MINUTES OF A MEETING OF THE MAYOR AND COUNCIL OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA, MONDAY, JULY 1, 1996 AT 5:30 P.M.

It was moved and seconded to go into closed session for the purpose of discussing the performance of the Town Manager and the 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. 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, Solid Waste Director Gayle Wilson and Town Attorney Ralph Karpinos.

Item 1 Ceremonies

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER BROWN, TO ADOPT RESOLUTION 2, RECOGNIZING PARKING SERVICES EMPLOYEE MAURICE DAVIS UPON HIS PARTICIPATION AS A TRACK AND FIELD OFFICIAL AT THE 1996 OLYMPIC GAMES IN ATLANTA. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION HONORING MR. MAURICE L. DAVIS FOR BEING SELECTED AS AN OFFICIAL IN THE 1996 OLYMPICS (96-7-1/R-2)

WHEREAS, Maurice Davis will serve as an official in the javelin, shot put and discus competitions in the 1996 Olympics; and

WHEREAS, Mr. Davis has worked for seven years as an official in track and field events including competitions sponsored by the Atlantic Coast Conference, the Metro Conference and the National Collegiate Athletic Association; and

WHEREAS, Maurice Davis served as an official in the shot put and discus competitions at the recent Olympic Trials; and

WHEREAS, Maurice has been selected based on his skills and expertise to participate as an official in the Olympic Games in Atlanta, Georgia; and

WHEREAS, Mr. Davis has worked in the Chapel Hill Parking Services Division since December, 1987;

NOW, THEREFORE, BE IT RESOLVED by the Mayor and Town Council of the Town of Chapel Hill that the Mayor and Council hereby recognize and honor

MR. MAURICE L. DAVIS

for being selected to participate as an official in the 1996 Olympic Games and for his service and support of athletic competition and the spirit of the Olympics.

Adopted unanimously, this the 1st day of July, 1996.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION 3, RECOGNIZING SOLID WASTE ADMINISTRATIVE ANALYST CURT CLAUSEN FOR HIS PARTICIPATION IN THE TWENTY KILOMETER WALK AT THE 1996 OLYMPICS IN ATLANTA THE MOTION WAS ADOPTED UNANIMOUSLY

(8-0).

A RESOLUTION HONORING CURT CLAUSEN, OLYMPIC ATHLETE (96-7-1/R-3)

WHEREAS, Curt Clausen is the premier racewalker in the United States; and

WHEREAS, Mr. Clausen recently qualified to represent the United States of America in the 1996 Olympics; and

WHEREAS, Mr. Clausen will compete in the 20 kilometer racewalking event; and

WHEREAS, Mr. Clausen has worked as the Administrative Analyst in the Chapel Hill Department of Solid Waste Management since December, 1993; and

WHEREAS, Mr. Clausen's dedication to excellence and hard work are exemplified in both his athletic prowess and his service to the community as a member of the Town staff;

NOW, THEREFORE, BE IT RESOLVED by the Mayor and Town Council of the Town of Chapel Hill that the Mayor and Council hereby recognize and honor

MR. CURT R. CLAUSEN

for qualifying to compete on behalf of the United States in the 20 kilometer racewalking event at the 1996 Olympics in Atlanta, Georgia; and the Mayor and Council encourage all citizens of the Chapel Hill area to join in wishing Curt every success at the Olympic Games.

Adopted unanimously, this the 1st day of July, 1996

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 4, RECOGNIZING COMMUNITY VOLUNTEERS AND TOWN EMPLOYEES FOR THEIR ASSISTANCE WITH THE OLYMPIC TORCH RUN EVENT ON SUNDAY, JUNE 23RD. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION OF APPRECIATION TO CITIZENS, BUSINESSES, AGENCIES AND INSTITUTIONS WHO SERVED AS VOLUNTEERS AND SPONSORS IN SUPPORT OF THE OLYMPIC TORCH RUN THROUGH CHAPEL HILL AND CARRBORO ON JUNE 23RD, 1996 (96-7-1/R-4)

WHEREAS, community heroes Ms. Frances Hargraves, William Myrle Smith, Art Cleary, Carl

Henley and Chuck Stone carried the Olympic Flame in Chapel Hill on Sunday, June 23, 1996; and

WHEREAS, the Olympic Torch symbolizes the spirit of positive competition, hard work and striving for excellence; and

WHEREAS, numerous citizens, businesses, agencies and institutions in the Chapel Hill-Carrboro area, including employees of the Town of Chapel Hill, worked in support of the Torch Run and related activities;

NOW, THEREFORE, BE IT RESOLVED by the Mayor and Town Council of the Town of Chapel Hill that the Mayor and Council hereby express appreciation to the citizens, businesses, institutions and agencies who worked as volunteers in support of and who contributed funds for the Olympic Torch Relay Program in Chapel Hill and Carrboro.

BE IT FURTHER RESOLVED that the Mayor and Council especially thank the many Town staff from all departments who supported this historic event with their energy, their good spirit and their many smiles to show the pride and friendship we all feel in Chapel Hill.

Adopted unanimously, this the 1st day of July, 1996.

Item 3 Petitions

Termaine Miles of Empowerment, Inc. said ten units of affordable housing were available for sale at the corner of Merritt Mill Road and Rosemary Street. Mr. Miles also said his organization was requesting Town funding of $20,000 for the proposed project. He noted that his organization would also request project funding of $10,000 from the Town of Carrboro and Orange Community Housing Corporation and $30,000 from Orange County. Myles Presler said that BB&T had expressed its willingness to move forward with a loan on this matter.

Noting that extremely tight timing was involved for this proposal, Council Member Chilton said the Town's fiscal support was needed to make the project possible. Noting the critical need to provide affordable housing opportunities, Council Member Chilton said he would support adoption of a resolution providing the $20,000 in Town funding requested by EmPOWERment, Inc. He also stated that Town staff would review the organization's financial statements relative to the proposed project. Council Member Chilton also noted that a professional inspector would make sure that the building was in sound condition in the near term.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION 4.1.

Stating that she believed that EmPOWERment, Inc. was a good organization, Council Member Andresen expressed concern about the very short time frame attached to the property acquisition. She inquired about the staff's analysis of the proposal. Mr. Horton said staff had received the petition late Friday afternoon and had not had an opportunity to review the matter. Council Member Andresen inquired about the possibility of staff doing some analysis and the Council having a special meeting to consider the matter. Mayor Waldorf said this was possible.

Council Member Brown inquired about the possibility of using revolving loans to grant this funding request. Mr. Horton said it was his understanding that EmPOWERment, Inc. was not proposing repayment of the requested funds. Council Member Brown requested that staff develop information about a revolving loan program for similar projects in the future. Mr. Horton noted that the Town had a revolving loan program for the Pine Knolls housing rehabilitation program. Council Member Brown asked whether or not this was the only Town project of this type. Mr. Horton said the Housing Loan Trust Fund program was similar in nature.

Council Member Capowski inquired whether or not the vacancy contingency of fifteen percent was realistic. Mr. Presler said the current owner indicated that this was a realistic figure.

Council Member Capowski requested additional information regarding proposed rehabilitation of the units. Mr. Kyles said these funds would be used to rehabilitate kitchens and other parts of the units. Mr. Presler noted that the project's operating income was based on monthly rental charges of $325.00 per unit.

Council Member Capowski asked whether the Town's contribution was contingent upon EmPOWERment,Inc. receiving a bank loan for the project. Mr. Horton said this was correct.

Council Member Franck inquired whether or not EmPOWERment, Inc. was a new entity. Mr. Presler said his organization was a new one which focused its energies on community development projects.

Council Member Franck inquired whether or not this was the program's only current project. Mr. Presler said EmPOWERment, Inc. was attempting to improve the quality of life of working class persons through employment, drug treatment and this proposed housing program. Mr. Presler said $260,000 was a relatively small investment to maintain ten affordable housing units.

Council Member Franck said he was concerned that the organization was new to handling housing programs. Mr. Horton noted that all three local governments (Carrboro, Orange County and the Town) would need to make a financial commitment in order for the project to be viable. Mr. Horton also said that it might be problematic for Orange Community Housing Corporation to provide funding for the proposed project. To this end, he suggested striking Orange Community Housing Corporation from clause number two of the proposed resolution.

COUNCIL MEMBERS CHILTON AND EVANS AGREED TO AMEND THE MOTION TO DELETE THE REFERENCE TO ORANGE COMMUNITY HOUSING CORPORATION.

Council Member Pavao said after analyzing the benefit and risk factors, Council Member Pavao said he felt compelled to support the proposed resolution.

Noting that a funding request of $20,000 was involved, Council Member Andresen suggested asking the staff to analyze the matter before Council action in a few days.

Saying that bank staff would do a really critical analysis of the proposal, Council Member Evans said she would support the proposed resolution. Mayor Waldorf said she also thought that the bank would take a close look at the proposal. Council Member Capowski said he would support the proposal as a reasonable investment.

Mayor Waldorf inquired whether or not operating funds for this project would be sought from the Town in the future. Mr. Presler said they would not be sought.

Council Member Evans inquired whether or not there were any further staff reflections on the matter. Mr. Horton said he had received the information concerning the Orange Community Housing Corporation during a telephone call from OCHC's director earlier in the day. Council Member Capowski inquired about the worst case scenario. Mr. Horton said this would be placement of a lien on the property.

Stating that although she had some reservations about the proposed process, Council Member Brown said she would vote for the proposed resolution. She also noted the importance of requiring more information from persons or agencies seeking Town funds. Saying it was somewhat bothersome that the Town did not have a revolving fund on hand for projects of this type, Council Member Brown said she hoped that the Council would take up this matter in the near future.

Council Member Andresen inquired what was visualized if the project was successful. Mr. Presler said the project's objective was to maintain ten units of affordable housing for working poor persons. Mr. Presler also said he had spoken to Mr. Edwards, owner of the Midway Barber Shop, who emphasized the importance of projects to revitalize the area. Mayor Waldorf and Council Member Pavao said this was a reasonable expectation.

RESOLUTION 4.1 WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REGARDING A FUNDING REQUEST BY EMPOWERMENT, INC.

(96-7-1/R-4.1)

1. The $20,000 will be allocated from Community Development grant funds if such funds are available and may be used for purchase of Merritt Mill Square under federal grant requirements; if Community Development funds cannot be used, the $20,000 will be appropriated from General Fund balance by Council action on a budget amendment in addition to this motion.

2. Additional local entities (Orange County and the Town of Carrboro) provide funds to be requested by EmPOWERment Inc. to help secure the purchase of this property.

3. Permanent financing shall be secured for the purchase, and the purchase shall be closed no later than December 1, 1996.

4. A mortgage lien on the property in the amount of $20,000 shall be recorded in favor of the Town. If the property is maintained and operated by a non-profit owner(s) for 10 years as housing affordable to persons of low to moderate income, the lien shall be deemed satisfied. If the property is not so maintained and operated for 10 years, interest shall accrue at the rate of 6% per year and one tenth of the $20,000 principal shall be forgiven on the first and each succeeding anniversary of the closing of the purchase of the property.

5. A pro-forma of projected revenues and expenses, including operating and maintenance costs, debt payments and reserves for future major maintenance or renovations, shall be provided to and approved by the Town Manager.

6. A performance agreement consistent with this motion is executed by the Manager, who is hereby authorized to do so. In accord with State law, the use of Town funds shall be audited at the expense of EmPOWERment Inc.

7. The Town funds shall be paid to EmPOWERment Inc. by the time of closing the purchase of the property.

This the 1^st day of July, 1996.

Council Member Andresen requested that the public hearing on stormwater impact statements be moved forward from its present date of November. Mr. Horton said staff could do so if the Council wished to do so. Mayor Waldorf said there appeared to be Council consensus to move the hearing date forward to an earlier date.

Item 4 Consent Agenda/Information Reports

Council Member Brown requested removal of item I for discussion by the Council.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT THE CONSENT AGENDA, EXCEPTING ITEM I. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION ADOPTING VARIOUS RESOLUTIONS AND ORDINANCES (96-7-1/R-5)

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

a. Firefighter’s roster (R-6).

b. Parking regulations for Howell and Green streets and Bolinwood Drive (O-1).

c. Changes to Employee Position and Classification Ordinance (O-2)

d. Southern Village right-of-way closure (R-7).

e. Paving petition for Lone Pine Road (R-8)

f. Municipal maintenance agreement for Chapel Hill-Carrboro traffic signal system (R-9).

g. Authorizing preparation of a report regarding regulation of off-street parking (with report regarding concerns of the Westside Neighborhood Association) (R-10).

h. Establishing committee to make nominations to the Durham-Chapel Hill-Carrboro Transportation Advisory Committee for appointments to a citizens committee. (R-11).

i. Downtown Service District Performance Agreement (R-12).

This the 1^st day of July, 1996.

A RESOLUTION AUTHORIZING CERTIFICATION OF FIREFIGHTERS (96-7-1/R-6)

BE IT RESOLVED by the Council of Chapel Hill that the Mayor is hereby authorized to certify to the North Carolina Firefighters’ Pension Fund the attached roster of Firefighters employed by the Town of Chapel Hill on June 30, 1996.

This the 1^st day of July, 1996.

CHAPEL HILL FIRE DEPARTMENT

Master Roster File Listing

Firefighters’ Pension Fund

Below are the names of the Chapel Hill Fire Department employees that have met the 36 hours of training for the fiscal year 1995-96.

Allred, Lee Hanna, Heyward Reece, Chris

Alston, Keith Harris, Vencelin Riddle, Stephen

Atwater, Lewis Henderson, Lemuel Rimmer, Darryl

Bailey, Dennis Horne, Charles Robertson, Jr., Joseph

Bell, Jonathan Hyde, Aubrey Saxton, II, Arthur

Bergen, Dace Johnson, Larry Seelbinder, Mary

Blalock, Jerry Jones, Daniel Shatley, Gordon

Blankenship, William Kelly, Douglas Smith, William

Borgesi, Robbie Layton, Joseph Sutton, Douglas

Bosworth, Robert Lewis, David Sykes, David

Bradley, Christopher Major, Howard Taitt, Ronald

Clark, Norman McLamb, Barry Talbert, Felix

Cline, Douglas Mellon, Caprice Terry, Billy

Cruz, Victor Minton, William Thompson, Billy

DeWeese, Sandra Neville, Claude Upton, Gerald

Downey, Ronald Overton, Robert Watson, Rodney

Durham, Lamont Parker, Johnny White, John

Farrow, Reginald Parrish, Douglas Wiseman, Ben

Fletcher, Cary Porterfield, Stephen Woody, David

Gregory, Jr., Millard

AN ORDINANCE AMENDING CHAPTER 21 OF THE CODE OF ORDINANCES

(96-7-1/O-1)

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

SECTION I

That Section 21-27 of the Town Code of Ordinances, "No parking as to particular streets." is amended by inserting the following therein, in appropriate alphabetical order:

STREET SIDE FROM TO

Bolinwood Drive East A point 800 feet north A point 1000 feet north

of the centerline of of the centerline of

Hillsborough Road Hillsborough Road

Green Street Both Umstead Drive End

Howell Street West The centerline of A point 60 feet south

Purefoy Road, at the of the centerline of

north east intersection of Purefoy Road, at the

Purefoy Road and Howell north east intersection of

Street Purefoy Road and Howell

Street

Howell Street West A point 300 feet south The centerline of

of the centerline of Purefoy Road, at the

Purefoy Road, at the south west intersection of

north east intersection of Purefoy Road and Howell

Purefoy Road and Howell Street

Street

Howell Street East The centerline of A point 800 feet south

Purefoy Road, at the of the centerline of

north east intersection of Purefoy Road, at the

Purefoy Road and Howell north east intersection of

Street Purefoy Road and Howell

Street

Howell Street South The centerline of A point 300 feet east

Purefoy Road, at the of the centerline of

south west intersection of Purefoy Road, at the

Purefoy Road and Howell south west intersection of

Street Purefoy Road and Howell

Street

SECTION II

That Section 21-27.8 of the Town Code of Ordinances, "No parking anytime except by residential permit." is amended by inserting the following therein, in appropriate alphabetical order:

STREET SIDE FROM TO

Howell Street West A point 60 feet south A point 300 feet south

of the centerline of of the centerline of

Purefoy Road, at the Purefoy Road, at the

north east intersection of north east intersection of

Purefoy Road and Howell Purefoy Road and Howell

Street Street

SECTION III

That Section 21-27.1 of the Town Code of Ordinances, "No Parking during certain hours." is amended by inserting the following therein, in appropriate alphabetical order:

STREET SIDE FROM TO

(c) 9:00 a.m. to 4:00 p.m. Monday-Friday

Howell Street South A point 300 feet east A point 514 feet east

of the centerline of of the centerline of

Purefoy Road, at the Purefoy Road, at the

south west intersection of south west intersection of

Purefoy Road and Howell Purefoy Road and Howell

Street Street

SECTION IV

That Section 21-27.1 of the Town Code of Ordinances, "No Parking during certain hours." is amended by deleting the following:

STREET SIDE FROM TO

(c) 9:00 a.m. to 4:00 p.m. Monday-Friday

Howell Street Either Full Length

SECTION V

These ordinances shall become effective on August 1st of 1996.

SECTION VI

All ordinances or portions of ordinances in conflict herein are hereby repealed.

This the 1st day of July, 1996.

AN ORDINANCE AMENDING THE POSITION CLASSIFICATION AND PAY PLANS DATED JULY 1, 1996 AND OCTOBER 1, 1996 (96-7-1/O-2)

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

Section I

That the Council hereby amends the "Ordinance Establishing a Position Classification and Pay Plan and Longevity Plan for Employees of the Town of Chapel Hill and Bonds of Officials beginning July 1, 1996 (96-6-10/0-5)" as follows:

(a) In Section III in grade 17 add the title Sanitation Inspector

(b) In Section IV, part C, in the Public Works Department (Sanitation Division) ADD the line

Full-time Part-time Grade No.

# hrs. # hrs.

Sanitation Inspector 1 40 - - 17

Section II

That the Council hereby amends the "Ordinance Establishing a Position Classification and Pay Plan and Longevity Plan for Employees of the Town of Chapel Hill and Bonds of Officials, beginning October 1, 1996 (96-6-10/0-6)" as follows:

(a) In Section III in grade 17 ADD the titles Sanitation Inspector and Word Processor II

(b) In Section IV, part C, in the Town Manager's Office DELETE the lines

Full-time Part-time Grade No.

# hrs. # hrs.

Word Processor 2 37.5 - - 16

Secretary I 1 37.5 - - 13

and ADD the lines

Full-time Part-time Grade No.

# hrs. # hrs.

Word Processor II 1 37.5 - - 17

Word Processor I 1 37.5 - - 16

Secretary II 1 37.5 - - 15

(c) In Section IV, part C, in the Public Works Department (Sanitation Division) ADD the line

Full-time Part-time Grade No.

# hrs. # hrs.

Sanitation Inspector 1 40 - - 17

(d) In Section IV, part C, in the Transportation Department (Operations Division) DELETE the line

Full-time Part-time Grade No.

# hrs. # hrs.

Secretary II 1 37.5 - - 15

and ADD the line

Full-time Part-time Grade No.

# hrs. # hrs.

Secretary III 1 37.5 - - 17

This the 1st day of July, 1996.

A RESOLUTION CLOSING SECTIONS OF THE MARKET STREET AND KILDAIRE ROAD RIGHTS-OF-WAY (96-7-1/R-7)

WHEREAS, the Town Council on May 13, 1996 adopted a resolution of intent to consider closing part of the Market Street and Kildaire Road rights-of-way, and a public hearing thereon was held on June 17, 1996; and

WHEREAS, closing these sections of the Market Street and Kildaire Road rights-of-way would not be contrary to the public interest; and no individual owning property in the vicinity of the rights-of-way would be deprived of reasonable means of ingress and egress to his or her property by the closing of said rights-of-way;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby adopts this order pursuant to North Carolina G.S. 160A-299, permanently closing a 12 foot wide section of the Market Street right-of-way, and a part of the Kildaire Road right-of-way with a total width of approximately 14 feet, as shown on Orange County Tax Map #7.126 and #7.126E, subject to the reservation of a blanket utility easement on Market Street south of Kildaire Road for a distance of 125 feet, all of which shall be recorded on a plat to be provided by the party requesting the right-of-way closure and approved by the Chapel Hill Engineering Department.

This the 1st day of July 1996.

A RESOLUTION RECEIVING A PETITION FOR PAVING OF LONE PINE ROAD

(96-7-1/R-8)

WHEREAS, the Town has received a petition for the paving of Lone Pine Road including portions of curb and gutter; and

WHEREAS, the petition has been determined to be valid under General Statutes 160A-217(a);

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council receives said petition for paving Lone Pine Road, and directs the Town Manager to return with a preliminary resolution of intent this fall, including recommendations for project funding.

This the 1st day of July, 1996.

A RESOLUTION PASSED BY THE TOWN COUNCIL OF THE TOWN OF CHAPEL HILL, NORTH CAROLINA (96-7-1/R-9)

WHEREAS the Municipality has agreed to enter into a Maintenance Agreement with the North Carolina Department of Transportation for the State owned portion of the computerized traffic signal system in the Town of Chapel Hill, and

WHEREAS the Department has agreed to participate in the costs as spelled out in the said agreement which covers a two (2) year period, and

NOW THEREFORE BE IT RESOLVED that this agreement is hereby formally approved by the Town Council of the Town of Chapel Hill and that the Mayor and Clerk of this Municipality are hereby empowered to sign and execute the Agreement between the Town of Chapel Hill and the Department of Transportation.

This the 1^st day of July, 1996.

A RESOLUTION DIRECTING THE TOWN MANAGER AND ATTORNEY TO RESEARCH THE OPTIONS FOR REGULATING PARKING ON RESIDENTIAL PROPERTY WITHIN TOWN LIMITS (96-7-1/R-10).

WHEREAS, the Town currently regulates parking along residential streets in areas adjacent to the University of North Carolina campus; and

WHEREAS, the Town currently prohibits the rental of parking spaces in residential neighborhoods; and

WHEREAS, the Town does not currently have regulations in place restricting the parking of vehicles on residential properties, and

WHEREAS, The Town has a vital interest in maintaining the health, safety and maintenance of its historic district neighborhoods,

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council directs the Town Manager and Attorney to research the options for regulating the parking of vehicles on residential property within the Town limits and to report back to the Council at its September 9 meeting.

This the 1st day of July, 1996.

A RESOLUTION AUTHORIZING ADVERTISEMENT FOR CITIZENS FOR APPOINTMENT TO THE DURHAM-CHAPEL HILL-CARRBORO COMPREHENSIVE TRANSPORTATION PLAN CITIZEN ADVISORY GROUP AND THE ESTABLISHMENT OF A COMMITTEE OF THE TOWN COUNCIL TO DEVELOP A LIST OF CANDIDATES FOR APPOINTMENT BY THE TRANSPORTATION ADVISORY COMMITTEE (96-7-1/R-11)

WHEREAS, the Durham-Chapel Hill-Carrboro Transportation Advisory Committee has adopted guidelines for establishing a Citizen Advisory Group for the development of the Regional Transportation Plan; and

WHEREAS, the guidelines include the appointment of neighborhood/citizen representatives; and

WHEREAS, the Town can submit candidates for appointment to the Transportation Advisory Committee; and

WHEREAS, the Transportation Advisory Committee will be making appointments to the Citizen Advisory Group in August, 1996;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Town Manager is authorized to advertise for citizen nominees to the Citizen Advisory Group during July, 1996.

BE IT FURTHER RESOLVED that the Council establish a committee (including the Town’s Transportation Advisory Committee representative), to meet prior to August 14, 1996 to review citizen applications and develop a list of nominees for consideration by the Transportation Advisory Committee.

This the 1st day of July, 1996.

Council Member Capowski requested removal of item b from the information reports for discussion. Council Member Evans requested removal of item c for discussion of the proposed date.

Item 5 Fourth Interim Report: Horace Williams and Mason Farm Properties

Mr. Horton said he recommended referring the item to the University.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION 13.

Council Member Brown asked whether the report before the Council was the Panel's final report. Mayor Waldorf said this had yet to be determined.

RESOLUTION 13 WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION TO FORWARD THE UNC-CHAPEL HILL PLANNING PANEL’S FOURTH INTERIM REPORT TO THE UNIVERSITY AS AN ADVISORY DOCUMENT FOR USE IN THE COMPLETION OF LAND USE PLANS FOR THE HORACE WILLIAMS AND MASON FARM TRACTS (96-7-1/R-13)

WHEREAS, the UNC-Chapel Hill Planning Panel has prepared a Fourth Interim Report which provides responses to the draft land use plans for the Horace Williams and Mason Farm tracts; and

WHEREAS, the Town Council has received the Fourth Interim Report and endorses its recommendations.

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes forwarding the UNC-Chapel Hill Planning Panel’s Fourth Interim Report, as presented to the Council on June 17, 1996, to the University as an advisory document for use in the completion of land use plans for the Horace Williams and Mason Farm tracts.

This the 1st day of July, 1996.

Council Member Franck suggested skipping the item regarding a zoning atlas amendment. Mayor Waldorf expressed her concurrence.

Mr. Horton said staff recommended that a charge be drafted for the creation of a new zoning district. He noted that the Council might wish to make alterations or changes to the draft resolution. Mr. Horton also suggested that the Council ask the Chancellor to revise the date for no development to occur on the Horace Williams tract.

Council Member Andresen said it seemed odd to ask the work group to come up with a draft amendment. Mr. Horton said this should be guided by the work that the Council had already done relative to the matter. Council Member Andresen said she was trying to visualize what the work product would be. Mr. Horton said Town staff or a consultant could provide assistance in drafting documents.

Council Member Brown suggested moving forward from the previously adopted goals in the matter along with Mr. Merriam's report.

Council Member Andresen said although the collaborative process was great, it was also important to highlight points of agreement.

Saying although he believed that the proposed timetable suggested by the Manager was comfortable, Council Member Franck had circulated a proposal to the Council to get the job done more quickly. Noting the importance of adopting a new zoning category before the end of 1996, Council Member Franck said he recommended making appointments to the work group this evening.

Council Member Evans said that the Planning Panel had asked to see the final JJ&R report upon its completion. Noting the importance of having a collaborative and participatory process, Council Member Evans said it would be wise to talk to University representatives about a realistic timeframe for completion of the project. Mr. Horton said staff had not discussed the possibility of completing the project over the summer with University officials. Council Member Franck said it was his perception that it would be advantageous to complete the project sooner rather than later. Council Member Evans said she deeply felt that a collaborative approach was the best way to proceed. She also said it was important to have an objective committee examine this matter in detail. Council Member Brown said that now was the time to go forward on the matter, rather than later.

Stating that almost every Town board or commission that had reviewed the proposed zone had some serious troubles with it, Council Member Capowski said he did not think it would be possible to wrap up the matter by December 2nd. Council Member Capowski also said he did not know whether or not the University's Board of Trustees would vote on the item at their September meeting, he thought that the staff's proposed timetable was more realistic. Mayor Waldorf said she had a hard time believing that others would want to work on the matter between July 15th and August 30th.

Expressing appreciation for Council Member Franck's idea, Council Member Andresen said it was important to talk to University officials about their interest in the proposed zone and to include the Town of Carrboro in the overall process.

Council Member Brown said she favored having two neighbors of the Horace Williams tract serve on the proposed committee.

Noting that he would be willing to move forward a little faster on this matter, Council Member Chilton said he was split evenly about whether or not to move ahead on this matter this evening.

Stating that the schedule proposed by Council Member Franck was an ambitious one, Council Member Pavao suggested moving ahead on the matter at the Council's first regular meeting in August.

Mayor Waldorf said it would be awkward to ask people to serve on the proposed committee who had not been previously consulted. She suggested making appointments to the committee on August 26th. Council Member Evans noted the importance of the Town having a dialogue with University officials about the proposed timetable.

Council Member Franck suggested that the Council adopt the Manager's recommended resolution.

Council Member Brown said the Council might also wish to work on the Committee's charge this evening.

Council Member Chilton said the Council could possibly take this matter up at its first meeting in August.

Council Member Andresen inquired whether or not there was a specific target date for a final work product. Mayor Waldorf said there was no specific date. Mayor Waldorf inquired whether or not applicable documents would include Mr. Merriam's goals, the draft land-use plan and the Planning Panel's reports to date. Council Member Franck said this was acceptable to him.

COUNCIL MEMBER FRANCK MOVED THE ADOPTION OF RESOLUTION 14.

Council Member Evans inquired about what appointments the Council was being asked to make. Mr. Horton said he believed that it was more appropriate for the University to charge its representatives, rather than asking the Council to do so.

Council Member Evans said she wanted to make sure that the committee reviewed the proposed JJ&R plan. Council Member Capowski inquired why the JJ&R documents were not included in the proposed documents. Mayor Waldorf stated that the Council had not formally adopted the JJ&R document.

Stating that although he did not have much opposition to the JJ&R document, he had concerns about consulting the University about the matter. He suggested that the Council move on to a discussion about who should be appointed to the committee.

Expressing her support for a collaborative report with the University, Council Member Brown said the Council needed to move on to composition matters.

Council Members Chilton and Franck noted the importance of soliciting applications for the committee. Council Member Capowski said if the proposal was for large zoning tracts in the Town, the neighbors’ category should not be limited to neighbors of the Horace Williams tract.

COUNCIL MEMBER ANDRESEN SECONDED THE MOTION TO ADOPT RESOLUTION 14.

Mayor Waldorf suggested that the committee be composed of two Council Members, two Planning Panel members and two neighbors of the Horace Williams property. Council Member Andresen inquired about the possibility of inviting members of the Carrboro panel to serve as ex-officio members. Mayor Waldorf suggested that the Town of Carrboro and Orange County be notified of the committee's meetings. She also noted the importance of having knowledgeable people serving on the committee.

RESOLUTION 14, AS AMENDED, WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REGARDING A COLLABORATIVE PROCESS WITH THE UNIVERSITY OF NORTH CAROLINA TO PREPARE A NEW ZONING DISTRICT (96-7-1/R-14)

WHEREAS, the Town Council intends to create new regulations to manage the planning and development of large, undeveloped tracts of land; and

WHEREAS, the University of North Carolina owns several such tracts and has interest in participating the consideration of such new regulations;

NOW, THEREFORE, BE IT RESOLVED that the Council establishes the following process for development and consideration of new regulations:

(1) The Town Council hereby establishes a Work Group to prepare draft regulations, the composition of which shall be as follows:

· Two (2) members of the Chapel Hill Town Council

· Two (2) members of the Chapel Hill Planning Board

· Two (2) members of the Chapel Hill Planning Panel

· Two (2) members of Horace Williams area

(2) The Town Council shall make appointments to this Work Group at its August 26 meeting.

(3) The charge to the Work Group shall be as follows:

· The Work Group shall use the Dwight Merriam draft zoning proposal for a Mixed Use Unified Development District, the suggested goals for zoning large tracts adopted by the Chapel Hill Town Council and the interim reports prepared by the UNC-Chapel Hill Planning Panel as a basis for their work.

· Prepare a draft amendment to Chapel Hill's Development Ordinance, creating a new zoning district.

· The purposes of the new district shall be to assure that, as large undeveloped tracts are planned and ultimately developed, development occurs in a manner that is consistent with Town goals and policies, and in a manner acceptable to property owners.

· The process for preparing this draft shall include regular meetings between the Work Group and the Town Council for purposes of providing interim reports and receiving policy direction.

· The process for developing this draft shall be a collaborative one between the Work Group and University representatives.

· A Final Report shall be presented to the Town Council by March 15, 1997.

This the 1st day of July, 1996.

Council Member Capowski inquired where the $20,000 for the empowerment project would come from. Mr. Horton said he recommended that these funds come from community development funds or the Town's fund balance.

COUNCIL MEMBER CHILTON MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT ORDINANCE O-2.1. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

AN ORDINANCE TO AMEND THE ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUES FOR THE FISCAL YEAR BEGINNING JULY1, 1996 AND ENDING JUNE 30, 1997 (96-7-1/O-2.1)

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, 1996” as duly adopted on June 10, 1996 be and the same is hereby amended as follows:

ARTICLE I

Current Budget Increase Revised Budget

APPROPRIATIONS

GENERAL FUND

Non-departmental 3,863,692 20,000 3,883,692

REVENUES

GENERAL FUND

Appropriated Fund Balance 800,000 20,000 820,000

This the 1^st day of July, 1996.

Item 6 Sterling Ridge Development

Mr. Waldon said staff recommended adoption of Ordinance 3.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT ORDINANCE 3. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

AN ORDINANCE AMENDING THE CHAPEL HILL ZONING FOR STERLING RIDGE PLANNED DEVELOPMENT - HOUSING (Chapel Hill Tax Map Number 26..17) (96-7-1/O-3)

WHEREAS, the Council of the Town of Chapel Hill has considered the application of Grubb Properties, Inc. to amend the Zoning Atlas to rezone property described below from Residential-2 to Residential-5 Zoning, and finds that the amendment achieves the purposes of the Comprehensive Plan; and

NOW, THEREFORE, BE IT ORDAINED by the Council of the Town of Chapel Hill that the Chapel Hill Zoning Atlas be amended as follows:

Section I

That the portion of the property identified as now or formerly Chapel Hill Township Tax Map 26, part of Lot 17, located northeast of Sage Road and west of Eastowne Drive, within the Residential-2 zoning district, be rezoned from Residential-2 to Residential-5. The legal description of the entire property is as follows (please refer to the attached map):

BEGINNING at a point, in the center of Racquet Club Drive, a proposed 60 foot wide public right-of-way, said point being located North 69°50'05" West, 512.84 feet from the intersection of the centerline of said Racquet Club Drive and Eastowne Drive an existing public road; thence along the center of said Racquet Club Drive the following five courses: 1) along the arc of a circular curve to the left which has a radius of 437.18 feet, and arc distance of 91.05 feet, a chord of North 83°44'13" West, 90.89 feet; 2) North 89°42'15" West, 100.00 feet; 3) along the arc of a circular curve to the right having a radius of 430.00 feet, an arc length of 203.35 feet, a chord North 76°09'23" West, 201.46 feet; 4) North 62°36'30" West, 100 feet; 5) along the arc of a circular curve to the left which has a radius of 430.00 feet, an arc distance of 358.82 feet, a chord of North 86°30'57" West, 348.50 feet to a point in the center of Racquet Club Drive; thence leaving the road and running along the common property line of Eastowne Associates, LLC and Chapel Hill Bible Church of Chapel Hill, Inc. the following two courses: 1) North 20°25'14" West, 160.96 feet; 2) along the arc of a circular curve to the right which has a radius of 450.00 feet, and arc length of 66.04 feet, a chord of North 16°12'59" West, 65.98 feet to a point on the existing zoning district line; thence along said zoning line through the property of Eastowne Associates, LLC, South 69°40'02" East, 959.22 feet to a point in the common property line of Eastowne Associates Tract A and Tract C; thence with said line South 18°38'56" West, 7.08 feet to a point and place of beginning and containing 1.75 acres, more or less.

Section II

That all ordinances and portions of ordinances in conflict herewith are hereby repealed.

This the 1st day of July, 1996.

Mr. Waldon said that two hundred dwelling units were proposed on a twenty-nine acre plus site. He also said that the Manager's recommendation was that the applicant be required to detain stormwater on site. Mr. Waldon stated that staff recommended adoption of Resolution Aa.

Council Member Andresen inquired how much of the Resource Conservation District (RCD) would be disturbed. Mr. Waldon said a little over an acre of land in the RCD would be disturbed while the rest would be undisturbed unless a stormwater detention basin was needed.

Jack Smyre, the applicant's representative, said his client concurred with the proposed conditions of approval.

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

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT RESOLUTION 16A.

Council Member Brown asked if the item could come back before the Council if there were a need to disturb more than one acre. Mr. Horton said staff could provide such notice and report the outcome. Council Member Andresen inquired what the solution would be if silt control measures were not adequate. Mr. Horton said Town staff could be used to prompt greater attention to the matter. Council Member Andresen asked if a stop work order could be issued if conditions were not being met. Mr. Horton said although this was generally the case, stop work orders could not be issued if relevant ordinances were being met. Council Member Andresen said if Orange County staff was spread too thin, there was no way to deal with erosion-related concerns. Mr. Horton said staff's experience was that Orange County staff had been getting good compliance with existing regulations. Council Member Andresen asked that staff forward a copy of the resolution to the New Hope Creek Association. Mayor Waldorf said this seemed reasonable.

RESOLUTION 16A WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION APPROVING AN APPLICATION FOR A SPECIAL USE PERMIT FOR STERLING RIDGE, PLANNED DEVELOPMENT-HOUSING (96-7-1/R-16a)

BE IT RESOLVED by the Council of the Town of Chapel Hill that it finds that the Special Use Permit application, proposed by Grubb Properties, Inc, on property identified as Chapel Hill Township Tax Map 26, part of Lot 17, and Chapel Hill Township Tax Map 26, Lot 35, if developed according to the site plan dated October 3, 1995 and revised April 4, 1996, 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 (with the exceptions listed below);

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 Town Council hereby approves the application for the Special Use Permit for Sterling Ridge in accordance with the plans listed above and with conditions listed below:

Stipulations Specific to the Development

1. That construction begin by July 1, 1998 and be completed by July 1,1999.

Required Improvements

2. That the applicant record a plat prior to issuance of a Zoning Compliance Permit that creates the proposed Sterling Ridge parcel and the Racquet Club Drive extension from Eastowne Drive to the edge of Council-approved Chapel Hill Bible Church right-of-way.

That the applicant construct Racquet Club Drive with a 33 foot cross section from back-of-curb to back-of-curb with a 5 foot sidewalk and 60 foot right-of- way from Eastowne Drive to the Chapel Hill Bible Church right-of-way.

That the applicant stripe Eastowne Drive so as to provide a left turn lane onto Racquet Club Drive.

3. That the applicant provide for open space and a greenway as follows:

a) That the applicant deed to the Town the approximately eight acres to be protected by a conservation easement prior to issuance of a Zoning Compliance Permit. The area to be protected by the conservation easement shall be clearly delineated on the final plans and the final plat. No language in the conservation easement shall prohibit the maintenance of the trail or the ability of the public to use the trail.

b) That the applicant provide a recorded public pedestrian and non-motorized vehicular access easement and a signed agreement with OWASA for that section of the proposed greenway alignment not on Sterling Ridge property. The trail easement and existing asphalt driveway must be separate.

c) That the applicant build that segment of the greenway trail to be located on the above mentioned easements and on the Sterling Ridge property. The trail shall be a minimum of 2 feet wide. It shall be natural surface or gravel except in those areas which are typically wet and unacceptable as a trail surface. In those areas five feet boardwalk sections shall be provided. A bridge shall be provided over the unnamed stream. The trail plans shall be approved by the Town Manager.

Stipulation Related to Stormwater Detention

4. On-site Stormwater Detention: That the development be required to construct stormwater detention facilities, which may be eliminated if the Manager finds them to be detrimental to community stormwater management efforts, based on a stormwater impact statement to be submitted by the developer prior to issuance of a Zoning Compliance Permit.

Stipulations Related to State and Federal Governments Approvals

5. Approval of Encroachment Agreements: That any required State permits or encroachment agreements be approved and copies of the approved permits and agreements be submitted to the Town of Chapel Hill prior to the issuance of a Zoning Compliance Permit.

Stipulations Related to Landscape Elements

6. Landscape Plan Approval: That a detailed landscape plan, landscape maintenance plan, and lighting plan be approved by the Appearance Commission and the Town Manager prior to issuance of a Zoning Compliance Permit.

7. Landscape Protection Plan: That a Landscape Protection Plan be approved by the Town Manager prior to issuance of a Zoning Compliance Permit.

Stipulations Related to Building Elevations

8. Building Elevations Approval: That detailed elevations of the buildings be approved by the Appearance Commission prior to issuance of a Zoning Compliance Permit.

Stipulations Related to Resource Conservation District

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

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

Stipulations Related to Utilities

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

12. Utility/Lighting Plan Approval: That the final utility/lighting plan be approved by Duke Power, Public Service Company, the applicable telephone company, and the applicable cable company, and the Town Manager before issuance of a Zoning Compliance Permit. The property owner shall be responsible for assuring these utilities, including cable television, are extended to serve the development.

Miscellaneous Stipulations

13. Solid Waste Management Plan: That a detailed 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.

14. Detailed Plans: That final detailed site plan, grading plan, utility/lighting plans, stormwater management plan (with hydraulic calculations), landscape plan and landscape management 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 with all applicable conditions and the design standards of the Development Ordinance and the Design Manual.

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

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

17. Construction Sign Required: That the applicant post a construction sign that lists the property owner's representative, with a telephone number, the contractor's representative, with a phone number, and a telephone number for regulatory information prior to issuance of a Zoning Compliance Permit.

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

19. 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 Town Council hereby approves the application for a Special Use Permit for Sterling Ridge, Planned Development - Housing in accordance with the plans and conditions listed above.

This the 1st day of July, 1996.

Item 7 Landfill Matters

Mr. Horton said he suggested scheduling a public hearing on this matter in the fall, possibly on September 18th. Mayor Waldorf inquired whether the Council had any questions for the staff. Council Member Franck noted that the Landfill Owners Group had scheduled a meeting on August 15th to discuss the integrated solid waste management plan.

Council Member Franck said Council comments were being requested to make sure that things were on the right track. Council Member Brown said that the integrated solid waste management plan and waste reduction did not reflect an either/or situation.

Council Member Andresen said she had four hours of videotapes regarding incineration produced by the Environmental Protection Agency. She said the tapes presented a very good overview of how incineration worked relative to state of the art operations.

Council Member Capowski asked whether the Landfill Owners Group would meet before the September 18th public hearing. Council Member Franck said there would be several meetings in this period. Council Member Capowski said he hoped that staff could present possible options relative to a cardboard ban at the individual homeowner level. Council Member Capowski also said he hoped that definitions could be explained before the hearing.

Stating that residential recycling was doing fairly well, Council Member Evans said that improvements needed to be made in multifamily and commercial solid waste and recycling. Council Member Brown said a consultant had generated a document in this regard. Stating that a large amount of recyclables from all sectors were still going into the landfill, Council Member Brown said she thought all sectors should be targeted.

Stating that she did not want to say very much about this until they received public comment at the hearing, Mayor Waldorf said she had some concerns about the proposed reorganization scheme and representation. Mayor Waldorf said she had a hard time understanding why the Town should favor having equal representation from Carrboro, Hillsborough and the Town in future organizations. Mayor Waldorf also stated that she did not understand how the liability for the landfill was assigned. Mr. Horton said in the end, this was a matter of law. He also said his basic understanding was that the agencies depositing wastes were responsible in proportionate shares. Mr. Karpinos said depending on the statutory basis for liability, the party who delivered the waste could be responsible for the landfill's cleanup and related matters.

Council Member Franck stressed the importance of compromises between Carrboro, Hillsborough, Orange County and the Town on landfill matters. He noted that Orange County could potentially run the whole matter, with the Town having no voice.

Stating that the Landfill Owners Group had looked at what types of organizational structure might work, Council Member Brown said that equal representation might be the best. She said if there were real concerns, this matter could possibly be discussed in the future. Council Member Brown also said she would like the Council to think about the Town's gain would be from more representation.

Noting that the Town was a part of Orange County, Council Member Evans said the Town would still have a voice even if the County were in charge of the landfill. Council Member Andresen said a lot had to do with how County Commissioners perceived matters. He stated that a representational split of 5-2-2 like the OWASA Board could lead to a lot of animosity in joint decisionmaking.

Stating that the Town was many times the size of Carrboro and Hillsborough in terms of population and the amount of waste generated, Council Member Capowski said he thought the Town should carry a little more weight in the matter. Council Member Brown said if Orange County took over the landfill, it would not be a matter of the Town having more say or voice. Council Member Brown said it was her understanding that Orange County had such authority vested by the State. Mr. Horton said this was correct.

Stating that OWASA Board members from the Town did not always vote as a block, Council Member Brown said it was really important that members of the Landfill Owners Group be elected officials. Mayor Waldorf said there was a potential for a lot of tied 4-4 votes under this organizational structure. She also expressed appreciation to the Landfill Owners Group for all of their work. Council Member Andresen said a little bit of tension was likely since elected officials would be sitting on the proposed board.

Council Member Brown said feedback was needed from the Council on the proposed integrated solid waste management plan.

Saying she thought it was somewhat extreme to remove members, Council Member Andresen said she would like to find a way to address this. Mayor Waldorf inquired whether it was possible to have a structure wherein Orange County was responsible for landfill operations and policies to be determined by a governing board. Council Member Franck said under the proposed new arrangement, collections would be made by individual governments, with recycling services not being a part of collection operations.

Council Member Capowski said it was important to know the effects of the proposed integrated solid waste management plan on individual citizens. Stating that this would depend on the actual implementation plan, Council Member Franck also said this would mean inspecting what was put in roll-out refuse cans.

Council Member Capowski said previous examination of costs of residential cardboard recycling had found that such a program would be cost prohibitive at that time. Mayor Waldorf said a real philosophical difference between the Town and Carrboro was recycling versus volume-based pricing.

Council Member Brown said top priorities were to look at developing a wider base for financing of solid waste operations, examining citizen awareness and examining pay as you throw and mandatory recycling options. Council Member Franck said it was better to begin with pay as you throw to get people's attention about solid waste.

Council Member Capowski said it was a really valuable concept to know how much a bag of garbage was worth, linking pay as you throw to roll-out carts.

Council Member Evans asked how pay as you throw worked for student and multifamily housing units and other similar situations. Noting the difficulties associated with implementing a pay as you throw system in multi-family settings, Council Member Franck said an identified bag system might work. Council Member Pavao said he looked forward to reading recommendations relative to implementation of pay as you throw systems in multifamily type settings.

Council Member Evans said she would like the issue of public education to be addressed.

Council Member Capowski said that there were some good hard questions about controlling the behavior of tenants relative to pay as you throw in apartments.

Stating that the Town was not currently recycling chipboard, Council Member Evans said a materials recovery facility could handle this type of material. Council Member Franck said the integrated solid waste management plan would address this matter.

He noted that a key element of the proposed plan would permit simplification and thus make collection costs less expensive. Council Member Franck stated that it did not make much sense to

collect yard waste in rural areas. Noting that there was no universal collection in rural areas, Council Member Brown said some areas had their own private collections while parts of Orange County had collection centers.

Council Member Brown said the Landfill Owners Group had decided that education about recycling, unit based pricing and other items was a vital part of any program. Council Member Evans said she wanted a little more information beyond a goals statement.

She also expressed hope that the Landfill Owners Group would keep an open mind about regional solid waste issues.

Council Member Andresen said it was important to weigh the levels of service relative to landfill and recycling matters prior to the public hearing. Mayor Waldorf said it was important for citizens to know the implications of what was being discussed.

Council Member Brown noted that she had two videotapes and a book available for Council Members to borrow relative to unit-based pricing systems.

Council Member Evans said it was important to examine unit-based pricing for businesses. Council Member Pavao said he favored discussion of a materials recovery facility.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER BROWN, TO ADOPT RESOLUTION 17. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION CALLING A PUBLIC FORUM TO CONSIDER THE PROPOSED REORGANIZATION OF THE LANDFILL OWNERS GROUP AND THE PROPOSED COMPREHENSIVE SOLID WASTE MANAGEMENT PLAN (96-7-1/R-17)

WHEREAS, the Landfill Owners Group has referred to the Town Council its proposal to reorganize the Landfill Owner’s Group; and

WHEREAS, the Landfill Owners Group has referred to the Town Council its proposed comprehensive solid waste management plan; and

WHEREAS, the Town Council recognizes that the consequences of adopting either or both of these items would significantly impinge on the daily lives of the residents of Chapel Hill;

NOW, THEREFORE BE IT RESOLVED by the Council of the Town of Chapel Hill that it hereby sets a public forum to consider the proposed reorganization of the Landfill Owners Group and the proposed comprehensive solid waste management plan, to be held on Wednesday, September 18, at 7:00 PM in the Chapel Hill Town Hall at 306 North Columbia Street.

This the 1^st day of July, 1996.

Item 8 Sewer Construction Costs in Mason Farm/Morgan Creek Area

Mr. Horton said he recommended continuation of the Town's present policy of $50 per front foot.

Council Member Andresen said the Council needed to ask OWASA to continue its present policy relative to providing sewer service.

Mayor Waldorf said she had received a letter from OWASA earlier in the day outlining a proposed timetable for the project.

Bob Hogan, 407 Morgan Creek Road, said he had lived at this address for about four years and favored the staff's recommended resolution. He noted that even with a subsidy, the project would still be quite expensive for area residents.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO ADOPT RESOLUTION 18.

Council Member Capowski noted that the highest Town subsidy in four neighborhoods to date was $1,800 per lot. He stated that the proposed subsidy in this instance was about $3,800 per lot.

Stating that he was sympathetic to people living in the neighborhood, Council Member Capowski suggested that a subsidy of $3,200 per lot would be sufficient. Mr. Horton said staff was not sure when OWASA could schedule this proposed project.

Council Member Andresen said she thought it would be bad public policy for the Council not to continue a percentage guideline.

Mr. Horton said staff looked at these matters on a front foot, rather than on a homeowner basis. Council Member Andresen said if the Council got into the business of not extending service to some neighborhoods that had been provided to others, the Council would be open to criticism.

Stating that the Council's policy of March 27, 1995 was clear, Council Member Capowski said the proposed subsidy was almost double the highest subsidy ever made by the Council on a per lot basis. Council Member Andresen asked whether a different subsidy formula was being used. Mr. Horton said no, noting that the subsidy depended upon the size of lots and the terrain of neighborhoods.

Council Member Evans, the mover, accepted the change proposed by Council Member Capowski. Council Member Franck, the seconder, did not accept the proposed change.

COUNCIL MEMBER CAPOWSKI MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO CHANGE THE AMOUNT TO BE CONTRIBUTED BY THE TOWN TO BE $192,000. THE PROPOSED AMENDMENT WAS APPROVED BY A VOTE OF 5-3, WITH COUNCIL MEMBERS ANDRESEN, BROWN, AND FRANCK VOTING NO. COUNCIL MEMBER CHILTON WAS NOT PRESENT AND HIS VOTE WAS COUNTED IN THE AFFIRMATIVE.

Council Member Capowski said this figure marked almost twice the amount of subsidy given in the past.

Noting that some septic systems were failing in the Morgan Creek area, Council Member Andresen said the Town had an obligation to help in these cases. Council Member Capowski said $192,000 of taxpayer funds would be used to help with the project.

RESOLUTION 18, AS AMENDED, WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION REGARDING CONSTRUCTION OF SEWERS IN THE MORGAN CREEK/MASON FARM AREA (96-7-1/R-18)

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

1. Requests that the Orange Water and Sewer Authority Board of Directors consider sewer installation in the Morgan Creek/ Mason Farm area with assessments based on a policy adopted in December, 1993 which includes assessing for construction costs calculated as $50 per foot of sewer line installed.

2. Expresses its intent to contribute $192,000 to assist low income homeowners in the Morgan Creek/Mason Farm sewer project area and as a contribution to OWASA for construction costs of the Morgan Creek/Mason Farm project subject to OWASA undertaking the project and subject to an appropriation by the Council the 1997-98 budget year.

This the 1st day of July, 1996.

Item 9 Cable Television Franchise Renewal

Mr. Horton said he recommended adoption of the proposed franchise agreement on second reading.

COUNCIL MEMBER FRANCK MOVED, SECONDED BY COUNCIL MEMBER PAVAO, TO ADOPT ORDINANCE 5.1 ON SECOND READING.

Expressing her concerns about the need for more citizen involvement and the length of the proposed franchise, Council Member Brown said she would vote against the agreement.

ORDINANCE 5.1 PASSED 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, brief description of services or products 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 such continuous use has existed; 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, brief description of services or products 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 1st day of July, 1996. (SECOND READING)

COUNCIL MEMBER CAPOWSKI MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO ADOPT ORDINANCE 5.2. THE MOTION WAS ADOPTED BY A VOTE OF 7-1, WITH COUNCIL MEMBER BROWN VOTING NO.

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)

Item 11 Consent Agenda

Council Member Brown inquired whether or not $700-$800 was sufficient funding for a newsletter by the Midway Development Corporation. Mr. Horton said Robert Humphreys and Harvey Reid had agreed that this was a satisfactory funding level for the newsletter's cost.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER EVANS, TO ADOPT RESOLUTION 12. THE MOTION WAS ADOPTED UNANIMOUSLY (8-0).

A RESOLUTION AUTHORIZING A PERFORMANCE AGREEMENT WITH THE DOWNTOWN COMMISSION (96-7-1/R-12)

BE IT RESOLVED by the Town Council of Chapel Hill that the Council authorizes the Manager to enter into a performance agreement with the Downtown Commission for services in 1996-97 generally as described in the Commission's Marketing Plan and Program of Work as submitted with the Manager's report on this matter on July 1, 1996; and including a subcontract or equivalent arrangement with the Midway Development Commission for partial support of the Midway Development Commission's monthly newsletters.

This the 1st day of July, 1996.

Information Reports

OWASA Board Meetings

Council Member Capowski said it would be desirable for him to receive an OWASA facesheet several days before these meetings. Council Member Andresen inquired about the possibility of Town staff covering OWASA Board meetings on a regular basis. Mr. Horton said this would not be possible to do for all OWASA board meetings. Council Member Andresen inquired about staff attending meetings with items of general interest. Mr. Horton said staff could provide information about items of general interest. Mayor Waldorf said staff could ask OWASA to deliver agenda packets to Council Members wishing to receive them.

Council Member Evans said Council Members could talk to Town representatives about their concerns.

Council Member Capowski said he would like to receive a few days notice of upcoming OWASA meetings.

Council Member Andresen said she would like to receive OWASA board packets in advance of OWASA board meetings.

Development Review Process

Council Member Evans said she would greatly appreciate it if the Council's discussions relative to the development review process could occur on September 9th, rather than on August 26th. Council Member Franck said he was more than willing to do this.

COUNCIL MEMBER EVANS MOVED, SECONDED BY COUNCIL MEMBER FRANCK, TO MOVE INTO CLOSED SESSION FOR THE PURPOSE OF (1) DISCUSSING LITIGATION IN WHICH THE PARTIES TO THE SUIT ARE THE TOWN AND PRIMESOUTH INC AS AUTHORIZED BY G.S. 143-318.11.a(3), AND (2) FOR 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 meeting concluded at 10:01 p.m. No report followed the closed session.