Chapter 12.26
BUS SHELTER AND BUS BENCH CONSTRUCTION AND ADVERTISING FRANCHISES
Sections:
12.26.020 Bus shelter and bus bench franchise.
12.26.030 Franchise terms and conditions.
12.26.040 Transfer or assignment of franchise.
12.26.050 Selection of franchisee.
12.26.060 Conditions on franchise.
12.26.090 Franchise agreements.
12.26.100 Revocation of franchise.
12.26.010 Intent.
It is the intent of this chapter and any subsequent amendments thereto to provide for and specify the means by which the city can attain the best possible bus shelter, bus bench and related construction and advertising services for the city and its public transportation users. (Ord. 1103-02-10 § 1 (part))
12.26.020 Bus shelter and bus bench franchise.
The city council may at its discretion, by the adoption of a resolution, grant an exclusive franchise to an advertising or other publicity firm that coordinates construction and/or advertising for bus shelters and bus benches within the public rights-of-way of the city pursuant to the provisions of this chapter. (Ord. 1103-02-10 § 1 (part))
12.26.030 Franchise terms and conditions.
A. The franchise granted to a franchisee pursuant to this chapter shall be exclusive and shall be for a term of no longer than ten (10) years as may be specified by the city council in the resolution granting a franchise hereunder and in the franchise agreement between the city and the selected franchisee.
B. No provision of this chapter shall be deemed to require the city council to grant any franchise if the city council determines that the grant of any such franchise is not in the best interest of the city and the public.
C. The bus shelter and bus bench construction and/or advertising franchise shall be subject to the terms and conditions specified in this chapter, as well any terms or conditions specified in the resolution granting the franchise and authorizing the franchise agreement with the franchisee.
D. In granting any bus shelter and bus bench construction and/or advertising franchise, the city council may prescribe such other terms and conditions, not in conflict with this chapter, as determined by the city council to be in the best interest of the city and the public. (Ord. 1103-02-10 § 1 (part))
12.26.040 Transfer or assignment of franchise.
A bus shelter and bus bench construction and/or advertising franchisee shall not sell, transfer, lease, assign, sublet, mortgage or dispose of in whole or in part, either by forced or involuntary sale, or by ordinary sale, contract, consolidation or otherwise, the franchise or any rights or privileges therein granted, without the prior written consent of the city council. A bus shelter and bus bench construction and/or advertising franchisee that desires to transfer or assign its franchise, because he or she intends to discontinue providing bus shelter and bus bench construction and/or advertising services to the city, shall make a written request for a transfer or assignment of the franchise. The written request, a deposit of one thousand dollars ($1,000) and the proposed transfer agreement or other document evidencing transfer of the franchise shall be submitted to the finance department at least one hundred twenty (120) calendar days before the requested effective transfer or assignment date. The finance department shall investigate the proposed transferee or assignee and determine whether the transferee or assignee is qualified to serve as a franchisee pursuant to the criteria and requirements set forth in this chapter. If the finance department determines that the proposed transferee or assignee is qualified to be a franchisee, they shall recommend that the city council approve the transfer or assignment. Upon completion of the city council’s approval or denial, the finance department shall provide the franchisee that requested the transfer or assignment with an accounting of the administrative and legal costs associated with the city’s review of the franchisee’s request for a transfer or assignment of the franchise and shall offset the costs against the deposit herein submitted and for any remaining difference render an invoice or refund accordingly. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise without the prior consent of the city council shall be null and void. (Ord. 1103-02-10 § 1 (part))
12.26.050 Selection of franchisee.
A. Within ninety (90) calendar days of the date the finance director determines that a bus shelter and bus bench advertising franchisee is needed to provide bus shelter and bus bench construction and/or advertising services to the city, the finance director shall request that the finance department prepare a request for qualifications for a bus shelter and bus bench construction and/or advertising franchise which includes a detailed scope of work and standard specifications for construction and design of bus shelters and the bus bench advertising affixed thereto.
B. The request for qualifications shall be submitted by the finance director to the city council for approval.
C. Once the city council approves the request for qualifications, the finance department shall send out a notice of request for qualifications for a bus shelter and bus bench construction and/or advertising franchise.
D. The finance department shall select the most qualified bus shelter and bus bench construction and/or advertising firm; provided, that the city receives at least one qualified proposal. The name of the most qualified proposer, if there is one, shall be forwarded to the finance director and he or she shall recommend in writing to the city council the name of the firm that he or she feels should be granted a franchise based on the objective criteria for awarding a franchise established by the finance department.
E. In preparing requests for and evaluating the proposals received by the city, the finance department shall comply with any procedures and criteria adopted by the city council in accordance with this chapter. (Ord. 1103-02-10 § 1 (part))
12.26.060 Conditions on franchise.
Any bus shelter and bus bench construction and/or advertising firm that obtains a franchise pursuant to this chapter shall:
A. Maintain, clean and repair advertising bus shelters on a regular basis or at the request of the city in writing by the city manager or his/her designee.
B. Maintain, clean and repair nonadvertising bus benches within the city on a regular basis or at the request of the city in writing by the city manager or his/her designee.
C. Furnish at its own expense, within ten (10) calendar days after written notice of approval of the franchise agreement by the city council, a performance bond or other security acceptable to the city in the amount of fifty thousand dollars ($50,000) or other amount indicated in the franchise agreement to guarantee the faithful performance by the franchisee of all of the terms and conditions of the franchise agreement, which security shall remain in full force and effect during the full term of the franchise agreement.
D. Pay all fees, costs and permit charges regularly assessed by the city in any way related to the maintenance, cleaning or repair of the bus shelters and benches.
E. The advertising panels on the shelters and benches are hereby designated as nonpublic fora and are maintained for the purpose of raising revenue. As a result, acceptance by franchisee of the franchise constitutes the franchisee’s agreement to accept and permit advertising that advances a commercial purpose.
F. Submit all advertising content to the city for prior review and approval.
G. Agree to indemnify and hold harmless the city and city’s elected officials, officers, agents, servants and employees against all claims, demands, costs, expenses, damages, liabilities, actions, causes of action and judgments of every kind and character to and against persons or property, including wrongful death, in any way related to, arising out of or connected with the franchise the franchise agreement or the maintenance and repair of bus shelters and bus benches and their advertising panels, sustained or claimed by any person, firm or corporation whomsoever and whatsoever. Further, franchisee shall defend with counsel selected by city any such action or suit brought against city and/or city’s elected officials, officers, agents, servants and employees, and shall pay all costs, attorneys’ fees and expenses of whatsoever nature resulting therefrom and in connection therewith. Franchisee shall promptly pay the amount of any judgment or judgments which may be entered in any such action or suit, including without limitation the payment of all consequential damages, attorneys’ fees and other related costs and expenses. Franchisee shall reimburse city and its elected officials, officers, agents, servants and employees for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Franchisee’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the city, its elected officials, officers, agents, servants and employees.
H. Obtain and produce upon request, proof of public liability insurance in accordance with the amounts and limits established in the franchise agreement.
I. Pay the applicable city franchise fee in accordance with this chapter. (Ord. 1103-02-10 § 1 (part))
12.26.070 Franchise fees.
A. Any bus shelter or bus bench construction and/or advertising firm granted a franchise pursuant to the provisions of this chapter shall pay to the city an amount equal to a minimum of five percent (5%) of the franchisee’s gross advertising revenues it receives for the rental of advertising space in and on each one of the advertising bus shelters, or a flat sum per advertising bus bench or shelter per month as described in the resolution awarding the franchise and the franchise agreement, whichever amount is greater.
B. Franchise fee payments due to the city under this section shall be computed monthly. For the purpose of the franchise fee payment computation, the applicable accounting period shall be calendar month unless otherwise agreed to in writing by the city and the franchisee.
C. The monthly franchise fee payments shall be due and payable on or before the twentieth day of the month immediately following the month for which the franchise fee is calculated. Each payment shall be accompanied by a brief report from the franchisee showing the basis for the computation and a written statement, signed under penalty of perjury by an officer of the franchisee and, if applicable, which identifies in detail the sources and amounts of gross advertising revenues received by the franchisee during the month for which payment is made. No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim that the city may have for further or additional sums payable under the provisions of this section.
D. If compensation is not paid when due, then franchisee shall pay a late payment penalty, in an amount equal to ten percent (10%) of the compensation that was not timely paid, for each thirty (30) days that the payment is late. In addition, franchisee shall pay interest on all fees which remain unpaid after thirty (30) days from the date due at the rate of ten percent (10%) per annum or the legal rate allowed, whichever is less.
E. The franchisee or the franchisee’s designated representatives shall, upon five days’ written notice from the city, make available to the city or the franchisee’s designated representatives its accounting records for confidential inspection and audit. If the results of the audit show a franchise fee underpayment of greater than two percent (2%), the franchisee will pay all costs associated with the audit in addition to any other amounts owed as shown by the audit. If the results of the audit show an underpayment of greater than ten percent (10%), the franchisee will pay the cost of the audit plus fifty percent (50%) of the total error as a penalty in addition to any amount owed as shown by the audit. If the results of the audit show an underpayment of less than two percent (2%) or an overpayment, the city shall pay its own costs associated with the audit. Any underpayment shall result in a penalty equal to ten percent (10%) of the underpayment and the amount of such underpayment shall accrue interest at the rate of ten percent (10%) per annum, compounded daily from the date the underpayment should have been paid pursuant to subsection C of this section until the date the underpayment is paid.
F. In the event the results of the audit are disputed, the city may, at its sole discretion, elect to arbitrate the dispute. In the event the city elects to arbitrate, the city and the franchisee shall each select an independent auditor at their own cost. The two auditors will agree upon the results of the audit. If the two independent auditors cannot agree upon the results of the audit, a third auditor will be selected by the two independent auditors to make a final determination. The determination of the third independent auditor will be final.
G. By accepting any franchise granted pursuant to this chapter, the franchisee irrevocably waives the defenses of any statute of limitation, laches, waiver or other equitable doctrine of similar import or effect in any action brought by the city to recover any franchise fee, interest or penalties due under this section.
H. By accepting any franchise granted pursuant to this chapter, the franchisee agrees that if it challenges the right of the city to collect the franchise fee provided by this section, any relief requested by franchisee and awarded to it by virtue of such challenge shall be prospective only from and after the date of the filing of the initial pleading seeking such relief in a court of competent jurisdiction. The franchisee hereby waives any and all claims or rights to collect back from the city, or obtain credit against future payment obligations, any amounts collected by the city prior to the filing of the initial pleading seeking such relief. In the event the franchisee’s challenge to any franchise fee payments should result in an initial judgment in its favor, franchisee shall continue to make all franchise fee payments in accordance with this section pending an appeal by the city. In the event the court of appeal, or trial court if city elects not to appeal, determines that the city is not entitled to collect any or all of the franchise fees, the city shall refund to franchisee those portions of the franchise fee which the court deems the city was not entitled to collect which were made subsequent to the filing of the initial action by franchisee, exclusive of interest on such amount.
I. The city shall retain the right to impose alternative forms of taxes and/or fees in the event that the franchise fees provided for in this section are no longer assessable due to a subsequent change in federal, state or local law. (Ord. 1103-02-10 § 1 (part))
12.26.080 Account.
Any fees collected pursuant to this chapter shall be maintained in a separate account or fund to be known as the “bus shelter and bench construction and advertising” fund or account. All monies deposited herein shall be used exclusively to fund the construction of improvements or maintenance related to the placement of bus shelters and benches along city rights-of-way. (Ord. 1103-02-10 § 1 (part))
12.26.090 Franchise agreements.
All franchises granted by the city council pursuant to this chapter shall be memorialized in a written agreement between the franchisee and the city. The written agreement (“franchise agreement”) shall be in a form approved by the city attorney. Each franchise agreement shall provide that the terms and conditions of each franchise as set forth in this chapter shall be incorporated by reference into the franchise agreement. (Ord. 1103-02-10 § 1 (part))
12.26.100 Revocation of franchise.
A. The city reserves the right to revoke any franchise granted pursuant to this chapter and to rescind all rights and privileges associated with it if:
1. The franchisee defaults in the performance of its material obligations under this chapter or the franchise agreement and fails to cure such default within ten (10) calendar days after receipt of written notice of the default and a reasonable opportunity to cure the default; or
2. If the franchisee fails to provide or maintain in full force and effect the insurance coverage as required by this chapter and as set forth in the franchise agreement; or
3. If the franchisee violates any order or ruling of any regulatory body having jurisdiction over the franchisee relative to the franchisee’s bus shelter and bus bench construction and/or advertising business, unless such order or ruling is being contested by the franchisee by appropriate proceedings conducted in good faith; or
4. If the franchisee practices any fraud or deceit upon the city or upon persons to whom it provides service as determined by a court of law; or
5. If the franchisee becomes insolvent, unable or unwilling to pay its debts and obligations, or is adjudged to be bankrupt.
The city’s revocation of the franchisee’s franchise shall in no way affect any right of the city to pursue any remedy under the franchise or any other provision of law.
B. Prior to revoking a franchise granted under this chapter, city shall give the franchisee notice and an opportunity to be heard on the matter, in accordance with the following procedures:
1. The city shall first notify the franchisee of the violation in writing by personal delivery or registered or certified mail, and demand that the franchisee cure the default within a reasonable time, which shall not be less than ten (10) days in the case of the franchisee’s failure to pay any sum or other amount due to the city under this chapter or the franchisee’s franchise agreement with the city and thirty (30) days in all other cases. If the franchisee fails to correct the violation within the time prescribed or if the franchisee fails to commence correction of the violation within the time prescribed, the city shall give the franchisee fourteen (14) calendar days’ written notice of a hearing to be held before the city council. The written notice shall specify the alleged violations supporting the recommendation for revocation of the franchise.
2. Prior to the hearing, the city council shall hear and consider all relevant evidence submitted by staff and the franchisee or its agent or representative. If the city council finds that the franchisee has committed a material breach under the franchise agreement or this chapter and that the franchisee has not corrected the violation or has not diligently commenced correction of the violation after receiving proper notice in accordance with this chapter, the city council may revoke the franchise. (Ord. 1103-02-10 § 1 (part))