Chapter 3.65 CABLE CODE

“Cable Act” means the Cable Communications Policy Act of 1984, as amended by the Cable Television Consumer Protection and Competition Act of 1992, and the Telecommunications Act of 1996, and any amendments thereto.

“Cable service” or “service” shall mean (A) the one-way transmission to subscribers of video programming or other programming service; and (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

“Cable system” or “system” shall mean a facility consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term shall not include:

1. A facility that serves only to retransmit the television signals of one or more television broadcast stations;

2. A facility that serves only subscribers without using any public right-of-way;

3. A facility of a common carrier which is subject, in whole or in part, to the provisions of 47 USC 201 et seq., except that such facility shall be considered a cable system (other than for purposes of 47 USC 541(c)) to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services;

4. An open video system that complies with 47 USC 573; or

5. Any facilities of any electric utility used solely for operating its electric utility system.

For the purpose of a franchise, “cable system” shall mean a grantee’s cable facilities servicing the City.

“Channel” shall mean a portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of a television channel, as “television channel” is defined by the FCC.

“City” means the City of Spokane Valley, a Washington municipal corporation.

“City manager” means the city manager or designee.

“Construction” or “construct” shall mean digging, excavating, laying, extending, upgrading, removing, or replacing of a facility.

“Facility” or “facilities” means all of the plant, equipment, fixtures, appurtenances, and other related property necessary to furnish and deliver cable television services, including but not limited to wires, cables, conductors, ducts, conduits, vaults, manholes, pedestals, amplifiers, appliances, and attachments, necessary or incidental to the distribution and use of cable television services.

“FCC” shall mean the Federal Communications Commission or any legally appointed or designated agent or successor.

“Franchise” shall mean the nonexclusive right and authority to construct, maintain, and operate a cable system through use of public rights-of-way in the City pursuant to a contractual agreement approved by the city council, and executed by the City and a grantee.

“Franchise area” shall mean the entire geographic area within the City as it is now constituted or may in the future be constituted.

“Grantee” shall mean any person or corporation granted a franchise under Chapter 3.65 SVMC.

“Gross revenues” means all amounts derived by a grantee and/or an affiliate from the operation of grantee’s cable system to provide cable services within the franchise area. Gross revenues include, by way of illustration and not limitation:

1. Fees for cable services, regardless of whether such cable services are provided to residential or commercial subscribers, including revenues derived from the provision of all cable services (including but not limited to pay or premium cable services, digital cable services, pay-per-view, pay-per-event, audio channels or video-on-demand cable services);

2. Installation, disconnection, reconnection, downgrade, upgrade, maintenance, repair, or similar charges associated with subscriber cable service;

3. Fees paid to grantee for channels designated for commercial/leased access use, which shall be allocated on a pro rata basis using total cable service subscribers within the franchise area;

4. Converter, remote control, and other cable service equipment rentals, leases, or sales (but not revenues from equipment used exclusively for the provision of services that are not cable service);

5. Advertising revenues as defined herein;

6. Fees including, but not limited to:

a. Late fees, convenience fees and administrative fees which shall be allocated in accordance with generally accepted accounting principles (“GAAP”); and

b. Franchise fees;

7. Commissions from home-shopping channels and other cable service revenue sharing arrangements which shall be allocated on a pro rata basis using total cable service subscribers within the franchise area;

8. “Advertising revenues” shall mean amounts derived from sales of advertising that are made available to grantee’s cable system subscribers within the franchise area and shall be allocated on a pro rata basis using total cable service subscribers reached by the advertising. Additionally, gross revenues subject to franchise fees shall include all commissions, representative fees, affiliated entity fees, and rebates paid associated with sales of advertising on the cable system within the City allocated according to this definition using total cable service subscribers reached by the advertising;

9. “Gross revenues” shall not include:

a. Actual cable services bad debt write-offs, except any portion which is subsequently collected which shall be allocated on a pro rata basis using cable services revenue as a percentage of total grantee revenues within the franchise area;

b. Any taxes and/or fees on services furnished by grantee imposed on subscribers by any municipality, state, or other governmental unit, provided that the franchise fee and the FCC user fee shall not be regarded as such a tax or fee;

c. Public, educational and governmental (PEG) fees collected by grantee from subscribers;

d. Contra expenses including but not limited to launch fees and marketing co-op fees to the extent consistent with GAAP; or

e. Unaffiliated third-party advertising sales agency fees or commissions which are reflected as a deduction from revenues to the extent consistent with GAAP;

10. To the extent revenues are derived by grantee for the provision of a discounted bundle of services which includes cable services and non-cable services, grantee shall calculate revenues to be included in gross revenues using a methodology that allocates revenue on a pro rata basis when comparing the bundled service price and its components to the sum of the published rate card prices for such components. Except as required by specific federal, state, or local law, equipment shall be subject to inclusion in the bundled price at full-rate card value. This calculation shall be applied to every bundled service package containing cable service from which franchisee derives revenues in the franchise area. The City reserves its right to review and to challenge grantee’s calculations;

11. Grantee may change the allocation methodologies set forth in this definition of gross revenue to meet standards mandated by the Financial Accounting Standards Board (“FASB”), Emerging Issues Task Force (“EITF”) and/or the U.S. Securities and Exchange Commission (“SEC”). City acknowledges and agrees that grantee shall calculate gross revenues in a manner consistent with GAAP where applicable; however, the City reserves its right to challenge grantee’s calculation of gross revenues, including grantee’s interpretation of GAAP and grantee’s interpretation of FASB, EITF, and SEC directives. Grantee agrees to explain and document the source of any change it deems required by FASB, EITF, and SEC on the first quarterly payment statement implementing the change. Upon the City’s written request, grantee shall provide additional detail, explanation, and/or reference to source materials;

12. The City acknowledges that grantee shall maintain its books and records in accordance with GAAP.

“Maintenance” or “maintain” shall mean repair, restoration, replacement, renovation or testing of the cable system or components thereof so as to ensure that it operates in a safe and reliable manner and as required by Chapter 3.65 SVMC.

“PEG” shall mean any channel set aside for public use, educational use, or governmental use without a channel usage charge.

“Person” shall mean an individual or legal entity, such as a corporation or partnership.

“Public property” shall mean any real estate or any facility owned by the City.

“Right-of-way” shall mean all property, and the space above and below, in which the City has any form of ownership, title, or interest, including easements and adjacent utility strips, which is held for public roadway or dedicated for compatible utility purposes, regardless of whether or not any roadway or utility exists thereon or whether it is used, improved or maintained for public use.

“Subscriber” shall mean any person who lawfully receives cable service via the system.

“Video programming” shall mean programming provided by, or generally considered comparable to programming provided by, a television broadcast station. (Ord. 20-012 § 1, 2020; Ord. 17-004 § 3, 2017; Ord. 09-030 § 3, 2009).

3.65.020 General provisions.

A. It is unlawful to engage in or commence construction, operation, or maintenance of a cable communications system without a franchise issued under Chapter 3.65 SVMC, except as may be otherwise provided by state or federal law. The council may, by ordinance, award a nonexclusive franchise to construct, operate and maintain a cable communications system within all or any portion of the City to any person, whether operating under an existing franchise or not, who makes application for authority to furnish a cable communications system which complies with the terms and conditions of Chapter 3.65 SVMC; provided, that SVMC 3.65.020 shall not be deemed to require the grant of a franchise to any particular person or to prohibit the council from restricting the number of franchisees should it determine such a restriction would be in the public interest. Any franchise for the construction, maintenance and operation of cable television systems using the public streets, utility easements, other public rights-of-way or places shall conform generally to the provisions of Chapter 3.65 SVMC, except as may be otherwise set forth in the ordinance granting such franchise.

B. The provisions of Chapter 3.65 SVMC may be incorporated by specific reference in any franchise agreement approved under Chapter 3.65 SVMC. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 4, 2009).

3.65.030 Nonexclusivity.

The grant of authority for use of the City’s rights-of-way under Chapter 3.65 SVMC is not exclusive and does not establish priority for use over other franchise holders, permit holders and the City’s own use of public property. Nothing in any franchise agreement made under Chapter 3.65 SVMC shall affect the right of the City to grant to any other person a similar franchise or right to occupy and use the rights-of-way or any part thereof. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 5, 2009).

3.65.035 Cable franchise application.

Any cable television entity seeking to provide cable television service in the City pursuant to a franchise shall initiate that process by submitting a complete application to the city clerk. The application must be completed, and any application that is deemed incomplete by the City shall be returned to the applicant. This requirement only applies to any new entrant not currently in the process of negotiating a cable franchise with the City as of June 2020. (Ord. 20-012 § 1, 2020).

3.65.040 Franchise issuance.

Prior to the granting of a franchise, the city council shall determine the following:

A. Initial Franchise.

1. That the public will be benefited by the granting of a franchise to the applicant;

2. That the public rights-of-way have the capacity to accommodate the cable communications system;

3. That the proposed franchise is consistent with the City’s present and future use of the public rights-of-way to be used by the cable communications system;

4. That the benefit to the public from the cable communications system outweighs the potential disruption to existing users of the public rights-of-way to be used by the cable communications system and the resultant inconvenience which may occur to the public; and

5. That all other conditions resulting from the grant of the franchise have been considered by the City and that the City determines that the grant is in the public’s best interest.

B. Renewal Franchise. When considering whether to renew a franchise with an existing cable provider, the City shall consider the following:

1. Did the applicant comply with the terms and conditions of the existing franchise;

2. If not, what were the terms and conditions the applicant failed to comply with, to what extent, and with what frequency;

3. That the quality of the applicant’s previous service has been reasonable in light of community needs;

4. That the applicant’s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests; and

5. That all other conditions resulting from the grant of the franchise have been considered by the City and that the City determines that the grant is still in the public’s best interest. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 6, 2009).

3.65.050 Fee.

A. In all franchises made under Chapter 3.65 SVMC, the grantee shall pay to the City five percent of its annual gross revenues in the City, pursuant to 47 USC 542, throughout the full term of the franchise agreement. Payment shall be due no later than 30 days from the end of each calendar quarter, after which interest shall accrue at the rate of one percent per month. In the event all or a portion of the franchise fee has not been paid within 60 days of the end of each calendar quarter, a penalty in the amount of 10 percent of the delinquent amount shall be added to the outstanding amount. All franchise fees, interest and penalties shall constitute a debt owed to the City and may be collected by any means allowed under the law.

B. No acceptance by the City of any payment from grantee 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 the City may have for further or additional sums payable under the provisions of the franchise agreement. All amounts paid shall be subject to auditing and recomputation by the City.

C. Grantee acknowledges and agrees that the franchise fees payable by grantee to City pursuant to a franchise agreement, as well as capital support provided by grantee for PEG equipment and facilities, are authorized under the Federal Cable Act and shall not be deemed to be in the nature of a federal, state or local tax.

D. Franchise Fees Subject to Audit. Upon reasonable prior written notice, the City shall have the right to inspect within 30 days the grantee’s financial records used to calculate the City’s franchise fees at a mutually agreed upon date, time, and location. If the City and grantee cannot agree on a date, time, and location within 30 days, grantee shall make the requested records available to the City at Spokane Valley City Hall on a date and time determined by the City. The City shall provide to the grantee a final report setting forth the City’s findings in detail, including any and all substantiating documentation. In the event of an alleged underpayment, the grantee shall have 30 days from the receipt of the report to provide the City with a written response agreeing to or refuting the results of the audit, including any substantiating documentation. Grantee shall review and the City shall be entitled to review grantee’s historical financial records used to calculate the City’s franchise fees consistent with the currently applicable state statute of limitations.

E. At any time after a franchise agreement is approved, the grantee may, pursuant to applicable federal law or FCC order, determine that certain in-kind cable-related contributions may be taken as an offset to the franchise fee. The grantee shall notify the City of the change within the quarter that the offset will be taken or the accounting change has been made. This will allow the City to anticipate and account for the budgetary impact, and to allow the City to consider mitigating action such as reducing or eliminating those in-kind items that may be taken as an offset against the City’s franchise fees.

F. Failure to comply with SVMC 3.65.050 shall constitute a material breach of the franchise agreement pursuant to SVMC 3.65.320. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 7, 2009).

3.65.060 Competitive equity.

A. The City reserves the right to grant more than one cable system franchise. The City shall amend a franchise, as requested by the grantee, if it grants additional cable service franchises or similar multiple channels of video programming authorizations that contain material terms or conditions which are substantially more favorable or less burdensome to the competitive entity than the material terms and conditions contained in a previously granted franchise. A word-for-word identical franchise or authorization for a competitive entity is not required so long as the regulatory and financial burdens on each entity are generally equivalent, taking into account any difference in the number of subscribers served, the number of PEG channels and aggregate support provided, the level of fees and taxes imposed, the term of the franchise, and all other circumstances affecting the relative burdens.

B. Notwithstanding any provision to the contrary, at any time prior to the commencement of a grantee’s 36-month renewal window, provided by Section 626 of the Cable Act, that a nonwireless facilities-based entity, legally authorized by state or federal law, makes available for purchase by subscribers or customers cable services or multiple channels of video programming within the franchise area without a franchise or other similar lawful authorization granted by the City, then a grantee shall have a right to request franchise amendments that relieve the grantee of regulatory burdens that create a competitive disadvantage to the franchisee. In requesting amendments, the grantee shall file a petition seeking to amend the franchise. Such petition shall: (1) indicate the presence of such wireline competitor; and (2) identify all material terms or conditions which are substantially more favorable or less burdensome to the competitive entity. The City shall act on the petition within 120 days.

C. In the event an application for a new cable television franchise is filed with the City proposing to serve the franchise area, in whole or in part, the City shall notify the grantee within 30 days of receipt of the application. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 8, 2009).

3.65.070 Taxes.

Nothing contained in any franchise agreement granted pursuant to Chapter 3.65 SVMC shall be construed to except the grantee from any applicable tax, liability, or assessment authorized by law. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 9, 2009).

3.65.080 Cable system specifications.

A. A grantee shall comply with all applicable technical standards of the FCC as adopted or amended. To the extent those standards are altered, modified, or amended during the term of the franchise agreement, the grantee shall comply with such altered, modified or amended standards within a reasonable period after such standards become effective. The City shall have, upon written request, the right to review tests and records required to be performed pursuant to the FCC’s rules.

B. The City shall have the right to regulate and inspect the construction, operation and maintenance of the cable system in the public rights-of-way. All equipment testing under a technical performance review shall be conducted by the grantee. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 10, 2009).

3.65.090 Cable service.

A. Cable service offered to subscribers pursuant to a franchise shall be conditioned upon a grantee having legal access to any such subscriber’s dwelling unit or other units where such cable service is provided.

B. Areas subsequently annexed by the City shall be provided with cable service pursuant to any franchise, including under the same terms.

C. Grantees shall comply with any applicable federal regulations relating to providing services to areas irrespective of income, commonly known as “anti-redlining” provisions. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 11, 2009).

3.65.100 PEG and local programming.

A. Commencing on the effective date of a franchise granted under Chapter 3.65 SVMC, and throughout the term of the franchise, grantee shall deliver those PEG channels with whom the City has contracted for service, up to a maximum of two channels, including one channel for public access, with the second channel reserved for future City use at the City’s election as a government channel. Grantee shall continue to deliver the PEG channel(s) so long as the City’s contracts are valid and the PEG channel(s) have content to distribute. The City shall provide copies of all PEG channel contracts, and contract renewals, to grantee within 30 days of execution.

B. The grantee may, at grantee’s option, provide the subscribers in the franchise area with the other regional PEG channels.

C. The City shall be responsible for all programming requirements for the PEG channels, including but not limited to scheduling, playback, training, staffing, copyright clearances, and equipment, maintenance and repair, unless responsibility for administering the PEG channels has been designated to a third party, which shall then become responsible for all programming requirements under SVMC 3.65.100.

D. At any time during the term of a franchise, the City may elect to undertake responsibility to program the government access channel. To do so, the City shall provide grantee written notice of its intent to program the government access channel. Upon receipt of the written notice, the City and grantee shall meet to discuss and mutually agree upon an implementation plan to activate said channel. Nothing in Chapter 3.65 SVMC prevents the City from collaborating with another neighboring community or communities serviced by the grantee, to facilitate the City’s needs for government access programming.

E. The grantee shall include the PEG channel(s) as part of the cable service otherwise provided to any subscriber, at no additional charge. If channels are selected through a menu system, the PEG channel(s) shall be displayed as prominently as commercial programming choices offered by grantee. A grantee will use reasonable efforts to minimize the movement of City-designated PEG channel assignments and maintain common channel assignments for compatible PEG programming. With respect to signal quality, a grantee’s distribution of PEG channels shall not materially degrade those channels.

F. The City’s PEG channel(s) shall be carried on the digital platform and grantee shall install, at its sole cost, such headend equipment to accommodate such channel(s). PEG channel(s) shall be accessed by subscribers through use of standard digital equipment compatible with grantee’s cable system.

G. The City may cancel use of the PEG channel(s) by giving a grantee at least 45 days’ advance notice of such action, after which cancellation of use of the PEG channel(s) shall be deemed complete, unless a longer time frame is identified in the notice of cancellation.

H. Grantee will remit to the City as a capital contribution in support of PEG capital requirements an amount equal to $0.35 per subscriber per month to be paid to the City on a quarterly basis for the life of the franchise. In the event notice of cancellation of the PEG channel usage pursuant to SVMC 3.65.100(H), grantee shall also cease collecting this PEG capital fee effective on the same date.

I. The City shall allocate all amounts under SVMC 3.65.100(I) to PEG capital uses exclusively. Grantee shall not be responsible for paying the PEG capital contribution with respect to gratis or bad debt accounts. Pursuant to 47 CFR 76.922, grantee may, in its sole discretion, add the cost of the PEG capital contribution to the price of cable services and collect the PEG capital contribution from subscribers. Pursuant to 47 CFR 76.985, all amounts paid as the PEG capital contribution may be separately stated on subscribers’ bills as a City of Spokane Valley PEG capital contribution. Upon grantee’s written request and due as agreed upon by both parties, the City shall provide the grantee with documentation showing expenditures for PEG capital use of the previous fiscal years’ PEG capital contribution and showing the budgeted use of the current year’s PEG funding. In the event the City cannot demonstrate that PEG capital funding was used or budgeted for PEG capital needs, grantee’s PEG funding obligations going forward shall be reduced by an equivalent amount.

J. No more than once per year, the City may provide notice of its intent to either reduce the monthly PEG rate or increase the rate. In no case shall the PEG rate exceed $0.35 per subscriber per month. The grantee shall implement the change within 60 days of notification from the City.

K. If the City provides notice to the grantee concerning its election to program the government access channel, the City shall designate its proposed government access facility location. Within 120 days of receiving notice, the grantee shall review its facilities and records and provide an estimate of costs associated with the construction and activation of a fiber optic return line capable of transmitting video programming to enable the distribution of the City’s government access programming to subscribers on the provided government access channel. The return line shall run from a location to be determined by the City to the grantee’s facilities. Within a reasonable time-period of receiving the City’s directive, the grantee shall construct and activate a return line in accordance with the cost estimate previously provided. The City agrees to pay the actual costs of the return line within 90 days of construction/activation and receipt of an invoice from the grantee. After completion, grantee shall maintain the return line, as permitted by federal law, invoicing the City for any actual repair or maintenance costs. Such actual or estimated repair or maintenance costs shall be provided to the City in advance when possible, and shall be documented and invoiced to the City by grantee for payment. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 14, 2009. Formerly 3.65.120).

3.65.110 Recovery of costs.

A grantee shall reimburse the City for all costs of one publication of an ordinance authorizing a franchise made under Chapter 3.65 SVMC in a local newspaper, and required legal notices prior to any public hearing regarding the franchise, contemporaneous with its acceptance of the franchise. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 17, 2009. Formerly 3.65.150).

3.65.120 Least interference.

The City shall have prior and superior right to the use of its rights-of-way for installation and maintenance of its facilities and other governmental purposes. Work by grantee in the rights-of-way shall be done in a manner that causes the least interference with the rights and reasonable convenience of property owners and residents. The owners of all facilities, public or private, installed in or on such public properties prior to the installation of the facilities of the grantee, shall have preference as to the positioning and location of such utilities with respect to the grantee. Such preference shall continue in the event of the necessity of relocating or changing the grade of any such right-of-way. Disputes between the grantee and other parties over the use, pursuant to a franchise agreement, of the rights-of-way shall be submitted to the City for recommended resolution.

No franchise under Chapter 3.65 SVMC shall, in any way, prevent or prohibit the City from using any of its rights-of-way, or affect its jurisdiction over them or any part of them. The City hereby retains its full police power to make all changes, relocations, repairs, maintenance, establishments, improvements, dedications or vacations of same, including the dedication, establishment, maintenance, and improvement of all new rights-of-way. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 18, 2009. Formerly 3.65.160).

3.65.130 Construction standards.

All work authorized and required hereunder shall comply with all generally applicable City codes and regulations. Grantee shall also comply with all applicable federal and state regulations, laws and practices. Grantee is responsible for the supervision, condition, and quality of the work done, whether it is by itself or by contractors, assigns or agencies. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 19, 2009. Formerly 3.65.170).

3.65.140 Restoration after construction.

If in connection with the construction, operation, maintenance, upgrade, repair or replacement of the cable system a grantee disturbs, alters, or damages any public or private property, the grantee agrees that it shall at its own cost and expense pay for any damage and replace and restore any such property to a condition at least reasonably comparable to the condition existing immediately prior to the disturbance. Whenever grantee disturbs or damages any right-of-way or other public property, grantee shall complete the restoration work within a reasonable time as authorized by the City’s city manager or designee. (Ord. 20-012 § 1, 2020; Ord. 17-004 § 3, 2017; Ord. 09-030 § 20, 2009. Formerly 3.65.180).

3.65.150 Obstruction permits required.

Grantee shall apply for and obtain appropriate obstruction permits from the City pursuant to the Spokane Valley Municipal Code. Grantee shall pay all generally applicable permit fees for the requisite City permits and reimburse the City for all generally applicable fees incurred by the City in the examination, inspection, and approval of grantee’s work. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 21, 2009. Formerly 3.65.190).

3.65.160 Emergency response.

The grantee shall maintain with the City an emergency response number providing an emergency 24-hour response for the City to use in case of an emergency. After being notified of an emergency, grantee shall cooperate with the City and make every effort to immediately respond with action to aid the protection of the health and safety of the public. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 22, 2009. Formerly 3.65.200).

3.65.170 Hazardous substances.

Grantee shall comply with all applicable state and federal laws concerning hazardous substances relating to grantee’s facilities in the rights-of-way. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 23, 2009. Formerly 3.65.210).

3.65.180 Environmental.

Grantee shall comply with all applicable state and federal laws concerning environmental protection relating to grantee’s facilities in the rights-of-way. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 24, 2009. Formerly 3.65.220).

3.65.190 Movement and relocation of facilities.

A. Relocation of Facilities at the Request of a Third Party.

1. If any removal, replacement, modification or disconnection of the cable system is required to accommodate the construction, operation or repair of the facilities or equipment of another City cable franchise holder(s), grantee shall, after at least 30 days’ advance written notice, take action to effect the necessary changes requested by the responsible entity, as long as the other franchise holder(s) pays for the grantee’s time and material costs associated with the project and grantee is issued a permit for such work by the City.

2. The grantee shall, upon reasonable prior written request of any subscriber, relocate its aerial distribution cable facilities underground, as long as the subscriber pays for the grantee’s time and material costs associated with the project and grantee is issued a permit for such work by the City.

3. In the event an underground conversion of cable facilities is required as part of the street improvement condition(s) of a new land use development, not associated with a City-designated capital improvement project, a franchise shall in no way limit the grantee’s right to bill and collect in advance all time and material costs associated with the underground conversion of the cable system from the person responsible for the land use development project.

4. At the request of any person holding a valid permit and upon reasonable advance notice and payment by the permit holder of grantee’s expenses of such temporary change, grantee shall temporarily raise, lower or remove its facilities as necessary to accommodate a permittee of the City.

B. Relocation at Request of the City.

1. Upon at least 60 days’ prior written notice to grantee, the City shall have the right to require grantee to relocate any part of the cable system within the rights-of-way when the safety, health or welfare of the public requires such change, and the expense thereof shall be paid by grantee. After receipt of such notice, grantee shall complete relocation of its facilities at least five days prior to commencement of the project or an agreed-upon date by both parties. Should grantee fail to remove or relocate any such facilities by the date established by the City, the City may effect such removal or relocation, and the expense thereof shall be paid by grantee, including all costs and expenses incurred by the City due to grantee’s delay, including delay damages established by third parties. If the City requires grantee to relocate its facilities located within the rights-of-way, the City shall make a reasonable effort to provide grantee with an alternate location within the rights-of-way. If public funds are available to any person using such rights-of-way for the purpose of defraying the cost of any of the foregoing, the grantee may make application for such funds.

2. In the case of relocation projects where the conversion of overhead utilities is within a City capital improvement project, then the grantee shall participate in the joint trenching portion of the project, and grantee shall pay to the City grantee’s portion of the traffic control and trench costs, including excavation and other associated costs, trench bedding, and backfill commensurate with grantee’s proportionate share of trench usage. However, if bids from the City or its designated contractor for placement of grantee’s conduits and vaults/pedestals in the supplied joint trench, in the reasonable estimation of the grantee, are not acceptable, the grantee shall have the option to utilize contractor(s) of its choice to complete the required work, so long as use by grantee of its contractor(s) does not delay the City project. The City or its designated contractor shall coordinate with the grantee’s contractor(s) to provide reasonable notice and time to complete the placement of the grantee’s facilities in the supplied joint trench.

3. Nothing in a franchise made under Chapter 3.65 SVMC shall prevent the City from constructing any public work or capital improvement. Further, the City shall have the right to require grantee to relocate, remove, replace, modify or disconnect grantee’s facilities and equipment located in the rights-of-way or on any other property of the City in the event of an emergency or when necessary to protect or further the health, safety or welfare of the general public, and such work shall be performed at grantee’s expense. Following notice by the City, grantee shall relocate, remove, replace, modify or disconnect any of its facilities or equipment within any right-of-way, or on any other property of the City.

4. If the grantee fails to complete the above work within the time prescribed by the City, given the nature and extent of the work, or if it is not done to the City’s reasonable satisfaction, the City may cause such work to be done and bill the reasonable cost of the work to the grantee, including all reasonable costs and expenses incurred by the City due to grantee’s delay. In such event, the City shall not be liable for any damage to any portion of grantee’s cable system. Grantee shall pay the City within 90 days of receipt of an itemized list of those costs. The City shall give consideration to any circumstances outside the grantee’s control preventing grantee’s completion of work. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 25, 2009. Formerly 3.65.230).

3.65.200 Tree trimming.

A grantee shall have the authority to conduct pruning and trimming for access to cable system facilities in the rights-of-way subject to compliance with applicable City code relating to the same as adopted or amended. All such trimming shall be done at the grantee’s sole cost and expense. The grantee shall be responsible for any damage caused by such trimming. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 26, 2009. Formerly 3.65.240).

3.65.210 Vacation.

The City may vacate any City road, right-of-way or other City property which is subject to rights granted by a franchise pursuant to Chapter 3.65 SVMC, but the grantee shall be provided notice of such vacation proceedings and the opportunity to secure future use rights as allowed under the Spokane Valley Municipal Code. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 27, 2009. Formerly 3.65.250).

3.65.220 Abandonment of grantee’s facilities.

No facility constructed or owned by a grantee may be abandoned without the express prior written consent of the City. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 28, 2009. Formerly 3.65.260).

3.65.230 Maps, books, and records.

A. Upon at least 30 days’ written request, grantee shall provide to the City a route map that depicts the general location of the cable system facilities placed in the rights-of-way. In the event of an emergency requiring such information, the City may request, and a franchisee shall provide, a route map on shorter notice. The route map shall identify cable system facilities as aerial or underground and is not required to depict cable types, number of cables, electronic equipment, and service lines to individual subscribers. The grantee shall also provide, if requested, an electronic format of the aerial/underground facilities in relation to the right-of-way centerline reference to allow the City to add this information to the City’s GIS program.

B. To the extent such requests are limited to specific facilities at a given location within the franchise area in connection with the construction of any City project, grantee shall cooperate with the City, upon the City’s reasonable request, to field-locate its facilities in order to facilitate design and planning of City improvement projects.

C. The City has the right to inspect books and records of grantee, which are reasonably necessary to monitor a grantee’s compliance with the provision of cable services. Within 30 business days of receipt of written notice from the City to inspect a grantee’s books and records under SVMC 3.65.230, the grantee and City shall determine a mutually agreeable date, time, and location to accommodate the City’s request without unreasonably interfering with the grantee’s business operations. If the City and grantee cannot agree on a date, time, and location within 30 days, grantee shall make the requested records available to the City at Spokane Valley City Hall on a date and time determined by the City.

D. The City has the right to request a copy of the books and records that are not identified as proprietary or confidential. For purposes of SVMC 3.65.230, the term “proprietary or confidential” includes, but is not limited to, information relating to the cable system design, customer lists, marketing plans, financial information unrelated to the calculation of franchise fees or rates pursuant to FCC rules, or other information that is reasonably determined by the grantee to be competitively sensitive.

1. The City shall have a right to inspect but the grantee shall not be required to release information that grantee reasonably deems to be proprietary or confidential in nature; provided, that this shall not prevent the release of such proprietary or confidential documents for purposes of any enforcement proceeding where appropriate legal steps are available to address grantee’s concerns regarding confidentiality. In the event the grantee asserts that certain information is proprietary or confidential in nature, the grantee shall identify generally the information which it deems proprietary and confidential and the reasons for its confidentiality in writing to the City. Each page of such information provided will be clearly marked as proprietary and confidential. Subject to SVMC 3.65.230(D)(2), the City will not dispute a grantee’s designation of information as proprietary or confidential. The City will treat any information disclosed by the grantee as confidential or proprietary and only disclose it to those employees, representatives, and agents of the City that have a need to know in order to enforce the franchise agreement, and who agree to maintain the confidentiality of all such information. The grantee shall not be required to provide customer information in violation of Section 631 of the Cable Act or any other applicable federal or state privacy law.

2. Information submitted to the City may be subject to inspection and copying under the Washington Public Record Act, Chapter 42.56 RCW. The City shall timely provide a grantee with a copy of any public disclosure request to inspect or copy documentation/information which the grantee has provided to the City and marked as proprietary and confidential prior to allowing any inspection and/or copying as well as provide the grantee with a time frame, consistent with RCW 42.56.520, to provide the City with its written basis for nondisclosure of the requested documentation/information. In the event the City disagrees with the grantee’s basis for nondisclosure, the City agrees to withhold release of the requested documentation/information in dispute for a reasonable amount of time to allow grantee an opportunity to file a legal action under RCW 42.56.540 as adopted or amended. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 29, 2009. Formerly 3.65.270).

3.65.240 Reports.

A. File for Public Inspection. A grantee shall maintain a file available for public inspection containing those documents required pursuant to the FCC’s rules and regulations. If a franchisee does not have a local business office, then the file shall be available for viewing online 24 hours a day by the general public, subject to downtime for routine maintenance.

B. Annual Report. No later than March 31st of each year, if requested by the City, grantee shall file a written report with the City, which shall include:

1. A summary of the previous calendar year’s activities in development of this system, including but not limited to services begun or dropped, number of subscribers (including gains and losses), homes passed, and miles of cable distribution plant in service (including different classes if applicable), and a map of the current cable distribution plant within the City.

2. A gross revenue statement for the preceding fiscal year and all deductions and computations for the period, and such statement shall be reviewed by a certified public accountant, who may also be the chief financial officer or controller of grantee.

C. Grantee shall, upon request of the City, make available to the city manager or designee a description of construction plans for the following 12 months.

D. The City, at its discretion, may waive in whole or in part the requirements of SVMC 3.65.240(B). (Ord. 20-012 § 1, 2020; Ord. 17-004 § 3, 2017; Ord. 09-030 § 30, 2009. Formerly 3.65.280).

3.65.250 City ordinances and regulations.

In the event of a conflict between Chapter 3.65 SVMC and the terms of a franchise granted pursuant to Chapter 3.65 SVMC, the terms of the franchise shall control subject to the limitation of the City’s exercise of the police powers set forth below. Subject to federal and state preemption, the material terms and conditions contained in the franchise may not be unilaterally altered by the City through subsequent amendments to any ordinance, regulation, resolution or other enactment of the City, except within the lawful exercise of the City’s police power. A grantee has the right to challenge any City ordinance or regulation that conflicts with its rights under a franchise. A grantee’s rights under a franchise are subject to the police powers of the City to adopt and enforce ordinances necessary to protect the health, safety and welfare of the public, and grantee agrees to comply with all applicable laws and ordinances enacted by the City pursuant to such power so long as the same do not unduly discriminate against grantee. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 33, 2009. Formerly 3.65.310).

3.65.260 Indemnification.

No franchise agreement shall be granted under Chapter 3.65 SVMC unless it includes an indemnity clause substantially conforming to the following:

A. The grantee shall defend, indemnify, and hold harmless the City, its officers, officials, employees, and volunteers from and against any and all claims, suits, actions, or liabilities for injury or death of any person, or for loss or damage to property, which arises out of grantee’s acts, errors or omissions, or from the conduct of grantee’s business, or from any activity, work or thing done, permitted, or suffered by grantee arising from or in connection with the franchise, except only such injury or damage as shall have been occasioned by the sole negligence of the City.

B. However, should a court of competent jurisdiction determine that the franchise agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the grantee and the City, its officers, officials, employees, and volunteers, the grantee’s liability hereunder shall be only to the extent of the grantee’s negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the grantee’s waiver of immunity under Industrial Insurance, RCW Title 51, solely for the purposes of SVMC 3.65.320. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 34, 2009. Formerly 3.65.320).

3.65.270 Insurance.

Any franchise granted pursuant to Chapter 3.65 SVMC shall contain the following provisions relating to insurance:

A. The grantee shall procure and maintain for the duration of any franchise agreement and as long as grantee has facilities in the rights-of-way, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the agreement and use of the rights-of-way.

B. No Limitation. The grantee’s maintenance of insurance as required by the agreement shall not be construed to limit the liability of the grantee to the coverage provided by such insurance, or otherwise limit the City’s recourse to any remedy available at law or in equity.

C. Minimum Scope of Insurance. The grantee shall obtain insurance of the types and coverage described below:

1. Commercial general liability insurance shall be at least as broad as Insurance Services Office (ISO) occurrence form CG 00 01 and shall cover liability arising from premises, operations, stop gap liability, independent contractors, products-completed operations, personal injury and advertising injury, and liability assumed under an insured contract. There shall be no exclusion for liability arising from explosion, collapse or underground property damage. The City shall be named as an additional insured under the grantee’s commercial general liability insurance policy with respect to any franchise agreement using ISO endorsement CG 20 12 05 09 if the franchise agreement is considered a master permit, or CG 20 26 07 04 if it is not, or substitute endorsement providing at least as broad coverage.

2. Automobile liability insurance covering all owned, non-owned, hired, and leased vehicles. Coverage shall be at least as broad as ISO form CA 00 01.

3. Workers’ compensation coverage as required by the industrial insurance laws of the state of Washington.

4. Excess or umbrella liability insurance shall be excess over and at least as broad in coverage as the grantee’s commercial general liability and automobile liability insurance. The City shall be named as an additional insured on the excess or umbrella liability insurance policy.

D. Minimum Amounts of Insurance. The grantee shall maintain the following insurance limits:

1. Commercial general liability insurance shall be written with limits no less than $5,000,000 each occurrence, $5,000,000 general aggregate.

2. Automobile liability insurance with a minimum combined single limit for bodily injury and property damage of $5,000,000 per accident.

3. Excess or umbrella liability insurance shall be written with limits of not less than $5,000,000 per occurrence and annual aggregate. The excess or umbrella liability requirement and limits may be satisfied instead through grantee’s commercial general liability and automobile liability insurance, or any combination thereof that achieves the overall required limits.

E. Other Insurance Provisions. Grantee’s commercial general liability, automobile liability, excess or umbrella liability insurance policy or policies are to contain, or be endorsed to contain, that they shall be primary insurance as respect the City. Any insurance, self-insurance, or self-insured pool coverage maintained by the City shall be excess of the grantee’s insurance and shall not contribute with it.

F. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A: VII.

G. Verification of Coverage. The grantee shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the agreement.

H. Subcontractors. The grantee shall cause each and every subcontractor to provide insurance coverage that complies with all applicable requirements of the grantee-provided insurance as set forth herein, except the grantee shall have sole responsibility for determining the limits of coverage required to be obtained by subcontractors. The grantee shall ensure that the City is an additional insured on each and every subcontractor’s commercial general liability insurance policy using an endorsement at least as broad as ISO CG 20 26.

I. Notice of Cancellation. Grantee shall provide the City with written notice of any policy cancellation within two business days of their receipt of such notice.

J. Failure to Maintain Insurance. Failure on the part of the grantee to maintain the insurance as required shall constitute a material breach of agreement, upon which the City may, after giving five business days’ notice to the grantee to correct the breach, terminate the agreement or, at its discretion, procure, or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand.

K. If the grantee is self-insured or becomes self-insured during the term of the franchise agreement, grantee or its affiliated parent entity shall comply with the following:

1. Provide the City, upon request, a copy of grantee’s or its parent company’s most recent audited financial statements, if such financial statements are not otherwise publicly available;

2. Grantee or its parent company is responsible for all payments within the self-insured retention; and

3. Grantee assumes all defense and indemnity obligations as outlined in the indemnification section of this agreement. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 35, 2009. Formerly 3.65.330).

3.65.280 Performance bond.

A. Within 60 days of the effective date of a franchise, grantee shall provide a performance bond to the City in the total sum of $250,000, which will remain in effect for the term of the franchise. The performance bond is to ensure the faithful performance of grantee’s obligations under the franchise including the payment by the grantee of any claims, liens, fees, or taxes due the City which arise by reason of the operation, maintenance, or construction of the cable system within the franchise area.

B. If a franchise is terminated, or upon expiration, renewal or transfer of a franchise, the City will return the original bond or sign the necessary documentation to release the bond promptly if grantee does not owe funds to the City or is not in default of a material provision of the franchise. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 36, 2009. Formerly 3.65.340).

3.65.290 Procedure for drawing on performance bond.

A. The procedure for drawing on the performance bond shall be as follows:

1. If grantee fails to make timely payment to the City of any amount due under a franchise granted pursuant to Chapter 3.65.SVMC, the City shall have the right to draw on the performance bond following at least 15 days’ advance written notice to grantee, unless the amount due is received within such 15-day period.

2. The time period for lawful withdrawal referenced above may be extended by the City in writing at City’s discretion. A grantee may request a hearing pursuant to SVMC 3.65.310 prior to a City draw on the performance bond. This limitation expires upon expiration of the time to request the hearing, or if one is requested by grantee. It expires 30 days after the City’s hearings process is concluded, whether or not further court review is requested. This shall not limit the right of a grantee to seek injunctive relief in appropriate cases with respect to said draw.

B. Upon drawing funds from the performance bond, the City shall give written notice thereof to the grantee. Not later than 30 days after the mailing or delivery of the notice from the City to grantee advising of the draw, grantee shall restore the performance bond to its full required amount. (Ord. 20-012 § 1, 2020).

3.65.300 Remedies to enforce compliance.

A. SVMC 3.65.300 does not apply to revocation of a franchise agreement. Whenever the City seeks to enforce a franchise agreement, it shall first provide written notice to the grantee of the nature of the problem and requested action, together with any applicable time frame for response. Any time limits here or in a franchise agreement may be modified by written agreement between the City and grantee, except time limits relating to revocation of a franchise agreement or where otherwise required by law must be approved by the city council.

B. Except in case of urgency or public need relating to management of the public rights-of-way as reasonably determined by the City, the grantee has 30 days from receipt of such notice to respond in writing to the City official sending the notice:

1. Contesting it;

2. Accepting it and agreeing to cure as requested within time limits specified; or

3. Requesting additional time or other modifications. In such event, grantee shall promptly take all reasonable steps to cure the default, keeping the City informed as to the steps to be taken and a projected completion date.

C. If the City is not satisfied with the grantee’s response, both parties shall meet informally to discuss the matter. If these discussions do not lead to resolution of the problem, the City shall notify the grantee in writing. Grantee may thereafter request a hearing pursuant to SVMC 3.65.310.

D. No provision of a franchise is intended to affect the right of either party to seek judicial relief from a violation of any provision of a franchise, or any regulation or directive under a franchise. The existence of other remedies under a franchise does not limit the right of either party to recover monetary damages, or to seek judicial enforcement of obligations by specific performance, injunctive relief or mandate, or any other remedy at law or in equity. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 37, 2009. Formerly 3.65.350).

3.65.310 Hearings.

Except for revocation matters, which are dealt with in SVMC 3.65.320, a grantee may request a hearing as follows:

A. Grantee may file a written request within 14 days of receipt of a decision it wants reviewed with the city manager. The request does not stay the effect of the decision or obligation to comply or exercise of any remedy available to the City except as otherwise provided. The city manager may conduct the hearing or appoint an alternate hearings officer, who shall not be the person issuing the order or such person’s subordinate. For matters exceeding $25,000 reasonably estimated value in controversy as determined by the city manager, the grantee may file a request that the city hearings examiner conduct the hearing. A reasonable filing fee may be set by the hearings examiner or generally applicable ordinances.

B. The hearing may be informal and shall be conducted within 20 days, with at least 10 days’ prior notice to both sides, unless these time frames are extended by written agreement of the parties. The official conducting the hearing is responsible to keep a record of any materials submitted and shall record the hearing by video or audio tape, for matters exceeding $25,000 reasonable estimated value amount in controversy. A written decision shall be issued within 20 days. Either party may appeal the decision to a court of competent jurisdiction within 30 days.

C. Except where otherwise provided, at the conclusion of the City hearings process, if grantee remains in default, it shall correct said default within 15 days or as otherwise ordered by the City. In the event the grantee does not cure within such time to the City’s reasonable satisfaction, the City may:

1. Seek specific performance of any provision that reasonably lends itself to such remedy as an alternative to damages, or seek other equitable relief; and/or

2. Await the conclusion of the judicial process.

D. Where grantee seeks judicial review and ultimately prevails, any money judgment against the City shall be paid or may thereafter be offset by grantee, in grantee’s discretion, against further franchise fee payments due to the City. In such event, grantee shall notify the City at least 60 days prior to apply the offset.

E. Nothing in SVMC 3.65.310 limits the City’s right to seek to revoke a franchise agreement pursuant to SVMC 3.65.320. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 39, 2009. Formerly 3.65.370).

3.65.320 Revocation.

A. The City may revoke a franchise agreement granted pursuant to Chapter 3.65 SVMC and rescind all rights and privileges associated therewith in the following circumstances:

1. Grantee abandons the cable system, fails to cure a nonpayment of a quarterly franchise fee within 30 days of the required payment date, or terminates the cable system’s operations; or

2. Grantee attempts to evade any material provision of the franchise agreement or practices any fraud or deceit upon the City or subscribers.

B. Prior to revocation of a franchise agreement, the City shall give written notice to the grantee of its intent to revoke the franchise agreement, setting forth the exact nature of the noncompliance. The grantee shall have 30 days from such notice to object in writing and to state its reasons for such objection and provide any explanation. In the event the City has not received a timely and satisfactory response from the grantee, it may then seek a revocation of the franchise agreement by the city council in accordance with SVMC 3.65.320.

C. The grantee may file a revocation hearings request within 14 days of the City’s written notice of intent to revoke the franchise with the city hearings examiner. The filing fee shall be established by separate resolution, and is considered an appeal of an administrative decision. Any revocation hearing under SVMC 3.65.320(C) shall be consistent with Chapter 17.90 SVMC, except as specifically set forth in SVMC 3.65.320. This shall provide the grantee a fair opportunity for full participation, including the right to be represented by legal counsel, and to introduce evidence. Within 20 days of the hearing, the hearing examiner shall issue a recommendation to the city council. At the next available city council meeting with notice provided to the grantee, the city council shall review the city hearing examiner’s record and recommendation, allowing the grantee an opportunity to state its position on the matter, reserving the right to set reasonable time limits. Within 60 days after the review, the city council shall determine whether to revoke the franchise agreement; or if the breach at issue is capable of being cured by the grantee, direct the grantee to take appropriate remedial action within the time and in the manner and on the terms and conditions that the city council determines are reasonable under the circumstances. The city council shall issue a written decision and shall transmit a copy of the decision to the grantee. Any appeal of the decision by the city council shall be to Spokane County superior court within 30 days of adoption of the decision. Upon timely appeal, the effect of the revocation is stayed pending final judicial resolution, but this shall not affect accrual of penalties or the right of the City to take any other enforcement action, including curing the default at grantee’s expense and liability, also subject to judicial review. The parties shall be entitled to such relief as the court may deem appropriate.

D. The city council may in its sole discretion take any lawful action that it deems appropriate to enforce the City’s rights under the franchise agreement in lieu of revocation. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 40, 2009. Formerly 3.65.380).

3.65.330 Conditions of sale and removal.

If a renewal of a franchise agreement is denied or a franchise agreement is lawfully terminated, and the City lawfully acquires ownership of the cable system or by its actions lawfully effects a transfer of ownership of the cable system to another person, any such acquisition or transfer shall be at a price determined pursuant to the provisions of the Cable Act.

Grantee shall have no obligation to remove the cable system where it utilizes the system to provide other, permitted and lawful, non-cable services and has obtained or is in the process of obtaining a franchise or other local authority to maintain facilities in the public rights-of-way, or where grantee is able to find a purchaser of the cable system who holds such authorization. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 41, 2009. Formerly 3.65.390).

3.65.340 Transfer of rights.

A franchise granted under Chapter 3.65 SVMC may not be assigned or transferred without the written approval of the City pursuant to the provisions of the Cable Act. However, grantee can assign or transfer a franchise without approval of but upon notice to the City to any parent, affiliate or subsidiary of grantee or to any entity that acquires all or substantially all the assets or equity of grantee, by merger, sale, consolidation or otherwise and for transfers in trust obtained to finance construction or operations of a cable system by pledging the system as collateral. (Ord. 20-012 § 1, 2020; Ord. 09-030 § 42, 2009. Formerly 3.65.400).