2003-378S:\Our Documents\Ordinances\03\Charterfranchisefee.doc
ORDINANCE NO. o?OD~-~~~
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING A SETTLEMENT
AGREEMENT WITH MARCUS CABLE ASSOCIATES, L.L.C., DB/A CHARTER
COMMUNICATIONS; AUTHORIZING THE CITY MANAGER AND THE CITY ATTORNEY
TO ACT ON THE CITY'S BEHALF IN EXECUTING ANY AND ALL DOCUMENTS
NECESSARY TO EFFECT SUCH AGREEMENT, AND TO TAKE SUCH OTHER ACTIONS
DEEMED NECESSARY TO FINALIZE THE AGREEMENT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, on March 5, 2003 the City notified Charter that the Audit of franchise fees
paid to the City by the cable television system for the period January 1997 through June 2002
had been conducted by C2 Consulting Services, Inc. and that C2 had raised a number of issues
regarding the calculation and amount of the fees paid; and
WHEREAS, the City believes that Charter was not able to produce financial documents
requested by the City for some of the years encompassed in the audit period; and
WHEREAS, Charter disagrees with some but not all of the conclusions made in the C2
study; and
WHEREAS, C2 and Charter have spent considerable time reviewing and evaluating
financial records for prior years, and the parties desire to conclude this review process and to
settle all prior claims relating to the franchise fee Audit.
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitals set forth in the preamble of this ordinance are incorporated by
reference, herein.
SECTION 2. The Settlement Agreement, ("Agreement"), Attachment A", is hereby
approved, and the City Manager is hereby authorized to execute said Agreement and other related
documents deemed by the City Manager and the City Attorney to be necessary to conclude the
Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 2003.
&,&', A "t
EULINE BROCK, MAYOR
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ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
Attachment A
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is made and entered into by and between
Marcus Cable Associates, L.L.C. d/b/a Charter Communications ("Charter") and the City of
Denton, Texas (the "City") relating to the City's audit of franchise fee payments by Charter and
its predecessors as described in the City's letter to Charter dated March 5, 2003 (the "Audit").
By this Agreement Charter and the City of Denton hereby settle any and all claims or
disputes regarding the Audit and payment of prior franchise fees.
WHEREAS, on March 5, 2003 the City notified Charter that the Audit of franchise fees
paid to the City by the cable television system for the period January 1997 through June 2002
had been conducted by C2 Consulting Services, Inc. and that C2 had raised a number of issues
regarding the calculation and amount of the fees paid; and
WHEREAS, the City believes that Charter was not able to produce financial documents
requested by the City for some of the years encompassed in the audit period; and
WHEREAS, Charter disagrees with some but not all of the conclusions made in the C2
study; and
WHEREAS, C2 and Charter have spent considerable time reviewing and evaluating
financial records for prior years, and the parties desire to conclude this review process and to
settle all prior claims relating to the franchise fee Audit.
THEREFORE, in consideration of the mutual covenants, conditions and obligations set
forth herein, the parties agree as follows:
Agreement
1. Payment to the City. Charter agrees to pay to the City within ten (10) days of the date
of this Agreement additional franchise fees for the audit period of $75,000, plus additional
interest that has accrued since the date of that calculation for a total of $78,000.
2. Partial Reimbursement of Costs. Charter agrees to pay the City within ten (10) days
of the date of the Agreement the sum of $2,400 as reimbursement for certain costs.
11 3. Additional Consideration. Charter acknowledges the City's concern over any missing
data or delay in providing certain data and agrees to pay the City within ten (10) days of the date
of this Agreement the sum of $10,000.
4. Settlement. Payment by Charter under this Agreement is intended for settlement
purposes only and does not constitute any admission by Charter or agreement with the
methodology or calculations utilized by C2 in estimative the additional franchise fees. This
settlement is intended to resolve and conclude all matters in dispute relating to the franchise fee
Audit period of January 1997 through June 2002, excluding any claim for fi-anchise fees or other
Settlement Agreement
fees due the City based on "cable modem service" revenues, as provided below, and neither the
City nor Charter shall have any further claim against the other relating to franchise fees for the
period of the Audit. By entering into this Agreement the City does not waive or release any claim
it has as to any fees due the City which arise from Charter's providing "cable modem service" to
subscribers in the City, such claims including but not limited to such revenue in the cable
franchise fee base from March 2002 forward (as such revenues were excluded) or as may be due
the City from such "cable modem service" as a "tel0e0mmUmcatlon service". Additionally the
City acknowledges that Charter by entering into this Agreement does not waive any rights or
legal arguments it may assert with regards to such claims by the City, if any, that arise from
Charter's provisioning of "cable modem service" to subscribers in the City.
5. Applicable Law. This agreement should be construed and interpreted in accordance
with the laws of the State of Texas.
6. Counterparts. This Agreement may be executed in counterparts each of which shall
be deemed an original and all of which together shall be deemed an original and all of which
together shall be deemed one and the same document.
7. Entire Agreement. This Agreement is the entire Settlement Agreement that exists
between the City and Charter with respect to the franchise fee Audit.
IN WITNESS WHEREOF the parties have executed this Settlement Agreement as of this
146 day of November 2003.
CITY OF DENTON, TEXAS
c ael A. Conch ff
City Manager
ATTEST`.
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
BY:
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Settlement A-rccmcnl
MARCUS CABLE ASSOCIATES, L.L.C.
d/b/a CHARTER COMMUNICATIONS
BY tt~c-- 4 '
Name:
Title:
ACKNOWLEDGMENTS
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