RECONVENE CITY COUNCIL 14. CONSENT a. Minutes of the January 30, 2001 Joint City Council/School Board meeting Anvroved 5-0 and the February 6, 2001 regular meeting. b. Recommendation to approve the final map for Tract No. 53163 for a five ~pproved 5-fl unit residential condominium subdivision at 45-49 California Street. c. Recommendation to award a contract in the amount of $42,400.00 to Avuroved 5-0 Air Management Industries for HVAC duct cleaning at various City facilities. d. Recommendation to enter into a Professional Services Agreement with pnnrnvarl 5_n Cultural Resources Management (CRM) in the amount of $45,000.00 for a historic resources study. e. Recommendation to adopt Resolution No. 6212, a Resolution of the City aaontea s-o Council of the City of Arcadia, California, declaring that weeds growing upon and in front of, and brush, rubbish, refuse~and dirt upon and in front of certain private property within the City area a public nuisance, and declaring its intention to provide for the abatement thereof.(PUaLic xEnurrrc rtnxcx 6, zooi) Recommendation to adopt Resolution No. 6210, a Resolution of the nao~a s-n City Council of the City of Arcadia, California, authorizing the filing of a petition to the State Water Resources Control Board contesting trash total maximum daily loads. g. Recommendation to accept all work performed by M.W. Loyd, Inc. for ~proved s-n construction refuse/recycling bin and brick dust enclosures at various City facilities as complete and to authorize the final payment to be made in accordance with the contract documents subject to a retention of $9,484.00. h. Recommendation to authorize the City of Arcadia to release funds in the ~proved s-n amount of $11,393.00 from the Juvenile Accountability Incentive Block Grant (JAIBG) program to be expended by the Los Angeles County District Attorney for juvenile prosecution services. 3 : ~ ~ Consent continued ACTION i. Recommendation to adopt Resolution No. 6211, a Resolution of the City aaopcea 5-0 Council of the City of Arcadia, California, designating the City Manager as the authorized representative to file an application for a groundwater storage feasibility study and pilot project with the California Department of Water Resources. j. Recommendation to enter into a Professional Services Agreement with A~vroved 5-0 Construction Controls Group to provide construction management services , for the new Arcadia police facility. k. Recommendation to retain HdL Coren and Cone; McGiadrey and Pullen Approved 5-0 LLP; BNY Western Trust Co.; and Best Best and Krieger LLP for various services in connection with the proposed sale of City General Obligation Bonds and Redevelopment Agency Tax Allocation Bonds. 15. CITY ATTORNEY a. Recommendation to Adopt Ordinance No. 2134, an Ordinance of the Adopted 5-0 City Council of the City of Arcadia, California, adding section 4912.7 to Article IV, Chapter 9.2 of the Arcadia Municipal Code regarding the placement of permanent Homeowners' Association identification signs within public rights of way within the City of Arcadia. ADJOURN to March 6, 2001 8t b:OO P.fil. ADJOURNED at 9:45 p.m. in memory of Juanita Gilbert Morgan and Patricia Faye Niedecken 4 ■ .v 00 04- +A,ii \c'itpOART59 STAFF REPORT OFFICE OF THE CITY MANAGER ' G, February 20, 2001 TO: Mayor and City Council FROM: William R. Kelly, City Managertri0 By: Cindy Rowe, Management Services Officer lLff_I SUBJECT: Public Hearing to Consider Whether Adelphia Communications Corporation is in Default of Section 15(b) of the Cable Television Franchise between the City of Arcadia and Adelphia Communications Corporation Regarding Two-Way High Speed Internet Access BACKGROUND As part of the cable television franchise renewal process, in 1995 a needs assessment was performed by Communications Support Group, which clearly indicated that high speed internet access was a priority among Arcadia cable subscribers and that interactive services of high speed capacity were needed by institutional users in the community. Based on that information, the cable system rebuild included in the cable franchise renewal with TCI in May, 1998, required the company to have the capacity to provide two-way, high speed internet access, to have it activated and made available to the community by June 18, 2000. Due to a network infrastructure delay, and in exchange for providing free modem service .at fifteen (15) school district and city facilities, on September 5, 2000, the City Council granted Adelphia additional time to December 1 , 2000, to complete, market and launch this internet service. This was based on oral assurances provided by Lee Perron, Adelphia's Vice President of Corporate Affairs, that the service would indeed be available by that date. LASER IMAGED Zoe 7,G1 / /? 9-ez • Adelphia Public Hearing February 20, 2001 Page two DISCUSSION Between December 1 , 2000 and January 31 , 2001 , City staff and the City's cable consultant made numerous attempts to ascertain whether Adelphia had launched two-way, high speed internet service through the City as required by the Franchise Agreement, the Transfer Agreement and the oral agreement. Repeated phone calls to the local Adelphia customer service office, phone calls to @home's sales offices in Colorado and visits to @home's customer service web page, all indicated that two-way, high speed internet service was not yet available within the City of Arcadia. It was not . until February 1 , 2001 , that a City representative was told this service could be installed at his home. City correspondence to Adelphia on December 22, 2000, requested that Adelphia show proof that it had instituted two-way, high speed Internet service through submission of sweep results and system testing documentation, or through work orders, marketing materials, billing • statements or similar verification. Nothing to date has been provided to the City by Adelphia. FISCAL IMPACT If it is determined that Adelphia breached its obligation under the terms of the Franchise Agreement, the City Council may order that the City recover liquidated damages in the amount of $1 ,000 per day of Adelphia's default, commencing December 1 , 2000. Also, the City may, for each month of delay past September 28, 2000, reduce the term of the Franchise Agreement by four (4) months and reduce the term of the Franchise Agreement by four days for each day beyond December 1 , 2000. Adelphia's • breaches also entitle the City to disapprove the three-year extension of the franchise term that is permitted in the Franchise Agreement. The City also has the option of terminating the Franchise Agreement. It is anticipated that the availability of high speed internet service will increase the number of cable subscribers, thus increasing franchise fees for Adelphia. Consequently, if the service is not available, or is available, but subscribers have not been made aware and allowed to subscribe, the City is ' not benefiting from the additional percentage of franchise fees. ...` w - - Adelphia Public Hearing February 20, 2001 Page three • RECOMMENDATION It is recommended that.the City Council hold a public hearing to determine whether or not Adelphia has breached its obligation under the terms of Section 15 (b) of the Franchise Agreement, which required Adelphia to provide two-way high speed internet access by December 1 , 2000 (the extended deadline). The City Council then, may: 1) terminate or conditionally continue the Franchise Agreement and seek any other rights or • remedies including, without limitation, the right to recover additional damages, losses, costs and expenses, such as attorney's fees, incurred by the City as a result of Adelphia's breaches; or 2) find that Adelphia has met contractual obligations and take no further action. • STAFF REPORT �'ORATEfl OFFICE OF THE CITY MANAGER, February 20, 2001 TO: Mayor and City Council FROM: William R. Kelly, City Manager By: Cindy Rowe, Management Services Officer SUBJECT: Correspondence Related to Adelphia Public Hearing qA The attached correspondence is provided as background information relative to the Public Hearing to consider whether Adelphia is in default of Section 15 (b) of the cable franchise: 1 . Section 15 (b) of cable franchise 2. 2/2/01 — Hearing notice to Adelphia from City Attorney 3. 12/22/00 — Notice of Default to Adelphia from City Attorney and 1/23/01 Response from Adelphia 4. 1/12/01 — Adelphia customer letter/survey 5. 12/1/00 and 12/4/00 — CSG's attempts to confirm service 6. 9/28/00 — Letter Agreement between Adelphia and City, resulting from 9/5/00 City Council action which was based on oral agreement with Lee Perron. (NOTE: This agreement was never signed by Adelphia because the school district modem needs changed, thereby necessitating further negotiations with Adelphia with regard to number and location of modems.) 7. 8/18/00 — Letter to Adelphia from City Attorney 8. . 7/21/00 — Letter to Adelphia from City Attorney 9. 7/19/00 — Letter to City from Adelphia -10. 6/21/00 — Letter to Adelphia from City Attorney 11 . 6/20/00 — Letter from Adelphia responding to City's 6/16/00 letter. LASER IMAGED • i 1 • • (3) this Franchise is terminated, canceled, or shall expire, then the Grantee shall, at the option of the City, and at the expense of Grantee, within at least one hundred twenty (120) days from written notice by the City, restore the Public Rights-of-Way or other area from which the property has been removed to the condition reasonably comparable to that which existed prior to the erection or construction of the equipment, including any improvements made to such property subsequent to the construction or installation of the Cable System as approved by the City Manager. (d) Abandonment. The Council may, upon written request thereof by the Grantee, approve the abandonment or sale of any such property in place by the Grantee under such terms and conditions as the Council may propose. Upon abandonment of any such property, Grantee shall cause to be executed, acknowledged, and delivered to the City such instruments as the City Attorney shall prescribe and approve,transferring and conveying the ownership of such property to the City. SECTION 15 - SYSTEM DESIGN AND CAPACITY (a) Bandwidth Capacity. Within two (2) years from the effective date of this Franchise the Cable System shall transmit no less than seventy-seven(77)•6-megahertz(analog video channels) through the utilization of no less than a 550 megahertz activitated cable plant. (b) Two Way Services-High Speed Internet Access. Within two (2)year ,the Cable System shall have the 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. The City and the Grantee recognize the provision of two-way high speed services as an important means to connect public, government and educational institutions and to functionally provide the equivalent of institutional network services in a cost- effective manner. Two-way services shall be instituted when (1) it is consistent with Federal and State laws, and(2) it is economically and technically feasible,provided,however that it shall be the Grantee's burden to demonstrate to the City's satisfaction that it is not economically or technically • feasible to institute such service, should the City request such proof. It is understood that upstream capabilities in existence on the Effective Date of this Franchise in support of the Educational and Government Access Programming will be continued in accordance with this Franchise. (c) Subscriber Compatibility. Grantee shall make good faith efforts to eliminate Subscriber complaints and confusion in attempting to integrate cable-ready television sets, VCRs and the Cable System Converters: (d) Parental Control Devices. Grantee shall provide Subscribers, upon request, with a • parental control locking device or digital code that permits inhibiting the viewing of parental designated channels. • 19 T 0. el Win February 2, 2001 • Al ARIA f' r� cg ��po8AaE9'1� VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED City of AND FACSIMILE Arcadia Robert T. Witthauer, Esq. Office of the Acting Assistant General Counsel City Attorney Adelphia Communications Corporation •1 North Main Street • Coudersport, PA. 16915-1141 Re: CITY OF ARCADIA—NOTICE OF EXPIRATION OF CURE PERIOD AND SCHEDULING OF HEARING Stephen P.Deitsch CityArsorny Dear Mr. Witthauer: This letter is written pursuant to Section 27(a)(3)(b) of the Franchise Agreement adopted by the City of Arcadia ("City") Ordinance 2084 ("Franchise Agreement") and the Transfer Agreement entered into between the City and Adelphia Communications Corporation ("Adelphia") on November 2, 1999 ("Transfer Agreement"). The City hereby asserts that Adelphia has breached the Franchise Agreement and Transfer Agreement as more fully set forth below, that Adelphia has failed to adequately respond to the City's Notice of Violation, that Adelphia has failed to cure those breaches, and that Adelphia has failed to provide an explanation, acceptable to the City, for such failures. Therefore, the City hereby notifies Adelphia that a hearing has been scheduled before the City of Arcadia City Council on Tuesday, February 20, 2001. At the hearing, the City Council will determine whether or not Adelphia has breached Section 15(b) of the Franchise Agreement and related sections of the Transfer Agreement pertaining to the availability of highspeed internet capacity. • 240 West Huntington Drive Post Office Box 60021 Arcadia,CA 91066.6021 (626)574-5407 (626)446-2991 Fax • • Mr. Robert T. Witthauer, Esq. February 2, 2001 Page 2 • • The hearing will be held on Tuesday, February 20, 2001, at 7:00 p.m. at the Arcadia City Hall, located at 240 West Huntington Drive, Arcadia, California. Adelphia will be provided an opportunity to be heard, including the right to present evidence, cross-examine witnesses, and be represented by counsel. If it is determined that Adelphia breached its obligations under Section 15(b) of the Franchise Agreement, the City Council may recover liquidated damages in the amount of one thousand dollars ($1,000) per day of Adelphia's default, commencing June 18, 2000. Also, the City may, for each month of delay past September 28, 2000, reduce the term of the Franchise Agreement by four ,(4) months and reduce the term of the of the Franchise Agreement by four days for each day beyond June 18, 2000. Adelphia's breaches also entitle the to City to disapprove the three year extension of the franchise term • which is otherwise permitted in Section 4 of the Franchise Agreement.. Additionally, the City may, pursuant to Section 5 of the Franchise Agreement, terminate or conditionally continue the Franchise Agreement if written proof, in a form and substance acceptable to the City, demonstrating that high speed interne access is. available in all parts of the City, is not provided to the City by 5:00 p.m. February 12, 2001 (such evidence may take the form of that described in the next to last paragraph of this correspondence). Moreover, the City reserves its right, pursuant to Section 27(a)(3)(b) of the Franchise Agreement to seek any other rights or remedies it may have, including, without limitation, the right to recover additional damages, losses, costs and expenses (such as attorneys' fees) incurred by the City as a.result of Adelphia's breaches. • • Mr.Robert T. Witthauer, Esq. February 2, 2001 • Page3 • Furthermore, if it is determined that Adelphia breached its obligations under Section 15(b) of the Franchise Agreement, then thirty (30) days following the City Council's determination, liquidated damages will . be due and owing and may, pursuant to Section 9 of the Franchise Agreement, be drawn by the City from the cash deposit and/or letter of credit established pursuant to Section 9 of the Franchise Agreement. As more fully set forth in our letters to Adelphia dated June 16, 2000, June 21, 2000, July 21, 2000, August 18, 2000 and December 22, 2000, Adelphia has breached the Franchise Agreement and the Transfer Agreement, and has remained in material breach of those Agreements as they pertain to highspeed internet access. In addition, • . Adelphia subsequently breached the agreement reached between the City and Adelphia in September 2000 ("September Agreement"), in which Adelphia committed to the actual transmission of two-way, highspeed internet service throughout the City by December 1, 2000. Without waiving the City's rights to do so at a later time, the City does not, by this notice, assert a failure of Adelpia to cure any violations of Section 15(a) of the Franchise Agreement. Throughout the period December 1, 2000 to January 31, 2001, City staff and the City's cable television consultant have made numerous attempts to ascertain whether Adelphia has attained actual • transmission of two-way, highspeed internet service throughout the City as required by the Franchise Agreement, the Transfer Agreement and the September Agreement. The City and its agents have made repeated phone calls to the local Adelphia customer service office, . phone calls to @home's sales offices in Colorado, and have visited @homes customer service web page. In all instances the City and its agents have been advised that two-way, highspeed internet service is not yet available within the City. On February 1, 2001, a City representative was• told that highspeed internet service could be installed at his home. However, as recently as January 21, 2001, @home's web site reported that such person's address could not • Mr. Robert T. Witthauer, Esq. February 2, 2001 Page 4 • receive such service and, most significantly, at no time has Adelphia demonstrated the availability of such service throughout the entire City as required by the Franchise Agreement. Although our letter of December 22, 2000 clearly requested that •Adelphia show proof that Adelphia had instituted two-way, highspeed • • internet service within the City in the form of sweep results and • system testing documentation, we also will accept copies of installation work-orders, marketing materials, billing statements, and similar verification which demonstrates that such service is being both made available by Adelphia throughout the City and subscribed to within the City. . • .• • If you have any questions or comments, please feel free to'contact me at your earliest convenience. Sincerely, • csrtjteA- Stephen P. Deitsch City Attorney Enclosure • S • • c: William R. Kelly, City Manager • Cindy Rowe, Management Services Officer . John Risk, Consultant • • • • RECEIVED • • CITY OF ARCAr" BEST BEST & KRIEGER LLP JAN 0 2 2001 A CALIFORNIA LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS LAWYERS CITY i1-4'4ri.,t,eA .::,ERR ARTHUR L. LITTLEWORTH• BRADLEY E. NEUFELD DAVID J.,HANCOCK KAREN M. FREEMAN •3750 UNIVERSITY AVENUE WILLIAM R. DEWOLFE• • PETER M. BARMACK . ''' HAYLEY'E.•PETERSON JOHN D. HIGGINBOTHAM P O. BOX 1028 RICHARD T. ANDERSON• JEFFREY V. DUNN ROGER K. CRAWFORD MALATHY SUBRAMANIAN RIVERSIDE. CALIFORNIA 92502.1025 . JOHN D.WAHLIN•, . STEVEN C.DEBAUN t SHAWN D. HAGERTY USI MESHREKY TELEPHONE(9091 656-1450 JOHN E:BROWN.• 'ERIC L. GARNER'' ••- JAMES P. MORRIS CRAIG M. MARSHALL TELECO PIERS MICHAEL T. RIDDELL• DENNIS M. COTA KEVIN T. COLLINS JEFFREY 5. BALLINGER 19091 688-3083 82.461 2 • MICHAEL GRANT-....' .P:H.W.F. PEARCE DAVID W. NEWMAN M.THERESA TOLENTINO BBKLAW.CD ' FRANCIS J. BAUM• ROBERT W. HARGREAVES JENNIFER T. BUCKMAN THERESA E. ANTONUCCI . GEORGE M. REYES• C. MICHAEL,COWETT MARIA E. GLESS MELISSA W. WOO B • WILLIAM W. FLOYD. JR. BRUCE W. BEACH GLEN W. PRICE E. SEAN ARTHER OF COUNSEL GREGORY L. HARDKE ARLENE PRATER MARYMICHAEL McLEOD TRANG T.TRAN CHRISTOPHER L. CARPENTER• KENDALL H. MACVEY MARK A. EASTER JAMES R.TOUCHSTONE CARMEN MARTINEZ of OSABA MICHAEL D. HARRIS• CLARK H.ALSOP' MICHELLE OUELLETTE STEVEN M. ANDERSON TRACIE PHAM ANNE T.THOMAS• DAVID J. ERWIN• KEVIN K. RANDOLPH ROBERT L. PATTERSON JASON C. GLESS DONALD F.'ZIMI+IER• MICHAEL J. ANDELSON• CYNTHIA M. GERMANO • BRYAN K. BENARD' • CHRISTINA L. DYER DOUGLAS S. PHILLIPS- MARGUERITE S. STRAND JAMIE L. RAYMOND FRANKLIN C.ADAMS GREGORY K. WILKINSON KYLE A. SNOW PAULA C.P.DE SOUSA WILLIAM WOOD MERRILL GENE TANAKA JAMES B. GILPIN LYSA M. SALTZMAN D. BRIAN REIDER VICTOR L.WOLF KIM A. BYRENS MARCO A. MARTINEZ KIRK W. SMITH DANIEL E. OLIVIER DEAN DERLETH JOHN F..WALSH • DINA 0. HARRIS HOWARD B. GOLDS SONIA RUBIO CARVALHO DANIEL G. STEVENSON WARREN B. DIVER ' STEPHEN P. DEITSCH JOHN 0. PINKNEY JEFFRY F. FERRE - JOHN R. ROTTSCHAEFER PIERO C. DALLARDA DORINE LAWRENCE-HUGHES OFFICES IN MARTIN A. MUELLER DWIGHT M. MONTGOMERY ALISON D. ALPERT INDIAN WELLS OFFICES I J. MICHAEL SUMMEROUR WILLIAM D. DAHLING. JR. KRISHAN 5. CHOPRA ' IAN WE (S(760156B-2811 969-8564 SCOTT C. SMITH BERNIE L. WILLIAMSON JAY J. LEE RAYMOND BEST I1 686.19571 SAN DIEGO 091 JACK B. CLARKE, JR. G. HENRY WELLES JAMES C.TURNEY JAMES H. KRIEGER(1 9 1 3-19751 BRIAN M� LEWIS• RICHARD T. EGGER MICHAEL D. DOLIDA EUGENE BEST 81693-19E411 ORANGE 17141 939-5940 • •A PROFESSIONAL CORPORATION . File No.24347.00600 • December 22, 2000 • BY CERTIFIED MAIL . RETURN RECEIPT REQUESTED . AND FACSIMILE . Mr. Lee Perron • Vice President, Corporate Affairs • . . Adelphia Communications Corporation 2939 Nebraska Ave. Santa Monica, CA. 90404 . ' • Re: NOTICE OF CONTINUING DEFAULT Dear Mr.Perron: This letter is provided as notice of continuing default by Adelphia Communications Corporation("Adelphia")under the Franchise Agreement adopted by City of Arcadia Ordinance 2084 ("Franchise Agreement"), the subsequent Transfer Agreement executed on or about November 2, 1999("Transfer Agreement"), and a settlement agreement dated September 26, 2000("Settlement Agreement"). Specifically,Adelphia has been found to have breached its commitment to launch two- .way, highspeed internet service throughout the City by December 1,2000 as it pertains to Section 15(b)of the Franchise Agreement. • In September of 2000,Adelphia and the City verbally agreed that, in lieu of the City enforcing its remedies for liquidated damages and franchise term reduction as permitted under the Franchise Agreement, that the City would accept from Adelphia title to, and the installation by Adelphia.of, certain communication hardware at specified locations within the City. Although Adelphia never executed the City's written correspondence memorializing this agreement as requested by the City, the City remains ready and willing to accept the foregoing donation and • installation of equipment as partial performance of the September, 2000 agreement from Adelphia in the form of the provision of the communication hardware. . . Y • LAW OFFICES OF BEST BEST & KRIEGER LLP • Lee Perron December 22, 2000 Page 2 • However, pursuant to the September agreement, Adelphia also committed to the actual transmission oftwo-way,highspeed internet service throughout the CitybyDecember 1,2000. Recent research conducted by the City on December 1, 4, and 18, 2000 reveals that two-way, highspeed intemet service has not been made available within the City to the general public. Additionally,on December 4,2000 the City was informed that two-way,highspeed internet service would not be available for up to six months. Please be advised that,based on Adelphia's breach of the Franchise Agreement and Transfer Agreement,as more fully set forth in our letters to you dated June 16,2000,June 21,2000, July 21,2000 and August 18,2000,and• delphia's subsequent breach of the September agreement, the City hereby notifies Adelphia that Adelphia is in continuing breach of Section 15(b) of the • Franchise Agreement, and has been since June 18, 2000. If,by January 23,2000,Adelphia does not cure the above-referenced breach,by:(1) providing actual two-way,highspeed internet access throughout the City;(2)submitting sweep results at a test location at the end of each trunk run to confirm signal capability; (3)retesting the system's capability;and(4)demonstrating one hundred percent carriage at all test points within the City,the City shall proceed to enforce any and all of the remedies authorized by the Franchise Agreement and the Transfer Agreement, including,but not limited to, the collection of liquidated damages in the amount of one thousand dollars($1,000)per day,relating back to June 18,2000,and payable from Adelphia's cash deposit and/or the letter of credit which letter of credit must be replenished by Adelphia. The City hereby reserves and affirms any and all rights it has under the Franchise 'Agreement and Transfer Agreement, as well as any and all rights acquired pursuant to the City's previously issued Notice of Default and Demand dated June 21,2000,Notice of Expiration of Cure Period dated July 21, 2000 and Notice of Intent to Set a Hearing dated August 18, 2000. I look forward to hearing from you once you have had a chance to review this letter. If you have any questions or comments,please feel free to contact me at your earliest convenience. Sincerely, ggiv,„4.4 Stephen P. Deitsch of Best Best&Krieger LLP City Attorney City of Arcadia RVPUBVSB1605950 - cc: William Kelly,City Manager Cindy Rowe,Management Services Officer John Risk, Consultant . Jai-23=01 07:01pm From-ADELPHIA LEGAL DEPTARTMENT 3142747782 T-077 P.02/02 F-943 1 North-Mein Sine Coudersport PA 16915.1141 Phone (814)274-9830 I E writer's Direct (814)2746041 f Fax 1814)2747782 Internet www aoelph1a.net _ e-mail rwathauei@adelphia net January 23, 2001 Stephen P. Deitsch, Esquire VIA TELECOM ER BEST, BEST & KRIECER LLP NO. 909-686-3083, 3750 University Avenue AND U.S. MAIL Post Office Box 1 028 Riverside, California 92502 Re:. City of Arcadia, California • Dear Mr. Deitsch: Your letter dated December 22, 2000 to Lee Perron regarding the above-referenced franchise has been forwarded to my attention. Please direct all future communications regarding this matter to the undersigned. Contrary to the assertions in your letter, high-speed Internet service was available in the City of Arcadia in December of 2000, during which time Adelphia was Alpha testing this service. Also, high-speed internet service is currently available throughout the City of - Arcadia. Further, Adelphia has already initiated a marketing campaign to induce residents of Arcadia to purchase high-speed Internet service, and Arcadia residents should be receiving mail within the next week advertising Adelphia high-speed Internet service. Therefore, Adelphia has fulfilled all of its obligations to the City of Arcadia, and thus cured any defaults or breach that may have existed, if any. As the matter of high-speed internet service has now been resolved, Adelphia looks forward to an amicable and mutually beneficial relationship with the City of Arcadia in the years to come.. Should you have any questions, do not hesitate to call. With kindest regards, I remain, Yours very trul • • • Robert T. Witthauer RTW/jIr Acting Assistant General Counsel cc: Lee Perron . Larry Windsor • Tr oA -, - r ra, ,=.nn R1 427477B2 PAGE.02 15255 Salt Le' ';ve. R f, • City of Indust;;_''� 91745 !T�' F ARC D; IA Adelphis Phone 626-855-3355 Fax 626-855-3385 JAN 1 7 2001 Internet www.adelphia.net C TY MANAGER January 12,2001 . Mr. William Kelly Manager • City of Arcadia 240 West Huntington Drive Arcadia, CA 91006-6021 . Dear Mr. Kelly: Adelphia welcomes the arrival of.2001, coming on the heels of an exciting year for • our company. In a growing number of service areas, we have demonstrated how seriously we're taking our mission to become our customers' "link for everything." The Adelphia of the future will feature the expanded programming made available through Adelphia Digital Cable; high-speed Internet access service and other exciting new products on the horizon, such as interactive TV, video-on-demand, residential telephone service over cable, e-commerce and other innovations. Adelphia customers will benefit from this convergence of telecommunications services, through the convenience and cost-savings of purchasing multiple products from a single supplier. Although the industry is rapidly changing, one thing that has not changed is Adelphia's commitment to keeping open the lines of communication between the company, its customers and our community leaders. You'll find enclosed a copy of the latest Adelphia Connection, our customer newsletter, including a survey we're sending to our customers. The results will give us a better idea of how we're doing in several important categories. Please take a moment to read the survey. We welcome your suggestions on how we can better serve our customers in 2001 and beyond. Thank you for taking the time to read Adelphia Connection. Your feedback and the opinions of our customers will help to shape the path we'll follow into this new era in telecommunications. Sincerely, / / /// /zi/z. Kurt Taylor • General Manager Enclosure • . 1 ' wa -"' - -- - s r.A,. iY'•`o, i " u "L_ ^ - ate'd tea; & '1 s, ,.e".`�r.1 NN:ek 'fit'a 11-.40.:44*tr•MN , .� '' *� �' { r` ' ., �' d � ra t,' .- - AdeL/��,hra..s. z x ��;6 f! a 4r,e 5:',.� 1Jg4c ,Customer , ; ti '# r i p a > o iv,ip > n r Care`JVliss on z s �3 - "a� ' -- e .x :,` t''''‘,,-1,-k.:'.`.'4 V Dor mission rs td earn, ..,1 d - , 1.Veti ,s „e. e r u,e o Ar 0, $ C1' I ® d our customers trustby making sure:that every -:.�.' � ,� „4� � A"'i�```�,��' ��1 '� ' ��� � ccistomet is satrs�ed with the outcome of 4� eaies t" 6g1414.,,,11:0-041-:4,-.R.� to .acr�A Q�efi f e ry j °'''''''e eve cantact he or she has with our eo le r a t e- i m v -w P P. W,11 yy�o t it 4' {e e� ,i; of i7t �li s 1}3 - 4 St.® e p —1 .� .`and theservice we provide."We,have°not �' av ad-5; .r'm r+'tAi e4,'+( t¢,s� `'`' g' s�f{r 4-44-,i,-- 1°wf`A - F*�P` �ta survey c,190lphracom gatrr ° l ,. '?t completed ou.4.-3 until we--r--,',,:-.,.•l ; fYN}'''S h :+1 CY '"edn9 .iii.. .,.f.,,'i't R 54"']SFw_t-+ 7 Yir il %� lag' ` '.e+^' ky'',`r,`°'''.'X+2s. "'+4 ih, ktt f i t'�l t+, t g`' f - Y'k -t ',l()U e...• ofthe trine " V ,, 1 #' fL of aid eN'tl n-' a,fiq ie s�ry9! y P a p,, � P A' rr', kg'`;.,.i.r a ^�.¢,�-.�,'+" ?„ `'y"i`�}'"'ems' $'M' 'k� ,.t,�x 3�_;'l. t Its time to put that.mission:"statement to the -4 � 2®®,x ,81% aip kp1atc E0114. mpf/con jer ou; o<!..1,',"iMs r test askin aurcustomershowwere doing+ f rte" .A-W d AT.,..-0 n �-' „`'C dR.e it 1V"^'O AV' ttkt •" r . 'n ; We value u in,ut orr .all:.as ecls of your... i , f clod concPrAlS W i t,M , "f , 4 r t. i d Y P P _ 3M ., 'r - t •ri3r r f S,'I.(••INWIE �tx�,� gigt Yy ,,t v -, , ,r - „J �'- )fe`''z,' �. t'` t++. }�• f m rs ,+r ^Y,f 'r'; ? x�i :Adelphia seNlce;Your answers,to the survey. h�'�.ell oil lt^to"�oottri c tir cusromeruir tproy serxrce'as a P i , Ail f'*?a n i �t.x1,.y x'•g. ,go.i,',;4%`�- x1+P r ,.k0i. +:r xkii 3 C}y- gtl's-anSll--.'''''''' UIde US!n-- *.''*.-to }.Y -':uk'2�. 3 � fi"F t' >•' 3 1J.3`� � � ltext �..fi� r �'' h 3"u $ J S �, tS 5 k{ ; 4 result of chgnges 1ve rr c kt in res(�Qnse tc5 YO�1R>su6geshorip , -serve yov:,,better 1 ' 4 1S. `a f rkP {e` �. a a, :t , 7.4 s;t t t ?, r,e S 7'e 1•� Sr } 'Z � j t t ,7r �k s X11 ,�Tt-y }g t� +, t '�� tit i.I q�H rY iS f�� t r t u r�'t, g a,�i fN t 4 '" M'� i.5' it tfil4i r k¢ y aft b��, ( f c e_j o x p� ;4 7 U.-r,a '4see e} F�YSx ,4( c g' Se`s i f} �t: N FgYi : �' w 3 +5�'4J n 4�' } a' vti '4 7 a a�h z �'s t 4k Y - n a v r dl t ANfY Ah,Ai1L t s i 3 Customee'satesfathon ' ` " Additional fe �lhack • Within the last six months,have you contacted Adelphia Please list anyprograrriming services(new channels)you wit is a question or problem2 if So,please rate your ` would like to have add ed to your.`Adelphia cable setvicet •ex erierlce in the following areas,(circle one) - ...• Ease of contacting Adelphia Excellent Good Fair Poor • Employee(s)courtesy Excellent Good Fair Poor •Employee knowledge and Excellent Good Fair Poor Which of your current.programming services do you • g watch most frequently? v professionalism. ;r Resolution of your question Excellent Good Fair Poor or problem Which of your current programming services do you Adelphia's service to you watch the least? Please rate your Adelphia cable television service in the following categories: (circle one) Quality and variety Excellent Good Fair Poor What suggestions do you have to improve of programming Adelphia's service to you? • Rates(cost of service in Excellent Good Fair` Poor relation to its value)• • . • Adelphia's technology Excellent Good Fair Poor Reliability/quality of service Excellent•Good Fair Poor Supplying the following information is optional: . . Adelphia's community Excellent Good Fair Pear. Name service/outreach • Address . Overall opinion:0f " Excellent Good Farr Poor Adelphia's serVice Criy/Statey:7.IP . r " - . ' " e n i k ' , y: ' Y Ww S —x + T Y 1t= w ,}3 'IS L:;. F» r v6 a r1,74. 7;ip ZD dj}1117,16-', �. a iY nx , i't R ifa�-er y * I coe 11 please DO NOT ii'nclude this survey with your cable bill payment Completed surveys can be dropped off at your local cable office,or you corn send them to ,. h f- i atom'" 5urve - ' Adel hraCu er, ��`" ' p y Communications Dept ` ,�' a� r North Mart Sts y x y a Coudersport,P14 16915, rV , u } x t 7 '� j h 1 r '*.. Z h tt y y , gt 1 e i- �,: ,: Or�vasit wv 'adelphra corn c�ndcomplete the surveyzonline „Your Link For Ederyf'h1PIIg L Y ri. ti 7 }a }+fi T f.. ac . s 5 s a c f `i i }} ca S itz k,{` T2- 1A f;$h ` .ii J 1 w}1i'.,, `+•: 1 M1 1,,,,,,5,,i..v k u'1 x r+r.4 , 1 f ti. f i ,L tit t h`S 5 AY V l 3 5 .'. f ,•�.Ara., �.�.,..w. i s.;...i...�.U..v ..'. ..§..:_._�...a...a',., it z.:...}:,.,,,ri >...a,.+'vn r ,..f y:.":+, -.t.:. .r,_.7 w l-.::. _..,_. . . .,x...a_. .._._. + 4 .3s`�, a-4,0**.:� ! A a r▪ ay�fy i Ya! ''4y'�r'`, fa 5 :44041.44-40 0'v 0§470- 2 .;, 4' w,;',f pa...3ri,e',..`:e f .ns4,A$,�,gv+r : ,v� i .,�':.,}c s, o �' h�,2- t 'yP �' l L1 ��'`*�� Z I Y��Y .Y '�. "!�€•._ IQI� �l�L*. Y'�ay'�.i}�' - a`fi " �".. J .y$ ..3 P° L ,} Li7k ,?Tifi. A'w+,J. S n+" l l . G t,4,..,-€t_ Sp:, `,+r.. 0" ��'„A-, `'°� +tit"o e1.1,'C§7 ,., r. i? 'rt.,s e t{use . h , a1�V xar ,`.i °fr , `{ , . . rt F, ,r , r s a � y v b S: r 4' - H r rc vff`T� E oie,,e r $,ETE4R rL+_W) 'tet�l tro,Y2OO11 �4 yr 8 "a t dS, ¢e,i' t▪ "7 v` ),,a' A _,'* „3 ain' i'� f • r oAg uF vy A :a o ' ens the door• th f9 K ''.„,..� ' �' an,• ,_,,r , ,dye,,,, 'vi 7.. ,,,, .r* x,.... �y 4014 Eel xF::''''..1'--1-74`..-'''-'\.7� Sr ,y Not only was fhe year k. 00 one of revolutionary change in �` ,°; ,;, ' �� . the telecommunications marketplace but it was also a year of : ;r incredible growth and development at Adelphia We welcomed �` :.7":" '' t p�4 °`- '` many new customers from across the nation. We also introduced - i ri ti ,: _ , Adelphia Digital Cable and Power Link high-speed Internet service ,' `. 1 ,,, 4:14. ' • into many of our service areas. Through these developments, along ,.,, 7°-NO, t t.- I •` with Adelphia Long Distance and PageTime, Adelphia is bringing its , ` °""" '-�. } ; customers a whole new world of programming choices and b .. - j communication options. :'AA,., , ' „a During 2000, we made great strides to establish our company as Y 1 4` r :,. k . 3 the preferred provider for all your entertainment and information needs '' -<, .1 �k=.. Adelphia has built its reputation on these three fundamental principles: � . - yw .,4,. sup ee ®,r technology � e:ever of t eap ',tr�ltte P'superior service V • JUST 11STF� I on't just take it from us IP� A POLICE CHIEF GEORGE POLIdAR OF�i1IONROE!/rLI.E,PENNSYLVANIA,WOS a reluctant convert to '.. - fi„ 4, - Adelphia Power Link However the chief became a believer after Maintenance Technician t -.7;"' , ' sp Dave Wynn paid him a visit "All of your service people were helpful but Dave went out a ,,f,. ' ,f a •, To of his way,"Chief Polnar says 'My service has been breezing along without a hitch. �'-� z , ' f ....,',.44-1,. ® Power Link is the Rolls Royce of Internet capability." q$ d,y= ...GI, . O A KERYN ANDERSON OF SOUTH BURLINGTON, VERMONT,attended a community ._ a .4" " ¢ G celebration sponsored by Adelphia to learn more about Adelphia Digital Cable. fa, z Wow,was 1 impressed'Not'only did you have a team of knowledgeable people •� ` , t r :�t S '` known existed With rewarded ucon.en eni exposure ramming gu cable my husband d and!even V , w O Yo P g og Y s _ x i., ,t k have already marked the events we waatYto see.4 f `a r hsY wVVF• yt ?-•-.;:–4,44.-"� A R.A.kou OF F,ORr'PA NE/A 03AMq,s nit o lei# r ` elphiOa Pr sident and CEO fk., t,t�a a ; ' t i. - • +,;Y.• ,}s',,t f JFY+' v, L ii*X7 • x t ' John 1Zfgas to ample enf e,company,prirh. Iarly chniaans Nicholas MMElydth � a>7s'� ��7�. r;.H•, � x r K+ �ti c �, �' a �v.`�..fi�a"` '. +� fi z 3 r �rf 4„3 E 0 .� and ftTarcApblm I recenttyiretired ofte 50{yen*asn amth p'KV ner ha�ra'goat ry , : :' `° S E� -i 4tz www+tb4,t t m fi t s r x �� ,' cable pro T/0rnsatwo i}meS thrdUgh,.no fault of AdelpAra{ si�you r`ece`ntly �x y,. , :� ti xnv*J -a- N� •ju d ri 4344.3 i +n 1 + �' ,, co acqurrecg' e sysie(ri l gge{ved rrrimedrate respone`frrorn f lJ bolgs'egnd Marc-and they -,`: .. ,. resolved pty prtbblerngrf n nedr',ately 1 c p i glad ihatyo,ry g d`;pof aur�c�ommunrry and n, c i'- . d -'� S, as. 9 ti.&` S.` e. t :S,K` e s .L.., ',,V4,',. .,;,4;:.4,1 .�:, \v:.: � that they die fr'tem'�bers,af,4de�liras-te� Y, {� �,� Y ,�, �-�,� � ,-�{ N ® iwK xY v m»J 4.i Siva i� 4tr, {.-:4 c +# ''4�K. � •`: "boo ?�,.. „ ,3 _Mh kZ yIWd13Uu ,'• Th f s nrhaf they, have"to say,but what;do YOU•think?(See.,back side) We know you have a chotce f routd sis ernrrcor ies c:)A e tet4.atrlh7offtx rnefi o es$ , and other telecommunications3se Ices and�k e4f0-01 you;f'or,bei� /ret't li cusr fer �' j t ti c.a,.v f t1di *> > 4 bra 2 1i m M '"'.aa- r r . `•The year 2001 promises fo bring oew p,ore eketiing prbc m ,itervices�rour''cry BAs the ,� �v`x«a Jti s:i, n ylfeit—...f m 'v—.0,�s .4,v f r ,� - f'. broadband revolution continues,`Ade1'pfita ja:rer irrat t o foref, �' -nd;raft.ol� y 0*111 cotitint`e 'F. .•' 4:4 f 11`'yT 3`f �7•N. �5".,„. a k'v a "" zT:44 . a. ., y'4 to provide you with the dedicatedt ii o,ner,se�-v ce 4,-,.....‘3,.....,,,,,,ou deser, k . ; ��;� zt i .`f - Y `e >i l, .g k3.m4 ZI " r U 'a',t'F� Mot all pr uc as d rvpces'are 6';11oble,t $1 ;'in �Y c ,'1 0� �. FROM' : COMMSUPPORTGRP FRX NO. : 7077956258 Dec. El4 2000 11 40RM P2 • It COMMUNICATIONS SUPPORT GROUP, INC. 1499 WESTGATE LANE PENNGROVE, CA 94951 VOICE: (707) 795-8995 FAX: (707) 745-6258 EMAIL:jriskgconcentric.net Following are the results of two attempts to verify Adelphia's provision of high speed cable modem service in Arcadia. These attempts were made on Friday December 01, 2000 and again on Monday December 4, 2000 for confirmation. Adelphia @Home service availability in Arcadia, CA December 01, 2000 Scenario: • _ Relocating to Arcadia and require high speed Internet access. Checking availability through Adeiphia. . . • Action: Call.Adeiphia-626-333-4265 . • Results: Voicemail, press Zero for.operator Action: Zero key pressed • Result: "If you don't press a key within five seconds you will be transferred to operator Action: Zero key pressed . Result: "If you don't press a key within five seconds you will be transferred to operators • Action: Zero key pressed Result: "If you don't press a key within five seconds you will be transferred to operator Action: . None taken • Result: . Ringing phone.then click and disconnected. Action: • Redial Adelphia-626-333-4265 . Cable ModemAvailabili€y.doc Communications Support Group:Inc.0 2000 . Page 1 FROM COMMSUPPORTGRP FAX NO. : 7077956258. e4 2000 11:40AM P3 - 11 Cindy Rowe V City of Arcadia @Home cable modem service availability in Arcadia . 12/4/00 Result: "Press 2 for CSR"; then "press 5 for CSR" "Please wait while your call is being routed"; then"click" and disconnect Action: Redial Adelphia-626-333-4265 Result: . Success! Got CSR, yet then told that this is not the correct number to call and given the number for Adeiphia @Home: 888-307-2424. Action: . •Call Adeiphia @Home: 888-307-2424. V Result: Wait for several minutes during call center's search for info. Then, service not yet available at Norman and 2nd street"try calling back in one month.° _ V Follow-up: "Is this service available for zip code-_91066" (City Hall) . Result: Waft for several minutes during call center's search for info. Then, service not yet _ available for zip.code 91066 street"try calling back in one month." Follow-up: "Is service available for alternate address?" —Wistaria Ave. Response: No @Home service yet available in Arcadia"try calling back in one month." Referral: V "Try calling-Powerlink, Adelphia's other high speed access division. 888-233-5638" Action: _ Call AdelphialPowerLink 888-233-5638 V V Result: . Voicemail,wait then Wally' answers and offers cable modem service currently available in West Hollywood and LaHabra. Follow-up: "When can.I expect this service to be available?" Response: . "Probably six months to one year, try calling Adeiphia in Arcadia." Cable Modem Availabilitydoc Communications Support Group,Inc©2000 Page 2 • FROM COMMSUPPORTGRP FAX NO. : 7077956258 T'9c. 04 2000 11:41AM P4 • Cindy Rowe City,of Arcadia • @Home cable modem service availability in Arcadia 12/4/00 • December 4, 2000 • Action: Call Adelphia-626-3334265 Result: "Press 2 for CSR"; then"press 5 for CSR" "Please wait while your call is being routed" Result: Success! Got.CSR, than told that this is not the correct number to call and given the number for Adelphia @Home: 888-307-2424_ Action: Call Adelphia @Home: 888-307-2424. • • Voicernail: "press one for @Home sales, this call may be monitored. • Ring Ring Ring, All reps are busy please hold and call will be answered in order received. Voicemail: Thank you for calling, all reps busy please continue to hold. Result: . Wait for five minutes and listen to muzak. Phone Answered by friendly, courteous staff member Rhoda. Query: "is this(@Home) service available for zip code-91066" (City Hall) Response: c@DHome service is not currently available and there is no projected date for @Home service for that zip code, additionally Rhoda volunteered that no @Home service is available at no location in the City of LA. 'END*" Cable Modern Availabil ty_doc Communications Support Group,Inc.0 2000 page 3 • • O G D J .c..& -_- ' Sep-27-00 OS:13A Cit;~of Arcadia , . E „,, :;ate 1..,... tf.. •City o Arcadia September 26, 2000 Office of the . City Manager . Adeiphia Communications Attn: Lee Perron, Vice President Corporate Affairs . 2939 Nebraska Avenue . w iirreia,Kyy Santa Monica, CA 90404 .- City liiastiger Dear Lee, • On September 5, 2000, the Arcadia City Council voted to accept Adeipllia's proposal regarding free installation of fifteen 115i high-speed cable modems and ' a launch date of December 1, 2000, to transmit two-way Internet service throughout the City of Arcadia. While we may disagree about the obligations of Section 15(b) of the Franchise Agreement, we appreciate your willingness to • provide this high-speed equipment which will improve communication capabilities for the Arcadia Unified School District and the City of Arcadia. Pursuant to our agreement, by the end of this calendar year, Adelphia will install and provide through the end of the Franchise term, fifteen (15) two-way, high- speed cable modems capable of providing service equal to the highest package marketed by the same industry in Southern California, but in no event less than T-1 (1.5 Megabits per second) (i.e., Power Link or its equivalent;, to the . following locations: Eleven (11) School sites as designated by the Arcadia Unified School District (equipment of equal value will be requested by the School District • . and provided by Adelphia at locations where high-speed modems currently . exist) One (1) to the Arcadia Public Library, located at 20 W. Duarte Road One (11 to the Arcadia City Hall, located at 240 W. Huntington Drive One (1) to the Arcadia Police Station: located at 250 W. Huntington Drive One (11 to the Arcadia Fire Headquarters, located at 710 S. Santa Anita 240 Weer Eitmtiys`te Drive Acadia,CA 91066.=I . (624)574•S402 (674)446•$729 Fes . bd Wd8b:t0 0002 tZ 'oaQ 8SZ9S6LL0L : ON 5,'dd c1691 0dd(lSWWO.0 : WOad 5o0-2 -00 08:13A Cit7\xf Arcadia . 626 t.6 5729 P.02 Lee Perron September 2E, 2000 Page two The City's Administrative Services Director, Tracey Hause, or her designee, shall determine installation locations on behalf of the City, and Rob Leary will make the determination on behalf of the Arcadia Unified School District. Adelphia shall install all items in a safe and workmanlike manner and shall return all property affected by such installation to the condition such property was in prior to such installation, normal wear and tear excepted. Adelphia shall also provide and install all necessary software required to utilize the moderns. The City and School District shall make reasonable accommodations for Adelphia's installation personnel and shall not unreasonably interfere with such personnel's activities. Additionally, Adelphia commits to a launch date of December 1, 2000, to transmit two-way, high-speed Internet service throughout.the City of Arcadia. Fulfillment shall be demonstrated through the conducting of tests and submitting results thereof demonstrating actual use of two-way, high-speed Internet access. Adelphia shall also submit to the City, by December 1, 2000, a status report • summarizing the testing conducted by Adelphia during the months of October and November, 2000. If Adelphia does not comp'y with this letter of . agreement, the City will retain its rights and remedies under the Franchise Agreement. - . Thank you, Lee, for Your continued cooperation. Please sign and fax or mail a . copy of this letter as acknowledgement of our agreement which will settle any and all claims arising to this date under Sections 15(a) and 15(b) of the • Franchise Agreement. . Sincerely, P .I�C/'~��fi: WILLIAM R. KELLY STEP EN P. DEITSCH . . City Manager City Attorney LEE PERRON Adelphia Communications • _1 Sd Wd6b:'G0 000E Ve .° eSZ9S6LLeL- : 111 Y.tid d?1J12i0ddfLSWW00 W023d BEST BEST & KRIEGER LLP . A CALIFORNIA LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS LAWYERS •ARTHUR L. LITTLEWORTH` BRADLEY-E. NEUFELD DAVID J. HANCOCK .LECARIE S. WHITFIELD 3750 UNIVERSITY AVENUE WILLIAM R. DEWOLFE• PETER M. BARMACK HAYLEY E. PETERSON KAREN M. FREEMAN P.O. BOX,1 028 RICHARD T. ANDERSON• JEFFREY V. DUNN ROGER K. CRAWFORD JOHN D. HIGGINBOTHAM RIVERSIDE, CALIFORNIA 92502-1028 JOHN D. WAHLIN• STEVEN C.DEBAUN SHAWN D. HAGERTY MALATHY SUBRAMANIAN TELEPHONE tORNI 886-1450 JOHN E. BROWN ERIC L. GARNER• JAMES P. MORRIS USI MESHREKY MICHAEL T. RIDDELL• DENNIS M. COTA KEVIN T. COLLINS CRAIG M. MARSHALL TELECOPIERS MICHAEL GRANT. P.H.W.F. PEARCE CARYN L. CRAIG JEFFREY S. BALLINGER (905)686.3063 652.4612 FRANCIS J. BAUM• ROBERT W. HARGREAVES DAVID W. NEWMAN M.THERESA TOLENTINO WWW.BBKLAW.COM GEORGE M. REYES• C. MICHAEL•COWETT JENNIFER T. BUCKMAN THERESA E. ANTONUCCI WILLIAM W. FLOYD,JR. BRUCE W. BEACH MARIA E.GLESS MELISSA W.WOO GREGORY L. HAROKE ARLENE PRATER GLEN W. PRICE E. SEAN ARTHER OF COUNSEL KENDALL H. MACVEY MARK A. EASTER MARYMICHAEL MCLEDO TRANG T.TRAN . CARPENTER. CLARK H. ALSOP MICHELLE OUELLETTE JAMES R.TOUCHSTONE CARMEN MARTINEZ DE OSABA S CHRIST OPOP EL HER L L HARRIS• DAVID J. ERWIN• KEVIN K. RANDOLPH STEVEN M.ANDERSON TRACIE PHAM ANNE L.THOMAS. MICHAEL J. ANDELSON• CYNTHIA M. GERMANO ROBERT L. PATTERSON JASON C. GLESS DOUGLAS S. PHILLIPS• MARGUERITE S. STRAND BRYAN K. BENARD DONALD F.ZIMMER• GREGORY K.WILKINSON KYLE A.SNOW PAULA C.P.oe SOUSA FRANKLIN C. ADAMS GENE TANAKA JAMES B. GILPIN LYSA M. SALTZMAN WILLIAM WOOD MERRILL VICTOR L. WOLF KIM A. BYRENS MARCO A. MARTINEZ D. BRIAN REIDER DANIEL E. OLIVIER DEAN DERLETH JOHN F.WALSH K W. SMITH HOWARD B. GOLDS SONIA RUBIO CARVALHO DANIEL G.STEVENSON D KIRK O. HARRIS MITH STEPHEN P. DEITSCH JOHN 0. PINKNEY JEFFRY F. FERRE JOHN R. ROTTSCHAEFER PIERO C. DALLARDA DORINE LAWRENCE-HUGHES MARTIN A. MUELLER DWIGHT M. MONTGOMERY ALISON D.ALPERT OFFICES IN J. MICHAEL SUMMEROUR WILLIAM D. DAHLING, JR. KRISHAN S. CHOPRA INDIAN WELLS (760) 568.261 I SCOTT C. SMITH BERNIE L.WILLIAMSON JAY J. LEE RAYMOND BEST(I 865-19571 ONTARIO(9091989-8554 JACK B. CLARKE,JR. G. HENRY WELLES JAMES C.TURNEY JAMES H. KRIEGER(1913.1975) BRIAN M. LEWIS• RICHARD T. EGGER MICHAEL D. DOLIDA EUGENE BEST(1893-19811 SAN DIEGO (8 191 525-1300 • `A PROFESSIONAL CORPORATION File No.24347.00600 August 18, 2000 RECEIVED CITY OFARCADIA AUG 212000 VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Oily AAA NAL AND U.S.MAIL • Mr.Lee Perron Vice President, Corporate Affairs Adelphia Communications Corporation 2939 Nebraska Ave. . , Santa Monica, CA. 90404 • Re: City of Arcadia("City")Franchise • • Dear Mr. Perron: This' letter is written in response to Adelphia Communications Corporation's ("Adelphia")letter dated July 19,2000,in which its legal counsel,Mr.Robert T.Witthauer,asserted that Adelphia was in full compliance with that certain Franchise Agreement dated June 9, 1998 ("Franchise Agreement"). Based on testing conducted by the City subsequent to that letter, as well as test results submitted to the City by Adelphia,the City is reasonably satisfied that, as of the date of this letter,Adelphia's obligations under section 15(a)of the Franchise Agreement have been met, although arguably untimely. . However,with respect to Adelphia's obligations under section 15(b)of the Franchise Agreement, the City's technical audit concluded that Adelphia has failed to comply with the requirements of that section. Specifically,Adelphia does not currently have"the activated capability" throughout the cable system to transmit two-way high speed service as required by section 15(b). By this letter,the City hereby notifies Adelphia that the 30 day cure period permitted under section 27 of the Franchise Agreement has expired. LAW OFFICES OF _ BEST BEST & KRIEGER LLP Lee Perron August 18,2000 Page 2 Therefore, pursuant to section 27(a)(3)(b) of the Franchise Agreement, the City intends to set a hearing date at which the City will determine whether Adelphia is in default under section 15(b)of the Franchise Agreement. The City may also determine whether Adelphia did not timely cure any default under section 15(a) of the Franchise Agreement. If it is determined that Adelphia is in default of its obligations under either section 15(a)or(b)of the Franchise Agreement, staff could recommend to the City Council that the$1,000 per day liquidated damages apply to the period commencing June 18,2000. The City hereby reserves its right to invoke any and all remedies permitted under the Franchise Agreement. • However,before setting a hearing on this matter,the City would appreciate hearing from Adelphia regarding its perspective on its obligations under section 15(b) of the Franchise . Agreement. Specifically,the City would like to know whether Adelphia believes that negotiations toward a settlement of this situation would be a worthwhile endeavor short of conducting a hearing. Otherwise, the City will proceed to the default hearing as provided for under the Franchise Agreement. I look forward to hearing from you once you have had a chance to review this letter. If you have any questions, or would like to discuss this matter in more detail, please feel free to contact me at your earliest convenience. Sincerely, Acite„g&t://leit., 5 - Stephen P.Deitsch of Best Best &Krieger LLP City Attorney City of Arcadia RVPUBUSB\580309 . . - cc: William Kelly, City Manager(U.S.Mail and facsimile) Cindy Rowe, Management Services Officer(U.S. Mail and facsimile) John Risk, Consultant (U.S. Mail and facsimile) - Robert T. Witthauer, Esq. (U.S. Mail and facsimile) • • • BEST BEST & KRIEGER LLP {, . ' A CALIFORNIA LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS • sy LAWYERS 01 • t ARTHUR L. LITTLEWDRTN• BRADLEY E. NEUFELD _ DAVID J. HANCOCK LECARIE S.WHITFIELD SECENED 3750 UNIVERSITY AVENUE RICHARD D T.A DERSON• JEFFREY V. DUNN ROGER K. CRAWFORD JOHN ID,'CH HIGGINBOTIWY OF ARCADIo CALIFORNIA I 055 92502-1028 JOHN D.WAHLIN• , STEVEN C. DEBAUN SHAWN D. HAGERTY MALATHY SUBRAMAN JOHN E. BROWN ERIC L. GARNER• JAMES P. MORRIS USI MESHREKY 4'1 I/� (TTEEL�EPHONE (9091 6B6-I 450 DENNIS M. COTA KEVIN T. COLLINS CRAIG M. MARSHALL MICHAEL T.FRANCES J. BAUM'-L• ROBERT W. HARGREAVES DAVID W. NEWMAN Al. BALLINGER `O"'�)6B6-30CB31ER662-4612 • GEORGE M. REYES• C. MICHAEL COWETT JENNIFER T. BUCKMAN THERESA E.ANTONUCCI WWW.BBKLAW.COM • WILLIAM W.FLOYD,JR. BRUCE W. BEACH MARIA E. BLESS MELISSA W. WOO GREGORY L. HARDKE ARLENE PRATER • GLEN W. PRICE E. SEAN ARTHER 11 �/p� p,`',(R� -;j1�,yO • DAVID JI.ERWIN• T KEVIN K. RANDOLPH STEVEN M. ANDERSON TRACIE PHAM I�� lV A �C!-\G "-^AEL D NHARR SLATER• • CLARK H. ALSOP MICHELLE OUELLETTE JAMES R.TOUCHSTONE CARMEN MARTINE o O A A • MICHAEL J.ANDELSON• CYNTHIA M. GERMANO ROBERT L. PATTERSON JASON C. GLESS ANNE T. THOMAS• DOUGLAS S. PHILLIPS• MARGUERITE S. STRAND BRYAN K. BENARD . DONALD F.ZIMMER• GREGORY K.WILKINSON KYLE A. SNOW PAULA C.P.oE SOUSA FRANKLIN C. ADAMS GENE TANAKA JAMES B. GILPIN LYSA M. SALTZMAN • WILLIAM WOOD MERRILL VICTOR L. WOLF KIM A. BYRENS MARCO A. MARTINEZ D. BRIAN REIDER DANIEL E. OLIVIER DEAN DERLETH JOHN F.WALSH HOWARD B. GOLDS SONIA RUBIO CARVALHO DANIEL G. STEVENSON • KIRK W. SMITH STEPHEN P. DEITSCH JOHN 0. PINKNEY JEFFRY F. FERRE DINA 0. HARRIS JOHN R. ROTTSCHAEFER PIERO C. DALLARDA DORINE LAWRENCE-HUGHES . • MARTIN A. MUELLER DWIGHT M. MONTGOMERY ALISON D. ALPERT OFFICES IN J.MICHAEL SUMMEROUR WILLIAM D. DAHLING, JR. KRISHAN 5. CHOPRA INDIAN WELLS(760) 568-261 I SCOTT C. SMITH BERNIE L. WILLIAMSON JAY J. LEE RAYMOND BEST I 1 565.1 957) ONTARIO (909) 989-65B4 JACK B. CLARKE. JR. G. HENRY WELLES JAMES C.TURNEY JAMES H. KRIEGER (1913.19751 • BRIAN M. LEWIS* RICHARD T. EGGER MICHAEL D. DOLIDA EUGENE BEST(1593-IPSI I SAN DIEGO (6151 525-I 300 •A PROFESSIONAL CORPORATION • . File No.24347.00600 • July 21, 2000 . . VIA FACSIMILE AND U.S.MAIL . Robert T. Witthauer, Esq. , 1 North Main Street • Coudersport, PA. 16915-1141 ' •Re: - City of Arcadia, California Dear Mr: Witthauer: This letter is in response to your letter dated July 19, 2000 in which you'assert that Adelphia has cured any default in its performance obligations to the City of Arcadia("City")under that certain Franchise Agreement dated June 9, 1998 ("Franchise Agreement"). By our letter dated June 21, 2000,the City notified.Adelphia of the specific defaults which City has reason to believe exist with respect to the Franchise Agreement. In that letter,the City demanded that-Adelphia cure . the defaults existing.under sections 15(a) and 15(b) of the Franchise Agreement. • City has arranged to conduct testing throughout the system area in order to verify your assertion that Adelphia has cured the defaults listed in our June 21, 2000 letter. This testing will occur,with the presence of Adelphia engineers,on Thursday and Friday,July 27 and-28,2000. The City has reason to doubt,based on previous correspondence with Mr. Lee Perron, Vice President of Corporate Affairs,that Adelphia has cured all of the defaults existing with respect to both sections I5(a) and 15(b) of the Franchise Agreement. Specifically, the City has reason to believe that Adelphia will not be able to demonstrate activated and instituted two-way,high speed internet access, •as required by section 15(b) of the Franchise Agreement. • Section27(a)(1)(a)of the Franchise Agreement expressly requires Adelphia to"submit . sweep results at a test location at the end of each trunk run to confirm signal capability" upon completion by Adelphia o fits obligations under the Franchise Agreement. Adelphia has ety to fulfill this obligation. City shall therefore presume that such tests,if any were conducted at all, confirmed City's original belief that Adelphia was in default as of July 18, 2000—the date on which Adelphia • LAW OFFICES OF BEST BEST S, KRIEGER LLP Robert T. Witthauer, Esq. • July 21, 2000 Page 2 was to have completed its obligations under sections 15(a)and 15(b). However,more important for the purposes of this stage of the proceedings is the fact that section 27(a)(1)(a)requires Adelphia to "correct any deficiencies and retest"in the event Adelphia is not in compliance with the Franchise Agreement as of July 18, 2000. Moreover, section 27(a)(1)(a)requires Adelphia to "demonstrate one hundred percent carriage at all test points within thirty days of the scheduled completion date." Therefore,unless Adelphia presents test results supporting its contention that Adelphia has cured the . heretofore referenced defaults on or before Wednesday, July 26,2000 at 5:00p.m. Pacific Standard • Time, City shall hold Adelphia responsible for any and all costs incurred by City in performing the upcoming tests on July 27 and 28, 2000. Adelphia's test results may be delivered to City Hall, Attention: Cindy Rowe In the event that the City's testing on July 27th and 28th indicates that Adelphia remains in default of either section 15(a)or 15(b)of the Franchise Agreement,City shall exercise its• rights under section 27(a)(3)(b). City hereby notifies Adelphia that the thirty(30) day cure period under the Franchise Agreement and City's notice of default has expired. Should the City's test results indicate that Adelphia remains in default, City shall schedule a public hearing in accordance with section 27(a 3 • of the Franchise A• ee,I-. . This hearing will not be sooner than ten (10) days after this letter. City may thereafter determine that Adelphia has been,and continues to be in default under the Franchise Agreement,whereupon,the City shall be entitled to draw upon the reserve funds in the amount of one thousand dollars ($1,000)per day, commencing with the required completion date—June 18, 2000. If you have any questions or comments,please feel free to contact me at your earliest convenience. • -Sincerely, 7.117'41-11- • Best Best& -:er LLP City Attorney • City of Arcadia • RVPUBUSB\576534 cc: William Kelly, City Manager John Risk, Consultant Lee Perron, Vice President, Corporate Affairs Kurt Taylor, General Manager 1 North Main Street • RECEIVED Coudersport PA 16915-1141 Phone (814)274-9830 J U L w a 20 Writer's Direct (814)274-6041 Adelphia Fax (814)274-7782 BEST BEST & KRIEGER Internet www.adelphia.net • e-mail rwitthauer @adelphia.net • July 19, 2000 Stephen P. Deitsch, Esquire VIA TELECOPIER BEST BEST & KREIGER LLP NO. (909) 686-3083 3750 University Avenue AND U.S. MAIL Post Office Box 1028 Riverside, California 92502 Re: City of Arcadia, California Dear Mr. Deitsch: I am writing in response to your letter dated June 21, 2000. Please be advised that . Adelphia has cured any default in its performance of obligations owed to the City of Arcadia within the thirty (30) day cure period. Should you have any questions, please do not hesitate to call. With kindest regards, I remain, Yours very truly • • I Robert T. Witthauer Acting Assistant General Counsel r .1 , BEST BEST Et KRIEGER LLP FILE cat A CALIFORNIA LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS LAWYERS • ARTHUR L:LITTLEWORTH• BRADLEY E. NEUFELO DAVID J. HANCOCK LcCARIE S.WHITFIELD 3750 UNIVERSITY.AVENUE WILLIAM R. DcWOLFE• PETER M. BARMACK HAYLEY E. PETERSON KAREN M.FREEMAN P.O.BOX 1 028 RICHARD N STE ERSDN• JEFFREY D STEVEN C.D BU JOHN D. AN SHAWN 0. HAGERTY MALATHY S ' ,JOHN D.WAHLI UBRAMAN AN RIVERSLO=I�F {��26425.01026 JOHN E. BROWN ERIC L. GARNER- JAMES P. MORRIS USI MESHREKY a 4p� Q.�{ MICHAEL T. RIDDELL• DENNIS M.COTA KEVIN T.COLLINS CRAIG M. MARSHALL O E l) A MICHAEL GRANT. P.H.W.F.PEARCE CARYN L.CRAIG JEFFREY S. BALLINGER )6 8-3053 682.41512 FRANCIS J. BAUM• ROBERTW.HARGREAVES DAVID W.NEWMAN M.THERESA TOLENTINO WWW.BBKI,.AW.COM GEORGE M. REYES• C.MICHAEL COWETI JENNIFER T. BUCKMAN THERESA E.ANTONUCCI �T�/ 1Cn1' WILLIAM W. FLOYD,JR. BRUCE W. BEACH MARIA E.GLESS MELISSA W.WOO t_V LOF COUN2MOD GREGORY L. HARDKE ARLENE PRATER OLEN W. PRICE E.SEAN.ARTHER . KENDALL H.MACVEY MARK A.EASTER • MARYMICHAEL MOLEOD . TRANO T.TRAM CHRISTOPHER L.CARPENTER' CLARK H.ALSOP MICHELLE OUELLETTE JAMES R.TOUCHSTONE •CARMEN MARTINEZ Cc OSABA MICHAEL D. HARRIS• DAVID J. ERWIN• KEVIN K.RANDOLPH STEVEN M.ANDERSON TRACIE PHAM MICHAEL J. ANDELSON• CYNTHIA M.GERMANO ROBERT L. PATTERSON JASON C.GLESS ANNE T.THOMAS• DOUGLAS S.PHILLIPS• MARGUERITE S.STRAND BRYAN K. BENARD {TO.yY'YCAZ)11.... GREGORY K.WILKINSON KYLE A.SNOW PAULA C.P.Sc SOUSA t t HIW9 E� (- GENETANAKA JAMES B.GILPIN LYSA M.SALTZMAN WILLIAM WOOD MERRILL VICTOR L.WOLF KIM A. BYRENS MARCO A. MARTINEZ O.BRIAN REIDER DANIEL E.OLIVIER DEAN DERLETH JOHN F.WALSH SMITH K W. SM HOWARD B. GOLDS SONIA RUBIO CARVALHO DANIEL G.STEVENSON KIRK O. HARRIS STEPHEN P. DEITSCH . JOHN 0. PINKNEY JEFFRY F.FERRE JOHN R.ROT)SCHAEFER PIERO C. DALLARDA ODRINE LAWRENCE-HUGHES , • MARTIN A.MUELLER DWIGHT M. MONTGOMERY ALISON D.ALPERT OFFICES IN J.MICHAEL SUMMEROUR WILLIAM D. DARLING,JR. KRISHAN S.CHOPRA INDIAN WELLS(760)568.26 II SCOTT C.SMITH BERNIE L.WILLIAMSON. JAY J. LEE RAYMOND BEST C1868.1 D57) JACK B. CLARKE,JR.. G.HENRY WELLES JAMES C.TURKEY JAMES H.KRIEGER CID 1 3-1075) ONTARIO 15DR)550.8584 BRIAN M.LEWIS• RICHARD T. EGGER MICHAEL D. DOLIDA EUGENE BEST(1853-112a 1) SAN DIEGO(B I D)525-1300 •A PROFESSIONAL CORPORATION File No.24347.00600 June 21, 2000 VIA FACSIMILE AND U.S.MAIL MVO) la-ki Mr.Lee Perron • Vice President, Corporate Affairs . Adelphia Communications Corporation 2939 Nebraska Ave. . Santa Monica,-CA 90404 . Re: City of Arcadia Cable TV Franchise - Dear Mr. Perron: NOTICE OF DEFAULT UNDER FRANCHISE AND TRANSFER AGREEMENTS The law hrm.of Best;Best & Krieger LLP selves as City Attorney for the City of . • Arcadia("City"). We have been directed by the City Manager to serve this formal notice of default •. by Adelphia Communications Corporation("Adelphia")of certain of its obligations under that certain Cable Television Franchise Agreement adopted by City ordinance 2084("Franchise Agreement")and • . the subsequent Transfer Agreement dated on or about November 2, 1999 ("Transfer Agreement"), and demand that Adelphia cure such default, as described more fully below, within thirty(30)'days. • of the date of this letter. If such default is not entirely cured within thirty days, the City intends to exercisd its rights-under the Franchise Agreement,including,but not limited to:(1)seeking liquidated • • damages, including drawing on the security fund established under the Franchise Agreement and/or reducing the term of the Franchise Agreement by four days for every day of non-compliance beyond . the date set for compliance; (2) disapproving the three year extension of the Franchise Agreement; and/or (3) terminating the Franchise Agreement for Adelphia's material breach of the Franchise . Agreement. . • • LAW OFFICES OF BEST BEST & KRIEGER LLt' Mr. Lee Perron . • June 21, 2000 • Page 2 Section 15(a) of the Franchise Agreement requires Adelphia to transmit no less than seventy-seven (77) 6 megahertz channels through the utilization of no less than a 550 megahertz activated cable plant. Section 15(b) of the Franchise Agreement requires Adelphia to have the activated capability throughout the entire cable system to transmit cable services in two directions and to provide high-speed internet access. Both of these obligations were reaffirmed by Adelphia in sections 2(D) and (E) of the Transfer Agreement. The bandwidth upgrade was to have been completed by June 18, 2000. The two-way service/high-speed internet access was to be instituted (i.e., implemented)once such,service was economically and technically feasible and legal. Based on the admitted popularity oftwo-way,high-speed internet access,the City believes that all•prerequisites to performance are satisfied and that implementation of two-way, high-speed internet access is required of Adelphia at this time. The Franchise Agreement authorizes the City to collect liquidated damages in the amount of one thousand ($1,000) dollars per day past the date on which Adelphia was required to make and implement the improvements described in section 15 •(a) and. (b) of the Franchise Agreement. In addition,the City is authorized to reduce the term of the Franchise Agreement by four days for each and every day beyond the date on which Adelphia is required to make and implement the improvements required by section 15 (a) and (b). Section 4 of the Franchise Agreement also provides that the failure of Adelphia to complete the improvements in the time required is a material • breach of the Franchise Agreement, entitling the City to disapprove the three year extension of the franchise,term which is otherwise permitted in section 4. Finally, section 5 of the Franchise.: Agreement authorizes the City tq terminate theFranchise Agreement for violation of any"material . provision" of the Franchise Agreement, expressly including the upgrade requirements provided for in sections 15(a) and (b). . • Pursuant to section 27(a)(3),the City asserts that, as ofJune 18,2000,Adelphia failed to: (1)transmit no less than seventy-seven(77) 6 megahertz channels through the utilization of no less than a 550 megahertz activated cable plant through the cable system; (2) have the activated capability throughout the entire cable system to transmit cable services in two directions with the capability of supporting.high-speed internet access; and (3) implement the two-way, high-speed internet access. Therefore,City hereby demands that Adelphia cure the alleged violations within thirty • • (30) days.of the date of this letter.. If Adelphia fails to cure the above referenced violations within such (30) days, City will institute administrative proceedings as authorized by the Franchise Agreement to draw upon the security fund,reduce the term of the Franchise Agreement,disapprove. the extension of the Franchise Agreement term, and/or terminate the Franchise Agreement. • Adelphia and its predecessor in interest, TCI Cablevision, have now had over two years in which to complete the required improvements and services. As your letter of May 25,2000 demonstrates, there is a high demand for the services which Adelphia is required to provide. Furthermore, others in the telecommunications industry are providing these services and have been • LAW OFFICES OF BEST BEST & KRIEGER LL/- • Mr. Lee Perron • June 21, 2000 Page3 • doing so for more than a year. Therefore, there is no technical or economical impediment to Adelphia's compliance with the terms of the Franchise Agreement. • • If you have any questions or comments regarding this letter,or if you believe that facts exist which justify Adelphia's failure to comply with the Franchise Agreement, please feel free to contact me at your earliest convenience. • Sincerely; Stephen P. Deitsch . of Best Best &Krieger LLP • City Attorney City of Arcadia cc: William Kelly, City Manager • John Risk, Consultant • • • • • • • • • • • • • • AdeIp ®a June 20,2000 Mr.William R.Kelly City Manager RECEIVED City of Arcadia 240 W.Huntington Dr. CITY OF ARCADIA Arcadia,CA 91066-6021 JUN 2 3 2000 Re: Offer in Compromise CITY MANAGER Dear Mr.Kelly: As of Monday,June 19,2000 I am in receipt of the City's letter regarding the timing of completion of the system rebuild and the introduction of cable modem services.Though we have not had sufficient time to further discuss these outstanding issues,Adelphia would like to share with the City our response and proposal. In regards to section 15(a),Adelphia does not expect any problems with completion of the rebuild within the designated cure period of thirty days.As I shared in earlier communication with the City,our engineering staff projects to complete the project within two to four weeks of the original target date of June 18,2000. Our current assessment is that the project will be completed within the next ten to fourteen days.I think it is fair to once again state that the significant additional capital investment in designing and building a far superior fiber optic architecture provides long term value to the residents of the City of Arcadia.With that in mind,Adelphia would prefer to not waive the cure period. Concerning section 15(b),Adelphia is very confident that the letter of the franchise will be met at the time of the completion of the rebuild construction and activation.Though there is no date certain regarding the introduction of modem service,it is the intent to deploy cable modems in Arcadia as quickly as possible. The issue of technical and economic feasibility will require further discussion. One example of technical feasibility is the ability to connect from the two-way system to fiber internet back-bone.Third party vendors such as MCI and Sprint provide these types of connections.Delays in these connections would not only be beyond the control of Adelphia and/or the City,but would deem the feasibility of providing service as unavoidably negative.In consideration of the long standing desire to have cable modem service available in the City of Arcadia,Adelphia is willing to accelerate our earlier launch schedule from year end 2000 to October 1,2000.I would also like to point out that Adelphia has already offered to provi e1 modem service to all schools and libraries in Arcadia at no cost.If the City would like to discuss additional modem service to City buildings,Adelphia is open to further discussion in this area. As a collaborative effort to resolve this issue,I would like to suggest that we schedule a meeting in the very near future to settle any outstanding concerns.I look forward to speaking with you in the near future regarding any comments or questions you may have.My office number is(310)264-8043: Sincerely, j cc Lee A.Perron Vice President Corporate Affairs Copy: Kurt Taylor Martha Hudak John Risk Cindy Rowe 2939 Nebraska Avenue Santa Monica, CA 90404 Phone (310)829-7079 FEB-91-2001 15:58 BEST BEST & KRIEGER LLP 909 6S2 185 P.0? BEST Bf' 51 KRIEGER LLP . A eALIFORNIA LIMITED LIAEHLITY PARTNCRS•IP INCLUDING PROFESSIONAL CORPORATIONS LAWYERS _ ARTIWR L.LITILCWORt 1 BRADLEY E.KERNEL° RICNARD T.EODER e.MARS JARAMILLO 3780 UNIVGRmITY AVENue WILLIAM R.ORWOLFE• PETER M. DARMACK DAVID J.NANCOCK JAY J LEE o.0,sox •eta RIOMARO T ANDei5ON• JEFFREY V DUNN NAYLEY E.PETERSON JAMES.rummer R)VERSIDE.CALIFORMIA 52502.10ES JOHN O.WANLIN• SEVEN a.DABAUM ROGER K.CRAN.FORD MICHAEL 0 DOLIDA Tn.E►HONE IGODI Di0.1 AOO J ON.C.DROWN ERIC L.DARNER• SHAWN 0.HAGERT' CAnA C.NAOOPIAN TILL ODD)DS MICNACL T.RIDDELL' DCNNIE M.COTS JAMES P.MORRIS LISA K.LE R12 MICMAtL GRANT. P,H.W,Y,PEARCE KEVIN T.GOWNS LECARIE O.WnITFIELD tDOD)DDD•OODa Oii•N FRANCIS II.BAUM• RoDERT W.HAROREAVES CARYN L.CRAIG KAREN N.FREEMAN wWW.00KI.AW.COM GEORGE N.REYES• C.MIOMAEL COWETT DAVID W.NEWMAN JOHN 0.4IO0tNDOTNAM WILLIAM W.FLOYD.JR. BRUCE W.BEACH JENNIFER T.OUCKMAN MALATNY DUBRAMANIAN ORCCORY L.HARDKC ARLENE PRATER MARIA E OLEOS U01 MESROCKY OF COYNBEI. KENDALL H.MAOVGY MARK A.EASTER OLEN W,PRICE CRAIG M MARSHALL ONAIBYOPN6R G. CARPENYER- Cy.RK N.ALSO'. MIONELLE'OUELLETTE MARYMICHACL MCLCOO JEFFREY S.DALLINDER O, MARR18- MICHAEL DAVID J.ERWIN• KEVIN K.RAHOOLPII JAMES R.TOUCHSTONE M.THERESA TOLENT+Ne M ANNE L THOMAS• MICHAEL J.ANDELSON• CYNTHIA M.OERMANO STEVEN M.ANDERSON JUDY L.we.ENDS D OUOIAS B.PHILLIPS• MARGUERITE O.STRAND ROBERT L.PETEERSON THERESA E.ANTONUCCI DONALD.F. SIMMER• • GREGORY K.WILKINSON KYLE A.SNOW BRYAN K.BENARO MELISSA W.WOO CHRISTINA I..DYER . DENS TANAKA .TAMES B.O.LP.K PAULA C.P.of SOUSA FRANKLIN C.ADAMS VICTOR L.WOLF KIM A.SIRENS LYRA M.SALTEMAN WILLIAM WOOD NGRR/LL DANIEL E.OUVIER DEAN DERLETt MARCO A.MARTINEE O.BRIAN REIDER NnwARO B.00LOS DONIA RABID CARVALNO JOAN F.WALSN KIRK W. your STGPNCM P.DEIT)CP JOHN 0.PINKNEY DANIEL 0.OTEVENSON - . JOHN R.ROYTDCNAEFER P1500 C.DALLARDA JEFFRY F.FERNS armor.*IN MARTIN A.MUELLER aw1GNT M.MONTGOMERY DORINE LAWRCNCE•HUDHES J.MICNAEL DIIMMCROUR WILLIAM 0.DARLING.JR. RATAN P.HICKEY RAYMOND BGSr[I DO0.1067) RANCHO MIRAGE(700)8®6.201 1 SCOTT C.SNOW BEANIE L.wRAJR.M:ON AUSON 0.ALPIRY JAMES N.KPICOER II*1 3•I 876) ONTARIO[GOD!060.886• JACK D.CLARKE,JR. C.HENRY WELLES JOROE A.MARTINEZ BRIAN M.LEWIB• . 01NA O.HARRIS KRISNAN 8.CROPRA EUGENE BELTt■15o=-1 OS I) SAN 51E00(61 Of 825-1 200 •A PROFESSIONAL CORPORATOR File No. 24347.00600 . June 16,2000 VIA FACSIMILE AND U.S.MAIL ' Mr.Lee Perron • Vice President, Corporate Affairs Adelphia Communications Corporation 2939 Nebraska Ave. Santa Monica, CA. 90404 . Re: Arcadia Cable TV Franchise- Offer in Compromise • . • j Dear Mr. Perron: ' The law firm of Best,Best&Krieger serves as City Attorney for the City of Arcadia ("City"). We have been directed by the City Manager to present the following offer in compromise to settle the pending dispute between the City and Adelphia Communications("Adelphia"). The City asserts that Adelphia Communications Corporation ("Adelphia") is in default of that certain Cable. Television Franchise Agreement(adopted by City Ordinance 2084)("Franchise Agreement")and the subsequent Transfer Agreement executed on or about November 2, 1999 ("Transfer Agreement")_ This offer in compromise is subject to Evidence Code section 1152. Furthermore,any agreement reached between Adelphia and City staff shall be subject to ultimate approval by the Arcadia City Council ("City Council"). The City Council intends to hear this matter at a closed session at its June 20,2000 meeting. / Section 15(a)of the Franchise Agreement requires Adelphia to transmit no less than seventy-seven (77) 6 megahertz channels through the utilization of no less than a 550 megahertz activated cable plant. Section 15(b) of the Franchise Agreement requires Adelphia to have the activated capability throughout the entire cable system to transmit cable services in two directions and _ to provide high-speed internet access. Both of these obligations were reaffirmed by Adelphia in • sections 2(D).and (E)of the Transfer Agreement. The bandwidth upgrade must be completed by RVPUS3USD\57t075 • rtt1-101—L601 1J='C 1715 1 btb I 6, roc tU=K LLr 7r.J7 ooc 1- r.CJa LAW OFFICES OF ,rti BEST BEST E.. KRIEGER ' i Lee Perron • . V June 16, 2000 Page 2 June 18, 2000. . The two-way service/high-speed internet access was to be instituted (Le., implemented) once such service was economically and technically feasible and legal. Based on Adelphia's own statements,the City asserts that such prerequisites have been satisfied. The Franchise Agreement authorizes the City to collect liquidated damages in the amount of one thousand (S1,000) dollars per day past the date on which Adelphia was required to make and implement the improvements described in section 15 (a) and (b) of the Franchise Agreement. Section 4 of the Franchise Agreement also provides that the failure of Adelphia to complete the improvements in the time required is a material breach of the Franchise Agreement, entitling the City to disapprove the three year extension of the franchise term which is otherwise permitted' in section 4. Iniaddition, the City is authorized to reduce the term of the Franchise Agreement by four days for each and every day beyond the date on which Adelphia is required to make and implement the improvements required by section 15 (a)and(b). Pursuant to section 27(a)(3),the City asserts that,as of June 18,2000,Adelphia will have failed'to: (1) transmit no less than seventy-seven (77) 6 megahertz channels through the utilization of no less than a 550 megahertz activated cable plant through the cable system;(2) have the activated capability throughout the entire cable system to transmit cable services in two directions with the capability of supporting high-speed Internet access; and (3)implement the two-way, high- speed internet access. Based on the admitted popularity of two-way,high-speed internet access,the City believes that implementation of two-way,high-speed internet access is required of Adelphia at this time. The City hereby offers to settle the claims which the City has against Adelphia with regard to the requirements of section 15(a) and (b) of the Franchise Agreement. Specifically, in consideration of Adelphia's timely and completion of the obligations described in the following two paragraphs, City will waive those remedies available to the City arising out of Adelphia's alleged breach of section 15(a)and/or(b)of the Franchise Agreement. Such remedies waived by City will include the right to franchise termination,liquidated damages,reduction ofthe existing franchise term and non-approval of the three year franchise term extension specified in section 4 of the Franchise Agreement. City would further agree to approve the three year extension permitted in section 4 of- the Franchise Agreement, provided no other provision(s) of the Franchise Agreenent or Transfer Agreement is violated. City would further agree not to institute the public hearings required under the Franchise Agreement for termination or recovery of liquidated damages. The City's obligations hereunder are expressly conditioned upon Adelphia's timely compliance with the provisions of the following paragraphs and with all other terms of the Franchise and Transfer Agreements. Adelphia will,in consideration of the City's settlement of claims arising under section 15(a) of the Franchise Agreement, pay to the.City thirty thousand dollars ($30,000) on or before July 1, 2000. Adelphia will complete the improvements required by section 15(a)of the Franchise Agreement on or before August 1, 2000. Adelphia will prove compliance with these terms by submitting sweep tests to City as described in section.27(a)(1)(A) of the Franchise Agreement. RV@UB1ISIMS71075 FEB—@1-2001 I s VW7 oac lox r.rte=+ i-1 t < ' • LAW OFFICES. OF ,P BEST BEST & KRIEGER P Lee Perron • June 16, 2000 . • Page3 Adeiphia would irrevocably waive any and all rights to any cure period, notice of default,notice of expiration of cure period, or public hearing, relating to claims arising from section 15(a) of the Franchise Agreement. Furthermore, Adeiphia will, in consideration of City's settlement of claims arising under section 15(b)of the Franchise Agreement,pay to the City an additional sixty thousand dollars (S60,000)on or before July 1,2000. Adelphia will complete and launch(i.e.,make available to every subscriber within the City)the two-way,high-speed internet access required by section 15(b)of the Franchise Agreement on or before November,2000. Again,Adeiphia would irrevocably waive any and all rights to any cure period, notice of default, notice of expiration,of cure period, and public hearing,relating to claims arising from section 15(b)of the Franchise Agreement. Please provide Adelphia's response to this offer to compromise no later than 12:00 . p.m.,pacific standard time,June 20,2000. In the mean time,if you have any questions or comments, please feel free to contact me at your earliest convenience. Sincerely, . • evin K.R 's'ph of Best Best&Krieger LLP Assistant City Attorney City of Arcadia cc: William Kelley, City Manager Jahn Risk, Consultant • • r RvPUBUSDl571075 TOTAL P.04 t � • TRANSCRIPT (Insofar as decipherable) • RELATING TO AGENDA ITEM 9a. A PUBLIC HEARING FEBRUARY 20, 2001 CITY COUNCIL MEETING To consider whether Adelphia Communications Corporation is in default of Section 15(b) of the Cable Television Franchise between the City of Arcadia and Adelphia Communications Corporation regarding two-way High Speed Internet Access. LASER IMAGED • City Manager William Kelly: Mayor and City Council. This is a public hearing relative to issues dealing with Adelphia Communications Corporation. Cindy Rowe, from the City staff, will make the initial presentation. We will also have our special cable consultant, John Risk, here in conjunction with the City Attorney. There will be a multifaceted presentation. Cindy? Cindy Rowe,Management Services Officer: Honorable Mayor and City Council. You have received the staff report on this issue, and we have provided you with a packet of supplementary correspondence which should be entered into the record this evening as well. This is a public hearing, and was duly published in the Arcadia Weekly on February 8. For the benefit of the audience, I would like to briefly review the background information. As part of the television cable franchise renewal process in 1995, a needs assessment was performed by the city's cable consultant, Communications Support Group, which clearly indicated that high speed Internet access was a priority among Arcadia cable subscribers. Based on that information, the cable system rebuild included in the cable franchise renewal in 1998,required the company to have the capacity to provide two-way high speed Internet access, to have it activated and made available to the community by June 18, 2000. Due to a network infrastructure delay, and in exchange for providing free modem service at 15 City and School District facilities, on September 5, 2000, the City Council granted Adelphia additional time, to December 1, 2000, to complete, market and launch this Internet service. This was based on oral assurances by Adelphia that the service would indeed be available by that date. Between December 1, 2000 and January 31, 2001, City staff and the City's cable consultant made numerous attempts to determine whether or not that service had been launched in Arcadia, and were not able to determine that that was done. Repeated phone calls to customer service reps went unanswered in terms of whether or not this service was available. We were put Page 1 off and told that it was not yet available in Arcadia. It was not until February 1,when a City representative was told that the service would be installed in his home. City correspondence to Adelphia on December 22, 2000,requested that Adelphia show proof that it had instituted two-way high speed Internet service throughout, submission of sweep results, and system testing documentation, or to-work orders,marketing materials,billing statements or similar verification. Nothing to date has been provided to the City. If it is determined that Adelphia breached its obligation under the terms of the franchise agreement, the City Council may order that the City recover liquidated damages in the amount of $1,000 per day of Adelphia's default, commencing December 1, 2000. Also,the City may, for each month delay past December 28, 2000, reduce the term of the franchise agreement by four months, and reduce the term of the franchise agreement by four days for each day beyond December 1, 2000. Adelphia's breach has also entitled the City to disapprove the three-year extension of the franchise term that is permitted in the franchise agreement. The City also has the option of terminating the franchise agreement. It is also anticipated that the availability of high speed Internet service will increase the number of cable subscribers, thus increasing franchise fees for Adelphia. Consequently, if the service is not available, or is available but subscribers have not been made aware of it, the City is not benefiting from the additional percentage of franchise fees. It is recommended that the City Council hold the public hearing, listen to testimony, and take whatever action you determine after that. This is the end of the staff report. The cable consultant, as the City Manager said, is present this evening and Mr. Lee Perron and Mr. Kurt Taylor from Adelphia are present to answer questions, as am I. Page 2 Mayor Gary Kovacic: Great. Any questions at this point? Let's open the public hearing and first hear from Adelphia, if you have anything to say. Lee Perron,Vice President of Corporate Affairs,Adelphia Communications: Good evening, My name is Lee Perron. I'm the Vice President of Corporate Affairs for Adelphia Communications, in Southern California. I think I'd like to just go through a bit of a series of events that led up to where we are, and clear up some unfortunate confusion in regards to the availability of this service in this city, and the type of service we are providing in the City of Arcadia. Adelphia actually purchased the system for Arcadia in very late 1999. And at that point in time, we realized immediately that TCI had done really nothing to begin the rebuild of the system. We also realized that there was a date of June 8 when the system had to be completely rebuilt. That was a daunting task in the sense of one very particular item, and that is, that in the current franchise that you have, the requirement that TCI agreed to, was to rebuild the system to 550 Megahertz. When Adelphia looked at that, we thought that was an incredibly inferior system and inferior architecture, and that the City of Arcadia deserved much better, especially in an effort to not only roll out new technology products such as high speed cable, but other products such as video on demand and eventually a local telephone service, other services that we would like to provide, and also the architecture that Adelphia was building at that time was much smaller node sizes, much more fiber rich, had a much higher system reliability and really was a much greater platform for deploying services. So we completely redesigned the system to 860 with node sizes of approximately 150 to 200 homes, versus the 550 with node sizes of approximately 1200 homes that was earlier proposed. Page 3 You know, the technology changes rapidly these days. I don't think there was any time, or any way at the time that the City renegotiated this new franchise to know that 860 would be the new architecture,because it moved from 550 to 750 to 860 very rapidly in a short period of time. So we completely redesigned the system,which took us some time and we worked feverishly to get the system rebuilt. In mid-May, we realized that we were probably going to miss the June 8 target by a couple of weeks. Not a huge amount of time, but we knew that June 8 would be very difficult to meet. So we came and we met with the City Manager's office and explained that to him, it looks like we would be a couple of weeks late. We knew, at that time, that most likely what would happen is we would be notified that if we didn't meet June 8, that we would have a 30-day cure period, and if we did not complete it successfully within the 30-day cure period, then Adelphia would absolutely be subject to any of the liquidated damages or any recourse that the City could take. • What actually happened is that we stayed on target, and we did get the system rebuilt, and we were about two weeks late, and it was within the 30-day cure period. At that time, what I had done, because we knew that the City was very, very concerned about this, and the City Council was very concerned about this very important issue, is that I had written letters to the City. In addition to pointing out some of the reasons we thought we would be a little late, but felt that we would get the project done in a reasonable time frame, we made an offer to the City that if they would like us, when we began to deploy cable modem service, to offer free modem service to the schools and the library at no charge, that we would be happy to do that. • Subsequent to that point, Staff has been very, very diligent in regards to making sure we were aware of all the issues if we missed the target. And we continued our conversations,both in person and on the phone. Subsequent to the completion of the rebuild, our notification to the Page 4 city, they had a consulting engineer that came out and took a look at the system. And they did a very,very in-depth testing of the system. Out of the 116 nodes we have in the City, during a two-day period, along with our Vice President of Engineering for Southern California, went to 50 out of those 116 nodes in the City. The good news is that the end result was that the report from the consulting engineer and also from John Risk pointed out that the system, in fact, was not only rebuilt above and beyond, significantly above and beyond the 550 to 860 two-way,but in addition to that, is that after going through all the test points, that we significantly exceeded FCC standards and measurements for system performance. In addition to that, it was also noted that the system was actually two-way interactive at that time,both the downstream and the upstream were active and functional. The issue was that cable modem service was not available yet. And I don't want to split hairs with regard to the actual language of the franchise stating that the system needed to be modem- capable and that there wasn't at least, in our reading of the franchise documents, any date certain that cable modem service should be required to be launched in the City. We very much understood completely that that was a very, very important issue to the City. We recognized that, and we took ownership of that fact. And we did say that we felt that we could have modem service ready by December of 2000. Subsequent to that, it was requested by the City that in addition to supplying free modem service to the 11 schools and the library, that we also supply free modem service to the three public buildings. And we, in fact, agreed to that as well. On September 26, I did receive a letter, and it came from the City Staff. I would like to point out is that I really feel that our working relationship with City Staff is very good. I know sometimes Page 5 when you are taking a look at legal documents and contracts, discussions can become a little bit more formalized. But during this process, I really felt that our working relationship with the City,both with Staff and with the customers,has been very, very good. A couple of things that were in the letter that was sent September 26 that I was asked to sign and send back was outlined that agreement that was proposed back to you on September 5 that we would launch cable service, excuse me, modem service in December, we would provide the free modem service to those locations, and there were some other items in there, you know, regarding some of the testing,,etc., associated with showing proof of that,product being delivered. One of the things I'd like to point out is that when I went to speak with the Unified School District, I spoke with Rob Leary from the Unified School District here in Arcadia, and I mentioned to him about how we had come up with an agreement with the City, our willingness to supply that service. By the way, one of the things I do want to say is that modem service for 15 locations, if you take a look at the retail rate of$39.95 a month, and you take a look at that for the remaining months of the franchise,was really a commitment on the part of Adelphia, that if you want to put a monetary sort of check mark next to that, is in excess of$50,000 in service that was our commitment. When I contacted Rob Leary from the School District, Rob informed me that, well, that is a tremendous and a very generous offer,but he mentioned to me at that time that the Unified School District in Arcadia already had a Local Area Network, and just about all their buildings were already connected with T-1 service, and so the cable modem service might be somewhat superfluous. So I asked Mr. Leary, well, what can we do for you? He mentioned to me, well, you know,you've got all our campuses wired for cable service,which we provide at no charge; there are three buildings on three different campus sites that we just couldn't get a wire to, and they are not connected to our Local Area Network. Could you figure out a way to Page 6. get a cable line to those three locations? And then subsequent to that, at their request, we could supply three cable modems, and then that would allow them to have key communications between those buildings and the rest of the buildings that were connected to their Local Area Network. Now,there was never any discussion about this requirement. It was nothing we had talked about before with City Staff,but we noted that that was important to the Unified School District so we felt that would be important to the City. So we went out and did the site surveys and the engineering and we built cable lines and have activated service to those three additional buildings. What happened after that is that in the letter,because it says, I specifically, I, meaning Adelphia, will specifically provide cable modem service to these 11 school sites by the end of the year, and that was part of the requirements that I would have to meet in this letter, I really felt that we need to go back and revise this letter. So there is no written communication, but in oral communication,myself via phone with the City Manager's Office, I spoke with him saying,this particular element is probably no longer accurate since we need to change that aspect of the schools? And what I did receive back was a request saying,well, if the Unified School District is only going to use three out of the 11 modems that you have offered, could we use the remaining eight modems at locations that the City would like to use them at, and we said of course,that's not a problem, because we made a commitment of 15 modems and if the City would like to see additional modems in another location in the building,with that added benefit to the City in some way,we would be happy to do that. I had actually expected maybe a revised letter that outlined that change,based on my conversations with the Unified School District and building the cable lines there and the fewer cable modems. Unfortunately,what happened is that, and I'm not sure if this is due to a Page 7 miscommunication,but we did receive another letter on December 22, saying that we were still not in compliance with providing cable modem service. Now I would like to point out is that we started hooking up cable modem service in December in the City. And in fact,we had spoken with the City in regards to whether they wanted us to begin installations there, and where would they like them? And we did hear at that time is that they really needed to spend a little more time to decide where they would want the cable modems located,,and we're working through that. Now since then,we have installed one cable modem at the library. That was done on January 10th . It's up and operational. We have one cable modem that was installed in the Arcadia Rec Room on January 10th as well. And we do have one cable modem currently,working in City Hall as of February 9th One of the things that happened, and I will take the ownership of the fact that there was confusion with this, it was truly unfortunate, but what you.see that's being marketed, and we really started full-blown marketing in January, after we had completed our testing and node certification, was simply that, originally what we had talked about, and this was well over a year ago, is providing @Home service to Arcadia. That was the branded service that had been launched in the Southern California market. But we made a decision in the fall of 2000 that we would launch a product called PowerLink. Now you may see it marketed at PowerLink @Home, and I'll explain that. But PowerLink is a very special product. Adelphia is only one of two companies, cable television companies, in the entire United States that doesn't work through a third party to provide cable modem service. What I mean by that is that the @Home services that have been launched in other locations (End of Tape 1, Side A) Page 8 (Beginning of Tape 1, Side B) the phone calls go to @Home for at least what we call Tier 2, or customer support, and really it's a third party arrangement that actually many of the cable companies in the United States use. Much like Roadrunner, which is Time Warner's particular product that they have a third party relationship with. The PowerLink product is a product that is completely built and managed by Adelphia, and we think it's a superior product. And the reason is because we're not asking a third party to manage the traffic once it leaves the City of Arcadia, and goes through long-haul networks onto the Internet. We're not asking a third party to answer our phone calls for sales or for customer support, and we think because of that, thatwe can offer a superior product,not only in regards to the network management of the product and the quality and the throughput speeds, but we also firmly believe that we have entire ownership of the customer support content and also the customer support resources. Mayor Kovacic: Mr. Perron, can I interrupt you for a second. I don't mean to take too much time away from your presentation, but I want to get focused on the issue here. And I'd like to ask Cindy Rowe to come back up for just a second. Is the issue before us, merely whether this two-way high speed Internet access was available for Arcadia residents? Ms. Rowe: On December first. Mayor Kovacic: And you're saying it wasn't. Is that the only alleged breach that staff is asserting at this point? Ms. Rowe: Yes. Mayor Kovacic: OK. So Mr. Perron, if maybe you can focus on that issue, which is,was two- way high speed Internet access available to Arcadia residents as of, what's the date, Cindy? Ms. Rowe: December first. • Page 9 Mayor Kovacic: December 1, 2000. Mr. Perron: Absolutely. In fact, we actually performed an installation on December 1, 2000. And as a matter of public record, and a matter of fact, I will attest to that. What I was leading up to, and excuse me if I was taking a little too long, Mr. Mayor, was the fact that during the month of December, I know that there were several phone calls that were made in an effort to see if cable modem service was available in the City. Unfortunately, because of confusion, the phone calls were going to the @Home customer support, or going to the local office. The phone calls should actually have been going to the National Customer Care Center for the PowerLink @Home product, which is located in Coudersport, Pennsylvania. Now that was unfortunate that the way to be able to test to see if service was available, that phone calls were being made,but I have to tell.you, even as of this evening, in speaking with one of the consultants, I had to reaffirm that the product available since December 1, in the City of Arcadia, is the PowerLink @Home product. It's our PowerLink network product, our customer support. The only thing that @Home has to do with it, is that there's a CD that gives you an upfront content page that the customer may use,because we think it has a lot of added value and information for the product. But the phone calls do not go to @Home. I know that there was a time when the web page for @Home.was checked to see when the service would be available. Well, you have to understand that in our relationship with @Home,there's been a difference of opinion on the product that would be launched in Arcadia. They would have loved to have launched their product here, but we launched our PowerLink product. That's a contractual issue that we have with @Home that is our own issue, but it hasn't in any way deferred the availability. of the service. Page 10 Mayor Kovacic: Is it your position, then, that had an Arcadia resident called the right telephone number in December, they would have been able to receive two-way high speed Internet access? Mr. Perron: Absolutely. And the only thing we hadn't done, is we had the service available, is that we had not gone to a full-blown market launch. We were still in the process of making sure that our own internal customer service lines, our fulfillment of the product, which is very complicated and sophisticated, going to a customer's home, opening their PC, installing.a network interface card, installing the software to interact with our cable modem and access to the Internet, and making sure that we can fulfill that product when the customer calls and gets a work order,we show up on time, on the day that they want the service, and to make sure that if there are any issues or questions,that they've got a customer support group they can call. They're incredibly important, we were testing all those issues during December, but we were installing people. Now during the month of January, we actually did go to a full market launch. We actually delivered 21,728 mail pieces in January to customer homes. We used a company called Turtle Ridge,they're a direct delivery. It was not in the mail. They take them right to the house and put them at the door. If we had a gated community or an apartment complex with security, we might not have had access, and then we'll use a number of other resources, such as direct mail, and outbound telemarketing to reach those people. One of the things that we did, recognizing the very high Asian ethnicity, demographically in the community, is we actually used a Chinese New Year's piece with the Year of the Dragon. It has a special offer on it, these 21,000 that were delivered in the City. The special offer that we're doing right now, and it's still available, is for free installation and a free month's service, and the number inside the mail piece is 188adelnet, A-D-E-L-N-E-T. And that number is, 1-888-233-5638. And for anyone here this Page 11 • evening, or anyone watching us on cable television this evening, if you'd like to make that phone call or contact us for that offer, we'd be more than happy to do that. Now, in closing, I will say that I know that the Council is taking a look at a particular action tonight. We take it very seriously. We really feel that there's been a misunderstanding,that we'd like the opportunity to clear up. We were a little late of providing information to the City Attorney. Some of that didn't even get to him that he would like to see and review until this morning. So with that being said,we do apologize for the lateness of the response. But I will say that we honor our commitments, we very much want to be a very, very positive part of the Arcadia community and a service provider. And I think the only thing that I would ask, after hearing what I presented, is just simply that I think a face-to-face meeting would be in order, and if the Council would, after listening to the information that they have before them tonight, would decide to defer action until we could have that face-to-face meeting. I would like to have that,because I honestly have to tell you is that over about the last 30 days, I was instructed by corporate counsel to allow them to simply correspond back and forth by mail. I haven't made contact with the City Manager's office because of that. That's not the way I work. That's not the way Adelphia likes to work. And I really think that bringing the atmosphere and pressure down a little bit,having a face-to-face meeting, I think we could resolve any of the outstanding issues we have. Mayor Kovacic: Thank you, Mr. Perron. Any questions? Dr. Chang. Councilmember Dr. Sheng Chang: I have a question for Cindy. Ms. Rowe: Yes, sir. Dr. Chang: What is this two-way high speed Internet service setup? Exactly what is that? Page 12 Ms. Rowe: I think I'll let Mr. Risk respond to that, if I may. The technical setup of the system, you mean? Dr. Chang: OK, I try to get to the point, OK. Is that the service that would be installed in each customer? Ms. Rowe: Yes, you could have a modem that would provide the Internet service instead of through your telephone line. Is that correct, John? Mr. John Risk, President, Communications Support Group: Yes. Dr. Chang: OK. Mr. Risk: It would be a broad-band modem, and it's capable of speeds in excess of 1.5 megabytes per second. So it's significantly faster than dial-up service. Dr. Chang: OK. Mr. Risk: It would be outfitted in a network card that would go into your computer and through the USB port on your computer. Dr. Chang: OK, and this kind of service, according to our contract, should be automatically installed by Adelphia to our customer, to the customers? Mr. Risk: Right, directly. Dr.Chang: That means we dial the customer calling Adelphia for it. Mr. Kovavic: Now he said automatically. Does that have to be done on request? Mr. Risk: Oh,no. Meaning that the subscriber has to ask for the service,just as though a subscriber would ask for HBO or any other service. Dr. Chang: OK,just like HBO and other services. They have to call Adelphia for the services. Mr. Risk: Right. • 1 Page 13 Dr. Chang: So according to what he presented,he said that the service is available, it is just waiting for the customer to call. Is that correct? Mr. Risk: Well, that's what Mr. Perron said. Mayor Kovacic: Mr. Risk, before you get started. No, I'm not going to cut you off. I just want you to identify yourself. Mr. Risk: Sure. OK, is this the time for me or do you have questions? Mayor Kovacic: We're taking testimony and Dr. Chang had a question. Mr. Risk: OK, I'm John Risk. I'm President of Communications Support Group, and our company has been the cable consultant to the City since 1993. And the issue here is, in fact, whether the service is available and two,whether the public's been notified that it's available. And I'll just go on to say that I work for a number of cities all over the state, and this City, more than any of my clients, have advocated for high speed modem service the longest. Since 1993, this City has been on record, following an interesting survey that the Arcadia Unified School District did in 1993,which showed a significantly high number of PCs in the homes of Arcadia. It was significantly higher than the LA average. And the School District wanted to make a point of that to us as we were negotiating the cable TV franchise,that they considered high-speed modem service an important thing. And that their public, because of dissemination of school materials to the public over the School District's web page, and through students having access to the Internet at high speeds, their educational opportunities would be facilitated with Internet access. So that led the City, in fact, to send a letter in 1993, early 1994, to the General Manager of TCI at the time, Juan Herrera, stating that if TCI had just purchased @Home, please ask your • corporate officers to make Arcadia a test site for the @Home product. And that was urged. But Page 14 • • shortly after that letter was sent, that General Manager left the company or was transported to a different, actually, he was transported to Japan. He left the entire area. And when his replacement came, that issue was not, no longer pursued,because they felt that the Arcadia system lacked the technical integrity to support @Home,which was a true fact. So in 1995, during the needs assessment phase of the cable TV renewal,more than 260 residents, in responding to a survey that the City sent out via the cable bills and via the City newsletter, stated affirmatively that they would like to see interactive information services as part of the new cable system. In 1996, institutional users queried by the City including City Departments indicated high speed Internet access to be a significant need. And speed was the number one concern of them. Speed, Internet access speed. In 1998 the cable franchise expressly identifies in section 15(b), which is there, you know the title of that section is "Two-Way Services, High Speed Internet Access." It stands out very boldly. Next sentence: "Within two years." And as a negotiator of that franchise renewal,we worked hard with TCI on this issue. TCI was reluctant to offer service here, for whatever reason. We saw Pasadena with Charter Cable, we saw Cox Cable down in Irvine, we saw Comcast Cable in Orange County, offering modem service, and we were wondering why TCI was not wanting it here. So we fought hard for this language. In the transfers between TCI and Century,between the TCI-Century partnership and Adelphia, we discussed Internet access as the number-one priority, as a priority,not number one. The rebuild of the system was number one, two was high speed access. They were reminded countlessly during that process that this was important. Therefore, we're partners here. We advocate the product. We're the first to have been happy,to have been pleased, to have seen modem service widely disseminated and available on December first here. Page 15 But what had happened was, City Staff started making phone calls, I started making phone calls. If you look at Tab 5 of this packet, you'll see calls to the local office. Where does the subscriber call first? They call the phone number on their bill. We called that number. We identified ourselves as someone interested in moving to Arcadia. We were given another number to call after several attempts and we were put on hold a few times,not to mention that. But we were asked, then,to call @Home, which the Adelphia CSR told us to do. We called @Home at their 888 number,waited several minutes, gave the street, gave the zip code, came back and said it would be available in one month. And we said, well, is there any other way we can get modem service here? And the @Home person said, call.Adelphia PowerLink. Gave us the phone number, 888-233-5638. The same number that Lee Perron just stated. We got voice mail. Someone there said to us, Wally was his name, "Modem service is not available in Arcadia. It is available, however, in West Hollywood and La Habra." When, we asked him, can we expect it in Arcadia, he said affirmatively, "Probably six months to one year. Try calling Adelphia in Arcadia." We did the same exercise on December 4th. Same result. So was that enough? No. I said let's go to the Internet. Certainly the Internet is going to help us find this out. So on January 30 and on February 13, we logged on to the Internet. Went to @Home, because up until then we were told it's PowerLink or @Home, so we went to @Home first. On their web page we plugged in a zip code in Arcadia, we plugged a local street address, we were told it is not available in Arcadia. Mayor Kovacic: I don't mean to stop you, but I just don't want to get too far off target here. The question we're being asked to decide tonight is whether there was a breach of the contract, Page 16 and that comes down to the issue of whether two-way high speed Internet access was available to Arcadia residents in December of 2000. Do you understand that to be the issue? Mr. Risk: Well, I think the issue is modified in that the issue is what the settlement agreement spoke to. Not exactly what the franchise agreement states. The franchise agreement was the provision that was being negotiated up until the September public hearing the City Council had. Mayor Kovacic: What do you think the issue is as far as deciding whether there is a breach or not? Mr. Risk: .1 think the issue was, the service would be launched as of December first. Mayor Kovacic: So the question is whether it was launched or not? Mr. Risk: Yes. Mayor Kovacic: And what is you opinion? Mr. Risk: I would say it was not,because subscribers were not told it was available. When attempts by subscribers or persons representing themselves as subscribers directly asked for the service, they were told it was not available. Until February first, when Roger Chandler made a phone call, or his wife made a phone call, and found... Mayor Kovacic: Are you aware of any other breaches? Mr. Risk: No. Mayor Kovacic: OK. Mr. Risk: Other than the fact that several letters were sent and several phone calls were made and no substantive responses were given. We made efforts to ascertain this through a normal channel of communications, and that channel was not effective. Mayor Kovacic: OK. Thank you. Mr. Risk: You're welcome. Page 17 Mayor Kovacic: Would anyone else like to address the City Council on this? Mr. Perron, do you want to respond in any way to what's been said, or your position remains, which is that you had launched this service by December of 2000? Mr. Perron: I just simply want to state that I know there's one City resident here, tonight,who has cable modem service in Arcadia. And also another resident who couldn't be here tonight, a Mike Menerey at 2311 South 8th Street,who's a cable modem service customer, who's been a cable modem service customer in Arcadia as well. And the unfortunate thing is that during the process of trying to contact various people, with the idea that we're someone moving into Arcadia, which wasn't actually the case, but at any time, if a phone call had simply been made to Kurt Taylor, the General Manager of the system, or myself, it was available to the City at any time to discuss this matter and ensure that the right phone numbers, that people had the right information, we would have been happy to do that at any time. And I think that's just part of why I think a face-to-face meeting would be a good idea,because I think we have to clear up what I would like to think is some misunderstanding in regard to where we actually sit today. Mayor Kovacic: OK. Mr. City Attorney, did you have some questions? Mr. Stephen Deitsch, City Attorney: Mr. Perron, if you would, I would like to ask a couple of questions, if you could remain at the mic. Mr. Perron, I know you are aware of my December 22, 2000, correspondence to Mr. Witthauer regarding this hearing tonight and regarding the issues which relate to it. Mr. Perron: Yes. • Mr. Deitsch: I believe you are aware that in the correspondence the City Attorney requested that Adelphia provide certain documentation to the City, are you not? Mr. Perron: That's correct. Page 18 Mr. Deitsch: One of the things the City asked for was submission by Adelphia of sweep results at a test location at the end of each trunk run, to confirm signal capability. Have you provided such test results to the City? Mr. Perron: The only results that I'm aware of at this particular time are results that were provided to the City in the late summer of 2000. At the end of the actual construction, the actual consulting engineer for the City actually conducted tests, that the test results have been submitted and affirmatively showed not only did we meet all of the requirements,but the upstream, or reverse capability of the system was, in fact, operational. Mr. Deitsch: And were they conducted at each trunk line termination point, at the end of each trunk line? Mr. Perron: They were conducted at a number of trunk lines that were picked at random and determined by the consulting engineer, and so the testing results were simply at the choice of the test results that the consulting engineer chose. Mr. Deitsch: In this December 22 correspondence, the City Attorney also asked Adelphia to demonstrate 100% carriage at all test points within the City. Has Adelphia provided that information to the City? Mr. Perron: We haven't provided it at this particular time, but I would be happy to say if that's something we need to provide, we're more than happy to do that. To me, if the real issue was, is cable modem service available to the City, I think the fact that we were installing in the City, I think, really was proof in and of itself that the service was available in the City. Mr. Deitsch: Is there any reason why Adelphia could not have provided this information following its receipt of the December 22nd letter? After all, today is February 20th Page 19 . Mr. Perron: I'll have to check into that. I'll be more than happy to discuss that with our Engineering Department. I do know that there was quite a bit of information that was submitted to the City. I recognized early on, that that submission of that information was late, and I apologize to the City for that. But I'm hoping that in review of that information that's been submitted, that I would strongly believe that answers the questions that the City has of us. And if we need to provide additional information,we'd be more than happy to do that. Mr. Deitsch: Will you provide all the information requested in the December 22nd letter from the City Attorney to Adelphia? Mr. Perron: I don't see any problem with that. If what I'm hearing is that, if the City wants in addition to the test points that were actually measured and submitted to the City by the consulting engineer of the City, if we need to provide additional information, we're more than happy to work with that. I can tell you, that I stand before you on the public record, without any hesitancy at all, to say that if we took a third party and went out to every single test point, and every single location in the City, and tested to see if cable modem service was operational and was working, the answer would be yes. If we did that a month ago, the answer would be yes. Mr. Deitsch: So I take it, your answer is yes,you will provide all the information requested in the December 22nd letter? Mr. Perron: I don't,well, I don't see a problem with that. Because you know what? I'm not a lawyer, and so I don't know if there's something in there that troubles our corporate counsel? But I will say that I read the letter. In a palms-up gesture to the City, I don't think there was anything that was asked in there that creates any issues whatsoever for Adelphia? Mr. Deitsch: You feel it was a reasonable request? Page 20 Mr. Perron: I felt that testing every single test point, does that prove that cable modem service is available in the City?No, it doesn't. It doesn't do anything. Mr. Deitsch: What else would? Mr. Perron: Actually going out and taking a look at cable modems being installed in different nodes in the City to make sure what you have is synch-block, or block-synch. That means that. you get lights on a modem that show you have both forward and reverse capability in the system plan, and that the cable modem is not only communicating with the head-end equipment that is located in our network system, but is communicating outside of our network system, outside of Arcadia, and to the Internet. That would show'that cable modem service is working and available in the City. Simply going to every single test point in the City and making a measurement would do nothing except say, you can,you've got downstream signal to this test point, and that you could send a signal back saying I have upstream signal from this test point back to the head end. Would that show there is cable modem service available in the City? Absolutely not. And in fact, it has no bearing whatsoever, other than to show that the system is capable of modem service. Mr. Deitsch: Your proposed testing,now, when could that be performed, and would it indicate whether two-way Internet access is available throughout the City? All points? Mr. Perron: Well, I'm sharing with you that testing endpoints does not prove in any way. Mr. Deitsch: No,no. You proposed a different test, if I understood correctly. When could that be fully performed in your opinion? Mr. Perron: I think if, my feeling would be, is that just when we worked with the City's engineering consultant, out of 116 nodes, he said let me pick 50. Any 50 I want. And I'm going to go and see if the plant is actually built to construction as you said it did. We went through that Page 21 process, no problem at all. If the City would like us, and if the City would like to pick X number of nodes that you think would show good faith on the part of the company, to have us go out and install cable modem services at test points within X number of nodes, we'd be happy to do that. And depending on the number of nodes that you pick, that would probably determine the time that it would take it. But it's not an exhaustive performance testing, but in fact,that is the only performance testing that would show that cable modem service is available throughout the City. Mr. Deitsch: What time frame would you suggest to demonstrate that through your proposed test? Mr. Perron: My feeling would be immediately. And if you wanted to pick 20, 30, 50 node locations such as the consulting engineer did, depending on the number that you pick, I would imagine that we could very easily do somewhere between two and three a day, as far as the test points go,which means that, it would seem to me, that in less than 30 days we could work through the process. Mr. Deitsch: And if, instead, the City preferred to obtain from you the information requested in the December 22nd letter,by what deadline could Adelphia provide that information? Mr. Perron: We would absolutely be able to provide that within 30 days, as well. The only point, and maybe one of the reasons why you didn't receive that information, and we'd rather • have a discussion, is, I think I made the point, in regards to that particular testing,really doesn't prove modem service exists in the City of Arcadia. Mr. Deitsch: How many customers does Adelphia presently have for two-way high speed Internet service, in Arcadia? Page 22 Mr. Perron: In Arcadia, we have approximately 40 customers today, and I forget the number of. pending customers. I could check that and give you the information. We're doing installs daily, and we have a pending demand of installs that we're doing. Mr. Deitsch: And it's your opinion that the two-way Internet high speed service is available throughout the City? There is not one home in the City that would not have this capability if it desired such service, and contracted with Adeiphia? Mr. Perron: Once again, I stand before you on the public record and I say, absolutely. The only thing that would provide an issue is that if you went, let's say,to an apartment complex and you went to install the cable modem service and didn't receive connectivity right away,that most likely would mean there's nothing wrong with the network or the two-way system,but there could be some work that needs to be done on the individual drop wiring that would be located in that apartment complex, of which we would make arrangements with the customer to provide any repairs necessary to insure that they could have service. Mr. Deitsch: Mayor, I do have a question for Mr. Risk,but if there are any other questions in the meantime for Mr. Perron? Mayor Kovacic: Mr. Perron,while you are still here. Two questions, really. First of all, if somebody wants this access, what is the number that they call to get the right person? Mr. Perron: They call, let me get it again. We have,Mr. Risk, a free installation offer,by the way. It's 1-88adel, A-D-E-L, net,N-E-T. And that number is 1-888-232-5638. And if anyone working for the City or is a resident of the City calls to get service, and for any reason if there are any issues with the Customer Service Department there, if there's any confusion about whether the service is available or not, or they seem that they got the wrong information, I would encourage them to immediately call Kurt Taylor, the General Manager of the system, or feel free Page 23 to call me at my office, at the Regional Office in Santa Monica,by the way that number is 1-310- 264-8043, and for anyone watching, it's 310-264-8043. That is my direct line number. And with that being said, if there's any issue or confusion, I would be more than happy to make sure that they get an installation date, and once again, that they get a free installation and one month free. Mayor Kovacic: And finally,why is it that a lot of people, including people living at my house, complain about the reception for 2, 4, and whatever VH-1 is on, 96, whatever it is? Mr. Perron: Well, I haven't heard that and I apologize. I will say, Mr. Mayor, if you have a service call at your house, have one of our technicians come out? Mayor Kovacic: Well, I don't want to receive any special treatment. I'm receiving these complaints from a lot of people. So what you're saying is;if somebody is getting fuzzy or snowy reception for 2, 4, or any other channel, they call who? Mr. Perron: They call our local Customer Service Department in the City of Industry. That number is located on your bill. As a matter of fact, each month. Mayor Kovacic: And as far as you know, every channel on the cable system should be clear? Mr. Perron: Absolutely! And what you described is often, that is local broadcast stations, or in the low band, and often that is very indicative of what we call"ingress,"which usually means there is a loose connection somewhere in the house. Either right outside, at the ground block, where the cable enters into the house, or inside the house, especially if you have multiple outlets, including if you have an outlet in your house without a cable and a television connected to it? That's an open outlet and could be receiving interference, and we can actually put a terminator on there to cap that. Mayor Kovacic: OK. Any other questions? Page 24 Dr. Chang: Yes, I have a question. Mayor Kovacic: Dr. Chang. Dr. Chang: Mr. Perron. Are you replacing the box? Mr. Perron: Excuse me, Dr. Chang? - Dr. Chang: Are you replacing the box, the remote control, the control box? Mr. Perron: Yes, absolutely. Dr. Chang: You are replacing now? Mr. Perron: Yes. One of the things that we're doing is that we're swapping out all the analog converters that exist in our markets across Southern California. We are placing digital receivers into those homes. With our new pricing structure,what's happening for most customers that have Premium Services,their price is actually going down, and they're actually receiving more, product. Dr. Chang: Because, about 10 days ago, one of your people called my home and said that they would come the next day at 9 o'clock to replace the box. And my wife waited four days, and nobody showed up. Mr. Perron: Well, we have a big problem. If that's the case that's happened,but I think Mr. Taylor can follow up on that, and we'll make sure that that gets taken care of, at your convenience. We hate to have missed appointments. Dr. Chang: I just want to, Mr. Perron, I just want to read to you,part of the letter submitted by Mr. Jeff Bowen, President of the Highland HOA. He said that a special note, reception of basic channels, such as 2 and 4, in fact one person said Adelphia told him to run his television through his VCR to clean up the show and lines in the picture. Do you have any comments? . Page 25 Mr. Perron: Well, once again, any time we've got a customer that has a problem, we want to run a service call and make sure that's corrected. And by the way, we run service calls not only 7 days a week,but 24 hours a day. If a customer calls us at 2 in the morning on Wednesday, and they say, my cable picture is out, I want you to come and fix it. We're not going to tell you,you have to wait until we have reports of an outage in your area. We will actually dispatch a technician and roll the truck and come at 2 in the morning. And I want to make sure that when we do have an appointment, we keep the appointment. If we don't keep the appointment, and we miss one, once again, we still have what we call our on-time guarantee. And because, I can tell you right now, if we miss a service call, or if we're even late,we put a$20 credit on the customer's bill. If we miss an installation appointment or even late, then we make sure it's free installation for that service. So we have a big incentive not to be missing appointments, and not even being late for appointments. And our approach is,not to make the customer ask. But if we show up and we're 15 minutes late, we apologize for the inconvenience, that we respect the fact that time is valuable to our customers, and we let them know what the offer is. So we make sure that we honor that offer, Dr. Chang. Mayor Kovacic: Mayor Pro Tern Segal. Mayor Pro Tem Segal: Mr. Perron, I hate to be the bearer of bad news of service. But to use myself as an example, I've had somebody at my house four times regarding these lines on the screen. And each of the four times the service person came out, it was fixed for a day. And each • of the four times, the next day, it was not fixed. The last time they came out,they said, well, what you need is a digital cable box, which, I kind of researched that myself, and that's just another dart throw at a problem that they just really haven't fixed. So I guess my question,my concern would be, the letter you got there, along with personal experiences and people Page 26 complaining, you know, other people in the City complaining about this issue that the Mayor raised, and this issue of lines on the screens on these channels isn't going away. And certainly isn't making any friends in this town for Adelphia. And I would truly hope that there would be a much bigger concerted effort to fix that problem in the very near future before it becomes a problem that all of us are going to have to deal with our constituents who aren't very happy about the service. Mr. Perron: I appreciate the comments, Councilman Segal. I apologize that you are having any kind of reoccurring problem. But I know that the General Manager, Kurt Taylor, is here this evening. After spending literally millions of dollars upgrading this to a fiber-optic network, it's absolutely unreasonable that we would have any ongoing issues with the type of system that we've built. So, hearing what you've said, I take that to heart. I do encourage people that if you've got a problem, ask for a service call,but what I'm hearing today, it sounds like there may be a couple of different issues that need to be addressed on some of these lower channels, and we'll make sure that gets taken care of. Mayor Kovacic: That's why I wanted to make sure that we're focusing on the areas of the alleged breach. And I think that we're going to have to get some guidance from our City Attorney,but, you know,human nature being what it is,we obviously, in our business, receive more complaints than compliments. But I can honestly say, as far as the cable television service is concerned, I get no compliments and a lot of complaints. So, somebody isn't doing their job right, and at least this hearing tonight has provided us all with a forum to kind of air our frustration about the state of cable television in Arcadia. And so, anyway, you say you're going to take it to heart and I'll take you at your word. Mr. Deitsch, do you have any more questions? Page 27 Mr. Deitsch: I do, Mayor,thank you for your indulgence. Mr. Perron, I'm looking at Section . 27(a) (la) of the franchise agreement with Adelphia. And I'm still troubled by Adelphia's failure to provide test results, which, arguably, are required under the franchise agreement. Now, • we were talking moments ago about the City Attorney's December 22nd letter to Adelphia, requesting test results, and I described the results that were sought, correct? That wasn't the first time the City Attorney or the City had requested Adelphia for those test results, was it? Mr. Perron: You're speaking of the December 22nd request for results? —. Mr. Deitsch: Yes, correct. Mr. Perron: That's the first time I recall. Mr. Deitsch: Well, are you familiar with the letter of July 21, from the City Attorney's office to Mr. Rob Witthauer, who is the Acting Assistant General Counsel of Adelphia? Mr. Perron: I don't recall the letter. Mr. Deitsch: The letter shows that you were copied on it, along with the City Manager, John Risk, our consultant, and Kurt Taylor, the General Manager of Adelphia. Mr. Perron: I'm only stating, sir, in the course of business and the number of letters that I read every day, that I simply don't recall the letter, but I'd be more than happy to go back and take a look at that letter and speak with our counsel. Mr. Deitsch: All right, in that July 21 letter,now that's what,probably, seven months ago at least now,the City Attorney's office indicated to Adelphia, "More important for the purposes of this stage of the proceedings is the fact that Section 27 (a) (la)requires Adelphia to correct any deficiencies and retest, in the event that Adelphia is not in compliance with the franchise agreement. Moreover, Section 27 (a) (1a)requires Adelphia to demonstrate 100%carriage at all test points within 30 days of the scheduled completion date." The letter went on to state the Page 28 following: "Therefore, unless Adelphia presents test results supporting its contention that Adelphia has cured the heretofore referenced defaults on or before Wednesday, July 26, 5 o'clock Pacific Standard Time, the City will hold Adelphia responsible for any and all costs incurred," etc. Mr. Perron: I think what happened after that, Mr. City Attorney,was that on July 27th and 28th, the City's consulting engineer actually went through and selected 50 of the 116 nodes, and those are the test results that are included in the engineering consulting report that was sent back to the City. I'm in receipt of an e-mail that was sent to our Vice President of Corporate Affairs in August, and it included a copy of that report, in fact, showing the test results that were made on July 27th and 28th. So if that's the test results that were requested by the City, I felt that we not only fulfilled the requirement in regards to the City consulting engineer, acting on behalf of the City, went through and actually tested himself, along with our Vice President of Engineering, test points in the City. And those test results were submitted back to the City. So if those are the test results we're speaking of, I'm quite confident that they have been completed and submitted back to the City, as requested by the City's consulting engineer. Mr. Deitsch: But didn't that letter, and for that matter, doesn't the agreement state that test results at a test location at the end of each front line run, confirming signal capability are required? Mr. Perron: I'm simply repeating back to you documentation that was sent by the City's consultant and had an attachment by the City's consulting engineer, that they saw fit in fulfilling their responsibilities on behalf of the City, that was what was requested. Now,they could have requested us to go to 116 nodes, and 116 test points. But we went to 50 nodes. And typically, you know, test points are a determined amount, depending on the number of trunk runs that you Page 29 have. You usually do an end of trunk run, so the number of test points, depending on the market size, could be 1, 2, 10, 20, 30, 50. It varies greatly by not only the architecture that's built, but also by the actual mileage that's been constructed within the geographic footprint. So I'm not being evasive, I'm simply saying that if that's what you're responding to, we worked with the City's consultant. They walked through,with us, exactly what they sought in their professional expertise as a consulting engineer,what would be requested to fulfill the obligation to actually show good faith on the part of the company in regards to statistical data, that was empirical and non-ambiguous in regards to measuring the performance of the system in its operation. Mr. Deitsch: And even though five months later, the City Attorney requested test results at the end of each trunk line again, is it fair to say,then, that Adelphia nonetheless decided on its own that what the City Attorney was asking for, would not be responded to, was not reasonable, perhaps? Mr. Perron: I think the only point that I am making is that, I have not spoken with any of the City staff, nor the City Attorney, nor the consultant,nor been contacted by anyone on that particular issue of that letter of December 22nd. And the only point that I made, and the only reason I suggested that we have a face-to-face meeting was, that information, if requested,was to fulfill verification of the availability of cable modem service in the City of Arcadia. I'm just sharing with you, very honestly, is that those measurements have absolutely nothing to do with the verification of modem service. Yet, I'm absolutely offering a way to do that, and that we would be more than happy to work with the City to comply with that, if they would like us to do that. This is not an act of civil disobedience on the part of Adelphia. We are not an adversarial company. We abhor having philosophical differences of opinion that lead to legal counsel having to write very serious letters back and forth. We much more prefer a very open, palms-up Page 30 type of relationship. If there's an issue, let's identify what it is, and let's resolve it. And if Adelphia has done anything at all wrong, we'll be the first ones to own up to it and whatever the consequences of our actions that are wrongful, then we will take ownership of those and acknowledge them. That's the only point I'm trying to make this evening. Mr. Deitsch: Well, Mr. Perron, the agreement says that you are to provide test results at a location at the end of each trunk line. And two letters, one in July and one in December, reiterated that that was the requirement then,to the agreement. Yet you haven't provided them, even as you stand before the Council tonight. Aren't you in default of the agreement, in • particular, Section 27 (a) (la)? Mr. Perron: I think at this particular point in time, I don't want to belabor the point, if the conversation is a technical trip wire that I'm supposed to set off some type of an event, then I don't think that's fair. I'm not in a deposition at this particular point in time, and I've answered your question very honestly, that the City made a request and then hired an outside consultant to fulfill that request, and we worked diligently with the City's consultant and fulfilled what they, on behalf of the City, requested that we do. If the consultant said, these are the test points that I want, and these are the test points that shall be required, then you have to understand, we, at least, had some fairly good level of confidence that the City and the consulting engineer were talking, and that the consulting engineer was sharing with the City exactly what they were going to do, what their methodology was, based on the request from the City,being aware of that, and then asking the company to comply with what the City was requesting. And that's all we did. We worked with the City's consulting engineer to do that. If, in fact, there was not compliance, I'm just simply puzzled by the consulting report, saying that we were in compliance, and that we never really heard back from the City subsequent to that time that there was any issue, that there Page 31 was any question with the test points and the number of test points or the measurements at the test points. We never heard any of those concerns until tonight. All I'm saying is if there are concerns like that,we would love to address them. Mayor Kovacic: We obviously didn't restrict who you could bring with you to provide any expertise that you don't have. But it's our fact-finding mission to listen to the testimony and then make certain fact determinations, and probably Mr. Perron's opinion about whether he's in breach or not is kind of irrelevant. Does anybody else have any other questions? Mr. Deitsch: Mayor, with your indulgence, a brief line of questioning a little bit different from where we are. You've indicated that two-way Internet service was made available to customers in Arcadia as of December 1. Mr. Perron: Yes. Mr. Deitsch: How many customers did you have for such service on December 1? Mr. Perron: I think we had one. We would have had two, actually,because I think what we did, we tried to install a cable modem service at City Hall on December 1,but at that time, the person, at least, that the installer and the engineer spoke to said, they really weren't sure exactly where the cable modem should go. You know, often, we... Mr. Deitsch: Mr. Perron, how did that customer come to you and seek such service? Are you aware? Was it advertised? Or how did that? Mr. Perron: No, we sought the customer out. That was part of our own efforts in making sure we were testing the network and the network was working, and that we were double-checking all aspects of the fulfillment process, so that when we did go to full market, that we could successfully fulfill the product. I guess the only analogy I make, is that when you open up a new Page 32 grocery store in the city,you don't put Grand Opening on the door on day one. You stay open for at least a few weeks and then from there you have a marketing effort. Mr. Deitsch: When did Adelphia go citywide in an effort to see if, to where the Internet was available, to actual customers? Mr. Perron: In January, the week of January 23rd, as a matter of fact. Mr. Deitsch: That was the first time? Mr. Perron: That was our first marketing effort. Mr. Deitsch: Why did you wait until then? Mr. Perron: We felt that the system was ready at that point for our marketing efforts. We felt that we could take the full demand of customer requests, answering the calls,providing the installations,providing good customer support, at a macro level, regardless of the demand that we got. Mr. Deitsch: You were not ready to do that on December 1? Mr. Perron: We were ready to do that on December 1. We were ready to make installations and show that the service was available. That's one of the main reasons we went to City.Hall, because, we actually wanted to show by having the cable modem up and working,connected to a PC in City Hall,that it works. It's here. Mr. Deitsch: That's all I have, Mayor. Thank you. Mayor Kovacic: OK, any other questions? Thank you, Mr. Perron. (Beginning of Tape 2, Side A) Mayor Kovacic: Ms. Marshall, do you have a question? Ms. Marshall: I just wanted to ask him if they thought about making their phone numbers on their bills and on their information a little clearer, so people know where they're supposed to Page 33 call? Seems like there is confusion as to phone numbers and whom you call for what and stuff. Sounds like you need to make a clarification on that. Councilmember Roger Chandler: Ms. Marshall, the phone number for complaints is 574- 7171. I have it memorized, as I do the Police Department's number, which is 5.150. 574-7171. I might add, I've been calling that number going way, way back through several cable companies. It seems to be an occupational problem, transmission difficulties. Mayor Kovacic: We're still having a public hearing, although it doesn't look like it. Does anyone else want to address the City Council on this matter? Mr. Dave Flynn: Mr. Mayor and City Council, I'd just like to state my experience with the modem. Mayor Kovacic: Could you give your name,please? Mr. Flynn: My name is Dave Flynn, and I have a small business in Arcadia, Oxford VUE. And about midsummer, I noticed that they were physically installing the cable on the pole, and I started making phone calls,tracking down, OK, I want a connection. And I didn't take no for an answer. I kept calling until I found the right person. And I've had the Internet connection now for several months, since mid-November, I think. And it's fast. It's really nice. And as far as installation, it was a matter of just take the modem out of the box and plug it in. I like it. It's literally two orders of magnitude faster than dial-up. I get 220 Kbytes per second. Mayor Kovacic: So what you're saying is,you got the connection from Adelphia in November? Mr. Flynn: I think it was mid-November or beginning of December, yeah. Mayor Kovacic: How's your Channel 2? Page 34 Mr. Flynn: We don't have any television, I don't know. I couldn't get GTE to move, I could not get an Internet connection from GTE at all. I was just, anybody who will give me Internet, I will go with. Mayor Kovacic: OK, thank you,Mr. Flynn. Would anyone else like to address the City Council? • Is there any motion to close the public hearing? Mr. Deitsch: Mayor, before the public hearing is closed, a formality, if I may. The Municipal Code requires that any documents be introduced formally by way of evidence and marked and submitted actually to the City Clerk for such purposes. I'd like to do that after the hearing,but at least mention the documents that would be part of the written record. Mayor Kovacic: Please. Mr. Deitsch: The Council has items 1 through 11 as part of its agenda report. Of course,the Staff report, as well, should be part of the record. That should be marked Exhibit 12. Something that should be marked Exhibit 13, which I'd like to formally introduce as part of the written record here, is a series of e-mails among City Staff regarding the availability of two-way high speed Internet service through Adelphia at certain City facilities. And another document to be. marked Exhibit 14 would, I believe it's reasonable, be the letter from Highlands Homeowners Association dated February 16, addressed to the City Manager Bill Kelly, with attachments. In introducing that, I note it's for the Council to weigh evidence and determine relevancy, and it's arguable that that letter doesn't pertain to compliance with Section 15(b) of the franchise agreement. However, it has been submitted to the City and therefore should be marked as an exhibit for this hearing. And then finally, at the request of Mr. Robert Witthauer, Acting Assistant General Counsel for Adelphia,which request he made to me over the phone today and Page 35 then faxed documents in support of his request. He has asked me to submit into the record a series of documents which Adelphia wishes to offer, and I believe we should mark that Adelphia Exhibit A, which is cover fax sheet dated February 19, 2001,that's yesterday at 4:30 p.m., which was actually faxed to me at City Hall today. And attached to it is a letter dated February 19, 2001, from Mr. Witthauer to me as City Attorney, together with attachments that support purportedly Adelphia's position in this hearing. Thank you, Mayor. Mayor Kovacic: Thank you, and seeing no objections, we'll submit those documents as part of the record, or receive those documents as part of the record. Would anyone else like to address the City Council on this matter? Is there a motion to close the public hearing? Mayor Pro Tem Segal: So moved. Ms. Marshall: Second. Mayor Kovacic: OK,we have a motion by Segal, second by Marshall. Seeing no objection, the public hearing is closed. Time for discussion. Mr. Deitsch, I'd like you to kind of help us with this. What is it, exactly, we're trying to establish or not establish by the evidence presented tonight? And if you have an opinion one way or the other, as far as whether a breach was committed, I'd like to receive that opinion, as well. Mr.Deitsch: Mayor, in question is Section 15(b) of the franchise agreement,which requires Adelphia,within two years of the entry into the franchise agreement, Adelphia has indicated tonight they believe that date was June 8, I believe it's June 18, actually, in the sense willing to give Adelphia a ten-day break on that, that Adelphia has 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 Internet access services. The City has had reason to believe, and therefore we had this hearing tonight, that Page 36 Adelphia failed to do that by June 18. But beyond that, the City entered into a series of communications,mainly by letters from the City Attorney's office to Adelphia, between June 21St and December 22nd, in which the City said the City believes Adelphia has not complied with Section 15(b), and requested that Adelphia provide evidence supporting that it had complied.' And it is the City's position that Adelphia has totally failed to provide any evidence. And you heard a certain line of questioning and answering tonight about that between the City Attorney and Mr. Perron. - But in short,the question is whether Adelphia has built that two-way high speed Internet access, and the City's willing to live by a December 1 deadline for having done so, based on what the City is willing, for purposes of this proceeding, anyway, to say was the extended deadline: December 1 for the completion of that, and the launching of that, two-way high speed Internet access. Mayor Kovacic: And what is your opinion on the compliance date? Mr. Deitsch: Well, I think that's a.very generous compliance date. Whether or not compliance has been achieved, I think, is open to question. And my recommendation tonight, as your City Attorney, would be to continue this item. You've already closed the public hearing and that's •fine and sufficient But continue this item until at least the very next Council meeting or perhaps two Council meetings from now, within which time perhaps the City might wish to accept Mr. Perron's suggestion that there be a meeting, and perhaps with the opportunity for Mr. Perron to bring with him better evidence,perhaps the evidence requested repeatedly by the City,regarding compliance by Adelphia with Section 15(b). Mayor Kovacic: OK, and just for my own clarification,why the confusion about the compliance date between June 18 and December 1? Is it because of a series of letters that went Page 37 back and forth between Staff and Adelphia? Those letters may have served to amend the contract as far as compliance? Mr. Deitsch: Well, that's true. There is no confusion, in my opinion. It was simply a matter of ongoing negotiation. Mayor Kovacic: So, in your opinion, what is the compliance date? June 18? Mr. Deitsch: Although that was the original compliance date, the City is willing to live with the extended deadline of December 1 as the compliance date for purposes of your determination. Mayor Kovacic: So the issue facing the City Council is whether they provided this two-way high speed Internet access by December 1, 2000. Mr.Deitsch: Correct. Mayor Kovacic: Questions? Mr. Chandler. Mr. Chandler: For the City Attorney,probably. What is it we're, it says in here that we could recover costs. It seems to me that probably the biggest concern with Adelphia cable is reception and things like that, you know, that are at-home interference. And it's quite apparent that the agreement is in question as to whether they hit a deadline. What is it we're seeking? Clearly they have this service available now. I, myself, made a call in February and while I needed to get a return call, I did get a return call, and they were ready to install on February 1St. So clearly, and we have some testimony that people are receiving that service now. So what are we, do we want to break the contract with them? Do we want to fine them? Do we want them to give us money? Do we want them to refund customers? What do we want from this? I mean, they're giving this service now. And it's perhaps later than we'd agreed. Mr. Deitsch: Mayor, first, it's important to remember that Adelphia has the obligation to provide that service citywide,not just to one home or not one quadrant in the City,by way of Page 38 . example,but citywide. And as I pointed out, Section 27 of the agreement actually provides the proof that Adelphia is required to submit without the City even asking that such service is available, and the City did ask repeatedly and Adelphia admittedly tonight,through Mr. Perron's testimony, has failed to provide that. So that's by way of background. This hearing tonight also deals not with TV reception,but with two-way Internet access. So the City Attorney has to advise the Council that in rendering a decision tonight, the hearing is limited to the issue of compliance with two-way high speed Internet access construction. Finally, you've touched upon remedies that are available if you find there's a default. And I think they're spelled out pretty well in the staff report, and Ms. Rowe testified to that earlier through her rendition of the staff report. And the penalties include such things as, and they're cumulative, by the way,you could choose one or more if you find they are in default. On the other hand, you can find that they're not in default and penalties, of course, don't apply. But, for example, Adelphia has submitted as required by law a deposit with the City. And if you fmd there's a default you can draw down on that deposit, which I believe is in the amount of $50,000, $30,000, that amount of the deposit that you feel is reasonable and sufficient to make up for the default of Adelphia in complying with 15(b) if you find there is a default. Liquidated damages in the amount of$1,000 per day, commencing with December 1,may be imposed by the City Council. In addition,the Council could immediately terminate the franchise agreement if you wish. Or, you could impose a penalty of non-renewal,right now, even though there's a provision in the agreement that provides that it is renewable for a term of three years. Or you can reduce the current term of the franchise by four months, and reduce the term of the franchise agreement in addition by four days for each day beyond December 1, that Adelphia may have Page 39 failed to comply with 15(b) of the agreement. These are all the remedies that are available to you, if you find there's a default. Mr. Chandler: OK, some pretty heavy stuff. Now their attorney has requested a two-week stay so that he can argue with you and staff, or provide more information. It seems to me that would be a prudent thing to do, and before further discussion occurs, I would like to suggest to the rest of the Council that we do allow that, two weeks, excuse me, four weeks. It seems that the issues are pretty serious here. On the face of things, it doesn't seem too serious, what's the big deal, a couple of months? Because I'm sure that not everybody in town was asking for this service, or even knew that it was available. But clearly, there's an issue about the contract. So I would,you know, it's my turn to talk, I would suggest to Council, or make a motion, that we do, indeed, allow a continuance for further information to be provided by Adelphia. Four weeks, five weeks, whatever the staff would recommend. Mayor Kovacic: I think our City Attorney suggested two meetings. So that would be four weeks. March 20th? OK, we have a motion. Is there a second? Mayor Pro Tem Segal: I'll second. Mayor Kovacic: OK, it's been moved by Chandler and second by Segal to continue this, determination of this matter to March 20th. Is there any further discussion. I have one question before we vote. Are we satisfied, is staff satisfied, is our consultant satisfied, is the City Attorney satisfied that they are now in compliance with the contract, and we're only talking about a delay in compliance? Or is it staff's position that they are still not in compliance with the contract? Ms. Rowe: Mr. Mayor, we wouldn't be here at all tonight if we had received the information, the proof that we requested. We're here as a watchdog for our community, and I think that our Page 40 4 •' residents went through a very long and painful rebuild. They were very patient. And this was part of that that was supposed to happen for them based on a needs assessment. And had we received the information, as I said,we wouldn't be here before you this evening. Mayor Kovacic: OK, and there's still information you haven't received? OK. Any further discussion? Hopefully this four-week period will allow that information to come forward, and maybe Adelphia to come up with some creative solutions. Roll call, please. Roll Call: Ayes: Chandler, Chang,Marshall, Segal and Kovacic. Noes: None Absent: None Mayor Kovacic: Yes. OK,thank you, staff and public. • Page 41 ETer(111414., �►\ /� 'U'onnsao 'STAFF REPORT OFFICE OF THE CITY MANAGER • February 20, 2001 TO: Mayor and City Council FROM: William R. Kelly, City Manager By: Cindy Rowe, Management Services Officer SUBJECT: Public Hearing to Consider Whether Adelphia Communications . Corporation is in Default of Section 15(b) of the Cable Television Franchise between the City of Arcadia and Adelphia Communications Corporation Regarding Two-Way High Speed Internet Access BACKGROUND As part of the cable television franchise renewal process, in 1995 a needs assessment was performed by Communications Support Group, which clearly indicated that high speed internet access was a priority among Arcadia cable subscribers and that interactive services of high speed capacity were needed by institutional users in the community. Based on that information, the cable system rebuild included in the cable franchise renewal with TCI in May, 1998, required the company to have the capacity to provide two-way, high speed internet access, to have it activated and made. available to the community by June 18, 2000. Due to.a network infrastructure delay,/and in exchange for providing free modem service at fifteen (15) school district and city facilities, on September 5, 2000, the City Council granted Adelphia additional time to December 1 , 2000, to complete, market and launch this internet service. This was based on oral assurances provided by Lee Perron, Adelphia's Vice President of Corporate Affairs, that the service would indeed be available by that date. LASER IMAGED { • • Adelphia Public Hearing . February 20, 2001 ' Page two . DISCUSSION Between December 1 ,. 2000 and January 31 , 2001 , City staff and the City's cable consultant made numerous attempts to ascertain whether Adelphia had launched two-way, high speed internet service through the City as required by the Franchise.Agreement, the Transfer Agreement and the oral agreement. Repeated phone calls to the local Adelphia customer service office, phone calls to @home's sales offices in Colorado and visits to @home's customer service web page, all indicated that two-way, high speed internet service was not yet available within the City of Arcadia. It was not , until February 1 , 2001 , that a City representative was told this service could be installed at his home. City correspondence to Adelphia on December 22,.2000, requested that Adelphia show proof that it had instituted two-way, high speed internet service through submission of sweep results and system testing documentation, or through work orders, marketing materials, billing statements or similar verification. Nothing to date has been provided to the • City by Adelphia. FISCAL IMPACT . If it is determined that Adelphia_ breached its obligation under the terms of the Franchise Agreement, the City Council may order that the City recover liquidated damages in the amount of $1 ,000 per day of Adelphia's default, commencing December 1 , 2000. Also, the City may, for each month of • delay past September 28, 2000, reduce the term of the Franchise Agreement by four (4) months and reduce the term of the Franchise Agreement by four days for each day beyond December 1 , 2000. Adelphia's • breaches also entitle the,City to disapprove the, three-year extension of the franchise term that is permitted in the Franchise Agreement. The City also has the option of terminating the Franchise Agreement. It is anticipated that the availability of high speed internet service will increase the number of cable subscribers, thus increasing franchise fees.for Adelphia. Consequently, if the service is not available, or is available, but subscribers have not been made aware and allowed to subscribe, the City is not benefiting from the additional percentage of franchise fees.. Adelphia Public Hearing February 20, 2001 Page three • RECOMMENDATION It is recommended that the City Council hold a public hearing to determine whether or not Adelphia has breached its obligation under the terms of Section 15 (b) of the Franchise Agreement, which required Adelphia to provide two-way high speed internet access by December 1 , 2000 (the extended deadline). The City Council then, may: 1) terminate or conditionally continue the Franchise Agreement and seek any other rights or • remedies including, without limitation, the right to recover additional damages, losses, costs and expenses, such as attorney's fees, incurred by the City as a result of Adelphia's breaches; or 2) find that Adelphia has met contractual obligations and take no further action. -yi,;",.4 Cindy Rowe • From: Ilario P. Idoni Sent: Tuesday, February 20, 2001 2:28 PM To: Cindy Rowe Subject: RE:Adelpia Modems Importance: High Sensitivity: Confidential Cindy- here are the emails I could find that went to and from Arcadia/Adelphia... If you look at the dates of the email, you'll clearly notice that the high speed cable modems were NOT online as of Dec 1. I don't have EXACT dates as to when the cable modems for City were live, but...the email do document the fact that as of Jan 17, 2001 we still were not"live". Recreation came online first(Jan 20ish)followed by Recreation (Jan 30ish) and City just seems to have come online last week(Feb 16). I still don't if the cable modem for the FD is operational. . If you'need any more help to this Adelphia matter please do not hesitate to contact me. I'll try to attend today's Council Meeting to see the outcome. • RE:cable modem RE:PD cable modem cable modem RE:cable Ilario P. Idoni IS Manager Hotline: (626) 574-5489 Direct: (626) 574-5431 Original Message From: Cindy Rowe Sent: Tuesday,February 20,2001 1:25 PM To: ComputerSupport Subject: Adelpia Modems Tonight the City Council will hold a public hearing to determine if Adelphia was in compliance with their franchise by providing two-way, high speed Internet service to the community on December 1, 2000. I have the e-mails describing the problems with our Library and Recreation modems,and on 1/19/01 there was still no service. In any of your records do you have documentation as to WHEN the Internet connection was actually made? I may need that to enter into the legal record this evening. Thanks for the help! Cindy 1 • Cindy Rowe From: Jon Few[jon.few @adelphiacom.com] Sent: Friday, January 19, 2001 4:32 PM To: Ilario P. Idoni Cc: - kurt.taylor @adelphiacom.com Subject: RE: cable modem Sorry for the delay, Ilario, I had to get an update myself. I seems we are having a problem with our PEG access and Educational access channels that are broadcasted from the civic center and the school district offices. These video carriers are too close to the modem's upstream carrier in those two nodes. Moving the modem upstream carrier is not a viable option, so we are looking at moving the video carriers to their own dedicated fiber in the old fiber backbone. This plan will take a little more construction, and will take a little more time. I will keep you up to date on things as they develop. Thx. J.F. Original Message From: Ilario P. Idoni [mailto:iidoni @ci.arcadia.ca.us] Sent: Wednesday, January 17, 2001 9:40 AM To: 'jon.few @adelphiacom.com' Cc: Cindy Rowe; Jason Wagner Subject: cable modem Jon-. the cable modems at both the library and recreation center are still not working. Adelphia has been out quite a few times to look at this, they've tried different modems and configurations, but it appears (from what I can tell) that the problem is outside out the City's systems. . .there does not appear to be a two way link established with the modem locations. Any update as to where we are on resolving this and a time when you expect the modems will be fully operational? > - - > Ilario P. Idoni > City of Arcadia > Information Systems Manager > 240 West Huntington Dr. > PO BOX 60021 > Arcadia, CA 91066-6021 > Hotline: (626) 574-5489 > Direct: (626) 574-5431 > Fax: (626) 821-0092 > E-mail: iidoni @ci.arcadia.ca.us 1 • Y Cindy Rowe From: Jon Few(on.few @adelphiacom:corri] • Sent: Wednesday, January 17, 2001 11:33 AM To: Ilario P. Idoni Cc: Sandona, Rick; Beth Stogner Subject: RE: PD cable modem Thanks, Ilario. We'll be in contact with Rick and Beth as soon as possible to do a pre-installation survey. Thx. J.F. Original Message From: Ilario P. Idoni [mailto:iidoni @ci.arcadia.ca.us] Sent: Wednesday, January 17, 2001 9:36 AM To: 'jon.few @adelphiacom.com' Cc: Sandona, Rick; Beth Stogner Subject: PD cable modem Jon- for the installation of the cable modem at the Arcadia Police dept please contact Rick Sandona at (626) 574-5179 or rsandona @ci.arcadia.ca.us For the Fire dept the contact is Beth Stogner at (626) 574-5112 or bstonger @ci.arcadia.ca.us > - - > Ilario P. Idoni > City of Arcadia > Information Systems. Manager > 240 West Huntington Dr. > PO BOX 60021 > Arcadia, CA 91066-6021 > Hotline: (626) 574-5489 > Direct: (626) 574-5431 > Fax: (626) 821-0092 > E-mail: iidoni @ci.arcadia.ca.us • 1 Cindy Rowe From: llario P. Idoni Sent: Wednesday, January 17, 2001 9:40 AM To: 'jon.few @adelphiacom.com' Cc: Cindy Rowe; Jason Wagner Subject: cable modem Jon-the cable modems at both the library and recreation center are still not working. Adelphia has been out quite a few times to look at this, they've tried different modems and configurations, but it appears (from what I can tell)that the problem is outside out the City's systems...there does not appear to be a two way link established with the modem locations.Any update as to where we are on resolving this and a time when you expect the modems will be fully operational? • Ilario P. Idoni City of Arcadia Information Systems Manager 240 West Huntington Dr. PO BOX 60021 Arcadia, CA 91066-6021 Hotline: (626) 574-5489 Direct: (626) 574-5431 Fax: (626) 821-0092 E-mail: iidoni(�ci.arcadia.ca.us Tracking: Recipient Read 'jon.few @adelphiacom.com' Cindy Rowe Read: 1/17/01 9:44 AM Jason Wagner Read:1/17/01 9:48 AM 1 • Cindy Rowe From: - Jason Wagner Sent: Tuesday, December 19, 2000 9:21 AM To: Cindy Rowe Subject: RE: Adelphia • Cindy, Ilario and myself were in contact with Jon Few from Adelphia in regards to the cable modem installation. We gave Jon our contacts at the recreation center and library so he can come in either this week or the next to install the cable drops. Jason x474 Original Message From: Cindy Rowe Sent: Tuesday, December 19, 2000 7:29 AM To: 'wagner @ci.arcadia.ca.us' Subject: Adelphia Jason, Do you know if Ilario made installation arrangements with Adelphia??? Cindy x432 • • 1 Feb-20-01 01:08pm From-ADELPHIA LEGAL DEPTARTMENT- - 8142747782 T-432 P.01/16 F-008 • 1 worth Main S[ret_ , Coudersport PA 1 691 5-1 141 Adelphia Phone (8141274-9830 - writers Direct (814)260-3562 Fax (8141 274-7782 • FAX COVER SHEET Internet www.adelphia.net e-maiI jackle.ruef®aaelphiacom.com DATE February 19, 2001 TIME 4:30 PM TO Stephen Deitsch, Esquire FAX NUMBER 909-686-3083 62‘- ���ot9f/ FROM JACKIE RUFF LEGAL SECRETARY PHONE NUMBER 814-260-3582 NUMBER OF PACES INCLUDING THIS COVER SHEET 16 IF YOU DO NOT RECEIVE ALL PAGES, PLEASE CALL THE NUMBER ABOVE AS SOON AS POSSIBLE This communication is intended for the named addressee only. it may contain privileged, confidential,trade secret or private information- if you have received this communication . without authorization from the names addressee, please telephone this office immediately and return the document to Adelphra at he address above. Unauthorized use or disclosure of this communication can result in civil liability. COMMENTS Per Rob Witthauer's instructions. Adelphia is an Equal Opportunity Employer • Feb-20-01 01:08pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.02/16 F-008 • 1 North Main Streer Coudersport PA 16915-1141 � Phone (814)274-9830 ���� �teI h Wriier s pirett (814)274-6041 Fx (814)274-7782 FILE Internet www.ade(phia.net e-mail rwitthauero%ade(phia.net February 19, 2001 Stephen-P. Deitsch, Esquire VIA TELECOPiER BEST, BEST& KRIEGER LLP NO. 909-686-3083, 3750 University Avenue AND ffDERAI. EXPRESS Post Office Box 1028 Riverside, California 92502 Re: City of Arcadia, California Dear Mr. Deitsch: I writing in response to your recent letter regarding the City of Arcadia. As set forth below, Adeiphia denies that it is in default in the performance of any of its obligations to the City and asserts all rights that it may have under the relevant agreements. First, high speed internet access is available throughout the City of Arcadia. Adelphia has begun marketing this service to Arcadia residents, and pursuant to your letter we are enclosing a copy of the marketing piece which was distributed to Arcadia residents in January. As to the City's inquires with @Home, this may be a source the City's confusion regarding Adelphia's high speed internet roll-out. While at one point there was some discussion of @Home serving as the Internet service provider for cable internet subscribers in Arcadia, it was later decided that Adelphia's PowerLink @Home service would instead be the internet service provider. Since Powerl.ink@Home has a separate customer service center from @Home, the City would not have been able to ascertain the status of Adelphia's PowerLink @Home roll out by phoning @Home's customer service office or viewing @Home's website. Regarding Adelphia's willingness to demonstrate the availability of internet service to the City, as I understand it the City was contacted by Adelphia in November of 2000 in an attempt to schedule installation in several City government locations, and that Adelphia was informed that the City was not ready for the installations and would advise Adelphia once the City had decided which offices would receive the service. Further, regarding your request for information we are enclosing copies of installation work orders and a copy of the marketing piece previously mentioned, in support of our contention that the service is available. While Adeiphia disagrees with the legal conclusion regarding Section 15(b) of the Franchise Agreement contained in the letter from Communications Support Group to Ms. Cindy Rowe dated August 1, 2000, in that Feb-20-01 01:09pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.03/16 F-008 Stephen P. Deitsch, Esqui; ( �; 'February 19, 2001 Page 2 same letter the City's own consultant states that "[u]pstream bandwidth is active from all nodes and the distribution system within Arcadia will be able to support this service but is delayed until Adelphia can complete its network infrastructure outside of the City that is needed to support this service." Thus, the City's consultant acknowledged that the system has the "activated capability" and is "capable of supporting high speed internee access services" as required by Section 15(b) of the Agreement. Finally, as I understand it the specific type of testing that you have requested recently is not possible due to the architecture of the system. However, Adelphia will be glad to work with the City to establish reasonable testing standards in order to prove availability and bring this matter to a close. Adelphia will be glad to provide additional information if the City deems it necessary. Please do not hesitate to contact me if you have any questions or comments regarding this or any other matter. Sincere] Robert T. Witthauer RTVV/jlr Acting Assistant General Counsel Feb-20-01 01:099m Frvm4D LPH|& LEGAL DEPTARTMENT 8142747702 7-432 P.04/18 F-008 '"_- insu^���nn Carc��t \ / - .w*~w^p� ' �owco u- Solucr.bcrw== `= ph5.-E. _ — '_ - °*1.mle,. __ __ — __ ^,~ 23/[ ,c rkTet -"I' - ' '' AccA-o,r., qKc,.' ,_,.,;/_,.:^. % .^_l'/.__� `"%.c'iD — ��—^ - -- — -- - — ` • C.:,..m,./,11.,^«"La.^ � ����'L��L— --' -- -- ‘:.1,.,,...,..1 {����� _ `°� __ ,_ ���� w°w' �^°" '�" ""°, — x��� �~ _^���� ` ~_- - �� _/��/_�{� - -- ' `" -- -- �� � No `.^�-^^ ' ' -_ __ ~ ` .^� ^�=l _—_-_---_ __- -- ' ___ MC �� � c.""��"*^1 o^�,^ '_ ' �p p^ �� ~/ `r�`� � C.m `�^u"� � «=`^~- 1�or�uk�—»�_' zagr~~~~-==_ _-- _ `` 0^11 (..pLI;2.-3 f.x.�b»2%7 03c?5.10,c,,d*. Lro`101912-A4? _ - ^~� � `^��o~°" .=. . , _ . ~��~���"____ -_ - i������� '_---_' -- -- ' ___' -_' - __ -_ _- -_- y .��' ���� . --. ' _ ' _ _ `~~ , ' L. --' -- -- _' �`�" __ ___- .. __ --`'`' ' _ _' '' '-- ___� __ __ ______ �_ � _- -- ---`_- .----_-__ _-__-_ ' __'__ __- � __ ___ ----_--_----- ' m�x�"u»^.`,^^.^`s,�. un /` `=' U • 1Z.,=-1-'A. 0.1n,ke-(?...J=^__x�.__In*+0-- p=--1-�^ __' -_ _-- _ _-__-- '' -- ��� - -- ----____ --_'--- --- -_- __- ----_-- ' -- __ --' '__ --_--- ---'_-_---- ___ ' -- _- _-' --_--_-- ---_- _-_--__-_ __ --''--- --'-_-__---_ __'------_— _--- ____ __'_-_ ----- ------- --__-- - _---__.---__ -_ --' -_ '-_' _ _- __ _- ____-_______ __ _- '_ '--- -_'--_--_--_._------- --_--- ��� ������ �����_ ' __ _ __ --_ __-_____ ___________-_ '' .__ ��°� c'~, "~ ��..:`�^`.`~u^,'="~°�."/u*"=".."=="=�..m"c.�~�" -' '-- ,"c"� ~.a"�.�wm**�"�awu^�°°=^�=~�`~~~~~~--- �e.- ^^�=~'^�°~ ' ~.."^`^^,.`'. � /' �=�������n=��p�^°�"���o"m�� .`.~^.^.— _ ~'`'^~~~~~ — o*" /3�/me___ ____� • . �' ' . . Fab-20-01 01:09pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.05/16 F-008 4r-'_ • __ emws 1, `taiton�nec asr =CZ Subhcnber Informasou Name ,a-v, e( / ,.Car,,zeAz wor.Order; ---- - Addre„ / 7LL C74,rk I 4Y/Qd Cd`rd/a — , k 9reo(, — ln:nllauon Dec. / �?/° !nacelle,ID- S e--t- • Comp,.rer Informar on Keldact rcr 11762 e - Morel _• __ — Opera.,ns S,,een: cv,n95 W.r9B x.un �(o ✓✓, I! - --- •-— rtL'Sc-a €1 4�- V.wa Fo-no •• - -_ - CI.•ocd Ye, Nv RE dam,Lc-d _. _- . . Ch.nnel ln,allea NIC/ U56 Apr Ce.tuma Seppl.ca N,C Va • NIC IRQ. 110 Addre„ •___, rape 15A Cal C blc Modem lnform.,tio,t Maaofaa.rer. DQ`l Moad. siN. 05/7Dia/g 20Z la?i/$x609 .7.246 MnCAt:area Arn->e.r•..f--. . U /t: ..,..rr._-cr•••,,..r_....'n.......e.t.. Pre Trtstahato.n Post imtellet.on PrInser 62 A— k wr,leDiel3D Spsce a CD-ROM ---- Tape Dn.. Scarno Anelag Mvacn, �- - ' ------ -- Demonerr r on Prohded Yea . ® F.k and Punt Sheon6 T-:nea Ott Note. Ce,noner ha,reed.foil,,.na:ret.nda and agrec,to dl of the to rrrz+..a common,m the COm,n cr'p ngt semen:.u:��nT the Rar2(dTerma end Cvnd.t.un,and the rNrtorm Net Bark End t:.e,L■eenrc Agreement 1 II r=•+m.e..nc..ry•t RRGn 0y reference Ey e.gmeg.I Further agrec w the abase 1113,-211M011 I iecSJnt end I.V ■tt Mat my computer t,.n d,tr s+n:.,9c'..ng r.•.td,00r. .c...,pr,or:o.netell,00�� •— /� Co.t.,ruta c,gnatorc �� 'j - ores .Z/ea 42 Feb-20-01 01:09pm From-ADELPNIA LEGAL DEPTARTMENT 8142747782 T-432 P.06/16 F-008 Vhig 1 � d / rallarion Checklist Subscriber.Information Name (. Y(e s C1,,-.4-1 t'I' �? Ork Order e �7 Mama insult.con Dam 62/41., 0 g') lns.Uer to Computer information M.nufacaorer - Model - Oper.ung Srsremm Wui45 .48 WeINT MacOS Rani /7O -• HD sae. T•_2 &Sa • Va..,Found: __ _ _ Cleaned RF 0ButV Le.el •- Channel. Lnrallcd 0 USB Adapter Customer Si.ppl.cd NIC. No NIC tRQ••• - uD Adarca,.—— Tree ISA teak Cable Mooem information Mm.,fsna ref - .. Model a/N - -- MAC Addre» s.,t...r rtr.ren-e N,-,g-e..r CD Necperl Dowcatre.m7nro.r3np.t - Pre Inirallanon )'oat lnsuprt,on Pnntec _ _ Q f - — Av.,I.DIr HO sp. . p 8 m A f CD-tcOM So,no — - TTpc DL.c — Scvt.t.r — nintl.1g,Modem Dcttwn,tnaon Pro,.dcd• Yes ;[ P�:nc Pr.nt Shan g T r^.cU Off orr,. I r /lam~ 442, (-dirafro • CucOAln has read.fully rndcratarids and agrees to all of the corm,and cona,t.ona.n the C..stomc:'s nyreemcnt,,r._I..a.nd tne.tanclard Terms and Cond.t.ocu and the Ca'home Ncv.ork End u,er Lc n:c Ageement atracnca hero.na.ncoct,ar.i,d Cereal Ily rerereccc. By..grs.ag-t 1..nher agree ro the abo.c lnau1l.mon Chakluc and certify that mr eomp_tcr,r m the,+me eper.•..c.v�d.:mr di a plan ao,not;Il)t-. ��� — 2 OD C�.tvmn$.ginure x R. 'L-- Dare Feb-20-01 01:10pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.07/16 F-008 - 1pa Insiullarion Checklist POWER LlNKf1 no....k Sub>criber IIttttformanon /�, J Name �,(.`' (/' �".eLka ,-Q,. ,y_.,� _ _ WOtk Order• Add-ea 1L3 11 t(2- c=k1T.l:3. �?T -A,�� "t�' yr^J/�J•`�� tnniellat,on Date (?/ 11 / :utaller tO — ✓`�/_--- - -- • Compurer Iaformaa oa nn.n.,Iac .rer t..�y-QG/_ - - - t's,del - ----- Qpc,.t.ng 5ycrern 4211011" W,d9S N.I4::0S .Ram _() {✓t �— i .)S.r.e � J�— --- - Vow for.nci • ...,sea Yb • Rf QtlmV Level _- ['tined _ (Installed N USS A.itpter t,.stork,S,.ppt,ed NIC. Yea No NIC IRQ u0 44141re4 _- _-__ Type ISA gab Cable Modem Information dJJ ManutacMrer ��11��}�!A Y'Odd. Slav (ii3ieOi Z oa?on 2..43i311 f:Ac Adaresa 0s=�2041 oc FC<•- 8r0.nG Preference. Nae,gator '.aperf Do..nstreem Thro._Fhp,.e Pre Insclta...A Pest 1,+>1.21ULt,vn — nzer -- - PaAVi.labtc HD Space .., ...1 tF CD-ROM 1 Sornd Tipc Dr..c - —�• Scanner • • �AN log model! T - -- Deer+.unat.un Pro..ded• C rD N. 64_1.le.ra 1•rt So-n.r,•f.., Oft Nocea • C.rtomcr Awl rend.f.Sy,.ndcratmoa an0 agrcn to all of the tern,-nd con.lrnonn m the C,.t.,mer'a Agreement,.mt_ang • the sandard Tetsns and Cosdatona and itie Qir Bonne Network Ltd,acz L.ccme A,areemen....ecried nereto and■ncorpora,en Aesee+by refermce 8; )..gang,I f_rther ayrc-to Vic>.bo.-In:.taIt hon C •cUmc and'. s,fr that my cvmputrr.a..-he>.mc v:c:.t.ny; as a.,,>tenor to,nanInc,on / C-am an S,gnsu+t - 7..v / //� • Feb-20-01 01:10pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.08/16 F-008 0 Work Urge C„Iii r. 1 R home '� Support PP o _Li,. _ENii i r:. .,..1:i:!.1. ._ .-I IL. .u• r6E', (888) 307-24; centuryathome @centurycomm cc 4 Subscriber Information 11 4. SChadule lnfomlation t-- Name:Arad. Rail/. Cable Operator Data Technician Address:.3 75 £a../77p113 L - • it1K64 /ik- Due Date: 0 JO 0i Due Date: Home Phone: t f L� Window:..f nour(s) Window: mour(si Work Phone: Due Time �-1Z Due Time: Login: Request Remarks: -,-D 0000 0145 Meets Info.: - mhMAre55 Cm--DOS®3-7 !o FD Uo mftc- 006o3'''7 /So a- - qC. - 1 : Lie Plant&Eauinmefttinformatia afiar'W. b(S C Laser Group: Dwelling Type: Node: IDZ House Status: Computer Information _ - Default Gateway: CPU: Netmask: • Operating System: Broadcast IP: RAM: Outlet Available: Sound Card: DNS Name: IP Address: Primary DNS Server Address: Subuomain Awiress: Secondary DNS Server Address: , -Address Information 11-- - - Mail Server Name: News Server Name: Directory Server Name: Web Proxy Server Name: - Pape. Run Oare-6/6/00 Feb-20-01 01:10pm From-ADELPHIA LEGAL DEPTARTMENT - 8142747782 T-432 P.09/16 F-008 �,--,.. Work 0rde ' fily pP -,lr k t r' ,.ti i i i L,. (-•iF P I i ,.-.I t t•i_. t r;t l i, r;'I`+ (8$8) 307-24: , centuryatnome @centurycomm cc 4 Work Reams!Information y Action _ Service Fee Tvoe. • Notes: By slanina Delow. I herebv agree as follows: 1- I have received a copy of the Subscriber Agreement pertaining to the @Home Network service(the"Service°) and agree to abide by Its terms I understand that the Subscriber Agreement contains important information concerning my rents and responsibilities- (a)i will be charged the moniny service fee fisted above,plus applicable francnise fees and taxes,for the Service and rental of the cable modem,networK card and other Century equipment. As set forth in the Subscrber Agreement,this rate is subject to change,and may be waived from time to time at Century's sole discretion. (b)'I will pay ' installation and other non-recurnng charges listed above, plus applicable franchise fees and taxes, based on selected installation and upgrade options. (c)I authorize Century to charge my Visa, MasterCard or American Express for all 2 I have received a copy of the t t1ome Network End User Software License Agreement aria agree to Moe by its terms 3 I.understand and agree that the terms and conditions of the Subscriber Agreement and the @Home Network End user Software Ucense Agreement may he revised from time to time and that I will be Informed of any such cnanges by a posting on the Service, postal mail or other means. My continued use of the Service following notice of such a change will constitute my acceptance of any such modification. if 1 do not agree to any such modification. I will immediately stop using 1ho Pcin.:ro onp trill ho onrirlen in rof,,nr1 of on....n,.c on grannro Fox Thor I MQ.•n no:r1:n oMv4nro 4 I agree that installation of the Service has been completed to my satisfaction,that I have received the cable modem(s) listed ahn'P ann that rhP mntiRm(ct ann all,ncrAll PnllinmRnr remain thi nrnnwmI of rpnttlrvr(7`)Hnme 5 I am obliged to abide Dy ire terms of the @Home Acceptable Use PDIIcy http-\\www.nome net\aup 6 File and print snaring have been turned off on your computer. If they are turned back on,there is a potential that other users on the Internet could access my computer system and/or files. By signing below I state that you understand the above and take full responsibility if file and print sharing is turned back on. Date: Signature: (d A I ararnn CO°I LLCr I f7 yr ra Pane • Feb-20-01 01:11pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.10/18 F-008 - r�.r.. . - worK uraE (. , �' T- '( home, Su PP on (888) 307-24: centuryathome@centurycomm.cc --{ . Subscriber Information k . Schedule Information - Name:frreetithc- eez. ^OZ iV Cable Operator Data Technician Address:315 Carne & Due Date: /-es-01 Due Date: Home Phone: Window: nour(s) Window: hour(S) Work Phone: Due Time S- i 2_ Due Time: Login: Request Remarks: -1-b 10000 f)145 Meets Info.: ffM MAr ss &n-o a?o 3-7 89 io Fo u mom- Dow 37a - /80 )4)- = cfC 1 : • 'Plant&'Eauinment Infonnatio, -` (t' U / S 41d L Laser Group: Dwelling Type: Node: /02 House Status: do muuterinfarmation Default Gateway: CPU: Netmask Operating System: Broadcast IP: RAM: - Outlet Available: Sound Card: DNS Name: IP Address: Primary DNS Server Address: Subdomain Address: Secondary DNS Server Address: Addcess.Information Mail Server Name: News Server Name: Directory Server Name: Web Proxy Server Name: Page Run Date-6/6/00 Feb-20-01 01:11pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.11/16 F-008 0 r '�. NTURY( Work ore &ippon pct h.c c r [)?r;l l!t r: i I n .•': t (88$) 307-24: centuryathome@centurycomm cc ...[ Work Resiuest Information Action Service Fee Tyne Notes: By sianinQ below. I hereby agree as follows: 1. I have received a copy of the Subscriber Agreement pertaining to the @Home Network service(the"Service")and agree to abide by its terms. I understand that the Subscriber Agreement contains important information concerning my rights and responsibilities (a)I will De charged the monthty service fee listed above, plus applicable franchise fees and taxes,for the Service and rental of the cable modem, network card and other Century equipment. As set forth in the Subscriber Agreement.this rate is subject to change,and may be waived from time to time at Centurys sole discretion. (D) I will pay installation and other non-recurnng charges listed above, plus applicable franchise fees and taxes, bases on selected installation and upgrade options. (c) I authorize Century to charge my Visa. MasterCard or American Express for all 2 I have received a copy of the OHome Network End User Software License Agreement and agree to abide by its terms. 3 I understand and agree that the terms and conditions of the Subscriber Agreement and the @Home Network End User Software License Agreement may be revised from time to Dme and that I will be informed of any such changes by a posting on the Service, postal mail or other means My continued use of the Service following notice of such a change will constitute my acceptance of any such modification. If I do not agree to any such modification, I will immediately stop using Tho S,`nn..rc ant WI ll ho a nT.Ti 1 Tn a raf..n'7 of.2t-to..n..ccA `'an,•PP fGOC root 1 hO..n nnal:n ctrl..On PA 4 I agree that installation of the Service has been completed to my satisfaction.that l have received the cable modem(s) listed ahnvR Ann That thf?mnAHmrsl Ana all install Paiiinmflnt rRmaln ThA nrnnRrtv of r.pnrllrYlal-inrn 5 I am obliged to Mae Dy the terms or the©biome Acceptable use Policy. nitp \\www.borne net\aup. 6. File and print sharing have been turned off on your computer. If they are turned back on, mere is a potential that other users on the Internet could access my computer system and/or files. By signing below I state that you understand the above and take full resoonsrbility if fife and orint sharing is turned back on ' L� �j�,� Date: r Signature: - ld a I 1 o,csINA Ordb1 tact, I(Pi( ry Paoe Feb-20-01 01:11pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.12/16 F-008 ,..-� work uraE CENTUT{Y(0 home. • Su ppmn •,if.'f;`i!..(, 'f •rfpl.=f, ...;lit:{ .,oi .i a� 4j. _,14 '.$ ii11 Jl+fl (888) 307-24. centu ryathome @centu rycomm.cc • Subscriber lnforrttatian - , -I,, Schedule Information Name: r AL4 . U 1 � Cable Operator Data Technician Address: 2.0 1,0 . batty 1:z, ,YC &tLL&. Due Date: I-10--01 Due Date: Home Phone: Window: 4 - nour(s) Window: nouns Work Phone: Due Time S- Z Due Time: Login: Request Remarks: - ` t$8 mita-aOSo3� 6cf�/40� Meets Info.: Dldn� sin 11�aG A Y s C —0 D5-789102)2 -rA t oaoo rY135 II-: ye) — -3 plant&E9 riamere =nforma ion k.r • Laser Group: Dwelling Type: Node:ip9 House Status: • Corriformaticil . Default Gateway: CPU: Netmask: Operating System: Broadcast IP: RAM: Outlet Available: Sound Card: DNS Name: • • IP Address: Primary DNS Server Address: Subdomain Address: Secondary DNS Server Address: _ ":Address-informat fl Mail Server Name: News Server Name: Directory Server Name: - Web Proxy Server Name: • Pape: Run Date:6/6/00 • Feb-20-01 01:12pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.13/16 F-008 . • %MUM. UrQE • C,./1:14Nrn TEA: l St,PP on ..-. cr :.L• . Cl•' .,li ir .ra'If 1.i„FS, :[IL -. , I •!1..,■t. Nt:t�:�•!.,,�br` (8138) 307-24. • • centuryathome @centurycomm cc • rk Fteauest lnfarriratinri Action Service Fe Tvoe Notes: • By signing below. I hereby agree as follows: • 1 I have received a copy of the Subscriber Agreement pertaining to the @Home Network service(the"Service")and agree to , abide by its terms. I understand that the Subscriber Agreement contains important information concerning my rights and responsibilities. (a) I will be cnarged the monthly service fee listed above,plus applicable franchise fees and taxes,for the , Service and rental of the cable modem,network card and other Century equipment As set forth in the Subscnber Agreement, this rate is subject to cnagge,and may be waived from time to time at Century's sole discretion. (b) I will pay installation and other non-recurring charges listed above, plus applicable franchise fees and taxes, based on selected installation and upgrade options_ (c)I authorize Century to charge my Visa, MasterCard or American Express for all 2 t nave received a copy of the Mime Network End User Software License Agreement and agree to abide by as terms 3. 1 understand and agree that the terms and oonaitions of the Subscriber Agreement and the @Nome Network End User Software License Agreement may be revised from time to time and that I will be informed of any such changes by a posting on the Service, postal mail or otner means. My continued use of me Service following notice of such a change will constitute my acceptance of any such modification. If I do not agree to any such modification, I will immediately stop using rho on..l'o vroi ,enll ho Ant:tlnd In 0 rof..ni(nf any..nl.corl 'lw n.,r'0 fooC thot 1 h0..n na•n in 9/i.,anl.0 4. l agree that instlaDation of the Service has been completed to my satissfaction,that I have received the cable modem(s) listed ahnvR and that Thi mndern( and all install aniiinmnnr remain the nronarty nf C'.anntrvThHnmp 5. I am obliged to abide by the terms of the @home Acceptable Use Policy. nttplkwww.home nettaup. 6. File and print sharing have been turned off on your mmputer_ if they are turned back on.mere is a potential that other users on the Internet could access my computer system and/or fifes. By signing below I state that you understand the above and take fun responsibility if file and orint sharina is turned back on. • Signature. n r Date. a } t Run Date-6/6/00 Page. ' Feb-20-01 01:12pm From—ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.14/16 F-008 eI fl,a ���rr�7L(5/S i�� Jowck Ll1JAst-Home Installation Checklist Sabvcribcr Information Name �Eti _ work oraer s _ Addroa _)3 QuI5( AJ --— -- ltt:t2lUrton Date �/ 1 t// (J� lo•tallcr ID - ��.�^ Computer Informatio�/�/� n Manafacwrer f t l 1 6s Operat115 System. wel95 w,n9B wmVT R.37 - - — r..,Ztze _ %r14 Fond• —. C,rancd. - RF dBmV ka.d - C:,bnnel • —_ Inai,llcd g" USB Adapicr Cwcomcr S..ppt.ca MC V No NICQ $O Addte>s._ Typc ISA PCi Gble Modem Information/ Man..fba..rer g(j r 3d-A(2_1) 5/N Uy3n U/da g6 05 l /1Ojo33 /rr NI ACAddreaa - _ -- browacr Prcfcrencc Na.aptor IE t-.tperf O nacr.a,Thro.solokt _--- _— - Prt r •nat.,' Pest Inautu4un Pr ntcr R.adoDIc ND Spacr — — CD-ROM -- - ------• --- TapcDr.•c -- -- • Sc.nncr T An.ioY Mod.m stir - — Dcmonatrac.on Pro..aea. Yes No Q Fdo and Prue 4i AL.fr ( f/e — — — — Customer naa)cad•foil)umeniand2 and og oo.to 3110 Inc tcr.n>end coad,gom tit th.Custom.;"Txrc:,ac.,t m.luame Vs{b ordard 1crma 2nd Cond.t ona end the 6Priomr Network EM llxr I.eeenbe A0reemeni aruChcd h.rcto=CI.ncorpn,aiM Dcrem by reference. Br aign,nb t Lana aK-•c ,the o.c In.� o CllcrNn:2a.' -n,ry th,.r..!cu.�p_,�.>,�:t!•;,- • ,_r_a.,,..n..•.. • ee•t.a>p,,0,to,CIall -- Coblomt7 S,y,1tacure -- i a 1_ _ _—. Dart f��! • • Feb-20-01 01:12pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782, T-432 P.15/16 F-008 1 ) . ` ..r. • - •hia Insrallarion Checklist POWEF t,ru K<<Mei,w SubaCviber Laformatwn N.me / ,^,f '3 AesG Wort.Urdrr7 - -—— AOacs). --f c/ �uCal-ti Cr ifr'e.- — ,eke-.2.1^.- (4 ''Q6- Ine.I1aon Dec. 2 _/-//,0,/ L,K.Ur•n) _S-Z? - — Computer Inforpm ny� M.n.,lact.icr 1n 7(" -- Model UaG-,--w..rC -- - —_ Oper.tm65yatem W,195 W.r92 WANT 2,44tOS limn. h c 2 - � - nD S,,c - - ' V.n,b Fund _ _.. Cte.m-a Y. No RFaBmV Lc.e1 Chemrd. — - --- lustalled mC i Jab naapter :...tuu,rr 5.ppl.cd N1C (9 \'- N1C IRQ 1/0 Aau.= Typc t]n Pi=1 Cable Modem InfurtnaYion Manuf3.turcr _ _ _ - Nuocl _- -_--_ _ -- 5/N ' viAC Acme.. ---_-- -— Brower Prefcrcucc Nay.bstur tF Nctperf nowrBtremn Th.o,.gllput —- -_- Pre trulallThutil Poor lmts1l.L0,1 _ anto - — P __r_ _ Ara.labk HD$pact -- -- -- - CD-ROM , ---- -- - __-__ found _ j _ --- - - - - --- Tap.Dn•e —•-— ---- - —T S[drllKl / 11 Ansbog Mudon r _ I - -- ---- -- pemorutnnoa Prua.d•:• t9 NO 3 tel.'4.1 P.—r. F._r,ng l".nca 741 cppl- Nut.: — 'x,,1.1_ -=,,-,...4 -- I -- - —•44 - . ',L . _ —- C..ttoma but Mitt,f1AJ.enderatandt ma ttz eu-.to ell of the taint and Lond.t.uns.n the C.+-mmcr.A6sccn:r .nclulmb Me ssnd.:41'm m and Condlnotta.na Mc(Piome Net..ori.Ena tho 1_.cen.Apecmcnt.etacncd hereto 3,141.,::orporattd heron by reference Hr a.gmhy,l furuter sgrcc t lc•.Govt 1 t.11at• Cl....:..{. •t.ho eead)that my:n,,.•....rr•.,r.;:,. ..n•. ,,:r..'I,;..•.._,..,Ire .a,t...a pi.Or to,r1SLSIlaL., �� r , CWWn1O Ssgasture + —- -. — - ILI. 0J-3L dj , Feb-20-01 01:13pm From-ADELPHIA LEGAL DEPTARTMENT 8142747782 T-432 P.16/16 F-008 WORK ORDER A " 878/1000 PRINT ID: WORM, __P�� 1 OF 1 DELPH I A SEQUENCE NO. 192, 73E ITY OF INDUSTRY CA WORK ORDER 26.3334265 I R TECH.B NU„;ER PRINT DATE 0955 91006673805013011 01/29/01 . 5118 IBER NUMBER RESIDENCE PHONE BUSINESS PHONE W.O.DESCRIPTION SCHEpuLED DATE TIME UNI' 57E100070148195 626-445-6689 c99-000-0000 -OWERLINK CHANG 1/30/01 .-5 •• SERVICE NAME AND ADDRESS VIP SUB MAP CODE Rv-SALES REP. MISC- SCt STATUS AREA CA' O8ENFiANS, JANE "A609 • 00 01508 609 C( 54 GENOA ST APT C - BEAD R CAD I A CA 910012-6738 REPRINT END DWEI,.UNG TYPE TYPE HOOK-UP IIIIIMMV INDIV. BILL A! RIAL CALLER NAME LAST PAYMENT O NER NUMBER NUMBER .. DATE 01/12/01 99 9999 9' NOTES TO I R TECHNICIAN DROP LOCATION NUMI EFT SIDE -' r�- . ORK TO BE PERFORMED CPNVegff-R-- TERMINAL CURRENT - L r •Os3COUNT D_„.a -IPTION ARGE S -IAL NUMB=- 4- - PM'S _ADDRESS BALANCE P5 1-1 "RIVACY A-* N R 20• — 5G 0-1* OD •'WAY PWRLIN$. 39. 95 BA-P5-5G-80 mgmwr 51 0-1* FI 'WRLINK INST 3322 BA 1-1 'ASIC 13. 83 _AVOW' BD 1-1 : XP BASIC 15- 50 EMP DISCNTS 39. 95 cow Do n 27 N 000 oALANCE 98. 85 DoSTt1' , AMOs)NT_.� O. 00 D 1 GR.RD F-FIT ' BARREL Ch SG GR.wR -TRANS MI-TP BLK. DROP C r+h W PLT riSE C 1 SP Ct. _ SPLIT BOOTS .i-HK TROUBLE CALL REASONS WO RSN: CONNECT MODEM DEPOSIT TO COLLECT DEPOSIT AMOUNT PAID TAG NO- C PREPAYMENT TO COLLECT PREPAYMENT AMOUNT PAID TAG NO- PASS _. __ TOTAL AMOUNT TO COLLECT TOTAL AMOUNT PAID TAG NO- NO V 1996 _ COMPLETION . TROUBLE CALL RESOLUTION CODES DATE to TECH.il'" START STOP CODE ® BURY DROP a NO Dully'DROP Customer I htsvc d agrcc tu Lhc TcnnS and Condinunb un the rcver a side : . fo. immtidi me .T•.'6rt'IfR,Gar r 0A-N: — COmPiwv"REPRE5ENlnLVE .+n1C AN Pn+ Al I 11PPfRTt iNtTv FMPI C yFR _ z� 3y / ST�OF / • 5Tb n L/ nxcaD e c. %' STAFF REPORT DEVELOPMENT SERVICES DEPARTMENT February 20, 2001 TO: Arcadia City Council FROM: Don Penn, Assistant City Manager/Development Services Director By: Donna Butler, Community Development Administrator SUBJECT: RECOMMENDATION TO AWARD A PROFESSIONAL SERVICES AGREEMENT TO CULTURAL RESOURCE MANAGEMENT (CRM) IN THE AMOUNT OF $45,000 FOR A HISTORIC RESOURCES STUDY SUMMARY The City Council has set aside $40,000 in Community Development Block Grant Funds (CDBG) for a Historic Resources Survey program for fiscal year 2000-01. In addition the City Council has approved an additional $40,000 in CDBG funds for the 2001-2002 fiscal year. The Historic Resources Survey will identify a list of potential historic and cultural sites throughout the City. The Development Services Department mailed Request for Proposals (RFPs) to 14 firms and received one (1) proposal. Based upon the cost, the proposal was rejected. A subsequent request generated two (2) proposals, including a revision to the first proposal submitted by Cultural Resource Management (CRM) and a second proposal from Michael Dice. Based upon work to be performed, experience and costs, the Development Services Department is recommending that the City enter into a professional services contract with Cultural Resource Management (CRM) in the amount of$45,000 to complete the first phase of the Historic Resources Study. BACKGROUND In August, the Development Services Department sent a request for proposal (RFP) to fourteen (14) firms and individuals to prepare a historic resources survey of potential historic and cultural sites throughout the City. The City LASER IMAGED 2/20/01 C-C.) iv . *Southern District - Arcadia County Park District — Arboretum District Santa Anita Park District CRM's proposal includes: Task I Preliminary Planning and Building Review Task II Visual Field Survey and Study of the following areas: Southern District (South Arcadia) Historic Downtown District Eisenhower District Orange Grove District Highland Oaks District Task III Evaluation and Documentation of Significant Structures in accordance with the State Housing Preservation criteria Task IV Preparation of Draft and Final Study The first phase will take approximately 6-7 months to complete. After completion of the first phase, the City may wish to consider contracting for the second phase that would involve survey of the Arcadia County Park District, Arboretum District and the Santa Anita Park District as well as preparation of Historic Preservation ordinances. FISCAL IMPACT In February 2000, the City Council approved the allocation of$40,000 of FY 2000-2001 Community Development Block Grant (CDBG) funds for a Historic Resources Survey. In addition, on February 6, 2002 the City Council set aside an additional $40,000 in the 2001-2002 CDBG fiscal year for continuation of this Historic Resources Survey program. Approval of the additional $40,000 provides funds to complete the City-wide survey. The proposed contract for CRM is for $42,000, plus reimbursables (estimated to be $3,000). Because this project will take approximately seven (7) months to complete, it is anticipated that the additional $5,000 can be charged to the 2001- 2002 CDBG fiscal year. If the Community Development Commission does not approve the additional allocation of $40,000 for the upcoming 2001-2001 fiscal year staff would come back to the City Council with a recommendation to make 3 2/20/01 . ,.- „. -■. (4-... N. ( • , I IA . . i:ORTH ..---- „:;3 .l r.17.',.- .,-.L.:::.-T.X,.,.._.• ,--,, o 1 . I ' • I 11‘11?M21 'N,_ . ' //.N , I .• 7. M". (..; .,..!„2..z.4' erodernesa Pan < r', ) ) r1 I k - ... .• LAM AVE 1■ '.' •L...^47!.. r. Ittlx, • I i'l :i.="*" I ...I . • i • _ ,s ' :.2 • ‘ t: ki • .,' • •/1 •• • .._ 1 Orange Grove District * t . , , ,,,—,i Highland Oaks District ','''U i-1. 1. .4W .7 1 -; • 1 . , ;• . ; , k • .: : i-, t : 1 - :31 v . .a.,„.. I-, - ,-,_.. ,.•_. ,.. ' . "' ..,.7 .. .. .'',. :z/ C. 1M \iMIPINIIPII!1.. 1 .._ . .,.. ( l , ,, - • -----:--1 ..- l — 1 'a 'k \ ,\\ IIK .6's% 1 I .3 ' Milladiallia % I- . FOOTHILL CLOD FooTHEI-37;0*. - . 2 rMINI . „.sF..- - - -- • - •-•,..-• - -- . - • FOOTHILL Eisenhower District ommommm ...- .6.. ..-..4.*--- ;:.: -7-7 ' Vaingir. .;-E''.;?•-°°.- .---L1 j :. -) I I i Ns-,:. ///..7 ."-,,, ,' .4a4',.1.- 11.11.11 • ,....- ;-4°"M^C° . ,::`, 1 • ,dearammaszmir arboretum -- , ii \ ..;,---,- i _ • i I .., . . Historic Downtown District * .._. , , ----,.._. .., , Ami )istriebt 1 7.... ,.r,n7 . ,..reofeCon . . \ 'N•••_ V• ` ' 3a71 =1 2' 'i l'-.- --i , ..._. ,--• ' • i mit —./■,..'.` rcadia County Park District .'s),,---;- ,-- - , 1 ,i'•' .5-"--,..;.'":'"'"-:.zoirm t, ."'''Y'v''' ' t . . ;ante Anit,--,,, sr (---,. --- :4,?:: i 4 .:-. 'i -- / :,:• ,...',§.- - M, .11W-- • ; .6:7: ..-:.;,..' 1 . ,tatiter`--. )ark Distri IC,---1 : . , . ,,,, 7 ._ . - .....m„r ...c.... . . • , •, . • . . — — . i---I I • ' ._, . ■-1--- I,';': CCC t.,-- F„ ......■ i• ,E -' ,•• I ?J• 1 ,,... .Au ".M.."'• ' -' .11=1111tommmi ,t-: --I I ' '-',,. . . 'Imo . .10 ., --! ---i- , CHINO NEAL.AVE ,7,;•:;•74 ,fa . 1.111.11111111K,AIMMITE -) f , . _ .... .. Am - MOM ' ni - - • Is- liftwo ir, ..,., Sou . em District * 1. Illaivi . I-ONOCIEN MIN. ...ONC''''' ' t I I lj I I It 111*. k •-• I= IOW I i 1 ii. .E f .411. f--I H . 11111111:1 --' - - ; ' ' i 1 1 . ;11001r. I I -';. • I ,..• OM ..., .-. _ . ' . •••• ; 1 , ,"-...• ;., 7- .,... '' ,„,..C.,, ,,• Av,,, ' .1 • ,- •• •' ii \-11 ,, 1.,;■., I .1 ..0.17.. ••,. ', C .7.1 I/ i C(,, a • __.L.--.` ,... -: .. -•./ ..,? I a' •- ; "2 . .,. • . ..-F :,.1 i 2 2 i • .-.. . I . • 1,Lij i • .1 . ,•3`- .7.'? •3•.'34 I .7.i. 1 1 ARCADIA GENERAL PLAN ' . * Areas to be studied • , . . . . . 1 . • _ . . 1 • • . . } \.... ( OS-L.c/ G !� i s3 / c� 3 �•a r"4c\ jA RPORAT50- STAFF REPORT DE VELO 'MENT SERVICES DEPARTMENT February 20, 200`1 TO: Mayor and City Council FROM: Don Penman, Assistant City Manager/Development Services irector Donna L. Butler, Community Development Administrator Prepared By: James M. Kasama, Associate Planner SUBJECT: Recommendation to approve the Final Map for Tract No. 53163 for a 5- unit residential condominium subdivision at 45-49 California Street. • SUMMARY Tract Maps are required for all subdivisions that result in five or more parcels or units. In accordance with Arcadia Municipal Code Section 9116.3, the City Council must approve a Final Tract Map provided it conforms to all the requirements of the City Subdivision Code and the State Subdivision Map Act. It is recommended that the City Council approve the Final Map for Tract No. 53163 for a 5-unit residential condominium subdivision at 45-49 California Street. DISCUSSION The Final Map for Tract No. 53163 has been reviewed by the County Department of Public Works and the appropriate City Departments. The map has been found to be in substantial conformance with the Tentative Tract Map conditionally approved by the Planning Commission on June 13, 2000, and is in compliance with the City Subdivision Code and the State Subdivision Map Act. RECOMMENDATION It is recommended that the City Council approve the Final Map for Tract No. 53163 for a 5-unit residential condominium subdivision at 45-49 California Street. Attachments: County letter of compliance Tract Map No. 53163 Land Use & Zoning Map Approved: t, p�GED William R. Kelly, City Manager LASER 1 i 1°'° co,v- iy „es. i a � n �{y o Los qNC ✓ 511 k" ���I`��. COL 1ro TY OF.LOS ANGELES T ••� : 4-7-* - DEPARTMENT OF PUBLIC WORKS••• . 900 SOUTH FREMONT AVENUE • c4uFof0;* ALHAMBRA, CALCFORN1A 91803-1331 Telephone:(626)458-5100 _ HARRY W.STONE,Director ADDRESS ALL CORK£,SPONDENCE TO: P.O.BOX 1460 December 19, 2000 ALHAlvfBRA,CALIFORNIA91802-1460 • IN REPLY PLEASE pp REFER TO FILE: LD-8 Mr. Terry Hagen City Engineer City of Arcadia 240 West Huntington Drive Arcadia, CA 91006-6021 Dear Mr. Hagen: TRACT NO. 53163 The enclosed subject tract map has been reviewed by our Department for mathematical accuracy, survey analysis, title information, and for compliance with the State Subdivision Map Act. The map is.now ready for your examination and certification as to compliance with the conditional approval and applicable City Ordinances. The City Council or Advisory Agency should make the findings required by the California Environmental Quality Act and the State Subdivision Map Act. After your approval and the approval of the City Council or Advisory Agency, the map should be returned to Land Development Division, Subdivision Mapping Section for filing with the County Recorder. If you have any questions, please contact Mr. Armando Aguilar of our Subdivision Mapping Section at (626) 458-4915. Very truly yours, HARRY W. STONE Director of Public Works PHIL K. DOUDAR z' Assistant Division Engineer Land Development Division RS:ca P:\MA P P I N G ITRAC T.LTR • Enc. • rs • ' . 1 LOT SHEET 1 OF 2 SHEETS • 16,015 SO. FT. TRACT NO. 63163 • a IN THE CITY OF ARCADIA =� COUNTY OF LOS ANGELES, STATE OF CALIFORNIA BEING A' SUBDIVISION OF LOT 12 AND 13 OF BLOCK 65 OF A PART OF ARCADIA SANTA ANITA TRACT PER MAP RECORDED IN BOOK 15, PAGES 89 AND 90 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. • FOR CONDOMINIUM PURPOSES • • OWNER'S STATEMENT: SURVEYOR'S STATEMENT: • I HEREBY STATE THAT I AM A UCFNSED LAND SURVEYOR OF THE STATE OF • 'NE HERESY STATE THAT 11E ARE HE OWNERS P OR ARE INTERESTED IN THE CALIFORNIA; THAT THIS FINAL MAP.CONSISTING OF 2 SHEETS.IS A TRUE • LANDS INCLUDED WITHIN THE SUBOMSCN SHOWN ON THIS YAP WITHIN THE AND COMPLETE SURVEY AS SHOWN.AND WAS MADE BY ME OR UNDER MY DISTINCTIVE BORDER UNES.AND WE CONSENT TO THE PREPARATION AND FlUNG CF DIRECTION ON FEBRUARY 2000: THAT THE MONUMENTS OF THE CHARACTER . SAD MAP AND SUBDIVISON. AND LOCATIONS SHOWN HEREON ARE IN PLACE; THAT SAID MONUMENTS ARE SUFFICIENT TO ENABLE THE SURVEY TO BE RETRACED. SINGING WOOD INVESTMENT INC.(OWNER) ■ • h ALFRED TrIELWELL LS 8599 0.,y Ilcvni STATE OF CALIFORNIA ) E(PIRES: 5/30/01 "'•'^T"m COUNTY OF LOS ANGELES )SS - b Afff ON , BEFORE ME THE UNDERSIGNED.A NOTARY - ?UBUC IN AND FOR SAID S7ATe, PFRPERSSONALLY KNOWN TO ME OR PROVED TD CITY ENGINEER'S CERTIFICATE: ME ON THE BASS OF SATISFACTORY EVIDENCE TO BE THE PERSONS WHORE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND AC(NOIWFDGED TO ME. I HEREBY CERTIFY THAT I HAVE EXAMINED'THIS MAP; THAT R CONFORMS THAT THEY EKEOJ7E0 THE SANE IN THEIR AUTHORIZED CAPACITIES MO THAT BY SUBSTANTIALLY TO THE TENTATIVE MAP AND ALL APPROVED ALTERATIONS THEIR SIGNATURES ON THE INSTRUMENT. THE PERSONS. OR THE ENTITY UPON THEREOF; THAT ALL PROVISIONS OF SUBDIVISION ORDINANCES OF THE CITY BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. OF ARCADIA APPLICABLE AT THE TIME OF APPROVAL OF THE TENTATIVE MAP HAVE BEEN COMPLIED WITH AND THAT I AM SATISFIED THAT THIS MAP IS TECHNICALLY CORRECT WITH RESPECT TO CITY RECORDS. • NOTARY PUBUC NAME PRINTED MY COMMISSION EXPIRES: MY PRINCIPAL PLACE OF BUSINESS IS IN LOS ANGELES COUNTY UNITED NATIONAL BANK.A NATIONAL BANKING ASSOCIATION.BENEFICIARY DATE 9.T!EN0IS33 EXPIRES:STEPHEN 35/20 1 JR. UNDER A DEW OF TRUST RECORDED JUNE 9.2000 AS INSTRUMENT NO. R.GE.2C9ILS IX?IRES: 9/30/20X1 00-891239 OF OFFICIAL RECORDS CITY TREASURER'S CERTIFICATE: I HEREBY CERTIFY THAT ALL SPECIAL ASSESSMENTS LEVIES UNDER THE • JURISDICTION OF THE CITY OF ARCADIA TO WHIOR THE LAND INCLUDED IN THE WTHIN SUBDIVISION CR ANY PART THEREOF IS SUB,ECT.AND WHICH MAY STATE OF CALIFORNIA ) 9E PAID IN FULL.HAVE BEEN PAID IN FULL • COUNTY OF LOS AN+'s,FS )SS ON BEFORE NE.THE UNDERSIGNED,A NOTARY • PUBLIC IN AND FOR SAID STATE,PERSONALLY APPEARED PERSONALLY KNOWN TO ME OR PROVER TO ME SATE CITY TREASURER-CITY OF ARCADIA ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES AND THAT BY THOR SCNATURES ON THE INSTRUMENT.THE PERSONS.OR THE ENTITY UPON PLANNING COMMISSION CERTIFICATE: BEHALF CF WHICH THE PERSONS ACTED,E.YECLLTED.THE INSTRUMENT. THIS IS TO CERTIFY THAT THE TENTATIVE MAP CF TRACT NO.53183 WAS APPROVED AT A MEETING HELD ON THE 13T14 OAY OF JUNE. 2000.I HEREBY CERTIFY THAT THIS MAP SUBSTANTIALLY COMPLIES WITH THE NOTARY PUBLIC PREVIOUSLY APPROVED TENTATIVE NAP. NAME PRINTED MY COMMISSION EXPIRES. • MY PRINCIPAL PLACE OF BUSINESS IS • IN LOS ANGELES COUNTY DATE SECRETARY OF THE PLANNING COMMISSION -CITY OF ARCADIA • CONDOMINIUM NOTE: THIS SUBDIVISION IS APPROVED AS A CONDOMINIUM PRO,ECT. FINANCE DIRECTOR'S CERTIFICATE: • WHEREBY THE OWNERS OF THE UNITS OF MR SPACE WILL HOLD AN UNDIVIDED I HEREBY CERTIFY THAT THE FEE REQUIRED BY SECTION 9118.4 OF THE INTEREST IN.THE COMMON AREAS WHICH WILL IN TURN,PROVIDE THE MUNICIPAL CODE HAS BEEN PAID TO THE CITY OF ARCADIA. NECESSARY ACCESS AND UTILITY EASEMENTS FCR THE UNITS- SASS OF BEARINGS THE BEARINGS SHOWN HEREON ARE BASED ON THE CENTERLINE OF CALIFORNIA STREET SHOWN AS NB958'47 E ON TRACT MAP NO. 46099,M.B. 1112-89-94 SATE FINANCE DIRECTOR-DIY OF ARCADIA SIGNATURE OMISSION NOTE: • THE 5GNATURE OF SOUTHERN CALIFORNIA EDISON COMPANY.A CORPORATION. EASEMENT HOLDER FOR PUBLIC UTILITIES PURPOSES BY DEED RECORDED AUX:JST CITY CLERK'S CERTIFICATE: 3,2000 AS INSTRUMENT N0.00-1218338 OF OFFICIAL RECORDS.RECORDS OF ;HEREBY CERTIFY THAT THE CITY COUNCIL OF THE CITY C� ARCADIA BY LOS ANGELES COUNTY.HAS BEEN OMITTED UNDER THE PROVISIONS OF SECTION MOTION PASSED ON APPROVED THE ATTACHED MAP. 66436(a)3A(I-VIII)OF THE SUBDIVISION MAP ACT. THER INTEREST IS SUCH - -- THAT IT CANNOT RIPEN INTO A FEE iTTI.E AND SAID SIGNATURE IS NOT REQUIRED BY THE LOCAL AGENCY. DATE. CITY C:_ERK-CITY OF ARCADIA • r .'7 . SCALE: 1"= 20' SHEET 2 OF 2 SHEETS TRACT. NO. 53163 _ ...2 INiTHE CITY OF ARCADIA '''-COUNTY OF LOTS ANGELES, STATE OF CALIFORNIA FOR CONDOMINIUM PURPOSES fO NOTNINC FSTAS. 'Y TTES PG I19EL7.r.-\ ALTA STREET , 1 1 ®6'WOE EASNCNT ff SOUIHEAN CAUFORNIA EDISON COMPANY.A 1 CORPORATION FOR PUBLIC UTUTES PURPOSES SY DEED RECORDED AUGUST 3,2000 AS INSTRUMENT NO.00-1216338,CF OFFICIAL RECORDS 1 g FM)SP11L PER o BONI T A STREET ILL It�z 39-90 .� 1 C.L.ALLEY ESTAEL o I 2 I SY PRORATION PER PMT T OF ARCADLA SANTA ANITA 0 . TRACT Y.R Is-69-90 FD HOMING SET NO I, o MINO ALLEY _ _O N�38'SEE L O 08.69' -�I: • 97(!.88'I -^ - - 100.0E - N 231.76' - CL.SANTA ANITA \~ O ,I mod lam' I 1 C I ' ANE(EAST LANE). 693.69' 6693313.0 1 DrAB.PARALLEL 10 _ . . . . '1 —— C..FIRST AVE 1 °.,t.66' .mate PT \ ST 2•IP , 220.7E -+ PART NI MCAG 1� SET 6 IP i • / 0�-LS 6989 SANTA ANITA TRACT LS fi # FLUSH Y.0.Is-m-6O^ FLUSH °� $I 30' J 1 25' ON Z ELY UNE CF LOTS Q MLYUNE LOTS t�OO ; 15 TNRU 17 F91(66 1 iHRU a 8LN 66 1 6• OF A PART OF ARCM J I...-11F A PART OF Is N6958'9SE m �J SANTA ANITA TRACT ARGGA SANTA I m 1 S MR.18-69-80 ANITA TRACT MR. ,�� 8 1 . I— 1l1-99-60 ' B.DO 20.0? >o•NECOONFIN ,,6958.93.E Q 1 s U_ Z 8 z DO CO, I— > U7 < CC — LUI Z I n_ co H. '' < 0 I > LLI I °- LLB 1 75< 14 Q > I r- 16,015 SQ. FT. < < 1-- (r) I . — 1 I ZH- 0 = I— z ZI-- r GIs I G -_ I- Q n se CF A PAI"ART OF P LL 8• ARCAOIA SANTA ANITA 8 d a TRACT M.15-89-NO Q I WtT UNE OF LOT 0 M UNC P.M.NC. L- I-m .2 AND ELY UNE g • 12091 PEP M.B.116-30-31 I OF LOT 11 RUC 86 ESTAB.NY PNORATGI PER g OF A PMT OF SANTA ANITA MGM TAtT Q 1 ANITA TRACT U.N. a TRACT 5-69-03 ■ I 25 15-18-80 OTAEL I BY PRORATION PIM g 30' 1 SAID TRACT. ' ' r 111.66 LCOS 2Q.76• 9B7 E 96169•:• �- SETY IP \ I �FW671 1.8 c I REF ACCEPTED AS PONT DPI PL I p I R CL CAUFGiNA STREET 8 O PROP CCR FITS PRORATION.P STAB.BY NFL).PRODUCTION I I • �THRU FD MONS V !– _+ s76�' bL aao9 1 I o vac ii • —eQa6 9' 'D ICI N69SBATE�---PDi NOISING MD SAW L9 3173 FUISH FRO SP`YE PEA ESTAR. NO REF MATCHES PL PROD NO.46099 4 . INTEIMOD0N O C 1112-69-60 FT P 1. • CALIFORNIA STREET • INDICATES THE BOUNDARY OF THE LAND BONG SUBDPIIOEO BY THIS MAP. CI. • . o >--° ..,'' t` 0 67 • m OFFICES ,E. 1 PHOTOG.2.� O O e V-NAIL SQLpN F,in De — CLOTHING SHOP 1 MED.OFF. O L,. '�(91 ® 101- C) Q a VACANCY ma O O m (3�3�) I (37) (4/) LAC-AC-d ' (::l„ 1 (. J to TANNING SALON' ul &TV .0 + v_ 50 y 50 50 f 50 50 ! SO LAI.G 9 I STUDIO BONITA ST. =t 7 g 50 53 5E) S G? 5ti~ s .-_ .i 19 r cg. �. I(SP I' f.-"�� [.0+J (4V l : r"..J C�?) a FRAME SHOP fi�1 W FLOR. e gc:) 1 0 0 0 0 0 ED > JEWELER F CLOTH. jVACANCY -s.,ni VAC. 0 9 , NAIL SALON cng 1 OFF,.,_ - 1 1 ,. J 3 SALON ! PARTY SUPPLIES n„' OFF. �O 50 .O EO !�) J ® \--3 �7 �0 ' �G M I CO Imp.......... ...... ..Lri..Ce-JL _...•?a�r . .TI. a._,...50 - iP.JGCmcacsa'm':. • ``'���'� , CARPET SHOP ` FURN. ►�e '►��• DENTIST - P.ea'I �� ..�� �,;in H SHOP , 1 1•••4 ••• POTTERY SHOP •- 1 . ' 0 4 4 , 4 i , •���j i����� OFFICES at2. �..„, 4 •w. OFF0 0 0 0 im VW t COOKIE 4 u: , GOLF ►O?♦ .v u. SHOP SHOP (2 9) Wit) (---' < J �� '►� ►Q? ��:✓ O FLORIST �O d ..4u�.►C +..4 50 CALIFORNIA - ST. ARCADIA R-3 HOUSE LL FIRST AVENUE SCHOOL C-2 LAND USE & ZONING MAP Tentative Tract Map No. TM 53163 T NORTH 45 & 49 California Street Scale: 1-inch = 100-feet 0:01:4 STAFF REPORT •RPOIUSY9 DEVELOPMENT SERVICES DEPARTMENT ' February 20, 2001 TO: Mayor and City Council Arcadia Redevelopment Agency FROM: Don Penman, Deputy Executive Director Tracey Hause, Administrative Services Director By: Pete Kinnahan, Economic Development Administrator SUBECT: REPORT AND RECOMMENDATION TO RETAIN HdL COREN AND CONE; MC GLADREY AND PULLEN, LLP; BNY WESTERN TRUST CO., AND BEST BEST AND KRIEGER FOR VARIOUS SERVICES IN CONNECTION WITH THE PROPOSED SALE OF CITY GENERAL OBLIGATION BONDS AND REDEVELOPMENT AGENCY TAX ALLOCATION BONDS SUMMARY The City proposes to issue up to $8 million in General Obligation Bonds as part of the cost of designing and constructing a new $16 million Police Facility. The Redevelopment Agency is proposing to contribute an additional $4 million of this cost of which all or part will also be from bond proceeds. As part of this bond issue, the Agency proposes to refinance its 1989 $3.8 million tax allocation bond issue, and to raise additional capital to finance other public improvements and typical redevelopment land assembly projects in the Central Redevelopment Project Area, and possibly in the South Arcadia Amendment Area, if such is approved by the City Council later this year. The Agency may also determine to repay its $4 million loan from the City using bond proceeds. (This is the subject of the Study Session prior to tonight's regular meeting.) . Staff forwarded a Request for Proposals to several firms for the following bond-related services. - a) A property tax analysis and forecast for an Agency bond issue was sent to three (3) firms. Three (3) firms proposed; HdL Coren and Cone is recommended for a cost of $16,000. LASER IMAGED -,P,9 3 . Mayor and City Council - t t Arcadia Redevelopment Agency • February 20, 2001 Page 2 b) An analysis of the Agency's cash flow and yield on its 1989 Bond Issue commonly called a Verification Analysis, was sent to six (6) firms. Two (2) firms proposed; McGladrey and Pullen, LLP is recommended for a cost of $2,400. c) A. request to provide fiscal agent (trustee) services for the Redevelopment • Agency and Paying Agent services for the City was sent to five (5) firms. Five (5) firms proposed; BNY Western Trust is recommended for both services. • Agency Fiscal Agent costs are $4,000 one time fee and $2,000 in annual fees. City Paying Agent costs are $750 one time fee and $600 in annual fees. d) The Agency and City will require a written opinion regarding certain factual and legal questions relating to both the City's and Agency's formation, legal status and current legal claims against each entity. This will require an analysis and opinion by the City and Agency Attorney, Best Best and Krieger. Staff recommends approval of Best Best and Krieger, for a cost of $7,500 to $10,000 per issue (total $20,000). DISCUSSION The proposed Police Facility is estimated to cost $16 million, $8 million is to come from the issuance of City General Obligation Bonds previously approved by the electorate, four ($4) million dollars is proposed to come from Capital Outlay Funds, and the remaining four ($4) million from the Redevelopment Agency as its share of the police facility cost. To date, the Agency has contributed $1.5 million to the project. The remaining $2.5 million is proposed to come from the proceeds of a tax allocation bond issue. • When debt instruments of any kind are issued, numerous related services are required. Normally (but not always), payment for these services is taken out of the proceeds of the bond sale. Staff, working with our financial advisor, Fieldman Rolapp & Associates, has prepared several Requests for Proposal (RFPs) for some of the needed services. 1. Property Tax Analysis and Projection An analysis of the Agency's existing and future tax increment revenues and the stability of these future revenues is required. With the assistance of Fieldman Rolapp, staff prepared and distributed a Request for Proposals to three (3) qualified, experienced companies. All three submitted proposals. Based upon a review of the proposals, contacts with references, timing and cost, staff has Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 3 • selected HdL Coren and Cone of Diamond Bar, California. Their basic cost is $14,500. Since this work is necessary well before an Agency bond issue, and their proposal amount is less than $15,000, the Executive Director has authorized this work to be done. Their draft report was utilized by staff in preparing for tonight's Study Session. 2. Verification Analysis The Agency proposes to refund its 1989 Bond Issue which paid for the - . construction of the City Maintenance Services facility. Such refunding will net the Agency approximately $25,000 - $30,000 in annual savings. An independent analysis of the proposed refunding part of the issue will be prepared by McGladrey & Pullen, LLP (MP), the Minneapolis, MN firm which staff is recommending for this "verification analysis". Specifically, MP will verify the mathematical. accuracy of the computations prepared by Fieldman Rolapp; e.g., cash flow, debt service, yield on refunding bonds, yield on escrowed securities. This is a required task as part of any refinancing. This will cost $2,400; costs to be taken out of the proceeds of the Agency bond sale. 3a. Fiscal Agent (Trustee) As part of the requirements of a securities issue, the Agency's bond sale proceeds will be deposited with a contracted Fiscal Agent/Trustee. This financial institution will assist in the preparation of bond documents and indentures, administer the initial and subsequent fund investments and transfers, monitor the administration of all accounts, process tax increment deposits and payments to bond holders, prepare reports as required by the SEC and other regulatory bodies. • An RFP was sent to five (5) firms, with all five responding. Staff is recommending the firm of BNY Western Trust Co., administered out of their downtown Los Angeles office. This recommendation is based upon their responsiveness to the RFP, their experience, references, reputation and cost. Their costs for the services are varied, but are generally equal to or less than their competitors. In summary, the Agency will pay approximately $4,000 in one time fees and about $2,000 in annual fees. These costs will be taken from the proceeds of the bond sale or annual interest earnings on Agency bond funds deposited with BNY. This contract would be for five (5) years. • Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 4 3b. Paying Agent The City's bond sale proceeds will be deposited with a contracted Paying Agent. This financial institution will pay the bondholders as required, and will inform the required depositors and individuals of redemptions or principal maturities. This service is typically handled by financial institutions who also serve as fiscal agents or trustees. This work was included in the RFP for Fiscal Agent and sent to five (5) firms. All five'submitted proposals. Based upon their responsiveness to the RFP, their experience and reputation, a check of their references, and cost, staff also recommends BNY for a one time cost of$750 and annual fees of $600. This will be a five (5) year contract. Staff, for ease of administration and economies of scale, does not recommend splitting these services to two institutions. 3. Issuer's Counsel The rating agencies, underwriters, and potential bond purchasers will 'require a • legal analysis of both the Agency and City. This is typically handled by existing counsel who is familiar with the factual and legal history of the respective entities. This firm is also taking certain legal and financial risks that the bonds will be issued and administered after issuance consistent with federal and state laws and regulations. Stephen P. Deitsch of Best Best and Krieger, now serving as both City and Agency Attorney, has the experience and competence to serve in this capacity.. Best Best & Krieger's fee for each issue would be $7,500-$10,000 (Total - $15,000-$20,000). Costs would be taken from the proceeds of the sale. Other Bonds - Related Services If the Agency and Council ultimately authorize the issuance of Tax Allocation Bonds,and General Obligation Bonds respectively, both issues will require additional services which will be explained in more detail at the time of bond issuance, e.g., cost for rating agency services (Fitch and Moodys); cost of printing, legal notices, filing fees, etc.). Copies of the RFPs and submittals are available for review in the Development Services Department. Mayor and City Council - � Arcadia Redevelopment Agency February 20, 2001 Page 5 FISCAL IMPACT Arcadia Redevelopment Agency One Time Fees Annual Fees 1. Property Tax Analysis $16,000 . -- HdL Coren & Cone 2. Verification Analysis • $ 2,400 -- McGladrey & Pullen, LLP 3a. Fiscal Agent/Trustee $ 4,000 $2,000 BNY Western Trust 4. Issuer's Counsel $10,000 -- Best Best & Krieger Sub-Total $32,000 $2,000 City of Arcadia 3b. Paying Agent $ 750 $ 600 BNY Western Trust 4. Issuer's Counsel $10,000 - -- Best Best & Krieger City Sub-Total $10,750 $ 600 Grand Total $53,150 $2,600 RECOMMENDATION It is recommended that the Arcadia Redevelopment Agency authorize the Executive . Director to execute a contract with the following firms for the estimated amount shown, as set forth above, subject to approval as to form by the City/Agency Attorney. 1. HdL Coren & Cone (property tax analysis) - $16,000 (includes contingency in the event additional work is requested by the rating agencies) 2. McGladrey and Pullen, LLP (Verification Analysis) - $2,400 • • Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 6 3a. BNY Western Trust (Fiscal Agent/Trustee) - $4,000, Annual - $2,000 4. Best Best & Krieger (Issuer's Counsel) - $10,000 It is recommended that the City of Arcadia authorize the City Manager to execute a contract with the following firms for the estimated amount shown, as set forth above. 3b. BNY Western Trust (Paying Agent) - $750 4. Best Best & Krieger (Issuer's Counsel) - $10,000 Approved: . st-.- BK City Manager/Executive l iirector • 9 n:\1 OF t 4,2/me. -5-1cg7iiarl ki 00oR„t89 STAFF REPORT DEVELOPMENT SERVICES DEPARTMENT February 20, 2001 . TO: Mayor and City Council Arcadia Redevelopment Agency FROM: 9ZDon Penman, Deputy Executive Director & Assistant City Manager/Development Services Director Tracey Hause, Administrative Services Directo r By: Pete Kinnahan, Economic Development Adm nistrator . SUBJECT: REQUEST FOR DIRECTION REGARDING . EXPENDITURE OF PROCEEDS FOR A POSSIBLE AGENCY TAX, ALLOCATION BOND ISSUE AND DISCUSSION OF GENERAL OBLIGATION BOND ISSUE INTRODUCTION . The City Council plans to issue $8 million in General Obligation Bonds to pay part of the cost of the $16 million Police Station. The City will contribute $4 million from its capital construction fund and the Redevelopment Agency will contribute $4 million. To date, the Agency has contributed $1.5 million in cash. The Agency contribution always included cash, as well as some Agency bond proceeds. Since the Agency does not have the cash on hand to fund the full $4 contribution, the $2.5 million balance will be required from the bond issue. Provided below are the funding sources for the new Police Station. (1) City General Obligation Bond Proceeds $ 8,000,000- (2) Agency funds already appropriated into City Police Station Project $ 1,500,000 Balance needed from Tax Allocation Bond Issue $ 2,500,000 _ Sub-Total $ 4,000,000 (3) City Capita! Outlay funds already appropriated into City Police Station Project $ 2,500,000 Balance needed from City Capital Outlay Fund $ 1,500,000 Sub-Total 4,000,000 TOTAL $16,000,000 LASER IMAGED .5-..s: l. -a- . 1 - Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page,2 Pursuant to State law, the Agency was required to establish a limit on the time it can incur debt. This date is January 1, 2004. It has also been required to establish a limit on the final date it can pay off its debt. This date is January 25, 2024. (Note: There is an exception/for the issuance of debt for the provision of low moderate income housing.) As a result, the Agency is facing a deadline, relative to possibly using redevelopment bond proceeds, to implement larger projects requiring significant initial capital (e.g., Foulger, Fifth/Santa Clara, South Arcadia Amendment Area and potentially other projects). This report is intended to inform the City Council/Agency of its current financial status and to obtain direction from the City Council/Agency to assist staff and the bond consultants in the preparation of the appropriate bond documents. Agency Financial Status A. Agency Debt 1. 1989 Bond Issue principal amount currently owed (City Municipal Services Yard) - $ 2,950,000 2.. City Loan, through 2018 Total - $ 4,000,000 (Principal - $2,800,000, Interest - $1,200,000) 3.., Agency Debt to Low.Moderate Income Housing Fund $ 4,045,000 This is the amount owed this fund for the period 1985- 1996. The Agency has adopted a Financing Plan calling for repayment beginning in 2014, following termination.of the Redevelopment Plan. Note: Bond Counsel advises the Agency does not have to use bond proceeds to pay this debt. For this reason, staffff has not included this in the discussion below. • Total Debt $10,995,000 B. Annual Deductions and Budget from Agency Tax Increment Revenues (2000-2001) Gross Revenue (from HdL Coren and Cone) $ 2,813,000 1. Transfer by Agency from Tax Increment Project Fund to 20% Low Moderate Income Housing Set Aside Fund - ($ 563,000) 2. Annual 1989. Bond Issue Debt Service (through FY 2015) ($ 320,000) 3. Annual City Loan Repayment- (through 2018) ($, 400,000) (Principal - $150,000; Interest $250,000) Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 3 4. Agency Personnel and Maintenance and Operations Costs ($ 632,000) (Salaries, benefits; operating costs; Indirect Cost Payment to City ($192,000) Note - 10% of the 2 Economic Development staff salaries/benefits are paid by the Low/Moderate Income Housing Set Aside Fund and are not shown here) 5. Agency Marketing Program ($ 177,000) (Commercial Façade Rehab Program; Business Retention/Attraction; Marketing) 6. Annual Agency Capital Improvement Program ($ 184,000) (This amount varies and is subject to Agency priorities and available funds —typical projects include Downtown Traffic Signal Improvements, Street/sidewalk improvements, e.g., Front Street, Santa Anita Entry Corridor, Colorado Place sidewalks; RR Bridge Façade Graphic. This figure is for 2001 and does not include carryover or encumbered projects) Total Available Remaining $ 537,000 Possible Agency Tax Allocation Bond Sale Proceeds Maximum Bond Proceeds (and other funds, but exclusive of housing set aside funds and Agency annual operational funds) $21,400,000 Less— Debt Service Reserve ( 1,630,000) Costs of Issuance ( 820,000) Sub-total $18,950,000 Refunding (1989 bond issue)* $ -2,950,000 Net available for projects, programs, activities $16,000,000 * The Agency refunded the 1986 $3.4 million Notes for the City Corporation Maintenance Yard in 1989. The $3.78 million ($2.9 in principal) in bonds will be paid off in 2014 ($320,000 year). Given the decline in interest rates, Fieldman Rolapp, the Agency's financial advisor, states that the Agency can achieve a.gross savings of $808,500 (net present value - $240,000) through the life of the bond issue, until 2015, by refunding the bonds, even after deductions for underwriter's discount and costs of issuance. There would be no prepayment premium (penalty) cost. • • Mayor and City Council - Arcadia Redevelopment Agency February 20, 2001 Page 4 Summary of Possible Agency Projects - Tax Exempt Projects — The Agency could contribute all or a reasonable (proportionate) share of the cost for the projects below. Please note that'the Agency must spend tax exempt bond sale proceeds for tax exempt purposes only and must do it within three (3) years of any bond sale. The current tax exempt interest rate is 5.0%. A. Police Facility ($4 million, $1.5 already funded as , $ 2,500,000 Agency's share) B. Fire Station Replace HQ Station on Santa Anita (20% of costs) $ 800,000 C. Repayment of City Loan — Note: City will have to spend on capital - $ 4,000,000 D. Public Capital Improvements, e.g., Santa Anita Entry Corridor, Front Street, RR Bridge Graphics, Traffic Signals, etc. $ 700,000 Total $ 8,000,000 Taxable Projects —The Agency could spend taxable bond sale proceeds for a tax exempt purpose, but not the reverse. The current taxable interest rate is 7.0%. A. Foulger Ford area land acquisition/relocation/ unknown clearance (any land sale proceeds will offset this cost) B. Fifth/Santa Clara developer assistance (Hale/Waken) not finalized C. South Arcadia Amendment area land assembly (assuming unknown Agency/Council approval of amendment and future project) D. Other future land assembly projects in project area unknown Discussion of Possible Projects Tax Exempt Projects/Uses of Funds A. Police Facility . The Police Facility budget is estimated to be $16,000,000. Based on previous City Council/Agency direction,the source of these funds is as follows: 1. City General Obligation Bond $ 8,000,000 2. Agency funds $ 4,000,000 3. City Capital Outlay fund $ 4,000,000 Sub-total $16,000,000 Mayor and City Council' - Arcadia Redevelopment Agency February 20, 2001 Page 5 S (1) City General Obligation Bond Proceeds $ 8,000,000 (2). Agency funds already appropriated into City Police Station Project $ 1,500,000 Balance needed from Tax Allocation Bond Issue_ $ 2,500,000 Sub-Total $ 4,000,000 (3) City Capital Outlay funds already appropriated into City Police Station Project $ 2,500,000 Balance needed from City Capital Outlay Fund $ 1,500,000 Sub-Total 4,000,000 TOTAL $16,000,000 B. Fire Station The Fire headquarters building is seismically unsafe. The Agency could contribute a reasonable proportionate share of the cost of a new station. Estimated cost - $3.3 to $4.0 million Agency- 20% share -Approx. $800,000 Issues: 1) Does the Agency want to contribute any funds to a fire station project and, if so, how much? • 2) Will a new Fire Station be designed,. built and paid for within 3 years? (Required if tax exempt bond proceeds are to be'used.) C. Repayment of City Loan The Agency owes the City Capital Outlay fund $4 million. The Agency annually pays $400,000 to the Capital Fund to repay, this loan. Of that, $150,000 was transferred to the General Fund in FY 2000-2001. The Agency could use bond proceeds to repay part or all of this $4 million debt. As shown in paragraph A above, the City Capital Outlay fund needs an additional $1.5 million to pay the City share of the Police Facility. The Agency could use bond proceeds to repay the $4.0 million loan and the City could use $1.5 million of this money as its contribution to the Police Station project cost to meet the full $4.0 million commitment. Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 6 If the Agency does repay the loan, the City must use these funds for public capital projects within three (3) years. One way to meet this requirement immediately is to use its $4 million repayment of City debt as the full City contribution for the new Police Facility. Issues: 1) Does the City want the Agency to continue to repay its debt annually (e.g., $400,000) through 2018 or does the City want the Agency to pay off the loan using bond proceeds? 2) Does the City want to use the loan payoff to the Capital Outlay Fund to pay for its $4 million "share" of the total Police Facility cost or just the $1.5 million balance needed? - D. Capital Improvement Projects The Agency annually adopts a CIP for needed downtown street and other public improvements. If the Agency elects to issue the maximum amount of bonds feasible so that essentially all of the Agency's tax increment is obligated to debt service payments, Low Moderate Housing, and Economic Development Division operations, there will be very little money available to implement typical smaller' capital improvement projects, at least for the first few years after bonds are issued. In time, if the economy is stable and/or improving, there will be a small but increasing amount of funds to do CIP projects. Issue: Does the Agency now want to issue the maximum available amount of bonds in order to get the greatest amount of net proceeds and therefore be unable for several years to use tax increment revenue for smaller capital improvement projects, or does the Agency wish to set aside a certain amount of its annual tax increment receipts (say $200,000) to be available for capital improvement projects benefiting the project area. To set aside an amount would mean the bond issue would be downsized. However, the bond issue could fund some of these improvements. TAXABLE PROJECTS _ A. Foulger Ford Area The estimated cost of assembling the eleven (11) acre site bounded by Santa Anita, Huntington and Santa Clara, including land acquisition, relocation, clearance, and administrative costs could run well over $25 million. (At $25 SF, the vacant four (4) acre Foulger Ford property alone would cost $4,375,000.) • ,i Mayor and City Council Arcadia Redevelopment Agency February 20, 2001 Page 7 Two developers, Watt Commercial Properties and J. H. Snyder & Co. have submitted mixed use commercial/residential proposals for the eleven (11) acre site. Recently, Mr. Paul Rusnak, the Pasadena car dealer, informed the City he is proposing to close escrow on the Foulger property. He indicates he may need Agency assistance to acquire adjacent properties up to a minimum of eight (8) acres, including Foulger, to accommodate some of his auto dealerships. Previously, the Agency and Rusnak were unable to reach a financial agreement and negotiations were terminated. • B. Fifth Avenue/Santa Clara Developer Assistance The development team of Dick Hale (The Hale Corporation) and Matt Waken (Waken Development Co.) has proposed to construct two buildings totaling 85,000 sq. ft. of professional office on the four (4) acre triangle at Fifth/Santa Clara and the Arcadia Wash. He has requested Agency assistance. Based upon the Agency's direction, staff is currently negotiating an amount with the owners. C. South Arcadia Amendment Area The Agency staff and its consultant, Keyser Marston & Associates, are currently preparing the necessary documentation for a proposed amendment to add most of. the South Arcadia business district into the existing Central Downtown Project Area. If approved, and the power of eminent domain remains in the Redevelopment Plan amendment, the Agency may elect to assemble underutilized or other parcels necessary for development. Agency bond proceeds could . be used for this purpose. • D. Other Land Assembly Projects The Agency may wish to assemble other sites for development in the downtown project area. As one can see, there are a.number of Agency projects that could utilize taxable bond proceeds. The Hale/Waken project is the only one where a fixed sum is being negotiated which would require Agency bond proceeds. However, the Foulger et al properties probably representLthe largest potential project with the largest financial impact. The Agency could, even without a firm agreement in place, proceed to acquire some of these properties and land bank them for a future project. This could be a very effective approach since acquisition and relocation can be a very lengthy process. However, land banking for a long period of time while paying debt service can be costly. The ultimate decision to proceed 7 ] Mayor and City Council . Arcadia Redevelopment Agency February 20, 2001 Page 8 with some land acquisitions may rest on the level of the City Council/Agency Board confidence that these sites will ultimately develop. Possible Distribution Formula for Agency Bond Issue The distribution of bond sale proceeds set forth below is intended°to assist the Agency Board and City Council in establishing projects and priorities. Net Bond Proceeds available after distribution (less Reserve $18,950,000 Fund, Costs of Issuance, etc.) - Minus Refinancing 1989 Bond Issue ($ 2,950,000) Net Available $16,000,000 Tax Exempt.Projects A. Police Station 2;500,000 B. Fire Station 800,000 C. Repay City Loan 4,000,000 D. CIP Projects 700,000 Tax Exempt Sub Total $ 8,000,000 Taxable Projects Hale/Waken Fifth Avenue Project; Foulger; South Arcadia; Other land assembly, etc. $ 8,000,000 Total - $16,000,000 Present at the Study Session in addition to City staff and the City Attorney will be Tim Schaeffer and Jim Fabian of Fieldman Rolapp & Associates, the Agency and City Financial Advisor for the bond issue, and Kurt Yeager of Stradling, Yocca, Carlson and Rauth, the Agency and City bond counsel. Approved: _ .L , 410 William R. Kelly City Manager/Executive Director •