MINUTES OF A REGULAR MEETING OF THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, MONDAY, JUNE 24, 1996 AT 7:00 P

MINUTES OF A REGULAR MEETING OF THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, MONDAY, JUNE 24, 1996 AT 5:30P.M.

It was moved and seconded to go into closed session for purposes of discussing the performance of the Town Manager and Town Attorney, as authorized by G.S. 143-318.11.a(6). The motion was adopted unanimously (8-0). The closed session ended at 7:00 p.m., and there was no report following the closed session.

Mayor Waldorf called the meeting to order at 7:04 p.m., noting that this evening's closed session had run a little bit longer than expected. Council Members in attendance were Julie Andresen, Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Richard Franck and Lee Pavao. Council Member Barbara Powell was absent excused. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Planning Director Roger Waldon and Town Attorney Ralph Karpinos.

Mayor Waldorf noted that yesterday's Olympic Torch run ceremony through the Town was very nice. She noted that Solid Waste Administrative Analyst Curt Clausen had qualified to compete in the twenty kilometer racewalk at the Olympic Games in Atlanta on July 26th.

Mayor Waldorf noted that Roger Perry of East West Partners had withdrawn his petition regarding a request for time extension for a special use permit for the proposed University Village development.

Ellen O'Brien, representing the North Carolina Education Foundation, said her organization would like to host a Walkathon in October.

COUNCIL MEMBER CAPOWSKI MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO REFER MS. O'BRIEN'S PETITION TO THE MANAGER. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Elaine Norwood said that she and her neighbors had a number of concerns relative to parking on McDade Street. She requested that Town stff come out and evaluate and attempt to improve the existing situation.

COUNCIL MEMBER ANDRESEN MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO REFER THE MATTER TO THE MANAGER WITH STAFF TO PREPARE A FOLLOW-UP REPORT WITH OPTIONS.

Council Member Brown inquired when the item could come back before the Council. Mr. Horton said a follow-up report could be made at the August 26th meeting at the earliest.

THE MOTION TO REFER WAS ADOPTED UNANIMOUSLY (8-0).

Esther McCauley, a resident of Carrboro, said she had lived in the Town of Chapel Hill for a number of years and requested that the Council eliminate non-resident student parking on McDade and other area streets.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT THE CONSENT AGENDA. THE MOTION WAS ADOPTED UNANIMOUSLY

(8-0).

A RESOLUTION ADOPTING VARIOUS RESOLUTIONS AND ORDINANCES (96-6-24/R-1)

BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby adopts the following minutes, resolutions and ordinances as submitted by the Town Manager in regard to the following:

a. Minutes of May 13, 20, 31, June 1 and 3, 1996.

b. Setting hearing on October 21 regarding Home Occupation regulations (R-2).

c. Year-end budget changes (O-1).

d. Awarding contract for buying emergency generator for the fire station at Weaver Dairy Road and NC 86 (R-3)

e. Adjustments in cable television rates for basic service (R-4).

f. Authorizing special parking permits in response to the Inter-Faith Council’s request (O-2).

g. Transit grant project ordinances (O-2.1).

h. Sale of merchandise on Town sidewalks (O-3).

i. Recommended FY 96-97 Hotel/Motel tax fund allocations (R-6).

j. Additional appointments to Shaping Orange County’s Future Task Force. Mayor Waldorf and Mayor pro tem Brown (R-7).

k. Adding a Town resident seat to the composition of the Library Board of Trustees and the Parks and Recreation Commission (O-4).

This the 24^th day of June, 1996.

A RESOLUTION RESERVING TIME ON THE TOWN COUNCIL'S PUBLIC HEARING AGENDA FOR OCTOBER 21, 1996 TO CONSIDER PROPOSALS FOR CHANGES IN THE ZONING REGULATIONS FOR HOME OCCUPATIONS (96-6-24/R-2)

BE IT RESOLVED by the Chapel Hill Town Council that the Council plans to hold a public hearing on October 21, 1996, on proposed changes in the Town's zoning regulations for home occupations.

BE IT FURTHER RESOLVED that the Council authorizes the Manager to reserve time on the agenda for October 21, 1996, for the home occupations matter, with the specific amount of time on the agenda for this item to be estimated in accord with the Council's procedures at that time.

This the 24th day of June, 1996.

AN ORDINANCE TO AMEND "THE ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUE FOR THE FISCAL YEAR BEGINNING JULY 1, 1995 (96-6-24/O-1)

BE IT ORDAINED by the Council of the Town of Chapel Hill that the Budget Ordinance entitled "An Ordinance Concerning Appropriations and the Raising of Revenue for the Fiscal Year Beginning July 1, 1995" as duly adopted on June 5, 1995 be and the same is hereby amended as follows:

ARTICLE I

Current Revised

Budget Increase Decrease Budget

APPROPRIATIONS

GENERAL FUND

Non-Departmental 3,470,761 68,900 3,681,314

Contingency 24,321 (10,000) 14,321

Finance 783,174 141,653 924,827

Parks & Recreation 1,247,206 33,489 1,280,695

Police 5,995,436 19,000 6,014,436

Town Manager 800,620 10,000 810,620

CAPITAL IMPROVEMENTS

FUND 1,074,011 329,428 1,403,439

ARTICLE II

REVENUES

GENERAL FUND

Transfers, Other Sources 1,692,938 210,553 1,903,491

Service Charges 763,710 29,304 793,014

Other 218,200 4,185 222,385

Grants 709,092 19,000 728,092

CAPITAL IMPROVEMENTS

FUND 1,074,011 329,428 1,403,439

This the 24th day of June, 1996.

A RESOLUTION ACCEPTING A BID FOR ONE GENERATOR (96-6-24/R-3)

WHEREAS, the Town of Chapel Hill has solicited formal bids by legal notice in The Chapel Hill News on May 10, 1996 in accordance with General Statute 143-129 for one emergency generator; and

WHEREAS, the following bid was received and opened on May 28, 1996:

VENDOR BID

Gregory Poole Power Systems $29,762

NOW, THEREFORE, BE IT RESOLVED, by the Council of the Town of Chapel Hill that the Town accepts the bid of Gregory Poole Power Systems in the amount of $29,762 in response to the Town's request for bids published May 10, 1996 and opened May 28, 1996 in accordance with General Statute 143-129.

This the 24th day of June, 1996.

A RESOLUTION APPROVING PROPOSED RATES FOR BASIC SERVICE (96-6-24/R-4)

BE IT RESOLVED by the Town Council of Chapel Hill that the Council approves the attached order prepared by the City of Raleigh staff and dated June 14, 1996, regarding the Federal Communications Commission form 1240 rate filings by Cablevision (Time Warner Cable) dated December 21, 1995.

This the 24th day of June, 1996.

AN ORDINANCE AMENDING THE TOWN CODE AUTHORIZING THE ISSUING OF SPECIAL PARKING PERMITS (96-6-24/O-2)

BE IT ORDAINED by the Council of the Town of Chapel Hill as follows;

Section 1. That Section 21-27.2e of the Town Code (Pertaining to Special Parking Permits) is hereby revised to read as follows:

(e) If the town manager shall find that:

(1) The applicant is a private nonprofit agency with an office on a public street or streets on both sides of which adjacent to applicant’s office parking is simultaneously prohibited; and

(2) There is no practical way in which client vehicles in addition to vehicles of the applicant’s staff may be parked off the public right-of-way;

then the town manager may issue up to five (5) one-year movable special parking permits for use by clients of the applicant. It is the intent of this section that the applicant make adequate arrangements for office staff either by procuring parking off of the public right of way or using transportation alternatives to the private car, and that the movable permits be used only by clients of the applicant. a total of thirty (30) special parking permits for use by clients and staff in any combination of annual permits or mobile guest permits. The manager may also issue additional temporary one-day permits as necessary for client and staff parking.

This the 24th day of June, 1996.

AN ORDINANCE TO ADOPT GRANT PROJECT ORDINANCES FOR TRANSIT PROJECTS (96-6-24/O-2.1)

BE IT ORDAINED by the Council of the Town of Chapel Hill that, pusuant to Section 13.2 of Chapter 159 of the General Statutes of north Carolina, the following grant project ordinance is hereby adopted:

SECTION I

The Section 9 project authorized is from 1996 federal funds from an agreement with the Federal Transit Administration and the North Carolina Department of Transportation.

SECTION II

The Manager of the Town of Chapel Hill is hereby directed to proceed with the implementation of the project within the terms of the grant agreements executed with the Federal Transportation Administration and the N.C. Department of Transportation within the funds appropriated herein.

SECTION III

The following revenue is anticipated to be available to the Town to complete activities as outlined in the project application.

Section 9

Federal Transit Administration (FTA) $246,500

N.C. Department of Transportation (NCDOT) 30,813

Town of Chapel Hill (local match) 30, 813

TOTAL 308,126

SECTION IV

The following amounts are appropriated for the project:

Section 9 Planning Funds

Salaries - Full Time $ 90,726

Fringe 13,000

Miscellaneous Contractual Services 6,400

TOTAL 110,126

Section 9 Capital Funds

Capital Equipment $ 58,000

M & R Vehicles 140,000

TOTAL 198,000

SECTION V

The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Report. The Manager shall also keep the Council informed of any unusual occurrences.

SECTION VI

Copies of this project ordinance shall be entered into the minutes of the Council and copies shall be filed within 5 days with the Manager, Finance Director and Town Clerk.

This the 24^th day of June.

AN ORDINANCE TEMPORARILY AMENDING CHAPTER 17 OF THE TOWN CODE REGARDING SALE OF MERCHANDISE ON PUBLIC SIDEWALKS (96-6-24/O-3)

BE IT ORDAINED by the Town Council of Chapel Hill:

Section 1. that the Council hereby temporarily and partially repeals Section 17-77 of the Town Code during daylight hours on July 12 and 13, 1996 with respect to the application of this section to public sidewalks and subject to the following provisions:

a. This temporary and partial repeal shall be effective such that only parties which own or occupy building or land space which is in the Town, which is adjacent to public right-of-way and which is at the sidewalk level may offer and sell goods and services on the adjacent public sidewalks.

b. Businesses selling goods or services under this ordinance shall comply with reasonable directives of the Town Manager or Manager's designee in order to assure emergency access, adequate and safe movement and access in the use of the public sidewalks or for other purposes in the interest of the public health and safety.

Businesses may offer and sell goods and services under this ordinance only directly in front of their business locations and on the side of the sidewalk area closest to the business location, and are encouraged to leave at least half of the normally used public sidewalk area open for pedestrian traffic.

c. This ordinance shall not be deemed to reserve any space on the public sidewalk for any specific person or entity. A person or entity which occupies an area of the public sidewalk in compliance with applicable ordinances and laws may occupy that area for the purpose of actively offering and selling goods and services, but shall not attempt to reserve that space when not so using it.

d. Parties offering and selling goods and services under this ordinance shall apply with all other applicable ordinances and laws including prohibitions regarding sale of alcohol.

Section 2. All ordinances and portions of ordinances in conflict herewith are temporarily repealed for the term of this ordinance.

Section 3. This ordinance shall be effective only during daylight hours on July 12 and 13, 1996.

This the 24th day of June, 1996.

A RESOLUTION APPROVING 1996-97 ALLOCATIONS FOR PERFORMANCE AGREEMENTS USING HOTEL/MOTEL TAX FUNDS (96-6-24/R-6)

WHEREAS, the Council adopted criteria for selection of hotel/motel projects on January 23, 1989, and provided further guidance on October 14, 1991 and April 11, 1994; and

WHEREAS, the recommended proposals meet the criteria established by the Council;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby adopts the following project proposals for FY 1995-96 for the use of hotel/motel tax funds:

Applicant Proposed Project Allocation

CH Preservation Society Brochure Project $ 1,000

El Pueblo Inc. Fiesta del Pueblo $ 5,000

NC High School Championship Enhancement $ 8,500

Athletic Association Project

NC Symphony Summer Performance $ 2,000

Seeds of Sheba Cultural Arts Bazaar $ 5,000

Seeds of Sheba Summer Arts Program $ 3,000

Somnambulist Project Drama Festival $ 200

Street Scene Teen Bands $ 2,300

Women's Center Women's Art Show $ 1,000

TOTAL $28,000

BE IT FURTHER RESOLVED that the Council hereby authorizes the Town Manager to execute, on behalf of the Town, performance agreements with the above organizations for use of the hotel/motel tax funds.

This the 24th day of June, 1996.

A RESOLUTION REGARDING ADDITIONAL APPOINTMENTS TO THE SHAPING ORANGE COUNTY FUTURE TASK FORCE (96-6-24/R-7)

WHEREAS, at its June 13 meeting the Shaping Orange County’s Future Task Force Steering Committee recommended balancing the number of committee members by gender;

NOW, THEREFORE, BE IT RESOLVED, by the Council of the Town of Chapel Hill that the Council hereby concurs with the recommendation to appoint the following individuals to the Task Force:

n Rhonda pope, Cedar Grove Township

n Carole Crumley, Chapel Hill Township

n Susan Prothro Worley, Chapel Hill Township

n Linda Foxworth, Chapel Hill Township

This the 24^th day of June, 1996.

AN ORDINANCE AMENDING THE TOWN CODE TO CHANGE THE MEMBER SHIP OF THE PARKS AND RECREATION COMMISSION AND THE LIBRARY BOARD OF TRUSTEES (96-6-24/O-4)

BE IT ORDAINED by the Council of the Town of Chapel Hill as follows:

Section 1. Section 12-17 of the Town Code (pertaining to the Parks and Recreation Commission) is hereby revised to read as follows:

“Sec 12-17 Membership.

The Commission shall consist of ~~ten (10)~~ eleven (11) commissioners, all of whom shall be appointed at large. ~~All members shall be residents and citizens of the Town. Nine~~ Ten members shall be residents and citizens of the Town appointed by the Town Council. One member shall be a resident of Orange County appointed by the Orange County Board of Commissioners.”

Section 3. Section 2-142 of the Town Code (pertaining to the Library Board of Trustees) is hereby revised to read as follows:

“Sec. 2-142. Appointment; vacancies.

The Six Seven members shall be appointed by the Mayor and Council. One member shall be a resident of Orange County appointed by the Orange County Board of Commissioners. Vacancies shall be filled in the same manner as original appointments.”

This the 24^th day of June, 1996.

Council Member Capowski requested removal of item c from information reports for discussion later in the meeting.

The Council made the following appointments:

Historic District Commission: Catherine Franck

Library Board of Trustees: Frederick Black, Paul Farel, Bitty Hoton

OWASA Board: Dan VanderMeer

Parks and Recreation Commission: Flicka Bateman, Dan Costa, Esther Foster, Eve Kedem, John Hawkins

Item 6 Possible Bond Referendum

Mr. Horton presented an overview of possible steps relative to holding a bond referendum in November, 1996 or Spring, 1997. Mayor Waldorf suggested that the Council first decide whether or not to proceed with a bond referendum.

Citing the recent favorable action of the General Assembly on school construction financin, Council Member Franck said it might be a good year to go ahead with a municipal bond referendum. Council Member Brown requested a clarification of the Council's options. Mr. Horton if the Council chose to adopt no resolution this evening, staff would proceed with minimal work on the item for the August 26th meeting. Mr. Karpinos said there would be a little more flexibility in scheduling if the Council chose to adopt the resolution this evening.

Mayor Waldorf inquired whether or not the Council wished to discuss specific dollar amounts for a possible bond referendum this evening. Council Member Andresen said the Council appeared to reach agreement in prior work sessions concerning parks, green space and open space facilities.

Noting the need for a fire station facility on the southern end of the Town in the future, Council Member Franck said he did not know whether or not it was necessary to debate options on the matter.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 8.

Council Member Brown noted that a proposal for $3 million in street and sidewalk improvements was also being contemplated.

Council Member Capowski asked whether or not Resolution 8 was a more formal statement of option three in the staff's memorandum. Mr. Horton said the resolution reflected a general, rather than final, categorization of possible items for inclusion on the bond referendum ballot. Council Member Capowski said the only issue he was wrestling with was whether or not to have streetscape as a separate bond referenda category. Mayor Waldorf noted that it was not necessary for the Council to decide on this matter this evening. Mr. Horton said staff needed to get an opinion from the bond counsel about whether or not streetscape could be a separate item.

Council Member Chilton said he preferred option two a little more than option three. Council Member Evans said it would be a good idea to receive public comment on the matter. She also suggested that language referencing open space and parkland refer to the planning jurisdiction, rather than the Town limits. Council Member Franck said this was an excellent idea. Mr. Karpinos said this objective could be attained by eliminating the words "within the Town of Chapel Hill" from the proposed resolution. Council Member Chilton said some persons might mischaracterize the removal of these words.

Council Member Chilton inquired when a public hearing would be held on the matter. Mr. Karpinos said the hearing would be held in late September. Council Member Brown asked whether or not the hearing could be held in early September. Mr. Horton said a hearing could be held any time the Council wished to do so. He stated that staff could bring back options for the Council's consideration. Council Member Capowski said matters needed to be spelled out before the Council's summer break. Council Member Chilton inquired which option Council Member Capowski favored. Council Member Capowski said he favored option number three.

Council Member Chilton inquired whether Resolution 3 was setting general categories. Mr. Horton said this was correct.

Council Member Franck said he preferred option three, outlining four separate questions for the public to consider. Council Member Andresen said she also preferred option number three.

The motioner and seconder agreed to remove the words "within the Town of Chapel Hill" from Resolution 8.

RESOLUTION 8 AS AMENDED WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION APPROVING THE FORM OF NOTICES OF INTENT TO FILE AN APPLICATION WITH THE LOCAL GOVERNMENT COMMISSION TO ISSUE BONDS, AUTHORIZING AND DIRECTING PUBLICATION OF SUCH NOTICE OR NOTICES OF INTENT AND DESIGNATING BOND COUNSEL (96-6-24/R-8)

WHEREAS, the Council desires to pursue the possibility of issuing one or more issues of general obligation bonds of the Town of Chapel Hill, North Carolina in the aggregate principal amount not to exceed $13,500,000 (the "Bonds"); and

WHEREAS, the proceeds of the Bonds would be used to pay capital costs of the acquisition, construction, installation, renovation, expansion, reconstruction and equipping of certain public improvements in the following respective maximum amounts: $5,000,000 to pay capital costs of providing additional parks and recreation facilities; $3,000,000 to pay capital costs of acquiring real property in order to maintain, protect, limit the future use of or otherwise conserve open spaces and areas; $2,500,000 to pay capital costs of providing public works facilities, facilities and public vehicles for fire fighting and prevention, and providing facilities for law enforcement; $3,000,000 to pay capital costs of construction, replacement and reconstruction of streets and sidewalk improvements; and

WHEREAS, a notice of intent to file an application with the Local Government Commission of North Carolina to issue the Bonds is required to be published in a newspaper of general circulation in the Town of Chapel Hill, North Carolina at least ten (10) days prior to the filing of such an application; and

WHEREAS, the law firm of Womble Carlyle Sandridge & Rice, P.L.L.C., Raleigh, North Carolina, has been recommended to the Town Council as a law firm possessing capabilities in each of the following areas:

(a) North Carolina municipal law, including in particular the Local Government Bond Act;

(b) Municipal finance and municipal securities law;

(d) Tax Law, including Section 103 and Sections 140 through 150 of the Internal Revenue Code of 1986, as amended.

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill, North Carolina as follows:

Section 1. The form of the notices of intent to file an application with the Local Government Commission of North Carolina to issue the Bonds in the form of Exhibit A and Exhibit B attached hereto is hereby approved and the Town Manager and the Town Attorney of the Town of Chapel Hill are hereby authorized and directed to cause one or more notices of intent, as may be required by the Local Government Bond Act, relating to Bonds for the purposes set out in said form of notice to be published in a newspaper of general circulation in the Town of Chapel Hill.

Section 2. The law firm of Womble Carlyle Sandridge & Rice, P.L.L.C., Raleigh, North Carolina, is hereby designated to serve as bond counsel in connection with the issuance by the Town of Chapel Hill, North Carolina of the Bonds, or any series thereof, and in connection with the issuance by the Town of Chapel Hill, North Carolina of such additional issues of bonds as the Council shall deem appropriate.

Section 3. The Town Manager and the Town Attorney are hereby authorized and directed to take such other actions as they may deem appropriate to expedite the process of issuing the Bonds, including, without limitation, the preparation of an application or applications for approval of the issuance of the Bonds, which application or applications shall be considered by the Council prior to filing with the Local Government Commission.

Section 4. This resolution shall taken effect upon its passage.

Section 5. A certified copy of this resolution shall be filed with the Local Government Commission.

This the 24th day of June, 1996.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO APPROVE OPTION THREE. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Mayor Waldorf suggested that one Council Member and herself put forward names for a citizen's bond group and a possible chair of the group. Council Member Franck stated that the Council did not need to take an official role in this matter. Mayor Waldorf noted that previous Councils had taken official roles in bond referendums. Mr. Karpinos said the Council could support bonds and the citizen's committee. He stated that Town funds could not be used to support the bond referendum. Council Member Andresen said a proposal on the bond referendum could be put together over the summer. Council Member Capowski asked whether the matter could be placed on the Council's July 1st agenda. Mayor Waldorf said this was possible.

Item 7 Southern Village

Mr. Waldon said the Council was being asked this evening to raise the threshold cap beyond the existing figure of five hundred units. He stated that existing regulations would permit up to six hundred and twenty-four units. Mr. Waldon also said that the provision of additional on-street parking would reduce the need for paved parking lots and would enhance the urban nature of the area. He noted that the applicant had requested that the requirement for off-street parking requirements for the site be waived. Mr. Waldon said staff felt this was a good idea and this course of action was recommended to the Council. He also said staff was recommended recessing the hearing to September 9th.

Council Member Andresen inquired whether stormwater could be handled on site for the additional one hundred and twenty five units. Stating that seventy, rather than one hundred and twenty five units were recommended, Mr. Waldon said this would qualify as low-density development with stormwater being handled on site. Council Member Andresen said she had a number of concerns about stormwater management. Mr. Horton said applicable steps would be taken to mitigate stormwater during construction, with a detention pond in place at the apartment construction site.

D.R. Bryan, the applicant said although he had no additional statement, he would be willing to respond to any Council questions.

Coleman Day, representing the Smith Level Alliance, reiterated the concerns of neighboring property owners relative to the protection of natural resources. Mr. Day requested that the Town's Urban Forester take an inventory of trees over two feet in diameter on the site. He also requested an accurate and updated clear-cut map and information regarding slopes and soils. Mr. Day asked that the Council look into the possibility of having oversight of the development by a zoning administrator, perhaps in concert with the Town of Carrboro.

Mayor Waldorf inquired about the proposed location of the seventy new units. Mr. Waldon showed the proposed site location. He noted that the anticipated completion date was the end of hte summer. Council Member Brown asked how many total units were proposed in this phase of the project. Mr. Bryan said five hundred and seventy. He stated that all roads, excepting one, were in place. Mr. Bryan said this road would be paved within the next thirty to forty-five days. Council Member Chilton inquired about specific plans for office and retail development in the near term. Mr. Bryan said there were no specific applications in hand for retail or office uses in the village core.

Council Member Capowski asked whether the Council was being to requested to raised the building threshold before building the lake. Mr. Bryan said this was correct. Council Member Capowski asked whether or not the Council was being asked to raise the threshold before the project's detention basins were in place. Mr. Horton said no, noting that a mechanism was being offered by which the project could continue on a financially sound basis. He stated that the Council was not being asked for a final decision on whether a lake or detention ponds were needed. Mr. Horton stated that the project would grind to a halt without raising the building threshold.

Council Member Capowski said former Council Member Art Werner had expressed concern to him that the recommendations of the Stormwater Management Committee were not being followed. Stating that the Stormwater Management Committee had expressed a preference for regional detention ponds, Mr. Horton said he did not think that the Committee had made specific recommendations regarding the engineering of ponds. Council Member Capowski requested that the staff's follow-up report contain information about how the applicant's proposal would fit in with the recommendations of the Stormwater Management Committee. Council Member Andresen stated that State officials had indicated that a decision on whether or not a lake could be built would be made within two weeks.

Council Member Brown requested that the staff's follow-up report respond to the Smith Level Alliance's concerns. Mr. Horton said staff would follow up on these matters as best as possible. Council Member Brown inquired about the viability of a zoning administrator. Mr. Horton said on-site inspections were handled by a combination of engineering, planning and inspections staff. He added that a zoning enforcement officer position could be added to the Town staff if the Council wished to do so.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO ADOPT RESOLUTION 9A.

Stating that the applicant had had three years to comply, Council Member Andresen said she would not support the resolution. She suggested that the Council wait until the fall to take up the matter.

Council Member Chilton said the clear intent of Council discussions from three years ago was to ensure that detention would eventually be put in place. He stated that the Council was not increasing its exposure if it permitted seventy additional units to be built during the next few months.

Council Member Capowski said he concurred with Council Member Andresen's desire to have a lake or detention ponds.

RESOLUTION 9A WAS ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER ANDRESEN VOTING NO.

A RESOLUTION APPROVING AN APPLICATION FOR MODIFICATION OF MASTER LAND USE PLAN FOR SOUTHERN VILLAGE TO ALLOW AN ADJUSTMENT TO THE BUILDING THRESHOLD CONDITION INCLUDED IN THE MASTER LAND USE PLAN (96-6-24/R-9a)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Master Land Use Plan Modification proposed by Bryan Properties, Inc., on property identified as Chapel Hill Township Tax Map 126, Block A, Lots 4, 4K and 20; Tax Map 122, Block B, Lots 8M and part of Lot 8B; Tax Map 126C, Block A, now or formerly Lots 4, 4K, and 20; if developed according to the terms of the Master Land Use Plan, recorded in Deed Book 1197, Page 481 at the Orange County Register of Deeds and subject to the revisions listed in conditions below:

1. Would maintain the public health, safety and general welfare;

2. Would maintain or enhance the value of contiguous property; or be a public necessity; and

3. Would conform to the Comprehensive Plan.

These findings are conditioned on the following modification of condition 12 of the Master Land Use Plan to read as follows:

12. Building Threshold for Permanent Detention Basin Installation:

a. That after the impervious surface or building threshold (~~500~~ 570 units or Town-approved percentage of impervious surface, whichever occurs first) has been reached for the entire property covered by this Master Land Use Plan approval, no additional building permits shall be issued for any part of the Southern Village until adequate stormwater management/water quality protection measures have been completed in compliance with all then applicable local, State, and Federal regulations. For the purposes of calculating this threshold, each dwelling unit and each 1,000 square feet of nonresidential floor area shall constitute a "unit". A note to this effect shall be place on all final plats and plans.

b. For every unit, the developer shall set aside $500.00 in and escrow account for the pond construction. For the purposes of the fund calculations, each increment of 1,000 square feet of nonresidential floor area would count as a "unit".

c. Once ~~500~~ 570 "units" have been constructed, the pond shall be constructed to accommodate buildout of the entire site.

d. The developer shall submit a monitoring plan and data for totalling the "unit" number and impervious surface area as each building permit application is submitted to the Town Manager. The monitoring plan shall be reviewed for approval by the Town Manager prior to issuance of a Zoning Compliance Permit for the first phase.

BE IT FURTHER RESOLVED that the Council hereby approves the application for Southern Village Master Land Use Plan Modification in accordance with plans and conditions listed above.

This the 24th day of June, 1996.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 9B. THE MOTION WAS ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER ANDRESEN VOTING NO.

A RESOLUTION APPROVING AN APPLICATION FOR A MODIFICATION OF SPECIAL USE PERMIT FOR THE NEIGHBORHOOD DISTRICT AND VILLAGE GREEN DISTRICT OF THE NORTHEAST TRACT OF THE SOUTHERN VILLAGE, TO ALLOW AN ADJUSTMENT TO THE BUILDING THRESHOLD CONDITION INCLUDED IN THE SPECIAL USE PERMIT (96-6-24/R-9b)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Special Use Permit - Planned Development Mix Use proposed by Bryan Properties, Inc., on property identified as Chapel Hill Township Tax Map 126, Block A, Lots 4, and part of 4K; if developed according to the terms of the Special Use Permit recorded in Deed Book 1197, Page 490, and the conditions listed below:

1. Would be located, designed, and proposed to be operated so as to maintain or promote the public health, safety, and general welfare;

2. Would comply with all required regulations and standards of the Development Ordinance, including all applicable provisions of Article 12, 13, 14, and 18, and with all other applicable regulations;

3. Would be located, designed and operated so as to maintain or enhance the value of contiguous property; and

4. Would conform with the general plans for the physical development of the Town as embodied in the Development Ordinance and in the Comprehensive Plan.

These findings are conditioned on the following modification of condition 5 of the Special Use Permit to read as follows:

5. Building Threshold for Permanent Detention Basin Installation:

a. That after the impervious surface or building threshold (~~500~~ 570 units or Town approved percentage of 24% impervious surface, whichever occurs first) has been reached for the entire property covered by the Master Plan for Southern Village, no additional building permits shall be issued for any part of the Southern Village until adequate stormwater management/water quality protection measures have been completed in compliance with all then applicable local, State, and Federal regulations. For the purposes of calculating this threshold, each dwelling unit and each 1,000 square feet of nonresidential floor area shall constitute a "unit". A note to this effect shall be placed on all final plats and plans.

b. For every dwelling unit, the developer shall set aside $500 in an escrow account for the pond construction. For the purposes of the fund calculations, each increment of 1,000 square feet of nonresidential floor area would count as a "unit".

c. Once ~~500~~ 570 "units" have been constructed, the pond shall be constructed to accommodate buildout of the entire site.

BE IT FURTHER RESOLVED that the Council hereby approves the Special Use Permit Modification for the Neighborhood District and the Village Green District in the Northeast Tract of the Southern Village in accordance with plans and conditions listed above.

This the 24th day of June, 1996.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO ADOPT RESOLUTION 9C. THE MOTION WAS ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER ANDRESEN VOTING NO.

A RESOLUTION APPROVING AN APPLICATION FOR A SPECIAL USE PERMIT MODIFICATION FOR THE VILLAGE CORE STOREFRONT DISTRICT AND THE VILLAGE GREEN ENTRANCEWAY TRANSITION DISTRICT OF THE SOUTHERN VILLAGE, TO ALLOW AN ADJUSTMENT TO THE BUILDING THRESHOLD CONDITION INCLUDED IN THE SPECIAL USE PERMIT (96-6-24/R-9c)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Special Use Permit - Planned Development - Mixed Use proposed by Bryan Properties, Inc., on property identified as Chapel Hill Township Tax Map 126, Block A, Lot 4 and part of Lot 4K, if developed according to the terms of the Special Use Permit recorded in Deed Book 1197, Page 498, would:

1. Would be located, designed, and proposed to be operated so as to maintain or promote the public health, safety, and general welfare;

2. Would comply with all required regulations and standards of applicable provisions of Articles 12, 13, 14, and 18, and with all other applicable regulations;

3. Would be located, designed, and proposed to be operated so as to maintain or enhance the value of contiguous property; and,

4. Would conform with the general plans for the physical development of the Town as embodied in the Development Ordinance and in the Comprehensive Plan.

These findings are conditioned on the following modification of condition 4 of the Special Use Permit to read as follows:

4. Building Threshold For Permanent Detention Basin Installation:

a. That after the impervious surface or building threshold (~~500~~ 570 units or 24% of impervious surface, whichever occurs first) has been reached for the entire property covered by the Master Land Use Plan, no additional building permits shall be issued for any part of the Southern Village until adequate stormwater management/water quality protection measures have been completed in compliance with all then applicable local, State, and Federal regulations. For the purposes of calculating this threshold, each dwelling unit and each 1,000 square feet of nonresidential floor area shall constitute a "unit". A note to this effect shall be placed on all final plats and plans.

c. Once ~~500~~ 570 "units" have been constructed, the pond will be constructed to accommodate buildout of the entire site.

d. The developer shall submit a monitoring plan and data for totalling the "unit" number and impervious surface area as each building permit is submitted to the Town Manager. The monitoring plan shall be reviewed for approval by the Town Manager prior to issuance of a Zoning Compliance Permit for the first phase.

BE IT FURTHER RESOLVED that the Town Council hereby approves the application for the Special Use Permit Modification for the Village Core Storefront District and the Village Entranceway Transition District of the Southern Village in accordance with the condition listed above.

This the 24th day of June, 1996.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER EVANS,S TO ADOPT RESOLUTION 9D. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION APPROVING AN APPLICATION FOR A SPECIAL USE PERMIT MODIFICATION FOR SOUTHERN VILLAGE - APARTMENT DISTRICT, TO ALLOW AN ADJUSTMENT TO THE BUILDING THRESHOLD CONDITION AND MINIMUM PARKING REQUIREMENTS CONDITIONS INCLUDED IN THE MASTER LAND USE PLAN (96-6-24/R-9d)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Special Use Permit application, proposed by Bryan Properties on property identified as Chapel Hill Township Map 126, Block A, (part of) Lot 4, if developed according to the terms of the Special Use Permit recorded in Deed Book 1244, Page 562 and the conditions listed below:

1. Would be located, designed, and proposed to be operated so as to maintain or promote the public health, safety, and general welfare;

2. Would comply with all required regulations and standards of the Development Ordinance, including all applicable provisions of Articles 12, 13, 14, and 18, and with all other applicable regulations;

3. Would be located, designed and operated so as to maintain or enhance the value of contiguous property; and

4. Would conform with the general plans for the physical development of the Town as embodied in the Development Ordinance and in the Comprehensive Plan.

BE IT FURTHER RESOLVED that the Council finds, in this particular case, that the following modification to the regulations satisfies public purposes to an equivalent or greater degree:

Modification to Section 14.6.7 of the Development Ordinance, Minimum Off-Street Parking Requirements, which stipulates the minimum number of off-street parking spaces required, to delete "off-street" from this requirement.

These findings are conditioned on the following modifications of conditions 3 and 8 of the Special Use Permit to read as follows:

3. That the development shall be limited to 250 dwelling units with at least ~~418~~ 391 ~~off-street~~ parking spaces. Approximately 54 on-street parking spaces (all 12 angled spaces and approximately 42 parallel spaces near the intersections) shall be removed so that the plans are in accordance with Town standards and regulations regarding public street and on-street parking. Any parking provided above the minimum Town requirement of 391 spaces is intended to be shared with the Village Core office and retail developments.

A parking lot of at least 8 spaces shall be provided ~~off-street~~ for the clubhouse/office building.

8. Building Threshold for Permanent Detention Basin Installation:

a. That after the impervious surface or building threshold (~~500~~ 570 units or 24% impervious surface, whichever occurs first) has been reached for the entire Southern Village development property covered by the Master Land Use Plan approval, no additional building permits shall be issued for any part of the Southern Village until adequate stormwater management/water quality protection measures have been completed in compliance with all then applicable local, State, and federal regulations. For the purposes of calculating this threshold, 1,000 square feet of nonresidential floor area shall constitute a "unit". A note to this effect shall be placed on all final plats and plans.

b. The developer shall submit a monitoring plan and data for totalling the "unit" number and impervious surface area as each building permit application is submitted to the Town Manager. The monitoring plan shall be reviewed for approval by the Town Manager prior to issuance of a Zoning Compliance Permit for the first phase of development in the Southern Village.

c. For every unit, the developer shall set aside $500 in an escrow account for the pond construction. For the purposes of the fund calculations, each dwelling unit and each increment of 1,000 square feet of non-residential floor area would count as a "unit".

d. Once ~~500~~ 570 "units" have been constructed, the pond shall be constructed to accommodate buildout of the entire Southern Village site.

BE IT FURTHER RESOLVED that the Town Council hereby approves the application for the Special Use Permit Modification for Southern Village Apartments in accordance with the conditions listed above.

This the 24th day of June, 1996.

Council Member Brown requested that the staff's follow-up report respond to questions and concerns raised by the Smith Level Alliance's petition. Mr. Horton said staff would follow up on these matters.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO RECESS THE HEARING TO SEPTEMBER 9TH. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Item 8 Beechridge Planned Development

Planning Director Roger Waldon presented an overview of key issues, including roadway alignments and environmental/Resource Conservation District matters. He stated that staff recommended the construction of a bridge spanning the Resource Conservation District area. Mr. Waldon also showed the proposed location of a proposed pedestrian easement on a site map. He also stated that staff recommended the adoption of Resolution A. Mr. Horton noted that Resolutions E through H were also offered regarding other aspects of the proposed planned development.

Council Member Andresen inquired about the topography of the Blackwood property. Mr. Waldon said there were some low areas and knolls on the site. Council Member Andresen inquired about the length of the proposed bridge span. Noting that no specific project engineering had taken place, Mr. Horton said the span could range from 200 to 230 feet in length.

Council Member Evans noted that Linden Road did not connect through, contrary to what was stated in the staff's memorandum.

Council Member Capowski inquired how much of the Blackwood property was pasture land. Mr. Waldon said he did not know. Council Member Capowski asked whether or not views of the pasture would need to be destroyed. Mr. Horton said this would depend upon property development choices in the future. Council Member Capowski said he would like the applicant to comment on his near term plans for the Blackwood property.

Tom Traut, 400 Bayberry Drive, said his lot was surrounded on three sides by the proposed development. Mr. Traut also said he was concerned about water runoff on to his property. Stating that his property was within twenty-five feet of a proposed pedestrian path, Mr. Traut said he was concerned about the proximity of the pathway to his home and the potential negative impact on his property value.

Mary Brady requested the closure of a temporary roadway connection through the Hunt Arboretum at the intersection of Bayberry and Arboretum Drives. She requested that the Council consider a possible compromise regarding the Bayberry Drive connector. A copy of Ms. Brady's remarks are on file in the Town Clerk's Office.

Charles Delmar said that Bayberry Drive and other roadways in his neighborhood were never intended to be thoroughfares. Noting that a number of developments had recently been approved in this area, Mr. Delmar requested the Council's assistance in careful planning of future roadway connectors in his neighborhood.

Kenneth Suchioka, a resident of Bayberry Drive, said that Bayberry Drive had become a Grand Prix-like roadway, with many drivers recklessly speeding down this road. He expressed concern that nothing had been done to address traffic control. Mr. Suchioka requested that the Council live up to conditions in the February 23, 1981 resolution regarding roads in his neighborhood.

Bill Geer, a resident of Azalea Drive, said he had resided in the Town since 1938. He said the Council could not allow developers to proceed with disregard for area residents. Mr. Geer also said he hoped that the Council would put through the Bayberry Drive connector as intended, relieving traffic volumes on Azalea Drive.

Bob Gardnier said that connecting Bayberry Drive was the only way to provide adequate egress to the area. He also stated that running sewer lines along Azalea and Bayberry Drives would permit area residents to have access to sewer service.

Fred Smith, 328 Azalea Drive, said there was unanimous opposition among his neighbors to the proposed pedestrian trail. Mr. Smith said that he and his neighbors urged the relocation of the proposed northern pedestrian easement. He requested that the Council accept the Parks and Recreation Commission's proposal to relocate the pedestrian easement to between lots fourteen and fifteen.

Terry Kitson, 100 Azalea Place, showed the location of a proposed sewer line up Azalea Drive. He said such an arrangement was preferable to clear cutting through through homeowner lots to construct such a sewer line. Mr. Kitson also stated that three of his neighbors directly effected by the proposed sewer line across their properties did not want the proposed line.

Lawrence Donners said he was concerned with proposed sewer and pedestrian access matters. He stated that the proposed sewer line could run underneath roadways, rather than across properties. Mr. Donners also inquired why the proposed pedestrian trail could not be rerouted as suggested by the Parks and Recreation Commission.

Richard Holloway said he had concerns about sight distances on roadways in the Azalea and Bayberry Drive neighborhood. He also stated that the proposed pedestrian trail would come within one hundred feet of his property.

Bill Reinhardt, 109 Chesnut Drive, said he favored implementation of a plan which would mitigate Azalea and Bayberry Drives serving as thoroughfares.

Kevin Huggins, the applicant, said that the Blackwood property was zoned RLD-5 and would have a developed character similar to the Arbor Lea development in Chatham County. Council Member Capowski requested a clarification of the applicant's property line. Noting that he had never surveyed the property, Mr. Huggins also stated that he estimated the cost of an arch span type bridge across the Resource Conservation District at approximately $600,000. Mr. Huggins said this would not be a viable expenditure for a twenty-seven lot subdivision. Mr. Huggins also noted that he was willing to move pedestrian trail access locations and to move sewer lines from individual properties to under Azalea Drive. Mr. Huggins also said that contrary to Mr. Geer's remarks, he did not know that Bayberry Drive would ultimately have to serve as a connector road. Mr. Huggins stated that he could understand why residents of Azalea Drive would want such a connection.

Council Member Brown inquired about vehicle access to the proposed pedestrian pathway. Mr. Waldon said limited vehicular access would be provided for service and emergency vehicles only.

Council Member Capowski asked whether or not it was correct that steep slopes on roadways would be necessary, regardless of which of the three options were selected. Mr. Waldon said options one and three involved steep slopes, while option two generally would not. Stating that the grade of the Raleigh Road hill was five percent, Council Member Capowski noted that the grade involved would be 2.4 times steeper than this hill.

Council Member Evans inquired about the viability of having the pedestrian easement moved between two lots, as suggested by the Parks and Recreation Commission. Mr. Waldon said it was possible to make this modification to the proposed resolution.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADJOURN THE PUBLIC HEARING. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION A.

Council Member Andresen said she believed that OWASA would consider installing gravity pumps to provide sewer service to the area. Council Member Andresen stated that she was not sure how this matter could be worked out with the OWASA Board. She inquired whether staff believed this matter could be worked out. Mr. Horton said he believed so.

Council Member Andresen said she could not support the bridge proposal because she did not see how the ravine could be traversed. She suggested that the Town work with State officials to initiate traffic calming techniques in this area.

Stating that he was very much in favor of interconnecting streets in most instances, Council Member Franck said he could not support a roadway crossing of the ravine/Resource Conservation District. Council Member Franck also said he favored amending Resolution 2a to place applicable signage at the eastern end of the stubout of Azalea Drive. The motioner, Council Member Evans said she did not accept this proposed amendment. Mr. Horton suggested possible language concerning the extension of Beechridge Court to the south. Council Member Franck said he accepted this proposed language.

Noting that he walked and bicycled all over the subject property, Council Member Capowski said that Azalea Drive was overused beyond what it was originally designed for. Council Member Capowski said he could not support the connector road options due to the area's topography.

Noting the importance of planning good roadway connections, Council Member Evans said that gulleys and gorges were spanned by roadways across steep hills such as Hillsborough Street. Council Member Evans expressed her support for a bridge in the area. Council Member Capowski said if there had been an option for Hillsborough Street, it would likely have been rejected in its present form.

Mayor Waldorf said the proposal was virtually undevelopable if a bridge was required. She noted that the proposed amendment to stipulation 2a was for Beechridge Court to be extended to the south to the Blackwood property.

Council Member Franck suggested deleting the clause 2c regarding a layout including two cul de sacs. Mr. Horton said he believed that the language was all right as proposed. Council Member Franck suggested that the western part of Bayberry Drive be renamed, with the developer paying any applicable expenses. Mr. Horton said staff could follow up on this matter. Council Member Franck asked staff to do so.

Mr. Waldon noted possible revised language concerning the proposed pedestrian connection being relocated to between lots six and seven. Council Member Brown inquired whether or not the proposed pedestrian trail could be moved so that it did not impinge on anyone's property. Mr. Waldon said although this could be done, the trail would be much steeper. Mr. Horton stated that the trail could be so steep as to discourage any pedestrian use at all.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER ANDRESEN, TO REVISE LANGUAGE REGARDING THE PEDESTRIAN TRAIL, RELOCATING IT TO BETWEEN LOTS SIX AND SEVEN.

Council Member Brown asked whether there was any language which would give property owners protection. Mr. Horton said staff could set back an easement a few feet from property lines and work on installing a short section of fence. Council Member Evans suggested having the path meander through trees, rather than installing a fence. Mr. Horton said trails generally meandered through trees.

THE MOTION TO RELOCATE THE PEDESTRIAN TRAIL WAS ADOPTED UNANIMOUSLY (8-0).

Council Member Andresen requested that Town staff ask OWASA staff to install sewer lines in the least harmful manner to existing property owners. Mr. Horton said staff had no objection to making this request. Mr. Waldon read possible language regarding location of a sewer line between lots four and five.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO LOCATE THE PROPOSED SEWER LINE BETWEEN LOTS FOUR AND FIVE.

Council Member Evans asked whether or not the sewer line would run up through the recreation space. Mr. Waldon said somewhat.

THE AMENDMENT REGARDING SEWER LINES (ITEM 2G) WAS ADOPTED UNANIMOUSLY (8-0).

COUNCIL MEMBER ANDRESEN MOVED, SECONDED BY COUNCIL MEMBER CAPOWSKI, FOR OWASA TO STRIVE TO HAVE SEWER LINES WHICH WOULD MINIMIZE IMPACTS ON EXISTING LOTS. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Citing concerns about potential safety hazards, Council Member Capowski said he would vote against Resolution A as amended.

The applicant, Mr. Huggins, expressed his acceptance of the proposed conditions of approval as proposed in the amended resolution.

RESOLUTION 10A, AS AMENDED, WAS ADOPTED BY A VOTE OF 6-2, WITH COUNCIL MEMBERS CAPOWSKI AND EVANS VOTING NO.

A RESOLUTION APPROVING AN APPLICATION FOR SPECIAL USE PERMIT FOR BEECHRIDGE PHASES II AND III PLANNED DEVELOPMENT - HOUSING

(SUP 126-D-4) (96-6-24/R-10a)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Special Use Permit application, proposed by Kevin and Vicki Huggins, on property identified as Chapel Hill Township Tax Map 126, Block D, Lot 14, if developed according to the site plan dated April 17, 1995, and the conditions listed below:

1. Would be located, designed, and proposed to be operated so as to maintain or promote the public health, safety, and general welfare;

2. Would comply with all required regulations and standards of the Development Ordinance, including all applicable provisions of Articles 12, 13, 14 and 18, and with all other applicable regulations;

3. Would be located, designed, and proposed to be operated so as to maintain or enhance the value of contiguous property; and

4. Would conform with the general plans for the physical development of the Town as embodied in the Development Ordinance and in the Comprehensive Plan.

BE IT FURTHER RESOLVED that the Council of the Town of Chapel Hill hereby approves the application for Special Use Permit for Beechridge Phases II and III Planned Development - Housing in accordance with the plans listed above and with conditions listed below:

Stipulations Specific to the Development

1. A. That construction begin by June 24, 1998 and be completed by June 24, 1999.

B. That the approval allows 27 single-family dwelling units on individual lots, with at least two on-site parking places on each lot.

C. That the developer shall post a construction sign listing the property owners' representative and phone number, the general contractor's representative's name and phone number, and the telephone numbers of the Town's Planning, Engineering, and Inspections Departments.

2. Required Improvements:

A. That Beechridge Court be extended to the south, to be stubbed-out to the Blackwood property, with a sign posted alerting residents about the possibility of future connection.

B. That the internal street(s) be constructed to public street standards, with a 27-foot back-to-back cross-section with curb and gutter, and with sidewalk on one side. A 50-foot right-of-way shall be dedicated.

C. The horizontal and vertical curves for Beechridge Court be revised to meet Town standards.

D. The street(s) is(are) to be maintained by the developer or Homeowners' Association until such time as the property is annexed into the Town or NCDOT accepts the streets for maintenance.

E. We recommend that the drainage pipe between Lots 25 and 26 be extended to the rear of the lots within a drainage easement.

F. The placement of the sewer line for the western side of the development shall be reviewed and approved by OWASA and the Town Manager.

G. That the sewer line proposed in the vicinity of Lot 5 be relocated further east, along the property line separating Lots 5 and 4, with the final location to be reviewed and approved by OWASA and the Town Manager.

H. That the Town Manager requests that, in considering final sewer plans, OWASA strive to approve plans serving existing lots which minimize impacts on those lots.

3. Detention Pond Maintenance: That the detention pond, and vehicular access to it, be on land which is deeded to a homeowners' association, and that the final plat clearly indicate that the developer or homeowners' association would be responsible for maintenance.

4. Steep Slopes: That a more detailed Steep Slopes plan be submitted, showing the potential buildable areas on the house lots, and committing to certain types of building foundations and construction techniques for those lots and house sites with slopes of 15% and greater. These restrictions shall be referenced in the Homeowners' Association documents.

Stipulations Related to the Resource Conservation District

5. Boundaries: That the boundaries of the Resource Conservation District be shown on the final plat and final plans with a note indicating that "Development shall be restricted within the Resource Conservation District in accordance with the Development Ordinance."

6. Variances: That all variances necessary for development with the Resource Conservation District be obtained before application for final plat or final plan approval.

7. Buildable Lots: That no lot be created that would require a Resource Conservation District variance in order to be built upon.

8. Street Crossing: If Bayberry Drive is connected within the development, the developer must demonstrate that the street crossing meets the special design and construction standards contained in Article 5 of the Development Ordinance.

Stipulations Related to Recreation Space

9. Dedication of Recreation Space: That the final plat dedicate and deed the Recreation Space to the homeowners' association for Parks and Recreation purposes only. The developer remains responsible for the recreation area until the Town or a homeowners' association accepts the property.

10. Recreation Space Improvements:

A. That three picnic tables and grills be provided in the flatter east-central portion of the recreation space; and that the type, design and location of recreation improvements be approved by the Town Manager prior to issuance of a Zoning Compliance Permit.

B. That a pedestrian corridor be provided as a continuous strip along the northern boundary of Lots 24 and 25, the western boundary of Lots 16 and 17, and along the western and northern boundaries of Lot 18, so that residents west of the RCD can walk east to the proposed Beechridge Court; and that a clear pedestrian connection, as well as a vehicular maintenance access, be shown from Beechridge Court to the proposed recreation space. The vehicular access shall include a gravel access drive for maintenance vehicles.

C. That the pedestrian easement proposed in the vicinity of Lot 6 be relocated to the lot line separarting Lots 6 and 7.

D. That the pedestrian corridors be located within land deeded to the homeowners' association, as opposed to within easements overlying individual private lots.

E. That the pedestrian trails be constructed of natural material (e.g., mulch), with sections of stairs, erosion bars, or boardwalks as needed;

F. That the pedestrian trails be signed at both Beechridge Court and Bayberry Court.

G. That final plans for all the above mentioned improvements be reviewed for approval by the Town Manager prior to issuance of a Zoning Compliance Permit.

Stipulations Related to Landscape Elements

11. Landscape Plan Approval: That a detailed landscape plan (including the buffer plantings) and landscape maintenance plan be approved by the Appearance Commission prior to the issuance of a Zoning Compliance Permit. The Landscape Plan shall include:

Type "B" landscape buffer along the northern, eastern, and western property lines.

Generally, the landscape buffer shall not be provided on individual lots but shall be provided on common area controlled by the Homeowners' Association. However, the Town Manager may approve buffers on individual lots on a case by case basis, prior to final review by the Appearance Commission, prior to issuance of Zoning Compliance Permit, and prior to recordation of the final plat.

Existing vegetation and/or fencing may be used, partially or wholly, to fulfill the buffer planting requirements, where deemed sufficient by the Town Manager.

12. Road Layout Relative to the Large White Oak: That the street layout for Beechridge Court be amended to avoid or minimize damage to the root zone of the 36" White Oak in the vicinity of Lot 7.

13. Tree Survey: That the landscape protection plan be revised to indicate the root zones of large existing trees, including the 36" White Oak (near Lot 7), near the proposed streets, stormwater and other utility lines, detention/retention facilities, and other areas likely to be cleared or graded.

14. Protection Fencing: The landscape protection plan shall also be revised to indicate that tree protection fencing will be erected between existing vegetation to be preserved near Lot 17 (400 Bayberry Drive) and the proposed construction activity associated with storm drainage pipe installation along Bayberry Drive.

15. Review of Revised Landscape Protection Plans: That a detailed revised tree survey, a detailed landscape plan, a revised landscape protection plan (with the grading plan), and landscape maintenance plan be reviewed and approved by the Appearance Commission and the Town Manager prior to issuance of a Zoning Compliance Permit.

16. Landscape Easement: That the landscape easement proposed along the northern boundary of Lot 6 be dedicated to the Homeowners' Association, for the purpose of planting and maintaining entrance plantings for the development.

Stipulations Related to Water, Sewer and Other Utilities

17. Fire Hydrants: That a hydrant plan for the site be submitted for approval by the Town Manager prior to issuance of a Zoning Compliance Permit.

Hydrants of sufficient number and appropriate location must be provided such that the Town standards of each building site being located within 500 feet of a hydrant.

18. Fire Flow: That a detailed fire flow report be prepared by a registered professional engineer, showing that flows meet the minimum requirements of the Design Manual, to be approved prior to issuance of a Zoning Compliance Permit.

19. OWASA Easements: That easement documents as required by OWASA and the Town Manager be recorded before final plat approval.

20. Utility Service Laterals: That prior to paving streets, utility service laterals (including cable and telephone) shall be stubbed out to the front property lines of each lot. For those lots within the Urban Services Boundary, sanitary sewer laterals shall be capped off above ground.

21. Utility/Lighting Plan Approval: That a water and sewer extension plan be submitted for approval by OWASA and the Town Manager prior to issuance of a Zoning Compliance Permit.

That the final detailed utility/lighting plan be approved by Orange Water and Sewer Authority (for those lots within the Urban Services Boundary), Duke Power, Southern Bell, Public Service Company, Time Warner Cable, and the Town Manager, before issuance of Zoning Compliance Permit. The property owner shall be responsible for assuring these utilities, including cable television, are extended to serve the development.

Miscellaneous Stipulations

22. Solid Waste Management Plan: That a solid waste management plan, including a recycling plan and plan for management of construction debris, be approved by the Town Manager prior to the issuance of a Zoning Compliance Permit.

Curbside collection may be required for steeper lots, and a note to this effect shall be placed on the final plat.

23. Detailed Plans: That final detailed site plan, grading plan, utility/lighting plans, stormwater management plan (with hydrologic calculations), landscape plan and landscape maintenance plan be approved by the Town Manager before issuance of a Zoning Compliance Permit, and that such plans conform to the plans approved by this application and demonstrate compliance all applicable conditions and the design standards of the Development Ordinance and the Design Manual.

The stormwater management plans shall include demonstration that stormwater runoff from impervious surfaces on Lots 6-10 will be diverted as much as possible away from the Traut property.

24. Homeowners' Association: That a Homeowners' Association be created that has the capacity to place a lien on the property of a member who does not pay the annual charges for maintenance of common areas, however designated. The Homeowners' Association documents shall be approved by the Town Manager, recorded at the Orange County Register of Deeds Office and cross referenced on the final plat.

25. Certificates of Occupancy: That no Certificates of Occupancy be issued until all required public improvements are complete; and that a note to this effect shall be place on the final plat.

If the Town Manager approves a phasing plan, no Certificates of Occupancy shall be issued for a phase until all required public improvements for that phase are complete; no Building Permits for any phase shall be issued until all public improvements required in previous phases are completed to a point adjacent to the new phase; and that a note to this effect shall be placed on the final plat.

26. Sight Triangle Easements: That sight triangle easements be provided on the final plat.

27. Traffic Signs: That the property owners shall be responsible for placement and maintenance of temporary regulatory traffic signs including street name signs before issuance of any Certificate of Occupancy until such time that the street system is accepted for maintenance by the Town.

28. Street Names and Addresses: That the name of the development and its streets and house numbers be approved by the Town Manager prior to issuance of a Zoning Compliance Permit.

29. Erosion Control: That a detailed soil erosion and sedimentation control plan be approved by the Orange County Erosion Control Officer and the Town Manager before issuance of a Zoning Compliance Permit.

30. Silt Control: That the applicant take appropriate measures to prevent and remove the deposit of wet or dry silt on adjacent paved roadways.

31. Continued Validity: That continued validity and effectiveness of this approval is expressly conditioned on the continued compliance with the plans and conditions listed above.

32. Non-severability: If any of the above conditions is held to be invalid, approval in its entirety shall be void.

BE IT FURTHER RESOLVED that the Council of the Town of Chapel Hill hereby approves the application for Special Use Permit for Beechridge Phases II and III Planned Development-Housing in accordance with the plans and conditions listed above.

This the 24th day of June, 1996.

Council Member Andresen requested that staff prepare a follow-up report to address resident's concerns about roadways and traffic.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 10E. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REQUESTING THE NORTH CAROLINA DEPARTMENT OF TRANSPORTATION REVIEW OF THE SIGHT DISTANCES AT THE INTERSECTION OF PARKER ROAD AND MOUNT CARMEL CHURCH ROAD (96-6-24/R-10e)

WHEREAS, the Council has received public comment stating that the sight distances at the unsignalized intersection of Parker Road and Mount Carmel Church Road are poor; and

WHEREAS, traffic on Mount Carmel Church Road frequently travels at speeds at or above the posted speed limit of 45 miles per hour;

WHEREAS, the above conditions may contribute to create hazardous conditions; and

WHEREAS, Parker Road and the above-described section of Mount Carmel Church Road are outside the Chapel Hill Town limits and are currently controlled and maintained by the North Carolina Department of Transportation;

NOW, THEREFORE, BE IT RESOLVED by the Town Council of Chapel Hill that it requests that the North Carolina Department of Transportation review the sight distances at the Parker Road/Mount Carmel Church Road intersection, and consider improving the sight distances at this location.

This the 24th day of June, 1996.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER CAPOWSKI, TO ADOPT RESOLUTION 10F. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REQUESTING THE NORTH CAROLINA DEPARTMENT OF TRANSPORTATION REVIEW OF THE SPEEDING PROBLEM ON AZALEA DRIVE AND BAYBERRY DRIVE, AND ITS RECONSIDERATION REGARDING THE INSTALLATION OF STOP SIGNS OR OTHER TRAFFIC CALMING MEAURES (96-6-24/R-10f)

WHEREAS, residents of Azalea Drive and Bayberry Drive in the Township of Chapel Hill state that speeding is a frequent problem on those streets; and

WHEREAS, Azalea Drive and Bayberry Drive are outside the Chapel Hill city limits and are currently controlled and maintained by the North Carolina Department of Transportation, and

WHEREAS, previous requests to the North Carolina Department of Transportation from the residents along these streets for the installation of stop signs at the two intersections of Azalea Drive at Bayberry Drive have been denied;

NOW THEREFORE BE IT RESOLVED by the Council of the Town of Chapel Hill that it requests that the North Carolina Department of Transportation review the traffic conditions on Azalea Drive and Bayberry Drive and consider installation of stop signs and /or other traffic calming measures at the Bayberry Drive/Azalea Drive intersections and/or other locations along those streets.

This the 24th day of June, 1996.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO ADOPT RESOLUTION 10G. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REQUESTING THE STATE HIGHWAY PATROL REVIEW OF THE SPEEDING PROBLEM ON AZALEA DRIVE AND BAYBERRY DRIVE AND ATTENTION TO SPEED LIMIT ENFORCEMENT (96-6-24/R-10g)

WHEREAS, residents of Azalea Drive and Bayberry Drive in the Township of Chapel Hill state that speeding is a frequent problem on those streets; and

WHEREAS, the intersections of Azalea Drive and Bayberry Drive are currently without stop signs; and

WHEREAS, the above existing conditions may contribute to hazards, as evidenced by regular incidence of accidents, and

WHEREAS, Azalea Drive and Bayberry Drive are outside the Chapel Hill city limits and traffic enforcement is the responsibility of the State Highway Patrol;

NOW, THEREFORE, BE IT RESOLVED by the Town Council of Chapel Hill that it requests that the State Highway Patrol again review the speeding and traffic conditions on Azalea Drive and Bayberry Drive, and take necessary steps to enforce the speed limit along these streets.

This the 24th day of June, 1996.

Mr. Horton stated that adoption of Resolution H would request OWASA to prepare a conceptual water and sewer service plan for the area. Noting that this would be in line with current OWASA policies, Council Member Andresen said this would be a good idea.

COUNCIL MEMBER ANDRESEN MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 10H.

Council Member Capowski inquired about the relationship between OWASA and possible future annexation of the area by the Town. Mr. Horton stated that the Town was required to provide like services to areas which were annexed into the Town, thus it would be important to work out a service plan for this area.

RESOLUTION 10H WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REQUESTING THAT THE ORANGE WATER AND SEWER AUTHORITY

(OWASA) CREATE A CONCEPTUAL SEWER PLAN FOR THE SOUTHEAST AREA OF TOWN (96-6-24/R-10h)

WHEREAS, many residential lots in the southwest area of the Town of Chapel Hill, including the existing Morgan Creek Hills Subdivision and the proposed Beechridge Development, are not currently served by public sewer; and

WHEREAS, this area of Town is experiencing new development and the Town Council believes it would be wise to review new development applications in the context of a future sewer plan for the area; and

WHEREAS, many of the originally installed septic tanks are approaching the end of their effective life span; and

WHEREAS, this area is within the Chapel Hill/Carrboro Urban Services Area and OWASA is the sewer service provider for this area; and

WHEREAS, the Town anticipates this area of Town to be annexed in the near future;

NOW, THEREFORE, BE IT RESOLVED that the Town Council of Chapel Hill requests that in the near future OWASA create a conceptual sewering plan for this area of Town in anticipation of annexation and the the need for installation of public sewer as septic systems age and will in the future need to be replaced for public health reasons.

This the 24th day of June, 1996.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER ANDRESEN, TO REQUEST THAT STAFF PREPARE A FOLLOW-UP REPORT REGARDING POSSIBLE ROADWAY CLOSURES IN THE AREA. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

Item 9 Pine Knolls Homeownership Program

Long Range Planning Coordinator Chris Berndt said the Housing and Community Development Advisory Board and Town staff recommended adoption of Resolution 12, with homeowners being eligible for second mortgages of up to $18,000 based on a sales price of $60,000.

Thanking the Council for its past efforts, Harvey Reid said he thought the proposed program would be a good one.

Virginia Barbee thanked the Council for the program. She said the program was needed and would be worth the funds expended.

Mayor Waldorf thanked Mr. Reid, Ms. Barbee and residents of the Pine Knolls community for all of their hard work to date.

COUNCIL MEMBER BROWN MOVED, SECONDED BY COUNCIL MEMBER CHILTON, TO ADOPT RESOLUTION 11.

Council Member Capowski inquired about the possibility of requiring that program participants live or work in the Town. Mr. Horton said that one difficulty would be that one of the program's objectives was to make it possible for people who otherwise could not move into the Town. Mr. Horton said he would advise the Council not to impose such a restriction. Council Member Capowski noted that another goal was to encourage people to move from rental housing into their own homes. Mayor Waldorf said he thought that a little flexibility in the program was a good idea. Mr. Horton said current Town residents could receive a general preference in the program.

RESOLUTION 11 WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION TO ESTABLISH A SECOND MORTGAGE PROGRAM FOR THE PINE KNOLLS HOMEOWNERSHIP PROGRAM (96-6-24/R-11)

WHEREAS, the Council has an ongoing interest in the development of low-income housing opportunities in Chapel Hill; and

WHEREAS, the Pines Community Center, Incorporated has proposed the development of twenty low-income homeownership opportunities in the Pine Knolls neighborhood in Chapel Hill; and

WHEREAS, the Center has requested that the Town develop a second mortgage program; and

WHEREAS, on February 26, 1996, the Town Council modified the guidelines of the Pine Knolls Homeownership Program;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council establishes a second mortgage program for the Pine Knolls Homeownership Program; with the potential sources of funds for the second mortgage program including HOPE 3 Funds, the Housing Loan Trust Fund, and Community Development funds;

BE IT FURTHER RESOLVED that the Council adopts the following guidelines for the Pine Knolls Second Mortgage Program:

Income Requirements

A qualifying household will be required to meet the income guidelines set forth by the Town Council for the Pine Knolls Homeownership Program (currently 60% of the area median income by household size, with an exception up to 70% of the area median income by household size);

First Time Homebuyer Preference

Preference will be given to first time homebuyers that live or work in Chapel Hill;

Amount of Subsidy

The maximum subsidy a buyer could receive for a second mortgage is 30% of the sale price of the house;

Financial Requirements

A qualified lender or other housing finance specialist will review each household’s financial situation to determine the amount of the subsidy needed to purchase a house. Debt to income ratios will be used to determine eligibility;

Shared Equity Agreement

Each buyer is required to sign a Shared Equity Agreement with the Town at closing. The agreement would define the terms of the second mortgage with the following provisions:

Equity and Appreciation Share: Upon sale or transfer of ownership of the property, a buyer will: (1) repay the original second mortgage amount; and (2) repay a share of the appreciation that is proportionate to the Town’s investment. That is, if the Town contributes 30% of the sale price of the house, the Town should receive 30% of the appreciation received from sale;

Improvement Limitations: Buyers are permitted to improve their property at their own expense provided that the improvements do not increase the fair market value of the property more than $1,000 per year of the buyer’s ownership. The following improvements are permitted: adding rooms; adding a carport or garage; adding a storage building affixed to the property; paving the driveway; adding a fence; or adding a fireplace.

Upon sale, an owner would be entitled to keep the value of the permitted improvements, subject to a maximum cap of $1,000 of value for every year lived in the house. The fair market value of improvements would be subtracted from the new sale price before calculating the Town’s share of appreciation.

Refinancing: An owner would be permitted to refinance their first mortgage provided that the total amount of all loans secured by the property including the Town’s second mortgage would not be greater than the original purchase price; and

Owner Occupancy: The house must be used by the buyer as their primary residence. The buyer is not permitted to use the property as a rental unit.

BE IT FURTHER RESOLVED that the Council authorizes the Town Manager and Attorney to develop legal agreements and forms to implement the program.

This the 24th day of June, 1996.

Mr. Horton said Town staff had been working with Donna Dyer of the Orange Community Housing Corporation on a public/private inititative housing project using Town land at Scarlett Drive and Legion Road. He stated that the proposed resolution would authorize the Manager to continue working on this proposal and authorize expedited process of the same.

Henry Whitfield said he was not at all opposed to affordable housing projects. Mr. Whitfield said he did however have reservations about moving residents from other communities into affordable housing projects in the Town. He also stated that the lot was not a very good location for eleven units, given its limited parking and recreation space. Mr. Whitfield requested that they defer action on the matter, pending receipt of a traffic study for this area.

Stating that the proposed 5,500 square foot lots would be quite small, John McFall said he had a number of safety and traffic related concerns about the preliminary proposal. Mr. McFall said he thought that the Council should initiate a traffic study for the proposed parcel.

Mayor Waldorf noted that the Town had received a letter from Grainger Barrett suggesting a traffic study before any final decisions were made regarding the proposal.

Council Member Franck said he did not believe that construction financing for the project would be a good use of Town funds.

Council Member Brown suggested the possibility of exploring a land trust in cooperation with other entities. She also expressed reservations about going ahead without a traffic study being conducted. Mayor Waldorf said it was necessary to generally look at what was happening relative to traffic in the area. Council Member Andresen said she also had traffic-related concerns. Noting that he shared concerns about traffic, Council Member Chilton said that these concerns did not need to completely hold up Orange Community Housing Corporation in proceeding with the proposal. Expressing her concurrence with the need to move the project along, Mayor Waldorf suggested the possibility of having attached homes on the site. Council Member Capowski inquired whether or not there had been any recent rezonings in the area. Mr. Horton said he did not know of any.

Orange Community Housing Corporation Executive Director Donna Dyer said she would hate for the project to be penalized solely because of its location. She expressed her concurrence with the Manager's suggestion of having something for staff to evaluate. Council Member Chilton inquired about the possibility of having more attached housing. Ms. Dyer said a number of configurations had been evaluated and could be brought before the Council.

Council Member Franck asked whether or not it made sense to subdivide land if a land trust were pursued. Ms. Dyer said she did not believe that this mattered one way or the other. Noting that he resided in the area, Council Member Franck said the principal concern was how to access U.S. 15-501.

Council Member Brown stated that all development proposals contributed incrementally to traffic-related problems. She said it was important to examine traffic-related solutions to make the project a better one.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 12, WITH A DIFFERENT CONFIGURATION FOR MORE OPEN SPACE AND POSSIBLY ATTACHED HOUSING.

Council Member Chilton inquired whether or not Council Member Brown was proposing that staff review the roadway intersection. Council Member Brown said this was correct. Council Member Franck said the intersection was not very busy. Mayor Waldorf suggested that Town staff review the intersection and a proposal for attached housing on the subject property. Council Member Brown reiterated the desirability of having a land trust option.

RESOLUTION 12 WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION AUTHORIZING FURTHER DEVELOPMENT OF THE SCARLETT DRIVE HOUSING DEMONSTRATION PROPOSAL (96-6-24/R-12)

WHEREAS, the Comprehensive Plan of the Town of Chapel Hill has an objective of encouraging a supply of decent, affordable housing adequate to meet the housing needs of the community; and

WHEREAS, the Orange Community Housing Corporation has submitted a preliminary proposal dated May 27, 1996 to bring together a combination of private and public resources to develop a housing demonstration program for first-time homeowners;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to work with the Corporation to further develop the proposal.

BE IT FURTHER RESOLVED that the Council requests the Corporation to submit a formal proposal for rezoning and subdivision approval, and that the Council authorizes expedited processing for development applications for this project.

This the 24th day of June, 1996.

Item 10 Report of Human Services Advisory Board

Human Services Advisory Board Chair Ed Devany presented an overview of the Board's procedures and recommendations regarding human service performance agreements. He thanked the Board's members and staff support person Karen Rose for their efforts in development of the recommendations. Council Member Andresen commended the Board for doing a great job.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION 13. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION APPROVING 1996-97 FUNDING FOR PERFORMANCE AGREEMENTS WITH HUMAN SERVICE AGENCIES AS RECOMMENDED BY THE HUMAN SERVICES ADVISORY BOARD (96-6-24/R-13)

BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby approves the following appropriations for performance agreements with human service agencies in 1996-97 to address the community's human service needs identified by the Human Services Advisory Board:

Amount

Alternative Sentencing $ 2,000

Charles House 3,180

Child Care Networks 1,180

Coalition for Battered Women 12,716

Communities in Schools 5,450

Community School People Under Six 2,725

Day Care Services Association 7,266

Dispute Settlement Center 4,270

Freedom House 7,720

Hearth Family Resource Centers 5,450

KidSCope 4,542

Meals on Wheels 2,725

Mental Health Association in Orange County 1,544

North State Legal Services 4,542

Orange County Rape Crisis Center 10,000

Orange County Women's Center 5,904

Orange County Disability Awareness Council 455

Orange County Literacy Council 5,450

Resident Council 4,542

Street Scene Teen Center 3,360

The Arc 6,360

Triangle Hospice 3,360

Triangle Radio Reading Service 1,816

TROSA 7,720

Volunteers for Youth 5,450

TOTAL $120,000

BE IT FURTHER RESOLVED that the Council hereby approves, and authorizes the Manager to execute on behalf of the Town, agreements with the above agencies for services described in the Human Services Advisory Board's report on June 24, 1996.

This the 24th day of June, 1996.

Mr. Devany reported that members of the Human Services Advisory Board had spoken to students, parents and others during the course of evaluating the middle school after school program. Stating that those involved in the program were highly creative, Mr. Devany said the Board recommended Town funding of the program for the coming year and initiation of a dialogue as soon as possible regarding future program funding.

Council Member Capowski inquired why Orange County was not funding the program. Mr. Devany said County officials indicated that they did not currently have adequate resources to fully fund the program. Noting that Town residents were also County residents, Council Member Capowski suggested initiating a dialogue with Orange County regarding program funding. Noting that the program was a good one, Mayor Waldorf said she was interested to see some collaboration in funding the program. Mr. Devany said the program was a good one which was desperately needed.

Council Member Andresen said it was important to make clear the importance of the school system funding the program. Mr. Devany said the entire board concurred on this point. Council Member Chilton expressed his appreciation to Mr. Devany and the entire Human Services Advisory Board for their work. Stating that all of the Board Members "did their homework", Mr, Devany said it was a joy to serve on the Board.

Item 11 Cable Television Franchise Agreement

Assistant to the Manager Greg Feller presented an overview of the proposed franchise agreement, noting that language had been added to address concerns about public access matters. He said that Time Warner had not agreed to proposed lower thresholds for adding public access channels to its system. Mr. Feller also noted that the proposed funding mechanism for public access was through a sixty-five cent per month per customer fee. He noted that the Council could reduce this charge if it wished to do so. Mr. Feller also stated that the Council would need to adopt the franchise agreement at two regular business meetings in order for the agreement to take effect.

Council Member Chilton said there did not appear to be anything in the proposed agreement which would compel the correction of cable television related problems. Mr. Feller said the pertinent language in the agreement required that the franchisee agree to engage in good faith negotiations. Council Member Chilton noted that it was not possible to get a court order compelling an entity to act in good faith. Mr. Horton noted that the Town did not have any leverage in this matter and that all negotiations were ultimately based in good faith.

Council Member Chilton also expressed concern that the language in Section 4.1 ultimately amounted to nothing regarding possible changes in services. Council Member Capowski said the Council had some say in determining what amounted to significant changes in service. Council Member Franck said that cable companies were subject to the wishes of their subscribers.

Council Member Chilton requested a clarification of Section 5.1b, regarding the standards for establishing additional community access channels. Council Member Franck said he hoped that the Council would turn this matter over to a non-profit organization.

Noting that he had given the Council a one page summary of his comments regarding the proposed franchise agreement, Council Member Capowski said he favored adoption of Ordinance 5.1.

COUNCIL MEMBER CAPOWSKI MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT ORDINANCE 5.1.

Council Member Franck inquired about the possibility of having non-commercial public access channels. Council Member Capowski said it would be desirable for this to be the case. He accepted the proposed amendment as a friendly one. Council Member Evans, the seconder, concurred. Randall Fraser, President of Time Warner Cable of Raleigh-Durham-Chapel Hill, accepted the proposed condition. Council Member Franck also suggested striking language regarding minimum standards for non-repeated public access programming. Council Member Capowski asked whether or not it was possible to make this change. Mr. Karpinos said this was possible. Mr. Fraser was agreeable to the proposed change.

Council Member Andresen inquired why a flat fee, rather than a percentage, was proposed for public access programming. Mr. Feller said Time Warner did not agree to a percentage arrangement during franchise renewal negotiations. Mr. Horton added that a number of options had been explored. Council Member Andresen inquired whether all customers would be required to pay the proposed fee. Mr. Horton said this was correct.

ORDINANCE 5.1 WAS ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER BROWN VOTING NO.

AN ORDINANCE GRANTING A CABLE TELEVISION FRANCHISE

TO TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP (96-6-24/O-5.1)

WHEREAS, the Town of Chapel Hill, pursuant to the Chapel Hill Cable Television Regulatory Ordinance (Ordinance No. 96-6-24/O-5.2) (hereinafter "Regulatory Ordinance") is authorized to grant and renew one or more non-exclusive Franchises to operate, construct, maintain and reconstruct a Cable Television System within the Town; and

WHEREAS, the Town, after due evaluation of the renewal proposed and after public hearings, has determined that it is in the best interest of the Town and its residents to renew its Franchise with Time Warner Entertainment-Advance/Newhouse Partnership:

NOW, THEREFORE, BE IT ORDAINED that the Town of Chapel Hill (hereinafter also known as the "Town" or "Grantor") hereby grants to Time Warner Entertainment-Advance/Newhouse Partnership (hereinafter the "Grantee") this Franchise as a renewal of its cable television Franchise in accordance with the provisions of the Regulatory Ordinance and this Franchise.

SECTION 1. RENEWAL OF FRANCHISE

1.1 Grant.

The cable television Franchise which was originally granted on the 19th day of November, 1979 to Village Cable, Inc. and now lawfully held, through assignments and extensions, by Grantee, a New York general partnership, is hereby renewed, subject to the terms and conditions of this Franchise Agreement Ordinance (hereinafter also referred to as the "Franchise"). The renewal provides Grantee with authority, right and privilege, to construct, reconstruct, operate and maintain a Cable Television System and offer video programming and other lawful communications services within the Streets and public ways in the Town as it is now or may in the future be constituted.

1.2 Right of Grantor to Issue and Renew Franchise.

Grantee acknowledges and accepts the right of Grantor to issue and/or renew a Franchise in accordance with applicable local, state and federal laws and Grantee agrees it shall not now or at any time hereafter challenge any lawful exercise of this right in any local, State or Federal court. This provision shall not limit any legal rights Grantee has to appeal or seek regulatory or judicial review of actions taken by the Town pursuant to its franchise authority, including but not limited to, denial of renewal, revocation, regulation of rates and other matters.

1.3 Effective Date of Franchise.

Following approval by the Town Council of this Ordinance, the Franchise shall be effective upon (a) the filing by Grantee with the Town Clerk of a Franchise Acceptance duly executed by an authorized official of the Grantee and (b) the depositing by the Grantee with the Town Clerk of the required Security Fund.

1.4 Term

(a) Duration. The term of this Franchise shall be for a period of twenty (20) years from the effective date, unless sooner terminated as provided in this Agreement, at which time it shall expire and be of no further force and effect.

(b) Renewal. Prior to the expiration of this Franchise, renewal of the Franchise shall be considered in accordance with the provisions of applicable federal, state and local law.

(c) Termination. Notwithstanding the foregoing, any failure to comply with the terms and conditions of the Franchise which has been cured by Grantee shall not be used as a basis for a finding that Grantee has not substantially complied with the material terms and conditions of the Franchise.

1.5 Written Notice.

All notices, reports or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to the Person designated below, or when five (5) days have elapsed after it is deposited in United States mail in a sealed envelope, with registered or certified mail, postage prepaid thereon, or on the next business day if sent by express mail or overnight courier addressed to the party to which notice is being given, as follows:

If to Town: Town Manager

Town of Chapel Hill

306 North Columbia Street

Chapel Hill, NC 27516

If to Grantee: Vice President

Time Warner Cable

708 East Club Boulevard

Durham, North Carolina 27704

copy to: Division President

Time Warner Cable

2505 Atlantic Avenue

Raleigh, North Carolina 27604

Such addresses may be changed by either party upon notice to the other party given as provided in this Section.

1.6 Franchise Not Exclusive.

This Franchise shall not be construed as any limitation upon the right of Grantor, through its proper officers, and in accordance with applicable law, to grant to other Persons or corporations rights, privileges or authority similar to or different from the rights, privileges and authority herein set forth, in the same or other Streets and public ways or public places or other places the Grantee is entitled to occupy by this Franchise, permit or otherwise; provided, however, that such additional grants shall not operate to materially modify, revoke or terminate any rights granted to Grantee herein and shall be in accord with the provisions of the Regulatory Ordinance.

1.7 Conflict with Cable Ordinance.

The provisions of the Regulatory Ordinance are hereby incorporated herein by reference as if set out in full, and form part of the terms and conditions of this Agreement. In the event of any conflict between the terms and conditions of this Franchise and the provisions of the Regulatory Ordinance, the terms of this Franchise shall prevail.

Provided, however, that in the event any law or regulation is enacted by any agency with jurisdiction over the subject matter of this franchise, other than Grantor, or any judicial or administrative decision is issued by a court or agency, other than Grantor, with jurisdiction over the subject matter of this franchise, which changes the authority of the Grantor to regulate the services of the Grantee or which changes the right or obligation of the Grantee to provide services, the Grantor shall have the right to invoke the provisions of Section 3.10 of this Agreement (whether or not the change proposed for discussion would be a material change in this Franchise). Grantee shall not be compelled to agree to any material changes in its obligations under this Franchise.

1.8 Definitions.

The definitions contained in the Regulatory Ordinance are incorporated herein as if fully set forth.

SECTION 2. GENERAL REQUIREMENTS

2.1 Governing Requirements.

Grantee shall comply with all lawful requirements of this Franchise, the Regulatory Ordinance and applicable local, State and Federal law.

2.2 Franchise Fee.

The Grantee shall pay to the Grantor an annual Franchise Fee of five percent (5%) of Grantee's Gross Revenues as defined in Section 2.3 below. The Franchise Fee shall be payable quarterly by April 30, July 31, October 31 and January 31 for the preceding three (3) month periods ending respectively on March 31, June 30, September 30 and December 31. Each payment shall be accompanied by a brief report in a format agreed upon by the parties showing the basis for the computation. The initial form of the report is attached as Exhibit B and may be modified from time to time by agreement of the parties.

2.3 Gross Revenues.

Gross Revenues means all revenue received by the Grantee, arising from or attributable to the sale of cable television video or audio program services, videotext services and video games provided by the Grantee within the Town or derived from the operation within the Town of its System, including, but not limited to, monthly fees charged to Subscribers for Basic Cable Service; monthly fees charged to Subscribers for any optional video or audio program service; monthly fees charged to Subscribers for any tier of video or audio program service other than Basic Cable Service; installation, disconnection and reconnection fees for the provision of video or audio program services; leased channel fees; video or audio program service equipment rentals; advertising revenue received by Grantee from video or audio program services; revenues received by Grantee from home shopping Channels; and revenues received by Grantee from the provision of data transmission, point to point telecommunications, telephone or telephony services. This sum shall be the basis for computing the fee imposed pursuant to Section 2.2 hereof. This term does not include:

converter or other equipment deposits;

bad debts;

Franchise Fees;

Supplemental Public Access Rate Charges;

any sales, excise, or any other taxes collected by Grantee on behalf of any state, city, or other governmental unit;

refunds to subscribers by Grantee;

commissions paid to others;

reimbursement for expenses (including returned check fees, copy expenses and similar items); or items excluded by local, state, or federal law.

Notwithstanding the foregoing, revenues received for the provision of data transmission, point to point telecommunications, telephone or telephony services shall be included in gross revenues (1) only to the extent permitted by law; and (2) only if all other providers of similar services in the Town are subject to equivalent fee and compensation requirements for use of the public rights of way in the Town. Where advertising or other revenue arising from or attributable to the sale of cable services by Grantee is received by unrelated third parties not under control of Grantee, and some portion of that revenue is remitted to Grantee, only the portion of such revenues paid Grantee shall be included in the calculation of Gross Revenues.

2.4 Supplemental Public Access Rate Charge

(a) In the event the Town Council elects to approve a Supplemental Public Access Rate Charge upon all basic cable television subscribers to support the production and distribution of video programming for the public access channels provided by Grantee pursuant to Section 5 thereunder, Grantee agrees to bill and collect such rate charge to the extent set forth herein. Upon the terms and conditions set forth below, Grantee shall itemize and bill in its statements for the provision of Basic Cable Television Service a Supplemental Public Access Rate Charge.

(b) The amount of the Supplemental Public Access Rate Charge to be billed by Grantee shall be approved by the Grantor but shall not exceed the sum of sixty-five cents ($.65) per basic subscriber per month subject to inflation adjustments as provided below. The amount of the maximum Supplemental Public Access Rate Charge which may be assessed by the Grantor may be further increased each year on the earlier of January 1st or the anniversary date of the Grantor’s decision to approve such a rate by the lesser of (i) three percent (3%) or (ii) the percentage increase in the most recent Gross National Product Price Index (“GNP-PI”) published by the United States Department of Commerce, Bureau of Economic Analysis, for the one-year period since the prior year’s anniversary date; provided, however, that in no event shall the amount of the Supplemental Public Access Rate Charge, including all allowable increases, exceed $1.00 per month during the term of this Franchise.

(c) The Supplemental Public Access Rate Charge shall be itemized as a monthly charge to all basic cable television subscribers and shall be included by Grantee in its statements for the provision of basic cable television service. No Franchise Fee payment shall be due on such funds collected by Grantee. Grantee’s sole obligation shall be to remit the amounts of the Supplemental Public Access Rate Charge it collects to Grantor on a quarterly basis along with Grantee’s Franchise Fee payment. Other than as outlined in paragraph (a) above, Grantee shall have no obligation to attempt to collect unpaid Supplemental Public Access Rate Charges on behalf of Grantor. When there is a partial payment of a bill for cable television services and a Supplemental Public Access Rate Charge, Grantee shall remit a portion of such payment based on the ratio of the Supplemental Public Access Rate Charge billed to the overall bill for cable television services. Grantee shall not be obligated to terminate service to any Subscriber for failure to pay all or any portion of Supplemental Public Access Rate Charge.

(d) Grantor must give Grantee sixty (60) days’ written notice of Grantor’s decision to require Grantee to begin billing and collecting the Supplemental Public Access Rate Charge. Upon receipt of such notice, Grantee agrees to begin billing the Supplemental Public Access Rate Charge to all basic subscribers within ninety (90) days. Grantor may make an annual adjustment in the amount of the Supplemental Public Access Rate Charge, consistent with the cap set forth in paragraph (b) above. Grantor must give Grantee sixty (60) days’ written notice of Grantor’s election to increase the Supplemental Public Access Rate Charge. Upon receipt of such notice, Grantee agrees to begin billing the Supplemental Public Access Rate Charge within ninety (90) days. The Town at its election may decrease (or eliminate) the amount of the Supplemental Public Access Rate Charge upon notice to Grantee at least 60 days before the earlier of (1) January 1st or (2) the anniversary date of the Grantor’s decision to establish such a rate. No other changes to such Supplemental Public Access Rate Charge may be made during the course of any given one-year period.

(e) Grantee’s obligation to bill and remit the Supplemental Public Access Rate Charge shall terminate upon Grantee’s giving thirty (30) days written notice to Grantor of the occurrence of any of the following events:

(i) The revenues collected through the imposition of the Supplemental Public Access Rate Charge are used by a non-profit public access entity, which may include the Town, for purposes other than the production of Local Public Access Programming distributed within the Town over facilities provided by Grantee; provided, that the Town shall have the right to accumulate a fund balance of Supplemental Local Public Access Rate Charges up to the amount of the prior franchise year’s receipts of Supplemental Local Public Access Rate Charges, for future costs such as equipment replacement associated with access programming; or

(ii) Grantor grants a franchise or other authorization to provide cable service or comparable video services to those of Grantee within all or part of the Town to a third party or parties and does not, when the Town has authority to, require such third party or parties using public rights-of-way to provide comparable public, educational, and governmental access facilities, and provide equivalent funding for such facilities.

(iii) The mechanism for collection or use of the Supplemental Public Access Rate Charge is determined to be unlawful by the Federal Communications Commission or a court of competent jurisdiction. In the event of termination of Grantee’s obligation to bill and collect the Supplemental Public Access Rate Charge, either the Grantor or Grantee may institute the procedures called for by Section 3.10 of this Agreement.

(iv) The number of Subscribers to Grantee’s Basic Cable Service falls below 10,500 for two (2) consecutive months other than June, July and August, as a result of competition from a provider of comparable video services. The Supplemental Public Access Rate Charge will be reinstated within 60 days when the number of Subscribers to Grantee’s Basic Cable Service returns to 10,500 for two (2) consecutive months.

(f) For purposes of paragraph 2.4(e) above, the term “Local Public Access Programming” shall mean programming which is: (1)(A) produced within the Town; or (B) produced or provided in pre-produced form by any Town resident; or (C) produced by any agency, public or private, which provides services to Town residents within the Town regardless of the location at which the programming was produced; and (2) contains no advertising, commercial matter, or promotional material for which consideration of any kind is received directly or indirectly by the Town or by the producer of such programming (provided, however, that the inclusion of a brief acknowledgement of the name of a donor shall not be deemed to constitute advertising, commercial matter, or promotional material so long as any such acknowledgement is no more than 10 seconds in duration and contains no more than the donor's name and a logo); and (3) allows for public expression relating to the educational, political, social or cultural interests of residents of the Town; and (4) is not produced or transmitted as a result of a lease, license, contract or agreement of any kind whereby the Town or its designee allows or requires a person, firm or corporation to program all or part of the public access channel in exchange for consideration of any kind.

“Town” as used in the foregoing paragraph shall be construed to include the area within the Grantor’s town limits, the Grantor’s Extra-Territorial jurisdiction, and the Grantor’s Joint Planning Transition Area. Notwithstanding anything to the contrary contained in the foregoing paragraph, the Grantor may enter into agreements for joint production of Local Public Access Programming with the County of Orange, the Town of Carrboro, and the Town of Hillsborough.

The Town may similarly enter into a joint production agreement with one or more additional local governments in the Triangle J region.

(g) The Supplemental Public Access Rate Charge described in this Section 2.4 is not a Franchise Fee payment. In all other respects, all payments, contributions, services, equipment, facilities support or other resources supplied by Grantee pursuant to Franchise requirements by Grantor shall be treated in accordance with applicable law for purposes of Franchise Fee computation. Grantee shall be permitted to pass through all Franchise commitments, obligations, or payments or recover them through adjustments to Subscriber rates, as permitted by applicable law and FCC regulations, and Grantor shall promptly approve all such rates or adjustments submitted by Grantee in accordance with such laws or regulations.

(h) Grantee expressly acknowledges and agrees that the Franchise Fee payments due from the Grantee to the Town pursuant to Section 2.2 hereof shall be in addition to any and all taxes of general applicability, or other fees or charges of general applicability Grantee is required by law to pay to the Town, all of which shall be separate and distinct obligations of the Grantee.

(i) Grantor and Grantee shall promptly notify each other of any and all claims or legal proceedings of any kind whatsoever brought against them relating to Grantor’s assessment, receipt and use of the Supplemental Public Access Rate Charge and Grantee’s billing and collection of the Supplemental Public Access Rate Charge. Either party may choose to intervene in any such legal proceeding or otherwise attempt to resolve such claims and each shall consent to such intervention or otherwise cooperate in allowing the other to assist in defending such claims or proceedings to the extent the other chooses to intervene. Each party shall have the right to defend any such claims with such counsel as it may select and, in its sole discretion, to raise any or all defenses or claims which they deem appropriate; provided, however, that nothing in this section shall be construed as requiring Grantee to defend against any such claim.

The parties acknowledge that the Supplemental Public Access Rate Charge provided for herein was agreed to by Grantee at the request of, and for the benefit of, Grantor and that in the event any such legal proceeding determines that the Supplemental Public Access Rate Charge has been imposed contrary to law or regulation, Grantor shall, only to the extent that it has revenues on hand derived from Grantor’s receipt of said Supplemental Public Access Rate Charges which have not been used to provide public access services, reimburse Grantee for monies Grantee is obligated to repay as a result of such legal proceeding or costs Grantee has incurred as a result of such legal proceedings. Grantor shall comply with any declaratory order issued by a Court or Agency with jurisdiction with respect to the collection and use of future Supplemental Public Access Rate Charges.

2.5 Recovery of Processing Costs.

To aid in the analysis and resolution of any future disputed matters relative to this Franchise, the Grantor and Grantee may, by mutual agreement (both as to whether to hire and whom to hire), employ the services of technical, financial or legal consultants, as mediators. All reasonable fees of the consultants incurred by the Grantor and/or the Grantee in this regard shall be borne equally; provided, however, that this provision shall not apply to discussions or negotiations relating to extensions or renewal of this Franchise.

2.6 Liability Insurance.

(a) Upon the effective date of renewal and in addition to all required insurance under the Regulatory Ordinance , the Grantee shall, at its sole expense, take out and maintain during the life of this Agreement public liability insurance with a company licensed to do business in the State of North Carolina with a rating by Best of not less than "A" that shall protect the Grantee, the Grantor, and their officials, officers, directors, employees and agents from claims which may arise from operations under this Agreement, whether such operations be by the Grantee, its officials, officers, directors, employees and agents, or any subcontractors of Grantee. This liability insurance shall include, but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property, resulting from Grantee's automobiles, products and operations. The amount of insurance for Single Limit Coverage applying to Bodily and Personal Injury and Property Damage shall not be less than One Million Dollars ($1,000,000.00) for any one person and Three Million Dollars ($3,000,000.00) for two or more persons in any one occurrence. The following endorsements shall be attached to the liability policy:

1. The policy shall cover on an "occurrence" basis.

2. The policy shall cover Personal Injury as well as Bodily Injury.

3. The policy shall cover blanket contractual liability subject to the standard universal exclusions of contractual liability included in the carrier's standard endorsement as to bodily injuries, personal injuries and property damage.

4. Broad Form property damage liability shall be afforded.

5. The Grantor shall be named as an additional insured on the policy.

6. It is the intent of the parties that Grantee's liability insurance shall be the primary coverage for claims arising with respect to this Franchise, the System or its operations and that no insurance coverage of Grantor shall be called upon to contribute to such claims or losses. It shall be the obligation of Grantee to promptly notify the Town of any pending or threatened litigation that would be likely to give rise to a claim against the Town or affect the Town's insurance coverage.

7. Standard form of cross-liability shall be afforded.

8. An endorsement stating that the policy shall not be canceled without thirty (30) days notice of such cancellation given to the Grantor.

(b) Grantee shall submit to Grantor documentation of the required insurance including a certificate of insurance with the required endorsements.

2.7 Indemnification.

(a) Grantee shall indemnify the Town as required by Section 10-104 of the Regulatory Ordinance. In addition, Grantee shall be solely responsible and save Grantor harmless from all claims for payment of Grantee's employees including compliance with Social Security, withholdings, and similar claims.

(b) This indemnification obligation is not limited in any way by a limitation of the amount or type of damages or compensation payable by or for Grantee under Workers' Compensation, disability or other employee benefit acts, acceptance of insurance certificates required under this Agreement, or the terms, applicability or limitations of any insurance held by Grantee.

(c) Grantor does not, and shall not, waive any rights against Grantee which it may have by reason of this indemnification, because of the acceptance by Grantor, or the deposit with Grantor by Grantee, of any of the insurance policies described in this Agreement.

(d) This indemnification by Grantee shall apply to all damages and claims for damages of any kind suffered by reason of any of the aforesaid operations referred to in this Section, regardless of whether or not such insurance policies shall have been determined to be applicable to any such damages or claims for damages.

(e) Grantee shall not be required to indemnify Grantor for negligence or misconduct on the part of Grantor or its officials, boards, commissions, agents, or employees (hereinafter "such acts"). Grantor shall, to the extent permitted by law, hold Grantee harmless for any damage resulting from any such acts of the Grantor or its officials, boards, commissions, agents, or employees in utilizing any PEG access channels, equipment, or facilities and for any such acts committed by Grantor in connection with work performed by Grantor and permitted by this Agreement, on or adjacent to the Cable System.

2.8 Grantee's Insurance.

Grantee shall not commence any Cable System reconstruction work or permit any subcontractor to commence work until all insurance required under this Franchise and the Regulatory Ordinance has been obtained. Said insurance shall be maintained in full force and effect until the expiration of this Franchise.

2.9 Worker's Compensation Insurance.

Grantee shall obtain and maintain Workers' Compensation Insurance for all Grantee's employees, and in case any work is sublet, Grantee shall require any subcontractor similarly to provide Workers' Compensation Insurance for all subcontractor's employees, all in compliance with State laws, and to fully protect the Grantor from any and all claims arising out of occurrences on the work. Grantee hereby indemnifies Grantor for any damage resulting to it from failure of either Grantee or any subcontractor to take out and maintain such insurance.

2.10 Security Fund.

(a) The Security Fund shall consist of two (2) parts. The first part shall be a construction bond. Within sixty (60) days of the effective date of the Ordinance adopting this Franchise, Grantee shall establish and provide to Grantor a construction bond, as security for the faithful performance by Grantee of all material provisions of this Franchise for upgrade of the System. The construction bond shall be in the amount of Five Hundred Thousand Dollars ($500,000), and essentially similar to the example provided in Exhibit C. The construction bond shall be maintained at the Five Hundred Thousand Dollar ($500,000) level until the System upgrade and/or rebuild provided for in Section 3.1 herein is completed and there are no asserted claims by Grantor against Grantee of material violations of the provisions of this Franchise for upgrade of the System. Upon completion of the System upgrade, Grantee need no longer maintain a construction bond.

(b) The second part of the Security Fund shall be an irrevocable letter of credit in the amount of at least Ten Thousand Dollars ($10,000). The letter of credit portion of the Security Fund shall be maintained at the Ten Thousand Dollar ($10,000) level throughout the term of this Franchise.

(c) The security fund may be drawn upon by Grantor for those purposes specified in Section 2.10 (a or b as the case may be) hereof, in accordance with the procedures of this Section, provided that Grantee has received thirty (30) days written notice to cure any material violations and a public hearing before the Town Council as required by Section 2.11 prior to any assessment. As long as the Grantor follows the procedures specified herein for utilizing and/or withdrawing funds from said Security Fund, Grantee shall not initiate litigation to prevent or impair Grantor from accessing those funds. Grantee's recourse, in the event Grantee believes any taking of the Security Fund is improper, shall be through legal action after the Security Fund has been drawn upon. If the Grantor's action or taking is found to be improper by any court or agency of competent jurisdiction, Grantee shall be entitled to a refund of the funds plus interest, together with reasonable attorney's fees.

(d) Nothing herein shall be deemed a waiver of the normal permit and bonding requirements made of all contractors working within the Town's rights-of-way.

2.11 Procedure for Remedying Franchise Violations.

(a) The procedures for remedying Franchise violations or breaches shall be consistent with the procedures of the Regulatory Ordinance. Grantor, by action of the Town Manager or a delegate, shall first notify Grantee of the violation in writing by personal delivery or registered or certified mail and demand correction within a reasonable time, which shall not be less than ten (10) days in the case of the failure of the Grantee to pay any sum or other amount due the Grantor under this Agreement or the Regulatory Ordinance , and thirty (30) days in all other cases. If Grantee fails to correct the violation within the time prescribed or if Grantee fails to commence corrective action within the time prescribed and diligently remedy such violation thereafter, the Grantee shall then be given a written notice of not less than thirty (30) days of a public hearing to be held before the Council. Said notice shall specify the violations alleged to have occurred.

(b) At the public hearing, the Council shall hear and consider all relevant evidence, and thereafter render findings and its decision.

(c) In the event the Council finds that Grantee has corrected the violation or has diligently commenced correction of such violation after notice thereof from Grantor and is diligently proceeding to fully remedy such violation, or that no material violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed. In determining whether a violation is material, Grantor shall take into consideration the nature of the violation and the damage (if any) caused to the Grantor or to Subscribers of the System thereby, whether the violation was chronic, and any justifying or mitigating circumstances and such other matters as the Grantor may deem appropriate, or which the Grantee may submit for consideration.

(d) In the event the Council finds that a material violation exists and that Grantee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation, the Council may impose liquidated damages, assessable from the Security Fund, of up to One Hundred Dollars ($100.00) per day for the first ninety (90) days and up to Five Hundred Dollars ($500.00) per day thereafter, for unexcused violations of the System upgrade requirements, and up to One Hundred Dollars ($100) per day for all other violations.

(e) If the Grantee believes that the Town has violated the franchise requirements which may include but are not necessarily limited to access-related requirements, Grantee shall give the Town written notice of such violation and the opportunity to remedy the violation in a reasonable time under the circumstances.

2.12 Reservation of Rights.

Grantor and Grantee reserve all rights that they may possess under the law unless expressly waived herein.

2.13 Annual Report.

In addition to the requirements of Section 10-107 of the Regulatory Ordinance, Grantee shall submit a written end-of-the-year report to Grantor utilizing the format outlined in the Annual Report to Town attached hereto as Exhibit D.

SECTION 3. SYSTEM UPGRADE

3.1 Upgrade and Initial Service Area.

Grantee shall rebuild or upgrade, as appropriate, the existing cable system throughout the corporate limits of the Town of Chapel Hill to increase the channel capacity to seventy-eight (78) video channels. The increase in channel capacity, subject to the conditions set out herein, shall be completed within twenty-four (24) months from the date of acceptance of the franchise by Grantee. Grantee shall initially activate fifty-six (56) channels.

Further, the cable system shall initially include an active return path for the purposes of transporting community access video programming from selected locations on Exhibit G. The return path capacity used for this purpose shall not exceed that required for programming on the community access channels. The modulators at each public location shall be provided by, and shall be the responsibility of, the public building owner or user.

The increase in channel capacity shall occur in an orderly manner so that the least amount of disruption and inconvenience will be experienced by subscribers to the Cable System. In order to accomplish this goal, Grantee shall develop and implement a plan based on offering the increased channel capacity on an electronic node-by-node basis. Undeveloped areas within the existing corporate limits that are developed subsequent to the System upgrade shall be eligible for extension of service from the upgraded System in accordance with the standards and procedures set forth in Section 3.2 of this Franchise.

The rebuild or upgrade shall utilize extensive application of fiber optic cables in order to minimize the number of amplifiers serving subscriber premises.

In order to provide for additional channel capacity in the future, the design and installation of system components shall provide for the economical expansion of channel capacity to 750 Mhz.

3.2 Extension Outside the Initial Franchise Area.

Grantee shall extend service to any residence(s) upon the written request of one or more residents who shall reside within the requested extension area and who shall agree to subscribe to Grantee's cable service where the number of occupied homes, and homes for which certificates of occupancy have been issued, which would be served by the requested extension equals 20 or more homes per cable mile with the measurement starting from the closest existing usable point of connection to the System. Unless additional time has been agreed to by the Town, such extensions shall be completed within ninety (90) days of submittal of a request where the above density standard is met and all additional utility permits or other right of way permits have been obtained. The Town and Grantee may agree to a different time for extension in particular instances.

If the number of homes per cable mile is less than 20, the requesting subscriber(s) may obtain service by paying a share of the incremental cost of the extension as follows:

Grantee shall pay a share of costs calculated as the fraction derived from the existing density as calculated above divided by 20 homes per mile; requesting subscriber(s)' share shall equal the remainder. For example, if the existing density is 8 homes per mile, Grantee shall pay forty percent (40%) of the extension cost and the requesting subscriber(s) shall pay the remaining sixty percent (60%).

When Grantee receives a request for an extension, the company shall, within 30 days, respond in writing with its calculation of the density. If the density is less than 20 homes per mile, Grantee shall also provide a firm price good for 90 days reflecting the proportional share which requesting subscriber(s) must pay on a cost sharing basis to obtain cable service. Within ninety (90) days from payment of the cost share by prospective subscriber(s) and receipt of all necessary utility permits or other right of way permits, Grantee shall complete the extension of service.

As the density increases in an area where service is extended on a cost sharing basis, Grantee shall, upon request, annually refund by check, or by credit for service at the resident's option, a proportionate share of the subscriber(s)' contributions commensurate with the increase in density. Such refunds shall not be due to requesting parties after ten (10) years from the date of completion of an extension.

3.3 Head End Location.

Grantee shall connect the cable system through fully redundant fiber optic links with a headend located at Research Triangle, Durham County, North Carolina. Grantee shall maintain services from the headend that are suitable to the needs of Grantor in accordance with the Franchise. The headend shall be capable of providing differentiated cable television services to the Chapel Hill franchise service area.

3.4 Future System Modifications.

To assure that Grantee's Cable System continues to reflect the general cable industry state-of-the-art throughout the term of the Franchise, Grantor and Grantee agree to utilize Grantee's cable systems in the Cities of Raleigh and Durham for comparison. It is understood and agreed between Grantor and Grantee that at the time this Franchise is entered into, significant new technologies and services are undergoing review and may soon be made part of cable television services and capabilities in the region. It is agreed by Grantee that it will include new services and technologies offered in Raleigh and Durham into the System serving Grantor where such services and technologies are compatible with the System and economically feasible.

3.5 Emergency Alert Capability.

Subject to the requirements of the FCC, within twenty-four (24) months of the effective date of this Agreement, Grantee shall provide the System capability to transmit an emergency alert signal to all participating Subscribers, in the form of an audio override capability to permit Grantor to interrupt and cablecast an audio message on all channels that Grantee may lawfully override simultaneously in the event of disaster or public emergency.

3.6 Standby Power.

Within twenty-four (24) months of the effective date of this Agreement, Grantee shall provide standby power generating capacity at the cable communications System control center capable of providing at least twelve (12) hours of emergency supply and four (4) hours at all hubs. Grantee shall maintain standby power System supplies throughout the major trunk cable networks capable of providing emergency power within the standard limits of commercially available power supply units.

3.7 Parental Control Lock.

Grantee shall make available, for lease, to subscribers upon request, the capability through the converter to limit access to video program services. In addition, Grantee shall make available for sale or lease, mechanical locking devices, if available at reasonable cost to Grantee, to subscribers, to limit access to video program services.

3.8 Technical Standards.

Grantee shall, at a minimum, comply at all times with all applicable Federal Communications Commission (FCC) Rules and Regulations, Part 76, Subpart K (Technical Standards), as may be amended from time to time.

3.9 Right of Inspection.

Grantor shall have the right to inspect all construction, reconstruction or installation work performed by Grantee under the provisions of the Franchise and other pertinent provisions of law, to ensure Grantee's compliance and to protect the public health, safety and welfare of Grantor's citizens.

3.10 Periodic Evaluation, Review and Modification.

The Town and Grantee acknowledge and agree that the field of cable television is a relatively new and rapidly changing one which may see many regulatory, technical, financial, marketing and legal changes during the term of this Franchise. Therefore, in order to provide for the maximum degree of flexibility in this Franchise, and to help achieve a continued, advanced and modern Cable System, the following evaluation and review provisions will apply:

(a) The Town may, upon thirty (30) days notice, request evaluation and review sessions at any time during the term of this Agreement and Grantee shall cooperate in such review and evaluation; provided, however, there shall not be more than one (1) evaluation and review session during any calendar year.

(b) Topics which may be discussed at any evaluation and review session include, but are not limited to, rates, channel capacity, the System performance, programming, PEG access, municipal uses of cable, Subscriber complaints, judicial rulings, FCC rulings and any other topics the Town or Grantee may deem relevant.

(c) During an evaluation and review session, Grantee shall cooperate fully with the Town and shall provide without cost such reasonable information and documents as the Town may request to perform the evaluation and review.

(d) If at any time during the evaluation and review the Town reasonably believes there is evidence of inadequate technical performance of the Cable System, the Town may require Grantee, at Grantee's expense, to perform appropriate tests and analyses directed toward such suspected technical inadequacies. In making such request, the Town shall describe and identify as specifically as possible the nature of the problem and the type of test the Town believes to be appropriate. Grantee shall cooperate fully with the Town in performing such tests and shall report to the Town the results of the tests, which shall include at least:

1. a description of the problem in the System performance which precipitated the special tests;

2. the System component tested;

3. the equipment used and procedures employed in testing;

4. the method, if any, by which the System performance problem was resolved; and,

5. any other information pertinent to said tests and analyses.

(e) As a result of an evaluation and review session, the Town or Grantee may determine that a change to the System or in the terms of the Franchise may be appropriate. In that event, either the Town or Grantee may propose modifications to the System or the Franchise. Grantee and the Town shall, in good faith, review the terms of the proposed change or any proposed amendment to this Franchise and seek to reach agreement on such change or amendment.

The Town and Grantee shall act in good faith during such negotiations and shall be obligated to agree to the reasonable requests of the other party for changes in the System or amendment to the Franchise when the change or amendment is not inconsistent with the other terms of the Franchise, or with applicable law or regulations, and the change or amendment is technically feasible, economically reasonable and will not result in a material alteration of the rights and duties of the parties under the Franchise.

SECTION 4. SERVICES AND PROGRAMMING

4.1 Services and Programming.

(a) Grantee shall provide Grantor with an initial list of program tiers and services offered and any other services offered which list shall be attached hereto as Exhibit E. Grantee shall provide Grantor with thirty (30) days advance written notification prior to any change within the control of Grantee of the number of program services offered and shall provide Grantor a new listing of services following any change in services. Subject to program availability at reasonable cost, it is Grantee's intent, not later than three months following the completion of the upgrade and rebuild of its cable system, to offer on a non-addressable basis those services described in Exhibit E as its Basic Service Tier and its Standard Service Tier; provided, however, and subject to the requirements of law, Grantee expressly reserves the right to add or delete services within its discretion, to change the mix and level of the services listed on these tiers, and to move any or all of these services to another tier and to offer the services either on an Addressable (encrypted) or non-Addressable (without encryption) basis. Subject to the requirements of law, Grantee reserves the right as to services offered on all tiers and groupings to add or delete services and to change the mix and level of the services and to offer the services either on an Addressable (encrypted) or non-Addressable (without encryption) basis.

(b) Grantee shall give the Town written notice a minimum of thirty (30) days in advance of any change within its control related to a service offered on a non-Addressable basis. The Town Council, following notification by Grantee, may at its option schedule a public hearing on the change explained in the notification not later than thirty (30) days (excluding days between the last regular business meeting in July and the first regular business meeting in August) following receipt of the notification. Grantee will notify affected Subscribers of any options and choices Subscribers may exercise at least thirty (30) days prior to any changes within control of Grantee.

4.2 Cable Channels for Commercial Use.

Grantee shall offer cable channels for commercial use on reasonable terms and conditions and in accordance with Section 612 of the Cable Act (47 U.S.C. § 522, as amended).

4.3 Periodic Subscriber Survey.

(a) Commencing two years after the completion of the system upgrade and every two (2) years thereafter, Grantee shall conduct a random survey of a sampling of its subscribers within Chapel Hill either by written questionnaire or telephone interview. Each survey shall be prepared by Grantee and furnished to the Town for review and comment (within a ten day period) and conducted in a statistically valid manner and using generally recognized standards of objectivity, validity and reliability so as to present reasonably reliable measures of subscriber satisfaction with:

1. signal quality;

2. response to subscriber complaints;

3. billing practices;

4. regulated program services; and

5. installation practices.

(b) Grantee shall provide the Town with the results of any survey conducted within thirty (30) days after the results are provided to Grantee or are tabulated for review.

SECTION 5. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS

5.1 Community Access

The access support to be provided by Grantee is outlined in Exhibit F. Further, Exhibit F outlines the responsibilities for public, educational and governmental access. This Section describes the requirement for channel capacity initially and in the future.

(a) Following completion of the System upgrade, Grantee shall make available to each of its Basic Cable Service Subscribers reception of at least four (4) access channels which shall be used solely for non-commercial public, governmental and educational purposes. The channels designated for access shall be provided by Grantee as a part of the Basic Service. The access channels shall be made available by Grantee for use, not inconsistent with the restrictions on use of these channels provided for herein, by the Town and its citizens in accordance with the rules and procedures established by the Town or any lawfully designated person, group, organization or agency authorized by the Town for that purpose.

(b) Whenever the non-commercial public and/or governmental access channels are in continuous use from 7:00 A.M. to 11:00 P.M. for six (6) weeks running, the Town may request additional channel capacity for additional such access use. Grantee shall be required to provide additional channel capacity for such access upon request by the Town when, subsequent to a survey of the then current demand, needs, and usage of and for access channels, the Town finds that a substantial demonstrated need for additional access channel capacity exists; provided, however;

1. In determining whether existing use is continuous and warrants additional channel capacity, the use of repeat programming and text or character-generated programming shall not be considered.

2. When technically and economically feasible alternatives are available, Grantee shall be given the opportunity to accommodate further channel usage for access purposes without dedicating a specific channel for educational and/or governmental access; and

3. Grantee shall not be required to provide a total number of access channels in excess of six (6) channels.

5.2 Free Service To Town Buildings.

Grantee, at its own expense and upon specific written request of the Town, will provide and maintain one connection for Basic Service to each Town building, each public primary, middle and high school; public library; and each police station, county sheriff's office and fire station within the corporate limits of the Town; provided, that Grantee shall not be responsible for providing the distribution system or internal wiring within any of such places and provided, further, that Grantee shall not be required to bear the expense or cost of any installation necessary for such purpose beyond a 125 foot service drop. Such additional costs, on a time and materials basis, shall be borne by the requesting institution or location. Further, no monthly customer service fee will be charged for Basic Service for the first connection of such facilities. Nothing in this Franchise shall be construed to permit any person, organization or other entity receiving a free connection or free service under this provision to extend such connection or service to other persons or locations or to receive any remuneration or compensation for any such connection or service unless approved in writing by the Grantee. The buildings receiving free drops are identified in Exhibit G.

5.3 Educational and Governmental Access Programming

All programming transmitted over educational and government access channels shall be non-commercial in nature. Program material to be distributed on educational or governmental access channels shall contain no advertising, commercial matter or promotional material for which consideration of any kind is received directly or indirectly by the Town or by the producer or distributor of such programming (provided, however, that the inclusion of a brief acknowledgement of the name of a donor shall not be deemed to constitute advertising, commercial matter, or promotional material so long as any such acknowledgement is no more than 10 seconds in duration and contains no more than the donor's name and a logo). Grantor may not enter into a lease, license, contract or agreement of any kind whereby Grantor or its designee allows or requires a person, firm or corporation to program all or part of a public, educational or government access channel in exchange for consideration of any kind. Program material to be distributed on local public access channels shall: (1)(A) be produced within the Town; (B) be produced or provided in pre-produced form by any Town resident; or (C) be produced by any agency, public or private, which provides services to Town residents within the Town regardless of the location at which the programming was produced; and (2) allow for public expression relating to educational, political, social or cultural interests of residents of the Town.

SECTION 6. REGULATION

6.1 Franchise Regulatory Ordinance.

The Franchise renewed under this Agreement shall be subject to all of the lawful provisions of the Regulatory Ordinance .

6.2 Force Majeure.

In the event Grantee's performance of any of the terms, conditions, obligations or requirements of this Franchise is prevented or impaired due to any cause beyond its reasonable control or not reasonably foreseeable, such inability to perform shall be deemed to be excused and no penalties or sanctions shall be imposed as a result thereof, provided Grantee provides notice to Grantor in writing within thirty (30) days of Grantee's discovery of the occurrence of such an event, which notice explains the circumstances. Such causes beyond Grantee's reasonable control or not reasonably foreseeable shall include, but shall not be limited to, acts of God, civil emergencies and labor unrest or strikes, untimely delivery of equipment, inability of Grantee to obtain access to property easements, rights of way and inability of Grantee to secure all necessary permits to utilize utility poles and conduit so long as Grantee utilizes due diligence to timely obtain said permits in a timely fashion.

6.3 Rate Regulation.

Nothing in this Franchise shall limit any regulatory authority Grantor has under applicable state or federal law or regulations to regulate rates for Grantee's services to Subscribers, or to regulate rates for Basic Cable Service in accordance with Section 10-97 of the Regulatory Ordinance. However, nothing in this Franchise shall provide Grantor with any additional regulatory authority over Grantee's rates beyond the authority otherwise provided by applicable state or federal law or regulations.

6.4 Franchise Parity.

Grantor shall not issue to any other person a franchise to operate a Cable Television System or to distribute video television programming within the Town on any terms or conditions which are more favorable or less burdensome than the terms and conditions imposed on Grantee under the Franchise granted hereunder. Any such additional Franchises shall be granted on substantially equivalent terms and conditions to those granted hereunder.

6.5 Transfer of Franchise.

(a) Grantee shall not sell, transfer, lease, assign, sublet or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, this Franchise or any of the rights or privileges granted by this Franchise, without the prior consent of the Council which consent shall not be unreasonably denied or delayed and shall be denied only upon a good faith finding by the Town that the proposed transferee lacks the legal, technical character or financial qualifications to perform its obligations under this Franchise. Any attempt to sell, transfer, lease, assign or otherwise dispose of this Franchise without the consent of the Council shall be null and void. This provision shall not apply to sales of property or equipment in the normal course of business. No consent from the Town shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with Grantee.

(b) The following events shall be deemed to be a sale, assignment or other transfer of this Franchise requiring compliance with this Section: (i) the sale, assignment or other transfer of this Franchise; (ii) the sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in Grantee by one or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in Grantee except a pro forma transfer to an entity controlled by or under common control with Grantee; (iii) the issuance of additional capital stock or partnership, membership or other equity interest by Grantee so as to create a new controlling interest in Grantee except a pro forma transfer to an entity controlled by or under common control with Grantee; and (iv) the entry by the Grantee into an agreement with respect to the management or operation of the Grantee and/or the System except management by an entity controlled by or under common control of Grantee. The term "Controlling Interest" as used herein means majority equity ownership of the Grantee.

(c) In the case of any sale or transfer of ownership of any Franchise subject to the approval required above, the Town shall have 120 days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission Regulations or other applicable state or federal law. If the Town fails to render a final decision on the request within 120 days from receipt by the Town of all required information, such request shall be deemed granted unless the requesting party and the Town agree to an extension of time.

(d) Grantee shall notify Grantor in writing of any foreclosure or any judicial sale of all or a substantial part of the property of the Grantee within the Town or upon the termination of any lease or interest covering all or a substantial part of said property. Such notification shall be considered by Grantor as notice that a change in control of ownership of this Franchise has taken place and the provisions under this Section governing the consent of Grantor to such change in control of ownership shall apply.

(e) For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, Grantor may inquire into the qualifications of the prospective transferee or controlling party, and Grantee shall assist Grantor in any such inquiry. In seeking Grantor's consent to any change of ownership or control, Grantee shall have the responsibility of ensuring that the transferee completes an application on the required FCC form (or in the event of the elimination of the required federal form, a similar form satisfactory to the Grantor), in form and substance reasonably satisfactory to Grantor, which application shall include the information required under State and federal law as well as under Subsections (a) through (h) of Section 10-93 of the Regulatory Ordinance . Unless otherwise agreed to by the Council, an application, acceptable to the Town, shall be submitted to Grantor not less than one hundred twenty (120) days prior to the date of transfer. The transferee shall be required to establish that it possesses the legal character, technical and financial qualifications to operate and maintain the System and comply with all Franchise requirements for the remainder of the term of the Franchise. If, after considering the legal, financial, character and technical qualities of the applicant and determining that they are satisfactory, the Grantor finds that such transfer is acceptable, the Grantor shall permit the transfer and assignment of the rights and obligations of such Franchise. Notwithstanding anything to the contrary, no such consent of Grantor shall be required for a transfer or assignment to an entity controlling, controlled by or under common control with the Grantee. The consent of the Grantor to any transfer shall not be unreasonably denied.

(f) Any financial institution having a pledge of the Grantee or its assets for the advancement of money for the construction and/or operation of the System ("Pledgee") shall have the right to notify the Grantor that the Pledgee or its designee satisfactory to the Grantor shall take control of and operate the Cable Television System, in the event of a Grantee default in its financial obligations. Further, Pledgee shall also submit a plan for such operation within thirty (30) days of assuming such control that will insure continued service and compliance with all Franchise requirements during the term the financial institution exercises control over the System. The Pledgee shall not exercise control over the System for a period exceeding one (1) year unless extended by the Grantor in its discretion. During said period of time it shall have the right to petition the Grantor to permit transfer of the Franchise to another Grantee.

SECTION 7. GENERAL PROVISIONS

7.1 Indemnification by Grantor.

(a) Grantor shall, to the extent allowed by law, indemnify, hold harmless, release and defend the Grantee, its officers, directors, partners, stockholders, agents and employees from and against any and all lawsuits, claims, causes of action, actions, liability, demands, damages, disability, losses, expenses, including reasonable attorneys' fees and costs or liabilities for damage to Grantee's property or disruption of Grantee's operation that may be asserted by any Person resulting or in any manner arising from Grantor's negligence in Grantor's construction, installation, operation, maintenance, repair or removal of any wires, fixtures or other equipment in or on Grantee’s facilities (i.e., poles, pipes, conduits, etc.) except to the extent that such losses, damages, claims or liabilities are caused by the actions or inactions of the Grantee, its officers, agents and employees. This indemnity shall apply, without limitation, to any action or cause of action for damages to persons or property, errors and omissions, theft, fire, or any other right of any Person, firm or corporation, whether or not any act or omission complained of is authorized, allowed or prohibited by Grantee.

(b) The Grantee shall promptly notify the Town of any claims subject to indemnification by Grantor and shall cooperate with all reasonable requests by Grantor for information, documents, testimony or other assistance appropriate to a resolution of such claims. Grantor shall have full responsibility for control of any action or undertaking directed at resolution of such claims.

7.2 Indemnification by Grantee.

(a) Grantee shall indemnify, hold harmless, release and defend the Town, its officers, boards, commissions, agents and employees from and against any and all lawsuits, claims, causes of action, actions, liability, demands, damages, disability, losses, expenses, including reasonable attorneys' fees and costs or liabilities of any nature that may be asserted by any Person resulting or in any manner arising from the action or inaction of the Grantee in constructing, operating, maintaining, repairing or removing the System, in carrying on Grantee's business or operations in the Town or in exercising or failing to exercise any right or privilege granted by the Franchise. This indemnity shall apply, without limitation, to any action or cause of action for invasion of privacy, defamation, antitrust, errors and omissions, theft, fire, violation or infringement of any copyright, trademark, trade names, service mark or patent, or any other right of any Person, firm or corporation, whether or not any act or omission complained of is authorized, allowed or prohibited by this Franchise Agreement, but shall not include any claim or action arising out of the actions or omissions of Town officers, employees or agents or related to any of Grantor’s programming or other access programming for which the Grantee is not legally responsible.

(b) Grantor shall promptly notify Grantee of any claims subject to indemnification by Grantee and shall cooperate with all reasonable requests by Grantee for information, documents, testimony or other assistance appropriate to a resolution of such claims. Grantee shall have full responsibility for and control of any action or undertaking directed at resolution of such claims.

7.3 Counterparts.

This Agreement may be signed in any number of counterparts with the same effect as if the signatures on each such counterpart were on the same instrument.

7.4 Construction.

The Section headings of this Agreement are for convenience only and in no way modify, interpret or construe the meaning of specific provisions of the Agreement. As used herein, the neuter gender shall also denote the masculine and feminine, and the masculine gender shall also denote the neuter and feminine.

7.5 Severability.

If any one or more provisions contained in this Agreement should be found invalid, illegal or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Any illegal or unenforceable term shall be deemed to be void and of no force and effect only to the minimum extent necessary to bring such term within the provisions of applicable law and such term, as so modified, and the balance of this Agreement shall then be fully enforceable.

7.6 Choice of Law.

This Agreement shall be governed by and construed in accordance with Federal law and with the laws of the State of North Carolina without regard to the choice of law rules utilized in that jurisdiction.

7.7 Entire Agreement.

This Agreement, including the materials otherwise referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and referenced herein. This Agreement may not be altered or amended except by an instrument in writing signed by the party against whom enforcement of any such change is sought.

This the 24th day of June, 1996. (FIRST READING)

This the 1^st day of July, 1996. (SECOND READING)

COUNCIL MEMBER CAPOWSKI MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT ORDINANCE 5.2.

Council Member Franck said he did not want the Town to get into the censorship business relative to the control of obscenity on cable television. He inquired whether or not it would be illegal to remove the section of the ordinance pertaining to the control of obscenity. _______ Prak, Time Warner's legal counsel, said the Council could choose to delete this section from its own regulatory ordinance.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO REMOVE THE SENTENCE IN SECTION 10.103 OF THE PROPOSED ORDINANCE WHICH AUTHORIZES THE FRANCHISEE TO NOT BROADCAST THE PROGRAMMING ON PUBLIC ACCESS CHANNELS WHICH IS OBSCENE, INDECENT OR PORTRAYS NUDITY.

Council Member Capowski inquired whether or not Mr. Karpinos had any concerns about this approach. Mr. Karpinos noted that if the suggested language were deleted, federal law would take precedence in this matter.

THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

ORDINANCE 5.2, AS AMENDED, WAS ADOPTED UNANIMOUSLY (8-0).

AN ORDINANCE AMENDING ARTICLE V OF CHAPTER 10 OF THE CHAPEL HILL TOWN CODE (FRANCHISING AND OTHER REGULATION OF CABLE TELEVISION SYSTEMS). (96-6-24/O-5.2)

BE IT ORDAINED BY THE TOWN COUNCIL OF CHAPEL HILL AS FOLLOWS:

SECTION I

Article V of Chapter 10 of the Town Code is amended to read as follows:

ARTICLE V. CABLE TELEVISION REGULATORY ORDINANCE.

SECTION 10-80. INTENT.

(a) The Town Council of Chapel Hill, pursuant to applicable Federal and State law, is authorized to grant one or more non-exclusive franchises to construct, operate, maintain and reconstruct Cable Television Systems within the Town limits.

(b) The Town Council finds that the development of Cable Television Systems has the potential of having great benefit and impact upon the residents of Chapel Hill. Because of the complex and rapidly changing technology associated with cable television, the Town Council further finds that the public convenience, safety, and general welfare and necessity can best be served by establishing franchise powers which should be vested in the Town or such Persons as the Town shall designate. It is the intent of this Article and subsequent amendments to provide for and specify the means to attain the best possible cable television service to the public and any Franchises issued pursuant to this Article shall be deemed to include this finding as an integral part thereof.

SECTION 10-81. DEFINITIONS.

For the purpose of this Article, the following terms, phrases, words and their derivations shall have the meaning given herein. Words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural number. All capitalized terms used in the definition of any other term shall have their meaning as otherwise defined in this Section 10-81. The words "shall" and "will" are mandatory and "may" is permissive. Words not defined shall be given their common and ordinary meaning.

a. "Addressable" means the method by which changes may be made in an authorized Subscriber's programs, tiers, and channel selections via electronic commands transmitted from the System headend or hub site to the authorized subscriber's receiving equipment.

b. "Basic Cable Service" means any service tier which includes the retransmission of local television broadcast signals. This definition will be deemed to change consistent with any changes in the definition of this term by the Federal Communications Commission.

c. "Cable Act" means the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779 (1984) (codified at 47 U.S.C. §§ 521-611 as amended by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385 and by the Telecommunications Act of 1996, Pub. L. No. 104-104, 100 Stat. 56 (1996) and as may, from time to time, be amended.)

d. "Cable Television System," "System" or "Cable System" means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable television service which includes video programming and other lawful communications services and which is provided to multiple Subscribers within the Town. Such term does not include:

1. A facility that serves only to retransmit the television signals of one (1) or more television broadcast stations;

2. A facility that serves subscribers without using any public rights-of-way;

3. A facility of a common carrier which is subject, in whole or in part, to the provisions of 47 U.S.C. §§ 201-226, except that such facility shall be considered a Cable System (other than for purposes of 47 U.S.C. § 541) to the extent such facility is used in the transmission of video programming directly to Subscribers; or

4. Any facilities of any electric utility used solely for operating its electric utility system.

e. "Channel" or "Cable Channel" means a 6 MHz portion of the electromagnetic frequency spectrum which is used in a Cable System.

f. "Council" means the Town Council of the Town of Chapel Hill.

g. "Franchise" or "Franchise Agreement" means an initial authorization, or renewal thereof, issued by the Town, whether such authorization is designated as a Franchise, permit, license, ordinance, contract, certificate, agreement, or otherwise, which authorizes the construction or operation of a Cable System.

h. "Franchise Agreement Ordinance" means a Franchise granted pursuant to this Article, containing the specific provisions of the Franchise granted, including references, specifications, requirements and other related matters.

i. "Franchise Fee" means any tax, fee or assessment of any kind imposed by the Town or other governmental entity on a Grantee or Subscriber, or both, solely because of their status as such. The term "Franchise Fee" does not include: (i) any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services but not including a tax, fee, or assessment which is unduly discriminatory against cable operators or cable Subscribers); (ii) capital costs which are required by the Franchise Agreement Ordinance to be incurred by the cable operator for public, educational, or governmental Access Facilities; (iii) requirements or charges incidental to the awarding or enforcing of the Franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or (iv) any fee imposed under Title 17 of the United States Code.

j. "Grantee" means any Person receiving a Franchise pursuant to this Article and its agents, employees, officers, designees, or any lawful successor, transferee or assignee.

k. "Grantor" or "Town" means the Town of Chapel Hill as represented by the Council or any delegate acting within the scope of the Town's jurisdiction.

l. "Gross Revenues" means all revenue received by the Grantee, arising from or attributable to the sale of cable television video or audio program services, videotext services and video games provided by the Grantee within the Town or derived from the operation within the Town of its System, including, but not limited to,

monthly fees charged to Subscribers for Basic Cable Service;

monthly fees charged to Subscribers for any optional video or audio program service;

monthly fees charged to Subscribers for any tier of video or audio program service other than Basic Cable Service;

installation, disconnection and reconnection fees for the provision of video or audio program services;

leased channel fees;

video or audio program service equipment rentals;

advertising revenue received by Grantee from video or audio program services;

revenues received by Grantee from home shopping Channels; and

revenues received by Grantee from the provision of data transmission, point to point telecommunications, telephone or telephony services.

This sum shall be the basis for computing the fee imposed pursuant to Section 10-98 hereof. This term does not include

converter or other equipment deposits,

bad debts,

Franchise Fees,

Supplemental Public Access Rate Charges,

any sales, excise, or any other taxes collected by Grantee on behalf of any state, city, or other governmental unit,

refunds to subscribers by Grantee,

commissions paid to others,

reimbursement for expenses (including returned check fees, copy expenses and similar items), or

items prohibited by local, state, or federal law.

Notwithstanding the foregoing, revenues received by Grantee for the provision of data transmission, point to point telecommunications, telephone or telephony services shall be included in gross revenues

(1) only to the extent permitted by law; and

(2) only if all other providers of such similar services in the Town are subject to an equivalent Franchise Fee and other compensation requirements for use of the public rights of way in the Town.

Where advertising or other revenue arising from or attributable to the sale of cable services by Grantee is received by unrelated third parties not under control of Grantee, and some portion of that revenue is remitted to Grantee, only the portion of such revenues paid Grantee shall be included in the calculation of Gross Revenues.

Each payment of Franchise Fees to the Town shall be accompanied by a brief report showing the basis for the computation in a format agreed upon by the Town and the Grantee as set forth in the Franchise.

m. "Initial Service Area" means the area of the Town which will receive Cable Service initially, as set forth in any Franchise Agreement Ordinance.

n. "Installation" means the connection of the System to Subscribers' terminals, and the provision of cable television service.

o. "Normal Business Hours" means those hours during which most similar businesses in the community are open to serve customers. In all cases, "Normal Business Hours" must include some evening hours at least one night per week and/or some weekend hours.

p. "Normal Operating Conditions" means those service conditions which are within the control of the Grantee. Those conditions which are not within the control of the Grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of the Grantee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the System.

q. "Person" means any natural person or any association, firm, individual, partnership, joint stock company, joint venture, trust, corporation, limited liability company or other legally recognized entity, private or public, whether for-profit or not-for-profit.

r. "Public, Educational or Government Access Facilities" or "PEG Access Facilities" means:

1. Channel capacity designated for non-commercial public, educational, or governmental use; and

2. Facilities and equipment for the use of such Channel capacity.

s. "Section" means any section, subsection, or provision of this Article.

t. "Service Area" or "Franchise Area" means the entire geographic area within the Town as it is now constituted or may in the future be constituted, unless otherwise specified in the Franchise Agreement Ordinance.

u. "Service Interruption" means the loss of picture or sound on one or more Cable Channels.

v. "State" means the State of North Carolina.

w. "Street" means each of the following located within the Town limits: Streets, roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way and similar public property to which the public in general has free and open access for purposes of travel.

x. "Subscriber" means any Person who subscribes to, or lawfully receives, a service provided by the Grantee by means of the Cable System whether or not a fee is paid for such service.

SECTION 10-82. FRANCHISE TO INSTALL AND OPERATE.

A Franchise granted by the Town under the provisions of this Article shall encompass the following purposes:

a. To engage in the business of providing cable television service and other lawful communication services within the Town of Chapel Hill, subject to applicable laws and regulations.

b. To erect, install, construct, repair, rebuild, reconstruct, replace, maintain, retain and operate cable, fiber optic lines, related electronic equipment, supporting structures, appurtenances, and other property in connection with the operation of a Cable System in, on, over, under, upon, along and across Streets or other public places within the Town of Chapel Hill.

c. To set forth the obligations of a Grantee under the Franchise Agreement.

SECTION 10-83. FRANCHISE REQUIRED.

It shall be unlawful for any Person, other than the Town, to construct, install or operate a Cable Television System in the Town within any Street without a properly granted Franchise awarded pursuant to the provisions of this Article.

SECTION 10-84. TERM OF THE FRANCHISE.

(a) A Franchise granted hereunder shall be for a term established in the Franchise Agreement Ordinance, conditioned upon the Grantor's adoption of an ordinance or resolution authorizing the Franchise and the Grantee's acceptance of the Franchise.

(b) Upon acceptance by Grantee as required herein, the Franchise so granted shall supersede and replace any previous Franchise to Grantee to own, operate and maintain a System within the Town. Provided, however, that the term of Grantee's existing Franchise shall not be shortened by grant or acceptance of the new Franchise and the term of any new Franchise granted hereunder shall commence only upon expiration of Grantee's existing Franchise.

(c) A Franchise granted hereunder may be renewed pursuant to the provisions of applicable State and Federal law and of this Article.

SECTION 10-85. FRANCHISE TERRITORY.

(a) Any Franchise shall be valid within all the territorial limits of the Town, and within any area added to the Town during the term of the Franchise, unless otherwise specified in the Franchise Agreement Ordinance. Grantee may, but shall not be required to provide service to newly-annexed areas that are not contiguous with the Town's existing boundaries prior to the annexation.

(b) In the event the Town annexes an area then served in whole or in part by an operator other than a person who has previously obtained a cable television Franchise from the Town, such operator shall have the right to continue providing cable television service in the area annexed but shall apply for a new Franchise pursuant to this Ordinance. Grantee shall be permitted, but not required, to provide service in the area served by another cable operator.

SECTION 10-86. APPLICABILITY OF ARTICLE.

(a) This Article shall be construed in a manner consistent with all applicable Federal and State laws.

(b) Any conflict between this Article, or any Franchise granted hereunder, and any other provision of law shall be resolved as provided in Section 10-114 of this Article.

(c) This Article shall apply to all Franchises granted or renewed after the effective date of this Article. It shall further apply to the extent permitted by applicable Federal or State law and with the agreement of the Grantee to all existing Franchises granted prior to the effective date of this Article.

(d) Grantee's rights are subject to the reasonable police powers of the Town to adopt and enforce ordinances necessary to the health, safety and welfare of the public. Grantee shall comply with all applicable general laws and ordinances enacted by the Town pursuant to that power.

(e) This Article and any Franchise granted pursuant to this Article shall be construed and enforced in accordance with the substantive laws of the State of North Carolina, subject to applicable provisions of Federal Law.

SECTION 10-87. TRANSFER OF FRANCHISE.

(a) Grantee shall not sell, transfer, lease, assign, sublet or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, the Franchise or any of the rights or privileges granted by the Franchise, without the prior consent of the Council, which consent shall not be unreasonably denied or delayed and shall be denied only upon a good faith finding by the Town that the proposed transferee lacks the legal, character, technical or financial qualifications to perform its obligations under the Franchise. Any attempt to sell, transfer, lease, assign or otherwise dispose of the Franchise without the consent of the Council shall be null and void. This provision shall not apply to sales of property or equipment in the normal course of business. No consent from the Town shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with Grantee.

(b) The following events shall be deemed to be a sale, assignment or other transfer of the Franchise requiring compliance with this Section: (i) the sale, assignment or other transfer of the Franchise; (ii) the sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in Grantee by one or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in Grantee except a pro forma transfer to an entity controlled by or under common control with Grantee; (iii) the issuance of additional capital stock or partnership, membership or other equity interest by Grantee so as to create a new controlling interest in Grantee except a pro forma transfer to an entity controlled by or under common control with Grantee; and (iv) the entry by the Grantee into an agreement with respect to the management or operation of the Grantee and/or the System except management by an entity controlled by or under common control of Grantee. The term "Controlling Interest" as used herein means majority equity ownership of the Grantee.

(c) Except as provided below, no Grantee may sell or otherwise transfer ownership in a Franchise which requires prior approval of the Council within a 36-month period following either the acquisition or initial construction of said System by Grantee. In the case of a sale of multiple Systems, if the terms of the sale require the buyer to subsequently transfer ownership of one or more such Systems to one or more third parties, such transfer shall be considered a part of the initial transaction. The above-described 36-month holding period shall not apply to (1) any transfer of ownership interest in any Franchise which is not subject to federal income tax liability; (2) any sale required by operation of any law or any act of any agency, any State or political subdivision thereof or the Town; or (3) any sale, assignment, or transfer, to one or more purchasers, assignees, or transferees controlled by, controlling, or under common control with, the seller, assignor, or transferor.

(d) In the case of any sale or transfer of ownership of any Franchise subject to the approval required above, after the 36-month period following acquisition or initial issuance of the Franchise, the Town shall have 120 days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission Regulations or other applicable state or federal law. If the Town fails to render a final decision on the request within 120 days from receipt by the Town of all required information, such request shall be deemed granted unless the requesting party and the Town agree to an extension of time.

(e) Grantee shall notify Grantor in writing of any foreclosure or any judicial sale of all or a substantial part of the property of the Grantee within the Town or upon the termination of any lease or interest covering all or a substantial part of said property. Such notification shall be considered by Grantor as notice that a change in control of ownership of the Franchise has taken place and the provisions under this Section governing the consent of Grantor to such change in control of ownership shall apply.

(f) For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, Grantor may inquire into the qualifications of the prospective transferee or controlling party, and Grantee shall assist Grantor in any such inquiry. In seeking Grantor's consent to any change of ownership or control, Grantee shall have the responsibility of ensuring that the transferee completes an application on the required FCC form (or in the event of the elimination of the required federal form, a similar form satisfactory to the Grantor), in form and substance reasonably satisfactory to Grantor, which application shall include the information required under State and federal law as well as under Subsections “a” through “h” of Section 10-93 of this Article. Unless otherwise agreed to by the Council, an application, acceptable to the Town, shall be submitted to Grantor not less than one hundred twenty (120) days prior to the date of transfer. The transferee shall be required to establish that it possesses the legal, technical, character and financial qualifications to operate and maintain the System and comply with all Franchise requirements for the remainder of the term of the Franchise. If, after considering the legal, financial, character and technical qualities of the applicant and determining that they are satisfactory, the Grantor finds that such transfer is acceptable, the Grantor shall permit the transfer and assignment of the rights and obligations of such Franchise. Notwithstanding anything to the contrary, no such consent of Grantor shall be required for a transfer or assignment to an entity controlling, controlled by or under common control with the Grantee. The consent of the Grantor to any transfer shall not be unreasonably denied.

(g) Any financial institution having a pledge of the Grantee or its assets for the advancement of money for the construction and/or operation of the System ("Pledgee") shall have the right to notify the Grantor that the Pledgee or its designee satisfactory to the Grantor shall take control of and operate the Cable Television System, in the event of a Grantee's default in its financial obligations. Further, the Pledgee shall also submit a plan for such operation within thirty (30) days of assuming such control that will ensure continued service and compliance with all Franchise requirements during the term the financial institution exercises control over the System. The Pledgee shall not exercise control over the System for a period exceeding one (1) year unless extended by the Grantor in its discretion. During said period of time it shall have the right to petition the Grantor to permit transfer of the Franchise to another Grantee.

SECTION 10-88. PURCHASE BY TOWN UPON EXPIRATION OR REVOCATION.

(a) At the expiration of any Franchise, for which Grantee has not requested renewal, or upon lawful denial by Grantor of Grantee's right to renewal and the expiration or exhaustion by Grantee of all rights to appeal such denial of renewal, the Town may, in a lawful manner and upon the payment of fair market value, determined on the basis of the Cable System valued as a going concern exclusive of any value attributable to the Franchise itself, lawfully obtain, purchase, condemn, acquire, take over and hold the Cable System.

(b) Upon the lawful revocation of any Franchise granted under this Article, the Town may, in a lawful manner, and upon the payment of an equitable price lawfully obtained, purchase, condemn, acquire, take over and hold the Cable System.

SECTION 10-89. EMERGENCY USE.

In the case of any emergency or disaster, Grantee shall, upon request of the Town, make available its Cable System to the Town or emergency management personnel, for emergency use during the emergency or disaster.

SECTION 10-90. GEOGRAPHICAL COVERAGE.

(a) Grantee shall design, construct and maintain the Cable Television System to have the capability to pass every dwelling unit in the Town, subject to any contrary provisions of the Franchise Agreement Ordinance regarding extensions of service.

(b) After service has been established by activating trunk and/or distribution cables for any Service Area, Grantee shall provide cable television service to any requesting Subscriber within that Service Area within thirty (30) days from the date of request, provided that the Grantee is able to secure all rights-of-way necessary to extend service to such Subscriber within such thirty (30) day period on reasonable terms and conditions.

SECTION 10-91. NON-EXCLUSIVE FRANCHISE.

Any Franchise granted shall be non-exclusive. The Grantor specifically reserves the right to grant, at any time, such additional Franchises for a Cable Television System or any component thereof, as it deems appropriate, subject to applicable State and Federal law. Any such additional franchises shall be granted on substantially equivalent terms and conditions to those granted hereunder and shall not be in any material provision more favorable or less burdensome than any other Franchise granted hereunder.

SECTION 10-92. MULTIPLE FRANCHISES.

Grantor may grant one or more Franchises for a Service Area. Grantor may, in its sole discretion, limit the number of Franchises granted, based upon, but not necessarily limited to, the requirements of applicable law and specific local considerations; such as:

a. The capacity of the public rights-of-way to accommodate multiple coaxial cables in addition to the cables, conduits and pipes of the utility Systems, such as electrical power, telephone, gas and sewerage.

b. The impact on the community of having multiple Franchises.

c. The disadvantages that may result from Cable System competition, such as the requirement for multiple pedestals on residents' property, and the disruption arising from numerous excavations of the rights-of-way.

d. The financial capabilities of the applicant and its guaranteed commitment to make necessary investment to erect, maintain and operate the proposed System for the duration of the Franchise term.

SECTION 10-93. FRANCHISE APPLICATIONS.

Any Person desiring an initial Franchise for a Cable Television System shall file an application with the Town. A reasonable non-refundable application fee established by the Town shall accompany the application. Such application fee shall not be deemed to be a "Franchise Fee" within the meaning of Section 622 of the Cable Act (47 U.S.C. §542), and such payments shall not be deemed to be (i) "payments in kind" or any involuntary payments chargeable against the compensation to be paid to the Town by Grantee pursuant to Section 10-98 hereof and applicable provisions of a Franchise Agreement Ordinance, or (ii) part of the compensation to be paid to the Town by Grantee pursuant to Section 10-98 hereof and applicable provisions of a Franchise Agreement Ordinance.

An application for an initial Franchise for a Cable Television System shall contain, where applicable:

a. A statement as to the proposed Franchise and Service Area.

b. Resume of prior history of applicant, including the legal, character, technical and financial expertise and management, customer service, franchise and other regulatory compliance of applicant in the cable television field.

c. List of the partners, general and limited, of the applicant, if a partnership, or the percentage of stock owned or controlled by each holder of 5% or more of the shares of stock, if a corporation.

d. List of officers, directors and managing employees of applicant, together with a description of the background of each such Person;

e. The names and addresses of any parent or subsidiary of applicant or any other business entity owning or controlling applicant in whole or in part, or owned or controlled in whole or in part by applicant;

f. A current financial statement of applicant verified by a CPA audit or otherwise certified to be true, complete and correct to the reasonable satisfaction of the Town;

g. Proposed construction and service schedule.

h. Additional information relevant to the regulatory issue to be determined by the Town.

SECTION 10-94. CONSIDERATION OF INITIAL APPLICATIONS.

(a) Upon receipt of any application for an initial Franchise, the Town Manager shall prepare a report and make recommendations respecting such application to the Town Council.

(b) A public hearing shall be set prior to any initial Franchise grant, at a time and date approved by the Council. Within one hundred and twenty (120) days after the close of the hearing, the Council shall make a decision based upon the evidence received at the hearing as to whether or not the Franchise(s) should be granted, and, if granted subject to what conditions. The Council may grant one (1) or more initial Franchises, or may decline to grant any Franchise.

SECTION 10-95. FRANCHISE RENEWAL.

Franchise renewals shall be in accordance with applicable local, state and federal law. Grantor and Grantee, by mutual consent, may enter into renewal negotiations at any time during the term of the Franchise.

SECTION 10-96. CONSUMER PROTECTION AND SERVICE STANDARDS.

a. Except as otherwise provided in the Franchise Agreement Ordinance, Grantee shall maintain a local office or offices to provide the necessary facilities, equipment and personnel to comply with the following consumer protection standards under Normal Operating Conditions:

1. . Cable System office hours and telephone availability:

(i) Grantee will maintain a local, toll-free or collect call telephone access line which will be available to its Subscribers 24 hours a day, seven (7) days a week.

(A) Trained Grantee representatives will be available to respond to customer telephone inquiries during Normal Business Hours.

(B) After Normal Business Hours, the access line may be answered by a service or an automated response System, including an answering machine. Inquiries received after Normal Business Hours must be responded to by a trained Grantee representative on the next business day.

(ii) Under Normal Operating Conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty (30) seconds from when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met no less then ninety (90%) percent of the time under Normal Operating Conditions, measured on a quarterly basis.

(iii) The Grantee will not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of complaints indicates a clear failure to comply.

(iv) Under Normal Operating Conditions, the customer will receive a busy signal less than three percent (3%) of the time.

(v) Customer service center and bill payment locations will be open at least during Normal Business Hours and will be conveniently located.

2. Installations, outages and service calls. Under Normal Operating Conditions, each of the following four standards will be met no less than ninety-five percent (95%) of the time measured on a quarterly basis:

(i) Standard Installations will be performed within seven (7) business days after an order has been placed. Standard Installations are those that are located up to 125 feet from the existing distribution System (as provided in federal standards).

(ii) Excluding conditions beyond the control of Grantee, Grantee will begin working on Service Interruptions promptly and in no event later than 24 hours after the interruption becomes known. The Grantee must begin actions to correct other service problems the next business day after notification of the service problem.

(iii) The appointment window alternatives for Installations, service calls, and other Installation activities will be either a specific time or, at maximum, a four-hour time block during Normal Business Hours. (The Grantee may schedule service calls and other Installation activities outside of Normal Business Hours for the express convenience of the customer.)

(iv) Grantee may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment.

(v) If Grantee's representative is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the customer will be contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for the customer.

3. Communications between Grantee and cable Subscribers:

(i) Notifications to Subscribers:

(A) The Grantee shall provide written information on each of the following areas at the time of Installation of service, at least annually to all Subscribers, and at any time upon request:

(1) Products and services offered;

(2) Prices and options for programming services and conditions of subscription to programming and other services;

(3) Installation and service maintenance policies;

(4) Instructions on how to use the Cable Service;

(5) Channel positions of programming carried on the System; and

(6) Billing and complaint procedures, including the address and telephone number of the Town's cable office.

(B) Customers will be notified of any changes in rates, programming services or Channel positions as soon as possible through announcements on the Cable System and in writing. Notice must be given to Subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the Grantee. In addition, the Grantee shall notify Subscribers thirty (30) days in advance of any significant changes in the other information required by the preceding paragraph.

(ii) Billing:

(A) Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits.

(B) In case of a billing dispute, the Grantee must respond to a written complaint from a Subscriber within thirty (30) days.

(iii) Refunds: Refund checks will be issued promptly, but no later than either:

(A) The customer's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or

(B) The return of the equipment supplied by the Grantee if service is terminated.

(iv) Credits: Credits for service interruption will be issued no later than the customer's next billing cycle following the determination that a credit is warranted.

SECTION 10-97. RATE REGULATION.

The Town reserves the right to regulate rates for Basic Cable Service and any other services to Subscribers offered over the Cable System, to the extent the Town is granted such regulatory authority by Federal or State law in addition to its power to issue franchises. The Grantee shall be subject to the rate regulation provisions provided for herein, and those of the Federal Communications Commission (FCC) at 47 C.F.R., Part 76.900, Subpart N. The Town shall follow the rules relating to cable rate regulation promulgated by the FCC at 47 C.F.R., Part 76.900, Subpart N. The Town's authority to regulate rates pursuant to Franchise shall be as specified in the Franchise Agreement Ordinance. If the Town determines that Town regulation of rates is appropriate for services by Grantee provided to Subscribers over the Cable System that were initially unregulated, the Town may invoke the Periodic Review procedures provided in the Franchise Agreement Ordinance and may propose an appropriate modification of the Franchise. The Town shall not assert regulatory authority over rates for service by Grantee where such services are provided in the Town by other service providers not subject to the same restrictions on rates.

Unregulated prices, adjustments in prices permitted under federal law or FCC rules and reductions in price shall become effective as permitted under federal law or the FCC rules. Grantee shall maintain on file with the Town at all times a current schedule of all rates and charges for subscribers.

The procedures and standards for Grantor's review of rates shall be as set forth in Article V.A of this Chapter as may be amended subject to applicable law.

SECTION 10-98. FRANCHISE FEE.

(a) Following the issuance and acceptance of a Franchise, the Grantee shall pay to the Grantor a Franchise Fee in the amount set forth in the Franchise Agreement Ordinance.

(b) The Grantor, on an annual basis, shall be furnished a statement within sixty (60) days of the close of the calendar year, certified by an official of Grantee responsible for the System's financial statements, reflecting the total amounts of Gross Revenues and all payments, and computations for the previous calendar year. Upon ten (10) days prior written notice, Grantor shall have the right to conduct an independent audit of Grantee's records, in accordance with Generally Accepted Accounting Principles. If, after resolving any dispute arising from such audit, Grantee has made a Franchise Fee underpayment of five percent (5%) or more, the Grantee shall assume all reasonable costs of such audit. In all other events, Grantor shall bear all costs associated with such audit.

(c) Except as otherwise provided by law, no acceptance of any payment by the Grantor shall be construed as a release or as an accord and satisfaction of any claim the Grantor may have for further or additional sums payable as a Franchise Fee under this Article or any Franchise Agreement Ordinance or for the performance of any other obligation of the Grantee.

(d) Franchise Fee payments shall be made in accordance with the schedule indicated in the Franchise Agreement Ordinance.

SECTION 10-99. DESIGN AND CONSTRUCTION REQUIREMENTS.

(a) Grantee shall not construct any Cable System facilities until Grantee has secured any necessary permits from Grantor, or other public agencies having authority over such construction.

(b) In those areas of the Town where transmission or distribution facilities of all the public utilities providing telephone and electric power service are underground, the Grantee likewise shall construct, operate and maintain its transmission and distribution facilities therein underground.

(c) In those areas of the Town where Grantee's cables are located on the above-ground transmission or distribution facilities of the public utility providing telephone or electric power service, and in the event that the facilities of both such public utilities subsequently are placed underground, then the Grantee likewise shall construct, operate and maintain its transmission and distribution facilities underground, at Grantee's cost subject to the provisions in the line extension policy and requirements of Subsection 10-99(d) regarding conduit installation by developers. Certain of Grantee's equipment, such as pedestals, amplifiers and power supplies, which normally are placed above ground, may continue to remain in above-ground closures.

(d) In new residential developments in which all the electric power and telephone utilities are underground, the following procedures shall apply with respect to access to and utilization of underground easements: The developer shall be responsible for installing cable television plant and facilities constructed in accordance with the technical specifications of the System provided by the Grantee pursuant to its Franchise and for contacting the Grantee and arranging for cable television service to the development. The final development map shall certify that the developer has provided cable television facilities and that cable television service is available to the development. Developers of new residential housing with underground utilities shall provide conduit and underground cable television facilities in accordance with the provisions of the Chapel Hill Development Ordinance. The final development map shall certify that the developer has provided cable television facilities and that cable television service is available to the development.

SECTION 10-100. TECHNICAL STANDARDS.

(a) The Grantee shall construct, install, operate and maintain its System in a manner consistent with all applicable laws, ordinances, construction standards, governmental requirements, Federal Communications Commission technical standards, and any standards set forth in its Franchise Agreement. In addition, the Grantee shall provide to the Grantor, upon request, a written report of the results of the Grantee's periodic proof of performance tests conducted pursuant to Federal Communications Commission standards and guidelines.

(b) Repeated failure to maintain the required technical standards after notice from the Town of the deficiencies shall constitute a material breach of the Franchise entitling the Town to utilize the procedures of Section 10-108 hereof.

(c) All construction practices shall be in accordance with all applicable Sections of the Occupational Safety and Health Act of 1970, as amended, as well as all other applicable local, State and federal laws and regulations.

(d) All Installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the National Electrical and Safety Code and National Electrical Code, as amended, and as may from time to time be amended.

(e) Antennae and their supporting structures (towers) shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable local, state and federal laws and regulations.

(f) All of Grantee's plant and equipment, including, but not limited to, the antenna site, headend and distribution system, towers, house connections, structures, poles, wire, coaxial cable, fixtures and appurtenances shall be installed, located, erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in accordance with good engineering practices, performed by experienced maintenance and construction personnel so as not to endanger or interfere with improvements the Town may deem appropriate to make, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic.

SECTION 10-101. TRIMMING OF TREES.

Grantee shall have the authority to trim trees, in accordance with all applicable utility restrictions, ordinances and easement restrictions, upon and hanging over Streets, alleys, sidewalks, and public places of the Town so as to prevent the branches of such trees from coming in contact with the wires and cables of Grantee. Town representatives shall have authority to supervise and approve all trimming of trees conducted by Grantee.

SECTION 10-102. USE OF GRANTEE FACILITIES.

The Town shall have the right, subject to all conditions and restrictions imposed upon Grantee by law, regulation or prior contractual, leasehold or property agreement, to install and maintain, free of charge, upon the poles and within the underground pipes and conduits of Grantee, any wires and fixtures desired by the Town to the extent that such installation and maintenance does not interfere with existing or future operations of Grantee. Grantor shall indemnify Grantee as provided in Section 7.1 of the Franchise Agreement Ordinance against any damage to Grantee's property or disruption of its operations.

SECTION 10-103. PROGRAMMING DECISIONS.

All programming decisions (other than for public, educational and government access programming provided by others) shall be at the sole discretion of Grantee; provided, however, that any significant change made in the mix or level of service required in the Franchise shall be consistent with federal law.

SECTION 10-104. HOLD HARMLESS.

(a) Grantee shall indemnify, hold harmless, release and defend the Town, its officers, boards, commissions, agents and employees from and against any and all lawsuits, claims, causes of action, actions, liability, demands, damages, disability, losses, expenses, including reasonable attorneys' fees and costs or liabilities of any nature that may be asserted by any Person resulting or in any manner arising from the action or inaction of the Grantee in constructing, operating, maintaining, repairing or removing the System, in carrying on Grantee's business or operations in the Town or in exercising or failing to exercise any right or privilege granted by the Franchise. This indemnity shall apply, without limitation, to any action or cause of action for invasion of privacy, defamation, anti-trust, errors and omissions, theft, fire, violation or infringement of any copyright, trademark, trade names, service mark or patent, or any other right of any Person, firm or corporation, whether or not any act or omission complained of is authorized, allowed or prohibited by this Article or any Franchise Agreement, but shall not include any claim or action arising out of the actions or omissions of Town officers, employees or agents or related to any Town programming or other access programming for which the Grantee is not legally responsible.

(b) The Town shall promptly notify Grantee of any claims subject to indemnification by Grantee and shall cooperate with all reasonable requests by Grantee for information, documents, testimony or other assistance appropriate to a resolution of such claims. Grantee shall have full responsibility for and control of any action or undertaking directed at resolution of such claims.

SECTION 10-105. INSURANCE.

Grantee shall provide insurance as specified in the Franchise Agreement Ordinance.

SECTION 10-106. RECORDS REQUIRED AND GRANTOR'S RIGHT TO INSPECT.

(a) Grantee shall at all times maintain:

1. A full and complete set of plans, records and "as-built" maps showing the location of the Cable Television System installed or in use in the Town, exclusive of Subscriber service drops and equipment provided in Subscribers' homes.

2. If requested by Grantor, a summary of service calls for the previous twelve months identifying the number, general nature and disposition of such calls, on a monthly basis. A summary of such service calls shall be submitted to the Grantor within thirty (30) days following its request in a form reasonably acceptable to the Grantor.

(b) Upon reasonable notice, and during Normal Business Hours, Grantee shall permit examination by any duly authorized representative of the Grantor, of all System property and facilities, and all records relating to the System or the Franchise, provided that such examination is necessary to enable the Grantor to carry out its regulatory responsibilities under local, State and federal law, this Article and the Franchise Agreement. Grantee shall have the right to be present at any such examination.

(c) The Town shall also have the right to inspect, upon twenty-four (24) hours written notice, at any time during Normal Business Hours, all books, records, maps, plans, service complaint logs, performance test results, records of request for service, and other like materials of Grantee in the office or location where such records are customarily kept, provided that the inspection of such materials by Grantor is necessary to carry out its regulatory responsibilities under local, state and federal law, this Article and the Franchise Agreement. Grantee shall have the right to be present at any such inspection.

(d) Copies of all petitions, applications, communications and reports submitted by Grantee or on behalf of or relating to Grantee to the Federal Communications Commission, Securities and Exchange Commission, or any other federal or State regulatory commission or agency having jurisdiction with respect to any matters subject to regulation by the Council affecting the Cable System authorized pursuant to this Article and any Franchise shall be made available to the Town upon request, subject to any legal prohibitions or limitations upon disclosure for reasons of subscriber or employee privacy or other similar prohibitions or limitations. Copies of responses to Grantee from the regulatory agencies for such filings shall likewise be furnished to the Town within fifteen (15) days of receipt of the response.

SECTION 10-107. ANNUAL REPORTS.

Grantee shall submit a written end of the year report to Grantor with respect to the preceding calendar year in accordance with the provisions of the Franchise.

SECTION 10-108. FRANCHISE VIOLATION.

If Grantee fails to perform in a timely manner any material obligation required by this Article or a Franchise granted hereunder, following notice from the Grantor and an opportunity to cure such nonperformance, Grantor may act to remedy such violation in accordance with the following procedures:

Grantor shall notify Grantee of any alleged material violation in writing by personal delivery or registered or certified mail, and demand correction within a reasonable time, which shall not be less than ten (10) days in the case of the failure of the Grantee to pay any sum or other amount due the Grantor under this Article or the Grantee's Franchise and thirty (30) days in all other cases. If Grantee fails either to correct the violation within the time prescribed or to commence correction of the violation within the time prescribed and thereafter diligently pursue correction of such violation, the Grantor shall then give written notice of not less than thirty (30) days of a public hearing to be held before the Council. Said notice shall specify the violations alleged to have occurred. At the public hearing, the Council shall hear and consider relevant evidence and thereafter render findings and its decision. In the event the Council finds that a material violation exists and that Grantee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation after notice thereof from Grantor and is not diligently proceeding to fully remedy such violation, the Council may revoke the Franchise or impose any other penalty permitted by the Franchise. After the revocation or other action by the Town, the Grantee shall have a period of thirty (30) days to appeal or seek judicial or regulatory review of the action by any federal or state agency or court having jurisdiction of such matters. During any such appeal or review, the rights of Grantor and Grantee under the Franchise shall not be affected and the Grantee shall have the right to continue to operate in accordance with the terms of the Franchise. The Franchise shall remain in full force and effect.

SECTION 10-109. ABANDONMENT OR REMOVAL OF FRANCHISE PROPERTY.

(a) In the event that the use of any property of Grantee within the public rights of ways, easements or other public property within the Franchise Area is discontinued for a continuous period of twelve (12) months following notice from Grantor that it has declared such property abandoned, Grantee shall be deemed to have abandoned that Franchise property.

(b) Grantor, upon such terms as Grantor may impose, may give Grantee permission to abandon, without removing, any System facility or equipment laid, directly constructed, operated or maintained under the Franchise. Unless such permission is granted or unless otherwise provided in this Article, the Grantee shall remove all abandoned above-ground facilities and equipment upon receipt of written notice from Grantor and shall restore any affected Street to its former state at the time such facilities and equipment were installed, so as not to impair its usefulness. In removing its plant, structures and equipment, Grantee shall refill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good condition as that prevailing prior to such removal without materially interfering with any electrical or telephone cable or other utility wires, poles or attachments. Grantor shall have the right to inspect and approve the condition of the public ways, public places, cables, wires, attachments and poles prior to and after removal. The liability, indemnity and insurance provisions of this Article and the security fund as provided herein shall continue in full force and effect during the period of removal and until full compliance by Grantee with the terms and conditions of this Section.

(c) Upon abandonment of any Franchise property in place, the Grantee, if required by the Grantor, shall submit to Grantor an instrument, satisfactory in form the Grantor, transferring to the Grantor the ownership of the Franchise property abandoned.

(d) At the expiration of the term for which the Franchise is granted, or upon its revocation or earlier expiration, as provided for herein, in any such case without renewal, extension or transfer, the Grantor shall have the right to require Grantee to remove, at its own expense, all above-ground portions of the Cable Television System from all Streets and public ways within the Town within a reasonable period of time, which shall not be less than one hundred eighty (180) days.

(e) Notwithstanding anything to the contrary set forth in this Article, the Grantee may abandon any underground Franchise property in place so long as it does not materially interfere with the use of the Street or public rights-of-way in which such property is located or with the use thereof by any public utility or other cable Grantee.

SECTION 10-110. EXTENDED OPERATION AND CONTINUITY OF SERVICE.

Upon either expiration or revocation of the Franchise, the Grantor shall have discretion to permit and/or require Grantee to continue to operate the Cable Television System for an extended period of time not to exceed six (6) months from the date of such expiration or revocation. Grantee shall continue to operate the System under the terms and conditions of this Article and the Franchise and to provide the regular Subscriber service and any and all of the services that may be provided pursuant to the Franchise at that time, and shall be entitled to all revenues or other compensation for such services during such extended term, subject to applicable laws and regulations regarding taxes, franchise fees and similar obligations.

SECTION 10-111. RECEIVERSHIP AND FORECLOSURE.

(a) A Franchise granted hereunder shall, at the option of Grantor, cease and terminate one hundred twenty (120) days after appointment of a receiver or receivers, or trustee or trustees, to take over and conduct the business of Grantee, whether in a receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless: (1) such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms and provisions of this Article and the Franchise granted pursuant hereto, and the receivership or trustees within said one hundred twenty (120) days shall have remedied all the faults under the Franchise or provided a plan for the remedy of such faults which is satisfactory to the Grantor; and (2) such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the court having jurisdiction in the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the Franchise granted.

(b) In the case of a foreclosure or other judicial sale of the Franchise property, or any material part thereof, Grantor may serve notice of termination upon Grantee and the successful bidder at such sale, in which event the Franchise granted and all rights and privileges of the Grantee hereunder shall cease and terminate thirty (30) days after service of such notice, unless (1) Grantor shall have approved the transfer of the Franchise, as and in the manner that this Article provides; and (2) such successful bidder shall have covenanted and agreed with Grantor to assume and be bound by all terms and conditions of the Franchise.

SECTION 10-112. RIGHTS RESERVED TO GRANTOR.

(a) In addition to any rights specifically reserved to the Grantor by this Article, the Grantor reserves to itself every right and power which is required to be reserved by a provision of any ordinance or under the Franchise.

(b) The Grantor shall have the right to waive any provision of the Franchise, except those required by Federal or State law, if the Grantor, in its sole opinion, determines (1) that it is in the public interest to do so, and (2) that the enforcement of such provision will impose an undue hardship on the Grantee or the Subscribers. Waiver of any provision in one instance shall not be deemed a waiver of such provision subsequent to such instance nor be deemed a waiver of any other provision of the Franchise unless the statement so recites. No such waiver of any provision shall be made without the consent of the Grantee.

SECTION 10-113. RIGHTS OF INDIVIDUALS.

(a) Grantee shall not deny service or otherwise discriminate against Subscribers or citizens on the basis of race, color, religion, national origin, age, gender, disability, family status, marital status, veteran status or sexual preference. Grantee shall comply at all times with all other applicable Federal, State and local laws and regulations, relating to non-discrimination in the provision of goods and services.

(b) Grantee shall adhere to the applicable equal employment opportunity requirements of Federal, State and local regulations, as now written or as amended from time to time.

(c) In the conduct of providing its services or other use of the System within the Town, Grantee shall take reasonable steps to prevent the invasion of a Subscriber's right of privacy or other personal rights through the use of the System as such rights are delineated or defined by applicable law.

SECTION 10-114. CONFLICTS.

The Town reserves the right to modify the provisions of this Regulatory Ordinance in accordance with applicable federal, state and local law. In the event of a conflict between any provision of this Regulatory Ordinance (or amendment to it) and a Franchise Agreement, the provisions of the Franchise Agreement shall control.

SECTION 10-115. FEDERAL, STATE AND TOWN JURISDICTION.

(a) If any federal, state or local law or regulation requires or permits Grantee or the Town to perform any service or act or shall prohibit Grantee or the Town from performing any service or act which may be in conflict with the terms of the Franchise, then as soon as possible following knowledge thereof, either party may notify the other party of the point of conflict believed to exist between such law or regulation and the Franchise. The Town may review such conflict and determine its effect in the same manner described in paragraph (c) of this Section and the Town shall retain the same rights as outlined in paragraph c of this Section.

(b) If any term, condition or provision of this Article or the Franchise or the application thereof to any Person or circumstance shall, to any extent, be rendered invalid or unenforceable as in conflict with any law, rule, or regulation of a superior governmental body, the remainder hereof and the application of such term, condition or provision to Persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Franchise and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with. In the event that such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on Grantee and the Town.

(c) In the event that any court, agency, commission, legislative body or other authority of competent jurisdiction (i) declares any section of this Article, or any Franchise granted hereunder invalid, in whole or in part, or (ii) requires Grantee either to (a) perform any act which is inconsistent with any of this Article or the Franchise or (b) cease performing any act required by this Article or the Franchise, Grantee shall promptly notify the Town. Such notice shall state whether Grantee intends to exercise its rights pursuant to such declaration or requirement. If the Town determines within six (6) months of receiving such notice that said declaration or requirement has a material and adverse effect on the Franchise after considering the needs of the community, the Town shall notify Grantee, and the Town and Grantee will negotiate in good faith any required changes to this Article or to the Franchise.

SECTION 10-116. UNLAWFUL CONNECTIONS OR THEFT OF SERVICE.

(a) It shall be unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, acoustically, inductively or otherwise, with any part of a franchised Cable Television System within the Town for the purpose of taking or receiving television signals, radio signals, pictures, programs or sound or other services.

(b) It shall be unlawful for any person, firm or corporation to make any unauthorized connection, whether physically, acoustically, inductively or otherwise, with any part of a franchised Cable Television System within the town for the purpose of enabling himself or others to receive any television signals, radio signals, pictures or program sound or other services, without payment of the proper charges to the owner of said system.

(c) It shall be unlawful for any person, without the consent of the franchised cable operator, to willfully tamper with, remove or injure any cables, wires, or equipment used by the cable operator for distribution of television signals, radiosignals, pictures, programs or sound or other services.

SECTION II

ARTICLE V.A, PROCEDURES AND STANDARDS FOR THE REGULATION OF CABLE TELEVISION RATES, is amended as follows:

RENUMBER Sections 10-94 through 10-98 as Sections 10-120 through 10-125 respectively.

SECTION III

ARTICLE VI, DEALERS IN SECONDHAND PRECIOUS METALS, is amended as follows:

RENUMBER Sections 10-100 through 10-104 as Sections 10-130 through 10-135 respectively.

This the 24th day of June, 1996. (FIRST READING)

This the 1st day of July, 1996. (SECOND READING)

Mr. Horton noted that the ordinances would be placed on the Council's July 1st agenda for second readings. Council Member Franck suggested that staff begin drafting procedures for a new entity to begin operating public access.

Item 12 Settlement of Batch v. Town of Chapel Hill

Mr. Karpinos said adoption of Resolution 14 would authorize the settlement of Batch v. Town of Chapel Hill.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 14. THE MOTION WAS ADOPTED UNANIMOUSLY

(8-0).

A RESOLUTION AUTHORIZING THE SETTLEMENT OF THE BATCH V. TOWN OF CHAPEL HILL LITIGATION AND APPROVING AN APPLICATION FOR PRELIMINARY PLAT APPROVAL FOR OLD LYSTRA ROAD SUBDIVISION AS PART OF THE SETTLEMENT (96-6-24/R-14)

WHEREAS, in 1987 the Chapel Hill Town Council denied an application for subdivision of property located on Old Lystra Road, in large part due to the failure of the proposed subdivision to have streets which coordinate with existing and planned streets and highways in accordance with the Town's Development Ordinance; and,

WHEREAS, the basis for this reason for denial of the application was the incompatibility of the proposed development with the Town's Thoroughfare Plan, and, specifically, the planned alignment for the Laurel Hill Parkway; and,

WHEREAS, in 1987, litigation was initiated in state court challenging the Council's decision to deny this subdivision application, ending in a judicial decision in 1990 affirming the Council's decision; and,

WHEREAS, in 1993, litigation was reinstituted in federal court again challenging the Council's 1987 decision to deny the subdivision application; and,

WHEREAS, in 1994, the Council acted to remove the Laurel Hill Parkway from the Town's Thoroughfare Plan; and,

WHEREAS, a settlement of the litigation has now been proposed which includes the approval of the proposed subdivision; and,

WHEREAS, the Manager and Attorney have recommended, and the Council finds, that the proposed settlement is fair and reasonable;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Manager and Attorney are hereby authorized to execute any and all necessary documents to settle the pending federal litigation entitled Batch v. Town of Chapel Hill in accordance with the terms of this Resolution.

BE IT ALSO RESOLVED that, as a part of the settlement of this litigation, the subdivision proposed by Dr. Dierdre V. Batch, on property identified as Chapel Hill Tax Map 122, Block B, Lot 2, if developed according to the plat dated September 1986 and the conditions listed below would comply with the provisions of the Development Ordinance:

1. That, if the N.C. Department of Transportation requires, the applicant construct a turning lane on Old Lystra Road at the subdivision's entrance, with final plans for this construction to be approved by the Town Manager and the N.C. Department of Transportation.

2. That the applicant obtain approval from the Orange County Health Department for installation of individual sub-surface sewage disposal systems to serve the dwelling units of this subdivision, prior to issuance of a Zoning Compliance Permit.

3. That all deeds and plats for this subdivision shall clearly state that the property is served by private on-site wells and septic systems and if extension of public water and/or sewer systems is required in the future, the property owners in this development may be at least partially responsible for paying for construction, availability, and connection fees for such extensions.

4. That a Class C buffer be provided along the site's frontage with Old Lystra Road.

5. That the recreation area meet Town standards and be deeded to the Town of Chapel Hill for open space and Parks and Recreation purposes only.

6. That a driveway access easement to the Gessinger property to the west be shown on the final plat with a note that the location of the easement may be changed by Dr. Batch with the agreement of the parties who are the beneficiaries of the easement by filing another plat showing the revised location prior to the sale of any lot crossed by such easement.

7. That an erosion control permit be obtained from the County Erosion Control Officer prior to issuance of a Zoning Compliance Permit.

8. That any agreement necessary to ensure responsibility for, and maintenance of, buffer easements be provided and approved prior to approval of the final plat.

9. That the Town Manager approve a work zone traffic plan for work along/near Old Lystra Road prior to issuance of a Zoning Compliance Permit.

10. That the final utility/lighting plan be approved by OWASA, Duke Power, Public Service Gas Company of N.C., Southern Bell, and Cablevision before issuance of a Zoning Compliance Permit or final plat approval.

11. That sight triangle easements be provided on the final plat.

12. That the developer shall provide a preliminary design for the water and sewer system for this subdivision as part of final plans, to be approved by OWASA and the Town Manager prior to recording a final plat. On the final plat, the developer shall dedicate appropriate easements to OWASA to allow eventual water and sewer line extensions to and through this development and other nearby properties if said properties could feasibly tie into a gravity sewer line from this development. All OWASA easements that are dedicated at the time of plat recordation shall be cleared at the time of subdivision development, unless they are located within the public right-of-way.

13. That the developer shall be responsible for placement and maintenance of temporary regulatory traffic signs upon issuance of any Certificate of Occupancy, until such time that the street system(s) is(are) accepted for maintenance by the Town.

14. That the names of the development and its streets be approved by the Town Manager prior to issuance of a Zoning Compliance Permit.

15. That the development and its streets be approved by the Town Manager prior to issuance of a Zoning Compliance Permit.

16. That Certificates of Occupancy be issued only after all required public improvements are completed; if a phasing plan is approved by the Town Manager, no Certificate of Occupancy shall be issued for a phase until all required public improvements for that phase are complete. A note to this effect shall be included on the final plat.

17. That final street plans, grading plan, utility/lighting plan, stormwater management plan (with hydrologic calculations), and buffer planting plan be approved by the Town Manager before issuance of a Zoning Compliance Permit or application for final plat approval, and that such plans conform to plans approved as part of this application and demonstrate compliance with all applicable conditions and the design standards of the Development Ordinance and the Design Manual.

18. That the continued validity and effectiveness of this approval is

expressly conditioned on the continued compliance with the plans and conditions listed above.

19. That if any of the above conditions is held invalid, this approval shall be void.

BE IT FURTHER RESOLVED that the Council hereby approves, as a part of the settlement of this lawsuit, the application for preliminary plat approval for Old Lystra Place subdivision in accord with plans and conditions listed above.

BE IT FURTHER RESOLVED that this approval is conditioned upon the plaintiff accepting this subdivision approval, dismissing the current litigation, and executing any and all release documents prepared by the Town's attorneys to waive any and all claims for damages and costs arising out of the Town's actions with respect to this subdivision application, and the litigation.

This the 24th day of June, 1996.

Item 13 Changes in Council Procedures

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 15. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REGARDING CHANGES IN THE TOWN COUNCIL’S PROCEDURES FOR NOMINATIONS TO BOARDS AND COMMISSIONS AND FOR CONSIDERING AGENDA ITEMS AFTER 10:30 PM (96-6-24/R-15)

BE IT RESOLVED by the Town Council of Chapel Hill that:

1. Nominations for boards and commissions

A citizen who applies for appointment by the Council to a board, committee, task force, etc. shall be deemed to be automatically nominated for appointment to that board if:

a. the citizen’s application has been distributed to the Council by the time of the meeting at which nominations are made for that board, and

b. the citizen is eligible for appointment to the board, commission, etc.

Nominations for multiple boards and commissions may be listed on the agenda as one consolidated item.

Automatic nominations under this procedure shall occur as a group for one or more boards and shall be announced by the Mayor or other Council Member chairing a Council meeting.

The automatic nomination of a citizen under this procedure does not preclude a Council Member from nominating one or more persons individually. However, the Council’s general practice in order to expedite conduct of meetings will be not to make individual nominations.

2. Appointments

When an appointment to a board, commission, etc. is on the agenda for a Council meeting, the Council will do the initial vote on the appointment by bringing completed ballots to the Council meeting to be tabulated by the staff. Ballots will continue to be signed in accord with State law and votes will continue to be a matter of public record as provided in State law.

If a seat or seats on a board are filled through the above procedure, the staff would announce the vote and no further action would be necessary for that given board.

If one or more seats on a board are not filled through the written balloting done in advance, the staff would announce the votes and the Council would decide whether to vote again at that meeting or defer the appointment to a subsequent meeting for another written ballot done in advance.

3. Consideration of agenda items after 10:30 pm

The Council’s general policy shall be to complete agenda items by 10:30 pm for business, public hearing and other meetings of the Council.

If at 10:30 pm an agenda item is under consideration but not completed, the Council may complete the disposition of that item but shall not take up additional items (other than closed session items as permitted under State law) except upon adoption of a motion to do so with at least seven affirmative votes for the motion. In accordance with general rules, Council Members who leave early without being excused will be deemed to be voting in the sffirm.

Items not completed in a given meeting due to the above policy will normally be carried over to a subsequent meeting, with the specific date of the later meeting and placement on the agenda to be determined in accord with the Council’s procedures.

When the Council meets jointly for public hearings, etc. with other governing boards or representatives of other governments, any time limits for completing items would apply to the extent that the participating entities agree on time limits for a joint meeting.

This the 24^th day of June.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER CHILTON, TO GO INTO CLOSED SESSION AS AUTHORIZED BY GS 143-318.11.a(3), TO DISCUSS LITIGATION, IN WHICH THE PARTIES TO THE SUITS ARE (1) THE TOWN AND PRIMESOUTH INC, AND (2) THE TOWN AND FORTERRA CORPORATION. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

The meeting concluded at 11:45 p.m.