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9.c) Forest Lake Cable Commission Joint and Cooperative Agreement Meeting Date: 7/17/2012 Agenda Item: :�� `�� .., � City Council Agenda Report City of Scandia 14727 209th St. North Scandia, MN 55073 (651) 433-2274 Action Requested: Discuss Scandia's participation in the Forest Lake Cable Commission (FLCC). Consider whether to adopt a resolution approving the dissolution and termination of the FLCC and the Joint and Cooperative Agreement establishing it(requested by Mayor Simonson.) Deadline/ Timeline: N/A Background: • The Forest Lake Cable Commission(FLCC) is a joint powers organization of the cities of Forest Lake, Columbus and Scandia. The primary activity of the FLCC is to produce government and local access programming for replay on LATV-10 and Ranger-20 cable stations. It is supported by subscriber fees from the cable company and franchise fees passed through the 3 cities. Each city has two representatives on the board of directors, an elected official (Mayor Simonson) and a citizen member (myself.) • The purpose of the organization, as stated by the Joint Powers Agreement is to "monitor the operations and activities of cable communications and related communications matters,provide coordination of administration, enforcement and renewal of the franchises of the members, and to conduct such other activities authorized herein as may be necessary to protect the interests of the Member and it citizens with respect to the delivery of cable communications and related communications matters. " • The full Council last discussed the FLCC in February of 2011, when the FLCC faced some issues that caused the city's representatives to believe it might be desirable to significantly change or perhaps dissolve the Commission. This resulted in a meeting of representatives of all three cities in March of 2011. A memo summarizing the results of that meeting is attached. Since then,the FLCC has gone forward with its activities including work necessary to develop and recommend a new franchise agreement to replace the ones that will be expiring in the fall. • On July 3, 2012, after meeting with representatives of the City of Page 1 of 2 07/13/12 Columbus, Mayor Simonson requested that staff prepare a resolution that could be adopted by both cities to dissolve the FLCC. A resolution was drafted by City Attorney Tom Miller. He also has provided a letter outlining the steps for one of the city members to withdraw, or for two of the members to cause it to be dissolved along with some of the matters that should be considered by the Council before taking action. • The Columbus City Council discussed this matter at its July 11, 2012 meeting. They asked for more information before they make a decision, including the results of the PEG assessment (Public, Education and Government Access)that is underway to determine the capital facilities and equipment needed to continue to operate the cable access station. • The Forest Lake City Council also discussed the FLCC at a meeting on July 11,with no action taken. An e-mail containing some thoughts about the issue from Forest Lake City Administrator Aaron Parrish is attached to this report. • FLCC Access Coordinator Sarah Chatwin has provided some information for the Council's consideration, which is attached to this report. She will be present at the meeting to answer any questions. Recommendation: Staff recommends that the Council discuss this matter. The Council could decide to adopt the resolution,which would not be affective until and unless it is also adopted by the City of Columbus. The Council could decide to request more information, such as the PEG assessment, before making any decision. Or the Council could reject the resolution and decide to continue with the FLCC. Attachments/ • Draft Resolution approving the dissolution and termination of the Materials provided: FLCC and the Joint and Cooperative Agreement • Letter dated July 10, 2012 from City Attorney Thomas Miller • Memo dated Apri17, 2011 re: Update on FLCC • E-mail dated July 11, 2012 from Aaron Parrish, City of Forest Lake • Report dated from Sarah Chatwin, FLCC Access Coordinator • Joint and Cooperative Agreement, Forest Lake Cable Commission Contact(s): Prepared by: Anne Hurlburt, Administrator (FLCC JPO) Page 2 of 2 07/13/]2 CITY OF SCANDIA RESOLUTION NO. RESOLUTION APPROVING THE DISSOLUTION AND TERMINATION OF THE FOREST LAKE CABLE COMMISSION, THE DISTRIBUTION OF ASSETS THEREFROM AND THE TERMINATION OF THE AUGUST 24,2007 JOINT AND COOPERATNE AGREEMENT ESTABLISHING SUCH COMMISSION RECITALS WHEREAS, the Cities of Scandia ("Scandia"), Columbus ("Columbus") and Forest Lake ("Forest Lake")(collectively, the "Parties") are parties to a Joint and Cooperative Agreement dated August 24, 2007 (the "Agreement") establishing a cable communications commission ("Commission") and setting out the rights and obligations of the Parties thereto; and WHEREAS, Article XI of the Agreement provides for the termination of the Agreement and the Commission by the mutual agreement of two or more of the Parties; and WHEREAS, the Scandia City Council has determined that the continued participation of Scandia in the Commission and the Agreement is no longer in the best interests of Scandia and its residents including those residents currently subscribing to the cable television services provided in Scandia and therefore desires to terminate and dissolve the Commission and the Agreement; and WHEREAS, Scandia understands that Columbus is also considering terminating the Agreement and dissolving the Commission. RESOLUTION NOW, THEREFORE, BE IT RESOLVED that subject to and contingent on the approval of such action by the Columbus City Council, the City Council of the City of Scandia hereby approves the dissolution and termination of the Commission and the Agreement as provided in and allowed by Article XI of the Agreement. FURTHER, BE IT RESOLVED that the City Administrator and her designee are authorized and directed to communicate the foregoing approval to the appropriate Columbus officials and to request a similar approval by Columbus to the dissolution and termination of the Commission and Agreement. FURTHER, BE IT RESOLVED that upon the approval of the dissolution and termination of the Commission and Agreement by Columbus, the Scandia staff are hereby directed to negotiate such documents and take such actions as are required to carry out the dissolution and termination of the Commission as provided in the Agreement. FINALLY, BE IT RESOLVED that the Mayor and City Administrator of Scandia are authorized and directed to take such actions and execute such documents as are reasonably required by and consistent with the spirit and intent of the matters described in this Resolution. Resolution Page 2 of 2 Adopted by the City Council of the City of Scandia this day of , 2012. Randall Simonson, Mayor ATTEST: Anne Hurlburt,Administrator/Clerk Thomas F.Miller,Esq.* J.Vincent Stevens,Esq. tom@millerstevens.com vinceQmillerstevens.com MILLER 8� STEVENS, P.A. Paralegal: Legal Assistants: Erin E.Wilkerson "A General Practice Law Firm Since 1998" Krisrin Jensen erin@millerstevens.com Sara Giese *licensed in MN&WI July 10, 2012 VIA E-MAIL Anne Hurlburt,City Administrator City of Scandia 14727 209th Street Scandia, MN 55073 Re: Forest Lake Cable Commission Our File No. 12-S03-TFM Dear Anne: INTRODUCTION This letter relates to the Forest Lake Cable Commission ("Commission") which is a joint commission established by a Joint and Cooperative Agreement dated August 24, 2007 ("Agreement") under the provisions of Minnesota Statutes 238.08 and 471.59 as amended. The Agreement creating the Commission was entered into by the cities of Forest Lake, Scandia and Columbus and these three cities continue to be Members of the Commission. Capitalized terms not otherwise defined herein shall have the meanings given them in the Agreement. We have been informed that the City of Scandia and perhaps the City of Columbus are dissatisfied with either or both of (1) the operations of the Commission and (2) the expense attendant to participation in the Commission by each such City. Accordingly, the City of Scandia desires to consider withdrawing from or dissolving the Commission. Therefore, as you requested, this letter addresses the mechanisms for attempting to do so. I will also try to set out some of the considerations which might be pertinent to the Council's consideration of this action although as of this date I have not reviewed the existing or proposed new franchise ageement or any other of the ongoing matters under consideration by the Commission which relate to the City of Scandia. DISCUSSION As we discussed, the City's stated goal can be accomplished in one of two ways: (1) withdrawal from the Commission or(2) dissolution of the Commission. A. Withdrawal. Article X of the Agreement deals with the mechanism for the City of Scandia to withdraw from the Commission. The benefit to proceeding in this fashion is that no other City's approval or similar action is required for Scandia to withdraw from the Commission. However, there is a significant downside to utilizing this mechanism in that a two (2) year advance written notice must be given to the other member municipalities prior to the City of 26357 Forest Boulevard,Suite 6 �P.O.Box 807 �Wyoming,MN 55092 �(651)462-0206 �Fax: (651)462-3309 www.millerstevens.com Anne Hurlburt, City Administrator July 10, 2012 Page 2 Scandia's withdrawing from the Commission. Further, this Article of the Agreement goes on to set out the process for withdrawal including valuation and distribution of any property interest Scandia may have in the assets of the Commission in relation to other non- withdrawing Members of the Commission. B. Dissolution. Article XI of the Agreement provides the mechanism for the overall dissolution of the Commission. While this Article is much more brief in its process requirements, it appears that if properly followed, the dissolution of the Commission under this Article does not require a two (2) year waiting period and instead, can be completed almost immediately although subject to a six (6) month period for the sole purpose of winding up the affairs of the Commission. However, such a dissolution requires the affirmative agreement by 2 of the 3 members. Therefore, the participation of Columbus in dissolving the Commission is essential in order to avoid the time delays and other pitfalls of a withdrawal from the Commission. C. Resolution. Assuming that the City of Scandia still desires to remove itself from the Commission as quickly as possible, I believe that following the provisions of Article XI of the Agreement are most appropriate. Accordingly, I.have contacted the attorney for the City of Columbus to ask for its position on taking a similar action and I have prepared and herewith attach for your review a proposed resolution for consideration by the City Council. To move forward a similar Resolution will need to be adopted by Columbus or a Joint Resolution approved by both Cities. D. Considerations. Some matters which the Council may wish to consider in taking action on the attached or a similar version of the attached Resolution are: 1. The effect, if any, on the provision of cable services to current subscribers. 2. The modifications to the current franchise agreement which I understand are currently in process. While the Agreement provides that the existing cable ordinance remains enforceable by Scandia after dissolution of the Commission, it is not clear what will happen in terms of ongoing review and amendments and the cost of such revisions. 3. The net financial status of the Commission. Article XI, Section 2, provides that upon its dissolution, all remaining assets of the Commission after pavment of obli at� ions shall be distributed among the members in proportion of the percentage interest of each based on the percentage capital contribution. Further, to the extent Scandia and Columbus are deemed to be "withdrawn Members" Article XI, Section 2 goes on to provide that they shall be entitled to such property interest as permitted pursuant to Article X of the Agreement. Article X, Section 3 identifies the mechanism for valuation of the property interest of a Member on withdrawal and as importantly, provides that Scandia would continue to be obligated under any promissory note, guaranty, mortgage or other security instrument it has signed in connection with Commission indebtedness. Once again, I am not aware of whether or not this is an issue presently however, a financial review of the impact of dissolution on Scandia is imperative. Anne Hurlburt, City Administrator July 10, 2012 Page 3 4. The City's ability to gear up and staff up to handle oversight of the now local franchise agreement for the provision of cable services in Scandia. This presents a cost certainly and perhaps a time delay which should be considered in determining the most appropriate course of action in moving forward with this matter. This is of particular concern with respect to governmental access to and the overall availability of PEG and similar channels. As a smaller used, Scandia may not have the same bargaining authority as the Commission. If you have any questions or comments regarding the contents of this letter or the attached resolution please don't hesitate to contact me at your convenience. Very truly yours, MILLER& STEVENS, P.A. /s/Thomas F. Miller Thomas F. Miller TFM:sg Enclosures �� ,---�'� ,--"�.�; / � °°�.�. � t._, ` � ��; r� ,. a i � ��.��.�� Memo To: Mayor and City Council From: Anne Hurlburt,City Administrator Date: April 7,2011 for April 12,2011 Work Session Re: Forest Lake Cable Commission(FLCC�Update At the February 8,2011 work session,the Council received a report on the Forest Lake Cable Commission(FLCC)joint powers organization(JPO.) As a result of that meeting, Scandia appointed a subcommittee(Mayor/FLCC member Randall Simonson,Council member Chris Ness and Administrator/FLCC member Anne Hurlburt)to meet with their counterparts in the other two cities of the JPO(Columbus and Forest Lake.) The purpose of the meeting was to ensure that the governing bodies of the other cities are informed of recent issues and to discuss the future of the JPO. They were provided with a copy of the February 4,2011 memorandum outlining recent issues and Scandia's concerns about the FLCC. The meeting was held on March 30. Present were Scandia's 3 representatives,Columbus's representatives(Mayor Dave Povolny,Council member/FLCC member Denny Peterson and Administrator Elizabeth Mursko)and Forest Lake's representatives(Mayor Chris Johnson,Council member/FLCC member Jackie McNamara.) Also present were the remaining 2 FLCC members Steve Brunsberg and Sarah Chatwin,and 2 FLCC staff inembers(Rita Jelinek and Tim Schingen.) (The meeting was properly noticed to allow a quorum of the FLCC to be present.) Over approximately two hours of wide-ranging discussion,there seemed to be consensus on the following points: • The JPO and the FLCC and its programs have value for our communities. • The cities need to provide oversight and ensure that their representatives to the FLCC are active and engaged. • The cities seem to share the goal of improving public access to governmental meetings,for US Cable customers and a11 citizens. There seem to be advantages to addressing this together rather than each city going on their own. There is a sense that we are behind other communities in making this service available. 7/12/2012 Page 2 of 2 • There are advantages to working together as the cable franchise comes up for renewal. The needs of the community,improving service and technology,and possible enhancements to the fmancing for public access will a11 need to be considered. • Over time the leadership,management and talent needed far success of the FLCC have not been present at the same time. The current void in management must be addressed by the FLCC. • The FLCC and its staff will need to develop trust and good working rela6onships,which were damaged by recent issues concerning the potential move of its facilities and departure of the Access Coordinator. • The FLCC needs a work plan to move it through the current crises,to improve operating procedures and policies and to address the management and staffing issues. • Once those issues are addressed,there may be advantages to expanding to include other communities(such as Wyoming)which may bring additional resources. • The FLCC may need to more actively engage with the school district now that the Ranger 20 station has become such an important part of public access. � The FLCC may also need to open communications with U.S. Cable. In the past a representative attended meetings,but not recently. Anne Hurlburt From: Aaron Parrish [Aaron.Parrish@ci.forest-lake.mn.us] Sent: Wednesday, July 11, 2012 3:00 PM To: Anne Hurlburt; 'Elizabeth Mursko' Subject: Cable Commission Thoughts Good afternoon! I just wanted to pass along a few thoughts on the dissolution of the Cable Commission. First, I think the dissolution discussion is not timely in light of the ongoing process in place for to renew our respective franchise agreements. I think we can negotiate a more effective agreement collectively than separately. After sitting in the Government Focus group as part of the franchise renewal, it seems that the issues of interest are fairly similar from community to community. Since the franchise agreements are fairly long term in nature, it is in our collective interest to do it right and maximize the investment the commitment the Commission has made to date. It seems that delaying the dissolution until the negotiations have concluded and new franchise agreements can be adopted would be a minimum expectation. Second, in the event of a dissolution there are some fairly significant liabilities that need to be accounted for. Based on my preliminary review of the joint powers agreement, I believe any liabilities associated with the dissolution would be shared on an equal basis by each member. This would be offset by the sale of equipment which I would presume is fairly negligible. Workers compensation for the displaced employees and the remaining four years of rent under the Commission's existing lease are likely the biggest obligations. Lease obligations could be up to$100,000 or lower depending on the ability to break the lease,sublease the space,or negotiate a mutually beneficial separation with the building owner. Third, I do believe there is value in the programming that is provided. In the absence of a partnership, I do not think this is samething we would be able to sustain individually. Bringing the staff in house is not an option for us based on our iabor structure. Perhaps a non-profit could be created that we have a service agreement with, but ultimately this would seem to present its own set of challenges. I think there are lots of opportunities to reach a broader audience through the use of technology and other improvements to be made. It seems that Sarah has made initial efforts in that regard and with time perhaps things could evolve further. We do value the partnership and hope that your respective cities considering maintaining the current collaboration. Feel free to touch base with any questions. Take care. �,�, �� `ares� ��e ,�� :.��:�� u��s Aaron Parcish, City Administrator City af Forest Lake 22Q Lake Street North Forest�ake, MN 55025 Ph: 651-209-9750 Fax: 651-464-4968 € ,. ,, � �,: 1 �.�� ---- —� -�,- JU� 1 � 201� Lakes Area Comm ��TY c��r� � �� Cable Channels LATV 10 and Ranger 20 � Brought to you by the Forest Lake Cable Commission Studio and office located at 24260 Greenway Ave. N. Suite C, Forest Lake, MN 55025 Phone: 651-464-1142 Fax: 651-464-8546 Website: latvten.com Report to the City Of Scandia By Sarah Chatwin, Access Coordinator, Lakes Area Community Television. Dear Mr. Mayor and Councilmembers, I started in January of this year and work part-time reporting directly to the Forest Lake Cable Commission,a joint powers organization established by Cities of Columbus, Forest Lake, and Scandia. The joint powers organization is responsible for regulating Lakes Area Community TV. The joint powers have two representatives from each city, so there is equal representation. I understand that you are considering the possibility of pulling out of the joint powers. I hope this will not take place. For many, many reasons. The First reason -We are a community station for all the communities! It would extremely unfortunate if cities decided to just film their own meetings. We do this now and we take it very seriously—filming city meetings should be and is our most important shoot. We have good, reliable people to do this and the necessary equipment. With franchise renewal we are hoping to provide even better content with the possibility of upgraded equipment for each city hall. But we do much more for this community —we promote partnerships,togetherness and outreach. People want to know what is going on in their area—Columbus, Forest Lake and Scandia, and we provide this service on the web and on the channels. As communities we have LATV channel 10, where we air government meetings and post them on demand on the website. We promote all the communities throughout the area by airing positive community happenings, events and public service announcements. Citizens can find out about events in all three cities—by checking our website or watching the channels. They can go to Scandia Taco Daze or Gammelgarden Museum or Meister's classic car show with their family. Our station signal currently reaches approx. 4500 households in the area. Working with the Forest Lake Area Chamber of Commerce we let citizens know about businesses in the communities. We have aired segments on Scandia Cafe, Meisters and Scandia Heating and Plumbing. Finally, we also air church services. This really benefits those not able to attend—seniors, especially, count on this programming. On Ranger 20 we promote our area schools including Scandia Elementary. Families in Scandia- their kids may attend St. Peters, Lakes International, and later the junior highs and the high school. People like to watch and see all the great things these schools are doing. We promote this whole area as having great schools for growing and learning. **We know that citizens reside and remain in the area when they are satisfied and excited about their children's schools. Citizens can follow the school board meetings on the web, can watch u-tube videos and can find out about events in the schools. They can also purchase DVDs of all our community and educational programming. **We are currently exploring our options to stream meetings live and also stream our community channels to the web. We of course already offer video-on demand and I would look at providing this directly to the cities' websites. Second—This is very unfortunate timing. We are far into the franchise renewal process. The joint powers have gone forward in good faith. As a team the board was in agreement and determined about the goal of providing the best franchise agreements for all three cities. We are working hard as a station staff and the Commission is working hard as well. Having the necessary budget, the Commission was able to make an educated choice on a law firm. It was decided to do a franchise fee review -to make sure that Midcontinent, and before them US cable, were paying the cities accordingly. Working as a team, as partners, the Commission has more bargaining power with the cable access provider. If Midcontinent finds out that disbanding the joint powers will happen or is a possibility, every city stands to loose. In the future, if there is no Commission, you will be negotiating with this cable provider and will have these expenses to pay. The Commission agreed, in the proper manner of franchise renewal, to do their due diligence. As the cities are aware, a PEG assessment was approved for the station. An RFP was sent out and after consideration,the Commission contracted with Holly Hansen Consulting ($7500) to examine equipment, and make equipment recommendations for a draft franchise renewal. Holly met with Commission and staff. The needs of all three city halls were examined. Staff organized focus groups. We had a government focus group, a community focus group—with 15 members strong, and an educational focus group. We had community leaders attend from throughout the area. From Gammelgarden, Columbus Lions, Youth Service Bureau, VFW, Community Helping Hand, Forest Lake Area Chamber of Commerce and so on. They are behind the station and very supportive. So are our education leaders from the district and other elementary schools. We received great ideas and really constructive feedback! Holly's report and the money spent will be a waste if the station does not have the opportunity to follow-through. #3—There are other obligations—the station currently is in the beginnings of a five-year lease contract. There are also obligations to current staff. #4—We are currently working with a small budget-based on a 15-year old franchise agreement. But look at what we accomplish! We hope to stay, and with new franchises and increased subscribership—we have gained the last four months, in a row, and by 75 subscribers in May alone for all cities. We hope to have a good renewal and this will only enhance the services we provide. #5—We are providing great community service as a station: The station sees the possibility of community sponsorship with Midcontinent. This would benefit communities but also promote our local access television station and the cable provider as a viable option to satellite. This June the station organized high school scholarships for area students. Midcontinent provided the scholarship ($500 for each student) and we provided the two students with engraved awards, with help from a local business. That local business was happy to give us a discount and also purchased a sponsorship package for the high school graduation program and DVD that was made available to families. We also partnered with area�rst responders and the high school on a very worthy anti-drinking and driving show. The Mock car Crash show was shown to every junior and senior in the entire high school. To kids that you know and live in this area! We have this program up on our website for families to view. This show has been nominated for a MACTA (Minnesota Association of Community Telecommunications Administrators) community television award. We worked with local businesses and got sponsorship to provide this DVD to other area schools, the YSB, and local driver's education programs for example. We are also planning to have copies available at city halls for families to come and obtain a free copy of this valuable DVD. #6—Acting as a liaison between the cities and Midcontinent. Explain call from citizens and petition. The station also fields calls from area citizens about cable, channels, station programming and access. #7—We have a history,we have recorded yours! This station has served the area since 1985. We have an historical archive of DVD programming—of local past events that have occurred in the area. We are established. What will happen to this library? What does the City of Scandia provide financially? The City of Scandia gives its franchise fees, received from Midcontinent Communications, to the station. This past month (June) the City received $660 from Midcontinent. (This amount fluctuates depending on subscribership.) Using this as an approximate amount for the year, then, Scandia will provide the station with approximately $7,920 to operate. We have a current 2012 budget of$169,925. $16,000 of this has been included from our savings to pay for franchise renewal this year. From Midcontinent, our station receives PEG Fees for having an access station. This is based on the number of cable subscribers in the area. We receive 70 cents per subscriber. Subscribership has been up in Scandia for the past three months. Currently there are 201 subscribers, so we received$140 directly from Midcontinent. Only the station can receive PEG fees to operate a local access station— a city cannot. Remember, we serve all three cities by operating an extensive website of government meetings on demand, community videos and public service announcements. You do not have to be a cable subscriber to view the information on this site. We hope to provide more content directly to a city's website in the future, if requested. Another goal is to have our programming schedule for both channels printed in the paper. To do this we would look at business sponsorship for our TV guide. ***********�***************************�x�**************************************** Please, I ask that you take great consideration before moving forward. If you have any questions, please do not hesitate to contact me. Thank you so much. Sarah Chatwin 651-464-1142, cell: 651-245-0557 August 24, 2007 JOINT AND COOPERA.TIVE AGREEMENT TOR:EST LAKE CABLE COMMISSION The parties to this Agreement are government�l units of the State of Minnesota. This Agreement supersedes any prior Agreemeni between the parties covering the establishment of a Cable Coinmunications Commission and is made pursuant to Minnesota Statuies §238.08 and §471.59, as amended. I. PURPOSE Tl1e genera] purpose of this Agreement is to establish an organization to monitor the operations and aetivities of cable communications and related cominunications matters, provide coordination of administration, enforcement and renewal of the franchises of the Members, and to conduct such other activities authorized herein as may be necessary to protec#the interests of the Members and its citizens with respect to the delivery of cable communications and related communications matters. II. NAME The name of the organization is th Foa-est Lake Cable Commission. III. DEFINITIONS SECTION 1. Definitions. For purposes of tliis Agreement, the following terms, phrases, �vords and their derivations shall have the meanings given herein. When not inconsistent with the context, tivords used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. The word , • , . �o��x3��s 1 � , "shall" is mandatory and "may" is pennissive. Words not defined shall be given their common and ordinary meaning. SECTION 2. "Board of Directors" or "Board" means the governing body of the Cornmission. SECTION 3. "Commission" means the organization created pursuant to this Ag►'eement. ' SECTION 4. "City" or "Cities" or"Municipalities" means any city or township. SECTION 5. "Director" means a person appointed by a Member City Council to be one of its representatives on the Commission. S�CTION 6. "Member" or "Member Municipality" means a municipality wliich enters into ihis Agreement and is, at the time involved, a Member in good standing. SECTION 7. "Eligible Member" means a municipality within the Cable Service Teiritory that may, if it so acts, adopt this Agreement and become a part of this Commission. IV. ELIGIBLE MEMBERS The Municipalities of the City of Forest Lake, and City of Scandia and the City of Columbus are eligible for Membership in the Commission. Other Municipalities desiring to become Members may be admitted by an affirmative vote of at least two-thirds (2/3) of the total eligible votes of the Commission and the payment by that municipality of such contribution as detei7nined by the Commission to be applicable at the tirne the Member is approved. V. DIRECTORS . SECTION 1. Qualifications/Appuintment. The City Council of each Member shall be entitled to appoint by resolution two (2) Directors, at least one of whom shall be a member of the 10l6&39v5 2 Council of that municipality and the other a c�ualified voter residing within the municipality. If a Director is a City Council member when appointed but subsequently ceases to be a City Council member prior to the expiration of the Director's term, the Member shall have the option to either allow said Director to serve out the remainder of their appointed term or appoint a sitting member of its City Council to serve out the remainder of the Director's term. When the City Council of a Member appoints its Directors, it shall give notice of their appointments to the Commission. Notices shall include the name and mailing address of the Director which shall be deemed to be tlie officia] name and address of tllat Director for the purpose of giving any notice rec�uired under this Agreement. SECTION 2. Term. Each Director shall be appointed for a term of two (2) years. A Director shall serve at the pleasure of his or her City Council. SECTION 3. Voting. There shall be no voting by proxy. All votes must be cast in person at Commission meetings by the Director or Directors. Each Director shall be entitled to one (1)vote. A Director shall not be eligible to vote on behalf of his or her Member Municipality during the time that said municipality is in default on any contribution or payment to the Commission. In the absence of one Director of a Member City from a meeting or the abstention of one Director from voting, the Director of that Member City that is present may cast all of the votes of that Member City. Abstentions by both Directors from a Member shall not be considered authorized votes cast. SECTION 4. Compensation. Directors shall serve without compensation froin the Commission, but this shall not prevent a Member from compensating its Directors if compensation by that Member is otherwise authorized by law. 1016839�� SECTION 7. Absences. If a Director of a Member has faur(4) consecutive absences from full Commission meetings,the Member shall be notified in writing. VI. OFFICERS SECTION 1. Number/Election. The o�cers of the Commission shall consist of a Chair, a Vice Chair, a Secretary, and a Treasurer, all of whom shall be elected at the annual meeting of the Commission held in February of each year. New officers shall take office at the adjournment of the annual meeting of the Commission at which they are elected. Only Directors of the Comrnission are eligible to serve as officers. SECTION 2. Chair/Vice Chair, The Chair shall preside at all meetings of the Commission and shall perform alt duties incident to the office of Chair, and such other duties as may be delegated by the Commission. The Vice Chair shall act as Chair in the absence ofthe Chair. SECTION 3. Secretary. The Secretary shall be responsible for keeping a record of all of the proceedings of the Commission. The Secretary sha11 send written notice and material pertaining to agenda items and meeting minutes to each Director, and the most current draft of the last meeting minutes and proposed next meeting agenda to each City administrator, at least five (5) days prior to the meetings. SECTION 4. Treasurer. The Treasurer shall conduct the financial affairs of the Commission and such other matters as shall be delegated by the Commission in coordination with the Member assigned to handle the Commission's accounting functions (see Article IX Section 3). In conducting the Commission's financial affairs,the Treasurer shall, at all times,act in accordance with generally accepted accounting principles. 1016839v5 4 VII. MEETINGS SECTION 1. By-Laws. The Commission shall adopt By-Laws, consistent with the provisions of tl�is Abreement, governing its procedures including time, place, notice requirements, and fi•equency of its regular meetings,the procedure for calling special meetings and other matters as are required by this Agreement. SECTION 2. By-Law Amendments. The Commission may amend the By-Laws from time to time. Amendments to the By-Laws may be adopted by a majority vote. The Commission shall take no action to amend the By-Laws without ten(10) days prior writien notice to each Director. An amendment to the By-Laws shall be filed with each Member and said By-Laws shall not be effective as amended until the seventeenth (17th) day following the filing of said amendment with the Members. An amended By-Law shall be deemed to have been filed on the day said By-Law is either delivered to the City offices of the Member or deposited in a United States mailbox in an envelope addressed to the City offices of the Member. SECTION 3. Voting/Quorum. The presence of four(4)Directors shall constitute a quorum of the Commission. No business shall be conducted without a quorum. Unless otherwise provided in this Agreement, no action shall be taken unless a quorum is present and the action is voted for by a majority of the total votes cast by the Directors present and voting at the Commission meeting, except that less than a majority may adjourn a meeting. VIII. POWERS, RIGHTS, AND DUTIES OF THE COMMISSION SECTION 1. rranchising Authority. The Membex Municipalities shall retain their fi•a�lchising authority to the extent that such authority is not delegated to the Commission in this Agreement. ]O1b839v5 5 SECTION 2. Authority. The Comnnission shall study cable communications and r�elated communications matters, administer renewa] proceedings, dc•afi a franchise ordinance, and recommend that each City Council represented on the Commission grant a standard frai�chise ordinance as draf[ed by the Commission. The Commission shall be the entity responsible for the ongoing administration and enforcement of the franchises. Tlie Commission may do all things reasorrably necessary and proper to the implementation of its powers and duties, including those powers set forth in this Article. As part of this process, the Commission shall seek input from all Member Municipalities and communicate the progress of the Commission to each Member City on a regular basis. SECTION 3. Needs Assessment. The Commission, at its discretion, shall compile, make pt�blicly available, and approve a Needs Assessment Report relating to tl�e renewal of a franchise under 47 USC§546. SECTION 4. Grant of Competitive Franchises. The Commission shall consider the grant of competitive franchises to qualified applicants in accordance with local, state and federal law. The Commission shall conduct the franchise procedure required pursuant to Miru�. Stat. � 238.081 including the public hearing required pursuant to Minn. Stat. § 238.081 subd. 6. Tlle Commission shall thereafter recommend a draft franchise ordinance for consideration by each Member City Council. SECTION 5. Adoption of Recommended Franchise Ordinance. The Commission shall prepare, adopt, and recommend a sample ordinance granting a qualified cable commui�ications company a non-exclusive cable communications franchise (hereinafter "franchise ordinance") to construct, maintain, operate, or manage a cable communications system encompassing all of the territory of the Members. 1016839r5 6 SECTION 6. Administration/Enforcement. The Commission shall administer and enforce ihe cable communications franchise ordinance or it may delegate the fi•anchise ordinance enforcement and administration to its Members. SECTION 7. Rates. To the extent allowable under federal and state law,the Commission shall review and approve or disapprove changes in rates charged by tlie cable communications company. SECTION 8. Contracts. The Commission may make such contracts as are reasonably necessary to accomplish the purposes of the Commission, including, but not limited to, contracts related to the provision of community access programming. SECTION 9. Consultants. The Commission may retain the services of technical consultants and legal counsel to advise it in accomplishing the purposes of the Commission. SECTION 10. Advisory Committee. The Commission may appoini an advisory committee to make recommendations to it on cable communications. The duties of such committee shall be set forth by the Commission. SECTTON 11. Gifts/Grants. The Commission may accept gifts, apply for and use grants and may enter into a�reements required in connection therewith, and may hold, use, and dispose of money or property received as a gift or grant in accordance with the terms thereof. SECTTON 12. Legislative Activities. The Commission may submit written comments on rules, regulations, or legislation regarding cable communications proposed by or before the Federal Communications Commission, other regulatory agencies, the Minnesota Legislature, or any other state or federal body. The Commission may also direct its representatives to appear and testify on cable communications before any governmental body. 1016839v5 7 SECTION 13. Tnvestigation. With the approval of a majority of the Commission, Directors rnay be authoi•ized to investigate lhe operation of cable communications systems in other cities in Minnesota or elsewhere, and the expenses of traveling and subsistence of Directors in makin� any such investigation shall be borne by the Commission. SECTION 14. Othcr Actions. The Commission may exercise any other power necessary and incidental to the implementation of its powers and duties as set forth in Anicle I. SECTION 15. Other Laws and Regulations. This Agreement, all Commission activities, and any franchise ordinance adopted or fi•ancllise granted by the Member Municipaiities shall be subject to all local, state, and federal laws and regulations. SECTION lb. Conflict Resolution. In the event of an unresolvable dispute between a Member Municipality and the grantee of any franchise granted pursuant to this Agreement, tlie Commission shall act as an appeal Board and use its best efforts to assist in the resoluiion of the dispute. SECTION 17. Publication/Effective Date. The franchise ordinance recommended by the Commissiol� sliall Ue sent to the Member Municipalities for their adoption. The recommended franchise ordinance, if adopted, shall be executed and published accordin�to the requirements of eacl� Member Munieipality. IX. FINANCIAL MATTERS S�CTION l. Fiscal Year. The fiscal year of the Coinmission is the calendar year. SECTION 2. Budget Process. Each year the Commission shall prepare an annual budget which shall be approved by the Member Cities. The Commission's annual operating expenses, including the percentage of fi-ancllise fees required to be paid to the Member Cities, sllall not exceed the fi•anchise fees and other revenues collected by the Commission. Howevet•, 1016S39v5 g any revenues obtained from ordinance amendments, variances, or oiher extraordinary items, shall not be considei•ed part of tlie annual budgei unless approved by the Commission. The annual budget shal] be submitted to the Member City Councils on or before August 1 of each year. No . budget shall become effective unless approved by resolution of the City Councils of the Member Municipalities. The proposed budget must be approved by each Member City Council within forty-five (45) days afier its submission to the Meh7ber Municipalities. A Municipality having an objection to the Commission's proposed bttdget shall submit any such objection in writii�g to the Commission within tl�e forty-f ve (45) day period, and failure to do so shall be deemed a positive vote for the proposed budget. SECTION 3. The Commission shall contract with one of the Members to administer the funds of the Commission, perform clerical functions for the Commission such as, accounting, record keeping, maintaining of accounts, bank accounts and perform other administrative duties which the Commission may specify. AI! funds of the Commission shall be handled in this matter and the Commission shall tiot collect monies or disburse funds on its own behalf. All expenditures of the Commission shal] be made by and to the Member which contracts with the Commission for fiscal management. Such Member shall serve in this capacity for a period of two years at which time the Member may agree to continue for another term or another Member must assume the role on behalf of the Coinmission. SECTION 4. Expenditures. The Cominission may expend its funds as it deems necessary and appropriate pursuant to this Agreement. The Commission will work with the Member assigned to handle the Commission's accounting fiulctions when disbursing funds. SECTION 5. Annual Audit. The Commission's financial books and records shall be audited or i•eviewed by an independeni financial ldvisor and approved by the Commission at ioibs39�> � lease once every two years, or at such other times as the Commission may direct. A copy of the audit report shall be given to each Member. Commission's books and records shall be available � for and open to examination and copying of the Members and respective representatives at ali reasonable times. SECTION 5. Franchise Fees. The franchise ordinance adopted by the Member Municipalities shall provide that the Members st�a9l collect all fxanchise fees paid by the cable communications company. Each member shall remit 88% of the franchise fees received to the Commission to fund the Commission's annual budget. Should one or more Members withdraw from the Commission the remaining Members shall consider whether this Section 5 should be revised, SECTION 6. Annual Report. The Commission shall submit to the City Council of each Member an Anrnial Report. This report shall contain the results of the annual audit, a summary of the past year's activities, and a discussion of the Commission's plans for the coming year. Tl�e report shall be submitted to the City Council of each Member on or before August 1 of each year. X. WITHDRA.WAL SECTION 1. Withdrawal. Members have the option to withdraw from the Commission upon two (2) years advance written notice to the other Member Municipalities of the Commission.. Should any Member withdraw from tl�e Commission hereinafter referred to in this Ariicle X as a"Withdrawing Member,"the Withdrawing Member shall be entitled to its portion of future Franchise Fees as well as its portion of any future public,educational and governmental programrning support, equipment or equipment grant fiinding required of any franchised cable operatoi•. A Withdrawing Member shall also retain title to any equipment provided by the �n��s39�-s 10 Commission that may be located in the Withdrawing Member's City Hall for cablecasting City Council meetings. Except as provided in Section 3 of this Article X, a Withdrawing Member shall not be entitled to any other assets of tlle Commission, use of the Commission's equipment and facilities nor access to any future programming provided by the Commission. SECTION 2. Withdrawal Process. A Member may withdraw from the Commission by giving to the Chair of the Commission a certified copy of the resolution of such Withdrawing Member's City council indicating its iatent to withdraw from the Commission (hereinafter such notice is referred to as a"Withdrawal Notice"). Upon receipt of the Withdrawal Notice, the Chair of ihe Commission shall forward a copy of the Withdrawal Notice to eacl� of tlle Directors. The withdrawal shall become effective two years from the date such Withdrawal Notice is given (the"Withdrawal Date"). Any attempted withdrawal by a Member which is not done in compliance with the provisions of this Section 2 shall not be effective and shall not relieve such Member of its respective obligations to the Commission set forth herein. SECTION 3. Property Interests of Members on Withdrawal. From and after the Withdrawal Date, the Withdrawing Member shall no longer be entitled to representation on the Commission or to any future assets of the Commission, except for: (i) its right to receive its proportionate share of the proceeds from any subsequent sale of the real property and building owned and used by the Commission as of the date of this Agreement, if any (collectively, ��) "Property"), as such distribution is calculated and limited by the provisions of this Section 3; ►i its proportionate share of future Franchise Fees and other programming support and equipment grant funding described in Section l of this Article X above; and (iii) its respective rights to any equipcnent provided by the Commission to ihe Withdrawing Member as described in Section 1 of this Article X above. ll 1016839v> Upon receipt of a Withdrawal Notice, the Commission and the Withdrawing Member shall establish the fair market value of the Property as of the Withdrawal Date, by written consent of the Withdrawing Member and the Commission {"Withdrawing FMV"). In the event the Withdrawing Member and the Commission are unable to reach mutual agreement within a period of ninety (90) days following ihe delivery of the Withdrawal Notice, the faix market value of the Property shall be conclusivel}� determined by appraisal conducted by an experienced appraiser acceptable to the Withdrawing Member and the Commission. If an appraisal of the Property is necessary and the Withdrawing Member and the Commission are unable to a�ree within one hundred twenty (120) days following the date of delivery of the Withdrawal Notice upon a single appraiser for the Property, the Withdrawing Member and the Commission shall each choose an appraiser, who together shall choose a third appraiser, each of whom shall appraise the Propei•ty as of the W ithdrawal Date. The average of the three appraisals shal] be the Withdrawing FMV. The costs of any appraisals required by this paragraph shall be paid by the Withdrawing Member. The VJit]Zdrawing Member shali be entitled to receive (following the subsequent sale of the Property and thereupon solely out of the proceeds derived therefrom) the Withdrawing Member's proportionate share (detennined by dividing the Withdrawing Member's cable subscribers as of the Withdrawal Date by total cable subscribers of a!1 Members as ofthe Withdrawal Date) of the Net Distributable Sales Proceeds (as hereinafter defined). For purposes of the foregoing calculation,"Net Distributable Sales Proceeds" means Withdrawing FMV minus{i)the amount of all indebtedness of the Commission as of the Withdrawal Date which is secured by the Property; and (ii) an amount equal to 10% of the Withdrawing FMV, said amount representing the reasonably anticipated costs of sale of the Property. The Withdi•awing Member's proportionate sllare of the Net Distributable Sales Proceeds shall be distributed in 1016839v� 12 accordance wit11 Article XII, Section 2. In the event the actual sales price of the Property is less than the Withdrawing FMV, the actual sales price shall be substituted for the Withdrawing FMV in calculating Net Disti•ibutlUle Sales Proceeds. Notwithstanding tlie fot�egoing, the Withdrawing Member shall continue its obligations and maintain its proportionate share of liability it has under any promissory note, guaranty, mortgage or other security insirument in connection with the Commission's indebtedness resulting from the purchase of t11e Property, unless otherwise agreed to by the respective lender or secured party. Upon withdrawal from the Commission,the Withdrawing Member shall have no authority and shall make no determinations regarding the sale of the Property or ihe price related thereto. XI. DISSOLUTION SECTION 1. Dissolution of the Commission. The Commission shall be terminated and dissolved by mutual agreement by two-thirds (2/3) of the Member Municipalities (i.e., if there are three (3) Members, two (2) must agree to dissolution). SECTTON 2. Distribution of Assets. Upon dissolution of the Commission, all remaining assets of the Commission, after payment of obligations, shall be distributed among the then cunent Members in proportion to the percentage interest of each then current Member based on ti�eir percentage capital contribution of the total contributions made to the Commission and in aceordance with procedures established by the Commission. Any withdrawn Members shall be entitled to sucl� property interests as permitted pursuant to Article X. The Commission shall continue to exist after dissolution for sucl� period, no longer than six (6) months,as is necessary to wind up its affairs, bui for no other puipose, ,oi�s34�s 13 SECTION 3. Effectiveness of Ordinance after Dissolution. The franchise ordinance shall provide that upon the dissoluiion of the Commission by operation of state or federal law, the ordinance shall remain effective and enforceable by each individual Member within its territorial limits. XII. EFFECTIVE DATE SECTION l. Execution of Agreement. A Municipality may enter into this Agreement by resolution of its council and the authorized execution of a copy of this Agreement by its authorized officers. Whei•eupon, the clerk oi•otl�er appropriate officer of that Municipality sllall file a duly executed copy of this Agreement together with a certified copy of the authorizing resolution with the Commission. SECTION 2. Effective Date. This Agreement is effective on the date when executed and the authorizing resolutions of the tlu•ee (3)Municipalities named in Article IV of this Agreement have filed as provided in this Article. SECTION 3. P�•evious Agreement Superseded. This Agreement,when effective, supersedes all previous agreements between the Members hereto establishing a joint cable communications commission. IN WITNESS WHEREOIj, the undersigned Municipalities have caused this Agreemeni to be signed on their behalf. DATED: CITY OF POREST LAKE 9 .� BY a. Its: Manaber/Clerk It . ayor DATED: I� �3— v7 CITY OF SCANDIA 1016839v5 1 4 C � �� , � ,-�' �� ✓ �:G' ��t-P�i.-jC-�..�'1`�_. B Y lts; Manager/Clerk lts: Mayor DA7'ED: �I��jG'"�UD�I CITY OF COLUMBUS � �i.� �✓1 v��, gy —� (.C,,f�c.,�J Its, M n ger/Clerk Its: Mayor 1016839vi 1 5