HomeMy WebLinkAbout02-23-1999
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kFebruary 23, 1999
Agenda Packet
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AGENDA AWId11b•-=!
CITY OF DENTON CITY COUNCIL
February 23, 1999 1`116
After determining that a quorum Is present and convening In an open meeting, the City Council
will convene in a closed meeting of the City of Denton City Council on Tuesday, February 23,
19;9 at 5:15 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney, Denton,
Texas at which the following items will be considered:
L Closed Meeting:
A. Conference with Employees - Under TEX, GOV'T• CODE Sec. 551.075. The
Council may receive Information from employees during a staff conference or
briefing, but may not deliberate during the conference.
B. Consultation with Attorney - Under TEX. GOVT, CODE Sec. 551.071 (1) and
(2).
Consider and consult with the City's attcrneys, including outside legal counsel,
concerning contemplated litigation to prevent the formation of, or certain action
by, including annexation by Denton County Fresh Water Supply District No. S of
any other Denton County Fresh Water Supply District, within the city limits or
extraterritorial Jurisdiction of the City of Denton, Texas, including, without
limitation, the initiation of an injunction or declaralory judgement action by the
City; or the intervention into pending litigation styled Ciry ojFrOco, Texas v.
Denton County Fresh Water Supply District No. S, Cause No. 366.185.99 in the
366u' Judicial District Court of Collin Co,:nty, Texas; and receivs advice on said
contemplated and pending litigation and related matters from these attorneys
where the Disciplinary Rules of Professional Conduct of the State Bar of Texas
require the attorneys to give their advice in private.
C. Deliberations Regarding Real Property - Under TEX. GOV'T• CODE Sea
551.072,
Consider and discuss the valuation and the possible sale, transfer, or other
divestiture of real property pertaining to the City of Denton's electric utility system,
Including, without iimitation: the Gibbons Creek generation facility located in
Grimes County, Texas; the Spencer generation facility located on Spencer Road In
Denton, Denton County, Texas; the hydroelectric facilities located in Denton
County, Texas; other component facilities of the City's electric transmission and
distribution system,
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ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A
CLOSED MEETING OR ON INFORMATION RECEIVED IN A CONFERENCE WITH
EMPLOYEES WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN i,
COMPLIANCE WITH TEX. GOV'T• CODE CH. 551• THE CITY COUNCIL RESERVES
THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS ( !
AUTHORIZED BY TEX, GOVT. CODE SEC. 551.001, ET SEQ. (TEXAS OPEN
MEETINGS ALT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO
RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED
MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN
MEETINGS ACT, INCLUDING, WITHOUT LIMITATION SECTIONS 551,071.151.085 OF
TH E OPEN MEETINGS ACT,
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City of Denton City Council Agenda
Februa,y 23, 1999 j
Page 2 i
Work Session of the City of Denton City Council on Tuesday, January 26, 1999 at 6:00 p.m. in
the Council Work Session Room at City Hall, 213 E. McKinney, Denton, Texas at which the
following items will be considered:
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NOTE: A Work Session is used to explore matters of interest to one or more City Council
Members or the City Manager for the purpose of giving staff direction into whether or not such
matters should be placed on a future regular or special meeting of the Council for citizen input,
City Council deliberation and formal City action. At a Work Session, the City Council generally
receives informal and preliminary reports and information from City staff, officials, members of
City committees, and the individual or organisation proposing council action, if invited by City
Council or City Manager to participate in the session. Participation by individuals and members
of organizations invited to speak ceases when the Mayor announces the session is being closed to
public input. Although Work Sessions are pubiie meetings, acid citizens have a legal right to
attend, they are not public hearings, so citizens are not allowed to participate in the session
unless invited to do so by the Mayor. Any citizen may supply to the City Council, prior to the
beginning of the session, a written report regardin;; the citizen's opinion on the matter being
explored. Should the Council direct the matter be placed on a regular meeting agenda, the staff
will generally preparo a final report defining the proposed action, which will be made available
to all citizens prior to the regular meeting at which citizen input is sought, The pwpose of this
procedure is to allow citizens attending the regular mec;ing the opportunely to hear the views of
their fellow citizens without having to vend two meetings.
1. Receive a report and hold a discussion regarding the results of the 19991000 budget pi Zrity
qu:stionnaire with City Council.
2, Receive a report, hold a discussion and give staff directfon regarding the transfer of the Cable
Television franchise.
3, Receive a report, hold a discussion and give staff direction regarding the Introduction,
Population Forecasts, and Growth Management Strategy sections of the Draft
Comprehensive Plan.
Following the completion of the Work Session the Council will convene into a Special Called
Session to consider the following:
I, Consider approval of a resolution nominating members of the Appraisal Review Board of the
Denton Central Appraisal District; and declaring an effective date.
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2, Consider adoption of an ordinance fixing and determining the general service rate to be
charged for sales of natural gas to residential and commercial customers in the City of
Denton, Denton County, Texas; providing for the manner in which such rate may be charged;
approving the commercial rates for public school gas services; providing for weather '
normalisation clause; providing for a schedule of service charges; providing for a main line i'.
extension rate; providing an Open Meetings clause; and providing an effective date clause,
3. New Business
This item provides a section for Council Members to suggest items for future agendas.
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City of Denton City Council Agenda
February 23,1999
Page 3
4. Possible continuation of Closed Meeting under Sections 531.071-351.085 of the Texas Op,
Meetings Act.
5. Official Action on Closed Meeting items held under Section 551-071451.083 of the Texas
Open Meetings Act.
CERTIFICATE
1 certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of , 1999 at o'clock
(a.m.) (P.m.)
CITY SECRETARY
NOTE. THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT, THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS N ADVANCE OF THE SCHEDULED MEETING.
PLEASE CALL THE CITY SECRETARYS OFFICE AT 349.8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1.800-
RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED
THROUGH THE CITY SECRETARY S OFFICE.
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AGENDA INFORMATION SHEET A - M,
AGENDA DATEt February23, 1994
DEPARTMENTt Finance
CM/DCM/ACMr Kathy DuRose, Assistant City Manager of Fiscal and Municipal Services
SUBJE~
Receive a report and hold a discussion regarding the results of the 1999.2000 budget priority
questionnaire with City Council
BACKGROUND
Please find attached the results of the 1999.2000 budget priority questionnaire. Responses from
each questionnaire have been tabulated and ranked in two formats. The first format ranks
responses from highest to lowest by response priority, while the second format ranks responses
from highest to lowest by effort rating. You will also find attached a summary of your responses
regarding specific policy Issues.
By referencing the scale at the top of each page, the effort rating indicates thi avenge level of {
effort the City Council would like in regards to a specific service area. The priority of response f
Indicates a priority rank of I through 7 (1-low, 7-high) for each service AMC For example,
suppose the effort rating for litter programs was a 4 (continue current effort), and priority of
response was a 7 (high), this combination would indicate that Council was astisfied with the
City's current effort in titter programs although it was establishing a high priority for this service
area.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
Not applicable.
FISCAL tNFORMATION
Not applicable.
EXHIBITS (If applicable)
Budget priority questionnaire results.
Res fully au itt
6Y~ ~ ~ (1t' \ o
!on ortune t
Director of Management and budget
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RESULTS OF THE CITY COUNCIL
19992000 BUDGET PRIORITY QUESTIONNAIRE
EFFORT RATING VALUE
No Opinion 0
Eliminate Current Effort _ 1
SubstanCall Reduce Current Effort 2
Reduce Current Effort _ 3
Continue Current Effort 4
Increase Current Effort 5
Su"" nbally Increase Current Effort 8
Initiate New Effort 7
RANKED BY EFFORT RATING
PRIORITY OF
RESPONSE
EFFORT 11•LOW;
RATING 7 • HIGH
Public Transportation iSPAN, etc 1 5.43 5.88 j
Street Malmonence/Re air 5.29 8,7T
Employee Pa Plan Adjustments/Benefits 5.29 8.14
Airport Development 5.29 5.86
Libre Expansion 5.29 5.88
Street Construction !Rebuildm 5.14 6.71 {
Storm Drainage Improvements 5.14 8.29
Infill Policy Development 6100 5.88
Contributions to Human Service Agencies 5.00 5.57
Economic De-relo mans • Business Retention 5.00 6.29
Community Oriented Policing ICOPSI 4.86 6.67 +
New Parks Park Expansion fin Nai hborhood, Community) 4.86 5.71 9
Groenbelt System Planning Development 4.86 5 43
Airport Marketing 486 519
Drug AbusalEnforcoment Pro rams 4.71 8.00
City Beeutifiesilorl (Parks, Facilities Medians) 4.71 5.86
Workforce Oiversit 4.71 8.43
Traffic Si nafi:etionlEn Ineerin 4.71 5.43
l Youth Recreation Programs 4.71 5.29
Library YouthlChildren's Programs 4,71 5.29 j
Sic cls/Hikin Trail Development 4.71 6.14
Eco, Dev, • Develop DISD Relations In Re erds to Coheslve Comm. Policies 4.71 5,00
Library Reference Services 4.71 4.88
Economic Development • Small Business Assistance 4,71 4.71
Eco. Dev. • City Merketin E:i'urts (Brand Imo e, Commercial, international) 4.71 4,57
Children Oriented Sa!ety Program,, 4.57 6.00
Employee Tramin Devolo ment 4.57 5.57
Now Athletic Fields 4.57 5.43
Eco. Dev, • Chamber of Commerce Marketing Program ilnduslriall 4.57 4.57
Develop Univ. Relations In Regards to Cohesive Community Policies 4,57 4.43
Fire Suppression 4.43 8.43
Fire Prevention 4:13 SIBS
Water Storage/Reserves 4.43 5.71
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RESULTS OF THE CITY COUNCIL
1999.2000 BUDGET PRIORITY QUESTIONNAIRE
EFFORT RATING V L a
No Opinion 0
Eliminate Current Effort 1
Substantial) Reduce Current Effort 2
Reduce Current Effort 3
Continue Current Effort 4
Increase Current Effort 5
SubstanCell Increase Current Effort a
Initials New Effort 7
RANKED BY EFFORT RATING
PRIORITY OF
RI&PONS9
EFFORT {1+LOW;
"TING 7 A HIGH)
Lo Range Com rehanelve PlanNrq 4.43 5.71
Solid Waste Collection 4.43 517
Personnel Recruitment 4.43 5.57
Park Maintenance Athletle Fields Medlene Mowl I 4.43 5.57
Downtown Redsvelo meat (Main St. eta) 4.43 5.14
Economic Dev. • Incentives for Dev. ITsx Abatement, eta) 4.43 4.8.-
Coda Enforcement • emotitlon of 8ubetanderd Bldg. 4.43 4.71
Develop Comouteriad Community Calendar 4.43 4.43
Electric Soivics 4.29 5,86
Development Review P•ocess 4.29 5,57
Juvenile Justice System 419 5.29
Risk Management 4.29 6.29
Nei hborhood Services INICE, eta) 4,29 6,29
Current Hotel Motel Tax Contributions 4,29 5.14
Wastewater Treatment Plant 4,29 5,14
Recycling Efforts 4.29 6.00
Library Pro rains (in General) 4,29 5.00
Economic Development -_Utility Incentive Lines 4,29 418
\ nfo;Data Plocessin Services 4.29 416
New Athletic Programs 4,29 4.71
Civic Center Maintenance 4,29 4,71
Low 6 Moderate Income Housing 4,29 4.57
Economic Development - Utility Incentive Rates 4.29 4.57
Auto Theft Prevention Programs 4.29 4.43
Police Patrol 4.14 6.71
Emergency Medical Ambulencel _ 4.14 6.14
Emer enc Pre efedneu Mane errant) 434 5.43
Landfill 4.14 5.20
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Economic Development • Development Foellilatfon 4.14 5.00 r'-
Internal Audit Services 4.14 4.86
Anrmal Control 4,14 4.71
Street 9wee in - 11 4.29
Eco, Dev. •Dev. Workfaroe end Tnlnln Partnership w1 Univ. NCTC 6 OISD 4.i4 14
Economic Development • Intemet10na1 Relations And Trade 4.1 3.71
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RESULTS OF THE CITY COUNCIL $
1999.2000 BUDGET PRIORITY QUESTIONNAIRE j
Nc Inion 0
tliminat► Current Effort 1
3ubstantldl Reduce Current Effort 2
Reduce Current Effort 3
Continue Current Effort 4
IncreeIsuntCurrent Effort S
Subeisll tncresee Current Effort S
Initial$ NOW Effort 7
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RANKED BY EFFORT RATING
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Crime Invest) atlon 4,00 5129
Muni ct al Court 4,00 6.43
Libre AudioNisuel Services 4.00 4.71
Envlronnental Health pns Actions stc.l 4.00 4,71
Recreation Center Programs 4.00 4.71
Code Enforcement • Nigh WeedslDebris Violations 4.00 4.57
Perkin )Traffic Enforcement 4.DO 4.57
Litter Programs 4.00 4.43
Economic Day. • Bieck and Hispanic Chamber Psrtnershi s 4.00 4.00
Legal Services 3.71 6.29
Tefecommunications System 3.71 4.80
PLI din Inspection 3.71 4.43
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Historic District Preservation 3.43 4.29
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RESULTS OF THE CITY COUNCIL
19992000 BUDGET PRIORITY QUESTIONNAIRE
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EFFORT RATING VALUE
No Opinion 0
Eliminate Current Effort 1
Substantially Reduce Current Effort 2
Reduce Current Effort 3
Continue Current Elfort 4
Increase Current Etlort 5
Substantiall Increase Curren) Effort 8
Initiate New Effort 7
RANKED BY PRIORITY OF RESPONSE
PRIORITY OF
RESPONSE
EFFORT N+LOW,
RATING 7-HIGH
Street MaintenancalRa air 5.29 8.71
Street Construction/Rebuilding 5.14 6.71
Police Patrol 4.14 6.71
Community Oriented Policl (COPS) 4.88 8.67
Fire Suppression 4.43 6.43
Storm Drainage Improvements 5.14 6.29 I
Crime Investigation 4.00 8.29
Employee Pa Plan Adcstments!Benefts 5.29 6,14
Emergency Medical iAmbulancel, 4.14 6.14 `
Dru Abuse/Enforcement Programs 4.71 6.00
Children Oriented Safety Programs r 4.57 8.00
Public Transportation (SPAN, etc.) 5.43 5.86
Airport Development 5.29 5.86
Library Expansion 5.29 6.8e
Inhll Policy Develo merit 5.00 6.86
City Beautification tParks, Facilities Medians) 4,71 5.86
Fire Prevention _ 4.43 5.88
Electric Service 4.29 5,86
New Parka/Pork Expansion fin Nei hborhood Communit ! 4.80 6,71
Water Storage/Reserves 4.43 5.71
Lon Ran a Com ahensive Planning 4.43 5.71
Contributions to Human Service Agencies 5.00 6.57
Employee Trainin !Development 4.57 6.57
Sobd Waste Collection 4.43 5.57
Personnel Recruitment 4.43 5.57
Perk Maintenance tAthletic rields, Medians, Mowing) 4.43 5,57
Development Review Process 4.29 5,57
Greenbelt System Plannl 1Devefc merit 4.80 5.43 ti
Workforce DtversltY 4.71 5.43 ~
Traffic Si neritat)on1En ineerl 4J i 6 43 43
New Athlatia Flelda 67 6.
Emer ertc PreoerodMaa{Menagemant) 4,14 5.4
Municipal Court 4.00 5.43
Economic Development • Business Retention _ 5.00 5.29
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RESULTS OF THE CITY COUNCIL
1999.2000 BUDGET PRIORITY QUESTIONNAIRE
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EFFORT RATING VALUE
No 0 infon 0
Eliminate Current Effort 1
Substantially Reduce Current Effort 2
Reduce Current Effort 3
Continue Current Effort 4
Increase Current Effort 5
Substantial) Increase Current Effort 6
Initiate New Etfort 7
RANKED BY PRIORITY OF RESPONSE
PRIORITY OF
RlSPafV6E
EFFORT (1■LOW;
RATING 7=114114H)
Airport MaAetin 4.86 5.2n
Youth Recreation Programs 4.71 5,29
Library Youth/r;hildran's Programs 4.71 5.29
Juvenile Justice System 4.29 5.29
Risk Management 4.29 5.29
Neighborhood Services (NICE, 00 4.29 5.29
Landfill 4.14 5.29
Legal Services 3.71 519
Bicycle/Hiking Trail Development 4.71 5.14
Downtown Redevelopment (Main St., etc,) 4.43 6.14
Current Hotel/Motel Tex Contributions 4.29 6.14 I
Wastewater Treatment Plant 4.29 ' 5.14
Eco. Onv, • Develop DISD Relations in Regards to Cohesive Comm, Policies 4.71 5=
Recycling Efforts 4.29 5.00
Library Programs Lin General) 4.29 5.00
Economic Development - Development Facilitation 4.14 5.00
Library Referents Services 4.71 4.86
Economic Div. • Incentives for Day. (Tax Abatement etc,) 4.43 4.8E
Economic Development • Utility Incentive lines 4.29 •.86
Info/Oslo Processing Services 4.29 4.86
Internal Audit Services 4.14 4.86
Telecommunications S sum 3,71 4.86
Economic Development • Small Business Assistance 4.71 4.71
Code Enforcement • Demolition or Substandard Still. 4.43 4.71
New Athletic Programs r 419 4.71
Civic Center Maintenance 4.29 4.71
Animat Control _ 4.14 4.71 r
L hra, r Audio/Viaual Services _ 4.00 4.71 t
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RecriaUOn Center Programs 4.00 4.71
Environmental Heatth Ilns actions, ete.l 4.00 4.71
Eco. Dov, ~ City Markets Etforu Brand Imago, Commkclel, tnternotlonsf) 4,71 .57
Eco. Dev. • Chamber of Commerce Marketing Program llndustriatl 4.57 4.57
Low & Moderate Income Mousing ;4.29. 4,57
Economic Devote int , Utrt(1 Incentive Rates • 4.29 .67
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RESULTS OF THE CITY COUNCIL
1999.2000 BUDGET PRIORITY QUESTIONNAIRE
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t 8 No Opinion 0
Eliminate Current Effort 1
SubstanCell Reduce Current Effort 2
Reduce Current Effort 3
Continue Current Effort 4
Increase Currsnt Effort ri
Subotantielly Increase Current Effort 8
Initiate New Effort 7
RANKED BY PRIORITY OF RESPONSE
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ir. f Q ,SFr .r i N' y'~~~r K''45 1 i ' ' {r f. ~ ` y ' •
Code Enf Qe AW.W4%VeWA4.0O, .97
Petk 4
Develop Unfversit Relations In Re ard$ to Cohesive COmmUnl! Pol'ales 4.57 4.43
Develop Com uterired Community Calendar 4.43 4.43
Auto Theft Prevention Programs 4.29 4.43
Lutes Programs 4.00 4.43
Senior Citiran Programs 3.86 4.43
Buildin Inspection 3.71 4.43
9tfeet B
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H1e1ak Dbfr n'#cN6tjo6
Eeo. Dev. • Dev. Workforce and Treinln Pertnershi wlUniv., NCTC, 6 DISD 4,14 4.14
Eddilor I -NTd r,
Code Enforcement • S112 Violations 3.57 3.88
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Bokw an spedBc actions or d8oof an plwn to staff by kWv/dud CouncX Members
for devOopmenf of the 1908-99 annual budget. I
New streets need to be planned and built or exhting streets widened and Improved to accommodate
our increasing population.
The extension of Scott St. to Newton St.
Concentrate on TMPA and electric regulation issues.
Connect to Cook St. to S. Cook St.
Complete our comprehensive plan and adjust our toning and subdivision regulations to reflect the plan.
Tennis Courts at MILK Recreation Center,
Proceed with CIP program.
Increase our efforts to Improve stormwater drainage and protect our floodploin, not just floodwsys
so we will not create future problems.
Expansion of the American Legion Building.
Complete comprehensive plan and Denton development plan.
Continue to keep our employee pay on track to meet market conditions.
Hire African Americans to the fire department,
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Implement publio improvements to downtown area.
Expand and Improve our current libraries and collections to serve our increasing population.
Increase our efforts to maintain and repair our current streets.
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A. AGENDA INFORMATION SHEET
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AGENDA DATE: Februnry 23,1999
DEPARTMENT: General Government
CM/DCM/ACM: Michael W. Jez, City Manager
91 ffL'T:
Receive a report, hold a discussion, and give staff direction concerning the transfer of the cable
television franchise.
BACKGROUND:
The existing cable television franchise was awarded to Sammons Communication in
November 1998. The franchise exrires in 2003. In September 1995, council approved the
transfer of the franchise to Marcus Cable,
In 1998, Microsoft co-founder Paul Allen purchased Marcus Cable. He also purchased St.
Louis-based Charter Communications (also it cable television provider). Charter's management
team is currently overseeing the operation of Marcus Cable,
As stated in Sec. 8-62 of the code of Ordinances (attached), the city has the right and obligation
to evaluate the proposed assignee on technical, financial, and legal grounds as well as general
character. In order to better evaluate the proposed assignee, the city of Denton jolted with
approximately 20 other cities in North Texas that are served by Marcus. This is similar to the
approach we took In 1995. The consortium of cities retained the services of Varnum, Riddering,
Schmidt, and Ilowlett, a law firm in Grand Rapids, Sit., that is well-recognized for their
expertise In cable and telecommunications matters. Repro serstatives from this same firm assisted
the cities In 1995 with the transfer to Marcus. Ile cities also hired C2 Consulting Services, Inc.
to evaluate the proposed assignee's financial qualifications, r
The cities had numerous face-to-face meetings and conference telephone calls with the
consultants and with representatives from Charter Communications. Many of the other cities in
the consortium, especially Fort Worth, have experienced unsatisfactory customer service from
Marcus which resulted in City Council members and city staff receiving many telephone calls
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from unhappy cable subscribers. Therefore, the major Issue in the transfer negotiations was
customer service standards and financial penalties 0; uidated damages) for failure to meet those
standards. Even though Denton has not experi aced these problems, we benefited by our
membership in the consortium, and the attached letter of agreement with Charter contains stricter
customer service standards and more severe financial penalties for failure to meet those
standards.
The negotiated letter of agreement also contains provisions for Charter to financially assist the
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city with conversion of the city cable channel to a digital format when such a format becomes the
industry standard. It also commits the cable provider to furnish each of our municipal library
locations with cable modem access to the Internet (whlch is approximately 1,000 limes faster
than telephone lines). Charter is also certifying that they are, or will be, Y2K compliant.
The city has 120 days from the date we are notified of a change of control in the cable company
to either approve or deny the transfer. The city is deemed to have consented to a transfer in the
event its refusal to consent is not communicated in writing to the grantee within the 120-day time
period. The original deadline for approval/denial was January 1, 1999. However, due to the
length of the negotiations and fewer City Council meetings over the holidays In most of the
cities, the deadline was extended by Charter to March IS. Charter has since extended the
deadline for final approval and the publication period past March 15 as long as the first reading
of the ordinance to approve occurs prior to March IS. The deadline for denying approval
remains March IS,
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OPTIONS:
1, Direct staff to prepare an ordinance approving the transfer of the cable franchise. The
first reading of this ordinance wnuld be scheduled for March 2, the second reading for J
March 23. Following a 2l -day publication period the transfer would be final
2. Direct staff to prepare a resolution denying the transk. Such a resolution would be
scheduled for City Council consideration on March 2.
R -CONIMENDATIONS:
Staff recommends Option #1, approving the transfer.
PRIOR ACTION/REVIEW: (Council, Boards, and Commissions)
None.
FISCAL INFORMATION:
Cost of legal and financial analysis and negotiation of letter of agreement: approximately
520,000-S2S,000. Charter will reimburse the city for its expenses including publication costs. A
Ntt cast to city: zero.
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Charier hm agreed that the costs associated with the transfer will not be passed itrough to
subscribers in rates.
EXHIBIT :
1. Sec. 8-62 (Transfers and assignments) of Chapter 8 (Cable Television) of the Code of
O: Jm„Itces.
2. Cable Television Franchise Agreement.
3. Letter of Agreement negotiated with Charier Communications.
4. Memorandum from Connie Carmody, C2 Consulting Services, Inc.
Respectfully submitted:
i e( W. J
City Manag
Prepared by:
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Richard Foster
Public Information Officer i
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POASLndulrt"A 21.99Truf6&rC&FIeTVrrmcMN doc
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18-62 DENTON CODE
Sec, 8.82. Transfers and assignments.
a) A cable television franchise shall not be sold, assigned or transferred, either in whole
or In part, or leased, sublet or mortgaged In any manner, nor shall title thereto, either legal
or equitable, or any right, interest or property therein pass to or vest in any person without the
prior written consent of the city. Such consent shall not be withheld unreasonably. No such
consent shall be required for a transfer of the franchise or the system in trust, mortgage or
other hypothecation as a whole or in part to secure an indebtedness,
(b) The proposed assignee must show technical ability, Handal capability, legal quali-
fications and general character qualifications as determined by the dty and must agree to
comply with all provisions of the franchise and such conditions as may be prescribed by the city
council and expressed by resolution. The city shall be deemed to have consented to a proposed
transfer or assignment in the event its refusal to consent Is not communicated in writing to the
grantee within one hundred twenty 1120) days following receipt of written notice of the pro-
^osed transfer or assignment,
(c) The grantee shall promptly notify the city of any &Chw or proposed change in or
transfer of or acquisition by any other party of control of the grantee. The word "control" as
used In this subsection is not limited tamp* stoeiholde» but includes actual working control
in whatever manner exercised. Lvery champ, binder or acquisition of control of the grantee
shalt make the franchise subject to anesllation unless and until the city shall have oonwnted
thereto, which consent will not be unreasonably withheld. ror the purpose of determining
whether it shall consent to such change, traaefer or acquisition of control, the city may 'squire
into the qualifications of the prospective controlling party and the grantee shall assist the city
In any such inquiry.
(d) A rebuttable presumption that a transfer of control has occurred shall arise upon the
acquisition or accumulation by any person or group of persons of ten (14) percent of the voting
interest of the grantee.
(e) The consent or approval of the city ouncil to any transfer of the franchise shall not
constitute a waiver or release of the rights of the city in and to the streets, and any transfer
shall by its terms, be expressly subordinate to the terms and conditions of any applicable
franchise.
(f) In the absence of extraordinary cirnmetances, the city shall not approve any transfer
or assignment of a franchise prior to substantial ompletion of construction of the proposed
system or completion of a commitment to reconstruct, rebuild or upgrade an existing system.
(g) The city council reserves the right of lint refusal to purchase a able system at or
above a bona lids offering price being made by a third party when the system is placed on the
market for sale. The city shall ertercise such right within ninety (90) days otnotification by the.
grantee of pending sale, or such right shall be forfeited.
ih) 1n no event shill a transfer of ownership or control be approved without any sucoessur / ! !
In interest accepting In writing the terow and conditions of the fianchise ageeemu.t as Amended-4
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CABLE TELEVISION } 8.83 s
rt1 The council reserves the right to review the purchase price of any transfer or assign-
ment of the system and any potential assignee to this franchise expressly agrees and under.
stands that any negotiated We value which the council determines will cause a significant
effect on subscriber rates in order to finance the purchase may result in a denial of transfer.
(Code 1968, } P2.23(3); Ord. No. 88.182, 11006), 11.148)
Seen. 838-8.80. Reserved.
ARTICLE H STANDARDS AND SPECIFICATIONS
Sec. 8 81. Construction, kwtallatioa and maiatenaaoe of system.
Methods of construction, installation and maintenance of the able system shad comply
with the most recent edition of the National Electrical Safety Cods, the National Elsttrial
Code adopted In chapter 28, article in, of this Code u the same may be amended from ttau to
time, and all applicable taws and ngulatfens to the extent that such coda we oonsisteat with
local law affecting the oautrustion. kAellatfon and maintenanm of electric supply and eom-
munimtioas lfnes. To the ended that such code is InoonsGtent with other provisions of this
franchise or with tool law, the latter shall pvsm.
(Code 1988, } Vs-50; Ord. No. 88.187, 11. 11.188)
goo. &H. System tower.
(a) Any tower constructed for uw in the able system shall comply with the standards
contained in Structural Standards for Steel Ar'.enna Towers and Antenna Supporting Strue-
tutor, EIA Standuds M229-A a publWwA' by the Engineering Department of the Electronic
Industries Auoeiation, 20011 Street, N. W. Wmhington, D. 0. 20008.
(b) Installation and physical dimeseions of any such tower shall amply with any appro.
priate Federal Aviation Administration regulatlorm
(c) Any antenna structure used in the table system shall comply with Construction
Marking, and Lighting of Antenna Structure, 47 C.F.R. 17.1 at seq., and Ali applkable laws
and regulations.
(Code 1966, If IlYi•61-64x•83; Ord. No. M182, ll 10"V, 11-1•88)
gee. 838. Safety.
All working facilities and conditions used during construction, installation and mairnta i
nance of the city's able television system shall comply with the standads of the Occupational r A
Safety and H"th Administration. l
(Code 1988, 15 V*44; Ord. No. 88.182, 11(5 Yr-W, 11-1.88)
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ORDINANCE NO,
AN ORDINANCE AMENDING ORDINANCE NO. 88-189, WHICH GRANTED A FRAN-
CHISE TO SAMMONS COMMUNICATIONS, INC. TO RECONSTRUCT, OPERATE, AND
MAINTAIN A CABLE TELEVISION SYSTEM IN THE CITY OF DENTON, TEXAS;
CONSENTING TO THE ASSIGNMENT AND TRANSFER OF THAT FRANCHISE FROM
SAMMONS COMMUNICATIONS, INC, TO MARCUS CABLE ASSOCIATES, L.P. IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS ORDINANCE;
APPROVING AN ACCEPTANCE AGREEMENT; PROVIDING FOR LIQUIDATED DAMAGES
NOT TO EXCEED $4,000 FOR FAILURE TO MEET CUSTOMER SERVIC'd STAN-
DARDS; PROVIDING FOR A SAVINGS CLAUSE; PROVIDING FOR PUBLICATION;
PROVIDING FOR THE EFFECT OF THIS ORDINANCE UPON OTHER ORDINANCES
AND RESOLUTIONS; AND PROVIDING FOR AN EFFECTIVE DATE,
WHEREAS, Sammons Communications, Inc. ("Sammons") currently
holds a cable television franchise pursuant to ordinance No. 58-
189, passed by the City Council on November 15, 1988 ■nd duly
accepted by Sammons which incorporates the provisions of Chapter e
"Cable Television" of the Code of Ordinances of the City of Denton
(collectively the *Franchise*) I and I
WHEREAS, Sammons, as seller, on April 5, 1995 entered into on
Asset Purchase Agreement to sell its assets and to assign and
transfer all its interest in the above-mentioned Franchise and its
cable system in the City to Marcus Cable Associates, L.P.
("Marcus")t and
WHEREAS, Marcus and Sammons submitted an Application for
Franchise Authority Consent on FCC form 394 providing certain
information with respect to the parties and the proposed transfer
and submitted additional information and documents relating to the
transaction and its effect on the provision of cable television
service within the City in response co roquists of the Cityt and
WHEREAS, in accordance with Section 8-62 of the Code of.
Ordinances, Sammons her'notified the Ctty of thf'prppdsed salo,'and
transfer of the Franchise to Marcus, and the'.City ~as.joinad with
a number of other cities in the Dallas/Fort worth region served by
Sammons to hire. the law firm of Varnum,iAiddering, Schmidt 4
Howlett, L,L,P,~ to examine and evaluate.":;the transfer and to
represent the `'cities in negotiations with Marcus AnQ Sammons
regarding the transfer, and to perform other-&tiss with regard
thereto; and
WHEREAS, the City Council, relying on the consultant's
recommendation, in accordance with Sectiod 8*61 of ;the Code of
Ordinances and applicable Federal Communicatlorf Commiosion ('FCC")
regulations, has examined Marcus Financial capability, legal
qualifications, general character qualific8ttiens, and its technical
ability to meet community needs for cable television services and
to comply with all the provisions of the Franchise, the current
Pole Lease and Cable Duct Use Agreements, the conditions imposed by
this ordinance, and wit' local, state, and federal
laws and regulationst a g
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WHEREAS, Marcus has agreed to certain amendments of the
existing Franchise and to cure various failures to perform certain
portions of the Franchise by Sammons and to alleviate any concerns
the City may have about Marcus' qualifications or its ability to
comply with all the obligations of the existing Franchise, the
cable television ordinance, and other applicable lawar and
WHEREAS, the City Council, upon recommendation of the City
Manager and after reviewing the evaluation of Marcus by the conuul-
tant, feels that Marcus meets the technical ability, financial
capability and legal and general character qualification criteria
established by the FCC and the Denton City Council; and l
WHEREAS, subject to Marcus' acceptance of the terms and
conditions set forth herein, the City Council believes that it is
in the best interest and consistent with the public necessity and
convenience of the City that the transfer and assignment of the
cable television Franchise from Sammons to Marcus be approved and
that ordinance No. 88.189 be amendedl NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINSs
SECTION 1. That the City Council hereby consents to and
approves the transfer and assignment of the Franchise which is
attached hereto and incorporated herein by reference as Exhibit
from Sammons to Marcus for the remaining term of such Franchise,
subject to the following terms and conditions and the terms and
conditions of the Franchises
I
A) Execution by Marcus of the Acceptance of the Terms and
Conditions to Transfer the Denton Cable Television System and
Franchise ("Acceptance Agreement"), including, without limitation,
the agreement to pay liquidated damages not to exceed $4,000 for
1 failure to comply with customer service standards in accordance
with Section D1(1) of the Acceptance Agreement, which is attached
as Exhibit "B" and incorporated by reference herein, including,
without limitation, the following conditions
(1) Marcus will promptly, but no later than twelve months
from the effective date of this ordinance, provide the
capability for insertion of video programming and other
video, voice, and data messages into the cable system at
the points in the City in accordance with the terms
required under Section IV(b)16) of the Franchise, and
will comply completely with the above section %e
franchise. (lr~
(2) Marcus will allocate one of the five access c' A
provided under Section XX%t(a) of the Franchise the
Denton independent School District when the Distract is
ready to use and access the channel,
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(3) Upon request of the City, Marcus will collect from
subscribers and pay to the City a monthly amount of no
more than fifty cents ($0.50) for each subscriber within
the City limits to assist in financing local access
activities. Such charge shall be set out as a separate
line item on all subscriber bills and shall not be deemed
a payment for basic service, but a pass-through of an
access and government programming fee. The charge will
not be part of gross revenue for purposes of calculating
the franchise fee.
(4) Marcus shall agree to comply with all the terms and
conditions of that certain CATV Pole Lease Agreement
between the City and Golden Triangle Communication+
("Pole Lease Agreement") dated the 7th day of May, 1979,
and that a•:tain Cable Duct Use Agreement Between the
City of Denton, Texas and Sammons Communications, Inc.
executed on or about April, 1988, which are attached to
this ordinance as Exhibits "C" and "D" and made a part
hereof for all purposes,
B) Execution by Marcus Cable Operating Company, L,P.i Marcus 1
Cable Company, L.P.t and Marcus Cable Property, L.P. of an Accep-
tance Agreement in the form attached as Exhibit "B" unconditionally
guaranteeing Marcus' performance of the obligations of the
Franchise and the Acceptance Agreement.
SECTIplt Ii. Marcus may, at any time and from time to time,
assign or grant or otherwise convey one or more liens or security
interests in its assets, including its rights, obligations and '
benefits in and to the cable television system and Franchise, to
any lender providing financing to Marcus. Any assignment or
transfer by a lender or as a result of a foreclosure will require
the City's consent as provided in the Franchise.
gEp'ION iii. That the City Council hereby consents to and
approves the transfer and assignment of all of Sammonli' right,
title, and interust in and to those certain Pole Lease and Cable
Duct Use Agreements, attached hereto and incorporated herein as
Exhibits "C" and "D" to Marcus, for the remaining term of said
agreements, subject to Marcus agreeing to comply with all the terms
ane conditions contained therein.
SECTION IV. That there is no waiver by the City of any
breach, default, or violation of the terms, covenants, or condi-
tions hereof to be performed, kept, and observed by Sammons or
Marcus. Nothing contained herein shall be construed to be or act f '
as a waiver of any subsequent default on any such terms, covenants,
and conditions of the Franchise, the attached Acceptance Agreement,
the attached Pole Lease and Cable Duct Via Agreements, or the terms
and conditions of this ordinance.
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SECTION V. That to the extent that this ordinance or the
attached Acceptance Agreement modifies any of the terms and
conditions of ordinance No. 88-189, as amended, or Chapter 8 of the
Code of Ordinances, Ordinance No. 88-189 and Chapter 8 of the Code
of Ordinances are hereby amended. Save and except as amended I
hereby, the remaining sections, sentences, and paragraphs of
Ordinance No. 88-189 and Chapter 8 of the Code of Ordinances shall
remain in full force and e, fect.
SECTION VI. That in accordance with Section 13.02 of the City
Charter, this ordinance shall become effective twenty-one days
after final approval, if, after that date, Marcus shall give its
written acceptance of this ordinance by signing as provided belowl
and provided that, after final approval and before the expiration
of twenf.y-one days, the full text of this ordinance shall be
published once each week for two consecutive weeks in the official
newspaper of the City, the entire expense of which shall be borne
by Marcus. The City Secretary is hereby directed to publish the
full text of this ordinance in such official newspaper of the City
once each week for two consecutive weeks immediately following the
passage of this ordinance on second reading.
SECTION VII. That this ordinance shall be in full force and
effect at the time provided by law from and after its passage and
written acceptance by Marcus= provided however, that this ordinance
shall expire on March 31, 1996, and shall be of no further force
and effect if the transactions described in the Asset Purchase
Agreement between Sammons and Marcus have not beeit closed by that
date or if Marcus fails to accept this ordinance.
SECTION Viii. Marcus and Marcus Cable operating Company,
L.P., Marcus Cable Company, L, P. and Marcus Cable Properties, L.P. ,
for themselves, their successors and assigns, hereby accepts this
ordinance including the attached exhibits and agrees to be bound by
all of its terms-and conditions and will execute the paragraph
entitled "Acceptance' on page five of this ordinance.
P SED AND APPROVED at its first reading this the day of
1995.
PA SED APPROVED at its second reading this the day
o 1995,
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BOB CASTLBBERRY, R
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ATTESTS
JENNIFER WALTERS, CITY SECRETARY
.
BYiERT W 4L&U-
AP D TO LEGAL FORMS
HE L. PRO_UTTYJ ~JTY ATTORNEY
Sys
ACCEPTANCES By the signature hereunder, Marcus Cable Company,
L.P., and Marcus Cable Properties, L.P., Marcus Cable Associates,
L.P. and Marcus Cable Operating Company, L.P., the transferee and
grantee, hereby represent that the officers signing below are fully
authorized to bind Marcus and Marcus Cable Properties, Inc., and
their signatures hereon constitutes an acceptance and Marcus' and
Marcus Cable Properties, Inc.'s agreement to fully comply and abide i
by the terms and conditions of this ordinance, ordinance No. 08-199 I
as amended hereby, the attached Acceptance Agreement and Pole Lease
Agreement, the provisions of Chapter 9 of the Code of Ordinances of
the City of Denton, Article XiII +Franchiaes* of the City Charter,
and all other appli.able laws and regulations.
MARCUS CABLE ASSOCIATES, L.P.
BY s "2~ 2A6
Thomas P. McMillin
Titles Vice President of +
1 Date Of Executions Ngyamber 1 , 1995
MARCUS CABLE OPERATING COMPANY, L.P.
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Sys 4049 2 T o7i m i P. McMilnn
Titles Vice Rrsaident of
Date Of Executions NAu& s,.r 1 1995 `
MARCUS CABLE COMPANY, L. P. ' ~i
BYI
+ Marcus Cable Properties, Thomas P. McMillin
Inc., th6 ultimate Titles Vice Praaidant of
general partner
Date Of Executions November 1995
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MARCUS CABLE PROPERTIES, L.P.
BYs . C
Thomas P. McMillin
Titles Vice Preaidant__of-
Date Of Executions November I , 1995
} Marcus Cable Properties, Inc.,
the ultimate general partner
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EXHIBIT "An
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wavm
Tu CITY Or DIN& TEAS
AUD I
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TABLE OF CONTENTS
E ~
SECTION 1. TITLE ...........................................2
SECTION 11, PREAMBLE ........................................2
SECTION III. DEFINITIONS .....................................1
SECTION IV. GRANS' OF AUTHORITY ..............................2
SECTION V. POLICE POWER ....................................3
................3
SECTION VI. SYSTEM UPGRADE AND TIMETABLE....
SECTION VII. INDEMNIFICATION AND INSURANCE ...................5
SECTION VIII. COMPLAINT PROCEDURE►.............................6
SECTION IX. CONSTRUCTION AND MAIM'ENANCE ....................7
SECTION X. CONSTRUCTION AND EXTENSION. 6040 loom 0 of map
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SECTION XI. CONSTRUCTION BOND REQUIRED. 4 0 0 a 0 6 6 4 0 0 0 6 a a * 0 0 6 9
SECTION XII. GOVERNING LAW ..................................10
SECTION XItt. FRANCHISE TERM, 10
SECTION XIV. RENEWAL ~PPR.OCEDURE 10
SECTION XV. PERYORKAN/.E REVIEW .............................10
SECTION XVI. SECURITY FUND ..................................11
SECTION XVII: LIQUIDATED DAMAGES .............................12
SECTION XVIII. FORFEITURE ..................1..................13
SECTION XtX. TRANSFERS 13
SECTION XX. FRANCHISE FEE ..................................14
SECTION XXI. 'RATES ..........................................14
SECTION XXII. ACCESS TO SERVICES AND FACTLITtES..............15
SECTION XXIII. EMERGENCY OVERRIDS .............................17 r '
SECTION XXIV. PROGRAMMING MIX ................................17
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SECTION XXV. FORCE NAJEURE ..................................17
SECTION XXVI. NOTICES ........................................18
SECTION XXVII. SAVINGS CLAUSE.................................19
SECTION XXVIII. CONRLICTING ORDINANCES AND RESOLUTIONS.4.......19
SECTION XX IX. FEES 19
SECTION XXX. PAYMENT OF TAXES ...............................19
SECTION XXXI. NON-LIADILITY ..................................20
SECTION XXXII. VAIVET<5 ........................................20
SECTION XXXIII. APPROVAL AND ACCEPTANCE........4..............s20
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NOTEi ORIGINAL EXHIBITS HAVE BEEN ATTACHED TO ORIGINAL ORDINANCE 88-189
I
ORDINANCE NO.~.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
GRANTING A FRANCHISE TO SAMMONS COMMUNICATIONS INC., TO CON-
STRUCT, RECONSTRUCT OPERATE AND MAINTAIN A ABLE TELEVISION
SYSTEM IN THE CITY aF DENTON, TEXAS AND SETTING FORTH CONDITIONS
ACCOMPANYING THE GRANTING OF THIS FRANCHISE; PROVIDING FOR A
PENALTY FOR THE VIOLATION OF PORTIONS OF THIS ORDINANCE; PRO-
VIDINO FOR A SAVINGS CLAUSEI PROVIDING FOR THE EFFECT OF THIS
ORDINANCE UPON OTHER ORDINANCES AND RESOLUTIONS; AND PROVIDING
AN EFFECTIVE DATE.
THE 6I1Y COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS[
WHEREAS, the Cit~r is authorised to groat, renew and deny
franchises for the installation, opwr.-.Lion and maintenance of
cable television and other telecommunications systems, and
otharwiae to regulate cable television within the City'a
boundaries by virtue of (i) Federal and State statutes, (ii) the
City's police powers, (iii) the City's authority over its public
rights of way, and (iv) other City powers and authority; and
WHEREAS, the City has undertaken an extensive review of cable
television service in the City, including but not limited to a
review of Sammons Communications, Inc., its respective records of
service, its facilities, the cable televisiod-related community
needs of the City and its citizens for both the present and
future, Sammons Communications, Iac.'s ability to carry out, each
of its commitments as set forts herein sad in related documents,
the experience and character of Sas was Communications, Inc.
manemeant teams and Samson,' financial, legal and technical
ualtfications to maintain ■nd operate a cable television system
~ranchias in the City in a manner which would serve the public
interest of the citizens of the CLty; and
WHEREAS, the City hereby finds that it would serve the public
interest of the citizens of the City to grant a cable television
franchise to Saststone Communications, Inc., subject to the terms
and conditions hereinafter set forth, and Sammons Communications,
Inc. voluntarily agrees to such torso and conditions;
NOW THEREFORE, in contidoration of the mutual covenants and
agremsents contained herein, the parties hereby agree as followal ~f
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SECTION I. TITLE. I
This ordinance shall be known and may be cited as "Cable TV
Franchise Ordinance."
SECTION It. PREAMBLE.
This ordinance was passed after a full, open and public
hearing upon prior notice and opportunity of all interested
parties to be heard and upon careful consideration of SAMMONS
COMMUNICATIONS, INC.'S qualifications, including its legal,
financial and technical qualifications.
SECTION III. DEFINITIONS.
For the purpose of this ordinance, and when not inconsistent
with context, words used herein in the present tense include the
future, the word "shall" is always mandatory. The captions
supplied heroin for each section are for convenience only. Said
captions have no force of law, are not part of the section, and
are not to be used in construing the language of the section.
The following terms and phrases, as used herein, shall be given
the meanings set forth below:
(1) "City" to the CITY OF DENTONI TEXAS, a municipal corpo-
ration under the laws of the State of Texas.
(2) "Grantee" is SAMMONS COMMUNICATIONS, INC. a corporation
oryani:ed and existing under the laws of the State of
Delaware, duly qualified and authorised to do business in
the State of Texas, and it is the grantee and franchises
of rights under this franchise.
(7) "City Council" is the City Council of the CITY Ot DENTON,
TEXAS, or its designated representatives.
As used in this document, a word shall have the moaning set
forth in Chapter S 1/2 of the City's Municipal Code of Ordinances
(hereinafter, the "Cable Ordinance") at Article II0 unless it is
M arent froi the context that it has a different meaning, or
ass such word is sppecifically defined herein. The term
"Grantee" shall refer to Saauons Communications, Inc, or a
wholly-owned subsidiary of Sammons or It company under common
control with or controlling Samong (provided that the liability
of Sammons and each affiliated entity acting as Grantee hereunder
shall be joint and several), and its successors hereunder. ,
SECTION IV. GRANT OF AUTHOIIITY. ~ l
There is hereby granted by the City to Grantee the ti ht and
priviloge to construct, reconstruct, erect, operate and maintain,
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in upon, along, across, above, over or under the streets,
alleys, easements, public ways and public places now laid out or
dedicated and all extensions thereof and additions thereto in the
City, all poles, wires, cables, underground conduits, manholes
and other conductors and fixtures necessary for the maintenance
and operation in the City of a cable television system for the
transmission of television si nals and other signals, either
separately or upon or in conjunction with any public utility
maintaining the same in the City, with all of the necessary and
desirable appliances and appurtenances pertaining thereto.
Without limiting the generality of the foregoing, this franchise
and grant shall and does hereby include the right in, over,
under, and upon streeca, sidewalks, alleys, easements, and public
grounds and places in the City to install, erect, operate or in
any way acquire the use of, as by lesainj or licensing, all lines
and equipment necessary to the Grantees cable system and the
right, to make connections to subscribers and the right to r• air,
replace, enlarge and extend said lines, equipment and connections.
SECTION V. POLICE POWER.
Grantee shall, at all times during the term of this franchise,
be subject to all lawful exercise of the polies power of the City.
The right is hereby reserved to the City to adopt, in addition to
the provisions herein contained and any other existing a plicable
ordinances such additional applicable ordinances as it shall find
necessary ~n the exercise of its police power= provided that such
additional ordinances shall be reasonable, shall not substantially
or materially conflict with or alter in an maser the rights
granted herein, and shall not conflict with the laws of the State
of Texas, the laws of the United States of America, or the rules
of the federal Communications Commission. All terms, conditions
and provisions of the Cable Ordinance shall be deemed to be
t+ "died in this Agreaawnt and Grantee does hereby agree to
co, ply with the terse of said Ordinance.
SECTION VI. SYSTElf VFQWE AND TIMADLE. .
(ca) Within the time period specified in (b) of this section,
the drantes shall have completely upgraded and initiated a Cable
Rates which has the capability of delivering sixty (60) video
channels over 410 MNZ Cable bandwidth the "Cabe System Upgrade")
and the Grantee shall use its beet afforts to "xisiae usage of
such capacity with non-duplicatad video channels.
(b) The Grantee shall exercise its best good faith efforts to
ex its construction of the Cable System Upgrade as required in ' a
subsection above in a sound and economical manner. Su feet to
the provisions, of Section XXV. (force Najeurs) hereof, Grantee
shall meet the following achedulei
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(1) Submission of all applications for authorizations
necessary to begin initial construction of the
cable system upgrade on or before July 1, 1990-
(2) Securing all authorizations necessary to begin
initial construction of the Cable System Upgrade
on or before September 1, 1990.
(3) Completion of all of the construction of the
Cable System Upgrade on or before November 1,
1993.
(4) The Cable System Upgrade shall have the
capability to transmit video, voice and data
services in two directions simultaneously ("two
way services"). Two-way services shall be
instituted at such time as it is consistent with
federal and state laws and regulations and it is
economically and technically feasibles provided,
however, it shall be Grantee's burden to demon-
strate to the City's satisfaction, upon request
of the City at any time, that it is not econo-
mically or technically feasible to institute such
two-way services,
(5) Grantee shall have completed the installation of
alternative (standby) power sources at the
headand on or before May 1, 1969. Thereafter,
Grantee shall maintain such power sources to that
all Cable System and work lines and sub-stations
ma be maintained at full power for at least two when sourcesuserving the CabletSystem havenceased.powsr
6) Grantee shall provide the capability for insere
Lion of video programmin and other video, voice
and data messages into the Cable System from the
follovin` points in the City: Municipal luilding,
215 6. McKinney, Central Me Station, 217 M.
McKinney, Service Center, 901 Texas Strut,
Police Station, 221 N. rim Library, 502 Oakland
and Civic Center, 521 E. Ke inney.
Grantee shall complete construction of such cable
lines not later than November to 19936 In
addition to the above-designated points for,
insertion of video programming and other video, b,
voice and data message into the Cable System (1'_
described above. Grantee shall provide a central
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insertion point for the Cable System within the
City, which shall be one of the points described
above and which shall include siggnal switching
and processing equipment as is reasonably
required to allow those utilizing the insertion
points listed above to transmit to the other
insertion points of the Cable System, or to
transmit to all subscribers, at the City's
option. Prior to designating the central
inaertion point for the Cable System within the
city, Grantee shall obtain the prior written
consent of the City Hanager to such designation.
(7) Grantee shall, not later than November 1, 1993,
provide and maintain two access channels
designated for the following usass
(a) Local Government/Denton Independent School
District (a shared channel)
(b) Education Access
(e) The Grantee shall submit its drawings and specifications
for the Cable System Upgrade to the City not later than March It
1990, provided, however, that the City assumes no liability or
responsibility whatsoever for the design or construction of the
Cable System Upgrade by virtue of its receipt of such drawings
and specifications, it being understood that the City's approval
of such drawings and apscifications shall not be required. At
the time the Grantee submits such drawings and specifications to
the City, the Grantee shall also submit a detailed plan of action
for the aeeomplishaeot of the Cable 9ystep Upgrade, including.
without limitation, performance criteria which will ppermit tto
City to monitor the Grantee's progress toward completing the
Cable System Upgrade in a timely fashloo.
SECTION VII, IND110MCATION AND INSURA10Ci.
Grantee shall hold thr City harmless from all lose sustained
by the City on account of any suit, judgment, execution, claim or
demand whatsoever against the Cite resultin from any call! ent
act or omission on the part of Grantee n the construction,
operation or maintenance of its Cable System in the City in
accordance with Section S 1/2.76 of the Cable Ordinance, for
this purpose, Grantee shall carry property damage and personal ,
injury insurance with some responsible insurance company. or a
companies qualified to do business in the State of Texas. The ,
amounts of such insurance to be carried for liabilityy shall be
not lees than those amounts set forth in the Cable Ordinance and
as set forth in Exhibit 1 to this Ordinance.
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SECTION VIII, COMPLAINT PROCEDURE.
(a) Grantee shall maintain a business office in Denton for
the purpose of receiving inquiries and complaints from its
customers and the general public.
(b) Grantee shall establish procedures for receiving, acting
upon, and remolvin` subscriber complaints and complaints by the
City to the satisfaction of the City Manager and the proposed
initial procedures shall be submitted to the City Manager upon
Grantee's acceptance of this Agreement. Grantee shall provide
written notice of such procedures to subscribers at least once a
year.
(c) The Grantee shall vaspond to complaints made by the City
or spbeeribere of the cable System promptly and, if possible,
shall resolve complaints made by the City or subscribers not more
than twenty-fou:~(24) hours following receipt of the complaint by
Grantee. Grantee shall maintain complete, detailed records
relating to its maintenance and operation of the Cable System
which shall be available for inspection by representatives of the
City at any time during normal Easiness hours of the City. Upgn
the City s request, Grantee shall respond to City in writing
within twenty-four (24) hours following receipt of such request
by the Grantee regarding any complaint which takes longer than
one week to resolve.
(d) Grantee shall provide a local, toll-fres telephone
service for subscriber complaints to be answered twenty-four (24)
hours each day in accordance with the schedule set forth in
Exhibit 2. Such tolephow number shall be promiwntly displayed
on the first page of oath customer bill and in the telephone
directory of the City of Denton.
(e) Grantee shall provide at least ten days (10) days written
notice prior to discontinuance of service to any subscriber of
the Cable System. It Grantee has improperly disconnected Cable
System service to an subscriber it shall provide from recon-
nection to the Cable System to such subscriber.
(f) All peteonnel, agents anJ representatives of Grantee,
including subcontractors, shall wear photo-identification badges,
prominently displayed, when acting on behalf of the grantee in
the City. '
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(g) Crantee shall provide advance notice in writing to the
residenr of any private property within the City prior to entry A. ,
onto such property wherever the grantee desires that any of its
V agents or representatives should enter such property.
Ch is requirement shall apply only when it is reasonable under she
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circumstances at the time and Grantee shall not be required to
provide such notice in emergencies.
(h) Grantee shall notify each subscriber of the Cable System
in adv.ince of the expected time of any service visit to such
subscriber's premises. Such notification shall specify whether
the anticipated service visit will be before or after noon.
Grantee shall accommodate the subscriber with respect to the
subscriber's expressed preference for a morning or afternoon
service visit.
(i) Grantee shall, not less than once a year, provide
subscribers of the Cable System, and potential subscribers, with
a coop lets list of service offerings, options, prices, and credit
policies associated with the Cable System.
(J) Grantee shall establish and maintain sufficient telephone
lines and p•rsonael so as to not delay unreasonably the answering
of all telephone calls. The City, upon receipt of documented
complaints from acre than tea subscribers during a single business
day between the hours of 8 00 a.m. and 6100 p.m. regardin their
inability to reach a live, personal representative of ranter
durin`` non•ssergency, non•sysees cutsgs periods, may seek
Iignidated damages a• peovidsd in Section S 1/2.61 of the Cable
Ordinance.
SCCTION IX. CONSTRUCTION AND 11AIlfl'nfANC24
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is) All structures, lines and equipment erected by Grantee
withn the City shall be so located as to cause minimum inter-
ference with the pror use of streets, all* s, easements, and
other public ways and" places and to cause ■2nimus interference
with the rights or reasonable convenience of property owners, and
Grantee shall coapl~~rr with all reasonable, proper and lawful
ordinances of the Clty now or hereafter' in forts. =xisting
poles, posts, conduits, and other such structures of any electric
pow r system, telephone cospan~r or other public utility located
in the City shall when possiks, be made available to Grantee
for leasing or licensing upon reasonable torso and rates and
shall be usad to the extent practicable in order to siniaiss
interference with travel and avoid unnecessary duplication of
facilities. Poles owned by City shall bs made available to
Grantee for its Use under the tares, conditions and provisions of
a separate Pole Rental Agreement to be negotiated between the
parties. '
(b) Grantee -hall not open or disturb the surface of any
street, sidewalk, driveway or public place for any purpose
without first having obtained a poreit to do so in accordance j
with applicable ordinances, including, but not limited to,
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Chapter 21 of the Code of Ordinances, except that Grantee shall
not be required to post a bond prior to commencing such
disturbance. Grantee specifically agrees to pay any fees in
connection herewith required by City Ordinances. In case of any
disturbance by the Grantee of pavements, sidewalk, driveway, or
other surfacing, Grantee shall, at its own cost and expense and
in a manner approved by the City, replace and restore all paving,
sidewalk, driveway or surface so disturbed in as good condition
as before said work was commenced.
(c) In the event that at any time during the period of this
franchise the City shall elect to alter or change any street,
alley, easement, or other public way requiring the relocation of
Grantee's facilitiea, then in such event, Grantee, upon
reasonable notice from the City, shall remove, relay, and
relogatn the same at its own expanse.
(d) Grantee shall, on the request of any person holding a
buildin moving permit issued by the City, temporarily raise or
lower is lines to permit the movie of the building. The
expense of such temporary removal shall be paid by the person
requesting the seam, and Grantee shall have the authority to
require such payment in advance.
(e) All poles, Linea, structure or other facilitLes owned by
Grantee in, on, over and under the streets, sidewalks, alleys and
easements and public grounds or places of the City shall be kept
by Grantee at all times in a safe and substantial condition.
SECTION X. CONMUCTION AND MEN 1001,
(a) In conjunction with subsittal of its proposal for
renewal, Grantee has submitted a construction plan, a copy of
which is hereby incorporated by reference and made a part of the
franchise agreement. The plan, attached hereto as Exhibit 2
includes system de•ija details, equipment, specifications ana
design performance criteria, a sap of the entire franchise area
and clearly delineates the followings
(1) The areas within the franchise area vhere the
cable systea is currently available to subscribers,
including a schedule of construction for each year
that construction or reconstruction is proposed.
(2) The ,areas within the franchise area where the
cable system cannot reasonably be extended due to
lack of present or planned dmlopseat or other
similar reasons, with the areas end the reasons
for not serving then clearly identified on the map.
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(b) Nothing in this section shall prevent the Grantee from
constructing or reconstructing the system earlier than planned.
However, any delay in the system construction beyond the times
specified in the plan report timetable must be submitted to and
approved by the City Council.
(c) Extension of the Cable System into any areas not
specifically addressed in the plan shall nonetheless be required
if the terms of any of the following conditions are nets
(1) Upoi request of potential subscribers a Grantee
shall extend the system to any contiguous area
not designated for initial service in the plan
when there exists a density of 35 hoses per
street mile for aerial cable or 30 home pper
street mile for underground cable. Extension
shall be at Grantee's cost. If underground
installation is required by regulation, Grantee
must make installation at Grantee's expanse.
Where atrial extension is allowed by regulation
but underground installation is requested by
benefited subscribers the cost of undergroundift
that exceeds the estlsatsd aerial extension cost
may be charged to such benefited subscribers.
(2) In areas not maetia the requiremeats for
mandatory extension o service Grantee shall
provide, upon the request of five (5) or more
potential subscribers desiring service, an
estimate of the costs required to extend service
to said subscribers. Grantee shall then extend
service upon request of said potential subscribers
according to the rate schedule. Grantee may
require advance payment or assurance of payment
satisfactory to Graatsa. The amount paid by sub-
scribers for early extension shall be nonrefund-
able, and in the event the area subsequently
reaches the density required for mandatory
extension, such psymants shall be treated as
consideration for early extension.
(d) Grantee shall construct, install, operate and maintain
its system in ♦ manner consistent with detailed construction
standards submitted by Grantee as a part of its application.
Grantee agrees to comply with the Codes, and any supplements or
amendments thereto, referenced in its proposal.
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SECTION XI. CONSTRUCTION BOND REQUIRED.
Pursuant to Section 5 1/2-63 of the Cable Ordinance, the
Grantee shall file with the City a construction bond in the amount
of $1,000,000 not later than August 1, 1990. The construction
bond shall be terminated only after the City Council finds that
the Grantee has satisfactorily completed reconstruction of the
cable system pursuant to the terms of the Cable Ordinance and
this franchise agreement.
SECTION XII. GOVERNING LAW.
This franchise is governed by and subject to all applicable
provisions of the Communications Act of 1934, as amended in 1984,
and regulations promulgated by the Federal Communications
Come onion pursuant thereto as well sm the laws of the State of
Texas, not inconsistent therewith.
SECTION XI114 FRANCHISE TERN.
This franchise shall take effect and be in full force from
and after acceptance by Grantee as provided in Section XXXIII.-,
and the same shall continue in full force and effect for a term
of fifteen (15) years.
SECTION XIV. RX MAL PROCtOM,
This Franchise Agreement shall be subject to renewal in
accordance with the terms and conditions of Section 626 of the
Cable Communications Policy Act of 1984 47 U.S.C. 546, as now in
force and effect or hereafter as amenda~.
SECTION XV. PMtFORNAK9 RLVILN.
The parties agree that the City shall have the ritht to con
duct a performance evaluation with the Grantee sad the citizens
of the City relatint to this Franchise Agreement, commencing in
the seventh year subsequent to the data of Grantee's acceptance
of this franchise. The Grantee agrees to incur the costa of the
evaluation and the City's ascertainment of the current cable-
related needs and interests of the City's residents; provided,
however, that the total payment by the Grantee shall not exceed
Twenty-Five Thousand (525,000.00) Dollars. This sum shall be
adjusted on the basis of the proportion that the then all Urban
Consumer Price Index (CPI-U) for the Dallas/Fort Worth Standard
Metropolitan Statistical Area bears to the February 1988 index,
which was 114.0. The City shall provide Grantee with the names
of firms n aed the recognized together e wish the Cityg shall
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select one of the three consultants to perform the evaluation.
Grantee agrees that such costs are in addition to and not to be
dedreted from the franchise fees due the City.
SECTION XVI. SECURITY FUND
(a) Within twenty (20) days after the effective date of a
franchise agreement, the Grantee shall deposit with the City's
Executive Director of Finance, and mainttin on deposit through
the term of the franchise, the sum of Sixty-Five Thousand
($65,000) Dollars in monies, as security for the faithful perfor-
mance• by it of all the provisions of this franchise agreement,
and compliance with all orders permits and directions of any
agency of the City having jurisdiction over its acts or defaults
under this contract, and the payment by the Grantee of any elaise,
liana and taxes due the City which arise by reason of the ton-
struction, reconstruction, operation or maintenance of the system
and the payment by the Grantee of any penalties or liquidated
damages due the City pursuant to this franchise agreement.
(b) The City Manager "y draw upon the security fund in the
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event of any ofr the occurrences set forth in this Section and in
Section 5 2/2-62 of the Cable Ordinance. Within tea (10) days
after notice to it that any amount has been withdrawn from the
security farid deposited pursuant to subdivision (a) of this
section in accordance with Section 5 1/2-62 (Liquidated Dane;eo),
the Grantee shall pa to or deposit with the Executive Director
of Finance a sus 67 money sufficient to restore such security
fund to the original amount of Sixty-Five Thousand (=65,000)
Dollars. Pailure to restore said security fund to the original
amount shall constitute a "terial breath.
(c) Examples of a basis for drawing upon the security, fund
include, but are not limited to the following:
(1) failure of the Grantee to pay to the City any taxes
after ten (10) days written notice of delinquency;
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(2) failure of the Grantee to pay to the City after
ton (10) days written notice, any amounts due and
owing the City by reason f the indesolty provision
of Section 5 1/2-76 of the Cable ordinance;
(3) failure by the Grantee to pay to the City, any
liquidated damages due and owing to the City pur-
suant to Section 5 1/2.62 of the Cable Ordinance; .
(4) failure by the Grantee to pay to the City any
amounts due pursuant o Section S 1/2-21(g) of the
Cable Ordinance;
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(5) failure by the Grantee to pay, upon ten (10) days
written notice, any amounts owing as franchise
fees pursuant to Section 5 1/2-69 of the Cable
Ordinance.
(d) The security fund deposited pursuant to this Section
shell become the property of the City in the .'cent that this
contract is cancelled by reason of the default of the Grantee.
The Grantee, however, shall be entitled to the return of such
security fund, or portion thereof, as remains on deposit with the
Executive Director of Finance at the expiration of the term of
the franchise agreement, provided that there is then no
outetknding default on the part of the Grantee.
(e) The rights reserved to the Ciey with respect to the
security fund are in addition to all other rights of the City
whether reserved by this contract or authorised by law, and no
action, proceedinff or exercise of a right with respect to such
security fund shall affect any other right the City may have.
SECTION XVII. LIQUIDATED DAMAGES.
(a) The parties agree to the liquidated damages specified in
Section 5 112-62 of the Cable Ordinance, as adopted on the tat
day of November, 1988, but without prejudice to any other
remedies available to the parties hereto to the extent permitted
by law. The parties agree that the liquidated d"ages set forth
in the ordinance may be greater or lose than the City's actual
damages and such damages represent the best estimate by the par-
ties hereto is the likely extent of such dame ee. The liquidated
damages are not intended to constitute a penalty, but rather are
designed to save the parties from Navin{ to engage in costly liti-
gation with regard to the extent of such damages. In addition to {
the amounts set forth in the Cable Ordinance, the following
liquidated damages shall apply: ;
For breach of any service standards adopted pursuant to
Section VIII., hereof:
=200.00 per day
(b) If the City Manager determines that the Grantee is liable
for liquidated damages 'he shall issue to the Grantee by certi-
fied mail a notice 01 intention to asees$ liquidated damages.
The notice shalt set forth the basis for the sesessmoot, and
shall inform the Grantee that liquidated damages will be assessed
from the date of the notice unless the assasement notice is
appealed for hearing before the City Council. If the Grak ee
desires a hearing before the City Council, it shall send a
written notice of appeal by certified mail to the City Manager
within ten (10) days of the date on which the City sent the
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notice of intention to assess liquidated damages. In the event
the City Manager receives such a notice from the Grantee, the
hearing on the Grantee's appeal shall be held within thirty (30)
days of the date on which the City sent the notice of intention
to assess liquidated dai%agea unless mutu,Ally extended by the City
and the Grantee. After such hearing, and based on the facts
before it, if the City Council finds (a) that an extension of
time or other relief should be granted, or (b) that there was
never a violation then it shall waive the City Manager's
assessment of liquideted damages. If the City finds that the
facts warrant the assessment of liquidated damagea, or any
portion thereof, the City may at any time thereafter draw the
amount of liquid damages from the security fund established
pursuant to Section 5 1/2-61 of the Cable Ordinance up to the
full amount of accrued liquidated dame *a to such date. In
considering whether or not to waive all or a portion of any
liquidated damages assessable against tho Grantee hereunder, the
City shall consider, without limitation, the numbers frequency
and magnitude of any prior breaches of this A reesent by the
Grantee and the speed with which the Grantee cure such breech or
breaches. M
SECTION XVIII. FOURITM.
If Grantee should violate any of the terms, conditions or
provisions of this franchise or if Grantee should fail to comply
~sith any reasonable provisions of any ordinance of the city regu-
lating the use by Grantee of the at roots alleys, easements or
public ways of the City, and should Grantee further continue to
violate or fail to comply with the same for a period of thirty
(30) days after Grantee shall have been notified in writing by
the City to cease and desist from any such violation or failure
to comply so specified, then Grantee may be deemed to have for- j
feited and annulled and shall thereby forfeit and annul all the
rights and privil• es granted by this franchise; provided that
such forfeiture shall be declared only by written decision of the
City Council. after following the procedures ask forth in Section
5 1/2-23 of the Cable Ordinance and an appropriate public pro-
ceeding before the City Council affording Grantee due process and
full opportunity to be heard and to respond to any such notice of
violation or failure to comply; and provided further that the City
Council may, in its discretion and upon a finding of violation or
failure to comply, impose a lesser penalty than forfeiture of this
franchise or excuse the violation or failure to comply upon a
showing by Grantee of mitigating circumstances. Grantee shall ,
have the right to appeal any finding of violation or failure to
comply and any resultant penalty to or seek relief in any court of
competent jurisdiction. In the event of any determination by the
City to revoke this Franchise Agreement, sur'n a determination
shall be stayed during the pendency of any judicial review
thereof.
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SECTION XIX. TRANSFERS.
All of the rights and privileges and all of the obligations,
duties, and liabilities created by this franchise shall pass to
and be binding upon the successors of the City and the successors
and assigns of Grantee; and the same shall not be assigned or
transferred without the prior written approval of the City
Council, which approval !hall be sought and obtained in accordance
with Section 5 1/2-26 of the Cable Television Ordinance. Grantee
specifically agrees to comply with the provisions of said Section
5 1/226.
SECTION XX. FRAWHISE FEE.
In consideration of the terms of this franchise for the first
tan years from the date of Grantee's acceptance of the terms of
the franchise, Gtantee agrees to pay to the Cit~r a sum of money
equal to five percent (51) of Grantee's gross subscriber revenues
per year pursuant to the provisions of Arttele I of the Cable
Ordinance. Thereafter, for the remainder of the term of the
agreement, Grantee shall pay to the City a aum of money equal to
seven percent (71) of Grantee's groat subscriber revenues pdr
year. If the lav does not allow the City to charge Grantee a
franchise fee in this amount, Grantee shall continue to pay five
percent (5x). the Grantee shall pay to the City in quarterly
inetallments within fort five (45) days after March 30, June 301
September 30 and December 31 of each year the franchise fee
attributable to gross receipts of the Grantee during the
,;receding quarter.
SECTION XXI. RATES.
To the extent permitted by federal and state lav, the'City
may regulate the following rates, fees and charges:
(1) Rates fr bscribers the whether provision
rresidential cable
commercial
su
including mult!ple tiers of basic cable service.
(2) Ratse for the initial installation or the rental of
one set of the minimum equipment which is nerassary
for the oubsevibers' receipt of basic cable sc Nice.
(3) byy the other Grantee that a may ybea of cc a sa bjoet to delivered
regulation.
The Grantee may petition tho Council for a change in rates
subject to regulation bq filing a proposed rate schedule with the
City Clerk. The procedures outlined in Section 5 1/2-70 of the
Cable Ordinance shall then be followed.
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SECTION XXII. ACCESS TO SERVICES AND FACILITIES.
i
Grantee shall provide the minimum range of services required
from time to time by the FCC as its regulations presently exist
or may hereafter be amended including, without limiting the
foregoing, public, educational and governmental use channels in
accordance with the following conditions:
(a) Grantee shall provide and maintain five channels for
public pprogramming, educational programming and governmental 1
programming three initially and, in the event that the conditions
of Sectio)n 1/2-91 of the Cable Ordinance are met, Grantee shall
provide rdditional access channels. In any event, Grantee shall
provide and maintain at least five channels not later than
November 1, 1993.
(b) The three initial channels, which are being maintained as
of the date of Grantee's acceptance of this Agreement, shall be
designated for the following use:
(1) University of North Texas
(2) Texas Woman's University
3 Public Aceesa/Local Organisation
(c) The access channels deacribed in subsection (a) above
shall be made availahle for non-commercial use to qualifying
applicants without chatge when requested all in accordance with
thha rules hereinafter mentioned.
(d) Rules shall be established by the cooperative effort of
City and the Grantee regarding access prograsmUS, priority of
use for the access ehanael, prohibition of lottery imfornation,
obscene or indaceet natter, and peraittia= public inspection of
the complete record of names sad addresses of all persons or
groups requesting access tunas
(e) Should a dispute arise between the user of an access
chanral and the Grantee relative to the quality of the audio or
visual signal, at the request of either, the dispute will be
submitted to an independent engineer to be jointly selected by
City and Grantee. The party requesting that such testing be
performed shall be required to pay for the cost of testing and
analysis performed by the engineer, unless the engineer shall
find that there is a distortion of signal quality. If a ,
distortion is found, the party responsible for causing the
distortion shall pay the cost of testing.
(f? The Grantee shill provide "A/1 switches" and "lock
boxas,I or similar parental control devices, at a reasonable
price to any subscriber upon such subscriber's request.
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(g) Subject to Section 5 1/2-40 of the Cable Ordinance, the
Grantee agrees to provide reasonable equipment to be used by
access cable casters with the aid of a technical and production
staff to be provided by the cable operator. Equipment that can
store programs for later showing shall be provided. in addition
Grantee shall make available a centrally located studio to all
access users on a first-come, first-serve basis. Grantee shall
provide, at a minimum, the production equipment and facilities
designated in Exhibit 3. All equipment shall be maintained in
good working order by Grantee and shall be replaced as needed,
consistent with good operating practice.
(h) Grantee agrees to continue to maintain a local {
programming studio containing the equipment specified in Exhibit
aad shall provide adequate staffing for the local programming
studio and for training of the public in the use of production
equipment. Grantee shall keep a log of inquiries by citizens
requesting such training and shall conduct free training sessions
in use of cablecasting equipment and cablecasting techniques not
less than once each three months during the term hereof.
(i) Grantee also agrees to provide an instructor and the
facilities to train, without charge, once per year, potential
access users through sessions offered through the Denton
Independent School District.
(j) Grantee shall establish rules and rates if necessary, to
ensure that the studio is available in an equitable sanaer
provided that Grantee shall not, charge for use of the public and
educational access channels unless City has approved the charging
of the proposed fee.
` (k) The parties hereby incorporate by reference' the
provisions of 41 U.S.C. 5321 which provisions are hereby amended
to apply to the Grantee and the City, as appropriate. These
provisions are incor rated herein to assure that the widest
possible diversity ofinformation sources are made available to
the residenti of the City from the Cable System in a sanner
consistent with the growth and development of the Cable System.
Grantee shall undertake any and all construction installation
necessary to keep current with the latest technological and
economically feasible developments in the state-of-the-art cable
television, whether with respect to increasing channel capacity,
developing new services, and instituting two-way service or-any ,
other state-of-the-art technologyy. Further, Grantee s ecifically
agrees to comply with Section 5 1/2-93 of the Cable Ordinance. ,
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SECTION XXIII. EMERGENCY OVERRIDE.
Grantee shall provide and maintain the equipment necessary
for the City to maintain an emergency alert system to override,
by remote control, the audio and/or video atonal to transmit a
message regarding a bona fide emergency over all cable video
channels simultaneously. Grantee shall designate a channel which
will be used for emergency broadcasts. Grantee shall provide a
remote data terainal, telephone linen, modems, cables and any
other items needed to adequately supply this service. Such
equipment shall be maintained ■t a location designated by City.
SECTION XXIV. PROGI"ING MIX.
(a) Grantee agrees to provide programming that maintains the
mix of distinct and separate channels that is presently provided
and listed in Exhibit 4. In accordance with the Cable 11ht, the
Grantee shall, for the term of this Agreement maintain the mix,
quality and level of programming set forth in iVibit 4.
(b) in addition to the programming six indicated abovd', j
Grantee rill use the up ceded system to provide a widd' range and
assortment of optiona? programming services. Grantee shall
provide, at a minimum, the following additional services$
(1) Provision of an additional full channel space
for films end culfural entertainment programmi%
(2) Provision of an additional full channel space for
children's entertainment programming
(3) Addition of . full channel appace for documsatary,,
public broadcasting programming
(4) weather n infof a full ormation service el space devoted to
(3) Addition of a Pay-Per-View Channel
(c) Such services shall be provided not later than November
1, 1994. Grantee agrees to produce a minimum of 400 hours of
local originatidn programming annually. Otte hundred (100) hours
of such programming may be supplied from other Saasa local
origination sources. ` a
SECTION XXV. PORCE KUVJPt. r,
In the event the Grantee's diligent performance of any of the
terms, conditions, obligations or requirements of this Agreement
is prevented or impaired due to any cause beyond its reasonable
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control which was not reasonably foreseeable to the parties
hereto, such inability to perform shall be deemed to be excused
for the period of such impairment, and no penalties or sanctions
shall be imposed. Before invoking this Section, the Grantee must
have exercised good faith in attempting to perform such terms,
conditions, obligations or requirements. Causes beyond the
Grantee's reasonable control and not reasonably foreseeable to
the parties hereto shall include, without limitation, labor
unrest and strikes. Upon its best good faith efforts to obtain
all authorisations on an expedited basis, the Grantee shall also
be excused for time delays in construction requirements in
Section VI which are caused by unreasonable delays on the part of
utility companies or the City in issuing licenses, permits or
authorisations for poles and conduits or other authorisations
necessary to continue construction. Whari the Grantee cannot
obtain access to any individual's property, after due diligence
and a good faith effort by the Grantee to obtain access to such
property compliance with the terms of this Agreement shall be
excused Ly the City as to that individual and the consequential
effects thereof only, and only for such period as the property is
inaccessible. Where the cause beyond the Grantee's control is !
either an act of God or civil emergency, an inability to perform
during such period shall not be an independent ground for
teraiamtLon of this Franchise Agreement.
SECTION XXVI. WrICES-
All notices, statements demands, requests, consents,
approvals, authori:ations, oRers, agreements, appointments or
designations hereunder by any party to another shall be in .
writing and shall be sufficiently given and served uppon the other
party, immediately if delivered personally or by telex or
telecopy (provided with respect to telex aad telecopy that such
transmissions are received on a business day during normal
business hours), on the second business day after dispatch if
sent by first class mail, registered or certified, return receipt
requested, postage prepaid and addressed as follows:
The City: City of Denton, Texas
215 E. McKinney Street
Denton Texas 76201
Attention- City Manager
The Grantee: Suusons Communications, Inc-
y {
500 South Erve Street, Suite 200-A
Dallas Texas 75201 11,%
Attentlor: General Counsel
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SECTION XXVII. SAVINGS CLAUSE.
If anq section, subsection, sentence, clause, phrase or
portion of this ordinance is for any reason held invalid or
unconstitutional by s federal or state court or administrative or
governmental agency of competent jurisdiction, specifically
including the Federal Communications Commission, such portion
shall be deemed a separate, distinct and independent provision,
and such holdin shall not affect the validity of the remaining
portions thereof.
SECTION XXVIII. CONFLICTING ORDINANCES AND RESOLUTIONS.
All ordinances or resolutions in conflict herewith are
expressly repealed to the extent of such conflict, except that in
the event of a conflict between the Cable Ordinance and the
franchise agreement, the ordinance shall prevail.
SECTION )MIX,. FEES.
This franchise ordinance renews and extends that Ordinance
which has previously been `ranted for the operation of Cable
television services in the City of Denton, Texas. Grantee agrees
to pay to the City of Denton a lump sum fee of $91,027, I5,000 of
which was paid by Grantee on July 8 1988, and the remainder of
which will be paid upon acceptance of this franchise agreement b
the Grantee. The sum of Sixty Thousand Dollars (;60,000
represents a voluntary contribution by Grantee in lieu of capital
expecditures and Grantee agrees that such payment may not be
deducted from the franchise fees provided for herein. Grantee I
specifically agrees, and to the extent permitted by law, waives
any rights to Clain to the contrary. The City roes to use such
funds for the operation of the Local Goveranontafhannel. Grantee
agrees to pay the sus of $31 027 to reimburse City for the coats
incurred in preparing, reviewing and awarding this franchise.
SECTION XXX. PAYNOT OF TAXES.
The Grantee covenants ■nd agrees that it will pay and
discharge, or cause to be paid and discharged, in timely fashion
all payments in lieu of taxes, service charges, assessments,
utility foes, user fees and other governmental charges which may
lawfully be imposed upon the Grantee with respect to the Grantee
or the Cable System or any portion thereof or relatiag thereto
or upon the revenues and income therefrom and will pay all lavfui
claims for labor, material and supplies which, if unpaid, might
become a lien or charge upon any of said properties, revenues or !
Income or which might impair the security interest granted by
this Agreement or the value of the Cable System or the Grantee;
provided that nothing in this Section shall require the Grantee
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to make any such payment so long as the Grantee in good faith
shall contest the validity thereof.
SECTION XXXI. NON-LLADILITY.
The City shall not be liable to the Grantee or any other
person or entity for death or personal injury or for loss, damage
or destruction of property in, on or about the Cable System or
any part thereof by or from any cause whatsoever other than the
City's own negligence or willful misconduct, nor shall the City
be liable in any way or regard to the Grantee or to any of the
Grantee's affiliates, officers, directors, memberps agents or
employees if any claim is asserted against the Grantee by any
toxin g authority or other entity as the result of any election or
decision which the Grantee may make or may have made with respect
to the Cable System for purposes of filiq federal or state income
or franchise tax returns or making any other type of filing what-
soever; and the Grantee shall indemnify and save harmless the City
and its officers, agents and employees from, and defend the sacs
against, any and all claims, liens, liabilities, expenses (includ-
ing attorneys' fees and disbursements), losses and judgments
arising from death or personal injury or from the loss, damage or
destruction of property of any person or entity resulting directly
or indirectly from any acts, omissions or negligence of the
Grantee, its officers, agents or employees with respect to the
use of, occupancy of, or operation in, on, of, or about the Cable
System or the Grantee.
SECTION XXXII. WAIVERS.
No waiver by City of any breach, default or violation of the
terms, covenants or conditions hereof to be performed, kept and
observed by Grantee shall be construed to be or act as a waiver
of any subsequent default of any of such terms, covenants and
conditions.
SECTION XXXIII. APPROVAL AND ACCIPTANCE.
In accordance with Section 13.02 of the City Charters this
ordinance shall become iffective twenty-one (21) days after final
! approval, if, before that date, Create* shall give its written
accepptance of this ordinance by signing as provided below; and
provided that 'after final approval and before the expiration of
twenty-one (21) days, the full text of this ordinance shall be
published once each week for two (2) consecutive weeks in the
official newspaper of City, the expense of which shell be borne
by Grantee.
Grantee for itself, its successors and assigns hereby accepts
this ordinance and agrees to be bound by all of its terms end
provisions.
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387
PASSED AND APPROVED on first reading, this the day of
14~j1?1~L(A~ , 1988.
PASSED AND APPROVED this the Arj day of &&MIAM, 1988.
e4=~- ,
RAT 5T
FtmW30 MAYOR
ATTEST:
APPROVED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ArMlY
BY: 1
GRANTEE
SAMMONS COMMlNICATtONS, INC.
RY:
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..0001
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STATE OF TEXAS 4
COUNTY OF DENTON
ACCEPTANCE BY MARCUS OF TERMS AND CONDITIONS TO
TRANSFER OF THE CITY OF DENTON. TEXAS
CABLE TELEVISION SYSTEM AND FRANCHISE
("ACCEPTANCE AGREEMENT')
Marcus Cable Associates, L.P. ("Mavis") makes the following agreement for the f
purpose of accepting Ordinance No. 95- /Q/ of the City of Denton, Texas ('City")
consenting to the transfer of the franchise granted by Ordinance No. 8.199, as amended from
Sammons Communications, Inc./Sammons of Fort Worth to Mantua Cable Associates, L.P.
i
Marcus Cable Operating Company, L.P., Marcus Cable Company, L.P., and Mama
Cable Properties, L. P. join this Agreement for the purpose of guaramaeing Marcus' performance
of the Franchise and this Agreement. '
A. The promises, covenants, and conditions contained herein Inure to the benefit of
the City and are binding on Marcus.
B. Marcus acknowledges that the transactions described in the Asset Purchase I i
Agreement dated as of April S, 1995, between Marcus Cable Associates, L.P. as buyer and
Sammons Communications, Inc., Simmons of Fun Worth, and c her entities as seller (col-
lectively "Sammons'), and the transfer of the franchise granted by Ordinance No. 88-199 (the
"Ordinance" or 'Franchise") Pursuant thereto are expressly subordinate to and will not affect
the binding nature of the Franchise ud the obligations of the Gmatee provided for therein, and
that the consent of the City to the transaction does not constitute a waiver or release of any
rights of the City. Marcus assumes and agrees to perform all of the obligations of the Franchise
including any obligations to make refunds for periods prior to the transfer.
C. Marcus acknowledges that the City has consented to the transaction in reliance
upon the repmsentations, documents and information provided by Marcus and Sammons, a'I of
which are incorporated herein by reference.
D. Cufito 1Cisefflim
1. Marva will cumply with the customer service rules of the FCC as j ! +
presently in effect, 47 CFR 176.309. Mucus's compliance shall be
measured and enforced as follows:
A. For the purpose of such rules 'normal business hours" therein us
deemed to be 8:00 AM to 5:00 PM Monday through Friday, and
Saturday 9:00 AM to 1:00 PM.
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b. Transfer to or answering by a voice mail system (or other
automated response system) does not constitute answering 'by a
customer representative" under 0 76.309(c)(11) or analogous
provisions of such rules.
C. Within 20 business days of the close of each calendar quarter (or
monthly, if the City requem same), Mamas will provide the City
with a report In such form as the City and Marcus may reasonably
agree, seeing forth on a consistent basis, fairly applied, Marcus's
performance as compared to such imWards, including in partk-.,Iu
as compared to the standards for telephone answer time, busy ~I
signals, standard Installations, service interruptions, appointment
windows, refunds tad credits.
d, Such reports shall Dow and use the telephone calla originating
from within the City if that Information Is readily available from
the system, and u to InaWlations, service interruptions, appoint-
ment windows, refunds, credits aid the like shall show and use
data only for subscriber in the City,
e. Such reports shall show Mucus's performance including and
excluding any periods of abnormal operating conditions, and if
Marcus contends that any nub abnorttati conditions occurred
daring the reporting period in question, they shall also describe the
tiro and exterd of such conditions.
f. Marcus acknowledges that trot -VIIitnce with customer service
standards will harm subscriber std the City and that the extent of
harm will be difficult or (rmmijle to meaner. The City may
therefore assess liquidated damages agalaa Marcus for non-
compliance with the ?receding customer service standards u
follows: The FCC Rules currently state u to ; 76,309(c)(Ixii) ~
and (iv); and J 76.309(c)(2xq, (il), (W) and (iv) (collectively
'quarterly customer service staoduds') that the suoduds set forth
therein "shall be met no tea than ninety (90) percent of the time
under norms) operating conditions measured on & quarterly buis.'
k
(i) Liquidated damages may be unused if Mama does not
meet the ninety (90) percent standard for a given subsection 1
(for example, ¢76.309 (c)ftli)) of the quarterly customer
service standards in a given caktdu quarter u follows. i
pint Second Third and subsequent
Noncompliance Noncompliam Noncompliance
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0 $ 2.000 S 4,000
(ii) The City may collect liquidated damages from any bond,
letter of credit, or security fund farnlshed under the
Franchise.
2. In the event of a change in 47 CFR 4 76.309 that snakes any of the
Federal customer service swAanis therein less stringent thin those In
effect in July, 1995, the City may adopt customer service regulations as
to the subject matter of the portion of the rule that is changed. City '
agrees to meet with Micua on any proposed changes prior to +rking
action on them, and to provide Marcus with at leant 60 days notice of Axh
action. Marcus agrees to comply with any such provisions that are no
more stringent than thou contained in 47 CFR # 76.309 as :a effect is
July, 1995 and to such extent agrees that it is not entitled to recover the
costa of such compliance through external cost treatment or otherwise.
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3. Marcus acknowledges that under applicable law the City may unilaterally
establish and enforce reasonable customer service regulations that exceed
or are not addressed by the standards establiabed by the FCC or the
standards cunemly established by the Franchise.
4. Maness will provide at minimum the same quality of customer service that
Sammons Is currently providing, but in all events no lw than the quality
of service required by the Franchise, Chapter 8'Cable Television' of the
Code of Ordinances of the City of Denton, and any other applicable City
ordinance and applicable FCC regulations. As evidence of and to mist
In compliance with such commitment, Sammons AM Marcus agree as
follows:
A. On an anmual basis Marcus will provide the City with historical
expenditure information and staffing levels on customer rorvice
related matters; the cuswmer service standards currently uikJ; its
materials, if any, on same as used by Its cvuotoer service
representatives; and Its procedures and forms used to mature
commmplianmce with applicable customer service stamdu&.
b. Mama will provide Poch other information u the City reasomabty N
requests MIA* to customer service matters.
f
R. Sjis>t~l_Quality. The following shale apply to Marcus' *lamentation of and
compliance with the mks and regulations relating to cable tekvltion technical standards for
38
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signal quality adopted by the FCC in MM Dockets 91.169 and 83.38 on February 13. 1992 and
subsequent amendments thereto;
I. All testing for compliance with the FCC technical standards shall be done
by a person with the necessary expertise and substantial experience in
cable television matters.
2. Upon request, Mama shall provide the City with the written report of
such testing.
3. Marcus shall establish the following procedure for resolving complaints ~i
from subscribers abort the quality of the television signal delivered to
them, A11 complaints shall go initially to the manager of Marcus' local
office. All matters not resolved by the manager shall at Marco' or the
subscriber's option be referred to City for attempted resolution. Ali
matters rot resolved at that step shall be referred to the FCC for it to
resolve.
I
4. Marius shall annually notify its subscribers of the preceding.
5. Upon request by the City, Marcus at its exoeme will tea the system in
areas or at subscriber locations specified by City where there are apparent
I
problems and provide City with the written repot of such taring. If the
tea shows a noncompliance with such standards, Marcus will bring the
system into compliance with such standards within 180 days.
' F. Prior DeLW, Marcus agrees on behalf of itself and Its affiliates that it will not
contend directly or indirectly that any defaults or failures to comply with the franchise or other
matters set forth in 41 USC ¢ 346(cx 1)(A) (Communications Act of 1934, Section 626(c)(1)(A))
(collectively 'defaults'). by Simmons occurring prior to the transfer to Mantas are waive!,
including but sot limited to the following;
I. The ability of the City to obtain redress for prior defaults, such as
recovery of any underpayment of franchise fees.
,
2. The ability of the City to enforce in the ham any Franchise terms which
may not have been etifurced in the past. r ,
Marco reserves the right to contend that the transfer and the City's approval thereof
preclude the City from considering defaults that occurred prior to the transfer in contraction with
any renewal or non-renewal of the Franchise. The City reserves the right to oppose ;uch
contention.
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The City confirms that it has Informed Marcus of all defaults or other instances of
noncompli.nce with tha Franchise of which the City Administrator primarily responsible for
cable television matters is aware as of the date hereof (without, however, having conducted any
financial or other audit of performance or compliance).
0. Validity of Franchlse. Marcus accepts and agrees to be bound by the terns and
conditions of the City Charter, Chapter 8 "Cable Television" of the Code of Ordinances, the
Franchise and all other ordinances applicable to its operations after the transfer. Manus does
not contend that any provision of the Franchise is unlawful or unertorceable, nor is it aware of
any other ordinance or any provision in the City Charter which it contends is unlawful or
unenforceable, The City acknowledges that the Franchise is in full force and effect.
H. Service sM F,nu went for Public F'li
1. Manua will continue to provide the same Installation sad service without
charge to public facilities as Sammons is providing at the present time, but
In all events no less than is required by the Franchise. Chapter 8 "Cable h
Television" of the Code of Ordinances, or any other applicable city
oMtnaece.
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2. In addidon, at the City's request Marcus will provide to the public
facilities identified in the Franchise or other applkablecity ordinance the
highest level of installation and service without charge u it provides to
any other community in the Fort Worth area,
3. If any service or equipment for public facilides provided pursuant to
subsections (1) and (2) above exceeds the requirements of the Franchise,
Chapter 8 "Cable Television" of the Code of Ordinances, or other
applicable city ordinance, Marcus will trot pass through the costs as so-
called "eiternal costs" or as new franchise requirements, except that
Marcus may pass through the cost of such services under subsection (b)
above that exceeds the Milremems of thu franchise or other applicable
city ordinance to the emeol that cost exceeds $3,000 per year in Fort
Worth, $2,300 per year in Denton or $300 per year in each other
' community.
1. FFO Mania. '
c:.
I. Marm agrees to set goals for conaoets to be eotst with qualified
Denton minorities, women and other residents to provide goods,
equipment and services to Mucus.
2. Manua agrees to set goals for jobs (including supervisory and midman-
agemm positions) to be made available by Marcus to qualified Denton
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minorities, women and residents. To this end, Manus agrees to faithfully
adhere to all applicable federal, state and city laws, rules and regulations
pertaining to ron-d iscrimination, equal employment and affun ative action.
3. During the term hereof, Manus agrees to share information developed in j
paragraphs (1) and (2) above upon request of the City. Marcus will
furnish the City with the foregoing goals and its concept proposals for
meeting them within 120 days after the transfer.
Matcw agnu to faithfully adhere to all applicable -aderal, state and city laws, rules and
regulations relating to non-discritination, equal employment and affirmative action.
1. A=ss Records, The records and reports of the franchise grantee which are
to be submitted to the City or otherwise made avw Jabte for the City (such as for inspection by
the City) pursuant to the Franchise or other ordinance or charter provisions of the City shall
include records maintained by Marcus Cable Operating Company, L.P., Mattes Cable
Company, L.P,, Manes Cable Properties, L.P,, and their affiliates to Cite extent necessary fer
the City to discharge its responsibilities under the Franchise, Chapter b "Cable Television" of
the Code of Ordinutces, FCC rotes or state or local law, or to Insure compliance with the
Franchise or this Agreement.
JJ
K. 1
1. Marcus will give the City 60 days notice In writing prior to allowing any
telecommunications entity other than Marcus to use or lease Its facilities
(other than towers) in the City or capacity thereon or to amending any
agreement with such an entity. No such arrangements or uses are
presently In existence except as have been disclosed. "Telecommuaka-
bons entity' means any entity subject to the jurisdiction of or regulated by
the Federal Communications Comminion (such as under the Communica-
tions Act of 1934 as amended) or the Texas Public Utility Commbrlon or
their muccossors, Including telephone, alternative seem sad cable
companies. Marcus will provide the City with such documew relating
to the foregoing as the City may reasonably request, including "in of
.the agreements.
2. Marcus wilt give the City 60 days notice In writing prior to providing
telecommunications services within the City or making Its facilities (other
r I t
than towers) available to others for tbat purpose. 'Telecommunications
secvices" mean conventional telephone service, mch as W cbed tocah
exclange service; and Doti-switched atrAm, such as alternative access
service which connect user locations and connect users to long distance ~p~
companies, ers
a" w in or my wilea oF wtl-et-drrEtedr~i
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801 Whig ("@Qh 'A- kes am
IasaO.
3. Nothing herein shall expand or modify any restrictions or limitations
under the Franchise or applicable law on use for telecommunicatlon
purposes of the facilities being acquired by Marcus.
i
L. T ansa don Tramaoarem to Rates. ML-us acknowledges that the transfer, the
consent process, the City's action granting consent, and this Acceptance Agreement do not
provide any basis for Increasing the amounts paid by subscribers (mmgh coat pass-through as
so-called "external costs" or as new franchise requirements and the content process, action, and
this agreement do not provide any basis for increasing the amount: paid by subscribers in any
other manner, except as otherwise provided herein.
M. Other Matter.
1. In the event of any conflict between tb: terms of this Acceptance
Agreement and the Franchise, Chapter 8 of the Code U Ordinances, the
City Charter, or any City Ordinance, that provision which provides the
greatest benefit to the CO, in the opinion of the City Council, shall j
prevail. 1
2. Marna wlII join the City in obtaining from the FCC any waiver from
time to time necessary to effectuate the provisions of this Acceptance
Agttseme>g.
3. If the transfer A the Franchise to Marc is Cable Associates, L.P., is not
completed on or before March 31, 19%. then at the City's option prior
to the transfer occurring, this agreement W the City's consent to tratsfer
shall become null and void. Such option may be exercised prior to the
transfer occurring by the City giving written notice to Marcus and
Sammons at the addresses designated in the Meet Purchase Agreement
dated as of April S. 1993.
4. Marcus will cause the City to be mintWned, by Sammons or otherwise.
for Its reasonable expenses in connection with t:a consent process
including publication costs and fen of consultants and u ornsys, including ti
the City Attorney. Such reladxnememt abaft not exa ed the aggregate
amount of $125,000 phis publication coats for the City and the other
municipalities which have acted with the City In connection with the
consent process.
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1.
4
S. The term "affiliate' means any individual, partnership, association, Joint
stock company, trust, corporation, or other person or entity who owns or
controls, or Is owned or controlled by, or is under common ownership or
control with the entity in question.
6. Venue of any suit under or arising out of this Agreement shall be
exclusively in Denton County, Texas or in the United States District Court
for the Northern District of Texas. This Agreement shall be construed it
accordance with the laws of the State of Texts.
N. Section 842(1) of the Cable Television Ordinance, No. 188-182, providea that
"any negotiated We value which the Council determines will cause a significant affect on
subscriber rates in order to (matte the purchase may result in a denial of transfer.' The City
will not deny approval of the trintfer on the basis of this provision, but the parties agree that
the provision may be interpmW to permit the City to deny bmrre rate increases that are based
upon sak price. Marcus reserves the right to contest the enforceability of the provision as So
interpreted.
0. Other Provisions.
A. Marcus will promptly, but no later thaw twelve months from the effective
date of the ordL-A= approvinj the transfer and assignment of the
Franddse to Marcus, provide the capability for Insertion of video
prosrsmmio~ and other video, voice and data messages into the cable
system at di points In the Clr/ regained under Section VI (b)(6) of the
Franchise (this has been done only at the Municipal Building thus far) and
will comply In all respects wlrh that section of the Franchise.
b. Marius will allocate one cf the five access channels provided under
Section XXII (a) of the Franchise to the Denton Indepeadeot School
District when the District is madly to use an aortas channel,
c. Upon request of the City Marcus will collat from subscribers and pay to
-the City a monthly amount of no more than $.SO for each subscriber
within the City limits for this purpose of auisting in Roamin$ total access
activities. Sucb charge shall be set out u a upaase line item on the r
subscriber's bill and shall not be deemed a payment for buic service but
a pan-through of an saiss and chug will not be pan of my nw for purposes of pcakuk the franchise r I \
fa. Mum will remit the money to the City mos thiy.
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d. Manus accepts sad agrees to perform the obligations of the CAN Pole 1
Lease Agreement of 1979 between the City and Golden Triangle
Communications and of the Cable Duct Use Alima ant Between the City
and Sammons Communications, Inc, executed or yr about April, 1988.
P. Marcus has informed the City's rm wW consultant, KFA Services, of the terms
of commitments it has received from equity Investors and lender for }Lancing its acquisition
of the Sammons systems, KFA Services' report of August 4, 1995, is based in part on this
Information. Marcus acknowledges that the City Is relying on that report in acting on the
application for approval of the transfer. Marcus agrees to inform the City's financial consultant
of any material differences between its final fmaxing anangemats and those disclosed In the i
approval Frocess, Mama fLrther agrees that the City may withdraw Its Approval and reconsider
the application if any such differences would have a material adverse effect on Mucus or the
mibscribers•
Q. In accordance with the letter executed by Richard A. B. dlelner and Peter
Armstrong dated August 16, 1995, A copy of which is attached hereto tad incorporated hereto,
by execution of this Acceptance Agreement, Mama extends the 120 day period to October 1,
1995 and agrees to all the terms And conditions of the attached letter.
Mucus Cable Associates, L.P.
Dated: By;.:2&1&
Marcus Cable Operating Company, L.P., Mama Cable Company, L.P,, and Matto
Cable Properties, L.P., herby unconditionally guarantee performance of the obligations of the
Franchise And of this Acceptance Agreement by Mum Cable Associates, L.P.
Mm us Cable Operating L.P.
Dated: 11fl~d.t'
By:~
r.
Mat+as Gbh Company, L.P. i t ~ Ir
Dated: e By.-~/fij,r~,
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Al
Mucus Cable Proptniyes, L.P.
Dated: By:
a
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Y
1
a.,,r,ooenx,,.aarm~rn
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CITY OF DENTON
MAJOR POINTS- MARCUS CABLE CHANGE OF OWNERSHIP
The ordinance and agreements approve the change of ownership of Marcus, with substantial protections
for the City and its residents as follows:
• Ownership changes to companies owned by Paul Allen (co-founder of Microsoft). Namemay
change to Charter Communications
Detailed customer service provisions-16 pages tong. Key points include:
• Strict standards on answering phones, responding on service calls and the like
Customer service available 24 hours/day, 7 day",eck
• Phone calls answered in 30 seconds 90% of the time
• Respond to service Interruptions within 24 hours
• Must meet FCC signal quality standards
• Service calls on time or customer gets $20
• Monthly, quarterly reports on compliance with standards
• Liquidated damages for failure to submit reports, meet phone, service call standards
• Generally Sl/subscriber for first violation, S2 second violation, $3 third
violation, with $5,000 minimum
• Damages assessed by City
• Requirement of local office reaf!itmed, open 8.5 Mon-Fri, plus 8 Additional bours/week
• Some assurances of continuity of management team which has corrected Marcus' recent major
problems I
• High speed Internet service over cable system authorized
• Marcus intends to provide same soon (already providing in some areas on limited basis)
• Free high speed Internet senice to libraries, 3 City buildings
Rate increases limited to once per year
Strengthened protections for City against future changes in control of Marcus
Guarantee orcable franchise, related documents, by parent companies of Marcus
• Sevtral current franchise violations, disputes with Marcus, resolved in City's favor
• Funding pmvided for City, schools to upgrade cameras and egvj*pment to new High Definition
Television Format r.hcn 30 channels switch to that format q 4,
• Reimbursement of City's costs related t,) transfer, getting problems corrected
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DENTON
AGREEMENT
Paul G. Allen, as transferee of ultimate control of Marcus Cable Associates, L.L.C.,
makes the following agreement for the purpose of accepting an ordinance of the City of
Denton ("City") consenting to the transfer of control of the cable television franchise in the
City and the restructuring described in an Acceptance Agreement dated
1999. Capitalized words and phrases in this Agreement have the meaning set forth in the
Acceptance Agreement.
1. Covenants Binding. The promises, covenants, and conditions
contained herein inure to the benefit of the City and are binding on
Allen.
2. Acknowled cat: Allen acknowledges that the transfer of control and
restructuring are expressly subordinate to and will not affect the
binding nature of the Franchise and the obligations provided therein,
and that the consent of the City to the Transaction does not constitute
a waiver or release of any rights of the City.
3. Reliance: Allen acknowledges that the City has consented to the
Transaction in reliance upon the representations, documents and
information provided by Company, Charter, Vulcan and Allen, all of
which arc incorpo,-ated herein by reference.
4. Alleged Prior Defaults. All ;n agrees that he will not contend directly
or indirectly that any defaults or failures to comply with the franchise
or other matters set forth in 47 USC $ 546(cxl XA) (Communicatio-is
1 Act of 1934, Section 626(cx) XA) (collectively "Defaults") which may
have occurred prior to the Transaction are waived, including but not
limited to the following:
4.1, 7'he ability of the City to obtain redress for alleged prior
Defaults, such as recovery of any underpayment of franchise
fees or obtain refunds for periods prior to the Transaction.
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4.2. The ability of the City to enforce in the future any Franchise f 1+, `
terms which may not have been enforced in the past
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4.3. The ability of the City to consider alleged Defaults occurring
prior to the Transaction in connection with any renewal or
nonrcnewal of the Franchise. j~
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4.4. This Section 4 is without prejudice to Company contending that
an alleged default or failure to comp!y either did not occur or 3
has been cured.
5. ontinu'ly of Management. Allen acknowledges that (a) at the time of
submission of the Form 394 subsc,i"uers residing in the City were
experiencing serious and on-going deficiencies in service, (b) the
provisions of Exhibit 8 are in response to these problems, and (c) the
City is approving the Transaction and the transfor of control in reliance
on the actions taken by Allen and Charter in the interim to improve
customer service and in the expectation of continuity of Charter's
management to assure that the problems will not recur. Allen has
caused the City to be informed that he intends to keep the present
Charter management team in place.
5.1. Allen agrees that if there is any substantial change in Charter's
senior management prior to December 31, 2001, then (a) Allen
or William D. Savoy, and (b) a top officer of Charter, upon
request, will appear in person in a public forum in Tarrant
County, Texas (to be held jointly with other cities with whom
Allen has made a similar agreement) in advance of the change
for the purpose of explaining the change and answering
questions, "Substantial change" for purposes of this Section
means a change of the CEO of Charter or the senior executive
reporting to him or her who Is responsible for the systems in
1 Texas managed by Charter.
}
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Date:
Paul O. Allen
0OMRFC00C9IC W2M120 tTI 1
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DENTON
ACCEPTANCE OF TERMS
AND CONDITIONS TO TRANSFER OF CONTROL OF A
CABLE TELEVISION SYSTEM AND FRANCHISE
("ACCEPTANCE AGREEM1,14T")
This Acceptance Agreement dated as of .1999 relates to a cable television
franchise granted by the City of Denton ("City") in Ordinance No. 88.189, as amended by
Ordinance No. 95.191 and an Acceptance Agreement dated September 12, 1995. The
foregoing Ordinances and the 1995 Acceptance Agreement are hereinafter referred to
collectively as the "Franchise." Marcus Cable Associates, L.L.C., formerly Marcus Cable
Associates, L.P., is the current grantee under the Franchise and is referred to herein as
"Company".
Company is a wholly owned subsidiary of Marcus Cable Operating Company, L.L.C.
Marcus Cable Operating Company, L.L.C. is a wholly owned subsidiary of Marcus Cable
Company, L.L.C. Marcus Cable Company, L.L.C. is in turn wholly owned, directly or
indirectly, by Marcus Cable Properties, Inc. ("MCP'7 and Vulcan Cable, Inc., a Washington
corporation ("Vulcan"). MCP and Vulcan are wholly owned by Paul O. Allen ("Allen").
The followhig matters are the subject of this Acceptance Agreement;
• Vulcan will become the Manager of Marcus Cable Company, L.L.C. pursuant
to First Amendment to Operating Agreement dated August 25, 1998.
a Allen has acquired 93.251.0 ownership of Charter Communications, Inc.,
("Charter'), a Delaware corporation that indirectly owns all of the Charter
cable television operating entities. Charter has been conducting the day-to-day
operations of Company pursuant to a Management Consulting Agreement
dated as of October G, 1998.
• Charter Communications Holdings, L.L.C. ("CC Holdings"), a Delaware
limited liability company, owns or will own 100% of Marcus Cable Company,
which will continue to own 100% of Marcus Cable Operating Company,
L.L.C., which in turn owns 100^/ of Company and 100% of all other Marcus
cable television orcrating entities. CC Holdings will also have Indirect 1001/6 ownership orali Charter cable television operating entities,
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• CC Ioldings will be 100% owned directly or indirectly by MCP, Vulcan,
Charter and Vulcan Cable 11, Inc. ("Vulcan 11"), a Washington corporation.
Allen owns 100% of Vulcan 11 in addition to his ownership of 100% of MCP
and Vulcan and 93,23% of Charter.
Vulcan, Vulcan 11, Charter, CC Holdings, MCP and Marcus Cable Associates, L.L.C.
make this agreement for the purpose of accepting an Ordinance of the City comenting to the j
transfer of control of the franchise to Allen and the restructuring set forth above, Including
management of Company 'Sarter.
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The structure of ownership and control as it will exist after the transfer of control and
the restructuring is set forth in Exhibit A attached hereto. The transfer of control of
Company to Allen and the foregoing restructuring, including Charter's management of
Company, are referred to collectively herein as the Transaction.
1. Covenants Binding: The promises,covenants, and conditions contained herein
inure to the benefit of the City and are binding on MCP, Charter, Vulcan,
Vulcan 11, CC Holdings and Company.
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2. Ag nowledament; CC Holdings, MCP, Charterand Vulcan acknowledge that
the transfer of control and restructuring are expressly subordinate to and will
not affect the binding nature of the Franchise and the obligations provided
therein, and that the consent of the City to the Transaction does not constitute j
a walver or release of any rights of the City. l
3. $g]janc : Compamv, CC Holdings, MCP, Charter and Vulcan acknowledge
that the City has consented to the Transaction in reliance upon the
representations, documents and information provided by Company, Charter
and Vulcan, all of which are incorporated herein by reference.
4. Customer Service. Company will comply with the customer service and
consumer protection provisions set forth in Exhibit B,
5. Prior Defaults. Company, MCP, Charter, Vulcan and CC Holdings agree that
they will not contend directly or indirectly that any defaults or failures to
comply with the franchise or other matters set forth in 47 USC § 546(c)(1XA)
(Communications Act of 1934, Section 626(LXIXA) (collectively "Defaults")
occurring prior to the Transaction are waived, inclu4ing but not limited to the
following.
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5.1 The ability of the City to obtain redress for prior Defaults, such as
recovery of any underpayment of franchise fees or obtain refunds for
periods prior to the Transaction.
5.2 The ability of the City to enforce in the future any Franchise terms
which may not have been enforced in the past.
5.3 The ability of the City to consider Defaults occurring prior to the
Transaction in conn-xtion with any renewal or nonrenewal of the
Franchise.
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5.4 This Section S is without prejudice to Company, N,CP, Vulcan or CC
Holdings contending that the default or failure to comply has been
cured.
6. YalidilY of Franchise. Charter, MCP, CC Holdings and Vulcan accept and
agree to be bound by the terms and conditions of the City Charter, the
Franchise and all ordinances applicable to Company's operations after the
transfer. Charter, MCP, CC Holdings, Vulcan and Company do not contend
that any irovision of the Franchise is unlawful or unenforceable, nor are they
aware of any ordinance or any provision in the City Charter which they
contend is unlawful or unenforceable. The City acknowledges that the
Franchise is in full force and effect,
7. Franchise for Cable Onlv. Company, MCP, CC Holdings, Charter and Vulcan
a:knowledge that the Franchise is granted solely for the provision of Cable
Service including services described in Section 12.
8. Service and Equipment for Public Facilities.
8.1 Following the transfer of control, Charter, MCP, CC Holdings and
Vulcan will cause Company to continue to provide the same
installations and service without charge to public facilities being
provided at the present time, but in all events no less than is required by
the Franchise, this Acceptance Agreement or any applicable city
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9, Access to Records; The records and rep3its of the franchise grantee which are
to be submitted to the City or otherwise made available for the City (such as
for inspection by the City) pursuant to the Franchise or other ordinance or
charter provisions of the City shall include records maintained by Charter, k
Vulcan, CC holdings and their Affiliates to the extent necessary for the City
to discharge its responaibilitics under the Franchise, FCC rules or state or local
law, or to insure compliance with the franchise or this Acccr!ance Agreement,
10. 1=1glction Transp rent to Rates: CC Holdings, Charter, MCP, Company and
Vulcan acknowledge that unless expressly provided elsewhere in this i
Acceptance Agreement (a) the transfer, the consent process, the City's action
granting consent, and this Acceptance Agreement and the terms hereof (other
than Section 18.2.) do not provide any basis for increasing the amounts paid
by subscribers through cost pass-through ej so-called "extemai costs" or as
new franchise requirements, (b) the consent process, action, and this
Acceptance Agreement do not provide any balls for Increasing the amounts
paid by subscribers in any other manner, and (c) Company will not separately
itemize costs or franchise requirements arising from this Acceptance
Agreement on subscriber bills, i
11. Reykw of Purchase Price. Section 8-62(i) of the Cable Television Ordinance
contains provisions relating to review by the City of the price paid for the
cable system and the impact of that price on future rates. In light of the
present limitations and uncertain future of rate regulation, the parties have
agreed not to address the interpretation, application and enforceability of these
provisions in the consent process. All such matters may be ralsed and decided i
in the future. MCP, Charter and Vulcan agree that the City has not waived any
claims or rights it may have in that connection by failing to pursue them In the
transfer approval process and the City acknowledges that MCP, Charter and
Vulcan have not waived any rights in that connection.
12. Cable Modem, lligh-Spged Data and Internet Services. The Federal
Telecommunications Act of 1996 modified the definition of "cable services"
in the federal Cable Act (Title V1 of the Communications Act of 1934, 41
USC Section 115 and folliwing). The change addresses cable companies'
ability to provide Enhanced, Advance, Cable Services over a Cable System k
as a cable service (and not as a ~%:lcphone service, with accompanying
telephone regulation.) The Franchise predates and does not reflect this $
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legislative change. Company inlends to provide Enhanced, Advanced Cable
Services where economically feasible.
12.1 To remove any uncertainty on Company' authority to provide
Enhanced, Advanced Cable Services the parties agree that Company
has the authority to provide Enhanced, Advanced Cable Services under
the Franchise a,td that the revenues therefrom shall be included in gross
revenues for the purpose of computing and paying cable franchise fees.
12.2 If Company provides any Enhanced, Advanced Cable Services to
residential subscribers within the City, then without any initial or
ongoing charge it shall provide the City cable modems and associated
access to the Internet with a speed of up to 250 kbs. Such modems and
service shall be provided to each City library located within City and
to three (3) additional locations specified by the City in City buildings.
13. System Upgrade. If Company has scheduled an upgrade of Company's
facilities in the City drat has notyet been completed, the estimated completion
date is shown on Schedule 13. Company, CC Holdings, MCP, Charter and
Vulcan agree that the Transaction will not adversely affect the scope or timing
of the upgrade.
14. CZtinuity of Management. Company, CC Holdings, MCP, Charter and
Vidcan acknowledge that (a) at the time of submission of the Form 394
subscribers residing in the City were experiencing serious and on-going
deficiencies in service, (b) the provisions of Exhibit B are in response to these
problems, and (c) the City is approving the Transaction and the transfer of
control in reliance on the actions taken by Allen and Charter In the interim to
improve customer service and in the expectation of continuity of Charter's
management to assure that the p•oblems will not recur. Allen and Chatter
have informed the City that f icy intend to keep the present Charter
management team in place. Until the Transaction is completed, Charter will
continue to manage Company and the cable television system in the City.
15. Frequency of Rate Increases. Company will not file a submission to increase
its rates for basic cable service, equipment, or service calls regulated by the
City more than once in each calendar year. e l
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M. Other Matters.
16.1 Conflict: In the event of any conflict between the terms of this
Acceptance Agreement :u7d the Franchise or any City Ordinance, that
provision which provi ;es the greatest benefit to the City, in the opinion
of the City Council, shall prevail.
16.2 Waivers-. The parties hereto will join the City in obtaining from the
FCC any waivers or other relief from time to time necessary to
effectuate the provisions of this Acceptance Agreement.
16.3 Null and Vold: At the City's option this Acceptance Agreement and
the City's consent to the Transaction shall become null and void in
either of the Ibllowing circumstances. Such option may be exercised
prior to completion of the Transaction by the City giving written
notice to Company and Vulcan at the addresses designated in the Form
394.
16.3.1 if the transfer of control of the Franchise or any other
part of the Transaction is not completed on or before
October 31, 1999.
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16.3.2 If the Management Consulting Agreement dated as of
October 6, 1998 pursuant to which Charter is directing the
management of Company is terminated or if Charter's
control over Company's operations is materially rtduced.
16.4 CZU: Vulcan will cause the City to be reimbursed for its reasonable
expenses in connection with th3 consent process including publication
costs and fees of consultants and attorneys. Such reimbursement shall
not exceed the aggregme amount of $275,000 plus publication costs for
the City and the other municipalities which have acted with the City in
connection with the consent process. Reimbursement of costs and fees
under this provision shall not be considered a payment of francb1se
fees, shall not be passed through to subscribers and is subject to the
provisions of Section 10.
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16.5 Venue and Choice of Law; Venue of any suit under or arising out of t t,
this Acceptance Agreement shall be exclusively in Denton County,
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Texas or In the United States District Court for the Northern District of
Texas. Thla Acceptance Agreement shall be construed in accordance
wM the laws of th; State of Texas.
16.6 Tregtment of ,iquidat,:d Damages; Company, CC Holdings, MCP and
Vulcan acknowledge and agree that liquidated damages under this
Acceptance Agreement (including its Exhibits) and the Franchise do
not constitu'e franchise fees, do not reduce the amounts otherwise
payable as franchise fees, and will not be passed through to subscribers.
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16.7 Y2K Compliance: By September 30,1999 Company will become Y2 K
compliatil and will establish and provide the City with a copy of a
contingency plan to prevent disruption of mission critical components
including customer service matters.
16.8 Wire M4jntenance Fee: Company has announced its intention to
discontinue the 990 optional wire maintenance fee program that
Company first implemented in 1998 ("Current Fee") and offer in its
place an optional program covering maintenance of both telephone and
cable wires for a monthly fee of approximately 990 ("New Avgram").
16.8.1 If this occurs during or before March 1999: (a) the City will not
seek to obtain refunds of amounts collected under the Current J
Fee; (b) if the City has adopted a Aide Order with respect to the
Current Fee, the Rate Order will be deemed to be withdrawn;
and (c) if there is a proceeding pending before the FCC with
respect to such a Rate Order Company and the City wi;l jointly
request termination of the procecd;91g.
16.8.2 The City will not challenge the New Program during 1999 if the
monthly charge remains under $1.00.
16.9 Rate Orders: Unless a final order of the FCC (affirmed on appeal if an
appeal is taken) determines that franchise authority rate orders are
automatically stayed by the filing of an appeal to the FCC, Company
will implement each rate order adopted by the City unless and until
Company obtains an order of the FCC or a court of competent
jurisdiction staying the effectiveness of the rate order. Company will , r fr \ r;
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reimburse all attorneys fees and other expenses Incurred by the City as
a result of a violation of this Section 16.9,
16.10 Frinchise Fee Calculation! Company will comply with the decision of
the United States Court of Appeals for the Fifth Circuit in City of
Dallas v FCC, I IS F3d 393 (1997).
16.1011 Company will pay the additional franchise fees due it
under the Fifth Circuit decision with intere•.i. and without
pass-through to subscribers for the time period from
September 1997 until Company implemented the
decision.
16.10.2 Company will also pay the additional franchise fees due
under the Fifth Circuit decision for th;, period of time
from the FCC's decision in United Artists Cable of
Baltimore, 10 FCC Red, 7250 (1995) to September 1997
together with Interest thereon. Company may pass
through payments under this Section 16,10.2 to
subscribers (other than Interest) if and to the extent
Company reduced its charges to subscribers as a result of
the FCC's decision.
17, Institutional Network ; Company shall provide, construct, of rate and
maintain an Institutional Network (excluding coders/decoders, interface and
other terminal equipment which will be supplied by Users) that will provide
the City and other I-NET Users with Institutional Network Services. The I.
NET shall be as set forth below. Unless the City agrees otherwise in writing,
the 1-NET, including the individual fiber optic fibers constituting all or a
portion of it, shall be owned and maintained by Company but provided for the
exclusive use of the City and other I-NET Users and shall be provided without
any charge to the City or 1-NET Users.
17.1 This Section is left blank,
17.2 Company shall +nstall and terminate additional fi;wr optic pairs
("Incremental I-N6T Fiber") in Company's future ~ewandreplacement i f
fiber optic installations for use as an I-NET es follows. t
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17,2.1 City will inform Company In writing from time to time of the
additional facilities it would like to have served by an 1-NET,
Company will use such information in its plans for future fiber
installations, where (forexample) one routing will pass a facility
City would like to have served and another (of comparable cost)
would not.
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17.2.2 By January 31 of each year Company will provide City with its
conceptual plans for new and replacement fiber optic
construction for that calendar year.
1713 Company will also provide City from time to time during the
year with written notice of conceptual plans for any additional
fiber optic construction duritig that year (er January of the
following year). Such notice shall be provided as soon as Is
feasible.
17.2.4 Upon written request by City, Company will provide City with
a conceptual cost estimate (and other information City may
reasonably require) of installing Incremental I-Net Fiber along
all or a portion of the routes that are a part of such conceptual
plans. Such estimates shall be provided as soon as possible after
request by City In order that City may have time to obtain
approval (such as from its legislative body) to Instill such
Incremental I-Net Fiber.
1715 As to a ry route where City has requested a conceptual cost
estimate, Company shall provide City with the final cost of
installing Incremental I-Net Fiber (and such other information
as City may reasonably request) as soon as Company's design
of the fiber for such route is reasonably complete, City will
have 30 days after receipt of the final cost figure to notify
Company to install Incremental 1-NET Fiber.
17.2.6 The cost of installing Incremental I-NET F&r shall be
computed on an incremental basis, meaning the difference in
cost to Company of constructing and installing fiber on a given .
route (a) with, and (b) without, the Incremental I-NET Fiber. t t e
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17.2.7 Company shall be reimbursed by City for the cost of installing
I-NET fibers under this Section 17.2 computed asset forth in
Section 17.2,6.
17.3 I-NET Maintenance. Company shall prc.Ide 1-NET Users with 8
reliable level of service, repair and maintenance that at a minimum,
meets the following pcrtbrmance standards;
17.3.1 Company shall maintain a minimum of 99.5 percent service
availability to 1-NET Users measured over a period of one year.
17.3.2 Company shall respond to repair requests from an 1-NET Use,
for circuits Identified as critical pursuant to Section 173.4
within 2 (two) bouts of the request. Company shall respond to
other repair requests within four (4) hours of the request.
17.3.3 Company shall provide ongoing maintenance at its discretion,
as it deems necessary. Company shall provide at least one week
advance notice to any affected I-NET User of any maintenance
requiring temporary Interruption of services, except in
emergency situations.
17.3.4 Company and the City shall develop a mutually agreeable
priority listing of critical circuits and their terminal locations.
When notifying Companyofset-vice complaints, an I-NET User
shall identify critical circuits requldng priority repair. Company
shall escalate repair of critical circuits to the extent reasonable
under the circumstances.
17.4 Definition .
17.4.1 Institutional Network or 1-NET means the fiber optic
communications network described in Section 17 and Schedule
17 to be constructed and operated by Company for the provision
to I-NET Users (but not Cable Service subscribers) of j
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17.4.2 Institutional Network :'Mt,M means the provision of usable
bandwidth capacity to I-NET Users through fiber optic lines for
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applications including but not limited to two-way dedicated
voice, data, video and telephony channels connecting and
interconnecting facilities owned, leased or used by the City,
schools, counties, road commissions or other units of state or
local govemment. Other applications include but are not limited
to computerized traffic control systems for coordinated traffic
control on an area-wide basis; Supervisory Control and Data
Acquisition (SCADA) systems for municipally owned water,
sewer, gas and electric systems (including street lighting
systems); interconnection of facilities serving police, fire and
other public safety systems, vidlon arralgnment fa., it itics for local
courts; interconnection of government buildings for the two or
one-way interchange of video signals; and local area networks
or wide-area networks connecting governmental buildings, such
as for G1S (Geographical informational Systems) purposes.
17.4.31-NET Use means and is limited to the City and any school or
unit of state or local government designated by the City to
receive Institutional Network Services under this Acceptance
Agreement.
18. HDTV: Broadcast and cable channels are likely to convert in whole or in part
to ar HDTV (high definition television) format within the next few years, with
cha,mcls likely being delivered in both HDTV and conventional analog
formdi; during a transition period. The following provisions address the
ability of the City to acquire additional PEG Channels such that one or more
Users may have their cignals simultaneously delivered by the Cable System in
both an HDTV and conventional analog 6 MHz MSC format for the transition
period, and provide funds for Users to convert to an HDTV format.
18.1 Report,; Company shalt provide quarterly reports to City or its plans
and progress for HDTV conversion, including the number of channels
to be converted, date, equipment changes, formats to be used and other
information reasonably necessary for the City to be able to plan an
ppropriate and potentially concurrent conversion of PEO Channels and
facilities to HDTV format.
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18.2 Grant: After the date when Company provides at least fitly (50)
channels in one or more of several high definition television (or
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successor) formats, as such formats may from time to time be adopted
or in effect ("HDTV Format"), then upon request from City Company
shall provide a Capital Facilities grant to City sufficient for Users to
convert all their facilities and equipment (including but not limited to
studios, vans, video, audio, lighting, control, storage and editing
equipment) to the HDTV Fonnat selected by City but with the amount
of such grant not to exceed 30¢ per customer per month when
amortized over Company's subscribers as of the end of the cakr dar
quarter preceding the date when the grant is made, using straight line
amortization without interest for the lesser of five (S) years or the
remaining term of the Franchise. City shall allocate the grant among
Users for such purpose as City deems Is In the public interest. Company
shall modify the cable system whereby Company receives PEG signals
from each User (for redistribution on its Cable System) so as to be
capable of receiving and accepting the User's signals. City shall co-
ordinate with Company to ensure that the HDTV Format selected by
City is compatible with the format employed by Company.
18.3 lemporarv Additional PEG Channel : After the date when Company i
provides at least fifty (50) channels in HDTV Format, City may from
time to time request, and Company shall provide, ono additional PEG
Channel so as to allow, to the extent deemed appropriate by City, PEG
Channel simulcasting in both 6 MHz analog NTSC format and In an
l IDTV Format. Company need no longer provide the additional PEG
Channel described in the preceding sentence when Company no longer
provides any channel of programming on the Cable System In 6 MHz
NT SC analog format.
18.4 Allocation of PEG Channel s: As of the effective date of this
Acceptance Agreement City may allocate and reallocate PEG Channels
as follows: City may at any time on six (6) months notice to Company
allocate or reallocate the usage of the PEG Channels among and
between different uses and Users. This e„ pressly may include City
removing a User or PEG Channrr replacing a User or PEG Channel,
requiring several different persons to share or jointly use a given PEG
Channel or conversely allowing one or more persons currently sharing
such a channel to have a channel on which they are the sole User.
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19. Leased Access and PEG Lhanne.: The need for a PEG Channel can be
removed by Company providing the User designated by City of such current
or prospective PEG Channel with an otherwise identical leased access channel,
so long as the leased access rate for such User is One Dollar ($1.00) per year.
In the event the preceding sentence is exercised it shall be applied first to
educational channels and then to public channels. If applied to such channels
the channel number on which they are tamed shall not be changed and such
channels shall be included in the basic tier of service and shall be listed in
Company's program guide or comparable listing with an appropriate j
description, such as "City of Fort Worth Channel" or "Fort Worth Public
Schools Channel" The need for a PEG Channel is removed only so long as
the User in question in fact is provided with such leased access channel.
20. Transfer. City consent in advance shall be required for a transfer of control of
Company, which shall include, but is not limited to, any of the following:
20.1 Any change in limited partnership interests, non-managing limited
liability company interests, or non voting stock representing thirty
percent or more of the equity interests in the entity in question. j
20.2 Any option, right of conversion or timiltr tight to iwy,rite interests
constituting control without substantial additional coc,sidcration (such
as compared to consideration previously provided).
20.3 Any change in the effectiv control of Company hicluding that I
described in 47 C.F.R. § 76.501 and following (ir; uding the notes
thereto but excluding footnote 20 as in effect on the date of this
Acceptance Agreement.
20.4 A transfer by haul 0. Allen of any interest in MCP, Vulcan, Vulcan 11
or Charter other than to an retity at least BO% owned by him that
assumes the guarantees provided in Section 23.
20.5 Any transfer or transfers such that the direct and Indirect ownership of
Allen in CC Holdings is less than 70°/a.
20.6 Any acquisition of more than 10% ownership of CC Holdings by a
person or entity (or a group of persons or entities acting together) other t
than Allen or entities wholly or more than 80% owned by Allen.
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21. Special Provision: Company will implement the refund plan in response to
FCC Order OA97-2441 upon approval of the plan by the FCC and without
filing a petition for reconsideration or other delaying action. f
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22. Definitions. The following definitions shall apply for the purpose of this
Acceptance Agreement and its Exhibits.
22.1 Affiliate means any individual, partnership, association, joint stock
company, limited liability company, trust, corporation, or other person
or entity who owns or controls, or is owned or controlled by, or Is under f
common ownership or control with the entity in question. j
22.2 Capital Faci ivct means PEG Channel and I-NET related facilities and
equipment including fiber lines, studios, production facilities, vans and
cameras or other property having it useful life of more than one year, as
well as any expenditures which increase or add to the value of the
facilities or equipment, adapt the facilities or equipment to new or
different uses, or maintain, restore, extend or prolong the useful life of `
such facilities or equipment.
223 Cable Servigg means
223.1 The one-way transmission to all subscribers of (i) Video
Programming, or (ii) other programming services, by which is
meant information which Company makes available to all
subscribers geacrally, such as digital cable radio service, and
22.3.2 Subscriber interaction, if any, including but not limited to that
~ which is used for the selection or use of such Video
Programming or other programming services, selecting from
various on-screen options, use of Enhanced, Advanced Cable
Services, game channels, interactive services, downloading
programs or data access, or ordering merchandise, and
22.33 Institutional Network Services.
22.4 Cable System or System means a facility consisting of a act of closed
transmission paths and associated signal generation, reception, and
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control equipment that is des?gned to provide Cable Services to
multiple subscribers within the franchised area, but such ternt does not
include (i) a facility that serves only to retransmit the television signals
of one or more television broadcast stations; (ii) a facility that serves
subscribers without using any public right of way; (iii) a facility of a
common carrier which is subject, in whole or in part, to the provisions
of Title 11 of the Communications Act of 1934, as amended, except that
such a facility shall be considered a Cable System (other than for
purposes of Section 621(c) of such Act) to the extent such facility is
used in the transmission of video programming directly to subscribers,
unless the extent of such use is solely to provide interactive on-demand
services; (iv) an open video system that complies with Section 653 of
Title VI of the Communications Act of 1934, as amended; or (v) any
facilities of any electric utility used solely for operating its electric
utility system.
22.5 Enhanced. Advanced Cable Services means enhanced services,
information services, Internet protocol (iP) telephony, htgh speed data
service, Internet access and Internet service (such as that of an Internet
service provider),
22.6 ECC means the Federal Communications Commission.
22.7 I•NET Use has the meaning set forth in Section 17.4.3. 1
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22.8 Institutional Network or I•NET has the meaning set forth in Section
17.4.1.
22.9 Instiiuonal Network Services has the meaning set forth in Section
17.4.2.
22.10 PEG Chanuth means the public channels, educational channels and
govcrinnent -hannels provided by Company on the cable system under
the Franchise, this Acceptance Agreement, or applicable ordinance, and
shall include leased access channels provided pursuant to Section 19
herein,
22.11 LLjU means a person authorized to operate or use a PEG Channel (or a t ~
teased access channel provided in lieu of a PEG Channel under Section
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19) or the I•NET, and shall include City. If several persons share the
operation of a PEG Channel each person shall be a separate User.
22.12 Video Prona mina means programming provided by, or generally
considered comparable to programming provided by, a television
broadcast station.
23. Guarants~• Marcus Cable Properties, Inc., Vulcan Cable, Inc., Vulcan Cable
R, Inc., Charter Communications, Inc. and Charter Communications Holdings,
L.L.C. hereby Jointly and severally unconditionally guarantee performance of
the obligations of the Franchise and of this Acceptance Agreement by
Company.
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Vulcan Cable, Inc.
By: I~
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Vulcan Cable II, Inc.
By: - -
Marcus Cable Associates, L..C.
By:
Marcus Cable Properties, Inc.
By:
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Charier Communications, Inc.
By:
Charter Cci ~munications Holdings, L.L.C.
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By.
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Ownership end Control Structure Revised February 17,1999
Paul o. Allen
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ownenhiy 1 ownmhrp Ownmhlp Owneohlp 1
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Charter tts% 7entd Krnq
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Properties, Inc, Inc,* Inc. Ina h h Hawed Wood
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C Marcus Cable Charter Communications 1
Properties, L L.C, -a H Holdings, L,L.C."
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Ownmhlp 1 end lndir"I 1 r
ownenhlp ~
Marcus Cable 1
Company, L,L,C,~
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Marcus Cable Charter
operating Company, Communications
L,L.C. Operating entities
Ioo%aE en ION 1 Management Consulting
end Inmrecl 1 1 o mmhry Agreement, 101W98
ownenAly
al l other Marcus Marcus Cable
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Cable operating Associates, L,L.C.,
entities current franchise im e• e• 0- M N M
grantee
Vulcan Cable, Inc, is the Manager of Marcus Cable Company, L,L.C, per First Amendment to Operating Agreement dated 9125/98.
Charter Communications Holdings, L.L.C. is 100% owned by Marcus Cable Properties, L.L.C., Vulcan Cable, Inc,, Vulcan Cable 11, Inc,,
and Charter Cot. ,munks4ons, Inc., collectively. H Is intended that these four top tier companies will be merged into a single entity in the future.
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EXHIBIT B TO ACCEPTANCE AGREEMENT
CUSTOMER SERVICE AND CONSUMER PROTECTION
1. Customer Service Standards: Company shall at all times comply with the
more stringent of the customer service and consumer protection provisions of
this Exhibit B, the Franchise and the FCC. This requirement is in addition to
the specific provisions of subsequent sections set forth below.
1.1 Company shall continue to comply with the National Cable Television
Association's On-Time Customer Service Guarantee, a copy of which
is attached as Exhibit BI. The guarantee promises on-time service tails
or ti,e customer receives $20.00, and on-time installation calls or the
customer receives it free installation. The $20.00 may be in the form of
a credit.
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1.2 Company may provide the Customer Bill of Rights of Charter to its
subscribers In the City.
2. City Monitorine: In addition to free outlets, free cable service or services
otherwise required by the Franchise, Company shall provide one service outlet
(which shall be at the Cable Administrator's office at City Hall, unless
otherwise specified by City) that shall receive without charge all programming
(and any other Cable Services) provided by Company, including services of
a premium, pay pct view or other nature. Such service shall be provided in
such a manner that City may monitor the programming and use of the cable
system for compliance with the Franchise, this Acceptance Agreement, FCC
technical standards, and applicable law. The services provided pursuant to this
Section 2 shall be in a secure office locatioa and not in a location open to
public viewing. C
3. Scrambliing Bloc inn: Upon completion of the planned system upgrade to
860 MHz, Company shall at all times scramble both the audio and video
portions of all channels with predominately adult oriented programming.
3.1 Upon request by a subscriber, Company shall entirely block such
subscriber from receiving both the audio and video portion of any
channel with predominantly adult oriented programming with devices
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such as a notch filter which prevent the frequencies containing a
specific channel or channels from being transmitted into the
subscriber's rr,r rises.
4. Pay Per View: Subscribers shall be given the options of (a) not having pay per
view or per program service available at all or (b) only having such service
provided upon the subscriber providing a security number selected by an adult
representative of the subscriber.
5, ration: Company shall provide written information on at least each of
the following matters (a) at the time of installation or reinstallation of service,
f (b) annually to all subscribers, and (c) at any time upon request of a subscriber
or the City. The information shall be dated with the printing, revision, or
effective date.
5.1 Products and services offered.
5.2 Prices (rates) and options for Cable Services and conditions of
subscription to Cable Service. Prices shall include those for
programming, equipment rental, program guides, installation,
disconnection, processing charges for late payment and other fees
charged by Company.
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5.3 Installation and service maintenance policies.
5.4 Instructions on how to use Cable Services, including procedures and
options for pay per view, premium channels and connection to a VCR.
3.5 Channel positions of programming carved on the cable system,
including a listing specific to the City showing the channel names and
numbers actually available to subscribers in the City.
5.6 Billing and complaint procedures with a notice for fits subscriber to
initially contact Company with complaints and questions,
5.7 Applicable privacy requirements as set forth In the Franchise or
provided for by law,
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5.8 The availability of lockout devices and the ability to have a channel
entirely blocked or trapped (Section 3.1).
5.9 The refunds and free service available for violations of Sections 10 and
12 and how to obtain some.
5.10 The procedure for resohing signal quality problems set fonh in Section
20.2.
6. &fice of Chanacs: Subscribers and the City shall be notified of any changes
in riles, Cable Services or channel positions as soon as possible through
announcements on the cable system or in writing. Company will notify City
in advance of notifying subscribers and will make every effort to notify City
forth-five (45) days in advance of a change. Unless a longer time period is
required by applicable law or regulation, notice must t,e given to subscribers
a minimum of thirty (30) days in advance of such changes if the change is
within the control of Company and as soon as possible if not within the control
of Company. In addition, Company shall notify subscribers and the City thirty
(30) Jays ht advance of any significan, changes in the matters covered by the
pre:cding Section 5. Notifications provided pursuant to this Section shall be
dated with the printing, revision or effective date.
7. T-6 phone Sen ice Standards:
7.1 Company shall have a local or toll-free telephone number available for
use by subscribers toll-free twenty-four (24) hours per day, seven (7)
days per week.
7.2 The local or toll-free numbers shalt be listed, with appropriate
explanations, in the directory published by each local telephone
company and in any significant directories published by others.
µ 7.3 Trained Company Representatives shall be available to respond to
subscriber telephone inquiries twenty-four (24) hours per day, seven (7)
days per week.
7.3.1 As to video service matters, the term "Trained Company r'•
Representatives" shall mean employees of Company who have t t
the authority and capability while speaking with a subscriber to,
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among other things, answer billing questions, adjust bills, and
schedule service and installation calls.
7.3.2 This Section 7.3 will take effect October 1,1999
7.4 Under Normal Operating Conditions, telephone answer time by a
Trained Company Representative, including wait time, shall not exceed
thirty (30) seconds from when the connection is made. If the call needs
to be transferred, the time to complete the transfer time shall not exceed
thirty (30) seconds. These standards shall be met no less than ninety
percent (901/o) of the time under Normal Operating Conditions,
measured on a quarterly basis.
7.5 Under Normal Operating Conditions, the subscriber shall receive a
busy signal less than three percent (3%) of the time, measured on a
quarterly basis.
8. Office/Home Delivery-Pick Uo:
8.1 Company shall maintain a physical office within the City, which shall
include a place where subscribers may pay their bills, pickup and return
converter boxes and comparable items and receive information on
Company and its services.
8.1.1 The office shall be open at least from 8 AM to 5 PM Monday
through Friday plus ea additional 8 bouts In the evening and/or
on the weekend.
9. Installation Standards! Under Normal Operating Conditions, Installations
located up to one hundred fifty (150) aerial feet from the existing distribution
cable system shall be performed within seven (7) business days after an order
has been placed no less than ninety-five percent (950/9) of the time, measured
on a quarterly basis.
10. Instal lation3 S mice Calls; The following shall apply to subscribers (current
or new) requesting installations or services
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10.1 Installations and service calls shall be available at a minimum from 8
AM to 7 PM Monday through Saturday. Company shall at the
subscriber's option either (1) schedule the subscriberto be the first call
of the day or last call of the day on a first come, first served basis, (2)
schedule the appoirtment for a date certain on a "call to meet" basis
where as the service technician finishes his/her prior task, the
technician calls the subscriber and arranges to meet the subscriber
shortly thereafter, or (3) establish an appointment window of no more
than three (3) hours with the subscriber (or adult representative of the
subscriber) or another appointment window mutually agreed upon
between the subscriber and Company.
10.2 Company shail respond to the request for service in accordance with the
option selected by the subscriber.
10.3 Company shall not cancel an appointment with a subscriber aver 5 PM
on the business day ptior to the scheduled appointment.
10.4 If Company's technician is ninning late for an appointment with a j
subset;bcr and will not be able to keep the appointment as scheduled,
the subscriber shall promptly be contacted. The appointment shall be
rescheduled, as necessary, at a time which is convenient for the
subscriber.
10.5 In the event access to the subscriber's premises is not made available
to Company's technician when rre technician arrives during the
established appointment window, the technician shall leave written ~
notification stating the time of arrival and requesting that Company be
contacted again to establish a new appointment window.
10.6 Notwithstanding the foregoing, if Company's technician or service
representative telephones the subscriber during or prior to the
appointment wirdow and is advised that the technician will not be
given access to the subscriber's premises during the appointment
window, t%cn the technician shall not be obliged to travel to the F
subscriber's premises or to leave the written notification referred to
abuse, and the burden shall again be upon the subscriber (or adult
mpresentative of the subscriber) to contact Company to arrange fora
new appointment,
10.7 Except as otherwise provided above, Company shall be deemed to have
responded to a service or installation request under the provisions of
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this section when a technician arrives at the service location or is
advised by telephone no access will be given.
10.8 Company's service technician or service representative shall take
adequate time on each service call to address or correct the problem in
question.
10.9 In the event that Company ceases to provide the NCTA On-Time ~
Customer Service Guarantee (Exhibit 91) a violation by Company of
the provisions of this Section 10 shall automatically entitle the
subscriber to one month of free basic service and (if currently
purchased by the subscriber) one month of free cable programming
service (as defined in 47 CAR. § 76.901).
10.10 Under Normal Operating Conditions, Company shall meet the
standards of Section 10.1 through 10.3 no less than ninety-five percent
(95%) of the time, measured on a quarterly basis.
11. Service Call Charges: No charge shall be made to the subscriber for any
service call relating to Company owned and Company maintained equipment
after the initial installation of Cable Service unless the problem giving rise to
the service request can be demonstrated by Company to have been:
11.1 Caused by negligence or malicious destruction of cable equipment by
the subscriber, or
11.2 A problem established as having been non-cable in origin.
12. Service Interruptions:
12.1 Under Normal Operating Conditions, Company shall meet the
standards Lf Sections 12.2 and 12.4 no less than ninety-five percent
(95%) of the time measured on a quarterly basis.
12.2 Under Normal Operating Conditions, Company shall begin workiag on
a Service Interruption promptly and In no event later than twenty-four
(24) hours after the Interruption becomes known to Company. r
123 "Service Intemiption" means the loss of picture or sound on one or
more cable channels, affecting one or more subscribers.
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12.4 Under Normal Operating Conditions, Company shall begin working on
subscriber complaints involving impahment or degradation of signal
quatity (other than a Service Interruption) promptly and in no event
later than the next business day after the problem becomes known to
Company.
12,5 Company shall be deernad to have begun work under the provisions of
this section when a technician arrives at the service location.
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12.6 Company shall provide affected subscribers, upon request by the City
or the subscriber, with one day's free service (equivalent to the service j
they were receiving at the time of the interruption) for each day or
portion thereof of Service Interruption.
13. Log of Complaints: Company shall maintain a written log, or an equivalent
stored in computer memory and cepable of access and reproduction In printed
form, of a random sampling of all cable-related customer Complaints within
the City that are referred to Company's Customer Care Group. Such log shall
be in form and sutstance acceptable to the City and at minimum list the date j
and time of each vich Complaint, identify the customer to the extent allowed
by law, and describe the nature of the Complaint and when and what actions
were taken b, Company in response thereto. The log shall be organized by
City. The log shall be kept at Company's office in or near the City for a
period of at least two (2) yearq and shall be available for inspection during
regular business hours by the City up )n request.
14. M.- Company shall comply with the following on Cable Service billing:
14.1 Bills shall be issued mondily to each subscriber with a balance due or
change of service,
14.2 Bills shall be clear, concise and understandable. Bills shall be fully
itemized, with itemisations Including, but not limited to, basic service,
cable programming service, premium service charges and equipment
charges, Bills shall also clearly delineate all activity during the billing
period, including optional charges, rebates, credits, and late charges.
14.3 Each bill shall prominently display Company's local or toll-free
telephone numbers available for use by subscribers, If a bill has more
than one portion (for example, one portion that Is kept by the customer
and one portion that is sent to Company) the num'.rers shall prominently
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appear on the front side of the portion of the bill retained by the
customer.
14.4 Company shall respond in writing to all written complaints from
subscribers regarding billing matters within thirty (30) days,
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14.5 Company shall not disconnect a subscriber for failure to pay
legitimately contested charges during a billing dispute. However,
during a billing dispute Company may disconnect a subscriber for
failure to pay charges that are not contested.
14.6 The City shall be given thirty (30) days advance notice of any change
in the format of bills.
15, Refunds and Credits: Refund checks for Cable Scrvice she11 be issued
promptly, but no later than either;
15.1 The subscriber's next billing cycle following resolution of the request
or thirty (30) days, whichever is earlier, or i
15.2 If service is terminated, 30 days after return of equipment owned by
Company or at the time of the next billing cycle, whichever is earlier.
15.3 Credits for Cable Service shall be Issued no later than the subscriber's
next billing cycle following a determination that a credit Is warranted.
16, late payment for Cabe Service
\ 16.1 Each bill shall specify on its face in a fashion emphasizing same (such k
as bold face typ:, underlined type or a larger font): "For payments
received after [date] a $processing fee for late payment may be j
charged."
16.2 No processing fees for late payment, however denominated, shall be
added to a subscriber's bill less than twenty-one (21) calendar days
after the mailing of the bill to the subscriber.
16.3 No processing Pecs for late payment, however denominated, shall be t (j
added to a subscriber's bill by reason of delay in payment other than
those described In this Section 16. All such charges shall be separately
stated on the subscriber's bill and Include the word "late" In the
description of them.
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16.4 There have been negotiations in connection with this Acceptance
Agreement regarding the appropriate amount of fees that may be
charged for late payment. The parties have agreed to withdraw this
issue from consideration without prejudice to any claims and defenses.
17. Disconnection
17.1 Company shall not disconnect a subscriber for failure to pay until at
least forty-five (45) days have elapsed after the due date for payment
of the subscriber's bill and Company has provided at least ten (10) days
written notice separate from the monthly bill to the subscriber prior to
disconnection, specifying the effective date after which Cable Services
are subject to disconnection.
17.2 Company may disconnect a subscriber at any time if Company in good
faith believes that the subscriber has tampered with or abused
Company's equipment, that there is a signal leakage problem (or other
non-compliance with FCC rules or other standards which poses a risk I
to lives or property) on the subscriber's premises, or that the subscriber
is or may be engaged in the tt•..A of Cable Services.
17.3 Company shall promptly disconnect any subscriber who so requests 1
disconnection, No period of notice prior to requested termination of 1
service shall be required of subscribers by Company. No charge shall
be imposed upon the subscriber for or related to disconnection or for
any Cable Service delivered after the effective date of the disconnect
request (unlcas there is a delay in returning Company equipment). If
the subscriber fails to specify an effective date for disconnection, the
effective dale shall be deemed to be the day following the date the
disconnect request is received by Company provided that Company
equipment has been returned.
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17.4 The tent "disconnect" shall include customers who elect to cease
receiving Cable Service from Company and to receive Cable Service
or other multichannel video service from another person or entity.
18. Truth In Advertising: Company's bills, advertising and communications to its + (t;
current or potential subscribers shall be truthful and shall not contain any false
or misleading statement. For the purposes of the preceding, a statement is
false or misleading If it contains an untrue statement of any material fact or
omits to state a material fact necessary in order to make the statements made,
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in the light of the circumstances under which they were made, not misleading.
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19. Report,: Company shall provide reports to the City manthly (by the 15th
business day of the following month) and quarterly (by the l Sth business day
of the following quarter) as follows:
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19.1 The reports shall include the following forms currently used by Charter
or otherwise in form and substance acceptable to the City, showing on
a consistent basis, fairly applied, Company's compliance with customer
rervice standards.
19.1.1 System Statistics Report, Exhibit W1, which covers customer
service matters.
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19,1.2 Monthly Report of Service Calls by Reason, Exhibit B3, which j
shall include an explanation of the categories of reported
reasons.
19,1.3 Monthly Outage Summary by Franchise, Exhibit 114.
19,1.4 Monthly Service Call Availability Analysis and Installation Call G
Availability Analysis, Exhibit BS.
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19,1.5 Monthly Customer Call Sample Report, Exhibit 136, both by
City and on an overail basis, showing the results of a random
sampling of customer complaints referred to Company's
Customer Care Group.
19.1.6 Monthly Call Center Performance Report, Exhibit B7
(excluding the 2% "assumed" adjustment).
19.2 Such reports shall.thow Company's pcrfonuanceexcluding periods that
were not Normal Operating Conditions ("Abnormal OperatinE
Conditions") and if Company contends any such conditions occurred
during the period in question, it shall also describe the nature and extent
of Abnormal Operating Conditions and show Company's performance
both Including and excluding the time periods Company contends such
conditions were in crfcct. A,
193 At the City's request Company will provide additional information and
existing reports reasonably related to the measurement and evaluation
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of Company's compliance with the customer service requirements of
the Franchise, the Acceptance Agreement, and this Exhibit D.
19.4 Reports of installations/service calls (Section 10) and service
interruptions (Section 12) shall report matters occurring within the City.
Telephone reports may be for a larger area than the City if Company
can demonstrate that it is, in fact, representative of the phone service
provided within the City, such as where a call center receives calls from
numerous municipalities with no ability to distinguish between or give
preference to calls from one area or City over another,
19.5 The City, by itself or in combination with other municipalities, reserves
the right to audit Company (or any Affiliate of Company) to verify the
accuracy of the reports required under this Section 19. All records
(including those ofAffiliates) reasonably necessary to conduct the audit
shall be made available at a convenient location in the Fort Worth area.
If the audit discloses performance that Is three (3) percentage points
worse than any of the standards of the referenced sections (such as
compliance 92% of the time versus 95% of the time) Company shall
pay the City's costs in connection with the audit within thirty (30) days
of submission of an invoice.
20. FCC Technical Standa•da: The following shall apply to Company's
implementation of and compliance with the rules and regulations relating to
cable television technical standards for signal quality, currently set forth at 47
C.F.R. § 76.601 and following, and subsequent amendments thereto:
20.1 Company shall notify the City in advance of testing for compliance
with FCC standards. The City may have a representative present to
observe such tests and may designate one location to be tested.
Company shall provide the City with a report of testing for compliance
with such standards upon written request (but not more than twice a
year). Such report to city shall state, in pertinent part, that the person
doing the testing has reviewed the applicable rules and regulations of
the FCC, the industry standards and other materials referenced therein,
and that such testing was done fairly and either shows full compliance
with such rules and regulations or sets forth with specificity and in +
detail all areas of non-compliance, their actual or likely scope and
causes, and Company's professional recommendation of the best
corrective measures to Immediately and permanently correct the non.
compliance
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20.2 Company shall establish the following procedure for resolving
complaints from subscribers about the quality of the television signal E
delivered to them: All complaints shall go initially to company. All
matters not resolved by Company shall at Company's or the
subscriber's option be referred to the City for it to resolve. All matters
not resolved by the City may be referred to the FCC for it to resolve,
20.3 The City at its expense (no more than twice per year, barring unusual
circumstances) upon thirty (30) days written notice to Company may
test the cable system for compliance with the FCC technical standards.
Company shall cooperate in such tests and provide access to the cable
system. Company shall reimburse the City for the full expense of any
test which shows a material non-compliance with such standards.
21, Liquidated Damages • Telephone Service. Installation. Service Calls:
Company acknowledges that non-compliance with the customer service
standards identified above will harm subscribers and the City and the amounts
of actual damages will be difficult or Impossible to ascertain. For the second
calendar quarter of 1499 and thereafter, the City may therefore assess the
following liquidated damages against Company for non-compliance with the
customer service standards set forth in Sections 7.3, 7.4, 7.5, 4, 10.1, 10.2,
10.3, 10.10, 12,1, 12.2 and 12.4 (measured on a quarterly basis). Company
acknowledges that the liquidated damages set forth below are a reasonable
approximation of actual damages and that this Section 21 is intended to
provide compensation and is not a penalty.
213 Telephone Standards. The damages for non-compliance with one or ,
more of the standards in Sections 7.3, 7.4 and 7.5 during a calendar
quarter are:
21.1.1 First non-compliance: $1.00 per subscriber.
21.1.2 Second non-compliance within three (3) consecutive calendar
quarters: $2.00 per subscribes
2113 1'htrd non-compliance within six (6) consecutive calendar
quarters and (subject to Section 21.4) each subsequent non-
compliance: $3.00 pcr subscriber.
21,2 Service and Installation Standards. The damages for non-compliance
with one or more of the standards in Sections 4,10.11 10.2,10.3,10.10,
12.11 12,2 and 12.4 during a calendar quat sr are:
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2111 First non-compliance; 51.00 per subscribes
21.2.2 Second non-compliance within three (3) consecutive calendar
quarters; $2.60 per subscriber.
21.2.3 Third non-compliance within six (6) consecutive calendar
quarters and (subject to Section 21.4) eech subsequent non-
compliance: $3.00 per subscriber.
21.3 Minimums. The liquidated damages for the first and each subsequent
non-compliance under Section 21.1 or Section 21.2 shall be no less than
$5,000, unless modified as provided in Section 21.4.
21.4 Effect of Extended Periods of Compliance. If Company complies with
all of the standards identified in Sections 21.1 and 21.2 for eight
consecutive calendar quarters, the damages for the first subsequent non-
compliance with any of those standards will be the greater of 250 per
subscriber or $3,000.
21.4.1 Following such a non-compliance the damages provided in
Sections 21.1 and 21.2 will again be applicable so that the next
non-compliance within four (4) consecutive calendar quarters
will be subject to Sections 21.1.2 and/or 2112.
21.5 An event of non-compliance will be taken into account in determining
whether a later event of non-compliance is a second, third or I
subsequent event without regard to whether City has assessed
liquidated damages or taken any other action with respect to the non-
compliance.
21.6 Company shall report the number of subscribers within the City on the
last day of the quarter by the 1 Sth business day of the following quarter.
22. Liguidated Damages - Othcr;
22.1 Liquidated damages in the amount sot forth In Section 21.1.1 (but not
less than the amount set forth in Section 211) may be assessed for
failure to timer submit the quarterly reports required by Section 19. ! l
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22.2 Liquidated damages may be assessed for violation of the provision of
Section 26.4 for submission of reports within five (5) business days in
the amount of $1,000 per day.
23. Procedure for Assessment of L.quidated Damages: The procedure for
consideration and assessment of liquidated damages is as follows:
23.1 Liquidated damages shall b: assessed by the City Managerorhis or her
designee
23.2 Company may obtain a review of the assessment by the City Council
by making a written request within ten (10) business days after receipt
of notice in writing of the assessment and its basis.
23.3 Company shall have an opportunity to be heard at a meeting of the City
Council or by a person designated by the Council as a hearing officer
prior to action being taken by the Council.
23.4 The City Council may adopt additional procedures, including
ap--jointment of a City official or other person to act as a hearing officer.
The Council's decision may be based upon the record of proceedings
conducted by the hearing officer or a proposal for decision submitted
by the hearing officer.
24. Payment of Liquidated Damages: Liquidated damages shall be paid on or ,
before the tenth (10th) business day following assessment or, if Company
requests review by the City Council, on or before the tenth (10th) business day
following issuance of the Council's decision.
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25. 9mbudsnta: Company will provide a senior employee (at the Vice President
or Director level) as director of government affairs and ombudsman reporting
directly to a regional vice president of CC holdings. The director of
government affairs will have responsibility for urorking with the City and other
cities in the area to address problems that may arise under the Franchise and
shall be Company's ombudsman for both the City and subscribers. Company
will give the City an opportunity to comment on the detalledjob description
of the director of government affairs before the position is filled.
26. City .ialson: Company shall continue to provide problem solving liaison
services for the City of the type being provided to the City of Fort Worth by
C'harter's Customer Carr, Gruup in the Fall of 1998. The purpose of this
service is to provide the City with direct access to supervisory level personnel
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who can obtain prompt action on customer service problems referred by the
City to Company. This service shall include at least the following:
26.1 The personnel providing the service shall be located in Tarrant County.
26.2 The personnel providing the service shall have sufficient authority and
access to Company facilities and personnel in order to investigate and
take appropriate remedial action without delay.
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263 The City shall be given a special direct phone number to use (which
may also be used by other cities, but which will not be made available
to the general public) which will generally during nornial business
hours be answered by a live person and will provide immediate access
to a person having the authority specified in the preceding section.
26.4 Company shall investigate (including an attempt to contact the
subazdber) and respond to the City on each call, fax or written
complaint or request by the end of the next business day and shall
provide a written report withln live (5) business days.
26.5 Company shall give the City notice in writing of changes in the key
contact personnel or material changes in procedures involved in
providing this service.
27. Dcfinitiow: For the purposes of this Exhibit 13, the following definitions shall
apply:
27.1 Cable Administrator means the person designated by City as having
principle responsibility for cable matters.
27.2 Cgnip]ajnl means a telephone call or written communication from a
customer notifying Company of a problem relating to Company's
billing or billing practices, Company's equipment, ploure quality,
failure to receive one or more channels, a change in Company's
practice or policy, Company advertising or other business practice, the
conduct of a Company employee or contractor, or the failure of
Company or a service representative to comply with customer service f
regulations.
27.3 Normal OpcratinYCondition means those service conditions which are
within the control of Company. Those conditions which are = within
the control of Company include, but are not limited to, natural disasters,
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civil disturbances, power outages, telephone network outages, and
severe or unusual weather conditions. Those conditions which g~
within the control of Company include, but are not limited to, special
promotions, pay-per-view events, rate increases, regular or seasonal
demand periods, changes in the billing cycle, changes in the form of
bills and other billing matters, changes in channel lineups or services
that are within Company's control, and repairs, rebuilds, maintenance
and upgrade of the cable system including computer software and
hardware.
27.3.1 M. Y2K problems involving systems of Company, CC
Holdings, Vulcan, Cha.ter or Affiliates of any of them are not
within the control of Company for purposes of measuring {
compliance with customer service standards during the period
January I, 2000 through and including January l4, 2000 but are
within the control of Company before and after that period of
time.
27.3.2 Labor Dish. Employee strikes, slowdowns and walkouts of
less than 30 days duration are not within the control of
Company.
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EXIi[BIT BI
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On-Timc Customer Servico goarskntee Program
Our On-Time Customer Service Guorantee Program undorscores our
oorarnkment to providiq our customers with the best service possible. This
program is not about retltnds; It is about tmaklog customer service a top
priority.
Simply stated, we pledge the followiag:
On-time installation appointments or the tnsta Won of the primary
outlet is 6tse
On-time service appointments or the euxomer receives S20
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EXHIBIT 132
Systclll s(atis(ics for City,
Third Quar(cr 1999
Homes Pissed 11,719
j
Custontera 4 937
Penetration 42%
jinstdladons 400
Discoanects 382
Net Gain Is
Tec6tsical Performance
Technical Service Calls 124
Technical Service Call Rate _ 2.5%
Service Interruption Response <2 11 rs. 99.1%
!
Service C211 AvAbUility for Next Busies Day 96.5%
Installation Schedules <7 drays 99.0%
System Reliability 99.917%
Telephone Performance
Calls Received I t0" j
Calls Answered <30 seconds 101,000
Percentage answered <30 seconds (unsd'ust 91.8% '
No rouge answered <30 seconds (adjust a 93.791
Reasons for adjustment; a
• ice storm 12/17/98
City Power outage 11125/98
Calls to City Referred to Gtarter to
On'limc Iletfoccnance
Scsvicecalk - 9A next bushtess day 99.8%
installations - 95% "Will, 7 buslness days 98.7%
Service disruption - 951f wllldn 74 hours
1'ralncd Conipany Rcpresenlallve
available to respond to telephone
lw1uhles 24 hrsfday, 7 daysfweek
11e.rcenlnuo calls recefvltsg busy slyrsal
lolal outafycs tcl)orted
Adjustments rare for Abnormal Opefallny Conditlons as
d4: fined In Srv;lldns 19.7 and 21.3 ul ExlilbIt Il,
Acs ~•plenc.~f Aryrremrnl .
84
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I
OCHARTERe January Service Calls By Reason
COMMUNICATIONS'
(19)
Qe~ (20)
a~
(01)
(12 {I % {IS 11141 (172~t1181Y ' 14%
(I I )4,~° 34 1111
(10)
4!;
C7
.L
b
co
104
1 (03)
(04)
O (03)
0 C 6.g Ed (01) 0 acclEe Prob (02) O Idde Pro0 (03) a Replace SA (O4) 0 N TF (OS) 0 system Ref (Ob) moth fix (V)
0RfplnceConv(M) 2Rewire (04) ■Uindgr Drop (10) 0 06elnErrot(11) tOtrUge(12) aPIenlfix(12) 0 ONDrop(14)
9T; P:ob(Is) a00,cum(16) a 1401 Some ( 11) tRewie(11) 0 Hadem Fix (19) 0OM(20)
97
ort Worth senice calls for January totalled 2,987 _
T F
EXIIIHIT IM
h1gc 1 Of 2
+
^ iaaa : 1:p3xk zzaa a^aa~ z=
Hill
e~ c ly. xaY "t .
ot!ff!Z~.
rst
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sc s c o~' s s 2 ~l cs 2•s s'c XI32~ 2.t ~'2'~S~ F
15
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6
EXHIBI I' 135
Pagc I oft
5s[Y}ccSIIllAYailabilily Analysis
Month of ,I,BI UM
mate NNwh Swath Southtat
Avaitsbility_Avxtlability Tmoyqub
01101m O 0 0 ~
OIAYI 9 0 0 0
01113M 0 0 0
01134119 0 0 0
01105/99 I 1 1
01106199 0 0 0
0107199 1 0 1
Oil" 0 1 1
01/0919 0 0 0
01110+99 0 0 O
01111199 0 0 0 j
01/12/99 1 0 O
01113/99 1 0 0
01114199 1 t 0
0111519 0 0 0
01/16199 0 0 0
01117/99 0 0 0
01118199 0 0 0
01/1919 1 0 0
Oil" 0 0 0
01/21/99 0 1 0
01122/99 0 0 1
01123199 0 0 0
0112419 0 0 0
01/25M 0 O 0
0126199 1 0 0
01101199 1 0 0
01128!99 0 1 0
0129/99 0 0 0
011A" 0 0 0
01/39 0 _ ....0 O
Taal 8 4 4
Standard 959t. 95% 9Sk
StattdarJ Mcr? Yl S - YFS Y[S 1 !
0 < SANUI DAY < 12 I lts
I "Next DAY
2 ~ Two Days oat
88
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EXI IIBIT 135
Page 2of2
Installalion Availak1.Wy_Analysls
Month of Ia.4.n_sa
Date AvaUsbIlliy,+ I
J
01101199
a 1RY1149 0
01/13/99 1
01104199 0
01/05M 1
01106199 0
01/07/99 0
01108109 0
01/09199 0
01/10194 0
01111199 0
01112109 0 1
01113109 a
01/14199 0
Off15/99 0
01116794 0
0111719 0
01/18/99 0
01/1919 0
Olf"m 0
401/21/9 0
OW2/99 0
OIf2"9 0
01124104 0
o1f-W 0
ON" 0
01127109 0
01/18/49 0
Otf2"9 1
OIf30N9 1
01131109
total a -
5>Andard _ 9551,.~_1
1 ~
sc.na.ni rr`a~ - ris~-`-1 r ~
0. SAMC VAY < 121Irs
I = Nca1 DAY
7 = Two bays OtA
89
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EXHIBIT 136
Custom6f Call Sample -January
Cells Swww iu
CO._.._
R.wa
T*dU 3S $1.6%!G
R.oeW6oa 9 27%
o J 2e
Cofwhidon a 72%
ProOromminp 4 314%
Z 14%
ii Instsfiatbh 1 0.0%
i P"Sw problem 1 0.9%
~CustomotEducsllOA 7.. .,.._49%
r
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M
EXHIBIT 137
! r
'Mi
6 51, Sot-
gig a
I G
Ir, V! 4$t 49 9
C Y Pp ~ 1. $ R$ ~ 5 9'
t ~ ~ 8 ~ °P 8 $ sags • YI
~'•k oaoooG cc a Ga o u GGGO Q
Mac
i~
' :3:333333333333333. ::~::.~3331.
O G G O O GIG O 0008000000C u i6 '1i Z'j~jl Y ! ° 1
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i
~NSULTING SERVICES, INC.
7tiJ1 Pencross (972) 726-7216
Dallas, Texas 75248 (972) 726-0212 not
Memorandum
Ty Consortium of Transfer Cities v
G I
From: Connie Cannady - C2 Consulting Services, Inc,
Date: 02/05199
Re: Financial Issues Related to Marcus/Vulcan Transfer
Pursuant to your request, C2 Consulting Scnices. Inc. ("C2") has conducted an analysis of
certain financial issues surrounding the transfer of the current cable television franchise
from Marcus Cable Associates, L, L. C. ("Marcus" or the "Company") to Paul Allen.' As
)(su are awar , the transaction :ssentially does not alter the current operator (Marcus Cable
Associates, L.L.C. as a wholly owned indirect subsidiary of Marcus Cabe Properties, Inc.),
but places the ownership of the Company with Paul Allen and places the management of the
operations in the hands of Charter Communications a Wired '.Vorld Company ("Chatter").
The following summanres the activities performed by C2, diiliculdes incurred regarding
the data provided, and observations concerning potential financial issues that may arise
during the next four years,
Although the purpose of this study is to examine the potential financial ability of the
operator to perform undo the teens and conditions of the transfer (and current franchise
provisions), C2 cannot and does not express any position with regard to the accuracy or
validity of the financial information provided by Marcus and Charter during the course of
the anal) ses.'
Based on the January 21" draft Acceptance Agreement, it is C2's understanding that Sit Allen will
exercise control of the franchise through a restructuring of Marcus Cable Properties, Inc, Vulcan Cable,
Inc , Vurcan 11, Inc and Charier Communications a Wired World Company a-id other comparla ~ r r
2 Financial data was provided by Atarcus and Charier via requests for information and C2 did not review
the actual Mxiki and records ofthe Company t lowexer, the historical data was obtained from financial ( f
reports prepared by outside independent auditors
1
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February 5, 1999
a
Activities Perforated
C2 conducted the following activities:
• Review of the FCC Form 394s provided by Marcus
• Development of Requests for tnfonnation (-RFI") concerning financial and
operational data requirements
a Review of responses to RFIs that were provided by Charter
a Attendance during several coalition meetings to discuss difficulties in obtaining
responses to specific RFIs
• Follow-up discussions with Charter reptescutatives conceming the data that was 1
provided and issues resulting from lack of requested information
• D velopment of estimated pro forma computations through 2002 based on data
provided by Charter and certain assumptions regarding data no! provided.'
a Comparison of certain key financial ratios to industry averages.
Date Limitations
Subsequent to the filing of the FCC Form 394, C2 requested that Marcus provide pro forma
balance sheets, statements of operation, cash flow statements and customer growth
information for the next ten-year period for its parent company operations. Further, C2
requested thut the information be provided in detail to determine the reasonableness of
growth projections regarding specific services and expenses. To date, the Company has not
provided any balance sheet pro forma information other than debt (through 2002), and has
not provided revenue and expenses information in sufficient detail to draw any conclusions
regarding plans for specific services.
I
However, as of January 29, 1999, a summary pro forna cash flow analysis was provided
by Charter which included projwions rot Marcus Cable Company, L,L.C. ("MCC")
operations from 1999 through 2002.4 In addition, Charter provided the unaudited
consolidated 1998 balance slice, for MCC and the budgeted revenue and expenses for the
1999 calendar year, "is i7formation, along with certain assumptions regarding future
changes, provides the basis for the observations noted below.s
'Charter has never responded to many of the RFI3 rotated to pro forma operations of the Company
Therefore, C2's analysis incorporates certain assumptions regarding projected operations. These
assumptions, in large part, have been discussed with Charier representatives
4 Prior information provided by f barter only had been at the level of the Fort Wonh district operations
Based on C2's follow-up request, Charter provided this summary for the total Marcus Csbte Company t, r
' C2 stresses the incomplete nature of the data provided and the inability to provide definitive conclusions
regarding the reasonableness ofthe projections
2
84
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February 5, 1999 a
Summary of Observations
There are certain key factors that should be evaluated during a review of potential financial
impacts of a change in cubit operations, (whether through new ownership, new
management or new franchise requirements). These include, but are not limited to:
a Financing requirements of the transfer transaction
Change in ol,erstions (increase/decrease in revenue/expenstsrcustomer base)
• Financing requirements for capital improvement programs
a Additional requirements purs.rant to the transfer
With respect to the financing requirements of the transfer transaction. it is C2's
` understanding that the purchase by Paul Allen (through Vulcan Cable, Inc,) of Marcus
Cable Properties, Inc. ("MCP"), the parent organization has not and will not require any
new borrowings by Paul Allen or any of the entities involved; Paul Allen has or will have
sufficient cash to complete the purchase. Therefore, there are no additional debt instruments
required for the transaction to be completed
The review of the anticipated changes in revenuclexpensesrcustomer base is baud primarily
on the summary cash flow analysis, pro forma revenuerexpense/customer projections for the
Fort Worth district operations, and the 1999 budget proxided by Charter. These projections
were compared to the actual operating results of htCC for the last five )ears. The following
observations can be made:
a The market penetration (subscribers as a percentage of homes passed by cable)
has remained fairly constant since 1995 (the time during which the current
franchises were transferred from Sammons to Marcus). In 1995, market
penetration was at 630/6, and as of the end of 1948, market penetration was
reported at 63.8°6.6 During the 1995 transfer, the Company had indicated that it
expected to increase its market penetration to 741,6 within ten )cars. 't'hus far,
only a very small portion of this projection has been realized.
a The net number of subscribers has dropped slightly when comparing 1995 to
1998, Subscribers had increased significantly dudy the interim )tars, but
recent sales of system has reduced the 1998 counts. Ilowever, basic strict
revenue per customer has continued to increase during this same period. In
addition, based on the information provided by Charter, basic service revenue
per customer is anticipated to int.-tease an additional 9.8x6 during 1999,'
" 1995 penetration data was reported in the 1997 IOK '999 penetration data was provided in the 1999
budget documentation
' Total basic subscribers declined approximately 104 from 199710 1999 dueto the mteofsystems in
Texas, Oklahoma, Connecticut, Illinois, Virginia and Mississippi i 1 r
r Although these amounts are accumulated on averagt for MCC, it may be indicative of a sizable rate
increast in certain areas
3
' 95
e
February 5, 1999
i
• Overall, operating margins (operating cash flow" as a percentage of grass
revenues) have been Hell above industry averages for the last five years (1993
1997). In 1998, the operating margin was slightly below the immediate
preceding years, but still well above industry everages. The prciectioas
provided by Charter indicate that the operating margins will continue at about
50% which based on historical performance, appear to b: achievable.
• A critical component of Charter's projections is the projected increase in the
total operating cash flow. Rased on the h1C'C summary, operating cash flow is
expected to increase by a:-proximately ION for each of the years subsequent to
1998. This projection seems somewhat aggressh cgiven the following:
I
• As noted above, the total number of subscribers has declined during 1998.
Without substantial increases in rates or the provisions of additional
services, a 9.5% growth in revenue may be difficult to achieve 10
• Charter did not provide information related to any decline in expenses that
may be anticipated in order to achieve such an increase on operating cash
now,
4 Although revenues did increase by approximately 10% between 19% and
1997, a significant portion of the increase was due to the acquisitions of
other systems. Charter did not provide any information indicating that
Marcus would continue to acquire systems during the 1999-2002 timeframe
The projected operating cash flow becomes important in light of the following
discussion concerning Marcus' ability to continue its capital improvement programs
and meet its outstanding debt obligations.
As you are aware, the Company has been upgrading many of its area systems and MCC has
been doing the same in other operations. MCC capital expenditures for 1998 and those
projected over the next two years are significant and begin to talxr off in the 2001.2002
timeframe. In fact, the planned capital expenditures for 1999 approximate (and slightly
exceed) the prujected operating cash flow for the year Therefore, in order to finance the
capital improvements program and continue to meet its normal operating needs, MCC will
have to sock additional capital- either by means of increasing its debt obligations, and'or
receiving a capital infusion from its affiliated operations tt
Based on the summary projections provided by Charter, MCC plans to finance any shonfall
in its on-going operations as well as the capital improvements program with debt. MCC
currently has a Revolving Credit Facility on which AICC has additional potential
'Operating cash now is revenue Icss cash operating expenses and reflects operating funds available to J
make capital evpendnures, pay interest on dki. and'or return monies to lenders or equity owners
' C2 notes that Charter did not provide a breakdown of the projected increases by revenue category for the
period 1999 through 2042
' It is ('2's understanding Thal depending on the ultimate parent structure, there may be some possibility of
equity capitat infusion I lowever, even without final resolution regarding the ultimate organiralion and r
rinarcing structure, it is clear that Paul Allen has subslanial liquid assets on which to draw.
4
f18
i
February S, 1999 1%
withdrawals. MCC projects that by maximizing the use of these credit limits it can meet its
operating and capital improvemenl requirements.
By incorporating Charter's 10% growth in operating cash flow and assuming that the
additional financing is obtained via the Rcvohfng Credit Facility, MCC will have to
increase its debt balances each year between 1099.2001. By 2002, the projections indicate
that the Company can begin to pay dowc game ofils debt.
i
The projected debt balances result in estimated debt to cash flow ratios '2 as follows:
a 1999-6.5
a 2000 - 6J
a 2001 -5.3
a 2002 - 4.9
As shown, with a declining requirement for capital improvements (and the Company's
projected healthy gains in operating cash flow), there is a corresponding projected decline in
additional debt financing. Although the ratios noted during 1999.2000 are stightl~ above
the averages for the industry, they are within r reasonable range for cable operators.'
In order to dclenninc .he sensitivity of
o the Company's projected operating cash flow
increases, C'2 performed the same analysis of debt to cash now by reducing the 10% annual
increases with the following results
With 5% Annual 1ii91s3h With No Growth
1999-6.8 1999 - 7.2
2000- 6.8 2000 - 7.7
2001 • 6.7 2001 - 3.1
2002- 6.6 2002- 8.6
As shown, even with greatly reduced atrticipaled growth (one-half of Charter's projections)
the debt to cash flow ratios still appear mansneable; albeit less healthy. No growth In
operating cash flows would require additional capital each year in order to meet normal
operating expenses, cover debt service and provide funds for the capital improvements
program, Given the historical growth In rcvcnue, it would stein unlikely that there would
be no growth in opeKating cash flow through the year 2002,
"Year cod long term debt outstanding divid-d by operatingcath flow This Is i general measure ofa
cable operator's financial teverege and itr capacity to pay Inleresi and principal on its debt while
rnaiutaining currant cable systems and operations Low number indicate a strong financial condition
(more cash flow in religion to debt); higher numbers indicate more tiiA of f nanclal dinIcultim (ttss cash r
flow In rrfition to debt)
"C2 notes that the initial debt to cash flow ratios projected by Marcus during the 1995 transfer were in the ( r
7.9 range 7'he actual ration fix 1995 through 1998 were somewhat low erthan projected, but still higher r /
that the projections for the 1999.2002 period
6
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Febewry 5, 109P
Additional Tr. osfer Requlrtmeats
It is O's understanding that based on the provisions of the transfer, the company
anticirates spending approximately $1,100,000 in 1999 related to various costs of the
transfer, 1-Net construction and PEO access channel equipment. These costs have not
specifically been taken Into account in the projections noted above. However, C2 notes that j
overall capital expenditures for MCC are projected to be S245,000,000 for 1999. Including I
these amounts in the 1999 cash requirements has only a slight Impact on the ratios and does
not appear to alter the overall financial position or the Company.
Performance Guaranies fl
As of the writing of this report, it Is C2's understanding that the other companies owned by
Paul Allen, that are either dimity linked to Marcus through, ,~vnershlp and/or management
of operations, are guaranteeing performance or the provis.ons of the franchise and the
transfer agreement. Therefore, in C2's opinion, even if the projections provided by charter
are not realized in their entirety, Marcus may have acce,,, to the necessary capital from one
of the other operating companies and/or Paul Allen tr'n self. Oiven the significant cable
system acquisitions by Paul Allen recently, it would be logical to assume that he would wish
to protect such an investment by rsisting in any debt reduction or restructuring if that
becomes necessary in the next several years.
C2 appreciates the opportunity to work with the Consortium of Transfer Cities, if you have
any questions regarding the analyses, the data, and/or the observations, please call me at
(972) 716.7216.
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A" No,
#4w& dt,3
AGENDA INFORMATION SHEET bm-tdX~ 9
AGENDA DATE: February 23rd, 1999
DEPARTMENT: Planning& Development
C.N/DCMUACM: Rick.Svehla J
SUBJECT
Receive a report, hold a discussion, and give staff direction regarding the Introduction,
Population Forecasts, and Growth Management Strategy sections of the draft Comprehensive
Plan.
BACKGROUND
The comprehensive plan Is the culmination of the Denton Plan Process, which was started in July
1997. Extensive work on plan components has been completed, including Existing Conditions
and Forecasting research, adoption of the Planning Policies in April i 998, and adoption of the
Growth Management Strategy in January 1999.
The comprehensive plan has been organized into several chapte s, and six review sessions have
been scheduled for Council rt dew and discussion. By May 21", 1999, the draft review process
will be finished, and pending Council direction, staff will offer the plan to the public for review
and comment.
I
RECOMMENDATION
The intent of Council review of the draft is to prepare the plan for public review. Council is not
being asked to deliberate on the plan until public comments are available. Revisions will be
made as per Council instructions, and other Improvements will be made as additional chapters of
the plan become available. A -taff recommendation will be made when the draft plan is
complete.
ESTIMATED SCHEDULE OF PROJECT
The City Council review schedule for the draft comprehensive plan is confirmed as shown.
Specific dates for other events listed below will be proposed as the process continues.
City Council
Meeting Date Draft Comprehensive Plan Chapters t be Reviewed
February 23nd, 1949 Introduction /Growth Management Strategy 4,, t,
March 30`x, 1999 Infrastructure Chapters (Transportation, Water, f'
.IJ Wastew~der, Storrnwater Drainage, Solid Waste)
t~
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April 13", 1999 Parks & Open Space, Environmental Management, Public Facilities,
Urban Design, Economic Diversification, Historic Preservation
April 27", 1999 Special Topics: "The Street", "The Edge", "Thresholds", "School
Districts", & "Maintenance I Enforcement"
May 21°, 1999 Land Use Chapters (Residtrotial, Commercial/Retail, Office,
(~'C Retreat) Industrial, Special Districts), Recommended Land Use Plan,
Implementation Strategy f
June -August 1999 Public Review Process
August 1999 Planning & Zoning Commission Public Hearing(s) and Recommendation
September 1999 City Council Public Hearing(s), Revisions, and Adoption
i
PRIOR ACTIONIREVIEW
July 1999 Denton Plan Process approved by City Council and P&Z
April 1998 Planning Policies adopted by City Council
January 1999 Growth Management Strategy adopted by City Council
FISCAL INFORMATION
Forecasting and Growth Management Strategy tasks were recently completed by the city's
consultants. The remainder of comprehensive plan work will be completed by city staff. All
departments are involved in the preparation of the plan.
A fiscal impact analysis will be included in the br of the draft comprehensive plan.
EXHIBIT
Exhibit A The Denton Plan Draft Comprehensive Plan
Section 1: Introduction
Section 2: population Forecasts
Section 3: Growth Management Strategy
Exhibit 8 The Dcrnton Planning Policy Documents (for reference purposes)
Respectfully Submitt
9 ~
v{d M. Hill
Director of Planning and Development
I
{ EXHIBIT A
The Denton Plan
DRAFT
I
City of Denton Comprehensive Plan
February 1999
Section 1; Introduction
Section 2; Population Forecasts
Section 3: Growth Management Strategy
Review:
City Council • Ftbmary 23ie, 1999
r
Plennin` and Development Department
A
d
~i
E Table of Contents
Section 1 Introduction
1. Message From the Mayor and City Council
(City Coun6l Photo)
If. Message Frort the City Manager
111. Statement .rf Purpose
A. The PlanniuS Process
Section 1 . Figure I: Process Dagnrn
B. The Comprehensive Plan & the Deve:apment Process
Section I . Figure Z: The Comprehensive Plan A Development Process Diagram
C. The City of Denton Vision Statement
D. Planning Policies
E. Public Involvement
III. Existing Conditions & Geographic Context
Section 1 . Figure 3. Denton Physic &I Growth Maps
A. Regional
1. North Texas
2. Dallas-Fort Worth Metroplex
3. Denton County
Section 1 , Table 1: City of Denton Share of Denton County Population
B. City or Denton
1. Pre-history
2. Early Settlement
3. 191h Century '
4. 20P Century
Section I . Figure 4: City of Denton Population
Section I. Figure S: Context Mips
5. The Natural Environment
a. Geology
b. Soils
C. Climate
d. Hydrology
e. Vegetation
section 1. Figure 6: Natural Fnvira+ment Maps
Section i .Figure 7: Vegetative Zones of Texas
6. Economy
Section 2 Population Forecasts A
f. City Background (/r t'
Section 2. Table 1: Summary of Land Area
If. Market Position
c
t+
/ 111. Population overview
IV. Holding Capacity
section 2 . TWO! Holding Capacity or Denton Urbanieng Arc+
V. Population Estimates Area and city of Denton
section 2. Table Deacon 1 o Add population And Land Area
Forecasts Vi. Growth Areas asts of Additional Populmion by Land Alta
Seedoo 2 . Table Jl: Denton P3annmg Area Forocsts o Dwelling Uniu !t Residential Land 1'se
section 2 . Table S: Forecasts of Additional Pope .
section 2 . Flgure t: Population Forecasts by Sub-Area Map
Section 3 Growth Management s Suitt Strategy
A. Process
B. Composite Analysis
1. Existing Land Use Development Pattern
2. Floodplains
3, Soil Suitability for Urbanization
4. Trees ite Suitability Map
Section 3. Figure 1: Campos
It. Alternative Development Scenarios
l A. Corridors Scenario
B. Urban Centers Scenario
C Neighborhood Centers Scenario
D. Compact Growth Scenario M
Section I. Figure 2: Aliematlve kvelopme
ill. Growth Management Strategy
A. Policies i,
B. Growth Management Strategy Assumptions
C. specific Aspects of the Growth Management Strategy
Section 3, Figure cirowth Manag
IV. implementation Tools ent Techniques and Toots
section 1. Table 1: Orowth Mallem
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Draft Denton Comprehensive Plan February 1999
Section 1 ■ Introduction !
City Guncil Member
Jack Wer, Mayor
ROW Beasley, Mayor ho rem
Carl 0. Young, Sr,
Net! burrnnce
Mike Cochran
Sandy Kristoferton
Mark Burroughs
1
L
Message
{ from the
Mayor & r
City Council
{ j Jack Miller, Mayor
C:My DaumalO'WFwMCOMPKEHENSIVE PLAN SEMONrSeedaa U11 1•21A9Age EXHIBIT A Pepe t or 39
Ike"
Draft Dentor Comprehensive Plan February , 1999
y
i
Message _
from the
City Manager
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Nlake Jez, City Manager
~ II
Statement of Purpose
The City of Denton Comprehensive Plan is intended to guide community growth and development
for the next twenty years. The plan is the start of an enduring process to make life better for all
citizens. During the next two decades, regional market forces may cause fenton's population to
double or even triple. The current city limits may expand from SS to as much as 100 square miles. i
Thousands upon thousands of investment decisions will affect the character of the city for many
years to come. Areas known for decades to be wooded tracts or posture fields will become part of 1 `
Denton's urban environment, with lasting Impacts that our grandchildren will Inherit. The city
faces many challenges to ensure that growth Is positive.
C My Doc mmu',MCaETRC'OMPaEIIENSIVE PLAN SEMONSIecdon lAn 7.23.19AM F\NIBIT A P~`e 2 of 74
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The purpose of the comprehensive plan is to translate a vision statement and planning policies into
meaningful and purposeful actions for the entire Denton community. The plan describes the steps
city government will take to protect public health and safety, to provide services efficiently and
effectively, and to meet quality of life expectations of the citizenry. The plan is an expression of
community sentiments and values for all to see, and implementation success is dependent upon
support and consensus. Potential investors, developers, business persons, and residents should use
this document to learn more about the community they may decide to join.
The comprehensive plan will need to be updated within five to seven years, which is the period of j
emphasis for implementation. The plan is not static and is may be changed as more information i
becomes available. The plan is by no means the end of a process; it is only a starting point. The
real test of the plan is the extent to which the Implementation strategy is effectuated, and the extent
to which today's vision is realized twenty years from now.
A. THE PLANNING PROCESS
"ISUNG DATA The sequence of activities used to provide., the
1°i "M~ w framework for Denton's comprehensive plan is
swn.I IAnwMw described in the July 1997 flowchart shown in Figure L
The organizational framework is critical to the
roflccASn development of the plan. PROCESS must guide
DmVvhw t"Ll"Newd W o ACTION. Although the Denton Plan is considered the
P&a tny.rn
city's plan, it is in reality a policy document. The Plan
coMMV-41T V 17510,.4 is a part of a larger process, a gradual refinement from a
mem broad vision to several more narrowly defined
ao.a Pdwal
implementation actions. Each step is important as it
IDENTON rLAN MUMS depends on the quality of its predecessor and is
N.1*JWN A. T,~ m W.L.el"
E. 11n eAlgw LV MIMN Awift 0am manageable as an independent task. This gradual
r....a...611a Wh Dejn P.A,aaW11M• refinement process has Increased public participation
cROWIH MA.4AGSMTNT SMAI MY opportunities and helped to cultivate community I!
AIU.Mi.. D..ca" Loral" consensus for the plan. The level of financial impact I
tl1uM Pkmvm vim
o„ ITmk and commitment increases with every step, and the
gradual development of a broad base of support is
mtl W~S.YnSMSPLA.4 crucial to successful plan implementation.
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Three improvements in Denton,s planning process have
SMALL AIIrA PLA.Ns been made:
NW M f.oP. CTIAI.1..
Arr 5P~.1.1=
First, the actual steps in the process have been formally
IMPLIMMATION TGOLS recognized and defined. Tasks are properly organized,
PLO IM1e ,M
allo-Ang complex issues to be addressed at a consistent
and manageable level. The plan contains several
toMNC,~tDP.cI 1
-.1110MA JN IIOI'LATAVI ' ,
AMMIIATpMF M phases that are progressively tiered as the plan scope
MIAe11UMM mmnIKAMI
<VMAL narrow'T
M/10r7r1eMn PI~101A11
1 LbOk-111oht1 SAWIPIAI
PgX1W&R21n.4I
J VMUNTAPV 140 rn7MIMPOS Second, the linkages between steps in the process are
` Section 1 . Figure I formally recognized. Existing Data end Forecasts are
acknowledged as the context within which the j
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Community Vision is formulated, and in tumr, the Community Vision governs the Planning
Policies.
Th1rd, the Comprehensive Plan and Small Area Plans provide opportunities for further
clarification of policy statements through the development of implementation priori
ties,
particularly when geographic applications may differ from area to area. Issues raised during public
meetings indicate that interpretative flexibility is a cause of concern to both developers and
neighborhood residents, and may be a significant obstacle to reaching plan consensus. Develcpers
typically want to avoid project ambiguity or inconsistent application of a community's
development 'rules' contained in the plan. When policy statements leave room for btual
interpretation, investment risks become greater due to the uncertainty involved when facing
discretionary decision:, made by city councils. Private developers should be able to Identify all
project costs at an early stage and make a decision on project feasibility before significant
investments arc made. The ability to conduct a thorough evaluation of a project is, therefore,
greatly enhanced wlten a plan is clear and specific. At the some time, neighborhood residents
worry that plans that can be broadly interprcted will contain 'loopholes' that developers can
exploit. The perception that private developers are better prepared to handle the technical aspects
of a project causes concern that neighborhoods are constantly operating at a competitive
disadvantage.
The plan is not limited to policy clarification. To avoid becoming a "shelf document", Denton's
plan has been equipped with an implementation strategy. In addition, the plan contains project
priorities, schedules for completion, and implementation responsibilities. A well-prepared
implementation strategy allows projects to be properly coordinated, and permits efficient use of
limited city resources. The implementation strategy is a flexible work program, describing
progress expectations of city slaf , The comprehensive plan integrates policy objectives with the
practical considerations of mashe plans for municipal water, sanitary sewer, stormwater,
thoroughfares, parks, public facilities, or other services.
8. THE COMPRCHN511 E pt,A~l 6r THE UEVELOPM1IENT PROCESS
The components of the plan must also be viewed within the context of the Interplay between public
objectives and private investment and development. The process of private development Is subject
to a type of "funneling" sequence, As shown in Figure 2, the VISION can be thought of as all-
encompassing, broad in scope, and extending beyond even the city's own boundaries. It is an
expression of community sentiment, designed for flexibinty and impossible to enforce„ The
VISION does not prescribe implementation to any significant degree, proposing possibly only to
stimulate other planning-related activities. By the time the process reaches its conciusim, the
scope of the process narrows to individual sites and structures within rigidly defined, legally
established property ownership rights. Several highly coordinated implementation actions must be
accomplished before a CERTIFICATE OF OCCUPANCY Is Issued, and the level of site
investment intensifies as project completion is approached. ~J
,
Members of the public are typically asked to participate in the development of items shown at the t
top of the process, when community consensus is needed. As the process narrows, however,
collective interests begin to give w-.y to individual rights. Public consensus objectives also give
way to regulatory compliance. All of the steps are critical to growth, and need to be coordinated
and clear if individual projects are to be considered an expression of community vision.
.
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( Section 1, Figure 2 The Comprehensive Plan and Development Process
~ ISI.ON~,~,a,,~~,.~
r POLIG.Y,STATEMENTS6
COMPREHENSIVE PLAN
SMALL AREA PLANS
ZONING & SUBDIVISION
REGULATIONS
CONSTRUCTION
STANDARDS
BUILDING
CODES
CERTIFICATE
OF
OCCUPANCY
C. it V OF DENTON VISION STATEMENT (Approved by City Council: April 1998)
Denton is a unique community whose diversity gives it strength. This uniqueness is a point of
community pride and it is the goal of the Denton Plan to insure that growth, development and the
use of community resources foster, encourage and promote the preservation of this vital quality.
The proper stewardship of our community assets while managing the pressures of growth Is a
balancing act that will require foresight, long range planning and a great amount of community
involvement. The Denton Pian should represent the best of our collective community aspirations
and, while preparing Denton for the 21a century, should never lose sight of the fundamental
qualities on which this town was built.
Quality, diversity, and opportunity are the keys to future success. People with all kinds of
different backgrounds are welcome to Dent>n, where they will continue to find a community that
offers wtll•paying jobs, reasonably priced housing, and good s:hools and parks. Homes of all
types and sizes offer a choice of lifestyles. Neighborhood centers will contain small at ops and
stores that are designed to harmonize with surrounding homes and provide daily necessities for tho
neighborhood. Residents will be able to choose to walk, ride a bike, use the transit system, or
drive to many destinations throughout the city. Local businesses and employers will prosper,
catering to customers' needs and promoting Denton's image at the same time. There must ve a i
place in the city for all types of development necessary for a healthy, vibrant market. We wotw to
preserve the distinctive qualities of our city while growth occurs, a goal that we know requires
foresight and preparation.
f
The Downtown is and always shall be the heart of Denton; the Square and surrounding streets will
be used every day and night as at gathering place for commerce, civic events, and entc ?sin rent.
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' Crowing numbers of downtown residents will Increase the energy level of the downtown, a ,d the
renovated Civic Center Park will draw new visitors from throughout the region. Yet the rcale of
the downtown will remain the same, human and comfortable, and examples of the city',, history
will continue to remind our citizens of their i critage. Historic preservation will be a ms;or theme
in all development and redevelopment efforts. The downtown will become even mote redesirian-
friendly, with new streetscapes and Improved sidewalks connecting the S luare to both ;ogle and
University, encouraging sidewalk cafes and other outdoor businesses.
To grow properly, Denton must nourish its university partnerships. The University of North Texas
will Sourish, and the UNT campus will Increase its visibility as a Denton landmark, prominently
displayed to travelers passing through the city. The Fry Street Area and Oak-Hickory Historic
District will continue to serve as important physical and social links between the Downtown and {
UNT. Texas Woman's University will also contribute to Denton's distinction as a city, and will be
even more strongly connected to the Downtown as a result of Civic Center Park renovations, The
UNT - Downtown - TWU corridor will achieve its full potential as a dynamic and lively area,
essential to the well being of the city. Working with city government and the buslness community,
the two universities will realize their full potential as magnets for high-tech and research-oriented
development The city, county, and school district will increasingly coordinate their efforts to
Improve public facilities and services, with careful planning for schools, roads, and utilities to
accommodate growth. Residents must always have reason to be confident that their taxes are
being spent wisely and efficiently.
Tlx Denton community will always be committed to enriching the lives of its citizens - regardless
of age, Income, or ethnic background - through education, culture, recreation, and entertainment.
Through the efforts of our schools and universities, our government, our civic and cultural groups,
and our businesses, Denton will build on its distinctive reputation as an arts city, and most
especially a music city. Through its outstanding p ibtic art, its galleries and studios, its museums
and theaters and clubs, its renowned university musicians and artists, its festivals and concerts and
shows, lhnion will provide to citizens a wide range of cultural and entertainment activities that
will also attract numerous visitors to our community.
We need nature as much in the city as in the countryside. Our built environment cannot remain
healthy without properly managed land, air and water resources; as we grow these resources wilt
become even more precious. We can avoid the costs or thoughtlessness while we capitalize on our
natural assets. As the benefits of Lake Ray Roberts and the Elm Folk Nature Conservatory
become fully realized, they will prove to be resources of incredible value, well worth our Initial
Investment. Floodplains and creeks will emerge as greenway corridors that serve many needs,
such as flood protection, recreation, tree preservation, and habitat support. Environmental planning
must take its righth I place as an essential pars of Denton's strategy to grow wisely.
The entire world Is within easy reach of Denton, sitting at the convergence of two Interstate
highways and located a short distance from two international airports. Denton is regional partners
within a major metropolitan area, and will share regional significance with Dallas and Fort Worth, ! r' ti
with each of the three cities being recognized as a county seat with a unique Identity. The ability
to interact within Denton itself, with the metroplex, or with the world is an asset that will continue
to be useful in marketing Denton as a progressive, forward-looking city with a "home town"
atm. •phtfe.
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Denton can achieve what we want - growth that enhances rather than destroys the qualities that
make Denton attractive. Denton will b questh to future generations a dynamic, Interesting, and
healthy city. Denton will prepare for growth and prosperity by considering all community
Interests. Our values and heritage are important to us. We like Denton now, but we know we can
make it even better. Orowth will cause change, but the essential ingrer ents that make Denton
unique today will be preserved and cultivated In the future.
D. PLANNING POLICIES
Planning policies for the City of Denton were adopted by City Council in April 1998. The policies
are identified throughout the comprehensive plan, and have been revised and supplemented as
necessary. The comprehensive plan replaces and superee.'-es the policies adopted in April 1998.
E. PUBLIC IVOLVEMENT
All City of Denton stakeholders have been invited to participate In all stages of the planning
processes conducted by the Denton city government. City staff has undertaken exhaustive efforts
to actively engage stakeholders to participate in city planning. This apl-rnsch will extend beyond
the planning process Into design and project-specific activities.
Thus far the comprehensive planning public Involvement process has Included review of the
following Wormation. Approximately 1,300 people have attended public meetings or participated j
in the comprehensive planning process through public surv_ys, written comments, verbal
t comments, or through the Internet since October of 1997.
+ Denton Pion Pulicies Reviewed October 1997 to April of 1999
Adopted by City Council Apnl of 1998
a Alternative Development Reviewed May 1998 to August 1998
Scenarios
Growth Management Reviewed September 1998 to January 1999
Strategy Adopted by City Council January 1999
The Comprehensive Plan Pending review; Jame 1999 to September 1999
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Section 1. F1 urea
i r1: •
Existing Conditions & Geographic Context
A. REGIONAL
1. North Texas
The City of Denton is located in North-Central Texas, 35 miles north of the
cities of Dallas and Fort Worth, commonly referred to as the Dallas-Fort Worth
Metroplex (DFW). Strategically located north of and between the two larger
s cities, the City of Denton has strong economic ties to the DFW Market while
maintaining an Individual Identity. Connected to the rest of the State of Texas
by the US Interstate System, Denton lies at the northern convergence of one of
the most highly-traveled highways In the country. 1 ravelling north from the
Texas-Mexico Border, Interstate 35 runs through the cities of San Antonio,
Austin, Temple, and Waco before dividing into east and west sections through
Dallas and Ft Worth and re-converging In southwest Denton.
r While using the services of major population centers in Texas, regionally,
Denton itself is a market center and service destination for many rural
communities In the arcs. Denton provides It. central location for retail, financial
service, health care, and wholesale activitl:s for communities in Wise, Collin,
Grayson and Cooke counties, +I
2, Dallas-Fort Worth Metroplex 1
wa Larger today than the population of 27 states, the Dallas-Ft. Worth Metroplex
continues to grow at a rapid rate. The Consolidated Metropolitan Statistical
Area (CMSA) is comprised of nine counties which include Collin, Dallas,
Denton, Ellis, Johnson, Kaufman, Parker, Rockwall and Tarrant Counties. The
CMSA is shown in Map 11, With land area of almost 7,000 square miles, the
area is larger than the state of Connecticut. The area contains 132
municipalities that have more than 1,000 residents. Experiencing some decline f
in the growth rate during the late 1990s and early 1990s, a resurgence of
migration to the area has brought renewed vigor to land development and
expansion from the city centers. The traditional economy in the Metroplex had
r been cattle and cotton farming, banking and defense industries. In recent years,
more corporate offices and high-tech industries have moved into the area
because of more temperate climate, lack of personal income tax, International
transportation linkages and the accessibility of a wide variety of year-round ti
i recreational activities. In 1973, the North Texas Council of Governments
estimated population for the region was 2,810,915. The 1998 estimated
I regional total population for the DFW area had grown to 4,798,330 with
C o~ expectations to increase an additional 2.1 million people tvithin the next twenty
"Is 119 years.
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Although personal transportation is still primarily based on the single-occupant vehicle, the Dallas
Ft. Worth Metroplex has become a hub of regional and international transportation. The 1990s
brouSht light-rail back to North Texas with the construction of the DART Rail system haking
Downtown Dallas with outlying cities throughout Dallas and Collin Counties. Regional commuter
rail travel is under current experiments for expansion linking Dallas, Ft. Worth and DFW Airport.
Three major airports service the Metroplex. The largest, DFW International Airport, carries 60
million passengers, 894 thousand US tons of cargo and has over 851 thousand operations annually.
The other major passenger airport Is Love Field located In Northwest Dallas. Construction in the
late 1990s has Increased the number of gates and accessibility to the airport by several m.-Jor
airlines.
Alliance Airport Is the cornerstone of the Alliance Development located at the boundary of Tarrant
and Denton Counties. Built as a cargo-based airport linked to distribution systems, its role
continues to expand as more companies use the airport facilities as a repair and maintenance
station.
Denton Is linked to this regional core of population by Interstate 35 East and West, US Highways,
77, 377 and 380, a major rail corridor paralleling 11 135 East, and a regional reliever airp(,rt. As the
Metroplex continues to grow into the 21st century, Denton's position as a gateway cit, will
become significant as a destination for commerce, recreation and residency.
While the City of Denton develops and maintains a unique and Individual communtiiy character, it
does not exist as an entity unto itself. Relationships among regional goternments and associations
keep Denton involved in facing challenges of growth affecting the entire area. As part of this
interactivity, Denton participates in the North Central Texas Council of Governments, a regional it
organizr1on charged with the mission to develop regional transportation and healthcare services
and the development of demographic data for a 16 county area.
Three school districts are located within the City of Denton. The majority of kindergarten to 12'"
year school-age residents attend Denton Independent School District (ISI)) schools. Others in the
extreme west portion of the City attend Krum ISD schools, and those students in the Southwestern
portion of the City attend Argyle ISD schools. Other school districts which cross into the ET) of
Denton are the Pilot Point, Aubrey, Ponder, and Sanger ISDs. The geographical relationship
betweec Cie school districts and the City is shown an Map 1.4.
3. Benton County
Located In the center of the county, Denton serves as Denton County's seat of government. Forty-
one different cities have at lea it part of their jurisdictions within Denton County, Including both
Dallas and Ft. Worth, Denton County consists of 937 square miles. Of the cities with all or most of
their jurisdiction within Denton County, Denton is the largest In land area of 56 square miles.
Lewisville, to the southeast along 11135 East is second largest with approximately 44 square miles.
Although Denton is the largest city in land siu In Denton County, It accounts for slightly greater
than 20% of the total population in the county. Rapid population growth in the southeastem
sections of the county has decr;ntralized the population density of the county, According to 1998
figures from the NCTCOO, 4 of the 10 cities In the DFW Metroplex with the highest annual
growth rates, Frisco, Flower Mound, Lewisville, and Corinth were located In southeast Denton
County. Corinth, located Immediately to the southeast of Denton along the IH 35E corridor,
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experienced an annual growth rate of 16.8% from 1991 to 1998. Corinth's successive years of I
growth have yielded greater than IWs grovah a year. f
Although much of Denton County Is experiencing growth, there still remains several communities
in the area surrounding Denton that remain primarily rural. Justin, Ponder, Krum, Sanger, Aubrey,
Krugerville, Pilot Point and Argyle maintain little if any retail or service establishments. Many of
the residents of these areas and unincorporated Denton County travel along the numerous Farm to
Market roads In Denton to reach the available goods and services.
Section .'fable
City of Denton Population
as it Share of Denton County Population
1930.1998
ear Denton Clty o City Population
County Denton As a Percent of
Population Population Count Population
196 6,
1970 - 75.633 39,874 .r
1 1,126 48.063
- 6
2
-"`~T , ,0 f.s
Source: OO -19 ureau o Census; 19 9 8, N ft-6 Go
B. CITY OF DENTON
1. Prehistory
Little physical evidence has been discovered of early man in the North Texas Region. Only a few
hearth sites have been found to indicate living conditions and the behavior of people in the area. At
the edge of the Blackland Prairie and the Cross Timbers Grand Prairie, immense migratory herds
of American Buffalo most likely frequented the area. Early nomadic tribes, their basic subsistence
based on the herds, would t; avel through the region following the movement of the animals. With
I the beginning of early agriculture, the first Native Americans known to settle in the Denton Area
were the Wichita and a sub-group called the Klchals.
I
2. Early Settlement
During the early years of the Republic of Texas, 11836 to 1841, various land grants were issued to
pioneers, veterans and land colonization companies. Much of the early settlement of the Denton
County area was granted to a Kentucky firm entitled The Peters Colony. The Peters group was 1.
under contract with the Texas government to bring emigrants from the east to settle In the region.
The first settlers were primarily farmers and ranchers. Over a period of sixteen years some
C eighteen small communities were established throughout the area comprising Denton County,
r' {
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( 3. 19th Century
The City of Denton was founded in 1857 as the new County Seat of Denton County, Id the
preceding ten years, three other locations had been tried for the County government. One hundred
acres were given to the County to be laid out in lots for sale to prospective residents as the City of
Denton. Only the present public square and one other block were reserved for public ownership.
Funds received from the sale of the property were used to construct the first courthouse located on
the north side of the square. This wood structure burned in 1875 and was replaced by a new
courthouse built in the center of the square. This second structure was razed In 1895 and the
present masonry structure was erected in 1896. Limestone for this landmark was carved from a
quarry north of the City.
Located in the geographic center of the County, Denton logically became the center for regions'
trade. Based mi an agrarian society raising cotton, corn, peanuts, sweet potatoes, pecans and
livestock Denton was the center of trade to much of the North Texas area. During die 1880s the
Texas and Pacific, Gulf, Colorado, and Santa Fe Railroads completed tracks across the County,
increasing the area that locally produced crtp could be transported and sold, bringing greater
prosperity to the area farmers.
4. 201h Century
Early in t';a 190M Denton established two of its greatest assets which have helped define the City
since, In 1901 the State of Texas took over a private college to establish the State Teacher's
College which would grow Into the University of North Texas. UNT has grown to be an
internationally recognized school in the fields of teaching, music and art. Texas Woman's
Un' ~ersity founded in 1900 as the Girl's Industrial Institute and College of Texas has become a
leading institution in the libetil arts, nursing, and social sciences.
With the corning of greater industrialization, improved toads and a growing population in the
Dallas/Ft. Worth Metropiex, development In Denton began to spread outwards from the original
townsite. New residences were constructed reaching northeast from Downtown. in 1914 the land
area within the corporate limits was approximately four and a half (41/a) sgaare miles. The City
also acquired its own electric tight and water plant and extended thirteen (13) miles of water
mains.
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From the 1920s to the 1940s, Denton experienced only moderate growth. Electric tail public
transportation service from Denton, to Dallas existed until the economic stagnation of the
Depression In the 1930s made it infeasible to operate. The construction of the Interstate system in
the 1950s brought the confluence of Interstate 35 cast and west and defined Denton as the
northenunost point in the greater urb, nized area of North Texu.
Today Denton is a thriving community. Although extremely significant, Denton no longer sustains i`
its prosperity primarily on agriculture. Cargo truck manufacturing, aviation, construction c
materials, high-tech industry, government end education play primary toles in the employment of
Denton's residents.
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Section 1 . Figure 4
City of Denton Population
80000
i
70000
60000
50000
40000 -
30000
20000
10000
0
1910 1920 1930 1940 1960 1980 1970 1980 1990 1998
Year
Source, VS Bureau of the Census.
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Section I . Figure S Context Maps
Mail
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S. The Natural Environment
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Denton Is it place of transition at its very basic level. Situated on the boundary between two of the
major physiographle provinces In the United States, the Gulf and Atlantic Coastal Plain and d,e
Aerior Lowlands, terrain, geology, soils, and vegetation can vary from the extreme western
border to the eastern border of the City. From the North and West, large tracts of slightly
undulating along grassy ranchland with few trees that encapsulate the view. The local relief
arriving from the Sou+.t passing cleat to Pilot's Knob and other natural formations rising out of the
plain would give tha impression that the local landscape Is hilly. Denton could also appear as a
densely wooded area surrounded by lakes And rivers arriving from the East and Southeast crossing
the Trinity River and Lake Lewisville. Altitudes in Denton County range from 530 feet to almost
1000 feet above scs level. Pilot's Knob located in southwest Denton next to the III 33W corridor,
has an estimated height of a little over 900 feet. The contrasts of the physical environment are not
only reflected in what is immediately visible, but the basic geology also shows wide contrasts.
a. Geolct
The underlying geology of the region Is characterized by the age of the surface materials. East of
the border between the two major regions of the Cross Timbers Prairie and the Blackland Prairie,
the topsoils range from the Lower Cretaceous and Upper Cretaceous periods, ranging between 80
and 65 million years in age. Outcrops of sandstone, limestone {nedver to alluvial systems}, and
igneous rock towards the southern edges of Denton County can be found. Several limestone
quarries are located in Denton County nerf the Trinity River system.
( b.59jjj
Of the to great soil orders recognized in the world, three can be found in Denton County and
around the City of Denton. Mollisols, Alfssols, and Vtrtisols are readily found in the area. Alfisols
are characterized by moderately deep soils on the upland savannahs. The Birome-Gasil-Callisbug
soil is a good example of the regi-wnal aUisols. Alfssols, the most prevalent soil order in the area
tend to be more clayey and have very poor permeability with high problems of soil erosion.
Sanger-Somervell, Navo-Willson, Branyon-Burleson-Heiden soils typify the Mollisols found in
Denton. Mollisols tend to be dark loamy soils consisting of soft grandular surface materials of
alluvial origin overlying calcareous sediments. They can be well drained, gently sloping to
moderately steep that have moderate to slow permeability of water. Vertisols Le the black waxy
clays of calcareous origin of the Blackland Prairie and Coastal Prairies. They lend to be rich loamy
clays with high incidence orshrink-swell between wet and dry periods. Examples of vertisols are
the AledoSomervell and the Houston Black-Sitphen,
c. climate
Denton is humid subtropical with hot summers. Tropical air masses from the Gulf of Mexico play
a dominant role in the climate of the area during spring, summer and fall, Polar air masses
contribute to the winter climate. Denton receives approximately 36 inches of precipitation a year,
but can occasionally have a dry year. Dry periods during the year occur mainly during January and
mid-summer. May is the wettest month. Relative humidity Is on average 60 percent throughout the
year. Winters are mild with average temperatures ranging from the mid-thirties as lows to an ' J
average or upper fifties for highs. Spring Is the most weather active season with strong prevalent
( Aindq from the south and west. Thundershowers Increase in April and May with occasional
destructive winds and hail. Summers are hot and humid with little variation. Precipitation slacks
off during July and August, Increases in September and slowly decreases through January.
CMyDaummhlMCaENCOMPAMNSIVEPLAN S£Cr10NS&donlait !-JJ-"da E%HIBITA PoSe14 09
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Autumns in Denton are pleasant with long stretches of sunny weather with mild temperatures. The
growing season can range from 226 days to 240 days out of the year. Air quality remains an
Important issue in Denton, Denton County, along with the Dallas Ft. Worth Metroplex, currently
holds a federal non-attainment status in ozone, nitrous-oxide and particulate mutter, Working
through NCTCOO, measures such as traffic managems,nt, reduction of reliance on the single
occupant vehicle, and point source containment are currently being implemented to reduce the
amount of air pollution in the area.
d. Hydrolocv
The City of Denton Is located In the Trinity River Basin and has four major watersheds crossing Its
boundaries. Most of the city lies within the Cooper and Pecan Creek watersheds, with the extra-
territorial jurisdiction (ETn as well as the City extending into the Clear and Hickory Creek
watersheds to the north and south respectively. All of these watersheds lead Into the Lake
Lewisville Reservoir. Of the two urban watersheds, Cooper and Pecan, many sections crossing
through town have been channeled to speed runoff from the built environment. both the Clear and
Hickory Creek watershed remain in a natural stata as development in these areas remains largely
rural. All of the watersheds within Denton flow from the upper elevations of the Northwest to the
Southeast.
Because of the poor percolation rate of the soils due to it mostly clay consistency, quick saturation
of the soil allows extreme runoff Into the drainage systems. To attempt to modify the Impact
impervious cover and runoff has on flooding areas of the city, regional retention lakes built In the
northeast and southern areas of the city have increased the holding capacity of surface water
runoff.
The City of Denton is in close proximity to two large htunan constructed water reservoirs. Located
to the northeast, lies Lake Ray Roberts and to the east and south, Lake Lewisville. Bohr lakes were
constructed by strategic damming of the Elm Fork of the Trinity River,
E. I'laigi19j)
As, with all the natural systems described, vegetative cover in Denton crosses many varieties from
the ,astern to the western edges of the City. Much of the city Is covered with treetops giving it soft
edge to the city landscape, The Cross Timbers and Blackland prairies both are characterized by
hardwood vegetation, mostly hickory, oak, and pecan with large areas of native grasses eon0sting
of androgons, grams, buffalo, and bluestem grasses. Much of the native tree vegewtirn was
originally located along water courses. With urbanization and cultita.lon many non-native plant
species have been able to survive the extremes In climate and the thick harder soils of North Texas.
The Cross Timbers prairies are drought-stressed woodlands, populated by low-stature, slow-
growing trees, many of which predate not only Texas statehood, but also the birth of the United
States.
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{ Section 1 . Figure 6 Natural Environment Maps
A MAJOR SOIL ORDERS NATIVE PLANT LIFE'
A REGIONS
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( Section 1 Figure 7 vegetative zones or Texas
CROSS 711vBM PRAT R ES
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V*
f 6. Economy f
This section will be provided along with
the Economic Diversification Chaplet (I
the Comprehensive Plan in April, j
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Section 2 ■ Population Forecasts -1998 to 2020
City Background
i
The City of Denton, Texas Is located approximately 35 miles north of Dallas and Fort Worth at the
confluence of Interstate Highway 35E and Interstate Highway 35W. The Dallas/Fort Worth
region, a 16 county region know as the Metroplex, has experienced substantial growth during the
past several decades, with the exception of the period following the economic downturn that
occurred in the late 1980s. The regional economy has been diversified considerably since the 80x,
and sustained growth is expected in the region,
The City of Denton is the seat of Denton County government and Is located approximately In the
geographic center of the County, The city has access to excellent transportation corridors for
highways and rail transit, and is close to two major airports, DFW International, second only to
Chicago's O'Hare Airport in passenger traffic, and Alliance Airport, the Nation's first all-cargo
airport.
Within the Study Area four land areas are of importance to the city for pluming purposes:
1) The area within the current city limits,
2) The area that is expected to become urbanized,
i 3) The area within the city's current 3'A mile extraterritorial jurisdiction (ETJ),
4) The area within the city's future S mile ETJ once a population of 100,000 Is achieved.
The Study Area accounts for 26% of the 957 square miles within Denton County.
~ Section . Table
Summary of Land Areas
Used for Study
Land Area Acres Square
Miles
tty o nton 35.95
Urbanizing Area 29,088 45.43
3 Y, Mile Ell 76,366
ieET 20.630
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Market Position
Economic development and corresponding population growth within Denton County Is stimulated
by the proximity to air service, the transportation corridors linking the city with Dallas and Fort
( Worth employment centers, and the presence of major public institutions within the City of
Denton. The University of North Texas and Texas Womans University provide a signification
economic base for the city, and they provide a skilled labor pool for local employers. Additional
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Draft Denton Comprehensive Plan February 1999
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public entities such as Denton County, the City of Denton, Denton Independent School District,
Denton State School and the Federal Emergency Management Agency provide additional
economic base.
The City is positioned geographically to take advantage of current development activities
occurring in the Metroplex. Regional development patterns are such that real estate in the vicinity
of Denton has become very desirable. Land in and around Denton is relatively inexpensive when
compared to other rapidly developing areas of the Metroplex such as southern Denton County and
southern Collin County. Major land developers are beginning to be attracted to the city. Rapidly
growing communities such as Carrolton, Flower Mound, Lewisville, Corinth, and Frisco in
southeast Denton County and southwest Collin County have been experiencing annual growth
rates throughout the 1990s ranging from 104/t to Son/o.
Ill.
Population Overview
Future population growth in Denton will be affected by external factors including growth rates
within the region %s,d state. Texas is among the fastest growing states in the U.S. The Dallas/Fort
Worth metropiex is one of the fastest growing metropolitan areas in the U.S. and Denton County is
one of the fastest growing counties in the metroplex. As areas closer to the employment centers of
Dallas and Fort Worth build out, growth pressures will be asserted in and around Denton. As
employment opportunities are developed around Alliance Airport and along the 1-358 corridor,
growth pressures will be asserted in and around Denton. Denton Is one of the next most likely
places in the metroplex to experience sustained growth.
The city is already experiencing rapid employment growth. During the 1990% non-construction
employment, as estimated by the North Central Texas Council of Govemments, has increased by '
30 percent. In contrast, population in the city increased only 10 percent from 1990 to 1998.
'these growth pressures have begun to materialize during the 1998 calendar yen. The city platted
more single-family residential lots and permitted more single-family residences than in the past.
In 1998, more than 1,200 single-family lots were added to the inventory and over 600 single-
fnmiiy residential permits were issued. In addition, over the last four years more than 400 multi-
family units have been constructed each year. In 1998, 1,100 additional housing units were added,
representing approximately 2,500 residents, or nearly 3yi percent growth.it is estimated that the E
232 square mile Denton Study Area had a 1998 population of 85,350, of which 73,050 (86%) lived
within the City of Denton. The time horizon for population forecasts is to the year 2020.
IV
Holding Capacity
1 Denton's current population density Is approximately 1,308 people within a square mile. The
average density observed for Metroplex titles, ranging In density from University Park at 6,162
people within a square mile to Rockwall at 826 people within a square mile, is 2,461 people within
C Vy Dw menioWBETIATO MENSM K AN SECT1014&cdon I& It 1.71.996K EXHIBIT A Pa je 20 of 39 .
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a square mile. Using the 101 square mile urbanizing area as the build-out land area, the following
table of holding capacities is derived.
Section 2. Table 2
Holding Capacity for the Denton Urbantzing Area
Based on var'ous population denslties
Description Area Population Density (Pecple per Square Mile)
(Sq. Miles)
1,300 1,750 2,2J0 2,640
I
Urbanizing 101,3 132,000 177,000 228,000 267,000
ounce: a tty o enton ant ng an ve opment Department, January, 1999
Over time it is likely that Denton will become more densely populated, At present leas than 40%
of the land arts within the current city limits is developed. Them are significant tracts of land
within the core area of the city and at its periphery that are not developed. These areas am very
likely to be developed within the time frame of the forecast. In addition, areas outside the current
city limits will be srutexed into the city and developed, primarily for residential uses. The best
population estimate of the holding c mdty of the urbanldq area 1, apyr,welmately 228,000,
based on an average density of 2,250 people per square mile, less than the average for other
( metroplex cities.
Population Estinml4es
The population forecast estimates a "most likely" population for the 252 square mile Denton Study
Area of 213,000. The City of Denton is expected to grow to 101 square mile with a populati,3rt of ,
187,400, or 88% of the Study Area population, In 1998 it is estimated that approximately 86% of
the Study Area population lived within the City of Denton.
The holding capacity analysis confirms the city's capacity with respect to land use to
accommodate the projected increase in population without significant changes to historic
` residential density, current development trends, and land use relationships.
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Section 2 . Table 3
Denton Piann!ng Area and City of Denton
Forecasts of Aaditional Population and Land Arcs
1998- 2020
5-Mile ETJ Study City of Denton
Area
Annual
Percentage Annual Study Area Density
Year Growth Numeric Area Population (sq. miles) (pop./mile)
Growth Population
1998 85,350 73,05 5 .0 1.304
I,
7 ,72 56.0
2000, 2.S°/. ..^,ri. ;°7142,18 , 0;'?. t 7. , .'+fl, 44 2,660 o 8:560 58.0 ,
o 59.0 ,
2003 3.Ho 2,840 97,660 ----8-2,4-50- 031,363
o , 2,540 86,110 Cf. 0 ,
2005.^j 3O Y ,l3 6 r , gjl,41.
113,050 1.480
2007 SON II ,700 100,460 66.5 1, I
2008 We 1,54i
130.870 , ,
/o
137,420 2010 ° 6,550 117,566 1. 7 16
,
0! 0 6,996 1 I
2 1 S. /o 7.200 151,500 129,000 7 . 1,613
20 3 1 + 59.ODO 135.W 90.0 ,
2014 4.8% 7,766 1 ,7 8. i,
16., ' 132,100 1,772
2017 4.2% 7,700 180.s66 l 1,783
a 95.0
2019 3.90/a 7,700 205.16d 176,500 98.0 1361
" -771
•
1998- +149% + I37 0 +8 +42%
2020
Source, The City of Denton Planning and Development Department
January, 1999
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VI.
Crorerk Areas
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Population growth in the Study Area is expected to continue to be concentrated within an
urbanizing area where the full range of city services will be available. By the year 2020, this
urbanizing area is expected to encompass 101 square miles. The Denton city boundaries could
expand to this area. The most eminent growth is expected in the south and southwest, as growth
pressures move up the 1.35E and 1-33W corridors. Later, as the city's population expands, the
growth is likely to shift to the east, north and into the heart of the city.
i
Wi hin the urbanizing area the following trends are expected:
• The southern sector is expected to house about 52% of the new population, growing from a
1998 population of about 14,000 (17% of total study area population) to a 2020 population of
81,00(1(38% of total study area population).
• The central sector is expected to house about 18% of the new population, growing from a 1998
population of about 32,000 (376/o of total study area population) to a 2020 population of 54,300
(26% of total study area population).
• The northern sector is expected to house about 18% of the new population, growing from a
1998 population of about 34,000 (40% of total study area population) to a 2020 population of
56,600 (27% of total study area population).
• The urbanizing area is expected to include 101 square miles with a population of 187,600, or
t 83% of the forecast Denton Study Area population. If the City boundaries expand to
encompass this wea, the average density of the city would increase from 1,309 people per
square mile in 1998 to 1,850 people per square mile in 2020, This is 75% of the 1998 average
density of selected metroplex cities.
The balance of the Study Area is expected to house about 12% of the new population, growing
from a 1998 population of about 5,000 (6% of total study area population) to a 2020 population of
21,000 (10% of total study area population).
ton a
Denton Planning Area
Forecasts of Additional Population by Load Area
Mg - 2020
sector Sub- Land Viinoted Forecast 020
Areas Area 1998 2020 ass % ofthe Residential
(sq. Mi.) Population Population Study Area Density
Po .mi.
Urbanizing
,
North a a 01.2 27 ~ 1,811 1
enlra t t
out ti a, 14, , 1 , iE
'f
balance -09M- 3,130 , 1 130
T6Tx= 252.8 943
Source City of Denton Planning and Development Department, January, 1999
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Section 2 . Table S
Denton Planning Area j
Forecasts of Additional Population, Dwelling Units and Residential Land U"
By Snb-Area
199b - 2029
Single Chun in sieg>r MWd• ' Low FamUy Family Density
Sod. IV" 2020 Population Famay FMay p Land Laid Land Use
Area Population Population 1991-2020 Dvn1Ue1 DMO D"'W0I L%. Use (Ames)
Uoiu (Acre) (Ac:m)
1 1 41 2, 3,719 --7W
r.
2 2,436 3. 781 -
21 33.9371 12.728 2" jjt7 242
y. r
38 ----1W 2,063 1 1,754 639
12,448 30,139 7.01 1.514 un TW
. s
28,044 94 I'M 2'M
6 7YW 20,119 4'M 1042 M6 -
"'t.
7 1 1.120 10,000 Liao 3171
li`W
so 1 297 4JOO
214 SwIll, 561
21581 ON 1.221 2.442
-44 2.920 1043 3,
13
1,746 14,000 [0,254 1 + - r
C "
19.911
J1J.,
56% 341b 19% 56%
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Section 2. Figure 1 Population Forecasts by Sub-Area Map
LEGEND
Ibads
®ary LMLS -
Lakas _
19 Ubertvlrg Area in ETJ I
ew..wri.►eere.rb....wn►e.a L
3'h Mie ETJ
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weno.a:nn u anane N e~,~MMrr
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%n* Md gle.~dapment DepaArnari Mir 16
dty Vdel?21NErn9t Toes MI ajN omarrern~ ""°j1J tN21
For more kdmaoon please wrW>; (940) 340-M C m~r~enwan pn1 ioaeo ~ +9A ~
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Section 3 ■ Growth Management Strategy
Development Suitability
i
A. PROCESS
The process of developing The Denton Plan involved detailed investigations Into the existing
natural and man-made systems. Multiple methods were utilized to accomplish this Investigation,
including field surveys, satellite imagery, aerial photography, and "ground-truthing" (verifying
data on-site). Specifically, the following information was studied:
Existing land use pattern.
Floodplains.
Soils.
Vegetation and tree cover.
The above information was assembled into a "composite suitability" map, which combined the
various constraints to development and indicated portions of Denton that were more suitable, less
suitable, cc unsuitable for development.
I
By studying the natural and man-made opportunities and constraints to development in Denton, the
Denton Plan capitalizes upon the City's assets. This approach helps guide growth where it is most
appropriate, as well as preserve and protect environmentally sensitive areas. The development
suitability was utilized in the development of the Alternative Development Scenarios. j
B. COMPOSITE ANALYSIS ,
The analysis of the existing natural and man-made systems identified a number of opportunities for
and constraints to developo ent. When considered cumulatively, some areas become lem desirable
to develop than others:
1. Existing Land Use Development Pattern
The City of Denton has developed with a variety of residential uses, with most of the central
portion of the City being developed. Retail and non-residential development is generally located
In the downtown area, along 11133, along U5 380, and along Loos 288.
2, Floodplains
Floodplains should be preserved as natural areas because of their important environmental
function. it is recommended that Ooodplains not be developed.
3. Soil Suitability for Urbanization
Soils may increase the construction cost for structures and roadways, and are a moderate constraint
to growth in some areas. Denton development has overcome these conditions in the post through
site preparation and engineering.
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4. Trees
The eastern half of Denton contains many treed areas that add to the environmental quality of the
city In the areas of air quality, drainage control, noise abatement, end aesthetic value. Future
development should occur in a manner that preserves treed areas, which in some areas may
constrain growth, depending upon the allowable land uses to treed areas.
These factors were overlaid using ERDAS Imagine software to develop a composite opportunities
and constraints map. Because of multiple factors associated with the 100-year floodplains -
flooding, poor soils, with adjacent steep slopes and mature tree stands - it is recommended that
these areas not be developed. Most of the rest of the City is suitable for some type of development
with soils and N egetation placing less stringent limitations upon development.
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Section 3. F:.,ure 1 Composite Suitability
Legend
0 Most Surtable r
Suitable
® Less Suitable
Unsuitable y
y•
r ~ u I
w r
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H.
( Alternative Development Scenarios
To fully explore the options of growth mana;ement and land use, four varying alternatives were
presented to exhibit the differences in how patterns of development could be applied to the City of
Denton. These Alternative Development Scenarios were a series of maps and series of major
implications of development that implementation would have on the City, The four hypothetical
scenarios were developed to identify a physical forth for the community; the potential implications
related to development patterns, land use, transportation, environmental and urban design; and the
potential City policies that should be, considered resulting in the development of the Cnowth
Management Strategy for the City of Denton. The purpose of these Scenarios was to review
overall implications of different options for land use, as a guide for development of the new
Denton Plan. All four Scenarios are distinctly different, although there are many common
elements among them.
The four hypcthetical scenarios that were explored included:
A. CORRIDORSCENARIQ
The Corridors Scenario Included patterns of high intensity development occurring In patterns of
bands along major thoroughfares and highways with limited reinvest nent, redevelopment or infill
development. Overall it low-density land use pattern with highest densities occurring along the
roadways. This scenario would increase the service area for public facilities, utilities and ~
transportation,
R. URBAN CENTERS SCENARIO J
A focus of mixed commercial, office and higher density resident;al land uses exemplifies the 1
Urban Centers Scenario. Growth would occur around designed centers within the City, Downtown,
Northwest Loop 288 and 11135 and Southeast Loop 288 and .;d 33E, and an Industrial node
surrounding the Denton Airport. Strictly residential areas would remain similar to current patterns
with a higher emphasis on transportation Improvement.
C. NEIGHBORHOOD CENTERS SCENARIO
Lower intensity and density of use contrasts the Neighborhood Centers from the Urban Centers
Scenario. Residential uses based on a gridded street network would center around local, limited.
use retait, parks or schools. Residential developments occur within walking distances of the
Neighborhood Center, Commercial and industrial districts exist.
D. COMPACT GROWTH SCENARIO t
Growth would be accommodated within a limited area. This development pattern increases the a, '
City's use of redevelopment, reinvestment and infill development and higher densities to order to , l
grow. It allows less divestment in capital costs for public facilities and Infrastructure and lends the 11
ability to design more efficient public transportation systems.
C,1Mr Eke menu'MC8ETN'COMPKtMtN51%T PLAN %tC11ONA ft-d*n An 2•77"99.doe EXHIBIT A pale 29 of 39
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Section 3-,. Figure 2 Alternative Development Scenarios
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Growth Management Strategy
The Growth Management Strategy is a composite of the desirable elements exhibited in the four
Alternative Development Scenarios, and also reflects existing land use patterns within the city.
The Growth Management Strategy for the City of Denton weresdopted by City Council in January
1999. The Gro% th Management Strategy and Plan are included in the comprehensive plan, and
have been revised and supplemented as necessary. The comprehensive plan replaces and
supereedes the Growth Management Strategy adopted In January 1999.
A. y Lt) [CUES
Growth will continue to occur in Denton, and the rate of growth will likely accelerate in the near
future, Proactive planning is considered the preferable approach, defining the "rules" by which
growth will benefit the most people. Proactive planning requires preparation and an investment of
resources in anticipation of growth. Public Involvement is critical to plan success. Anticipation of
the adverse impact of growth is a key element in proactive planning. in reactive planning,
preparation Is not necessary, Without proactive planning, growth is solely driven by consumer
demand, and planning for governmental services and utility systems is done "after the fact". The
less preferable alternative is to react to growth and its impacts as they happen. Preparation is not
necessary. Consumer demand drives the location and type of new development, and governmental
services and utilities systems are designed in response to growth trends. Adverse impacts are
typically more expensive to fix than to prevent. Proactive planning Is staying a "step mead" of
growth; reactions to growth are always a "step behind." The growth management strategy
contains policies that keep Denton a "step ahead." All other policies in The Denton Plan must
adhere to the Growth Management Strategy,
1. Essential services provided by government must be maintained at the highest levels of quality
possible, City services intended to protect and preserve public health and safety must be
provided to all existing and future Denton stakeholders.
2. The growth management strategy should support the coordination of public services with
private development. Development patterns that make the most efficient use of public
services and infrastructure should be promoted. The true impact of private development
should be accurately identified and assessed in proportion to public costs and benefits.
3. The community should establish development rules that are clearly stated, administered
efFclently, and enforced consistently. If development is proposed that does not satisfy all the
rules, it should not be allowed.
4. Land uses should be balanced to maintain a diverse economy and a welI -proportioned tax base,
The city will provide opportuni!ies for the development of a full array of land uses within the
city.
S. Areas of the city susceptible to environmental damage, or where infraomctue systems are 1
stressed, or where development would contradict city planning objectives shoatd be Identified
and protected.
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6. Zoning should be used as originally Intended, to address extreme incompatibilities between j
land uses. Zoning should be used to identify performance standards that allow land rocs In
defined districts based on their ability to mitigate potential negative Impacts on neighboring
properties. A reexamination of the use of zoning as a planning tool should be conducted to
reflect community values successfully.
7. Development guidelines should be established to allow a wider range of land uses to coexist i
within close proximity to each other. Site design principles, aesthetic guidelines, and
construction standards should be investigated as possible tools to promote land use
compatibility and encourage developmental diversity.
8. The location, placement, and design of public facilities such as parks, schools, fire stations,
libraries, or human services facilities should be used to create neighborhood activity centers.
9. Coordination of planning efforts between different units of local government should be
encouraged to save money and yield greater benefits to residents. Residential development that
establishes a variety of lot sizes, dwelling types, and housing prices should be encouraged.
10. The City should be designed to accommodate people rather than automobiles. As growth
occurs, a variety of mobility systems should be given space to connect people to destinations
that are important to daily functions. Transit, bicycle, and pedestrian linkages should be
planned and implemented to serve daily transportation needs safely and conveniently.
i 11. Denton's ability to grow and expend should be identified In the City's annexation strategy.
City limits and extraterritorial jurisdiction (ETn boundaries should be clearly established, and
relationships with other jurisdictions should be determined through Interlocal agreements. The
annexation strategy should also reflect the costs of service provision and external
environmental impacts associated with land located In the ET F.
12. Four major growth aspects of growth have been Identified and are subject to the following
management prefercices:
a Quality
Quality of growth is the highest priority and will be strongly managed.
Quantity
Quantity of growth will be managed through consideration of adequate public facilities
requirements and proactive planned extensions of services.
■ Location
Location of growth will be managed through organization or broad land use patterns, matching
land use intensity with available Infrastructure, and by preserving floodpltins as environmental
and open space corridors. A, _ c-
9 Timing
Timing of growth will be managed through consideration of adequate public facilities
requirements, capital Improvements programming, and phasing of utility extensions,
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B. GROWTH MANAGEMENT STRATEGY ASSUMPTIONS
Based upon the preferences expressed by the citizens of Denton at community meetings and at the
community workshop held to present the Draft Growth Management Plan, the following Growth
Management Plan Is presented as a preferred alternative for future growth in Denton. The plan
combines many of the concepts from the alternative development scenarios that received favorable
responses at the community meetings, including the development of "neighborhood centers",
"urban centers", and a strong industrial district within the City, while encouraging the restoration,
redevelopment and infill of parcels in the downtown area and adjacent to the University of North
Texas, and Texas Woman's University.
The following are the basic assumptions of the Growth Management Plan:
1. The Planning Horizon is for the year 2020.
2. The estimated population in the year 2020 will be 213,000 for the entire study area, which
includes the City of Denton and its 5-mile extraterritorial jurisdiction (ETJ).
3. The population of the City of Denton in the year 2020 will be 191,910, with an additional 45
square miles of ETJ expected to receive urban services and be considered for annexation.
4. The City intends to accommodate the additional population that the market dictates.
( S. The mix of Residential, and Commercial land uses will be approximately the same as currently
exists; Industrial land uses will be Higher, and Institutional uses will be lower.
6. Within Residential Land Uses, the percentage of Multi-Family to Single Family uses will be
less than exists today.
7. The 7.oning Mix in 2020 may or may not be the same as currently exists.
8. Denton will continue to encourage a range In housing types and densities In order to respond to ,
the needs and desires of its' residents.
9. Average residential densities will be the same as exist today.
10. There will continue to be an average of 28 people per SF residential unit and 1.8 people per
multifamily unit
11. The average, citywide, Single Family lot size will continue to be 10,000 SF, which corresponds
to a density of) units per acre, The Single Family residential density In Neighborhood Centers
will average 4 units per acre,
12. The average density for Multi Family development will continue to be 14 units per acre, which
corresponds to existing development patterns.
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13, The mirlmum lot size for SF Low Density development will be 2 acres, or more if required to
support a septic system.
14. Based upon the anticipated quantities and locations of future population, and the city's existing
land use mix, the city will need to accommodate approximately 15,000 additional acres of
single family development, and 1200 additional acres of Multi-Family development.
IS. Based upon the additional residential development and the existing land use mix, the City will
need to accommodate approximately 3000 acres of industr;al development, 3200 acres of
commercial development, and 2700 acres of institutional development.
M The plan encourages infiil development, restoration and redevelopment within the existing
Center City and surrounding the universities.
C. SPECIFIC ASPECTS OF THE GROWTH MANAGEMENT STRATEGY
I . Anticipating and allowing growth along the southern borders of the City of Denton, provided
development pays its' own way, except in cases where the City wishes to provide incentives to
encourage it's desired urban form or corridors,
2. Adopting an aggressive annexation policy in order to manage the density and quality of growth
within current ET) land, and to maintain the existing CCN.
C 3. Using infrastructure master plans to develop expectations of adequate levels of public services.
In areas where water and sewer services are provided, moderate density development can be
accommodated. In areas where services are not available, low-density development will be
necessary, using septic systems and wells,
4. Single family Low-Dcnsity residential uses will be allowed to develop in areas outside of the
Urbanizing Areas. The site of the lots In those areas will be based upon the area requued to
support a septic system, and will vary based upon each location's soils. The remaining land
within those areas would remain as agricultural uses.
5. Within the UtFjan and Urbanizing Areas, higher density residential patterns would be allowed
to occur.
6. These areas could be developed as "Neighborhood Centers" that are developed In an Inwardly
oriented manner with a focus upon the center of the neighborhood These developments would
be established in a manner that locates the center of the neighborhood within a S to 10 minute
walking distance from the edge of the neighborhood. The center would contain uses necessary
to support the surrounding neighborhood including retail uses such as convenience grocery,
barbers, or small professional offices, higher density residential uses such as townhomes, park
uses including central neighborhood "greens" and Institutional uses such as fire stations, PIN
schools, libraries and transit nodes. The mix of uses Identified to support each neighborhood
may be developed In a vertical manner with shops on the ground floor and offices or residences
on the upper floors.
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7. Future residential development within established residential areas would be developed in a
manner that responds to the existing residential development with compatible land uses and
patterns. The plan recommends that existing neighborhoods within the City be protected and
preserved.
8. The renter of the infili development would be in the downtown district where preservation,
restoration, redevelopment and infill would be the focus. Also, it is recommended that the City
consider creating "University Districts" at UNT and TWU. These districts would focus on
developing compatible, supporting land uses adjacent to the universities. t
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9. Multi-family residential development will be accommodated In the plan in a variety of forms.
Many of the deteriorating apartments adjacent to the universities could be renovated or
redeveloped as new student housing In order to better support the needs of UNT and TWU.
Additionally, other types of multi-family development should be considered within the City
such as townhomes. It is recommended that multi-family development be located in areas that
provide transitions between lower and higher intensity uses, and In a manner that will not
negatively impact surrounding uses. Additionally, multi-family uses should be located in small
groupings around the city in a manner that provides a mix of uses and densities, rather than
concentrating all multi-family uses in one area which can have negative impacts upon the City,
10, Future commercial uses are accommodated in the plan at key nodes throughout the City. The
plan recommends tno commercial uses not be located continuously along corridors in a "Strip"
manner,
11. Business would be accommodated in the plan in several areas. At the Intersection of Loop 288
and Ill 35, the plan calls for an urban center, This center would be a mixed-use center
containing office, retail, and high-density residential uses. This center could also Include some j
research or technological uses that would be compatible with the activities at the universities.
A second urban center south of the Intersection of Loop 288 and 1H 35E could contain '
medically related offices with a mix of supporting uses. A third urba,t center on the south aide
of tow., would be located at the City's ET2 along IH 35 west. This center would probably
develop after the frst two urban centers and could support general office uses or activities
supporting Alliance Airport.
12. In order to support the proposed urban centers, and to provide additional support for the
Universities, the plan proposes that the City consider extending the existing runway at the
airport to 7500 feet in length in order to accommodate business Jets. With this expansion, it is
proposed that the areas Immediately adjacent to the airport be reserved for industrial uses.
Industrial uses are typically very compatible with airports due to noise restrictions. Uses within
this area could Include light manufacturing uses, distribution centers, or any other Industrial
uses that are compatible with the City's policies regarding environmental quality. Additionally,
existing floodplains in this area could provide a very effective visual buffer between industrial
uses and other surrounding uses.
13. While the plan does not specifically identify locations for future parks and institutional uses
such as parks and schools, it is recommended that these uses be located as required to
adequately support future residential development. Additionally, it is recommended that these
uses be located In a manner that encourages community building within neighborhoods. The
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layout of neighborhoods should be In it manner that provides focus upon these facilities, with
strong pedestrian links to these facilities from the surrounding neighborhood, and with links to
the City's regional pedestrian and transportation systems.
14. In all areas, the plan recommends preserving the 1100-year floodplain in order to provide
adequate drainage systems, preserve wildlife habitats, for pauive recreational uses, for the
development of trails systems, and for providing buffers between Incompatible land uses.
IS. The plan recommends further evahw!ion of the value and function of the natural environment
within the study area to Identity areas with unique ecological significance for consideration on
a more site-specific basis in the Comprehensive Plan.
16. The plan recommends that the City's Urban Design objectives be considered on a more situ
specific basis In the Compreheuaive Piet.
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February 1999
omprchcn'Ne Plan
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IV.
lrrtplententatlon Tools
Section 3, Table 1 Growth Management Techniques and Tools
ISSUE 013JECTIVES TECHNIQUE&TOOLS
I
Qrelily of Growth • Strongly manage quality of s Growth Management Strategy Map
new development. a Comprehensive Plan
a Protect environmentally s Small Ana and Corridor Planning
sensitive areas, a Capital Improvement Program
s Ratain Denton's quality of s Master Plans for Infrutructure
life and un,que cbaracter. s Adequate Public Facilities Policies
a Revised Utility Participation Policies
o Incentives to Encourage lnfill and
Redevelopment Activity
a Incentives to Aocomplish
Comprehensive Plan Objectives
s Zoning Ordinance and Map,
Subdivision Regulations and Site Plan
Review Protest
s Joint Planning and Interlocal
Agreements with Other Oovemmeatat
Agencies
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Qwandry of Growth s Manage quantity of growth a Growth Management Strategy Map
to ensure that adequate s Comprehensive Plan
public facilities exist to s Small Area and Corridor Planning
service growth and that new s Capital improvement program
development meets s Master Piano for Infwtructure
community standards. a Adequate Public Facilities Policies !
a Revised Utility Participation Policies
s Impact Fee Program
s Annexation Policies
s Incentives to Encourage Infill and
Redevetopment Activity
s Ince.ntlvettoAccomplish
Comprehensive Plan Objectives
s Zoning Ordinance and Map
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Section 3. Table I Growth Management Techniques and Tools (Continued) -
f
ISSUE OBJECTIVES TECHNIQUE&TOM
London of Crowth • Strongly manage location • Orowth M ugement Strategy Map
orgrowth. • Compreherwiva Plan
s Support miKed•use In • Small Area and Corridor Planning
appropriate locations. • Capital Improvement Program
a Encourage infill • Master Plans for Infrastructure
development. a Adequate Public Facilities Policies
e Preserve existing a Revised Utility Participation Policies
nelghborhoods and • impact Fee Program
Downtown. • Annexation Policies
a Encourage nonresidential s Incentives to Encourage Into) and
growth that enhances the Redevelopment Activity
CIty's and School District 's s Incentives to Accomplish
lax base. Comprehensive Plan Objectives
• Zoning Ordinance and Map,
Subdivision Regulations and Site Plan
Review Process
77ming of Growth • Control the timing of a Capital Improvement Program
growth to ensure the a Master Plans for Infrastructure
adequate provision orCity a Adequate Public Facilities Policies
services and facilities. a Revised Utility Participation Policies
a Stimulate growth in desired a impact FCC Program
areas. • Annexation Policies '
s Incentives to Encourage Inns and
Redevelopment
s Incentives to Accomplish
Comprehsruive Plan Objective
• Zoning Ordinance card Map
At
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AGENDA INFORMATION SHEET
AGENDA DATE: February 23, 1999 For questions contact
Diana Ortiz at 349-8224
DEPARTMENTr Fiscal Operations
ACM: Kathy DuBose, 349.822$
SST:
A RESOLUTION NOMINAIINO MEMBERS TO 111E APPRAISAL REVIEW BOARD OF THE DENTON
CENTRAL APPRAISAL DISTRICT; AND CECLARINO AN EFFEMVE DAZE.
BACKGROUND:
As you are aware, the Appraisal Review Board hears all appeals that are presented to the
Appraisal District during the months of May through July and throughout the rest of the year as
appeals are requested. Since this Is a very time consuming process during May through July, the
individual who serves on the bend should be available full-time during those months. Members
of the Appraisal Review Board serve two-year terms. Though the Appraisal Review Board
members are nominated by taxing Jurisdictions, they are appointed by the Appraisal District
Board of Directors.
Tha Board of Directors is uheduled to make their appointment at their February 23, [999
meeting. A candidate is needed to fill a vacancy that was available due to the resignation of
Reginald Ilili, I have also attached information from the Appraisal District concerning the
qualifications, appointment, and compensation ormembers of the Appraisal Review Board,
Attached is a list of current Appraisal Review Board Members, and their terms.
PRQR AMQN/REVIEW;
Not applicable
FISCAT, INFORMATION,
Thcre is no direct fiscal impact
Respec ullysubmitted:
d
Diahb. Ortiz
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RESOLUTION NO.
A RESOLUTION NOMINATING MEMBERS TO THE APPRAISAL REVIEW BOARD OF
THE DENTON CENTRAL APPRAISAL DISTRICT; AND DECLARING AN EFFECTIVE
DATE.
WHEREAS, the City of Denton, Texas wishes to nominate members to the Appraisal
Review Board; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY RESOLVES:
SECTION 1. That the City of Denton, Texas hereby nominates
and as members to the
Appraisal Review Board of the Denton Central Appraisal District.
SECTION IL That this resolution shall become effective Immediately upon its passage
and approval.
PASSED AND APPROVED this the day of , 1999,
JACK MILLER, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
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BY: A
1',M1•,dap' LDLM Dmwm wAal,liw WHOMNATI A,lAAISAI RZVM*10AN15as
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kPPRAIS.kL REVIEW BOARD
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Qualification Appointment and Compensation
Who Can Serve?
To serve on the ARB, you must have lived in the appraisal district for at least two years
before taking office. You don't need any special qualifications, but you may not serve on
the board if you are:
A former member of the governing body, officer or employee of a
tasting unit or a former director, officer or employee of the appraisal
district will be ineligible to serve on the Appraisal Review Board is
counties with a population exceeding 300,000.
You also may not serve as an ARB member if you are closely related to a person who
operates for compensation as a tax agent or is in the business of appraising property for
property tax purposes in the appraisal district. Relatives brnred are those within the
second degree of consanguinity or affnity. if you knowingly violate this provision, you
commit a class B misdemeanor. This provision took effect September 1, 1989, and
applies only to ARB members serving terms that began after that date.
The laiv also bars from ARB service members who contract with the appraisal district or
with a taking unit in the appraisal district. The bar applies if the member or a business
entity in which the member has a substantial interest contracts with the appraisal district
or a taxing unit that participates in the appraisal district. Likewise, the same taxing units
and the appraisal district are each prohibited from contractuig with an ARB member or a
business entity in which an ARB member has a substantial interest. Substantial interest is
deftr.,A as either.
1. Combined ownership by the member or the member's spouse of at least 10
percent of the voting stock or shares of the business.
2. Service by the member or the member's spouse as a partner. limited partner or
officer in the business entity.
You may also not serve if you hold some other paid public office. The Texas
Constitution does not allow a peisan to hold more than one paid public office.
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S. B. 1017 requires the Comptroller to approve curricula. pro%ide materials and super%ise I
a course for training AR.B members. The Comptroller shall issue certificates indicating
course completion. All AM members must complete the course or may not participate
in ARB hearings. The bill also prohibits former appraisal district and taxing unit
employees, C.•>,D board members and members if taxing units' governing bodies from
seeing on the ARB in that CAD. (Effective September 1, 1997)
A1RB Teens and Size
Members serve two yt:r staggered terms; approximately half the member's terms expire
each year. Terras begin January 1. The appraisal district directors appoint ARB
members by a majority vote and record their decision in a resolution.
Tem s are limited based on the size of the population in the county served by the
appraisal district. A person in an appraisal district serving a county with a populaticn of
more than 300,000 may not serve more than all or part of three terms on the ARB. After
completing the third term, the person may never serve on the ARB again,
A" Comp nsatiol
The ARB receives a 530.00 ntit_timum fora half day and S 13 50 an hour for any hours
worked after the 530.00 minimum. The maximum nay is capped at S10).00 per dav.
AIZB Meetings
ARB regular meetings are the third Wednesday of each month at 9:00 A.M.
ARB reappraisal hearings will slut on a daily basis, as needed. from late May until the
appraisal roll is approved usually in late July. Meetings will normally be from 9;00 A.M.
to 5.00 P.,,l. Effective January 1. 1999. ARB's must provie z hearing times in the
evening and on a Saturday or Sunday,
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The Boatel f Directors of the Denton Centrialf~,p ra as Di 8ti~t fps
consideri you as a possible member of the`App ai a11Rev w, t
Board. T Board of Directors will choose lour,.m ets f rltyo '
year terms. The selection will be made at the Der mb r Hdard,
meeting, ould you please ansver the followinq.qu'st onsland'
return to he District. i
Name
Address
Address
Phone
Jurisdict n
1. ould you be willing to sew.'
if so yov would need to be avaiir el r m ay,upt
the end of July. The Board meets; rpcc 9'00 i.m..40I5100
.m. until the roll is certified.! IT era wi 1 a s be I
eetings periodically throughout tf)a'yee'. I
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2. ave you ever been an officer orAplbye o th I
appraisal district or a taxing un d, for hi h t e,'E
appraisal district appraises prop4 ity7
3. Have you ever served on the appta alldi'trlcts aid elf
directors?
I
a. ave you ever been a member of th ppwerl An bocy o e
taxing unit for which the appraia~I list is ap ta5 ear
property? ! fl
S. ow long have you resided in Dentgr` Counly?~
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6. occupation
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Do you have any prior experiences'de,ain o~ an i
appraisal revle.r board or any boardAak~ha to o j+ith
_I ! h {
property value?
S. could you make a decision based Dal evide cei'rat ek khan
feelings for the taxpayer?
9. The property tax code requires th Q oil ro ert be
valued at 1002 of market value. ;could y)u eep tQi~ it1
mind throughout the proceedings?,
10,. Mould you be willing to work night4 bird ee end 'ifs I
uecessary7
The Board of Directors will notify you off t1eir
decision.
Board of irectors
Denton Cc tral Appraisal District k{
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1999 APPRAISAL REVIEW BOARD
Original Term - Jan. 1996 Term Expires 12/31/99 e'
H.W. SPROWLS
617 Pine Bluff
Lewisville, TX 75067
972-221-2240
Original Term - Jan. 1997 Term Expires 12/31/2000
TOM BARBER
626 Reno
Lewisville, TX 75067
972-436-0270
Original Term - Jan. 1995 Term Expires 12/31/2000
ROIAND LANEY
2508 Robinwood Lane
Denton, TX 76202
817-382-8035
Original Term - Jan. 1998 Term Expires 12/31/99
BARRY G. KING
1808 Westridg:
Denton, TX 76205
Original Term - Jan. 1998 Term Expires 12/31/99
LARRY T. WILSON
205 Old Alton Dr.
Denton, TX 76205
940-484-32356
Original Term - Jan. 1996 Term Expires 12/31/99
J.A. HINSLEY
512 W. Hickory, Ste. 211
Denton, TX 76201
940-383-3009 - Office
original Term - Jan. 1998 Term Expires 12/31/99
PATSY L. MONCRIEF
1022 W. Stroder Road
Justin, TX 76247
1 940-648-3252
Original Term - Jan. 1999 Term Expires 12/31/2000
REGINALD L. HILL
1806 Teasley Lane 1406
940-566-0975
Original Term - Jan. 1999 Term Expires 12131/2000
CHARLES F. GOODHUE
1708 Timber Ridge Circle l 1
Corinth, TX 76205
940-497-3646
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Original Tet - qan. 1999 Term Expires 12/31/2000
W (3~PLAND T ORNTON, JR
625 imosa DriVa
Denton, Tx 76201
940-382-7804
94U-158-7404
Original Term - Jan. 1999 Term Expires 12/31/2000
RAYMOND REDMON
2125 Morse
Dinton, TX 76205
90=387-4247
Orig nal Term - Jan. 1999 Term Expires 12/31/2000
MAROliET Z. BRENNAN
f309 oodlake Ct.
Corinth, Tat 76205
940-484-7166
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ORDINANCE NO.
AN ORDINANCE FIXING AND DETERMINING THE GENERAL SERVICE RATE TO BE
CHARGED FOR SALES OF NATURAL GAS TO RESIDENTIAL AND COMMERCIAL
CUSTOMERS IN THE CITY OF DENTON, DENTON COUNTY, TEXAS; PROVIDING FOR
THE MANNER IN WHICH SUCH RATE MAY BE CHARGED; APPROVING THE COM-
MERCIAL RATE FOR PUBLIC SCHOOL GAS SERVICES; PROVIDING FOR A
WEATHER NORMALIZATION CLAUSE; PROVIDING FOR A SCHEDULE OF SERVICE
CHARGES; PROVIDING FOR A MAIN LINE EXTENSION RATE, PROVIDING AN OPEN
MEETINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE CLAUSE.
WHEREAS, the City of Denton is a regulatory authority under the Gas Utility Regulatory
Act ("GURA') Utilities Code ¢103.001, and has original jurisdiction over the rates of Lone Star
Gas, a division of ENSERCH Corporation, a wholly owned subsidiary of Texas Utilities Com-
pany ("LSGC" or "Company'); and
WHEREAS, LSGC on October 23, 1998 filed with the City of Denton, Texas a State-
ment of Intent requesting rates and ch-a3es for gas sales in the City of Denton customers be in-
creased 5440,428 per annum, requesting increases in service charges to City of Denton custom-
ers in the amount of $35,667 per annum, requesting continuation of the Weather Normalization
C',use, requesting implementation or a Cost of Service Adjustment Clause ("COSA') and Plant
Investment Cost Adjustment Clause ("PICA'); and
WHEREAS, the schedule of rates proposed by LSGC was suspended for a period of 90 days
from November 27, 1998 the effective date stated in the Company's Statement of intent for fur-
ther review and investigation by Ordinance No. 98.397; and
NVIIEREAS, on December 16, l9o8 the City of Denton retained the firm of Diversified
Utility Consultants, Inc. ("DUCE' or "Consultant') to review the Company's proposed rates and
charges; and
WHEREAS, the City Council having considered LSGC's request, the Consultant's Re-
port and Findings, the Company's response report to the Consultant's Findings, and after reason-
able notice and having considered this matter at three separate meetings of the Cr1y Council, is of
the opinion and finds that LSGC's rates should be increased at the amount of 3°;, or a S 193,225
increase in gas sales rates, and approval of the $35,667 annual increase in servir a charges, con-
tinued implementation of the Weather Normalization Clause and denial of the COSA and PICA
adjustment clauses will result in fair, just, and reasonable rates and charges and should be ap-
proved and rates set it accordance therewith; NOW, THEREFORE,
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TllE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. That eP ctive with the gas bills rendered on or after the date of the passage
of this ordinance, the man imum general service rate for sales of natural gas rendered to residen-
tial and commercial customers within the City limits cf Denton, Texas by Lone Star Gas, a divi-
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sion of ENSERCH Corporation, a wholly owned subsidiary of Texas Utilities Company, its suc-
cessors and assigns, is hereby fixed and determined to be 5193,225 in ulnual revenue, $35,667
per annum for service charges to customers in the City of Denton, and the continuation of the
Weather Normalization Clause. The Company shall file with the City within ten days of the ef-
fective date of this ordinance tariffs consistent with this ordinance and with design rates with a
$5.50 monthly customer charge fo• residential customers and a 510.00 monthly customer charge
for commercial easlomers and total revenues in accordance with this ordinance which tariffs
shall be attached to and made a part of L'LLis ordinance for all purposes as Exhibit "A". The rates
shall also be designed to be spread the impact of the increase equally among all residential and
commercial customers. The rates established thereby shall be those under which the Company
shall be authorized to render gas services and collect charges from its customers for the sale of
gas within the corporate limits of the City effective with gas services utilizeel by the customers
on and after the final date of passage of this ordinance. All other rate relief requested by the
Company is hereby denied,
SECTION 11. That in addition to the aforesaid rates, the Company shall pay to the City
for paymert to the Consultant the full amount of the rate case expense estimated at $20,000 in
accordance with §103.22 of GURA. The City Council hereby finds y.d determines that the rate
case expense charged by the Consultant was fair and reasonable. The Company is authorized to
recover the current rate case expense through a surcharge designed for a six-month nomina! re-
covery period. The Company will provide monthly status reports to the City to account for the
collection of the rate case expense,
SECTION III. That the rates approved hereby fix the overall revenues of the Company at
a level which will permit LSGC a reasonable opportunity to earn a reasonable return on its in-
vested capital used and useful in rendering service to the publi; over and above the Company's
reasonable and necessary operating expenses and are just and reasonable. All other rates re-
quested, including the COSA and PICA adjustment clauses, are hereby denied.
SESf 1ON IV• That the rates approved hereby shall be effective and in force for all con-
sumption from and after the effective date of the tariff required to be filed hereby and shall be
charged and cbscn cd thereafler until revised according le law.
1 SECTION V. That the action of the City Council of the City of Denton enacting this
ordinance constitutes, on the date of its final passage, a final determination of rates for LSGC
within the City of Denton
SECTION VI. That nothing contained in this ordinance shall be construed now or here.
after as limiting or modifying, in any manner, the right ant power of the City under the law to
regulate the rates and charges of LSGC. ,
SECTION UL That should any part, sentence, or phrase of this ordinance be deter-
mined to be unlawful, void, or unenforceable, the validity of the remaining portions of this ordi-
nance shall not be adversely affected. No portion of this ordinance shall fail or become inopem-
live by reason of the invalidity of any other part. All provisions of this ordinance are severable.
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SECTION VIII. That all ordinances, resolutions, or part thereof, in conflict herewith are
repealed to the extent of such conflict
SECTION IX. That the City Council has found and determine that the meeting at which i
this ordinance is considered Is open to the public and that notice thereof was given in accordance
with the provisions of the Texas open meetings law, Tex. Gov't Code ch. 551, as amended, and
that a quorum of tite City Council was present.
SECTION X. That this ordinance shall become effective immediately upon its passage
and approval.
PASSED AND APPROVED this the day of 1999.
JACK MILLER, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRE1,kRY
BY:
APPROVED AS TO LEGAL FORM-
HERBERT L. PROUTY, CITY ATTORNEY
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BY: C✓ ~rG
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KMLOLWOGV4wddyN.M`Or w.me.Pl,aw!valwvrr lu, J .
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Date: February 19, 1999
To: Mayor and Members of the City Council
! From: Jennifer Walters, City Secretary
Kirk Y.ing has provided the following information for the
Council's review.
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ORDINANCE NO. '
AN ORDINANCE FIXING AND DETERMINING THE GENERAL SERVICE
RATE TO BE CHARGED FOR SALES OF NATURAL GAS TO
RESIDENTIAL AND COMMERCIAL CONSUMERS IN THE CITY OF
DENTON, DENTON COUNTY, TEXAS: PROVIDING FOR THE MANNER
IN WHICH SUCH RATE MAY BE CHANGED, ADJUSTED, AND
AMENDED; APPROVING THE COMMERCIAL RATE FOR PUBLIC
SCHOOL GAS SERVICE; PROVIDING FOR A WEATHER
NORMALIZATION CLAUSE; PROVIDING FOR THE RECOVERY OF ANY
CURRENT RATE CASE EXPENSE; PROVIDING FOR A SCHEDULE OF
SERVICE CHARGES; AND PROVIDING FOR A MAIN LINE EXTENSION
RATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS:
SECTION i. Effective with gas bills rendered on and after the final date of passage
of this ordinance, the maximum general service rate for sales of natural gas rendered to
Star
residential and commercial consumers within the city limits of Denton, Texas by Lone
Gas Company, a division of ENSERCH Corporation, a Texas corporation, its suvessors
and assigns, Is hereby fixed and determined as set forth In Item A In the Attachment hereto
which is incorporated herein. This ordinance also approves the continuation of service to
school customers under the oommercal rate set forth in Item A in the attachment hereto.
No other rate is available for service to public schools,
SECTION 2, The residential and commercial rates set forth above shall be adjusted
upward or downward from a base of $2.7535 per Mcf by a Gas Cost Adjustment Factor
expressed as an amount per thousand cubic feel (Mcf) of natural gas for changes in the
Intercompany city gate rate charge as authorized by the Railroad Commission of Texas or
other regulatory body having jurisdiction for gas delivered to the Denton distribution system,
according to Item B, in the Attachme.A hereto which is Incorporated herein.
SECTION 3. Company shall also receive weather normalization adjustments
according to Item C, in the Attachment hereto which Is incorporated, herein.
SECTION 4. The residential and commercial rates set forth above shall be adjusted
upward or downward for cheng9s in taxes and other governmental Impositions, rental fees
or charges according to Item D, in the Attachment hereto which is Incorporated herein.
SECTIONS. In addition to the aforesaid rates, Company shall have the right to
collect such reasonable charges as are necessary to conduct its business and to carry out
its reasonable rules and regulations. The charges set forth in Items E and F in the r
Attachment hereto which is incorporated herein, are approved. Services for which no
charge Is set out may be performed and charged for by Company at a level established by
the normal forces of competition.
D
SECTION 6. In addition to the aforesaid rates, Company is authorized to recover
the current rate case expense through a surcharge designed for a six-month nominal
recovery period. The surcharge per Mcf will be calculated by dividing the rate case
expense to be recovered by one-half of the adjusted annual sales volume to residential and
commercial customers. The Company will provide monthly status reports to the City to
account for the collection of rate case expense.
SECTION 7. The rates set forth In thls ordinance may be changed and amended
by either the City or Company in the manner provided by law. Service hereunder is subject
to the orders of regulatory bodles having Jurisdiction, and to the Companys Rules and
Regulations currently on file in the Company's office.
SECTION 8. Unless otherwise noted herein, other than Lone Star Gas Company
(a named party), no person or entity has been admitted as a party to this rate proceeding,
SECTION 9. It Is hereby found and determined that said meeting at which this
ordinance was passed was open to the public, as required by Texas law, and that ad'lance
public notice of the time, place and purpose of said meeting was given.
PASSED AND APPROVED on this the day of , A. D., 19_.
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ATTEST:
City Secretary Mayor 1
City of Denton, Texas
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STATE OF TEXAS
COUNTY OF DENTON { )
I, City Secretary of the City of Denton, Denton County,
Texas, hereby certify that the above and foregol% Is a true and correct copy of an
ordinance passed and approved by this City Council of the City of Denton at a
session held on the day o'. , 19 as it appears of record in the
Minutes of said City Council In Book , page
WITNESS MY HAND AND SEAL OF SAID CITY, this the day of ,
,A.D. 19
City secretary
City of Denton, Texas
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ATTACHMENT TO ORDINANCE NO.__
CITY OF DENTON, TEXAS
LONE STAR GAS COMPANY
TARIFFS & SCHEDULES
ITEM A. RATES
Subjecl to applicable adjustments, the followirg rates are the maximum
applicable to residential and commercial consumers per meter per month of
for any part of a month for which gas service Is available at the same
location.
Residential:
Customer Charge $ 5.5000
All Consumption @ 3.7111 Per Met
If the service period is less than 28 days In a month the customer charge is
$1964 times the number of days service. If the consumption contains a
portion of an Me(, a prorata portion of the per Met charge will be made.
Commercial
Customer Charge $ 10.0000
First 20 Met @ 4.0270 Per Met
Next 30 Met @ 3.7270 Per Met
Over 50 Met @ 3.5770 Per Met
If the service period 13 less than 28 days In a month the customs, charge is
$.3571 times the number of days service. If the consumption :ontalns a
portion of an Met, a prorata portion of the per Met charge will be mad'.
Bills are due and payable when rendered and must be paid within fifteen
days from monthly billing dale.
Residential Off-Peak Sales Discount;
An off-peak sales discount of $.25 per Mcf will apply to reWential customers'
volume purchased in excess of 8 Met for each o` t'.e billing months May
through October.
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ITEM B. GAS COST ADJUSTMENT
Each monthly bill at the above rates shall be adjusted for gas cost as follows
(1) The city gate rate Increase or decrease applicable to current billing
month residential and commercial sales shall be estimated to the
nearest $0.0001 per Mcf based upon:
(a) The city gate rate estimated to be applicable to volumes
purchased during the current calendar month, expressed to the
nearest $0.0001 per Mcf (shown below as "Re"), less
(b) The base city gate rate of $2.7535 per Mcf, multiplied by
(c) A volume factor of 1.0"24 determined in establishing the above
rates for the distribution system as the ratio of adjusted
purchased volumes divided by adjusted sales volumes.
(2) Correction of the estimated adjustment determined by Item B (1)
above for the second preceding billing month shall be included as part
of the adjustment . The correcting factor (shown below as "C") shall
be expressed to the nearest $0.0001 per Mcf based upon:
(a) The corrected adjustment amount based upon the actual city
gate rate, less
(b) The estimated adjustment amount billed under Item B (1)
above, divided by
(c) Distribution system residential and commercial sales Met
recorded on the Company's books during the prior year for the
month that the correction is included as part of the adjustment.
(3) The adjustment determined by Item B (1) and Item B (2) above shall
be multiplied by a tax factor of 1.03988 to Include street and alley
rental and state occupation tax due to the change In Company
revenues under this gas cost adjustment provision.
In summary, the gas cost adjustment (GCA) shall be determined to the
nearest $0.0001 per Mcf by Item B (1), Item B (2) and Item B (3) as follows:
GCA = (Item B (1) + item 8 (2)] X Item B (3) r/
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GCA = ((1.0524) (Re • $2,7535) + Cl X 1.03988
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ITEM C. Weather Normalization Adjustment
The following Weather Normalization Adjustment clause authorized in the
rate ordinance dated June 4, 1998 will continue In effect
Effective with bills rendered during the October 1998 through May 1999
billing months, and annually thereafter for thb October through May billing
months, the above residential and commercial consumption rates for gas
service, as adjusted, shall be subject to a weather normalization adjustment
each billing cycle to reflect the Impact of variations In the actual heating
degree days during the period included In the billing cycle from the normal
level of heating degree days during the period included in the billing cycle.
The weather normalization adjustment will be Implemented on a per Mcf
basis and will be applicable to the heating bad of each customer during the
period Included In the billing cycle. It will be determined separately for
residential and commercial customers based on heating degree data
recorded by the DJFW Airport weather station. The adjustment to be made
for each billing cycle will be calculated according to the following formula:
NDD-ADD
WNA ADD x N x AHL
Where: WNA = Weather normalization adjustment
NDD = Normal heating degree days during the
period covered by the billing cycle
ADD = Actual heating degree days during the
period covered by the billing cycle
M = Weighted average margin per Mcf
Included In the commodity portion of the
rates effective during the October through
May billing months
AHL = Actual heating load per customer
The heating load to which the weather normalization adjustment Is to be
applied for residential and commercial customers Is determined by
subtracting the base load for the customer from the total volume being billed
to the customer. The base !oad of a customer Is the average level of
nonheating consumption.
The weather normalization adjustment is subject to a 60% limitation factor
based on temperatures being fifty percent warmer or colder than normal.
The weather normalization adjustment will be calculated to the nearest
$.0004 per Mcf.
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ITEM D. TAX ADJUSTMENT
Each monthly bill, as adjusted above, shall be adjusted by an amount
equivalent to the proportionate part of any new tax, or any lax increase or
decrease, or any Increase or decrease of any other governmental Imposition,
rental fee or charge (except state, county, city and special district ad valorem
taxes and taxes on net Income) levied, assessed or Imposed subsequent to
December 31, 1997, upon or allocated to the Company's distribution
operations, by any new or amended law, ordinance or contract. In addition,
each monthly bill, as adjusted above, shall be further adjusted to include any
municipal franchise fee or street and alley tax now or hereafter In effect In
this city to the extent that such municipal franchise fee or street and alley tax
is at a rate higher than 2% of the Company's gross receipts.
ITEM E. SCHEDULE OF SERVICE CHARGES
(1) Connection Charge
In addition to the charges and rates set out above, the Company shall
charge and collect the sum of
Schedule Cbawi
Business Hours $ 35.00
After Hours 52.60
For each reconnection of gas service where service has been ,
discontinued at the same promises for any reason, for the Initial
Inauguration of service, and for each inauguration of service when the
billable party has changed, with the following exceptions:
(a) For a builder who uses gas temporarily during construction or
for display purposes.
(b) Whenever gas service has been temporarily Interrupted
because of system outage or service work done by Company;
or
(c) For any reason deemed necessary for company operations.
(2) Read For Change Charge 4 r
A read for change charge +af $12.00 Is made when R is necessary for
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a company employae to read the meter at a currently served location'
because of a change In the billable party.
(3) Returned Check Charges
A returned chec% handling charge of $16.25 Is made for each check
returned to the Company for any reason.
(4) Delinquent Notification Charge
A charge of $4.76 shall be made for each trip by a Company
employee to a customer's residence or place of buslness when there
is an amount owed to the Company that Is past due. This charge
shall not t" made when the trip is required for safety Inves5gations or
when gas vervice has been temporarily interrupted because t;f system
outage or service work done by Company.
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ITEM F. MAIN LINE EXTENSION RATE
The charge for extending mains beyond the free limit established by
Franchise for residential, commerclal, and industrial customers shell be
based on the actual cost per foot of the extension.
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LONE STAR OAS COMPANY
DENTON,TEXAS
COMPARISON OF RATE INFORMATION
TEST YEAR ENDED 12.31-97 • I
City
Uns Proposed Aftemate
No. Rate Rate 1
1 Revenue
2 Residential $476,323 $144,987
3 Commercial (35,895) 48,329
4 Subtotal 5440,428 1193,316
5 So-rvlre Chsyes 35,667 34,667
6 Total Revenue $476,005 $228,093
7 % Revenue Increase 8.24% 3.00%
8 Rate Information
9 Residential:
10 Customer Charge $80000 $5.5000
11 Ail Consumption $3.5657 Per MCF $3.7111 rer MCF
12 Off Peek Sales Discount ($0,2500) ($0.2500)
13 Commercial.
14 CustomorCharge $14.0000 $10.0000
15 First 20 MOP $3.5657 Per MOP $4.0210 Per MOP
16 Next 30 MOP $3.2657 Per MOP $3.7270 Per MCF
17 Over 50 MCP $3.1157 Per MOP $3.5770 Per MCF
18 City Gate Rata $2.7535 Per MOP $2.7535 Per MCF
19 Volume Factor 1.0524 1.0524
20 Tax Factor 1.03986 1.03968
City
21 Rate Comparisons Aftemate
Present Proposed Rate 1
22 Average Residential F'
23 Q 52 Mcf $24.17 $2870 $25.05
24 O 10.0 Mcf $42.48 $44.09 $4304
25 Average Com.7f J81 Bill
26 a 30 Mcf $120.77 $119.32 $129.09
Grand Prairie Lewisville Carrollton Mesquite
27 Average Residential Bill
28 a 5.2 Mcf $26,90 $28.08 624.92 $2$4
29 Average Commercial Bill
30 @ 30 Mcf $138.91 $137.81 $129.51 $130.42
Note: Alternate rates based on revenue Increase shift from proposed 10 75% residential 125% 00mmerclat.
Increase of 3% over total present revenues from the City of Denton. I i f r V r
An off-peak sales discount of $ 25 per Mcl will ep;';, t0 realdendel customers volume purchased In excels Of S Md fa each
of the billing months May through October.
C 1LOTUSIWORKI t 291FILE0002. WN4
COST OF SERVICE ADJUSTMENT (COSA)
a
1-he COSA is a mechanism contained in the rate ordinance that provides for an annual adjustment
to be made to a customer's bill based on;hangcs that have occurred over the most recent two-year
period in a gas distribution system's actual operating expenses (excluding gas purchase expense and
taxes).
Benefits to the customer:
Incremental adjustments are smaller and easier to budget than larger full rate case increases;
+ Customer receives I :nefits of merger-related savings on a more timely basis when they occur
without having to wait for a large full-deficiency rate case; I
Adjustments are made at the end of the heating season in May when bills are typically declining;
COSAs historically lengthen the time between full ~ 1ciency rate cases; f
Fixed cost of service adjustments arc uniformly api;icd to both residential and commercial
customers.
Benefits to the City:
> increases the regulatory review by cities, since the same operating data provided the Railroad
Commission on the Company is furnished annually to the cities instead of only when full-
deficiency rate cases are filed;
Cities have the right to rescind or deny any adjustment not deemed appropriate;
+ Insures that any merger-related savings would be passed on to customers in r more timely
manner, %tiithout having to wait for a full-dclieiency tiling;
Adjustments would be limited to the annual rate of inflation with unrecovered balances carried
forevard to following year insuring against abnormal adjustments;
, Stabilized Company revenues mean more stabilized gross receipts fees;
Benefits to the Company:
Better matches revenues ,t ith expenses;
Stabilized revenues permit more effective budget administration;
Don't have to wait for full-deficiency rate cases to address operating expense concerns;
+ More regulatory oversight increases C'ompany'% accountability for operating more efficiently;
General Comments:
+ C'OSAs have been around in Lone Star Gas cities since 1982;
> C'urrendy over 250 cities enjoy the benefits of the COSA;
COSAs %~cre originally designed to be used in small to medium-sized towns to help reduce the
number and frequency of full-deficiency filings;
+ Only recently has the COSA been made available to Lone Star's larger cities as a popular
alternative to more frequent full-deficiency rate cases, and to pass along any merger-related
savings that may occur in tl c future;
> 1he annual adjustment usually ranges from .25) to S .25 per customer on the monthly
customer charge potion of the residential and commercial bill beginning in May of each year, z~
when bills are ar,ditionaliy declining from the winter months. s ! - c
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PLANT INVESTMENT COST ADJUSTMENT (PICA)
a,
The PICA is a mechanism contained in the rate ordinance that provides for an annual adjustment to
be made to a customer's bill based on incremental changes that have occurred from the previous
year in a gas distribution system's plant investment (less depreciation).
Benefits to the custo!aer:
Incremental adjustments are smaller and easier to budget than larger full rate case increases;
Customer is insured of being served by a safer and more reliable distribution system;
Bandits occur in t more timely manner without having to Weil for E large full-deficiency rate
case;
Adjustments are made at the end ofthe heating season in N13y when bills are typically declining;
PICAS should lengthen the time between full-deficiency rate cases;
0 Fixed cost of service adjustments are uniformly applied to both residential and commercial
customers.
provides more energy choices by encouraging more gas-piped subdivisions;
Benef rs to the City:
lncreoses "Ic regulatory review by cities, since the investment data is famished annually to the
cities instead of only when full-deficiency rate cases are filed;
Citics have the right to rescind or deny any adjustment not deemed appropriate;
Investment-related savings would be passed on to customwrs in a more timely manner;
Adjustments would be limited to the rate of return authorized in most recent rate case:
Cogent cost of capital is at an all-time low creating a desirable "lock in" on relatively low plant
investment retum;
o General health, safety and welfare of community is enhanced through increased investment
management;
Improved gas infrastructure enhances amt fosters economic development in the community;
Bencflts to the Company:
Facilitates and promotes more accuracy in making capital budgeting decisions;
More regulatory oversight increases Company's accountability for operating more efficiently;
b Don't h e io wait for full-deficiency rate cases to address changes in plant Investment;
0 lmprove Company's ability to more timely return on investor capital in a competing money
market. and in a competitive gas utility marketplace;
General Comments:
PIC'As ire relatively new and are in place in 8 Lone Star Gas cities. including Mesquite and
Grand Prairie, but arc now being offered to all Lone Star Gas cities;
0 PICA- arc designed to help reduce the number and frequency of full-deficiency filings, and
encourage sound operating and capital spcndiv~ decisions;
Only recently has the PICA been made available to Lone Star's larger cities as a popular
alternative to more frequent full-deficiency rate cases. as well as a way to meet investor
expectations while insuring n safe, reliable natural gas distribution system; J•
The annual adjustment varies from town-to-town, llowever, an example of recent PICAS in ~,A r
,Muenster ha. ranged from .04! to S .82 per customer on the monthly customer charge portion
of the residential and commercial bill which is made In Slay of each year.
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Comments on
DUCI Report Dated
February 12, 1999
Lone Star Gas Company
Denton Distribution
Systia0m
FEBRUARY 16,1899
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c• TEST YEAR 1997 IS NO AN ANOMALY
( The consultants incorrectly cite two" reasons" why they consider the 1997 test
year to be an anomaly.
• The consultants state that ENSERCH spent $25 million in 1997 related to
the merger. Lone Star Gas stated on Page 6 (Page 76 of Council
Backup) of its initial comments on the consultant's report that none of this
amount was booked to Lone Star Gas Company. It was booked below
the line by ENSERCH and Impacted only the shareholders. There was no
impact on the test year cost of service and no ImpW on the ratepayers
In Denton.
• The consultants state that Lone Star has not properly treated changes in
employment levels in 1997 to account for personnel taking advantage of
a Retirement Program related to the merger. The Company has explained
that the labor expense associated with operational employees Increased
in 1996 while the number of operational employees declined slightly as
compared to 1997. Using a 1997 test year, therefore, is a conservative
approach.
The consultants misrepresent the COSA by saying a rate decrease is justified
because the sample COSA based on 1996 and 1997 was a negative.
• A COSA Is a snapshot In Gme and captures the operating expenses for 2
consecutive December ended time periods and measures the change (up
or down) between those two periods. The example Indicates that COSA
expenses per customer were about level for the two time periods of 1996
and 1997. COSA was designed to make mld-course corrections to
address changes In the cost of service.
e The Denton sample Cost of Service Adjustment (COSA) calculation for
years 1996 & 1997 Indicates that 1997 Is not an anomaly as the
consultant has repeatedly stated. ,
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• DEPRECIATION - DIFFERENCE BETWEEN EL O AND AL O
ELG Is not an accelerated form of depreciation, despite its being portrayed
that way by the consultants. In reality, both ELG & ALG are straight line
depreciation techniques.
• DUCI admits that ELG done right is more aca:urate than ALG done right.
• The TRC approved ELG in GUD No. 8664, Lone Star's city gate rate
docket. Finding of Fact No. 92 in that case states:
`because I provides a more accurate estimate of the actual
consumption of property, the ELG depredation procedure requested
by Lone Star is reasonable."
1
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2
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DESIGN FOR A RATE INCREASE
f
• Consultants use of Double Oak because it is the smalh st percent increase
granted in the list of cities is not appropriate aecause it Is not
representative of Denton. The town closest in size to Denton Is Grand
Prairie and it granted an effective 70% of Lone Star's request with COSA,
PICA and WNW.
• The consultant's rate design, cannot be used because it Is based on
methods we do not believe are appropriate or reasonable. To help identify
flaws in the consultants rate design, Lone Star has prepared Chart A
which shows a comparison of the rate design data used by the consultant
along with the correct design presented by the Company.
• The rate design flaws, from DUCI Exhibit 2, page t of 2 (pate 20 of
Council Backup), 'Calculation of Revenues' are :
1) Line 4, Other Revenue ln:xease, uses the Denton system figure
instead of the City of Denton only.
2) Lines 8 and 9 show the residential and commercial increases to be
46% and 54%, respectively, instead of the requested 75125 split. a
3) Line 10 customers are those existing 6 months after the end of the
test year and are not representative of the distribution system as
previously discussed.
4) Line 14 uses present revenue incorrectly determined by DUCI, due
to the application of customers and volumes that go beyond the end
of the test year.
5) Line 17 customer charge revenue erroneously employs the
customers from line 10.
6) Line 19 . plumes are those existing 6 months after the end of the test
year.
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• DESIGN IF R A RATE INCREASE (conVd)
1
• DUCI's graph of monthly residential customers (Exhibit 3~ (Page 23 of
Council Backup) Is for the Denton Distribution System. There is a higher
rate of growth occurring for residential and commercial customers In the
Corinth segment. Corinth rate of growth Is about 22,6, compared to the
rate of growth for Denton of about 2%.
• DUCI compounds errors on customers and volumes by using an allocation
method that gives Denton the same proportion of customers and volumes
into the future, even doigh the Corinth segment is clearly growing faster
than the City of Denton.
• The Resldential(R) and Commercial(C) customer charges of $5,60 and
$10 respectively, as used by the Consultant, do not reflect the current
Denton customer acts of $9 and $20, j
i
• Use of lower customer charges and a one stop c ommard9l volume rata
will result In higher load factor customers subsidizing lower bad factor
customers, which will be counter-productive to economic development In
Denton.
• Use of lower customer charges will shift more of the burden to customers
during peak winter (lines, when volume usage Is high and the customers `
can least afford ft.
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• CASH WORKING CAPITAL
( • DUCI misquoted Lone Star regarding Cash Working Capital. Lone Star
said the commission prefers a lead lag study to determine cash working
caphal but that they did not require it. The context of this response is
based wholly on GUD 8684. The examloers proposal for decision in that
case stated;
"The Railroad Commission does not have a specific rule prescribing
the treatment of cash working capital In statements of intent." l
• The Railroad Commission made the following F#rxWVs of Fact in the Final
Order of Lone Stirs City Gate Rate, Docket No. MW
• FOF 33 - Cash Working Capital of zero for LSP-Excluding Storage
is reasonable.
FOF 34 - Cash Working Capital of zero for LSP-Storage• Is
reasonable.
{ • FOF 35 - Cash Working Capital of zero for LSG-T is reasonable.
• DUCI's so-called "lead lag study" in Docket 8684, which purported to show
a negative cash working capital requirement, wee rejected by the Railroad
Commission in favor of a zero requirement.
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• TOTAL CUSTOMERS ANQ VOLUMES
• The Company's method of determining customers and volumes for the rate
case Is a reasonable approach that has been accepted in the last 3 Lone
Star appeals before the Railroad Commission.
• The consultant has Incorrectly manipulated customers and volumes to
arrive at his desired conclusion. DUCI not only increased the Denton
System customers and volumes by a different customer adjustment, but
also Inappropriately shifted more customers to Denton when separating
customers and volumes between Denton and the Corinth/Denton segment.
• The fundametltal concept of matching requires that all components be
viewed as of the same point In time. DUCI erroneously increases
customers and sales volumes (I.e., revenues) to a level existing after the
end of the test year, but Ignores the fact that additional Investment and
expenses are Incurred to serve those additional customers. All must be
measured at the same point In time as Lo. io Star has done.
• Lone Star adjusted both customers and sales volumes to a December 31,
1997 level to properly match Investment and expenses. DUCI's method
of adjusting customers beyond the end of the test year does not properly
match customers and sales volumes to investment and expenses. DUCI
adjusts customers to a June 1998 level but does not utilize the nigher
operating expenses and Investment data. Lone Star's method has been
supported by the Railroad commission for the last 28 years.
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cCHART A
Page 1 of 2 1
LONE STAR GAS COMPANY
DENTON TEXAS
COMPARISON OF RATE DESIGN INFO
TEST YEAR ENDED 12 31 97
DUCt
LSG 25,51% of
75% of Requested Amount
LINE Requested Amount. (Based on Double Oaks
1 CUSTOMF iS
2 RESIDENTIAL 15,663 15,847
3 COMMERCIAL 2,059 _ 21119
4 TOTAL 17,722 M 17,968
5
6 SALES VOLUMES • MCF
7 RESIDENTIAL 972,244 985,300
8 COMMERCIAL 741 485 _ 759,082
9 TOTAL 1,713,729 1,744,362
10
11 REV WITH PRES RATES
12 RESIDENTIAL 4,542,628 4,527,424
13 COMMERCIAL 2,984,036 3,017,885
14 TOTAL GAS SALES 7,525,564 71545,109
15 SERVICE CHARGES 108,191 108 191
18 TOTAL REVENUES 7,832,755 7,651,300
17
18 REV WITH PROP RATES
19 RESIDENTIAL 4,783,581 4,566,210
20 COMMERCIAL _ 3,064,387 3,063,557
21 TOTAL GAS SALES 7,847,968 7,029,787
22 SERVICE CHARGES 141,858 142 985_
23 TOTAL REVENUES 7,989,826 7,77 52
24
25 INCREASE IN REVENUES
26 RESIDENTIAL 241,053 38,768
21 COMMERCIAL 80,351 45 872
28 TOTAL GAS SALES 321,404 l4, 58
29 SERVICE CHARGES 35,667 36 794
30 TOTAL REVENUES 357,071 121,462
31
32 PERCENT INCREASE IN REV
33 RESIDENTIAL 6,31% 0.86%
34 COMMERCIAL 2.d9% 1,52%
35 TOTAL GAS SALES 4.27% 1.12%
36 SERVICE CHARGES 33.59% 34.65% 1 r
37 TOTAL REVENUES 4.68% 1.59%
C I
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CHART A
LONE STAR GAS COMPANY P829 2 of 2
'
DENTON TEXAS
COMPARISON OF RATE DESIGN INFO
TEST YEAR ENDED 12 3197
DUC
LSO 25.51%or
75% of
LIVE Requested Amount
Requested Amount 8aeed on Double Oak)
1 RES BILLS 187,958 go, 2 RES SALES MCF 972,244 985,3(10
3 RES OFF PEAK PERIOD MCF 4,796 0
4
S COMMERCIAL BILLS 24,708 25,421
6 BLOCK 1 MCF 185,506 759,062
7 BLOCK 2 MCF 127,944 0
8 BLOCK 3 MCF 428,035 0
9
10 RES CUS CHO $7,0000 $5.5000
11 RES RATE $3.5189 $3.5728
12 RES OFF PEAK DIS ($0.2500) $0.0000
13
14 COM CUB CHO $12,0000 $10,0000
15 BLOCK 1 RATE $4.0031 $3.7010
18 BLOCK 2 RATE $3.7031 $0.0000
17 BLOCK 3 RATE $3.5531 $0,0000
18
19 PROPOSED REVENUE
20 RES CUS CHO REV 1,318,692 1,045,902
21 RES RATE REV 3,421,252 3,520,308 '
22 RES OFF PEAK DIS REV (14199) 0
23 REIMBURSEMENT 47,836 0
24 TOTAL RES REV 4,783, 81 --4.5M.21
2S
26 COM CUS CHO REV 296,498 254,280
27 BLOCK 1 REVENUE 742,601 2,809,277
28 BLOCK 2 REVENUE 473,791 0
29 BLOCK 3 REVENUE 1,520,855 0
30 REIMBURSEMENT 30,644 0
31 TOTAL. COM REV 3,054r~387 3,083,357
C
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