Spokane Municipal Code

Title 10 Regulation of Activities

Chapter 10.27A Cable Communications Code

Article III. Franchise Conditions

Section 10.27A.380 Purchase of Cable System by City

1. In the event the City decides not to grant a new franchise to a franchisee, the City shall have the right to purchase the system at its fair market value, which may take into account both the replacement cost and the going-concern value of the system. The fair market value shall be reduced by the amount of any lien, encumbrance or financial obligation which the City will assume.

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

1. 2. Going-concern value shall mean benefits that attach to the business as a result of its location in the city, a franchisee's reputat ion among subscribers or potential subscribers for dependa bility and quality of service, and any other circumstances resulting i n probable retention of old sub­ scribers or acquisition of new subscribers; except no value shall be assigned to the franchise itself.

2. In the event the City revokes, forfeits or terminates a franchise for cause, it shall have the right to purchase the cable system for an equitable price. An equitable price takes into account the nature of a franchisee's breach or malfeasance and the resulting harm to the community; it is not based on fair market value or going-concern value.

3. In the event the parties are unable to agree upon a price pursuant to subsection (A) or (B) of this section, whichever is applicable, said price shall be fixed and determined by a disinterested professional appraiser. The appraiser shall be chosen according to the procedure set forth in the Washington arbitration statute, chapter 7.04 RCW. The appraiser thus selected shall file an appraisement of either the fair and reasonable market value of said business and property of a franchisee, or the equitable price for said business and property, depending on whether the City seeks to purchase the cable system pursuant to subsection (A) or (B) of this section, as of the date of the exercise of this option. The appraisement shall he filed within sixty days after the selection of the appraiser as aforesaid. Said appraisement shall be in writi ng and shall be filed with both the City and the franchisee. The cost of said appraisal shall be borne equally by the City and the franchisee.

4. Upon receiving a valuation by the appraiser pursuant to subsection (C) of this section, the City has the right, in its sole discretion, to decline purchasing the cable system. If the City chooses to purchase the cable system, it shall do so upon payment in accord with the written report of the appraiser. Decisions of the appraiser are binding and shall not be appealed by either party to any court; except that a franchisee may litigate in a court of competent jurisdiction whether the individual is a qualified and disinterested appraiser.

5. Upon exercise of the option to purchase and the payment of the purchase price by the City and its service of official notice of such action upon a franchisee, the franchisee shall immediately transfer to the City possession and title to all facilities and property, real and personal, of the cable system, free from any and all liens and encumbrances not agreed to be assumed by the City, and the franchisee shall execute such warranty deeds or other instnunents of conveyance to the City as shall be necessary for this purpose.

Date Passed: Monday, June 4, 2007

Effective Date: Wednesday, July 11, 2007

ORD C34041 Section 1 (Recodification)