HomeMy WebLinkAbout5. Cable Franchise Transfer f � �v10SS & BARNETT
� /. .-� A YROFESSlONAL A�����.. . � . . �
REPORT TO THEN ESO A
ROSEMOUN'T� M NS�R
REGARQING PRERSHSP FROM
OF OWN INC. TQ
ST/�4R METRO CABLE,
MpRCUS CABLE PARTNERS, L.P.
Ma,rch 10, 1994
Prepared bY�
Brian, T. Grogan, ESq•
M4SS & BARNETT
A professional Association
4800 Norwest Center
90 Sauth ��Ve� �5402t4129
Minneapol .
(612) 347-a34�
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�, MOSS & BARNETT
A pRppg55IONAL ASSE�iAT10N
TAB� F c�F�ONTENT
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in . . . . . . . . , , 1,
1 Introauction � • • • ' ' ' Z
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p,pplicable Law . • • • • ' ' ' " �
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3 Process. • • • • ' ' ' �
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. . 6
q Deseription of Transfer of Contro 9
Intefview with Louis Borrelli & David Hanson . •
5 16
_Interviews with City Officials . • • • ' ' '
6 31
ualifications . . . . . • • • • ' " ' ' �
� Legal 4 �2
. . • • • • ' ' ' '
g Technical Qualifications . • 33
Financial Qualifications . • • • • ' ' ' ' � � �
9 3fi
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ip Additional Issues. . • • 37
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11 Recommenc�ations. . • • • • ' '
roving Transfer of 38
12 Draft Resolution App . . . . , . .
Control . . . • •
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13 Draft Aceeptance of a. Franchise fo� a 44
Cab1e Televisnnesotat� in•the•City of . • . •
� Rosemount, Mi 4$
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lq Draft Guaranty '
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� � MOS� & BARNETT
� A PRpFESSIONAL ASSOCIATION . � . �
INTRODUCTION
The City of Rosemount, Minnesota (the "City") has before
it a request from its franehisee Star Mid America Limited
Fartnership, a Wisconsin limited paztnership ("SMALP") , which
in turn is 97.5$ owned by Star Cablevision Group, a Wisconsia
general partnership (hereinafter, unless otherwise specified,
collectively referred to as "Star") , to agprove the proposed
transfer of ownership and sale of assets to Marcus Cable
Partners, L.P. , a Delaware limited partnership {"Marcus") .
Pursuant to Minnesota Statutes, Section 238.083 and the City of
Rosemount Cable Television Franehise Ordinance No. XI.14 (the
"Rosemount Franchise") , at Section 10.04, this proposed
transaction is prohibited without the written consent of the
City.
In light of the request by Star, applicable state law, and
Seetion 14.04 of the Rosemount Franchise, Moss & Barnett, A
Pr4fessional As'sociation, has been requested to pravide this
Report.
in preparing this Report we have relied on information
provided to us by the Gity, Star and Marcus. This informatian
includes the Rosemount Franchise; Marcus's Transfer Application
for the Approva2 of a Change of Ownership of a Cable
Cammunieations System and Franchise together with ezhibits;
agplicable portions • of the Purchase Agreement dated as of
November 12, 1993 by and among Star and Marcus (the "Purchase
Agreement") ; a draft Assiqnment and Assumption Agreement by and
among Star and Marcus; a draft Escrow Agreement by and amonq
Star and Marcus; a draft Covenant Not to Compete Agreement by
and among Star, Donald G. Jones and Marcus; a draft Retained
Sgstem Escrow Agreement by and among Star and Marcus; a draft
Management Agreement by and among Star and Marcus; internal
management statements dated September 30, 1993 far Star;
consolidated financial state�nents and other financial
information for Star for the years ending 1991 ana 1992 as
prepar�d by Ernst & Younq; Fo�m S-1 Registration St�tement to
the Securities & Eachange Commission filed on behaif of Marcus
Cable Company, L.P. , and Marcus Cable Capital Corporation dated
January 13, 1994; FCC Form 394, Application for Franchise
Authority Consent to Assignment or Transfer of Control of Cable
Television Franchise dated December 6, I993 submitted by Stas
Cablevision Group and SMALP. In addition, we have conducted an
interview with Dave Hanson, Vice President of Operations and
Louis Borrelli, Senior Vice Fresident, of Marcus and we hav�
conducted telephone interviews with the administrators of cable
television systems currently owned and oper�tec7 bg Marcus.
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� MOSS & BARNETT
� A PROPESSIONAL ASSOCIATION � � . � . � .� � �
APPLIGABLE LAW
• The following provisions af Minnesota law and of the
Rasemount Franchise qovern the actions of the City in actinq on
the request for approval of transfer:
Minnesota Statutes Section 238.083 Sale �r Traasfer of
Franchise- �
rate chan e
defin�d. For
Subd. l� Fundamental corpo 9
purposes of this section, "fundamental corporate change" means
the sale or transfer of a majority of a corporation's assets;
merger, includinq a parent and its subsidiary corporation;
consolidation or creation of a subsidiarg corporation.
Subd. 2. Wzittea approval of franchising authority. A
sale or transfer of a franchise, including a sale or transfer
by means of a fundamental corporate change, requires the
written approval `of the franehising authority. The parties to
the sale or transfer of a franchise shall rnake a written �I
request to the franchising authority for its approval of the
sale or transfer. The franchising autho=ity shall reply, in
writing, within 30 days of the request and shall indicate its �I
approval of the request or its determination that a public �
hearing is necessary if it determines that a sale or transfer !�
of a franchise may adversely affect the company•s subscribers. �,
The franchisinq authority shall conduct a public hearinq on the '
request within 30 days of that determination. ',
Subd. 3. Hotice of hearing. Unless otherwise already _
provided for by loeal law, notice of the hearinq must be given
14 days before the hearing by :publishinq notice of it once in a
newspaper of qeneral circulation in the asea being served by
the franchise. The notice must contain the date, time, and
place of the hearing and must briefly state the substance of
the action to be considered by the franchisinq authority.
Subd. 4. Approval or deaial of sale or transfer request.
Within 30 days after the public hearing, the fr�nchirinq
authority shall apprave or den�►, in writinq, the sale or
transfer request. The approval. must not be unreasonably
withheld.
Subd. 5. Sale or transfer of franchise �ithout sgstda.
The parties to the sale or transfer of a f ranchise only,
without the inclusion o€ a cable coimaunications system in which
at least substantial construction has eommenced, shall
establish that the sale or transfer of only the franchise will
be in the public interest.
Subd. 6. Sale or transfer of stock. Sale or transfer of
stock in a corporation so as ta create a new controlling
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� MOSS & BARNETT
A Paoress�oNni.Assoctenox
interest in a eable communications system is subject to the
requirements of this section.
The term "controlling interest", as used herein, is not
limited to majority stock ownership, but includes actual '
working control in whatewer manner eaercised. ',
Laws 1985, c. 285, § 22, eff. July 1, 1985
The Rosemount Franchise at Section 10.04 Sale or Transfer of
Franchise:
This Franchise shall not be sold, assigned or
transferred either in whole or in part, nor shall �itle
thereto, either leqal or equitable, or any right, interest
or pro�erty therein, pass to or vest in any person without
written approval of the Franchisor. Such approval shall
not be unreasonably withheld. For purposes of this
section, the� term "transfer" shall include sale or
transfer of all or a majority of the Franchisee's assets,
merger (includinq any pa=ent corporation, or sale or
transfer of stock in a corporation so as to create a new
controlling interest in the System. The term "controlling
interest" as used herein is nat limited to majority stock
ownership, but includes actual working control in whatever
manner eaercised.
The parties to the sale or transfer of this Franchise
shall make a written request to the Franchisor for its
approval of a sale or transfer.
Franchisor shall reply in wr3.ting within thirty (3Q)
days of the request and shall indieate approval of the
request or its determination that a public hearing is
necessary if it determines that the sale or transfer may
adversely affect the System's subscribers.
If a public hearing is deemed necessary, such hearing
shall be conducted within thirty (34) days of sueh
determination. Notice oE the hearing must be qiven 14
days before the hearing by publishing notice of it once in
a newspaper of general circulation in the franchise area.
The notice must contain the date, time, and place of the
hearing and must briefly state the substance of the action
to be considered by Franchisor.
Within thirty {30) days after the public hesring,
Franchisor shall approve or deny in writing the sale or
transfer request.
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� MOSS � BARNETT
. A PROFESSIONAL ASSOCUTION � � � � . �
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Based on Minn. Stat. . § 238.083 and § 10.�4 of the
Rosemount Franchise, we believe the following grocess promotes
an effective and orderly review of the transfer of ownership of
Star, resulting in an informed decisions
!. Parties to the sale or transfer of a Franchise shall make
a written request to the franchisinq authority for
approval of the sale or transfer.
A. This written request, however, is not final until the
parties to the sale or transfer have completed the
necessary application forms and returned them to the
franchising authoritg.
1. The parties to the sale or transfer should be
-_ allowed a reasonable time within which to
complete and return the application forms to the
franchisinq authozi�y.
2. Upon receipt by the franchising authority of the
application forms, the written request from the
parties to the sale or transfer is final.
II. The franchising authority shall reply within thirty (30�
days of the written request by either approving the sale
or transfer, or by determining that a public hearing is
necessary.
A. A public hearinq is necessary if the £ranchising I�,
authority determines that a sale or transfer of the
Franchise may adversely affect subscribers.
1. The franchising authority shall conduct a public '
hearing on the request within thirty {3�} days '
of that determination.
B. During the thirty (34) day perio8, the fraachising
authozity shall review the financial, leqai,
technical and character qualifications of the buyer
or proposed transferee.
1. During this thirty (30) day period, the
franchising authority shall also prepare a
report to be presented to the ezisting cable
operator, as well as the proposed transferee.
III. Notice of the public hearing must be given fourteen (14)
days before the hearing by publishing notice of it once in
a newspaper of general circulation in the area being
served by the Franchise.
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A. The notice must contain the aate, time, and place of
the hearing and must briefly state the substance of
the action to be considere� by the f ranchising
authority.
IV. The franchisinq authority makes its presentation at the
public hearing.
A. This public hearing qoes on, if necessary, for two
(2) weeks, during which the franchising authority may
draft a final report with its recommendations.
V. Within thirty (30) days after the public hearing, the
franchising authority shall adopt a zesolution in writing
approvinq or denyinq the sale or transfer reguest. This
approval must not be unreasoaably withheld.
A. In addition, this resolution may make findings which
include:
1. Amendments to the Franchise Agreement
incorporatinq any modifications which are
applicable.
2. Acceptance of the Aqreement by the transferee.
3 . Guarantees made by the general partner of the
transferee, and the qeneral partners of that
entity.
4. Gompliance with other closing requirements,
ineluding reimbursement of eapenses of the City
for legal and eonsultinq costs, and delivery of
partnership authorizations to enter into the
Acceptance Agreement.
5. fJpinions of the transferee's leqal counsel.
NOTE: The timing of the process outlined above and steps to be
followed may be modified based upon the need to evaluate issues
in the Franchise that are unresolved and modifications to the
Franchise. This is best accomplished thtough a negotiation
process.
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.���Q nc t`pNTi��I-
nFS�RIPTIQN OF TRA: � � "'.
Cablevision Group, a Wisconsin
At the present time Star interest in SMALP LimiteS
general partnership, owns 99 •5� which in turn
tnership, a Wisconsin limited partne e pital stock of Stat
Par which in turn
awns 100� of the issue a W��onsSi a�corporation,
Mid America I�. In�• � Inc. , a Minnesota corPoration.
�gg3 proviaes for the
owns 100� of A=eementraat d1November 12• � Delaware limited
The Purchase 9 L•p• � and Star
purcbase by Marcus Cable Partners,
Pa
rtnership, of the assets of Star Cable��sion Group
Mid America Limited Partnership.
,.,�o esx T v STRUCT��� n� �t ANGFiT SEE
• �`TTi2RE1V� Vt�a�j+•c�
Star eablevision Group.
A Wisconsin general partnership
general partner 99 •5� interest
Star Mid America Limiteartnershiphip
a Wisconsin limited p
100�
Star Mid Ame
rica Iv, Inc.
a Wisconsin corporation
10 0�
Star Metro Cable. Inc.
a Minnesota corporation
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, MOSS & BARNET`T
. � A PROPESSIONAL ASSOCIATION � . . �
Pursuant to the November 12, 1993 Purchase Agreement,
Marcus Cable Partners, L.P. wiil purchase the as�ets of Staz
Cablevision Group and SMAI,P, which owns all of the issued and
' outstanding capital stock of Star Mid America IV, Inc, Star
Mid America IV, Inc. is the parent of Star Metro Cable , Inc.
Goldman Sachs Marcus Cable Properties, L.P. '�,
investors �,
general partner
limited partner 14.8�
80.2$
Marcus Cable Company, L.P.
general partner
99$ limited partner
l�
Marcus Cable Partners, L.P.
The names "Star Cablevision, " "Star Cab2evision Group" or
any similar formulation (other than the names "Star Mid America
IV, Inc. " and "S�ar Metro Cable, Inc. " which are being
transferred to Marcus} are not beinq sold or transferred and
may only be used for a period of 120 days after the closing
date in the operation of the business of the systems.
Marcus Cable Company, L.P. is a holding company which has
no significant assets other. -than its investments in the
ogerating partnerships identified in the diagram below. Marcus
Cable Company, L.P, dervies all of its ogeratinq income and
cash flow from the operatinq partnerships. Accordingly, Marcus
Cable Company, L.P. must rely entizely upon distributions from
the operating partnerships to supply the funds necessary to
meet its. obligations including the payment of principle and
interest on the debentures (�75 million) . The debentures are
being issues solely to Ma=cus Cab1e Company, L.P. and Marcus
Cable Capital Corporation. Neither Marcus Cab1e Properties,
L.P. , Marcus Cable Properties, Inc. , tbe Goldman Saehs
investors or the lirnited partners of the operatinq
partnerships, or any of their respective directors, officers,
partners, stockholders and employees will be an obliqor under
the debentures. There is no present intention, and ther�
should be no eapectation that Marcus Cab1e Properties, L.P. ,
Marcus Cable Properties, Inc. or any other party, will, in the
future, fund the operations or deficits of Marcus Cable
Company, L.P. or Marcus Cabie Capital Corporation.
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Y MOSS bz BARNETT
� A PROT85510NAL/45SOCUTiON � � . � � . .
�ORPORATE STRUCTURE FOLL�WING STAR AGQUtSIT10N
�p. L!l�-i r/e c� N�
Marcus Cable Properties, Iac. �i
Bmployeea of
� General Partner Marcua Cable I,
Companp. L.P.
Li.m:ted �artner in each Operatiaq ,
Partnership (1� or less interest) I',
Marcus Cab1e Froperties, L.P.
Limited Partners
General Partner
{19.8� iaterest)
Goldman Sachs
Investors Marcus Cable Company, L.P.
(1009� interest)
Limitea -'-" '
Partners Marcus Cab1e Capital
(80.2� interest) Corporation
General Par�aer
(99� interest) (99.99� iatereat) (99,999� iatarest)
Marcus Cable Marcus Cable of Marcus Cable of
Partners, L.P. San Aaqelo, L.P. Delarrare and
(Wiscoasin Systems) (San Asgelo Systems) Marylan8, L.P.
(Dela�nare and
Marylaad Sgstema)
(100� iaterest)
Marcus Gable. Inc.
(formerly. Star Metro. Inc.)
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, MOSS & BARNETT
� A PROFSSStONAL ASSOCIATION � � . . � � �
INTERVIEW WtTH MARCUS REPRESENTATNES
On March 3, 1994 I spoke with Mr. Louis Bor=elli, Senior
Vice President of Marcus Cable and Mr. Dave Hanson, Vice
President of 4perations for Marcus Cable to discuss Marcus
Cable's plans and intentions with respect to the cable
television systems subject to the Purchase Aqreement. The ,
following summarizes this telephone conference, in a question
and answer format:
Brian T. Grogan:
What changes do you plan to make locally as a result
of this acquisition?
Louis Borrelli:
Well, I '11 give the easy answer -- none. Hut I ' 11
let Dave talk about whether there is anythinq that
has come up in conversations specifically with the
Cities that he mag be aware of.
Dave Hanson:
Well, in terms of our ogerations as we've said all
alonq, Star has made a lot of changes since acquiring
this group . from Metro and they are moving in the
riqht direction. We will probably ask them to focus
a little di€ferently on each and every transaction so
that customer service becomes more of an issue or an
item and that it is upper most in their minds. I
think from an administzative standpaint for the
company itself, that we attempt ta address public
access issues just as soon as we possibly can to see
if it is advantageous to everyone at this time to qo
in and set it up as a non-profit organization that is
controlled by the public.
BTG: What about ezisting Star pe=sonnei and iadividuals
that are ao� operating Iocallp to provide service in
communities? Are you planning to eliminate any jobs,
change personnel �r add personnel?
DH: No, no, and no.
LB: That was part of the deal. If they want to, you
know, i mean, it's not unusual when changes of
owrzership occur that some people miqht take that as a
time to make a change. I don't anticipate anybody at
the manaqement 2eve1 certainly makinq that change,
but I can't assure that. We are goinq to be offering
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� � A PROPESSIONAL ASSOCIATION � � � � � . . ��
employment to everyone who is there currently and
with no plans to make any changes. It's obviously
very prernature, before you own a system. We've never
• done a transaction where we have gone in and, done a,
you know, whole sale, let's slash and burn.
DH: With any transaction that we`ve ever done in the past
if there has been a reduction of personnel it has
always been strictly throuqh attrition. We have not
gone in and eliminated a position to get rid of a
person if we determine we can fill that f rom within
by changing duties that''s the way it was done. We
never went in and fired anybody. I would say that in
speaking to the future I think we have an opportunity
on some of the advertising sales side to look at
potentially offerinq employment to more people in the
eommunity. That's just something that we have been
lookinq at as we look over these properties but as
far as �the rest of the positions go we haven't gone
in aepth at all.
BTG: Will the sale of the Star Systems to I+tareus cause
subscriber rates ta increase?
DH: I think the government has kind of taken care of
that. There is nothing related to the sale that I
think chanqes the economics. If anything they
probably improve the economics. I don't know for
sure but I think our finaneial position, our overall
leverage and access to capital probably is better
than what Star's current situation is. But in terms
of cuts in the rates, those are all basical2y qonna
be dictated by federal statute and then that's
basically what we' re going to have to follow.
LB: In going to the operating philosophy of the company
if you look at past transaction that we have been
invoived in, our history has been one that the rates
have not changed because of an acquisition. The
rates have chanqed tygically at the rate of inflation
in our ezistinq properties and with new acquisitions
only at a time when we have enhanced the value to the
customer either through added services or upgrades.
DH: The only time when we have made what I would call
drama�ic r�te adjustments has been after system
rebuilds or upqrades where we took a capacity from
say 12 or 18 channels up to 36 or 60 and �aaea, you
know, a dozen or two dozen channels, but as you know,
I mean, even if you did that today I think goverr�ment
would probably let you get a buck and a half back on
a $2 million rebuild. Unfortunatelg, I think what we
are goinq to have to say on a lot of these chanqe
issues �is the status quo until the laws are c�earer
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, MOSS & BARNETT
A PxorrssioNu.Assocu�noN
and until we can get a reasonable return "and provide
them better services. It' s unfortunate but that's
the way it' s worked out.
BTG: Do gou iatend to increase the tiering of
proqramtning. For ezample. Providing more programmiag
on aa a la carte b�sis?
LB: No. Aqain, what I think I 'd hawe to say on that is
that we really can't make any definitive decisions
and really we' re out wastinq our time with a lot of
what if strateqies until we know ezactly what the new
laws allow us to do, what the parameters are that
would specifical�y sag that a certai�n channel or
group of channels or a la carte and therefore
unregulated versus a second or third regulated tier.
As a company we are pretty rnuch a plain vanilla
company. We don't do a lot af tiesing, we generally
just have a broadcast basic level of service and
eapanded programming level of service. We are very
aggressive in how we package pay televi�ion, but we
don't have a lot of varyinq levels of services or a
la cartes in any of our other systems.
BTG: will the transfer create so much debt to the cable
spstem that the cable operator will aot have
flezibilitp in the future to meet new technoloqy
demands that may arise.
LB: No. The one thing that has happened with the new law
is that it has caused cable operators to become far
more canservatively finaneed. Our financial plan
calls for a large amount of capital be ezpended in
order to facilitate new technology. I don't think
that leverage is anythinq outside of what the normal
marketplace would allow because basically its being
dane with a traditional bank in public debt financing
and the markets today generally don•t like to see
high leverage and so, you know, we're putting a large
amount of real qreen in this in terms �f real equity
and we've got enough �ash in hand and we wili
generate enough internal cash to be able to fund ali
of our capital plans, service our debts, service the
public debt, and amortize the bank debt as well, so,
no we don't think that that is going to be a problem
at all.
BTG: Will the manner ia which you bill customers differ
from that of Star. In other words, will you break
out charges differently than what Star has doae in
the past.
LB: We do not believe so. I apoloqize for not being
totally f luid on how they c3o it currently, but again,
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� W MOSS & BARNETT
� A PROFESSIONAL ASSOCIA770N . � � � � � � .
I think the itemization of bills is one that is
fairZy specific as to what the minimum requiferaents
are and we would obviously complg with whatever the
minimum requirements are. If they are doing more
than that my guess is that we would just continue
with what they are billinq, but I can't say that for
sure. Dave, you may know a little more about that.
DH: The billing system they are usinq is one that we will
continue to employ and is one that we are familiar
with and I don't see any reason to change any o€ it.
LB: Unless the community doesn't like what we are doing.
But my guess is that we would continue with what they
are doing unless someone decided that it doesn't meet
whatever we are supposed to comply with at the
federal level.
gTG; Do you follow any particular set or code of coasumer
protection standards. i�or ezample, have you
incorporated into pour dag to day operatioas in
various commuaities, enforcement of the PCC's
customer service standards or have gou developed
sepa=ate standards over and above tbase of the FCC?
LB: Well, we tend to meet or eaceed the FCC guidelines in
our current operations. That has been more than
sufficient for the communities that we serve, but I
guess my answer is that we tend to, we will meet or
ezceed whatever standards people want to set for use
but for the most part the FCC standards are ths ones
that everyone has been happy with.
DH: And in most cases where there is some questions about
the effeetiveness of the FCC standards, when we sit
down with the city regulators and talk about these
standard, we can come up with a plan that is both
beneficial to us in terms of and typically ours and
is also beneficial to the community. We do both. We
have set ourselves up as the FCC standards being
minimum and we have gone beyond that in communities
where they have asked for same change and it makes
sense.
BTG: Do you have a separate customer se=vice agreemeat o=
contract that you enter into with subscribers?
LB: I•m not sure I understand that.
BTG: Well, when you sign up ne�w subscribers oz when you
take over thes+e s�stems, will .you be introducing aay ,
new customer service contract as far as the
obligations of the subscriber and the company in that
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� MOSS & BARNETT
� A PROPESSION�L ASSOCIA170N . �
relationship of providing cable service and paying
moathly bills, etc.
' DH: No. I
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LB: I don't think so. Z mean, we sign a work order when I
we do an install just like any other cable company i
but we're operating under the FCC guidelines, we I ,
don't believe we are changing any of the billinq
practices or service practices of the current ,
operator so I guess the answer is no. ',
DH: There is no specific contract that the customear ,
signs. They sign the work order showing that the '
work was done.
BTG: Do pou use any customer satisfaction surveys either
in individual communities or on a national basis.
LBs Yes. We do informal poilinq as well as formaZ
polling. Informal I would say is calling back, you
know, recent work whether it's new installs,
reconnects, service calls, to determine that the
whatever work was done at the house customers were
satisfied and we do that on a regular basis.
Depending upon volume and time of year, the
percentage of people called back vara.es but that is
done on an informal basis and then on a more formal
basis we do a random survey with an outside research
firm and that generally measures not only customer
satisfaction in terms of service but as we1Z as
programming content and satisfying what the actual
product that we have. We also throw some questions
there about new technologies and other thinqs that
will help us make decisions as we move forward.
HTG: Some cable comp�nies are ia th� busiaess of taking
over a distressed cable compaay, holding it for e
short period of time aad thea sellisg it. Would this
applg to Marcus' cable o�rations?
LB: No, I don't think we would anybady wauld call this
acquisition a distressed acquisition. It's probably
one of the best properties in the market in terms of
future qrowth and potential. We have in the past
been able to acquire companies that some people might
consider distressed and make improvements but that's
not the business that we are in. We have been in the
cable business in one form or another as an ogerating
entity since 1982 and before that a lot of us have
been in the business far longer than that in other
capacities so we �are not an arbitrager if you will of
cable systems. We tend to own them and ogerate them
and we don't have a three year flip plan on any of
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�
. MOSS & BARNETT
� A PROFESSIONAL ASSOCIA710N . . � . . ... � � �.
these properties. This is part of a long term plan
that we have to enhance and eapand our ezgosure in
the Minnesota-Wisconsin area.
BTG: What is gour operating philosophy towards system
maintenance.
LB; Well, we really believe in maintaining system
integrity. We have both policies and procedures far
maintenance. We have a safety policy. We have a lot
of things that if you were to look at from the
standpoint of how we operate day to day and how do we
take care of things for both short and lonq term that
I think would leave most people to believe that we
are more interested in doinq thinqs riqht and doing
them right the first time because we thing that it is
cheapes in the long run. Now, that doesn't mean that
we are able to do everything we want to do day one
but I think that most people would acknowledge that
our companies are well run, that our plant is well
maintained and that we have in the past and continue
to plan to provide sufficient capital so that
customer quality in terms of pictures and reception
and services delivered continually improve and
maintain the pace you know as far as the industry
qoes wi�h properties of similar size.
BTG: What is your ogerating philosophy to�vards public,
educational and govern�eatal access channels.
LB: Well, I think that any product, any programming that
is unique to the community that serves purpose is a
valuable asset not only to the cammunity but to the
cable system. My background is in access. I started
out in this business over 15 years aqo as a studio
rat doinq origination access progra�m€aing so it's kind
of a soft spot in my heart but I have come to realize
through my own ezperience indirectly as we11 as in
the cable systems we have owned and operated is that
there are communities that really put a heavy
emphasis on access and in those cases campanies are
very smart to facilitate that commitment by
allocating resources and channels, etc. What we
don't want to do ana that we try to avoid doinq is
funding or supporting or facilitating an effort that
really doesn't -- I want to say this the riqht way.
It doesn't deserve to be supporte8 meaning that the
community really has a lack of interest but because
of a franchise obliqation or say a minority of people
involved that are able to not coerce but force the
issue on the local cable operator all the sudden you
have this facility but it doesn't qet used, the
channels don`t qet used and really that's a waste of
time so if• �here is a demonstrated commitment and
-i�-
y MQSS & BARNETT
A PROPESSIONA{.ASSpCIAT10N � . � . . . �
there is a liability that ezists and we have been
very supportive but I do believe that access is just
that and we should be in the position to help
facilitate that access but I don't necessarily want
to be in the business of producing it for them or to
be putting a lot of time and resources that I think
should be really better directed from an independent
group or from a city group you know funded by
franchise fees.
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� MOSS & BARNETT
� A PROf855tONAL ASSOCIA'I'ION
��R�fGl�S A�f f1 L�� [ O�M�?
Marcus Cable Partners, L.P. owns, operates or controls
cable communication systems in 215 communita.es in Wisconsin.
They also ogerate sgstems in Delaware and Maryland. They have
forrner franchises in Minnesota, Pennsylvania, South Dakota and
Wisconsin. They have 41 potential franchises throughout
Minnesota and Wisconsin. In the State of Wisconsin, they serve
approximately 142,161 subscribers.
The principals of the corporation are Jeffrey A. Marcus,
President; Louis A. Borrelli, Jr. , Senior Vice President; Mark
Biersmith, Chief Financial Officer; Cynthia Mannes, Vice
President; John Pietri, Director of Enqineering; and John
Klingstedt, Controller.
We contacted ten (10) communities with cable systems
currently operated by Marcus to ascertain:
(1) how the cable operator has worked with the
municipalities;
(2) if subscribers appear to be satisfied with the
service rendered; and
(3) the eatent of support by Marcus for public access
programminq and local programminq.
At least one municipal official from each con�nunity was
contacted and asked the following questions, given responses as
summarized below:
1. How many years has Marcus been operating the cable system?
Marcus has operated the systems for periods ranqinq
from approaimately three years to fifteen yea=s.
2. Did Marcus build the cable system?
In no case has Marcus built the cable system.
3. How old is the eaisting system?
System aqe ranges from fifteea to forty years.
4. What type of cutbacks or amendments have been made since
Marcus took over?
All of the communities noted that no cutbacks and/or '
amendments have been made.
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y l
� IViOSS & BARNETT II',
.. A PAOPESSiONAL/iSSOCIATION . � � � � �. � � �I
5. Is there a local office for Marcus? If not, how far awa� '�
is the office? I
Marcus maintains a local affice in all of the I,,
communities ranging between one block to two miles ,
away from the municipality's office. ',
b. How many basic cable channels are there? ',
Basic cable channeis range from approzirnately ten to '
thirty-seven channels. '
7. Does Marcus support public access programming2 Ss there '
public access grogramming?
A majority of the communities have access
programming. However, ther� are quite a few
communi�ties that do not use public access
programminq. A few only use it as a bulletin board.
A few communities are going through a franchise
renewal at this time and are hoping to have more use
once the system is upgraded. The Whitewater
community says it has an active public access
channel. It noted that the production quality is
poor, It recent2y surveyed the comcaunity and
according to the survey, the number one cable show is
the City Council meetings.
8. Does Marcus do any local progra�ning?
Only a few communities stated that Marcus does local
programming.
9. Do the schaols use the system?
Only a few com�aunities indicated that the schools . use
the system. The school system in Two Rivers at one
time did not qet along well with Marcus because it
wanted to handle its own proqramming on an access
channel. The schools now handle their own channel
and have their own equipment.
10, Are most subscribers happy? Has the City received many
complaints?
Most communities felt that they c]o not receive very
many complaints. Ashland said that they received
complaints reqarding the reliability of the system.
Ladysmith indicated that the subsczibers wanted a
package with fewer channels at a lower price. The
Tomah system received a lot of complaints reqarding
the negotiations for retransmission/must carry.
Whitewater received complaints regardinq the
production quality of its access chaanel. Another
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M . . . . . � . ',
. MOSS & BARNETT
� A PROPESSlONAL ASX)C1ATiON . � � � . ��
community commented that they received complaints on '
the franchise fees being shown on the bill. Two ',,
Rivers had conducted a survey which indicated that !�
the costs were too high, the service was fine, but �
the customer service was the weakest point. The City �II
official commented that Marcus told the City it wou2d �
not increase the rates if it approved of the I
transfer. However, four months later Marcus
increased the rates.
11. Daes Mazcus satisfactorily resolve subscriber complaints?
� Most communities believe that their subscriber
com laints are satisfactoril resolved. Quite a few
P Y
h com laints a
of the communitzes stated that t e p g
directly to the cable operator or are filtered
through a Cable Commission.
12. What are ��e current subscriber rates?
Current subscriber rates ranqe from approzimatelp
$7.40 to $42.50. HBO runs approaimately $12.95.
13 . Has Marcus made any changes in subscriber rates?
Most of the communities do not recall a recent
increase in rates ezcept for premium channels in a
few communities.
14 . How would you describe the City' s relationship with Marcus?
Most of the communities report the relationships
ranging from good to positive. One community stated
that the relationship is up and down.
15. What types of problems has the Citg ezperienced with
Marcus?
The problems range from the follawinqt rate
increases, electrical system violation after
inspectian, not eatendinq service to unserved areas,
laying cable while doing construction, nat providing
complete financial statements and increased rates
after transfer even though the agreement would be not
to do so.
16. What are your franchise fees? Are they paid on time7
The franchise fees range from 3� to 5� and are paid
on time. One community noted that the cable operator
is paying the franchise fees under protest due to the
fact that the City feels that the franchise fees
received should be on all revenues Marcus is
generating. Some of the communities are negotiating
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M
� MOSS & BARNETT
� � � � A PRQFESSIONAL ASSOCIATION � � � � . � � '�,
5$ during its franchise renewal. One comrnunity does '�
not collect franchise fees. Rice Lake has u�ed the
fees to offset property tazes but now uses them for
- • the cornmunity access channels. i,
17. What is the proqramminq/gicture quality like?
Most of , the communities responded that the
proqram/picture quality was qood to very good. Z�o
communities stated that two stations are f requently
fuzzy. Tamah stated they have problems from time to
time, but the cable operator says that the system is
old. Marcus claims that the problems will be
resolved once the system is rebuilt.
18. Would you qrant a new franchise to Marcus? Why ar why not?
Al1 of the comrnunities said they would renew the
franchise with Marcus.
SPECIFIC RESPOPSES FOR EACH COIYII�IQNITY -
BURI�IPC1"ON, WI
(414) 763-3717
CONTACT: Chris Kerkman, Clerk/Treasurer
Going through renewal.
Recently held a public hearinq.
Programming problem.
Was not servicinq people timely.
Doss not recall overwhelminq number af people at hearing.
Discussed regulations on proqrams.
Must Carry/Retransmission.
Has not had many complaints in four years.� Maybe one or two.
Up to 10 letters of complaints mainly from retirernent homes.
1. Since March 6, 1990.
2. NO.
3. Built in 1973 or 1974.
4 . None, status quo.
5. Yes, 5 blocks.
6. Appro=imately 37, 4 premium.
7. No access channels, one channel available for PEG. News
network is using 5 - 6 minutes every one-half hour.
8. Not aware of.
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� �
, MOSS & BARNETT
A Pxorass�oxec Assoct,+nox I
I
9 . No. I
10 . Eapense is main complaint. I
11e Feels they do - good response.
12. 3/1/94 HBO, $12.45, CINEMAX, $12.5Q, DISNEY, $9 .35, 2 I,
PREMIiJM, $18.9 5
BASIG� $42.50 includes broadcast channels
II
MVPT $71,89 value for $44.95 I
includes Broadcast, Satellite Showcase, 3 Premium '�
MVP II Maaimum Value Package I�,
Includes Hasic, Satellite Showcase, 4 Premium for
$49.95 �,
13 . Does not have information. '�
14 . Have not had much contact until renewal process. ;
15 . None. '
16. Yes, paid on time. � Franchise fees now listed on I
bill. 3$ franchise fee. '
17. Programming problem. Subscribers want more Chicago ',
stations. Settled contracts. Stations wanted to be '
bought. ,
18 . Feels City will renew. I
ANTIGO, WI . ,
(715) 623-7849
CONTACT; Donald Schroeder, Town Chairman '
1. At least 10 �*ears. ',
2. No. I
3 . Doesn't know. '
4. None, they have made increases.
5. Yes, 1 1/2 mile.
6. Doesn't know. '
7. Yes, yes.
8. Some.
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. MOSS & BARNETT
� � A PHOP&SSIONAL ASSOCUTION � . � � � � . � �
9. Doesn't know - thinks the technical school uses.
la. No complaints.
11. Must or would Come to Town Board to cornplain.
12. Heard $20-$25 a month.
13 . Yes, on movie channels.
14 . Good.
15. Were complaints that rates are too hiqh.
16. Paid on time. Not sure �
17. Good.
18. Probablg.
ASI�I�PD, WI
(715) 682-7071
CONTACT: Carol Larson, City Clerk
l. City has had cable approaimatelg 30 years. Marcus
bought out a number of years ago - at least l0.
2. No. -
3. 30 years old, has been upgraded over years.
4. No.
5. Yes. 12 blocks. !�
6. 11 channels, 2 shopping channels� basic broadcast
$10.36. �
7. City never requested. Does not have interest City '
has not approached Marcus to provide. � j
8. No. '
9. No.
10. City conducted survey. Satisfied with everpthing
eacept reliability of system. The system is 30 years
old. Marcus approached early to start renewal to
rebuild system. Complaints include that there are
� lines through some channels or there are outages.
Marcus is good about bringing system back up.
,- -21-
. IviOSS & BARNETT
� � A PROFESSSONAL ASSOCIA7ION � � � . . �
11. Yes.
13 . Yes, not recently.
14 . Good - not close relationship. Good business in
City. Not workinq hand in hand -- City business, i.e.
Council decided not to regulate rates. Feels Marcus
provides quality service and competitive rates.
Note: Snaw emerqencies - Mareus, at no charge, gives '
access to City to dial into system to broadcast
announcements, i.e. odd/even parking or other
emergency (haven't used) . Credit to local management.
15, Very little. City is in renewal process. City
inspected electrical sy�stem and noted electrical code
violations. Marcus is working at correcting. Noted
there are also deficiencies in installation. _
16. Less than 2$, proposing 5�, yes.
17. ? '
18 No doubt. '
LADYSMZTH, WZ
(715) 532-2600
CONTACT: A1 Christianson, City Administrator ',
1. Several years ago. I
2. Built in 1970. Changed ownership three or four tirnes '
since that time.
3. 23 years. '�
4. None - added.
5. Yes, one block.
6. 12 approaimately. Not many subscribers. Most !i
subscribers have ezpanded basic. I
7. In gast, yes. Not much demand to use. With last two �
weeks, used erawl-in on weather channel for utiiity
company, ,
8. No. '
9. No.
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x MOSS & BARNETT
� A�PROFESSIONAL ASSOCIATION . � � �
10. Have no� received many complaints. At one time; only
had one package with 36 channels. Subscribers wanted
basie package with fewer channels and lower price.
11. Daes not receive enough to comment. Not aware of
anything; unresoTved complaints go directlg to cable
company.
12. Basie?
Ezpanded $27.42
13 . No.
14 . Good, Anythinq to lower rates would be iooked at. I
Cable company is looked at as business. No major ,
problems. ',
15. None.
16. Not aware.
17. Generally, pretty good. Individuals have complained
that one or two channels are fuzzy.
18. Sure they would.
MENOMQNIE, WI
(715) 232-2187
CONTACT: Loweli Prange, City Administrator
1. Approzimately 5 years.-
2. No, Did rebuild one year ago.
3. 20 years old.
4 . No.
5. Yes, one mile.
6. 13 channels.
7. Have dedicated channe2. City does not use.
8. No.
9. No.
10. Does not receive many complaints.
11. Yes, cable campany is looking to ezpand hours to
handle eomplaints and requests.
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_ MOSS & BARNETT
A PnoFessiowiu.Assocunow
12. Broadcast basic (broadcast station) $ 9.46
Satellite Showcase 14.04 - 18
channels
Combined Broadcast and Satellite 23.50
HB� 12.95
2 Prema.um 18.95
13 . Not in last 12 - 18 months.
14 . Better than with Star. Star and City did not qet
along.
15. Not many other than eztendinq serviees to areas
unserved. Marcus thouqht it was not cast e€fective. -
Pretty amicable relationship, City Manager meets
regularly with manqer of cable company to discuss
matters.
16. 5� yes. Also provicle financi,als with franchise fee
payments.
17. Picture O.K.
18. A11 things being equal, yes. City seek someone else
- no.
TOMAH, WI
(608) 372-5948
CONTACT: Phyllis Zimmerman, City Clerk I
(On Franchise Renewal .Commission)
1. A long time ago. Agproaimately 15 years. �'',
2. No. Does not know how much has been replaced. 'i
Marcus hopes to rebuild whole syst�m to give better i,
service and wiil also eztend boundaries. The I
outlying areas not able to receive cable at this ,
time. The City does not have a Franchise for '
Marcus. An Ordinance was signed last month. ,
3 . No idea. Approaimately €rom the 1960s. ,
4. Cannot answer.
5. Yes, one mile.
6. ?, Lost Eau Claire station because '
retransmission/must carry. !
7. Yes, City not usinq at this time. With upgrade, hope
to have more use by schools and City.
_24_
Y . . . . � � � . �,�.
_ MOSS & BARNETT !
�. .. A PAOFESSiONAL ASSOCLITION � � � . . ... . .. � � i
8. Not aware of. A gentleman tapes different events to
put on access channel. He is charged by Marcus.
9 . To some eatent. Hopes to use more. Schools can
bring in programming from other areas.
10. While neqotiating with a lot of channels, the City
received a lot of complaints. Cable operator
provided a switch to subscribers �o activate channels
that subscribers are unable to receive through cable
system while goinq through negatiations. Not a lot
of cornplaints. Have had problems with outages on the
weekends and system not beinq brouqht back until
first of the week.
11. Cannot answer. Assumes cable operators does. When
Commission asks questions, they respond.
12. Auqust 30, 1993 letter to Mayor sets out Basic at
$7.40 and Satellite Showcase at $16.10. Mareus
reduced rates for aclditional outlines and converters.
13 . Not aware.
14 . Good.
15 . Not active relationship until within last year. Had
little eontact, no problems.
lb. No franchise fees. Depends on City's involvement.
17. Problems time to time. Cable ogerator tries to
resolve problems, but often says system is old. New
system will resolve problems. Rebuild should take
place in 1944 - 1995.
18. Yes.
WHITEWATER, WI
(414) 473-0500
CONTACT: Gary Boden, City Manager
1. 5 years or less. Third owner.
2. NO.
3. 15 years old.
4. No. Seeing restructuring of services. Going throuqh
franchise renewal. Eacept system upgrade�,. Working
with heighboring communities on franchise renewal,
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� MOSS & BARNETT
A�PROlESSiONAL ASSOCIATION � . . � � � . . � ''�,
5. Yes, 4 blocks. ',
6. On edge of two market areas: Madison and Milwaukee - II
unique area with 15 channels. �
7. Yes. Have active publie access. City is university
community. Unique, has two public access channels.
� One used for university, one used for local.
Production quality poor. The number one cable shaw,
: according to survey, is City Council meetings.
8. No. A£filiation with WIN News. Contraets out for
Cablecasting of News. :
9 . Yes, part of gubiic access channels.
10. Very pasitive relationship. Reasonable quality
reception. Has not jumped on rate regulation. Feels
part of satisfaction issue. No increase in rates.
� Complaints not significant, ezcept production quality
of local access.
11. Yes. Have active Cable TV Committee which is not
comprised of City Council but of volunteers with
school system, etc. People complain to them. They
monitor service. Have active relationship with
Marcus. Filter problems. Community pretty satisfied.
12. Basic
$26.00
FiB4/CinemaalDisney and eapanded $46.00
$52.00 is most subscribers pay.
13 . Across board have had one increase in 3 gears.
Eapect increase this year.
14. Positive.
15. Problems with laying cable while doing construction.
Good management. Sensitive to concerns. Take
seriously concerns and to rest�lve. May not be fast
enough, but what is reasonable.
16. ? _ .
17. Good. Make subscribers aware when sunspots occur.
Working into Franchise ability to have character
generators to wire into municipal offices for
emergency announcements.
18. Yes.
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.
. M(�SS & BARNETT
A PROfES310NAL A550CtATtON � . � � �� � � �
MOPROE, WI
(608) 325-572?
CONTACT: Alois Mayer, Town Chairman
Jim Myers, City Clerk
1. 3 years approzimatel�r.
2. No.
3o Approsimately 10 years old.
4, No.
5. Yes. 2 blocks.
6. 20-11.
�. City has a channel to use for bulletin board to �ype
messages onto. School has channel to put messaqes an
bulletin baard and rebroadcast events.
8. Yes, puts message on bulletin board. Also uses for
advertising for businesses.
9. �es, see #7.
10. Receive few complaints: Customers upset when
franchise fee is shown on bills and fact of havinq to
pay for. Also upset about late fee penalty.
Received four complaints in last 3 years.
11. Last one, yes.
12. Does not knaw.
13 . Yes, two years ago on premium channels.
14. Good. Used influence on thera. When City moved
railroad depot to save for historical purposes,
Marcus said they would take down lines for a charge
of $12,OOfl. City asked Marcus to pare down. Marcus
cut to $3,OU4 and said the rest was a donatiQn to the
City. City told 'Marcus Power & Light was charging
$3,000 and telephone company was also charqing $3,000
and asked why they could not do the same. Won't look
good if $7,000 - $8,000 mare.
15. None.
16, 3%
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.
y MOSS & BARNETT
. A PROFESSIONAL ASSOCIATION � � . � . . .
17. Real good, yes.
18. Yes.
ZWU RIQERS, WI
(414) 793-5525 '
CONTACT: Anthony Roach, Secretary, Franchise Renewal
Committee, Finance Director and City Clerk
1. Transfer occurred in 1990. '
2. No. '
3 . Fairly old. More than 15 years old. 20-25 years. '
In process of renewal with Marcus. Franchise eapires ,
January, 1995. J,
4 . No. Had to accept original and in its entirety. I��
5. Yes, 1 1/2 - 2 miles. I
6. 12 channels.
7. Yes. Yes.
8. Some, limited.
9. Yes. Recent development - schoois aia not get along
well with Marcus. Schaols now handles own channels
and have their own equigment.
10. As part of franchise renewal., sent survey to
eustomers. Survey showed new Cable Act not
effective. Service fine. Costs too high. Fairiy
satisfied with service. Customer service is the
weakest point. Marcus said it would not increase
rates if approved transfer. Four months later,
� raised rates. Having trouble with Marcus during
renewal. Having problems retrieving information
under new Act regarding rates. Incomplete xecords
regarding financial statements and regarding City•s
operations financial statements. Marcus dragging
their feet. Marcus may ask for cost-of-servic+e.
Marcus is rethinkinq because of 2f22 rulings.
11. For the most part, yes. Questionnaire showed that
they do. Rated satisfactorily, but room for
improvement.
12. $ 8.55 for 12 channels, $12.95 HBO, $12.50
Showtime/Cinemaa, $9.35 Disney.
: -28-
y �ri(JSS & BARNETT
� A PROlESSIONAL ASSOCIATION � . ��
A11 premiurn channels went up $1.00 this month.
Customers said not properly notified. City received
one week notice.
13 . Prior to rate freeze annual adjustrnents.
14 . Local fine. �
15. See No. 10 above.
16. 3% - 5$ n�gotiating. Yes. Proble� when Marcus took
over. Franehise fees shown on bill. City felt
should receive franchise fees on all revenues Marcus
is qer�erating. Marcus therefore is paying €ees under
protest.
17. Reeently conducted technical sweep and showed that
everything is good. Isalated areas are troublesome.
Marcus resolves to the best of their ability.
Surveys showed good response.
18. Yes. No choice. Neqotiating 4 year franchise term.
Oriqinally Marcus wanted rebuild as part of r�newal
and wanted to eatend term. Due to reeent 73s further
rollback, Marcus agrees with City that technoloqy is
always changing and should go with four year term.
Rebuild is not part of negotiations. Marcus is doing
some market driven enhancements to system.
RICE �RE, WI
(715) 234-2425
CONTACT: Jerry Atherton, Fire Marshall, Zoning Administrator,
Building Inspector, Used to be on Cabie Conunission
as Technieal Advisor.
1. 7 - 8.
2. NO.
3 . 1950s. Has been upgraded in the 1970s and when
Marcus took over and upgraded to mid band and added
channels.
4. No. Given 15 year franchise.
5. Yes, one block.
6. 12 - 13 channels at reduced rate.
$12 - $13.
j
-29-
� MOSS & BARNETT
A Pxores�or�,►t.Assc>cunox
7. Yes, have channel. Marcus installed necessary
equipment to feed from headend. Have roam in City
Hall. Have offered to put informativn on channel.
Have part-time employees who video tape events for
channel. Have had very little p,ragramming. Trying
to qet more programming. Little input f rom
community.
8. Not aware of.
9 . No. Thinks will meet with technical schools to talk
abaut usinq channel.
10. Receive a lot of complaints. People Eeel strongly
about cable. A lot of complaints are not valid.
Complaints include rates and why carry sports.
11. Cable Commission meets monthly. Brought up at
meeting. Yes. A lot of miscommunication. A lot of
complaints do not go directly to eable operator.
Seemed like for a while did not haue good
xelatianship. Mr. Atherton is aiso building
inspector. Part of subdivision in area not
serviced. Marcus would not serve across from area
where served. Finally serviced, due to Commission
being on top of issue. Complaints registered at
Commission meeting went to media.
12. See above.
13 . Deceraber, 1993 prices did not raise. No dramatic
ehanqe in prices, l 1/2 year prior to passing of
Cable Act, providing basic tier at reduced priee is
an option. Told 4 - 5� subscribers would subscribe
to basic. Asked cable aperator to look into putting
basic channel on system. Took 4 - 5 months to do.
14 . Up and down. Community of 8,000. Feeds weather
information hourly.
15. See above.
16. 5�, semi-annual. Yes. I�iand carry over check �30 -
$40,000. City would use to offset property tazes.
Now use for community aecess channels.
17. Much better. Signal level used to be poor. Problem
with teehnical staff. Late with payment. Decided to
audit to see if receiving fair share. Provided
information, Relations not good clurinq this time.
Last two years doing better job.
18 • Yes. Would negotiate di€ferently now since have
attended conference to learn about what to negotiate
durinq franchise renewai.
-30-
� MOSS Si. BARNETT
� � A PROFESSIONAL ASSOGIATIQN . . � . � . . � . �
L.E�a�c�uauFrca�oNs
�• The legal qualifications standard relates primarily to an
analysis of whether the entities involved in the transactian
are duly organizeci and authorized to own the cable system and
the Rosemount Franchise. The standard of review applicable is
that the City's consent shall not be unreasonably withheld.
We have focused our analysis of legal qualifieations on
Marcus Cable Partners, I�.P. 'and Marcus Cab1e Company, L.P.
Based on the information provided by the above-referenced '�,
entities, neither has ever been convicted in a criminal '
proceeding in which offenses applicable to the operation of a ',
cable television franchise have been alleged. In addition, I
neither of the entities has ever been a party to a civil I
proceeding in which it was held liable fo= activities which
might affect its performance under the Rosemount Franchise.
Within the Purchase Agreement, Marcus represents that it
is a limited partnership duly organized, validTy eaisting and
in good standing under the laws of the State of Delaware; and
that on the Clasing Date under the Purchase Agseement, it will
be "qualified to do business as a limited partnership in the
states of Minnesota and Wisconsin. "
Based upon our review of the information provided, it
would appear that the City could not reasonably withhold
approval of the transfer of control based upon the legal
qualifications of the entities involved in this transaction.
-31-
� MOSS & BARNETT
A PROFESSIONAL ASSOCtATlON � � � � ' �
TECHNI�AL QUALtFICATIONS
The technical qualifications standard relates to the
technical eapertise and eaperience in operating and maintaininq
a cable system. In such a review, the standard of review is
once again that the City' s consent shall not be unreasonab2y
withheld.
Under the . proposed transfer of control, the franchisee
wi�.l te�nporaril� (for a period of not more than 120 days)
remain in eaistence. Star Mid America IV, Inc. , will also
temporarily (for a geriod of not more than 120 days} remain in ,,
eaistence, although apparently a change in name to Marcus '�
Cable, Inc. will occur within 12D days. The proposed transfer I
conveys the ownership of all stock in Star Mid America IV, Inc.
to Marcus. '
Marcus has stated it intends to retain the local
operations peaple currently employed in the systerns it is
aGquiring.� '- Further, Ma=cus has represented that no changes are
proposed in present billing practices, provision of PEG
services, or in the terms and conditions of the Rosemount
Franchise. Marcus antici.pates programminq changes will be made
in the future, after samplinq the proqramming needs and
interests of subscribers.
Marcus lans to consolidate the Star systems with
P
teehnical upgrades usinq fiber optic technology to reduce the
number of headends, thereby creatinq eonsolidated systems. The
Star systems located in Minnesota will be fed from a single
headend in Rosemount. Marcus hopes this consolidation will
provide increased operating, technical, and marketing
efficiencies. This will allow Marcus to further develop Star
systems advertisinq sales operations and to eapand special
event pay-per-view operations to include several regular movie
- channels utilizing addressable technology.
In reviewing the technical abiiities of the entities
involved in this transfer of control, together with the
representation of continued operations under ezisting
personnel, we conclude it wauld be unreasonable to find that
Marcus is not technically qualified to own and operate the
cable system.
-32-
� MOSS & BARNETT
A PROFESSiONAL ASSOCtATTON . . . � �
FINANGtAL QUAIIFlGATIQNS
Based on our review of the documents available to us, as
well as �ertain representations and projections made by Marcus
Cable Partners, L.P. and Marcus Cable Company, L.P. , we do not
believe the City can reasonably c3eny the proposed transfer
based can the financial qualifications of Marcus Cab1e Partners,
L.P.
A. OVERVIEW OF AVA�LABLE FINANCING
The net proceeds to be received by Marcus Gable
Company, L.P. and the operating partnerships from the
offering of debentures, after deducting estimated eapenses
and underwriting discounts, are estimated to be
approaimately $71.5 million. Marcus Cable Company, L.P.
and the ogerating partne�ships will use such net proceeds
together with net proceeds from initial additional
borrowings of approzimately �58'.5 million under a new
credit aqreement and $25 million in proceeds from an
additional equity investment by Goldman Sachs investors,
(i� to acquire the Star systems and (ii) to pay a
transaction fee to Marcus Cable Properties, Inc. in
connection with the Star acquisition.
AVAILABLE FUNDS
Initial Additional Borrowinqs
Under New Credit Agreement $ 60 Million
_o Senior Discount Debentures
Due , 2006 75 Million
Equity Investment by Goldman
Sachs Investors 25 Million
TOTAL SOURCES OF FUNDS $160 Million
USE OF FUNDS
Star Acquisition $149 Million
Transaction Fee to Marcus
Cable Properties, Inc. $1.5 Million
Underwriting Discount, Fees
and Other Eapenses �5 Million
Eacess Cash �4 .5 Million
TOTAL USES OF FUNDS $160 Million
-33-
� MOSS & BARNETT
A PROFESStONAL ASSOCIA710N , � � � . �
Concurrently with and as a condition to the closinq
of the offering of debentures, Marcus Cable Company, L.P. ,
throuqh the three (3) opera�ing partnerships, will amend
and restate its egisting Bank Credit Agreement entered
into on October 13, 1993 (the "Credit Agreement" and as
amended and restatecl the "New Credit Agreement") with
various financial institutions which will allow for the
issuanee of the debentures and will provide the operating
partnerships with $165 millian of credit availability (an ,
increase of $45 million of credit availability) , $130 ',
million of which wi11 be in the fo=m of a term loan to be '
outstanding at the closinq of the offering of the I
debentures and $35 million o€ which will be in the form of
the reduced revolving credit facility, of which $25 '
miZlion will be immediately available and drawn at the
closing of the offerinq of the debentures ($60 million in
the aggregate, the "Initial Additional Borrowings") and
$10 million is available subject to compliance with
certain covenants and financial tests under the New Credit
Agreement. The closing of the Initial Additional
Borrowings under the New Credit Aqreement will occur prior
to or simultaneously to the closing of the offering of the
debentures.
B. SPECIFIC CONCERNS TO NOTE
Marcus Cable Company, L.P. is highly leveraged as a
result of the substantial indebtedness it had to incur to
finance acquisitions and ezpand its operations. It should
be noted, however, that the cable industry ge�erally is
operating under the constraints of considerable leverage.
After giving effect to additional initial borrowings under
the New Credit Agreement and to the Application of the n$t
proceeds f rom the saie of the debentures as if such
transactions has occurred on September 30, 1993, Ma�cus'
aggregate cansolidated indebtedness on a pro` forma basis
on such date would have been approzimately $33O million.
In additian, Marucs may incur other indebtedness to make
additional aequisitions in the future. Marcus ,anticigates
t�iat, in light of the amount of its e3isting indebtedness,
it will continue td have substantial leverage for the
foreseeable future.
Since its founding in 1990, Marcus has received from
the Goldman Sachs investors and its other equity
investors, aggregate capital contributions of
approzimately $55.9 million and, as of September 30, 1993,
Marcus had an aggregate of $160.8 million in consolidated
bank indebtedness outstanding. In October 1993,
borrowings under the Credit Aqreement and proceeds f rom
the sale of the debentures provided Marcus with $188.5
million of net proceeds, of which $160.8 miilian was used
to repa� ezisting bank indebtedness and the remainder was
used to redeem certain partnership units. Marcus' cash
-34-
.
� MOSS & BARNETT
� A PROYBSSIONAL ASSOC1KflON � � . � . . . . � .
generated from operating activities has been sufficient to
meet the its debt service, working capital and capital
ezpenditure requirements. Marcus believes it will
continue to generate cash flow and obtain su€ficient
financing to meet such requirements in the future. If
Marcus were unable to do so, however, it would have to
refinance its indebtedness or obtain new financinq.
Further, the Federal Co�nunications Commission
("FCC") , on February 22, 1994 adopted a 2nd Report & Order
in the matter of rate regulation of cable television
rates. Although this Report & Order is as yet
unavailable, the FCC estimates an additional 7�k reduction
in the rates charged to cable subscribers. These new rate
requlations coupled with the ezisting requlatory scheme
adopted by the FCC over the 1993 calendar year, presents ,
significant concerns regarding how Marcus can increase '
operating revenue from its partnerships ta offset its debt �,
oblig`a�ions. '
Marcus has been garticularly successful in inereasinq
revenues through the introduction of multiple gremium
service packages that emphasize customer value and enable
Mareus to take advantage of proqramminq aqreements
offering cost ineentives based on premium service unit
qrowth. Marcus' customer and revenue growth, in
combination with the economies of scale (such as volume
discounts for equipment) and other operating efficiencies
associated with reqional clusters of systems (such as
centralized management, billing, marketing, technical and
administrative functions) , as well as substantial
system-level eapense reductions, has enabled Marcus to
increase operating cash flow and operatinq margins in it�
systems. Notwithstanding such increases, as a result of
the high level of depreciation and amortization associated
with Marcus' acquisitions, capital eapenditures and the
interest costs related to its financing activities, Marcus
has reported net losses since its inception.
Notwithstandinq the issues outlined above, the new
Credit Aqreement toqether with the aaditional capital
which will be made available to Marcus via the debentures,
should be adequate to fund ang negative cash flow
initially sustained as a result of the Star acquisition.
While the FCC's new rate regulatory scheme may have a
significant impact on Marcus' ability to satisfy its aebt
obligations it is impossible at this time to cietermine the
ultimate impact of such revised regulations as they have
not yet been released to the public.
-35-
M4SS �. BARNETT
� A PROTESSIONAL ASSOCIATlON . . . . . . . .
ADDiTtONl4L ISSUES
1994 from Brian T.
Pursuant to a letter dated January 31, System Manag�r�
Barnett to Ms. Lisa Co��ment to variaus
Grogan of Moss & regarding Marcus'
Star Cablevision, overnmental access channels �aae
public, ec�ucational and 9 uestions was
obligations. Marcus' response to these Q
of Lakeville, Minnesota as this �We
specifically for the City However,
the municipality
which formulated the questions• Marcus'
s and have therefore incorpo t t�d�
believe the information to S be informative regarding n
philosophy towarc]s PEG acce 2�� 1g94, as an attachme
their response, aated February a specific
section of the report. No other additional issues were
this of Rosemount, Minnesota requiring
raised by the City
response of Marcus.
-36-
r
ATTACHMENT TO ADDITIONAL ISSUES
.. L�N,Hor��►x,Dai.�&I.n�nGx�,L�•
ATTORNEYS AT lAW
�$Op NORWEST FINANCIAI CENTER
7900 XERXES'AYENUE SOUTH
BLOOMINGTON.MINNESOTA 66431
TELEPHONE 16121 635-380�
� FAX(6121 8BS3278
JANE E.BREMER
p�p,pIAL i812)899-92Y7 . . . . � . .
February 28, 1994
VIA TELEFAX
Brian T. Grogan, Esq. p,ND U. S. MAIL
Moss & Barnett
4800 Norwest Center
90 South Seventh Street
Minneapolis, NIlJ 55402-4129
Dear Brian: Nadolsky a�d �e
Thank you for the time you took to speak with GarY
ested by the Lakeville Cable
regarding the additional information requ onsive to the
reciate your clarification of certain
�om�nission. As both Stare�na Marcus desire to be resp
questions posed, we furth PP
of the information requested.
lier correspondence, Marcus has �°�'tted that it
n from Star in
As stated in our ear hilosophically
will comply with all franchise oblig���antlyl��rcus$i$Pg shi Wi��
the City of Lakeville. Juat as mP relation p
committed to a collaborative and cooperative working y�ile
the City rdin subscriber preferences anand e
focused on the best i�eeaestsg f the subacribers. a�eg
reasonable minds may disagree g latory �d
of resources, the �tio alallowefewer d�.scretionary funds► forcing �S
required rate redu
to choase our priorities wisely.
for public programmin3
Further, Marcus believes that responsibii�ti� the CompanY' $ lntent to
belongs in the hand� of the communi�y��rd tkie tr�iee�t would not be
comanence discussions wi.th�t�l��iateyp�lie body. �
responsibility to the app P
t or a propriate to commence theseldiaCu��P��i�at�e��le for
Nrcus is prepared to commit to a mutual y
these d
iscussions and welcomes input from the Cable Commission on this
topic.
With regard to the specific qu
estions posed by and far the City of
Lakeville, our responses are as follows: a scale and
, a �,=i t�at ion_. The P Y
1. �.. i��Pe Pa�• Sca, r a=� lo ees will
perfozmance stane�itive�marketufactorssforpeach
be based on comp
r
Lw�txrnt, Ho�vtaN, DAL,Y�i LlrrnGx�rt,Lzv.
�
Hrian T. Grogan, Esq.
February 28, 1994
�age 2
position. Marcus has no current plans to change the pay
scale of existing Star employees who join Marcus, but ,
will continue reviewing pay scales as appropriate. ,
2 . Access Rules. Marcus has no plans to cha.nge the current
access rules. Of course, our commitment is to
nondiscriminatory access to facilities, equipment and
channel space in accordance with the appropriate
guidelines established by the rules.
3. StaffinQ. Ma.rcus has not definitively determined what
its staffing in the City of Lakeville will be. In a11
likelihood, no material changes will be made in public
access staffing.
4. A�cesg Tele hone. Nlarcus uaderstands that Star is
currently exploring a plan to route access calls through
the existing Star customer switchboard. As we
understand this question, this should resolve the
Commission's cancern.
5. Access E �iixunent. Access equipment will be repaired
and/or replaced on an as-needed basis using
factory-autharized service technicians. The Company has
no current plans to add aceess equipment in Lakeville.
6. Star Channel 8. Marcus has made no decisian regarding
the retention of Star Channel 8.
7. Conununitv Control of Access. As discussed above, Marcus
believes access should be in the hands of the community
and, consequently, would support transfer of access
responsibility to the appropriate public body.
8. Additional Access Cha,nnels. Marcus will comply with
franchise requirements in the City of Lakeville
regarding additional access channels. Marcus believes
there is a significant difference between
character-generated progra.mming and video programming.
The overall goal of cable television programming must be
subscriber satisfaction as subacriber revenues provide
the vast majority of company and access operating
reuenue. Consequently, Marcus would not support
granting additional access channels for
character-generated programming.
i
� L�xu�t, Ho��, D,�.y& Lwnc�,L�.
erian T. Grogan, Es
Februar;�, 28, 1994 q�
P-�_-.�
9• State-of h n,-,-
"state of_t�art Marcus believes that
given the " is an essentially meaningless ter��
pace of today�s technoZogical deve2opments.
Perhaps the most practical an,d
question is that state-of-the-artnistwhatevere eO th�.s
prepared, to pay for. P ple are
10. Ins • n
installation standards x
complianee with gCC �loyed b ��
and National l�tr�� .oaeln full
standards. The line extension distance measurement$
commence at the last active pedestal.
11. F�nanr_;a i �.._, _
i.nforn�ation on a ' M�rcus will maintain revenue
itemized gross revenue�s���b$$i$ �d will
fee pa to acco an Provide
yments. Financial statementg are not m�intanchise
at the eyst� level b
and Marcus has no cur ente ���rity of cable operators
City-$pecific financial reports, t� �lntain
I hope this information is helpful to
contact me with any �o�ents or �'au• please feel free to
questions you �Y have.
Sincerely,
.�--
Jane�' . Bremer
� N� , for
HOFFNIAN. DAI,Y & LINDGREN, Ltd.
cc: Gary Nadolaky, Star Ca,blevision
Lisa Washa, Star Cablevi$ion
Louis A. Borrelli,
David Hanson Jr' � Marcus Cable partners
, Marcus Ca,ble Partners • L.P.
, L.P.
JEB:gev:LC4s
r
� MOSS & BARNE'�'T '�
A Pxorrssiox�u,AssocunoN I
RECOM'MENDATIONS 'I
Hased specifically on the £oreqoing information and
evaluations, we believe the entities involved in this transfer
of control passess the necessary legal, technical, financial,
and character qualifications. Therefore, we find no reasonable
grounds on which to deny the request for approval o€ said
transfer of control.
Based on the findinqs, we recommend that:
1. The City Council review this report, listen to public
comment, as necessary or appropriate, and undertake
all necessary action to pass and adapt a Resolution
similar in form and content to the "draft" document
following these Recommendations.
2. The City follow up to ensure that the required
Acceptance,� Guaranties, and corporate and partnership
documents are delivered within thirty (30) days of
�he closinq on the purchase transactian.
-37-
n � � . � . � � . �
DRAFT RESOLUTtON
APPROVING TRANSFER OF OWNERSHIP
-38-
�
CITY OF .ROSE�+IOUNT. MINNESOTA
RESOLUTION NO.
RECOMMENDING AFPROYAL OF T'f� TI2ANSFER
OF OWNERSH3P OF STAR METRO CABLE, INC.
WHEREAS, on or about May 16, 1989, the City of Rosernount,
Minnesota ("City") granted a Cable Communications Franchise to
Star Mid America Limited Partnership by adoption of Ordinance
No. XI . 14 (the "Rasemount Franchise"); and
WHEREAS, Star Mid America Limited Partnership (the
"Franchisee") , is the current and lawful holder of the
Rosemount Franchise; and
WHEREAS, Star Mid America IV, Inc. is a wholly-owned
subsidiary of Star Mid America Limited Partnership, a Wisconsin
limited partnership ("SMALP") ; and
WHEREAS, SMAI,P is owned 99 .5% by Star Cablevisian Group, a
Wisconsin general partnership, as its general partner and 4.5�
by certain members of Star Cablevision Group' s manaqement team I
as its limited partner; and
WHEREAS, Star Cablevision Group and SMALP have entered
into a Purchase Agreement dated as of November 12, 1993 with
Marcus Cable Partners, L.P. , a Delaware limited partnership,
for the purchase by Marcus Cable Partners, L.P. , of all of the
assets of SMALP and Star Cablevision Group which inciudes all
of the issued and outstanding capital stock of Star Mid America
�v, ��c; and
WHEREAS, Marcus Cab1e Partners, L.P. is owned by Marcus
Cable Company, L.P. , a Delaware limited partnership (which is
-39-
owned 82.5% by institutional investors which are affiliates o€
Goldman Sachs as limited partners and 17.5� by Marcus Cable
Properties, L.P. , a Delaware limited partnership, as general
partner) , as its general partner, and Marcus Cab1e Properties,
L.P. , a Delaware Limited Partnership {which is owned by Marcus
Cable Properties, Inc. , a Delaware corporation, as qeneral
partner and officers and emplogees of Marcus Cable Manaqement,
Inc. as limited partners) ; and
WHEREAS, in compliance with the terms of the Furchase
Agreement, the narne of SMALP, shall initially rernain unchanged
and the name of the Franchisee shall also remain unchanged; and
WHEREAS, under the Rosemount Franchise, the transf$r of
control of SMALP constitutes a transfsr by means of a
fundamental corporate change with respect to the Franchisee; and
WHEREAS, under Rosemount Franchise, any such transfer
requires the approval of the City; and
WHEREAS, the City, with the assistance of Moss & Barnett,
A Professional Association, has reviewed the proposed transfer
of eontrol of SMALP and the legal, technical, and financial
qualifications of Marcus Cable Partners, L.P. ; and
WHEREAS, based on information obtained at a public hearing
conducted by the City on March 15, 1994 and on the reports and
information received by the City, the City has found no reason
to disapprove of the transfer of control of the Franchisee.
NOW, THEREFORE, the City Council for the City of
Rosemount, Minnesota resolves as fallows:
-40-
1. The Rosemaunt Franchise is in full foree and
effect without default thereunder by the Franchisee to the
date hereof in accordance with its terms and conditions as
set forth therein.
2. The Rosemount City Council hereby consents and '
approves of the transfer of control of Franchisee subjec� ,
to: I�',
a. Closing of the asset purchase transaction ''
pursuant to the terms and conditions described in I'
information provided by Star Cablevision Group, ,
SMALP, Marcus � Cab1e Partners, L.P. ; Marcus Cable �
Company L.P. and Marcus Cable Properties, L.P. to the I
City. �I
c. The Franchisee reimbursing the City of �I
Rosemount for all reasonable costs, ezpenses, and
professional fees incurred as a result of the II
approval of the transfer of control of the Franchisee.
d. Marcus Gable Partners, L.P. , Marcus Cabie
Campany L.P. and/or Marcus Cable Properties, L.P,
promptly notif�ing the City in writing of the
completion of the transfer of control of Franchisee.
e. Marcus Cable Partners, L.P. , Marcus Cable
Company L.P. and/or Marcus Cable Properties, L.P. ,
within thirty (30) days o€ the closing, abiding by
the requirements for acceptance and c3osing as listed
below:
-41-
i. Marcus Cable Partners, L.P. shall ,
provide a signed Aceeptance Agreement, in a form I'i
supplied by the City.
ii . Marcus Cable Company L.P. shall
provide a siqned Guaranty, in a form supplied by
the City.
iii. The Franchisee, Marcus Cab1e Partners,
L.P. , and Marcus Cable Company L.P. shall each
provide evidence of corporate or partnership '
authority; as applicable, in form and substance
acceptable to the City, to enter into the
Rosemount Franchise, and to sign the Guaranty
and/or Acceptance.
3 . The City of Rosemount hereby waives any right of
first refusal which the City may have pursuant to
Section 10.02 of the Rosemount Franchise, as amended, or,
otherwise, to purchase the Rosemount Franchise, or the
cable television system servinq the City, but only as sueh
right of first refusal apglies to the request for approval
of the transfer of control of Franchisee now before the
City.
4. Marcus Cable Partners, L.P. may assign or
otherwise grant a security interest in and lien upon any
capital stock and assets of Franchisee and any of the
rights, title and interest represented by the Rosemount
Franchise held by Franehisee as collateral for their
financings.
-42-
,
5. In the event the transfer of control o£
Franchisee contemplated by the foregoinq resolutions is
not completed, for any reasons, the City's consent to
transfer of control shall not be effeetive.
A motion t� approve the foregoinq Resolution No.
was made by Council Member and duly
seconded by Council Member .
The foliowing Council Members voted in the affirmative:
The following Council Members voted in the negative:
Passed and adopted by the City Council for the City of
Rosemount this day of March, 1994.
ATTEST: CIZ'S� OF ROSEMOUNT, MINNESOTA
By: By:
Its:
-43-
' _ _
. ' . . . . . . ..
,J . . . . . � . .
DRAFT ACCEPTANCE
OF THE fRANCHISE
-44-
ACCEPTANCE OF A F'RAPCHISE FOR A
CABLE TELEVISIOH SYSZ'F.IK I1Q THE
CITY OF ROSEL�UAT, MII�AESOTA
WHEREAS, the City of Rosemount, a Minnesota municipal
corporation (hereinafter the "City") , by action of its
g�vernirng body on March , 1994, adopted a Resolution
approvinq the transfer of control of Star Mid America Limited
Partnership ("Star") to Marcus Cable Fartners, L.P.
(hereinafter the "Franchisee") ; and
WHEREAS, the Gity of Rosernount, Minnesota, Cable
Communications Franchise Qrdinance ("Rosemount Franchise")
requires that Franchisee accept the Rosemount Franchise in form
and substance acceptable to the City.
NOW, THEREFORE, pursuant to the terms and requirements o€
the Rosemount Franchise, and in consideration of the qrant of a
franchise by the City, Franchisee accepts the Rosemount
Franchise, and Resolution adopted on March , 1994, and makes
the following representations and warranties to the City:
1. Franchisee is a Delaware Limited Partnership duly
organized, validly eaisting, and in good standing under the
laws of the State of Delaware, is authorized to do business in
the State of Minnesota and has the full power, authority, and
legal capacity to ezecute, deliver, and perform this Aceeptance
and perform the terms and conditions of the Franchise.
2. All actions necessary to authorize the ezecution and
delivery of this Acceptance and the per€ormance of the
-45-
n
� �
Franchise have been duly authorized b� all necessary and
required proceedings.
3 . The e�ecution and delivery of the Acceptance and the
perfarmance of the Franchise does not and will not conflict
with or result in the breach or termination of, or constitute a
default under, any indenture or instrument with respect to the
borrawing of money, or any matsrial contract, lease or
agreement, or order, judgment or decree or any law, rule or
regulation to which Franchisee is a party or by which it or any
of its groperty is bound or affected.
4 . Franchisee has carefully read the terms and
conditions of the Franehise and accepts the rights, duties, and
obligations created thereunder, subject to its rights under
applicable state and federal law.
5. Neither Franchisee or any of its representatives or '
agents have committed any illeqal acts or engaged in any
wrongful conduct contrary to, or in violation of, any federal,
state, or local iaw or regulation in connection with the
obtaining of this Franchise.
Dated: , 1994
MARCLTS CABLE PARTNERS, L.P. ,
a Delaware limited partnership
By
Its
-46-
.
STATE OF ) I
) ss.
COUNTY OF )
The foregoinq instrument was subscribed and sworn to
hefore me this day of , 1994,
by , the of Marcus Cabie
Partners, L.P. , . a Delaware limited partnership.
Notary Public
-4 7-
r
�
DRAFT GUARANTY
FOR MARCUS CABLE COMPANY, L.P.
-48-
r
�
���
GUARANTY given by Marcus Cable Company, L.P. , a Delaware
limited partnership (hereinafter "Guaxantor"} , to �he City of
Rosemount, Minnesota (hereina�ter "City") .
WIiEREAS, Marcus Cab1e Partners, L.P. ("Marcus"} has taken
over control of, Star Mid America Limited Partnership
("Franchisee") of the Rosemount Cable Television Franchise
("Rosemount Franchise") ; and
WHEREAS, Marcus and Guarantor requested the City's
approval of the transfer of control of Franchisee; and
WHEREAS, the City has passed and adopted Resolution
No. on March , 1994 approving the transfer af
ownership of Franchisee to Marcus; and
WHEREAS, the City' s approval of such transfer of control
of Franchisee is continqent upon Guarantar guaranteeing the
faithful performance by Marcus. of all of the terms of the
Franchise; and
WHEREAS, the Guarantor has aqreed to enter into this
Guaranty Agreement pursuant to City's request.
NOW, THEREFORE, in consideration of the foreqoing, the
Guarantor agrees as follows:
1. Obliaation. The Guarantor hereby quarantees the
prompt and complete performance by Marcus of all the covenants,
conditions, and terms of the Franchise. The Guarantor further
guarantees the payment of all damages, judgments, costs and
ezpenses, includinq fees which by virtue of the Franchise or
-49-
�
�
otherwise, might become recoverable by the City from the
Franchisee or Marcus.
2. Terms of Guarantv. This Guaranty shall be absolute,
complete, continuing, and irrevoeable, and the Guarantor shall ',
not be released of its obligation hereunder so long as any ��I
claira of City against Franchisee arising out of the Fxanchise
or otherwise is not settled or discharged in full. No notice
of any indebtedness heretofore or hereafter contracted or
acquired by the Franchisee need be given to the Guarantor.
3 . Waiver. The Guarantor hereby waives notice of the
City' s acceptance of this Guaranty. The Guarantor acknowledges
that it is Guarantor's responsibility to be informed of the
financial condition of Franchisee and Marcus, and the City has
no duty to advise the Guarantor of any information known to it
in that regard.
4 . _ Liabilitv or Defsult, All liability of the Guarantor
to the City shall mature immediately, without notice or demand,
ugon the occurrence of any of the followinq acts or events by
or with respect to the Franchisee: (a) default on any
liability or obligation to the City; (b) dissolution, in case
i i
of the Fran hisee or Marcus • c Insolvenc or inab 1 t to
c . Y Y
( )
meet obligations as they become due; (d) filing of a petition
for relief in bankruptclr; (e) failure to pay any franchise fee,
taz, or assessment when due; (f) appointment of a trustee,
custodian, or receiver; (g) entry of any judgment, or issuance
of an injunction or a warrant of attaehment or ezecution.
-50-
►
�
5. �emedies. No right or power of the City hereunder
shall be deemed to have been waived by any act or conduct on
the part of the City, or by any neglect to eaercise such riqht
or power, or by any delay in so doing; and every riqht or power
shall continue in full force and effect until specifically
waived or released by an instrument in writing eaecuted by the
City.
6. Governina Law. This Guaranty shall be deemed to be
made under and sha11 be governed by the laws of the State of
Minnesota in all respects, including matters of construction,
validity and per£ormance, and the terms and provisions hereof
may not be waived, altered, modified, or amended eacept in
writing du7.y signed by an authorized representative of the
City. By eaecuting this Guaranty, Guarantor does not waive any
rights under federal, state, or local law.
7. Severabilitv. If any of the provisions of this
Guaranty shall contravene or be. hela invalid under the laws of '
any jurisdiction, this Guaranty shall be construed as if not
containing those provisions and the rights and obligations of �
the parties hereto shall be cons�rued and enforced accordingly. ,
8. Benefit. This Guaranty shall inure to �he sole I��
benefit of the City, its successors and shall be binding upon
the Guarantor and its successors. �I
-5i-
1
� '
N WITNESS WH ersi ned G arantor has ea I
I EREOF, the una g u ecuted
this Guaranty as of , 1994.
MARCUS CABLE CUMPANY, L.P.
a Delaware Liinited Partnership
By
Its
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me
this day of , 1994, by the of
Marcus Cable Company, L.P. , a Delaware Limited Partnership.
Notary Public
855Z140
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Rosemount Town Pages
AFFIDAVIT OF PUBLICATION
Diane Berge, being duly sworn, on oath says that she is an authorized
agent and emplayee of tlie publisher of the riewspaper, known as The ������
Rosemount Town Pages, and has fuil lrnowledge of the facts which are
stated below: r�o.�a���ccw��s�
(A)The newspaper has comptied with all of.tbe requirements constituting �a�aa�.d.�•��=w�
qualification as a legal newspaper, as prqvided by Minnesata Statues ����,��;�,"�,p�,
331 A,02,331 A.07 and other applicable laws,as amended: �r��r����ms�s��
The rinted � �.r"�r'b°caa'T°�.�°�"�a`y�s�
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rinted and ublished once each week for successive '""�"`°�°''"`�`�'�`�����
P P me cs�x��io me�o��tns o�e��sn�w
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in tha C�iq Coundl C6�s ivime�atel9 F�m 10 lha
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ever Thursda to and includin Thursda the da of
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, 19 --- , and printed below is a copy of the �����M�1�'•
lower case alpl�abet from A to Z, both inclusive, which is hereby BY�o��c�r�ra�rrcn.
acknowledged as being the size and kind of type used in the composition �,,��,,�,,,,�
and publicaGon of the notice: s���
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Title:'Typesetter
Subscribed a�}d� sworn to before me on this �day
of�Y',���c K/ ,
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Notary Public
AFFIDAVIT
t""'""".'�. �,,,,e�„�..,� ,
. �.>>_n,vnlE K EIBENT � ' '
: ��•e;�� ,anlary Vub11C M�nnasota ��
�• Oako►a Cuunty
� MY C:omm; Ezp 5-t5-96 I
�
CITY OF ROSEMOUNT
FsXECQTIVE SIIi�l,ARY FOR ACTION
CSTY COUNCIL MEETING DATE: Ma.rch 15, 1994 :
AGENDA SECTION�
AGENDA ITEM: Public Hearing for Cable public Hearing•
Franchise Transfer
PREPARED BY: Ron Wasmund AG�A �E� # � �
Interim City Administrator
ATTACI�+lENTS: Document for Councilmembers APP VE Y:
Public review available)
Brian Grogan from the legal firm o� Mns�handtBansfer�willrbeepresenthto discussfwith
Lakeville, Farmington and Rosemoun
Council some of the particular items relating to the transfer. He has prepared and I have
enclosed for you a document report that I would liseinto eonsiderable detail�regardingathe
oe
rin . Brian g • r,,�
esda ni hts public hea g f �rcus. By revie
prior to Tu Y J ial alifications o
C
le al ri hts, technical qualifications and finan qu
g arl .
5 red e
of the report, some of your questions may be answe Y
The purpose of the public hearing loft��cuseCable Partnersgassa business�toeacquirelthe
their interests and the legitimacy
assets and franchise from Star Cable. We will also be looking at the technical and
financial qualifications of Marcus. In addition to review of those legal, technical and
financial qualifications, there will also be an opportunity to ask questions about
specific areas of the franchise agreement. Some of the questions that have Technicaled to
me to date are: � Service drop to schools, specifically the Dakota County
College request to have service brought to their school. This has been presented to Star
Cable and Marcus Cable in writing �ain° oftCity Hall £or theeability to broadcast thet
written inquiry. � Interactive c g
City meetings. The franchise agreement specifies that within 60 days of the request that
interactive cabling will be provided. We need to confirm with Ma.rcus that they are
willing to honor that request. � Intera.ctive cabling of commn;ty4CeE�ipmentpab1City
access. Are they going to Pn�V�tates�t at thesequipmentqwill be p�ided for interactive
Hall. The franchise agreeme
cabling. The question that we need to pose to Star is what they'reSde�cr�hatgsome oftthe
suggesting that modulators only will be supplied, or are they sugg 5
camera equipment will be provided. The franchise aeae�m�ht�Yunk lineswheT�new1f�
divisions are constructed that they shall be equipp
question then that we have to ask of Marcus and Star is what do we do with rura areas
that develop on large acreage lots and may be developed single lots individeneral itemsr
than a subdivision. When do they get served. The last item would be any 5
relating to the franchise agreement.
The desired results or conclusions of the public hearing are to describe and come to
agreement on any amendments to the franchise agreement based upon the questions that I
have outlined, or any others that are identified and concluded the night of the hearing.
And then a final resolution authorizing the transfer. Again Brian Grogan will go through
his report, he will review the financial qualifications of the company and providnluhtwith
the information needed to make the decisions we will be asked to make on Tuesday 3
AUTHORIZING
RECObII�lENDED ACTION� RSH�IPIOF STAR. METROECAB EI�INC1T04MAFtCUS CABLE
THE TRANSFER OF OWNE
PARTNERS ����
�C1,o-ri a-�r-� h�
COUNCIL ACTION:
8
. �/ � a
CITY OF ROSEMOUNT
DAROTA COUNTY, MINNESOTA
RESOLUTION 1994 - 27
A RESOLUTION RECOMMENDING APPROVAL OF THE TR�NSFER
OF O�INERSHIP OF STAR METRO CABLT, INC.
Y�HEREAS, the Cable Television Franchise in the City of
Rosemount, Minnesota ( "City" ) is currently owned and operated by
Star Metro Cable, Inc. ( "Franchisee") , a wholly-owned subsi.diary
of Star Mid-American IV, Inc. , pursuant to the City of
Rosemount, Minnesota Resolution No. 1988-40, adapted on May 17,
1988; and
�1HEREAS, Star Mid America IV, Inc. is a wholly-owned
subsidiary of Star Mid America Limited Partnership, a Wisconsin
limited partnership ( °SMALP") ; and
WIiEREAS, the Franchise was renewed in the name of SMALP by
mutual mistake of City and Fran�hisee pursuant to City of
Rosemount, Minnesota Ordinance No. XI. 14, adopted May 16, 1989
(the "Rosemount Franchise") ; and
DPHEREAS, the City hereby acknowledges and ratifies Star Metro
Cable, Inc. as the Franchisee pursuant to the Rosemount
Franchise; and
DPHEREAS, SMALP is owned 99 . 5% by Star Cablevision Group, a
Wisconsin general partnership, as its general partner and 4 .5%
by certain members of Star Cablevision Group' s management team
as its limited partner; and
WHEREAS, Star Cablevision Group and SMALP have entered into a
Purchase Agreement dated as of November 12, 1993 with Ma.rcus
Cable Partners, L.P. , a Delaware limited partnership, for the
purchase by Marcus Cable Partners, L.P. , of all of the assets of
SMALP and Star Cablevision Group which includes all of the
issued and outstanding capital stock of Star Mid America IV,
Inc. ; and
WHEREAS, Marcus Cable Partners, L.P. is owned by Mareus Cable
Company, L.P. , a Delaware limited partnership (which is owned I
82 .5% by institutional investors which are affiliates of Goldman �,
Sachs as limited partners and 17.5o by Marcus Cable Properties, ',
L.P. , a Delaware limited partnership, as general partner) , as ',
its general partner, and Marcus Cable Properties, L.P. , a ,
Delaware Limited Partnership (which is owned by Marcus Cable '
Properties, Inc. , a Delaware corporation, as general partner and
officers and employees of Marcus Cable Management, Inc. as
limited partners) ; and
WHEREAS, in compliance with the terms of the Purchase Agreement,
the name of Star Metro Cable, Inc. , shall initially remain
unchanged and the name of the Franchisee shall also remain
unchanged; and
RESOLUTION 1994 - 27
WHEREAS, under the Rosemount Franchise, the transfer of control
of Star Metro Cable, Inc. constitutes a transfer by means of a
fundamental corporate change with respect o the Franchisee; and
WHBREAS, under Rosemount Franchise, any such transfer requires
the approval of the City; and
WHEREAS, the City, with the assistance of Moss & Barnett, A
Professional Association, has reviewed the proposed transfer of
control of Star Metro Cable, Inc. and the legal, technical, and
financial qualifications of Ma.rcus Cable Partners, L.P. ; and
D�HEREAS, based on information obtained at a public hearing
conducted by the City on March 15, 1994 and on the reports and
information received by the City, the City has found no reason
to disapprove of the transfer of control of the Franchisee.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City
of Rosemount, Minnesota hereby approves the following:
1 . The Rosemount Franchise is in full force and effect without
default thereunder by the Franchisee to the date hereof in
accordance with its terms and conditions as set forth
therein. '
2 . The Rosemount City Council hereby consents and approves of '
the transfer of control of Franchisee subject to: �,I
a. Closing of the asset purchase transaction pursuant to
the terms and conditions described in information
provided by Star Cablevision Group, SMALP, Marcus
Cable Partners, L.P. ; Marcus Cable Company L.P. and
Marcus Cable Properties, L.P. to the City.
b. The Franchisee reimbursing the City of Rosemount for
all reasonable costs, expenses, and professional fees
incurred as a result of the approval of the transfer
of control of the Franchisee.
c. Marcus Cable Partners, L.P. , Marcus Cable Company L.P.
and/or Marcus Cable Properties, L.P. promptly
notifying the City in writing of the completion of the
transfer of control of Franchisee.
d. Marcus Cable Partners, L. P. , Marcus Cable Company L.P.
and/or Marcus Cable Properties, L.P. within thirty
(30) days of the closing, abiding by the requirements
for acceptance and closing as listed below:
i. Marcus Cable Partners, L.P. shall provide a
signed Acceptance Agreement, in a form supplied
by the City.
2
RESOLUTION 1994 - 27
ii. Marcus Cable Company L.P. shall provide a signed
Guaranty, in a form supplied by the City.
iii . The Franchisee, Marcus Cable Partners, L.P. , and
Marcus Cable Company L.P. shall each provide
evidence of corporate or partnership authority,
as applicable, in form and substance acceptable
to the City, to enter into the Rosemount
Franchise, and to sign the Guaranty and/or
Acceptance.
3 . The City of Rosemount hereby waives any right of first
refusal which the City may have pursuant to Section 10 . 02
of the Rosemount Franchise, as amended, or, otherwise, to
purchase the Rosemount Franchise, or the cable television
system serving the City, but only as such right of first
refusal applies to the request for approval of the transfer
of control of Franchisee now before the City.
4 . Marcus Cable Partners, L. P. may assign or otherwise grant a
security interest in and lien upon any capital stock and �
assets of Franchisee and any of the rights, title and
interest represented by the Rosemount Franchise held by
Franchisee as collateral for their financings. ��
5 . In the event the transfer of control of Franchisee �I
contemplated by the foregoing resolutions is not completed,
for any reasons, the City' s consent to transfer of control i
shall not be effective. '
ADOPTED this 15th day of March, 1994 . '
E. B. McMenomy, Mayor
ATTEST:
Susan M. Walsh, City Clerk
Motion by:_ McMenomy Seconded by: Busho
Voted in favor: Busho. Anderson, McMenomy, Staats
Voted against: None.
3
CITY OF ROSffi�OUNT, MINPESOTA
� RESOLUTION I�O.
RECOI�II+�NDIHG APPBOVAL OF THE TRA�SFSR
OF OW�ERSHIP OF STAR MLTRO CABLE, IHC.
WHEREAS, the Cable Television Franchise in the City of
Rosemount, Minnesota ("City") is currently owned and operated
by Star Metro Cable, Inc. ("Franchisee") , a wholly-owned
subsidiary of Star Mid-America IV, Inc. , pursuant to the City '
�
of Rosemount, Minnesota Resolution No. 1988-40, adopted on May
17, 1988; and
WHEREAS, Star Mid America IV, Inc. is a wholly-owned
subsidiary of Star Mid America Limited Partnership, a Wisconsin
limited partnership ("SMALP") ; and
WHEREAS, the Franchise was renewe`d in the name of SNlALP by
mutual mistake of City and Franchisee pursuant to City of
Rosemount, Minnesota Ordinance No. XI .14, aaopted May 16, 1989
{the "Rosemount Franchise") ; and
WHEREAS, City hereby acknowledges and ratifies Star Metro
Cable, Inc. as the Franchisee pursuant to the Rosemount
Franchise; and
WHEREAS, SMALP is owned 99.5� by Star Cablevision Group, a
Wisconsin general partnership, as its general partner and 4 .5�
by certain members of Star Cablevision Group's management team
as its limited partner; and
WHEREAS, Star Cablevision Group and SMALP have entered
into a Purchase Agreement dated as of November 12, 1993 with
Marcus Cable Partners, L.P., a Delaware limited partnership,
for the purchase by Marcus Cable Partners, L.P. , of all of the
assets of SMALP and Star Cablevision Group which includes all
of the issued and outstanding capital stock of Star Mid America
IV, Inc; and
WHEREAS, Marcus Cable Partners, L.P. is owned by Marcus
Cable Company, L.P. , a Delaware limited partnership (which is
owned 82.5� by institutional investors which are affiliates of
Goldman Sachs as limited partners and 17.5$ by Marcus Cable
Properties, L.P. , a Delaware limited partnership, as general
partner) , as its general partner, and Marcus Cable Properties,
L.P. , a Delaware Limited Partnership (which is owned by Marcus
Cable Properties, Inc. , a Delaware corporation, as general
partner and officers and employees of Marcus Cab1e Management,
Inc. as limited partners) ; and
WHEREAS, in compliance with the terms of the Purchase i
Agreement, the name of Star Metro Cable, Inc. , shall initially
remain unchanged and the name of the Franchisee shall also
remain unchanged; and
WHEREAS, under the Rosemount Franchise, the transfer of
control of Star Metro Cable, Inc. constitutes a transfer by
means of a fundamental corporate change with respect to the
Franchisee; and
WHEREAS, under Rosemount Franchise, any such transfer
requires the approval of the City, and
WHEREAS, the City, with the assistance of Moss & Barnett,
A Professional Association, has reviewed the proposed transfer
of control of Star Metro Cable, Inc. and the legal, technical,
and financial qualifications of Marcus Cable Partners, L.P. ; and
WHEREAS, based on information obtained at a public hearing
conducted by the City on March 15, 1994 and on the reports and
information received by the City, the City has found no reason I��
to disapprove of the transfer of control of the Franchisee. II
NOW, THEREFORE, the City Council for the City of I!,
Rosemount, Minnesota resolves as follows: '
1. The Rosemount Franchise is in full force and
effect without default thereunder by the Franehisee to the
date hereof in accordance with its terms and conditions as
set forth therein.
2. The Rosemount City Council hereby consents and
• approves of the transfer of control of Franchisee subject
to:
a. Closing of the asset purchase transaction
pursuant to the terms and conditions described in
information provided by Star Cablevision Group,
SMALP, Marcus Cable Partners, L.P. ; Marcus Cable
Company L.P. and Marcus Cable Properties, L.P. to the
City.
b. The Franchisee reimbursing the City of
Rosemount for all reasonable costs, ezpenses, and
professional fees incurred as a result of the
approval of the transfer of control of the Franchisee.
. .
c. Marcus Cable Partners, L.P. , Marcus Cable
Company L.P. and/or Marcus Cable Properties, L.P.
promptly notifying the City in writing of the
completion of the transfer of control of Franchisee.
d. Marcus Cable Partners, L.P. , Marcus Cable
Company L.F. and/or Marcus Cable Properties, L.P. ,
within thirty (30) days of the closing, abiding by
the requirements for acceptance and closing as listed
below:
i. Marcus Cable Partners, L.P. shall
provide a signed Accept'ance Agreement, in a form
supplied by the City.
ii . Marcus Cable Company L.P. shall
provide a signed Guaranty, in a form supplied by
the City.
iii . The Franchisee, Marcus Cable Partners,
L.P. , and Marcus Cable Company L.P. shall each
provide evidence of corporate or partnership
authority, as applicable, in form and substance
acceptable to the City, to enter into the
Rosemount Franchise, and to sign the Guaranty
and/or Acceptance.
3 . The City of Rosemount hereby waives any right of
first refusal 'which the City may have pursuant to
Section 10 .02 of the Rosemount Franchise, as amended, or,
otherwise, to purchase the Rosemount Franchise, or the
cable television system serving the City, but only as such
d � Y
right of first refusal applies to the request for approval
of the transfer of control of Franchisee now before the
City.
4 . Marcus Cable Partners, L.P. may assign or
otherwise grant a security interest in and lien upon any
capital stock and assets of Franchisee and any of the
rights, title and interest represented by the Rosemount
Franchise held by Franchisee as collateral for their
financings.
5. In the event the transfer of control of
Franchisee contemplated by the foregoing resolutions is
not completed, for any reasons, the City's consent to
transfer of control shall not be effective.
A motion to approve the foregoing Resolution No.
was made by Council Member and duly
seconded by Council Member .
The following Council Members voted in the affirmative:
The following Council Members voted in the negative:
Passed and adopted by the City Council for the City of II
Rosemount this day of March, 1994.
ATTEST: CITY OF ROSEMOUNT, MINNESOTA
By: ' By:
Its:
856Z140
_..�
� � ' 9l7
j. � �;���1 �1s�r�c�
� g� Dakota Counfy Special Education Programs
` �11�����'��1�1�
y . Gaxota Caurt/Sec�n�ary T��hnicat Center •
Dakota County Te�h►�icat Coflege
February 9, 1994
Ms. Lisa Washa, Manager
Star Cablevisi Avenue
16900 Cedar
Rosemount, Minnesota 550b8
Technical College, I am
Dear Lisa: understanding that
It is mY reement.
termediate School District 917(Dakota County
On behalf of 1n ls �t of your Franchise Ag
to form�lY 1equest connection to cable service.
writing all schools> as stated in Section 4.06, P
connection to free basic
It indicates that:
rovide a free cable dbuP dings, schools,
4.0 6 Franchisee shall. p .
remium services to all City
service and all p �tments.
police and fire deP yVe were unawaze that
to all schools. This situation
at service wasn t available in our �ea• Monday,
were told �'uired that service be provided ln Rosemount on
In the p�t `'�e eeting be �onnected. This
the franchise agreement Ieq our desire to
e pub�l� Utilitie��°mad�es outl n ng �is franchise
was discussed at � A Presentation arties involved in
February 7, 1994. uest known to all p
letter is to officially m�e our req
to continue to provide edncau°nal
agreement. �at is available
ortant to our ability ro ramming
V,7e view this connection as imp The educational p g
teachers. excellent addition to our media services
� pzOgramming to students ande� will make an
from the cable television Sy needs. us to
and support our curriculum steni s coverage a�ea-.-
an educational access �h�el'�ablels sy °uld allow
Further, we are also requesting to �e subscribers : in
ro ramming ton, Lakeviile, and Apple Valley.
provide educational P g Farming
which includes Rosemount, t attention to these requests.
We would appreciate your promp
Since�ely, 8��; G.Hebert
� �f�,�� R.Schneider
�� � �� `' D.Schroeder,
I•iorsted, Ed.D. K.0'Brien ;
Roger M. D.Sullivan ;
Superintendent Cit Manager C.Jackson �
Wasmund, Rosemount Interim Y :
cc: Roe W alsh, Commissioner p.S. _ Roger wi11
7ohn Oxborough,
Com�issioner report on this at i
S�a,Nn ivlulhern, Commissioner —2 j15/94 Sch.Bd•Mtg`
,.��i w?a-2L3t 7 �
� 'Isi�c;:��,��;;��L::S'i`��=f F.Y..�.Y l•�-•�°(_
� � �.r----^�". ^ rf ar� . ' ]�( .� 1�C ' � .
. .. �.f`r){.t;' �r s 1�i11 .r✓ _ � _..�:;G;'f:�5 . -
�fi i i i�'�i�"..��:ic i'_• `,j �...'t D;t..Ci:�7:a-� _
� ;;;l;u �� _ . i�.•^i; v� 3 r��7ru�V�rii � ..�—. -..c:C;.�r...r:7�G1L;•�S: � .
..' ,.'r=`y:a'vy
. ' _ r. �F' iiJ:li.'o% �
. � � ,:_ �i..... ,.. �
''�� LARHIN, HOFFMAN, DALY BL LINDGREN, LTD.
ATTORNEYS AT LAW
1500 NORWEST FINANCIAL CENTER .. °
7900 XERXES AVENUE SOUTH
BLOOMINGTON, MINNESOTA 56437
TEIEPHONE{612}835-3800
FAX(612)69&3278
JANE E. BREMER ���� � � Y�y4
DIR.DIAL 18121 8983297 . . . �� � � . . .
March 11, 1994
Mr. Roger M. Norsted, Superintendent
Intermediate School District 917
1300 145th Street East (County Rd. 42)
Rosemount, MN 55068
Dear Mr. Norsted:
This office serves as counsel to Star Metro Cable, Inc. (°Star") , the
franchisee in the City of Rosemount. Your letter to Ms. Lisa Washa,
General Manager of Star, dated February 9, 1994, has been referred to
me f or review and comment.
While the Intermediate School District is certainly entitled to
request connection to the cable system, there is no obligation in the
Rosemount franchise that this extension be provided free of charge to
the Dakota County Technical College. Section 4.06 specifically
applies to C1tY buildings, schools, police and fire departments,
rendering the Dakota County Technical College outside the scope of
this franchise provision. The logic of this exclusion is obvious:
because the Dakota County Technical College serves a broad range of
communities and individuals, there is certainly no reason that the
cable subscribers of Rosemount should be wholly responsible for
subsidizing cable installation to the Technical College.
Further, even if the Dakota County Technical College were included in
this provision, Section 4.-06 obligates the company to provide a free
cable drop, a term of art which means the extension from the nearest
feeder cable to the exterior wall of the facility. In th�e case of the
Dakota County Technical College, approximately 2 . 6 miles separate the ,
feeder cable from the point where a drop could be provided, requiring
an extension of the cable system to accommodate your request. The cost
of this extension would be the responsibility of Intermediate School
District 917 .
Enclosed for your convenience please find a rough es�ima:te of the cost
to extend the cable system in order provide a drop to the Dakota
Coun;ty Technical College. This estimate of approximately $42, 000 _
assumes we can meet federal technical standards, does not include` end
t�ser. equipment and is subject to change based on precise measurements
� and cost information as of the date you decide to proceed.
;
,� LARHIN; HOFFMAN, DALY& LINDGREN, LTD.
Mr. Roger M. Norsted
March 11, 1994
�
Page 2 -
Finally, the educational access channel required by the Rosemount
cable franchise has already been allocated to Apple Valley-Rosemount
School District #196 . You may either request time directly from the
school district, which has both scheduling and editorial
responsibility for the channel, or we would be happy to discuss a
channel lease arrangement whereby the Intermediate School District
would lease a channel from Star to. service the communities we serve.
If you have any comments or questions, please feel free to contact me.
Sincerely,
Ja E. Bremer, for
KIN, HOFFMAN, DALY & LINDGREN, Ltd.
Enclosure .
cc: Ms . Lisa Washa _
:
_ 1
- - '�
JEB:gev:LE5s
.V , lu�a4 1�:28 F�1 612 432 5765
STAR C�BLEVISIOY ��� J�tiE BRE4IER
� �002;00?
- ' Dakot� County Technical College Estim
(2.6 Miles off Existing Cable Systeni) a�e
Materials:
13,728 ft. .7�0 Underground cable X
600 ft. .500 Underground cable X '70 pe� ft. $ g�6�9 Q�
9 Trunk Amplifiers .4� per ft. $ 24Q.00
X �1,100.00 $ 9,900.00
1 Lzne Extencier Am
p X $ 250.aQ $ 250.00
9 Trunk Amp Pedestais
1 x � 70.00 $ 630.00
Line Extender Ped
2 � � 3 8.00 $ 3 8.00
Power Supply .
X � 300.40
Labor: - $21,267.00 ;
14,328 ft. Plawing
25� ft. X � 1.00 $1�,328.00
Boring
X � 6.SQ $ 3,900.00
Splicing and Activation
2
Grand Total $20,72 8.00
$4�,9=Qp
Currently our amplifier cascade is at 2 3 tru
we would be at 32 arn.plifiers, A cascade of that dptl���r�' tivith. this build
marginal in meeting the FCC proof of�e�oxmance ance becomes
spec�fications.