§ 7-8. Purchase of CATV system by city.

(a)

Right to purchase. In the event a licensee forfeits or the city terminates its license pursuant to provisions of this chapter, or at the normal expiration of the license term (preceded by at least one (1) year's notice), the city shall have the right, directly or as an intermediary, to purchase the licensed CATV system.

(b)

Purchase upon termination of the license. If a license is terminated for cause prior to the date of expiration, the city may purchase the CATV system for an equitable price pursuant to section 627(b) of the Cable Communications Policy Act of 1984 as amended.

(c)

Purchase upon expiration of a license. In the event the city decides not to renew a license, the city shall have the right to purchase the system for its fair market value considering, among other factors, the replacement cost and the going concern value of the system. In this section:

(1)

Replacement cost means the cost of building a new system, using the latest technology and current costs, minus an allowance for the age and condition of the present system.

(2)

Going concern value means the benefits that attach to the business as a result of its location in the city, licensee's reputation among license subscribers or potential subscribers for dependability and quality of service, and any other circumstances resulting in probable retention of old subscribers or acquisition of new subscribers; except no value shall be assigned to either the license itself or any increase in value arising out of any expectation of cable system revenues beyond the expiration date of the license.

(d)

Waiver of relocation costs. The acceptance of a license by a licensee expressly waives its rights, if any, to any relocation costs that might otherwise be provided by law.

(e)

Transfer to city. Upon exercise of this option and the payment of the purchase price by the city and its service of official notice of such action upon a licensee, the licensee shall immediately transfer to the city possession and title to all facilities and property, real and personal, of the CATV system, free from any and all liens and encumbrances not agreed to be assumed by the city in lieu of some portion of the purchase price set forth above, and the licensee shall execute such warranty deeds for other instruments of conveyance to the city as shall be necessary for this purpose.

(f)

Arbitration of value and costs. In the event the city and a licensee cannot agree upon the value of the CATV system, either may give notice of a demand to the other for arbitration. Arbitration shall commence and proceed according to law except as follows:

(1)

The parties shall, within fifteen (15) days, appoint one (1) arbitrator each of whom is experienced and knowledgeable in the valuation of utility property. Arbitrators shall each agree upon the selection of a third arbitrator, similarly qualified, within fifteen (15) days.

(2)

Within thirty (30) days after appointment of all arbitrators, and upon ten (10) days' written notice to the parties, the board of arbitrators shall commence a hearing on the issue of valuation.

(3)

The hearing shall be recorded and may be transcribed at the request of either party. All hearing proceedings, debate, and deliberations shall be open to the public and at such times and places as stated in the notice or as thereafter publicly stated in the order to adjourn, except as otherwise authorized by the city attorney.

(4)

At the close of the hearings, and within thirty (30) days, the board of arbitrators shall prepare findings and the decision agreed upon by a majority of the board which shall be filed with the city and served by certified mail upon the licensee. Unless the parties extend by mutual agreement the time which the board of arbitrators has to make a decision, the proceedings shall become null and void and shall be started anew should the board fail to reach a decision within thirty (30) days of the close of hearings.

(5)

The decision of the board shall be final and binding upon the parties.

(6)

Either party may seek judicial relief as provided in Arizona Revised Statutes title 12, chapter 9, article 1 [A.R.S. § 12-1501 et seq.].

(7)

The cost of arbitration shall be borne equally unless the board of arbitrators finds the offer of the city or the demand of the licensee was unreasonable, in which case costs may be apportioned so that less or none of the costs may be borne by one (1) party.

(8)

The time periods specified herein may be modified upon the mutual consent of the parties.

(Ord. No. 1757, § 43, 8-19-85)