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HomeMy WebLinkAboutStaff Report 159-0812 City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE:JUNE 23, 2008 CMR: 159:08 SUBJECT:APPROVAL OF THE AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO, THE CITY OF MENLO PARK, THE CITY OF EAST PALO ALTO, THE TOWN OF ATHERTON, THE COUNTY OF SAN MATEO AND THE COUNTY OF SANTA CLARA TO PROVIDE FOR A CABLE TELEVISION AND VIDEO FRANCHISE ADMINISTRATION AND ENFORCEMENT PROCESS CONSISTENT WITH THE CALIFORNIA DIGITAL INFRASTRUCTURE AND VIDEO COMPETITION ACT RECOMMENDATION Staff recommends that the City Council approve the Amended and Restated Joint Exercise of Powers Agreement (Amended JPA) by and between the City of Palo Alto, the City of Menlo Park, the City of East Pato Alto, the Town of Atherton, the County of San Mateo and the County of Santa Clara to provide for a cable television and video franchise administration and enforcement process relating to state franchise holders under the California Digital Infrastructure and Video Competition Act (DIVCA). The Amended JPA will serve as the substitute for the Joint Exercise of Powers Agreement, dated July 26, 1983 and the Joint Operating Agreement, dated October 13, 1983. BACKGROUND In July 1983, a Joint Exercise of Powers Agreement was entered into by Palo Alto, Menlo Park, East Palo Alto, Atherton, and portions of San Mateo and Santa Clara Counties (the Joint Powers) for the purposes of obtaining cable television service for residents, businesses and institutions within these jurisdictions. In October 1983, the parties executed a Joint Operating Agreement giving the City of Palo Alto the sole authority to grant and administer the cable franchise process on behalf of the Joint Powers. In 1986, a cable television franchise agreement was executed with Cable Co-op. In 1999, the Cable Co-op Board of Directors and subscribers approved the sale of its system to AT&T Broadband. On July 24, 2000, the Council adopted a resolution consenting to the transfer of the Cable Co-op franchise to AT&T Broadband and the adoption of a new cable franchise agreement CMR: 159:08 Page 1 of 5 with AT&T Broadband. The AT&T Broadband franchise was subsequently transferred to Comcast in July 2002. On October 22, 2001, the Council designated the Midpeninsula Community Media Center, Inc. (Media Center), as its Community Access Organization (CAO) to manage and operate the Joint Powers’ Public, Education, and Government (PEG) access facilities and channels provided pursuant to the AT&T Broadband (now Comcast) franchise. Subsequently, the Joint Powers entered into an agreement with the Media Center giving it responsibility for operating and managing the PEG channels and facilities. On January 1, 2007, DIVCA went into effect. The purpose of DIVCA is to create a streamlined process for the granting of video service franchises in an effort to foster the rollout of technology, encourage competition and expand customer choice. This new law permanently changed the franchising and regulatory structure for the provision of cable television and other video services in California. Under DIVCA, video service franchises are now granted exclusively by the California Public Utilities Commission (Commission) rather than by local franchising entities. On March 30, 2007, the Commission granted AT&T a statewide franchise. The Joint Powers’ incumbent cable operator, Comcast, was allowed to seek a state franchise after January 1, 2008, when another state franchise holder (in this case AT&T) entered the local market. On January 2, 2008, the Commission granted Comcast a state franchise that extends to the Joint Powers’ service area. In April and June 2007, the Council amended and added several chapters to the Palo Alto Municipal Code to reflect changes in the law due to DIVCA (CMR: 171:07 and CMR 273:07). On January 22, 2008, the Council amended the Palo Alto Municipal Code to establish a fee, consistent with DIVCA, to support PEG access that will apply to AT&T and to Comcast as they provide service under their new state franchises. DISCUSSION DIVCA allows the Joint Powers to continue to serve as the "local entity" for DIVCA purposes. This permits the Joint Powers to continue to rely on Palo Alto for such activities as franchise fee and PEG fee collection and audits, PEG oversight and customer service with respect to all state franchise holders who provide video services in the Joint Powers’ service area. Staff recommends that the Council approve the proposed Amended JPA, in substitution of the existing Joint Exercise of Powers Agreement and the Joint Operating Agreement, to reflect changes in the law due to DIVCA and to allow Palo Alto to continue to administer the cable and video franchise enforcement and monitoring process for state franchise holders. There are several important benefits to the continued existence of the Joint Powers under DIVCA. It provides for centralized financial support, contracting, oversight and management of the Joint Powers’ relationship with the Media Center. The Media Center’s responsibilities include: PEG channel administration, operation and programming; training of PEG channel users; and maintenance of PEG facilities and equipment. At the present time, Palo Alto receives PEG fee payments from franchise holders for all Joint Powers subscribers. Palo Alto forwards this money directly to the Media Center. The proposed Amended JPA would give Palo Alto the authority to continue to give the Media Center the entire Joint Powers PEG fee. Any breakup of CMR: 159:08 Page 2 of 5 the Joint Powers in this area would pose a significant risk of splintering financial support to the Media Center. If this were to happen, it would directly and adversely impact the Media Center’s ability to carry out its PEG programming and service obligations, resulting in a significant loss to the Joint Powers and its PEG viewers. The Amended JPA also provides significant economies of scale by allowing the Joint Powers members to continue to share the cost of franchise administration responsibilities. Centralized franchise fee collection, distribution, audit responsibility and customer service standard enforcement saves each Joint Powers member administrative and enforcement costs that it otherwise would have to incur individually. The Amended JPA also gives its members more collective leverage over cable and video service providers in the resolution of franchise fee, PEG access, customer service and other kinds of disputes than each member would have individually. Palo Alto’s franchise administration responsibilities would include the following: Ceno’alized Franchise Fee Collection and Remittance: DIVCA allows local entities to assess a five percent franchise fee on state franchise holders. Franchise fees would continue to be collected by Palo Alto and, after Palo Alto’s franchise administration costs are deducted, distributed to each Joint Powers member based on its number of subscribers. Centralized PEG Fee Collection and Remittance: DIVCA allows the Joint Powers to continue to collect a PEG support fee of 88-cents per residential subscriber per month from state franchise holders. PEG fees for al! Joint Powers subscribers would continue to be collected by Palo Alto and remitted to the Media Center for PEG purposes. Centralized and Coordinated Oversight of Video Service Providers’ DIVCA PEG Channel Obligations: DIVCA preserves the Joint Powers’ seven current PEG channels. DIVCA requires the placement of these channels on the basic service tier and, to the extent feasible, on the same channel numbers used by Comcast. DIVCA also requires that PEG channels be capable of carrying a standard television signal and that PEG channels be of similar quality and functionality to that of commercial channels on the state franchise holder’s basic tier. Palo Alto would enforce these DIVCA PEG channel requirements under the Amended JPA. Centralized Contracting, Oversight and Management of the Relationship with the Media Center: On July 8, 2002, the City entered into a CAO agreement with the Media Center on behalf of the Joint Powers. This agreement will expire in July 2010. Under the Amended JPA, Palo Alto would be responsible for managing the existing CAO agreement and negotiating, approving and managing subsequent agreements. Audit Responsibility for Franchise and PEG Fees." Palo Alto would continue to be responsible for conducting franchise fee and PEG fee audits, approximately every three years, to collect unpaid or underpaid franchise and/or PEG fees. Customer Service Standard Enforcement: Palo Alto would continue to be responsible for enforcing federal and state customer service standards. CMR: 159:08 Page 3 of 5 Resolution of Customer Service Complaints and Response to Customer Inquiries: Palo Alto would continue to be responsible for resolving customer complaints and responding to customer inquiries on behalf of the Joint Powers. 1-Net: The 2000 AT&T Broadband (now Comcast) franchise requires Comcast to furnish the Joint Powers with an institutional network ("I-Net"). The I-Net connects approximately 70 schools, libraries and government facilities in the Joint Powers’ service area for delivery of data, video and voice services. Currently, about approximately 70 percent of the I-Net sites are operational. Under DIVCA, existing local franchise obligations regarding I-Net facilities will continue only until the local franchise would have expired by its terms. In the case of the AT&T Broadband (now Comcast) franchise, that date is July 25, 2010. Under the Amended JPA, Palo Alto would continue to monitor and enforce Comcast’s existing I-Net obligations through that date and would be responsible for negotiating any I-Net transition after that date. NEXT STEPS Following the approval of the Palo Alto Council, the remaining Joint Powers members will bring the Amended JPA to their respective governing bodies for approval. Within thirty days after the effective date of the Amended JPA, Palo Alto will give notice of the Amended JPA to the California Secretary of State, in accordance with California law, Government Code Section 6503.5. RESOURCE IMPACT State franchise holders provide compensation (e.g., franchise fees, PEG fees, PEG channels and facilities, etc.) for the use of public streets and rights-of-way in the Joint Powers’ service area. After deducting Palo Alto’s franchise administration costs, franchise fees are distributed to Joint Powers members. Joint Powers administrative costs totaled $95,541 in 2007. These costs were shared by Joint Powers members based on subscribers (Palo Alto 50 percent; Menlo Park 25 percent; East Palo Alto 11 percent; Santa Clara County 5 percent and San Mateo County 2 percent.) These costs would increase significantly for Palo Alto and the other Joint Powers members if the Joint Powers arrangement was not in place. In 2007, Comcast paid Palo Alto franchise fees in the amount of $638,944. In 2007, PEG access fees for all agencies totaled $328,781. POLICY IMPLICATIONS This proposed amendment will bring the Joint Exercise of Powers Agreement and the Joint Operating Agreement into compliance with the current State law for video service franchises. ENVIRONMENTAL REVIEW This is not a project under the environmental assessment is required. California Environmental Quality Act, therefore, no ATTACHMENTS: Attachment A: Amended and Restated Joint Exercise of Powers Agreement CMR: 159:08 Page 4 of 5 PREPARED BY: DEPARTMENT HEAD APPROVAL: MELISSA CAVALLO Cable Coordinator Administrative Services Director CITY MANAGER APPROVAL: STEVE EMSLIE and KELLY MORARIU Deputy City Managers CMR: 159:08 Page 5 of 5 ATTACHMENT A Contract No. AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT BY AND BETWEEN THE CITY OF PALO ALO, THE CITY OF MENLO PARK, THE CITY OF EAST PALO ALTO, THE TOWN OF ATHERTON, THE COUNTY OF SAN MATEO AND THE COUNTY OF SANTA CLARA Dated as of 2008 080108jb 0072908 TABLE OF CONTENTS Section 1 2 3 4 5 6 7 8 Description Term; Purpose of Agreement Organization, Powers, Functions Working Group, Review Board Franchise-related Revenues and Expenses Public, Education and Government Access Withdrawal of Member Notices Miscellaneous Page 5 5 6 7 8 9 10 12 071128jb 0072908 AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO, THE CITY OF MENLO PARK, THE CITY OF EAST PALO ALTO, THE TOWN OF ATHERTON, THE COUNTY OF SAN MATEO AND THE COUNTY OF SANTA CLARA This Amended and Restated Joint Exercise of Powers Agreement (the "Agree- ment"), dated ., 2008 (the "Effective Date"), is made by the City of Palo Alto, the City of Menlo Park, the City of East Palo Alto, the Town of Atherton, the County of San Mateo and the County of Santa Clara (individually, a "Party" and, collectively, the "Parties" or the "Cable Joint Powers"), in reference to the following facts and circumstances: RECITALS: A. Title 1, Division 7, Chapter 5 of the California Government Code (the "Joint Exercise of Powers Act" or the "Act"), Section 6500 et seq., authorizes two or more public agencies by agreement to jointly exercise any power common to the contracting agencies. Each of the Parties is a "public agency" within the meaning of the Act, Section 6500. B. In July 1983, the Parties executed a Joint Exercise of Power Agreement (the "JPA Agreement"), authorizing the City of Palo Alto ("Palo Alto"), on behalf of the Cable Joint Powers, to administer a cable television franchising process within a common geographical area or franchise area (the "Franchise Area"), described in Exhibit A, to award one or more franchises to render state-of-the-art cable television services in that area. C. In October 1983, the Parties executed a Joint Operating Agreement (the "JOA Agreement"), authorizing Palo Alto on behalf of the Cable Joint Powers to administer and otherwise oversee and implement the cable television franchise that was awarded to Cable Communications Cooperative of Palo Alto, Inc. (the "Co-op"), in March 1986. In July 2000, the City Council of Palo Alto (the "Council") approved the assignment and transfer of the Co-op franchise to TCI Cablevision of California, Inc. ("TCI"). In October 2003, Comcast Cable Communications, Inc. acquired TCI’s assets, while Comcast of California IX, Inc. ("Comcast") held the franchise under the JPA Agreement (the "Comcast franchise"). D. Under the JPA Agreement, Palo Alto on behalf of the Cable Joint Powers is granted the power and authority to award and administer a cable franchise for the Franchise Area, and a joint cable working group is (and to the extent there is created by the Cable Joint Powers a franchise review board ) established to deal with any cable issues that may arise. Palo Alto intends to continue as the administrator of the Comcast franchise, to the extent obligations under that franchise will continue to be performed until July 24, 2010, in accordance with DIVCA, referred to in Recita! F, and the Comcast 071128jb 0072908 State Franchise (as defined in Section 2.2) and the AT&T State Franchise (as defined in Section 2.2), on behalf of the Cable Joint Powers. E. Under the JOA Agreement, Palo Alto on behalf of the Cable Joint Powers is required to, among matters, account for franchise fee payments and administration expenses related to administration and enforcement of the Comcast franchise, and to administer the community access process on behalf of the Parties. F. In September 2006, the Digital Infrastructure and Video Competition Act, Assembly Bill 2987, Stat. 2006, Chapter 700 ("DIVCA"), changed the laws and regulations governing video franchises. The California Public Utilities Commission now has the sole authority to issue video franchises, and local agencies are permitted only to regulate current local cable franchises until the earlier of the expiration date of such franchises or a date on which it is determined that there exists effective competition following the entry of a holder of a state franchise into the Franchise Area. Under DIVCA, a local agency retains its right to impose and collect a franchise fee, to require a franchise to abide by certain public, education and government ("PEG") channel access ("PEG Access") obligations, and to exercise due authority over management of its public rights-of-way. G. Palo Alto, Menlo Park, East Palo Alto, and Atherton have adopted, and the Counties of San Mateo and Santa Clara are in the process of adopting, ordinances to conform their applicable ordinances, resolutions, laws, rules and regulations to DIVCA. In furtherance thereof, the Cable Joint Powers intend to amend and restate the selected provisions of the JPA Agreement and the JOA Agreement in order to address, among other matters, the rights and obligations of the Parties and the role of Palo Alto with respect to current and future cable and video franchise issues arising in connection with the Comcast franchise obligations, to the extent outstanding, and, in particular, the provision of PEG Access by Comcast and any other holder of a state video franchise (°’State Franchise") which operates within the Franchise Area ("State Franchisee"). Both Comcast and Pacific Bell Telephone Company dba AT&T California ("AT&T") have been awarded State Franchises to operate within the Franchise Area as of the Effective Date. H. The Parties intend to substitute this Agreement for the JPA Agreement and JOA Agreement. It is the intention of the Parties to give to the California Secretary of State written notice of the amendment to the Joint Exercise of Powers Agreement in accordance with California Government Code section 6503.5. AGREEMENT: NOW, THEREFORE, in consideration of the following covenants, terms and conditions, the Parties agree: 071128jb 0072908 SECTION 1. TERM; PURPOSE OF AGREEMENT 1.1 The term of this Agreement will commence on its execution by the Parties and continue on a year-to-year basis until the Parties agree to terminate this Agreement or a majority of the Parties have withdrawn from the Cable Joint Powers pursuant to Section 6. 1.2 Pursuant to the Joint Exercise of Powers Act, the purpose of this Agree- ment is to provide for the administration of the cable television and video franchising and franchise administration and enforcement processes relating to the State Franchises separately granted to Comcast and AT&T (and any other State Franchisee) to provide cable and related video services within the Franchise Area until the respective expiration dates of their State Franchises and any renewals thereof that result in the provision of cable or related video services within the Franchise Area at any time during the term of this Agreement. The purpose of this Agreement is also to make efficient use of the common powers of each Party and develop all other reasonably necessary or appropriate powers to provide greater individual and group coordination and collaboration among the Parties to secure state-of-the-art video services to the extent permitted by the laws and regulations governing such services and operations. SECTION 2. ORGANIZATION, POWERS, FUNCTIONS 2.1 There will not be established pursuant to the Act an agency which will be a public entity separate from the Parties. The Parties, acting in their capacity as a joint action agency, are referred to in this Agreement as the Cable Joint Powers. 2.2 Palo Alto is empowered and authorized to administer and enforce the State Franchises awarded to Comcast (the "Comcast State Franchise") and AT&T (the "AT&T State Franchise") and any other State Franchisee seeking to provide video service under DIVCA within the Franchise Area, except as (a) provided in Sections 2.3 or 2.4, or (b) as may be expressly disapproved by the Parties and expressly reserved to any Party other than Pa!o Alto. Nothing in this Agreement will be construed to limit the right of any Party to administer a cable or video franchise that operates wholly and exclusively within that Party’s jurisdictional boundary or to take such actions as are necessary to effectuate the purpose of this Agreement. 2.3 Notwithstanding the provisions of Sections t .2 and 2.2, the Parties empower and authorize Palo Alto to administer the Comcast State Franchise and the AT&T State Franchise on behalf of the Cable Joint Powers and to the extent it is permitted by DIVCA, including, but not limited to, collecting and remitting the franchise fee and any PEG support fee after accounting for reasonable and necessary expenses, enforcing customer service standards, and managing PEG Access for the Franchise Area. A Party may at any time give notice to Palo Alto and the other Parties that, in accordance with Section 6, it Wishes to Withdraw from this Agreement and assume all rights and obligations with respect to the administration and management of the Comcast State 071128jb 0072908 Franchise, the AT&T State Franchise and any other State Franchise operating within its jurisdictional boundary. 2.4 Notwithstanding the provisions of Sections 1.2 and 2.2, if any entity other than Comcast or AT&T is granted a State Franchise and it elects to provide video service within the Franchise Area, then the Cable Joint Powers empower and authorize Palo Alto to administer that State Franchise on behalf of the Cable Joint Powers and to the extent it is permitted by DIVCA, including, but not limited to, collecting and remitting the franchise fee and any PEG support fee after accounting for reasonable and necessary expenses, enforcing customer service standards, and managing PEG Access for the Franchise Area. A Party may at any time give notice to Palo Alto and the other Parties that, in accordance with Section 6, it wishes to withdraw from this Agreement and assume all rights and obligations with respect to the administration and management of such State Franchise operating within its jurisdictional boundaries. 2.5 The right of Palo Alto to acquire an ownership interest in the cable or video system of Comcast pursuant to Sections 1.2.01 and 1.2.02 of the JOA Agreement is hereby terminated. The right of any Party or some, but not al!, Parties to acquire an ownership interest in the cable or video system of Comcast, AT&T or any other State Franchisee will be determined by agreement of the Parties at a mutually convenient time. SECTION 3. WORKING GROUP. REVIEW BOARD 3.1 Palo Alto’s city manager (the "City Manager") will establish a joint cable working group (the "Working Group") to consider any and all cable and video service- related issues relating to the Comcast State Franchise, the AT&T State Franchise and any other State Franchise operating within the Franchise Area pursuant to Section 2.4, and to make recommendations to be presented to the Council. The City Manager or designee will chair the Working Group meetings and proceedings and otherwise provide staff services to the Working Group. These meetings will not be subject to compliance with the Ralph M. Brown Act, California Government Code Section 54950 et seq. 3.1.1 Each Party has the right to designate an individual to become a voting member of the Working Group. A representative of Stanford University may be designated the representative of the County of Santa Clara. 3.1.2 The Working Group will continue to function during the Comcast State Franchise, the AT&T State Franchise and any other State Franchise operating within the Franchise Area pursuant to Section 2.4, for the purpose of oversight, review and enforcement of all requirements of the operation and management of the cable or video system over which DIVCA confers authority to local agencies. 3.2 Upon Palo Alto’s receipt of a request, in writing, of a majority of the Parties, Palo Alto by its City Manager or designee will inform the Parties of the request to appoint a franchise review board (the "Review Board") to address any issue that cannot or has not been resolved by the Working Group to the complete satisfaction of all 071128jb 0072908 Parties. Palo Alto then will arrange for a meeting to consider the creation of the Review Board. The governing body of each Party will each appoint an individual to serve on the Review Board. The Review Board, if appointed, will consist of seven (7) members, appointed by the governing body or the delegate of each Party; provided, however, two (2) members will be appointed by Palo Alto and one (1) member each wilt be appointed by the other five (5) Parties. The County of San Mateo member will represent the interests of residents of unincorporated San Mateo County, comprising Ladera, Menlo Oaks and University Heights. The County of Santa Clara will represent the interests of residents of unincorporated Santa Clara County, comprising the Leland Stanford Junior University. These meetings will be subject to compliance with the Ralph M. Brown Act, California Government Code Section 54950 et seq. The Parties acknowledge that the Review Board has not been appointed as of the Effective Date. 3.2.1 The Review Board, if appointed, will review and resolve issues formally raised by any Party in accordance with Section 3.2 in regard to the administration, enforcement and execution of responsibilities relating to State Franchises operating within the Franchise Area assigned to local agencies by DIVCA that are issues not delegated to Palo Alto to handle under the terms of this Agreement. The processes and procedures for formally presenting issues to and resolving issues by the Review Board will be established at the time the Review Board is appointed. The Review Board, if appointed, will convene only when a majority of the members of the Cable Joint Powers requests, in writing, the convening of such meeting and notice is directed to Palo Alto, as the administrator, that all Cable Joint Powers members shall be given notice of the convening of such meeting in order to resolve any issue that is presented by one or more members of the Cable Joint Powers. 3.2.2 Palo Alto, as administrator of the JPA Agreement and continuing as the administrator of this Agreement in accordance with Section 2.2, will be responsible for the oversight, enforcement and regulation of the Comcast State Franchise, the AT&T State Franchise and any other State Franchise, consistent with DIVCA. Palo Alto will follow the determinations of the Review Board, if appointed, in matters under the Review Board’s jurisdiction. In its role of administrator, Palo Alto will provide the Review Board members on a regular basis at the frequency as may be determined by the Review Board information on its activities and substantial changes in the Comcast State Franchise, the AT&T State Franchise and any other State Franchise, including, but not limited to, rates, services, PEG Access and other matters. The City Manager or designee with the assistance of the Working Group members will provide staff services to the Review Board, if appointed, and such services are requested and approved by the Cable Joint Powers. SECTION 4. FRANCHISE-RELATED REVENUES AND EXPENSES 4. ! Palo Alto wil! receive and account for any and all franchise fees due and payable by Comcast, AT&T and any other State Franchisee, to the Cable Joint Powers. The franchise fees wilt be made payable to Palo Alto. After Palo Alto accounts for the reimbursement of all costs and expenses contemplated in Section 4.2, Palo Alto will 071128jb 0072908 distribute the franchise fees to the other Parties on the basis of the percentage of franchise revenue derived from cable or video customers in each jurisdiction. 4.2 Palo Alto will be reimbursed for all out-of-pocket costs and expenses incurred in connection with its administration of the Comcast State Franchise, the AT&T State Franchise and any other State Franchise, operating within the Franchise Area. The franchise fees received will be allocated according to the following priority: A. To reimburse Palo Alto for any out-of-pocket costs that Palo Alto may incur in the administration of any and all State Franchises, including, but not limited to, reasonable attorneys’ fees and the fees of consultants with expertise in cable and video franchising and the costs associated with PEG Access and programming for any Cable Joint Powers member other than Palo Alto or otherwise reasonably attributable to such member; B.To cover the costs of the regulatory and oversight functions; and C. To pay for other cable- or video-related activities benefiting the area in which the revenue was generated, as allocated by Palo Alto among all of the Parties on the basis of the percentage of revenues derived from the cable or video customers located in each jurisdiction. 4.3 The Working Group will review Palo Alto’s reimbursement requests on a quarterly basis or other frequency as may be determined by the Working Group. The Review Board, if appointed and so authorized, will review Palo Alto’s reimbursement claims to the extent such claims are not approved by the Working Group. The determination of the Review Board will be final. 4.4 Palo Alto will submit an accounting of franchise-related revenues and expenses to the Cable Joint Powers on a quarterly basis or other frequency as may be determined by the Working Group. Palo Alto’s accounting of franchise-related revenues and expenses will be audited annually by an independent auditor and included in the audit of Palo Alto’s books and accounts, which will be conducted annually. The audit of the independent auditor will be made available to all other Parties within thirty (30) days of its issuance. SECTION 5. PUBLIC, EDUCATION AND GOVERNMENT ACCESS 5.1 The Parties have appointed the public benefit corporation and not-for- profit entity, the Midpeninsula Community Media Center, Inc. ("Media Center"), as the community access organization to administer the PEG channels and manage PEG Access support on the cable or video systems that are required to be provided under the Comcast State Franchise, the AT&T State Franchise and any other State Franchise in the provision of PEG Access in the Franchise Area, including, but not limited to, the development of rules for the administration of bandwidth of the institutional network to be made available to public institutions and non-commercial users of the cable or video service 071128jb 0072908 system(s) in the Franchise Area. Each Party will reasonably cooperate with the Media Center or other community access organization for the purpose of implementing PEG Access. 5.2 Any revocation of the designation of the Media Center or other entity as the community access organization may be referred to the Review Board, if appointed, whose decision on revocation will be final. 5.3 Palo Alto wilt ensure that the Media Center or other community access organization performs the following primary responsibilities: facilities; B. C. D. The adoption of rules governing the use of PEG channel time and The scheduling and use of PEG channel time and facilities; The provision of training to PEG channel access users; The raising and uses of funds for PEG Access purposes consistent with the Comcast State Franchise, the AT&T State Franchise and any other State Franchise; E.The maintenance of PEG Access channels and facilities and coordination of the use of institutional network access facilities; F.The promotion of PEG Access; and G. The development of new PEG Access uses and the determination of the need for additional PEG Access channels and facilities. 5.4 Palo Alto will require the Media Center or other community access organization to provide reports annually or at other established frequency to the Council and the Review Board, if appointed, on its budget and activities, including, but not limited to, its accomplishments during the annual reporting period or any other reporting period. 5.5 Each Party will be responsible for administering the government access channel(s) and that portion of the institutional network available for local government use within its jurisdictional boundary lying within the Franchise Area. 5.6 Palo Alto will receive and account for any and all PEG support fees paid and to be paid by Comcast, AT&T and any other State Franchisee serving the Franchise Area and remit the appropriate amounts to the Media Center or other community access organization. The PEG support fees will be made payable to Palo Alto. 071128jb 0072908 SECTION 6. WITHDRAWAL OF MEMBER 6.1 Any Party may withdraw from participation in the Cable Joint Powers or the Review Board, if appointed, or the Working Group, on terms and conditions mutually acceptable to the Parties or, if no agreement can be reached by the Parties, as determined by an arbitrator acceptable to the Parties or in accordance with applicable law. 6.2 A Party seeking to withdraw will provide no less than six (6) months’ prior written notice to the other Parties of its intention to withdraw. A Party which seeks to withdraw from the Cable Joint Powers will perform all of its outstanding obligations under this Agreement through the effective date of its withdrawal. A Party’s obligation to pay for its allocable portion of administrative costs and expenses incurred to the effective date of withdrawal will survive the withdrawal of a Party from the Cable Joint Powers, and such obligation will also survive the termination of this Agreement. SECTION 7. NOTICES 7,1 All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder given by a Party to any other Party or Parties, will be provided, in writing, and will be deemed sufficiently given and served upon the other Party if (1) personally served, (2) sent by United States Postal Service certified mail, postage, prepaid, (3) sent by express delivery service, or (4) in the case of a facsimile, if sent to the telephone number(s) set forth below during normal business hours of the receiving party and followed within 48 hours by delivery of hard copy of the material sent by facsimile, in accordance with (1), (2) or (3) above. Personal service will include, but not be limited to, service by express delivery service and service by facsimile transmission. Delivery of notices properly addressed will be deemed complete when the notice is physically delivered to the Party’s designated representative. All notices provided pursuant to this Agreement will be addressed as set forth below or as a Party may subsequently designate by written notice. TO: Palo Alto City Manager City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (650 329-2468 with a copy to:City Clerk City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (650) 323-631 071128jb 0072908 lO TO: TO: And Menlo Park with a copy to: And East Palo Alto witha copy to: And City Attorney City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto CA 94303 FAX: (650) 329-2646 City Manager City of Menlo Park 701 Laurel Street Menlo Park, CA 94025 FAX: (650) 328-7935 City Clerk City of Menlo Park 701 Laurel Street Menlo Park, CA 94025 FAX: (650) 328-7935 City Attorney City of Menlo Park 1100 Alma Street, Suite 210 Menlo Park, CA 94025 FAX: (650) 324-0227 City Manager City of East Palo Alto 2415 University Avenue East Palo Alto, CA 94303 FAX: (650) 853-3115 City Clerk City of East Palo Alto 2415 University Avenue East Palo Alto, CA 94303 FAX: (650) 853-3115 City Attorney City of East Palo Alto 2415 University Avenue East Palo Alto CA 94303 FAX: (650) 853-5923 071128jb 0072908 11 TO: TO: TO: 071128jb 0072908 Atherton with a copy to: And San Mateo with a copy to: And Santa Clara with a copy to: Town Manager Town of Atherton 91 Ashfield Road Atherton, CA 94027 FAX: (650) 614-1212 Town Clerk Town of Atherton 91 Ashfield Road Atherton, CA 94027 FAX: (650) Town Attorney Town of Atherton P. O. Box 279 Moumain View, CA 94042 FAX: (650) 967-1395 County Manager County of San Mateo 400 County Center Redwood City, CA 94063 FAX: (650) 363-1916 County Clerk County of San Mateo 400 County Center San Mateo, CA 94063 FAX: (650) 363-1916 County Counsel County of San Mateo 400 County Center Redwood City, CA 94063 FAX: (650) 363-4034 County Executive County of Santa Clara 70 West Hedding, 11th Floor San Jose, CA 95110 FAX: (408) 293-5649 Office of the County Counsel County of Santa Clara 70 West Hedding, 9th Floor San Jose, CA 95110 FAX: (650) 292-7240 12 SECTION 8. MISCELLANEOUS 8.1 This Agreement will be governed by and construed in accordance with the laws of the State of California. The Parties will comply with all applicable federal, state and local laws in the exercise of their rights and the performance of their obligations under this Agreement. 8.2 All provisions of this Agreement, whether covenants or conditions, will be deemed to be both covenants and conditions. 8.3 This Agreement represents the entire agreement and understanding between the Parties and it supersedes all prior negotiations, representations and contracts, written or oral. This Agreement may be amended by an instrument, in writing, signed by the Parties. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one and the same instrument. 8.4 Any and all exhibits that may be referred to in this Agreement are by such references incorporated in this Agreement and made a part hereof. 8.5 The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendment or exhibit hereto. 8.6 As used in this Agreement, the special terms will have the same meaning as those words are defined in the Comcast franchise or in DIVCA, including California Public Utilities Code section 5830. In the event of a conflict, the definitions in section 5830 will take precedence, unless the context otherwise requires the Comcast franchise definition to apply. // // // // // // // // // 071128jb 0072908 13 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement as of the Effective Date. ATTEST CITY OF PALO ALTO City Clerk APPROVED AS TO FORM: Mayor Senior Asst. City Attorney APPROVED: City Manager Director of Administrative Services 071128jb 0072908 14 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. ATTEST CITY OF MENLO PARK City Clerk APPROVED AS TO FORM: Mayor City Attorney 071128jb 0072908 15 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. ATTEST CITY OF EAST PALO ALTO City Clerk Mayor APPROVED AS TO FORM: City Attorney 071128jb 0072908 16 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. ATTEST TOWN OF ATHERTON Town Clerk Mayor APPROVED AS TO FORM: Town Attorney 071128jb 0072908 17 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. ATTEST COUNTY OF SAN MATEO County Clerk Chair APPROVED AS TO FORM: Coumy Counsel 071128jb 0072908 18 IN WITNESS WHEREOF, the Parties by their duly authorized representatives have executed this Agreement on the Effective Date. ATTEST COUNTY OF SANTA CLARA County Clerk APPROVED AS TO FORM: Chair County Counsel 071128jb 0072908 19 EXHIBIT A ~’A~O ALTO PALO ALTO