Ordinance No. 1091393
ORDINANCE NO. 1091
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CYPRESS ADDING SECTION 6 -51 TO CHAPTER 6 OF THE
CODE OF THE CITY OF CYPRESS RELATING TO THE
REGULATION OF STATE VIDEO FRANCHISES.
WHEREAS, the California State Legislature enacted a completely new franchising law
for companies intending to provide video services to the State's residents — AB 2987, the Digital
Infrastructure and Video Competition Act of 2006; and
WHEREAS, AB 2987 pre -empts local franchises and establishes the California Public
Utilities Commission as the sole franchising authority in California for video service providers;
and
WHEREAS, local government maintains control of the public right -of -way, authority
over encroachment permits and the enforcement of customer service standards, and its
entitlement to designated Franchise fees; and
WHEREAS, much of AB 2987 is self implementing, however in order to ensure
collection of the Franchise fees and PEG fee and to enforce the state - mandated customer service
standards, local government must undertake certain formal adoptions pursuant to statute.
NOW, THEREFORE, the CITY COUNCIL of the CITY OF CYPRESS does hereby
ordain as follows:
SECTION 1. Section 6 -51, Regulation of State Video Franchises and City Video
Franchises, is hereby added to the Cypress Municipal Code to provide, in its entirety, as follows:
Under State law effective January 1, 2007, the California Public Utilities Commission
( "PUC ") will have the authority to grant state video franchises ( "State Franchises "). The City of
Cypress (the "City ") will acquire certain rights and responsibilities with respect to state video
franchise holders. These include the receipt of a franchise fee and a fee for Public, Educational
and Government ( "PEG ") purposes, both based on a percentage of gross revenues of state
franchise holders, as well as the establishment and enforcement of penalties for violations of
customer service rules.
Sec. 6 -51.1 State Video Franchise Fees.
(a) Any state video franchise holder ( "State Franchisee ") operating within the
boundaries of the City of Cypress shall pay a fee to the City equal to five percent (5 %) of
the Gross Revenue of that State Franchisee.
(b) Any State Franchisee operating within the boundaries of the City of Cypress
shall pay an additional fee to the City equal to one percent (1 %) of the Gross Revenue of
that State Franchisee, which fee shall be used by the City for PEG purposes consistent
with state and federal law.
(c) Gross Revenue, for the purposes of (a) and (b) above, shall have the definition
set forth in California Public Utilities Code § 5860.
Sec. 6 -51.2 Audit Authority.
Not more than once annually, the City may examine and perform an audit of the business
records of a State Franchisee to ensure compliance with Section 6 -51.1.
Sec. 6 -51.3 Customer Service Penalties Under State Franchises.
(a) The holder of a State Franchise shall comply with all applicable state and
federal customer service and protection standards pertaining to the provision of video
service.
(b) The City Manager, or his /her designee, shall monitor the compliance of State
Franchisee(s) with respect to state and federal customer service and protection standards.
The City Manager, or his /her designee, shall provide the State Franchisee(s) written
notice of any material breaches of applicable customer service standards, and shall allow
the State Franchisee(s) thirty (30) days from the receipt of the notice to remedy the
specified material breach. Material breaches not remedied within the 30 -day time period
shall be subject to the following penalties by the City Manager, or his /her designee.
(1) For the first occurrence of a violation, a fine of $500.00 shall be
imposed for each day the violation remains in effect, not to exceed $1500.00 for
each violation.
(2) For a second violation of the same nature within 12 months, a fine of
$1,000.00 shall be imposed for each day the violation remains in effect, not to
exceed $3,000.00 for each violation.
(c) A State Franchisee may appeal a penalty assessed to the City Council within
sixty (60) days. After relevant speakers are heard, and any necessary staff reports are
submitted, the City Council will vote to either uphold or vacate the penalty. The City
Council's decision on the imposition of a penalty shall be final.
Sec. 6 -51.4 City Response to State Franchise Applications.
(a) Applications for State Franchises within the boundaries of the City of Cypress
must concurrently provide complete copies to the City of any application or amendments
to applications filed with the PUC. One complete copy must be provided to the City
Clerk, and one complete copy to the City Manager.
(b) The City Manager shall provide any appropriate comments to the PUC
regarding an application or an amendment to an application for a State Franchise.
FIRST READING at a regular meeting of the City Council of said City held on the 29th
day of May, 2007, and finally adopted and ordered posted at a regular meeting held on the 11th
day of June, 2007.
ATTEST:
CITY CLERK OF THE CITY OF CYPRESS
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
MAYOR OF THE CITY OF CYPRESS
I, DENISE BASHAM, City Clerk of the City of Cypress DO HEREBY CERTIFY that
the foregoing was duly adopted at a regularly scheduled meeting of said City Council held on the
1 lth day of June, 2007, by the following roll call vote:
AYES: 5 COUNCIL MEMBERS: Bailey, Mills, Narain, Seymore and Luebben
NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
CITY CLERK OF THE CITY OF CYPRESS