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HomeMy WebLinkAbout2014.11.10 Council Workshop PacketAGENDA PASCO CITY COUNCIL Workshop Meeting 6:00 p.m. November 10, 2014 1. CALL TO ORDER 2. ROLL CALL: (a) Pledge of Allegiance. 3. VERBAL REPORTS FROM COUNCILMEMBERS: 4. ITEMS FOR (a) 2015 Preliminary Budget Presentation (approximately 95 minutes). (NO WRITTEN MATERIAL ON AGENDA) 2015 Preliminary Budget available for public review on the City's webpage at www.pasco-wa.gov. (b) New Police Facility Status Report: 1. Agenda Report from Stan Strebel, Deputy City Manager dated November 5, 2014. 2. New Police Facility — Debt Services Schedule. (c) Settlement Agreement Charter Communications: 1. Agenda Report from Stan Strebel, Deputy City Manager dated November 4, 2014. 2. Settlement Agreement Charter Communications — Proposed Agreement. (d) Charter Cable Franchise Transfer to Comcast Cable: 1. Agenda Report from Stan Strebel, Deputy City Manager dated November 3, 2014. 2. Cable Franchise Transfer— Proposed Resolution. 3. Cable Franchise Transfer— Transfer Agreement. 4. Cable Franchise Transfer— Comcast Franchise Guaranty. 5. OTHER ITEMS FOR DISCUSSION: (a) (b) (c) 6. EXECUTIVE SESSION: (a) (b) (c) 7. ADJOURNMENT REMINDERS: 11:45 a.m., Monday, November 10, Pasco Red Lion — Pasco Chamber of Commerce Membership Luncheon. (Dave Zabell, Pasco City Manager, Presenter) 2. 4:30-6:30 p.m., Wednesday, November 12, Pasco Red Lion — 12th Annual Elected Leaders Reception. (MAYOR MATT WATKINS, COUNCILMEMBERS REBECCA FRANCIK, SAUL MARTINEZ and AL YENNEY) 3. 7:00 a.m., Thursday, November 13 — BFCG Tri -Mats Policy Advisory Committee Meeting. (COUNCILMEMBER BOB HOFFMANN, Rep.; REBECCA FRANCIK, Alt.) 4. 7:00 p.m., Thursday, November 13 - Ben -Franklin Transit Board Meeting. (MAYOR MATT WATKINS, Rep.; MIKE GARRISON, Alt.) City Hall will be closed on Tuesday, November 11 in honor of Veterans' Day. AGENDA REPORT FOR: City Council TO: Dave Zabell, City Manager FROM: Stan Strebel, Deputy City Manage&� SUBJECT: New Police Facility Status Report I. REFERENCE(S): New Police Facility — Debt Service Schedule November 5, 2014 Workshop Mtg.: 11/10/14 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: 11/10: Discussion, Provide Direction to Staff III. FISCAL IMPACT: Staff is proposing that the budget target (total cost) for the new Police Facility be raised from $8 million to $9 million. IV. HISTORY AND FACTS BRIEF: A) Last April, Council authorized a professional services agreement with Terrance Thornhill, Architect, for design services for the new Police Facility. The key goals for the project were to have the facility ready to bid in early December with a planned construction cost of $7 million, total project cost of $8 million. B) Staff has been working with the architect for the last six months to design the proposed facility within the needs of the department, the original timeline and budget. Working through various alternatives a number of innovative ideas were identified, including: a. The use of basement space, primarily for storage and similar uses, which results in a much lower estimated cost ($56/sgft vs. $250-+/sgft). b. The use of mezzanine space, again, primarily for storage, which results in similar cost savings ($34/sgft vs. $240/sgft). c. The cost of basement space may provide the opportunity for the City to develop a state of the art, secure, City-wide data center, designed to meet the anticipated future needs of the City Hall campus in addition to accommodating police needs. d. The use of a pre-engineered metal structure for about 20% of the total facility resulting in a cost estimate reduction of $50/sgft. C) Based on current bidding and construction conditions, staff recommends some changes from the original program estimates, as follows: a. Based on the number of major projects currently under construction in the Tri - Cities, plus the holidays in December, which make it more difficult to get complete and responsive bids, it is recommended that bidding be delayed until January. This is estimated to provide the best climate for securing of bids while maintaining a reasonable construction schedule. b. Even with the considerable cost savings anticipated as a result of the construction techniques listed above, in order to complete the recommended facility, staff feels that a total construction cost of $8 million vs $7 million may be more realistic. This would result in an estimated total project cost of $9 million. c. Staff has recalculated the necessary debt service for the $9 million cost over a 20 -year term (which though 5 -years longer than presented to Council last spring, is consistent with the City's expectation, and representation to the public, in advance of the 2011 election) with the result that it is expected that the additional cost, if approved, can be absorbed within the resources of the public safety sales tax (see attached). 4(b) d. All the debt for the Police Facility, the construction of the Municipal Court space plus the Street Crimes Unit operational expense can be paid from the 30 -year sales tax authorization, assuming 1% annual growth in the sales tax collection. V. DISCUSSION: A) Mr. Thornhill will be present at the meeting to review the construction concepts and cost estimates plus the anticipated schedule as outlined herein. Council direction and approval is requested in order for the work to continue as outlined. 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REFERENCE(S): November 4, 2014 Workshop Mtg.: 11/10/14 Regular Mtg.: 11/17/14 1. Settlement Agreement Charter Communications — Proposed Agreement II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: 11/10: Discussion 11/17: MOTION: I move to approve the Settlement and Release Agreement with Charter Communications and, further, authorize the City Manager to execute the Agreement. HI. FISCAL IMPACT: Charter payment of $90,322. IV. HISTORY AND FACTS BRIEF: A) The City has been in negotiations with Charter Communications over the renewal of Charter's franchise agreement for nearly three years. As part of the City's preparation for negotiation, Council authorized the hiring of a consultant to advise on a number of matters of importance covered under the franchise. One part of the preparation included completion of an audit of Charter's past performance and compliance with the terms of the franchise was conducted. The audit helped the City to reach an agreement with Charter on the payment of $90,322 as a settlement for the City's claims of underpayment of franchise fees and utility taxes for the settlement period (10/1/07-10/30/14). V. DISCUSSION: A) Council approval the settlement agreement is recommended so that this issue can be taken off the table for future franchise renewal discussions. As Council is aware, Comcast has made a request to assume Charter's franchise and, assuming FCC approval (plus a sufficient number of approvals by local franchise authorities) of the transfer, the City is expecting to complete the remainder of the renewal process with Comcast by next fall. 4(c) SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement (the "Settlement Agreement") is made this day of November, 2014, by and among City of Pasco (the "City"), and Falcon Video Communications, L.P. locally known as Charter Communications ("Charter"). RECITALS WHEREAS, Charter operates a cable system in the City and is required to pay to the City franchise fees pursuant to a franchise agreement between the parties (the "Franchise"), and utility taxes pursuant to local law; WHEREAS, the City conducted an audit of the franchise fee payments made by Charter for the period from October 1, 2007, to September 30, 2011 (the "Audit Period"); WHEREAS, the City's audit claimed that Charter underpaid franchise fees for the Audit Period; WHEREAS, Charter disputed the results of the City's audit and arrived at a different conclusion than the City's audit; WHEREAS, the City and Charter extended the Audit Period up to and including the period from October 1, 2011 to October 30, 2014, and further included the City's claim for utility taxes from October 1, 2007 through October 30, 2014, in their discussions related to the City's audit; WHEREAS, Charter has agreed to submit payment to the City in the amount of ninety thousand three hundred and twenty-two dollars ($90,322.00) to forever settle past claims on franchise fees and utility taxes due the City for the period between October 1, 2007, and October 30, 2014 ("Settlement Period"); WHEREAS, the City and Charter now desire to conclude, settle, release and discharge once and forever, all rights, claims, causes of actions, liabilities, disputes and demands relating to the City's past claims on franchise fees and utility taxes due the City for the Settlement Period; NOW THEREFORE, in consideration of the foregoing, and in consideration of the mutual promises and obligations hereinafter set forth, and for good and valuable mutual consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to this Settlement Agreement hereto agree as follows: AGREEMENT SETTLEMENT AMOUNT The City and Charter have agreed that Charter shall submit payment to the City in the amount of ninety thousand three hundred and twenty-two dollars ($90,322.00) in full settlement of past claims on franchise fees and utility taxes for the Settlement Period ("Settlement Amount"). Charter agrees to pay this amount to the City within thirty days (30) days after receipt of the executed Settlement Agreement from the City. It is expressly understood and agreed that the Settlement Amount represents full and complete satisfaction and compromise of any and all claims, actions, causes of action, controversies, demands, damages, debts, agreements, obligations, liabilities, interest, liens, expenses, costs, attorney's fees and demands of any kind or nature, known or unknown, arising out of or in any way related to the City's past claims on franchise fees and utility taxes due the City for the Settlement Period. Notwithstanding any provision of this Settlement Agreement, the parties hereby acknowledge that to the extent permitted by and in a manner consistent with applicable law, Charter may, (1) recover the Settlement Amount from subscribers, and (2) include the recovered amount as a line item on subscriber bills. 2. RELEASE OF CLAIMS This Settlement Agreement is entered into in compromise of disputed claims and rights with respect to franchise fees and utility taxes paid and owed during the Settlement Period. Specifically, the City and Charter desire to compromise, settle and discharge all disputes, claims, demands, actions or causes of action whatsoever of every kind and nature that pertain to, or arise out of, franchise fee and utility tax payments by Charter during the Settlement Period. The City, therefore, hereby forever discharges and releases Charter, and its parents, subsidiaries, related affiliates and their respective officers, directors, shareholders, owners, partners, employees, agents, contractors, representatives, predecessors, successors, assigns, insurers, and attorneys, and each of them from any and all claims, demands, rights, liability, suits, debts, liens, actions and causes of action, of every kind and nature whatsoever, at law or in equity, known and unknown, suspected and unsuspected, disclosed and undisclosed which the City ever had, now has or hereafter may have by reason or any act, omission, matter, cause or thing, arising out of the payment, nonpayment, underpayment, or overpayment of franchise fees and utility taxes during the Settlement Period. It is understood and agreed that this is a compromise of disputed claims and shall not be construed as an admission of any liability of Charter to the City, nor shall it establish a precedent for how either party may proceed with regard to franchise fees or utility taxes due to the City for timeframes after the Settlement Period. Furthermore, the City expressly agrees that this Settlement Agreement and the dispute between the parties concerning Charter's payment of franchise fees and utility taxes during the Settlement Period that it settles, may not be used by the City in any way in any subsequent judicial or administrative proceeding against Charter other than to enforce the terms of this Settlement Agreement. 3. VOLUNTARY AGREEMENT This Settlement Agreement is freely and voluntarily given by each party, without any duress or coercion, and after each party has consulted with its counsel. Each party has carefully and completely read all of the terms and provisions of this Settlement Agreement. It is understood and agreed by the City and Charter that nothing herein shall be deemed to be an admission of liability by Charter with respect to the matter of this Settlement Agreement. Settlement Agreement — City of Pasco and Falcon Video Communications/Charter Communications Page 2 4. AUTHORITY AND BINDING EFFECT City and Charter represent and warrant to the other that each has the legal right, power and authority to enter into this Settlement Agreement and to perform its obligations hereunder. This Settlement Agreement will inure to the benefit of and be binding upon the parties and their respective successors and assigns. The parties for themselves and their respective successors and assigns agree to join in or execute any instruments and to do any other act or thing necessary or proper to carry into effect this or any part of this Settlement Agreement. ENTIRE AGREEMENT This Settlement Agreement sets forth the entire agreement between the City and Charter relating to the subject matter of this Settlement Agreement. 6. GOVERNING LAW This Settlement Agreement, and any controversies arising hereunder, shall be interpreted in accordance with the laws of the State of Washington and adjudicated in a state or federal court of competent jurisdiction located in the State of Washington. IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as their free and voluntary acts and deeds, effective as of the date first above written. City of Pasco, Washington Dave Zabell, City Manager Approved as to Form: Leland B. Kerr, City Attorney Attest: Debbie Clark, City Clerk Falcon Video Communications, L.P., lWa Charter Communications Mark Brown, Vice President Approved as to Form: Charter Communications Counsel Settlement Agreement — City of Pasco and Falcon Video Communications/Charter Communications Page 3 AGENDA REPORT FOR: City Council TO: Dave Zabell, City Manat6� FROM: Stan Strebel, Deputy City Manage SUBJECT: Charter Cable Franchise Transfer to Comcast Cable I. REFERENCE(S): November 3, 2014 Workshop Mtg.: 11/10/14 Regular Mtg.: 11/17/14 1. Cable Franchise Transfer - Proposed Resolution 2. Cable Franchise Transfer - Transfer Agreement 3. Cable Franchise Transfer - Comcast Franchise Guaranty II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: 11/10: Discussion 11/17: MOTION: I move to approve Resolution No. , approving a Transfer Agreement governing the terms related to transfer of the City's cable television system franchise from franchisee Falcon Video Communications, L.P. to Comcast Communications, and further, authorize the City Manager to execute the Agreement. III. FISCAL IMPACT: The recommended action should result in no financial impact to the City. Comcast will continue to operate the cable system under the terms of the existing franchise, including the payment of franchise fees to the City. IV. HISTORY AND FACTS BRIEF: A) Earlier this year, a major merger and transfer of cable ownership was announced involving Comcast Communications, Time Warner Cable, and Charter. This merger and transfer of ownership involves hundreds of cities across the country and is subject to Federal Communication Commission and Department of Justice approval. As part of this multi -part transaction, the ownership of the Charter system serving the City of Pasco will be transferred to Comcast. Under Pasco's franchise agreement, Charter is required to gain approval from the City Council for the transfer of cable ownership. B) On June 18, the City received a request from Comcast Corporation on behalf of Charter Communications, h►c. (the ultimate parent of Falcon Video Communications, the holder of the cable television franchise) seeking consent for transfer of control of the local franchise agreement to Comcast Corporation. According to federal law, the City has 120 days to act upon this transfer, or it is deemed approved. By mutual consent, this window was extended to November 19, 2014 to allow sufficient time to negotiate a transfer/change of control agreement. C) A "change of control" is similar to the assignment of a real property lease. The change of control/transfer of ownership process is guided by FCC rules. If the application materials are in order, and if the parties assuming control have the ability to adequately fulfill the terms of the cable franchise, little discretion is available to the City. The City has compiled with those rules and engaged in an analysis of the information submitted by Comcast/Charter. As a result a transfer agreement has been negotiated under which Comcast agrees that it will "step into Charter's shoes" and take full responsibility for all matters, past, present, and 4(d) fixture including franchise violations known and unknown and the formal proposal submitted by Charter in response to the Request for Formal Proposal (RFRP) issued by the Cities of Pasco and Richland as part of the franchise renewal process. D) Charter will be relinquishing control of the cable system to Comcast if the transfer is approved. Therefore, Charter and Comcast have agreed have that the City deadline for acting on the formal request for renewal of the franchise and the decision to grant or deny the request for franchise renewal be extended to September 30, 2015. This will permit the City to engage in discussions with Comcast, the new franchise holder, after the Federal Communication Commission and the Department of Justice act on the request for transfer of control and ownership. V. DISCUSSION: A) Staff, the City's cable consultant, and outside counsel have reviewed the application materials and collaborated on the change of control agreement, and recommend that the agreement be approved. RESOLUTION NO. A RESOLUTION of the City of Pasco approving a Transfer Agreement governing the terms related to transfer of the City's cable television system franchise from Franchisee Falcon Video Communications, L.P. to Comcast Communications and authorizing the City Manager to execute the agreement. WHEREAS, Falcon Video Communications, L.P. ("Franchisee") currently operates a cable system under the terms and conditions of a cable franchise (the "Franchise Agreement") granted by the City pursuant to Ordinance, as lawfully amended from time to time in accordance within the provisions in such documents (collectively "Franchise Documents") and applicable law; and WHEREAS, Charter Communications, Inc. ("Charter") is the ultimate parent company of Franchisee (Franchisee and Charter may be referred to collectively herein as "Companies'); and WHEREAS, pursuant to a multi -step transaction (the "Proposed Transaction") described in the Comcast/Charter Transaction Agreement dated as of April 25, 2014 between Charter and Comcast (the "Transaction Agreement"), the cable television system located within the City ("System") currently operated by the Franchisee will become owned by a wholly-owned subsidiary of Comcast; and WHEREAS, if consummated, the Proposed Transaction will result in a merger under which Franchisee will become COO Transfers, LLC through an internal Charter restructuring and immediately thereafter COO Transfers, LLC will become a wholly owned subsidiary of Comcast (the "Transaction") ("COO" as used herein refers to the entity as owned by Comcast Corporation after the closing of the Transaction); and WHEREAS, the Franchise Documents provide that prior approval of the City is required for a transfer of the System; and WHEREAS, on June 19, 2014, the Companies and Comcast filed with the City an FCC Form 394 (the "Transfer Application") pursuant to the federal Cable Act and FCC regulations, and have requested that the City consent to the Proposed Transaction in accordance with the terms of the Franchise Documents, and all applicable federal, state, and local law; and WHEREAS, pursuant to the federal Cable Act and FCC regulations, the City is required to act on the Transfer Application within 120 days of the City's receipt of a complete and accurate Transfer Application unless the parties agree to an extension of that time period; and WHEREAS, the City responded by letter to the Companies' and Comcast's Transfer Application requesting answers to a series of questions; and WHEREAS, the Companies and Comcast responded to the City's letter on July 28, 2014; and WHEREAS, the 120 -day deadline for the City to act on the Transfer Application would be October 17, 2014, if the application were deemed complete, however Comcast and Charter issued an extension of the deadline to November 19; and WHEREAS, the City has reviewed the Transfer Application and examined the financial, technical, and legal qualifications of Comcast in accordance with applicable laws and the Franchise Documents; and WHEREAS, the Companies, COO, and Comcast have agreed that, following the completion of the Proposed Transaction, COO as the new franchisee will continue to be bound by and comply with, and be liable for any past failure of Franchisee to comply with all of the commitments, duties and obligations under the Franchise Documents and all applicable federal, state and local laws, to the maximum extent required by law; and WHEREAS, the foregoing agreement is embodied in a Transfer Agreement by and among the City, the Companies, Comcast, and COO; and WHEREAS, based upon the parties' Transfer Agreement and the City's review and examination, and in reliance upon the representations, documents, and information provided by the Companies and Comcast in connection with the Proposed Transaction and supplemental information, the City is willing to grant its consent to the Transaction. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of the Pasco: Section 1 The Transfer Application and the Change of Control of the Franchisee as described above is hereby approved as of November 19, 2014, subject to the following conditions: A. The Companies and Comcast must execute the Transfer Agreement in substantially the form attached hereto and deliver the executed copy of the Transfer Agreement to the City Clerk no later than 5:00 p.m. PST on December 1, 2014. B. Guarantors must execute a Guaranty in substantially the form attached hereto and deliver the executed copy of the Guaranty to the City Clerk no later than 5:00 p.m. PST on December 1, 2014. C. The Proposed Transaction must be consummated on or before June 30, 2015, and on terms that do not materially and adversely affect the City and that are not in any material respect different from those described in the Transfer Agreement, the Transfer Application and other related materials provided to the City by the Companies and Comcast, otherwise the consent provided herein shall by voidable at the option of the City. Section 2 If the foregoing conditions are satisfied, the Transfer Application and the Transfer of the Franchisee shall be deemed approved in accordance with applicable law. If any of the aforementioned conditions is not satisfied, the Transfer Application and Transfer of the Franchisee shall be deemed denied as of 5:00 p.m. PST on November 18, 2014 under applicable law. Cable TV Transfer Agreement — Charter to Comcast Page 2 Section 3 The City Manager is authorized to execute the Transfer Agreement. ADOPTED by the City Council of the City of Pasco at a regular meeting on the day of 2014 CITY OF PASCO: Matt Watkins, Mayor ATTEST: Debbie Clark, City Clerk APPROVED AS TO FORM: Leland B. Kerr, City Attorney Cable TV Transfer Agreement — Charter to Comcast Page 3 TRANSFER AGREEMENT This Agreement is made this _ day of 2014, by and among: 1.1.1. City of Pasco, Washington, a Municipal Corporation ('City'); 1.1.2. Falcon Video Communications, L.P. ("Franchisee"); 1.1.3. Charter Communications, hic. ("Charter"); 1.1.4. COO Transfers, LLC ("COO"), as used herein refers to the entity as owned by Comcast Corporation after the closing of the Transaction; 1.1.5. Comcast Corporation ("Comcast"); and 1.1.6. Franchisee and Charter may be referred to collectively herein as "Companies." RECITALS WHEREAS, Franchisee currently operates a cable system under the terms and conditions of a cable franchise (the "Franchise Agreement") granted by the City pursuant to Ordinance , as lawfully amended from time to time in accordance within the provisions in such documents (collectively, the "Franchise Documents") and applicable law; and WHEREAS, Charter is the ultimate parent company of Franchisee; and WHEREAS, pursuant to a multi -step transaction (the "Proposed Transaction") described in the Comcast/Charter Transaction Agreement dated as of April 25, 2014, between Charter and Comcast (the "Transaction Agreement"), the cable television system located within the City ("System") currently operated by the Franchisee will become owned by a wholly-owned subsidiary of Comcast; and WHEREAS, if consummated, the Proposed Transaction will result in a merger under which Franchisee will become COO through an internal Charter restructuring and immediately thereafter COO will become a wholly owned subsidiary of Comcast (the "Transaction"); and WHEREAS, the Franchise Documents provide that prior approval of the City is required for a transfer of the System; and WHEREAS, on June 18, 2014, Charter and Comcast filed with the City an FCC Form 394 (the "Transfer Application") pursuant to the federal Cable Act and FCC regulations, and have requested that the City consent to the Proposed Transaction in accordance with the terms of the Franchise Documents, and all applicable federal, state, and local law; and WHEREAS, the City and Franchisee have been engaged in an extended franchise renewal process that is not yet complete; and WHEREAS, the City and Franchisee have agreed to extend the term of the Franchise to September 30, 2015; and WHEREAS, the Companies and Comcast have agreed that, following the completion of the Proposed Transaction, COO will continue to be bound by and comply with, and be liable for any past failure by Franchisee to comply with, all of the commitments, duties and obligations under the Franchise Documents and all applicable federal, state and local laws, to the maximum extent required by law; and WHEREAS, Comcast has agreed to guaranty the performance of COO as the new franchisee under the Franchise; and NOW, THEREFORE, in consideration of the City's consent to the Transfer, and subject to the terms and conditions of this Agreement and of the City's Resolution granting consent to the Transfer, THE PARTIES DO HEREBY AGREE as follows: 1. TRANSFER OF THE FRANCHISE 1.1 The City's consent to the Transfer Application and the transfer of control of the Franchise in connection with the Proposed Transaction, through the adoption of the Transfer Resolution in substantially the form attached hereto (the "Transfer Resolution'), is a condition precedent to this Transfer Agreement becoming effective. This Transfer Agreement will be voidable if the Proposed Transaction is not consummated by June 30, 2015, or if the City Council does not consent to the Transfer Application and the transfer of control of the Franchise by adopting the Transfer Resolution. 2. AFFIRMATION OF FRANCHISE OBLIGATIONS 2.1 Comcast and COO hereby accept, acknowledge and agree that, after consummation of the Proposed Transaction, COO as the new franchisee will be bound by and responsible for all the commitments, duties, and obligations, past, present, continuing and future, embodied in the Franchise Documents, whether those commitments, duties or obligations arose before or after the date of consummation of the Proposed Transaction or the date that the City Council adopts the Transfer Resolution, to the maximum extent permitted by law, and that neither consummation of the Proposed Transaction nor the City's approval of the Transfer Application will have any effect on these obligations. 2.2 Comcast and COO agree that neither consummation of the Proposed Transaction nor the City's approval of the Transfer Application shall in any respect relieve COO as the new franchisee of any responsibility it may have for past acts or omissions, known or unknown, including any liability for any and all previously accrued but unfulfilled obligations of the Franchisee to the City under the Franchise Documents and applicable law, for all purposes, including but not limited to review of past performance for purposes of determining whether the Franchise should be renewed. Neither consummation of the Proposed Transaction nor this Transfer Agreement shall modify the rights of the Companies and/or the City under or related to the Franchise Documents as compared to the rights that could have been exercised by the Franchisee and/or the City had the Proposed Transaction not occurred. This Agreement shall have no effect on the rights of the City to ensure compliance, or cure of non-compliance, by Franchisee or COO as the new franchisee under the Franchise Documents, and the Companies and Comcast shall not raise a claim to the contrary. Transfer Agreement — Charter to Comcast Page 2 2.3 The City agrees that this Agreement is without prejudice to or waiver of the Franchisee's or COO's rights to defend any claim of default or non-compliance with the Franchise Documents on the basis that such default or non-compliance has not occurred, or has been cured or from raising any other defense. 3. ADDITIONAL CONDITIONS 3.1 In the event the Proposed Transaction described in the Transfer Application does not close by June 30, 2015, or closes on terms that are in any material respect different from the terms disclosed to the City in writing, then any City consent to the Transfer Application shall be voidable by the City and of no force or effect if so voided, and the Transfer Application shall be deemed to have been timely denied if so voided. 3.2 The Companies, COO, and Comcast waive any and all claims that they may have that any denial of the Transfer Application that may result from Subsection 3.1 fails to satisfy the deadlines established by applicable law including, without limitation, claims based on, arising out of, or relating to the time limits set forth in 47 USC § 537, as amended, or 47 CFR § 76.502(a), and agree that they shall be deemed to have agreed to an extension of time for the City to act on the Transfer Application within the meaning of 47 CFR § 76.502(c) as required to make any denial effective. 4. ADDITIONAL AGREEMENTS OF THE PARTIES 4.1 The City reserves all rights not expressly granted in this Agreement. In particular and without limitation: 4.1.1 Neither this Agreement, nor any other action or omission by the City at or before the execution of this Agreement, shall be construed to grant the City's consent to any future transfer of the Franchise, and/or change in ownership and/or control of the Franchisee, or to mean that the City's consent to any such future transfer is not required. 4.1.2 The City's consent to the Transfer Application shall not constitute a waiver or release of any of the City's rights or claims with respect to Franchisee's compliance (or non-compliance) with the terms, conditions, requirements and obligations set forth in the Franchise Documents, whether arising before or after the date of the Transfer Resolution or consummation of the Proposed Transaction. The City's approval of the Transfer Application shall in no way be deemed an agreement or concession by the City that Franchisee is in compliance with all of its obligations under the Franchise Documents. 4.1.3 The City, in collaboration with the City of Richland (collectively "Cities"), has been engaged in a franchise renewal process with the Franchisee pursuant to 47 USC 546 (a) — (h). On July 31, 2013, the Cities proceeded with the Cable Act's formal renewal process and issued an RFRP. On December 30, 2013, the Franchisee submitted a formal renewal proposal in response to the RFRP issued by the Cities ("Renewal Proposal"). In order to permit further time for informal renewal negotiations, the parties entered into an agreement tolling the formal renewal process, which expires on September 30, 2015. 4.1.4 Comcast and COO shall not contend that the City is barred, by reason of its consent to the Transfer Application, from considering or raising any claim based on Franchisee's past or present failure to comply with any term or condition of the Franchise Documents or applicable law, including, without limitation, any unpaid franchise fees lawfully due the City from Franchisee, any known and unresolved consumer complaints, and any construction, Transfer Agreement — Charter to Comcast Page 3 security or facility requirements of the Franchise Documents that are unsatisfied, and regardless whether any such claim arose before or after the date of the Transfer Resolution or consummation of the Proposed Transaction. 4.1.5 Comcast and COO agree to assume all risks associated with any fixture non- renewal or non -extension or other potential termination of the Franchise, and further agree that they will not raise any claim or defense that they are entitled to renewal or protected from revocation by the City's approval of the Proposed Transaction. 4.1.6 Except as otherwise expressly provided for herein, this section 4 is without prejudice to the Companies' and Comcast's rights to defend any claim of default or non- compliance with the Franchise Documents on the basis that such default or non-compliance did not occur, or has been cured, or from raising any other defense. 5. RATES 5.1 Comcast and COO further agree that neither the Proposed Transaction, the Transfer Application consent process, the City's Resolution granting conditional consent to the Proposed Transaction, nor this Transfer Agreement, standing on its own or collectively, provides any basis for increasing the amounts paid by subscribers through cost pass-through as so-called "external costs" or as new franchise requirements, and neither the City's consent process nor the City Council resolution granting conditional consent, standing on its own or collectively, provides any basis for increasing the amounts paid by subscribers in any manner. 6. REPRESENTATIONS AND WARRANTIES 6.1 The Companies, Comcast, and COO acknowledge the City's representation that its consent to the Transfer Application is made in reliance upon the representations, documents, and information provided by the Companies and Comcast in connection with the Transfer Application and supplemental information thereto. 6.2 Comcast, COO, and the City represent and warrant that the Proposed Transaction is not based on any representation by the City (other than as provided by federal and state law) that the Franchise will be renewed or extended; that Comcast and COO assume all risks associated with any future non -renewal or non -extension of the Franchise; and that the Companies and Comcast and COO retain all rights, claims, and defenses they or their predecessors may have regarding the operation of the cable system under applicable law, including under 47 USC § 546. 6.3 Comcast represents and warrants that the Proposed Transaction will not in any respect adversely affect COO's ability to meet the lawful and valid requirements of the Franchise Documents. 6.4 Comcast and COO agree they will not file a request under Section 625 of the Cable Act with the City seeking modification of any existing franchise requirements as a result of any increase in debt service, debt service coverage or equity requirements incurred in connection with the Proposed Transaction. Transfer Agreement — Charter to Comcast Page 4 6.5 The Companies, Comcast, and COO acknowledge that the City has not undertaken a franchise compliance audit as a part of its review of the Transfer Application and that there may be issues related to Franchisee's possible non-compliance with the Franchise Documents that are not known to the City at this time. Pursuant to Section 2.1 of this Agreement, Comcast, COO, and the Companies agree that COO as the new franchisee shall be bound by and liable for all the commitments, duties, and obligations, past, present, continuing and future, of Franchisee embodied in the Franchise Documents, to the maximum extent permissible by law, and that the City's action to approve the Transfer Application shall not be interpreted as, or deemed to be, a waiver of the City's rights to enforce the Franchise Documents, regardless whether any claim by the City relating to any failure by Franchisee to comply with the Franchise Documents arose before or after the date of this Agreement. 7. INDEMNIFICATION 7.1 The Companies agree to indemnify and hold the City harmless against any loss, claim, damage liability or expense (including, without limitation, reasonable attorneys' fees) proximately caused by any representation or warranty made by the Companies herein which proves to be untrue or inaccurate in any material respect. 7.2 Comcast and COO agree to indemnify and hold the City harmless against any loss, claim, damage liability or expense (including, without limitation, reasonable attorneys' fees) proximately caused by any representation or warranty made by Comcast or COO herein which proves to be untrue or inaccurate in any material respect. 8. BREACHES 8.1 Any breach of this Transfer Agreement shall be deemed a breach of the Franchise Documents. 9. MISCELLANEOUS PROVISIONS 9.1 Effective Date: This Agreement shall be effective and binding upon the parties upon closing of the Proposed Transaction. 9.2 Entire Agreement: This Agreement constitutes the entire agreement of the parties with respect to the matters addressed herein. No statements, promises or inducements inconsistent with this Agreement made by any party shall be valid or binding, unless in writing and executed by all parties. This Agreement may only be modified by written amendments hereto signed by all parties. 9.3 Binding Acceptance: Any purported assignment of this Agreement or the rights or privileges of any party hereunder is void without the express written consent of the signatories hereto. Subject to the foregoing, this Agreement shall bind and benefit the parties hereto and their respective and permitted heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. Transfer Agreement — Charter to Comcast Page 5 9.4 Voluntary Agreement: This Agreement is freely and voluntarily agreed to by each party, without any duress or coercion, and after each party has consulted with its counsel. Each party has carefully and completely read all of the terms and provisions of this Agreement. Neither the Companies nor Comcast, nor any of their affiliates, nor the City, will take any action to challenge any provision of this Agreement; nor will any of them participate with any other person or entity in such action. 9.5 Drafting: This Agreement is a product of common negotiation among the parties and shall not be construed against any party on grounds relating to drafting, revision, review or recommendation by any agent or representative of such party. 9.6 Counterparts: This Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original copy, and all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterparts. 9.7 Governing Law: This Agreement shall be governed in all respects by the law of the State of Washington. 9.8 Captions and References: The captions and headings of sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Transfer Agreement as of the day and year first above written. APPROVED: City of Pasco Dave Zabell, City Manager M43-11 Debbie Clark, City Clerk APPROVED AS TO FORM Leland Kerr, City Attorney Falcon Video Communications, L.P Charter Communications, Inc. Title: COO Transfers, LLC. Comcast Corporation Transfer Agreement — Charter to Comcast Page 6 FRANCHISE GUARANTY Comcast Corporation ("Comcast'), a Pennsylvania corporation, is delivering this Franchise Guaranty in connection with, and in consideration for the City of 's ("City") conditional consent to the assignment and transfer of control of the entity ("Franchisee") holding the Cable Franchise Agreement, dated as of , as amended and as may hereinafter be amended or renewed (the "Franchise"), with the City. Comcast hereby guarantees to the City that: (i) the Franchisee will timely comply with the Franchise and all applicable city, state and federal laws, regulations, codes, standards and administrative or judicial decisions ("Applicable Laws"); (ii) the Franchisee will pay all fees, taxes, damages, judgments, costs or expenses ("Liabilities") owed to the City as a result of Franchisee's failure to timely comply with the Franchise or Applicable Laws; (iii) in the event the Franchisee fails to comply with or satisfy any such obligations, Comcast will promptly cause Franchisee to cure such nonperformance or pay such Liabilities, or Comcast will itself make good on any such nonperformance or Liabilities beyond the ability or willingness of the Franchisee to cure or pay, including without limitation any and all past, present and future Liabilities under the Franchise, in the same capacity as the Franchisee; and (iv) Comcast will not interfere directly or indirectly with the Franchisee's ability to comply, nor will it directly or indirectly cause Franchisee to fail to comply, with the Franchise or Applicable Laws. EXECUTED as of the day of 2014. COMCAST CORPORATION By: _ Name: Title: Address: 1701 JFK Boulevard Philadelphia, PA 19103 Attention: General Counsel STATE OF COUNTY OF The foregoing Franchise Guaranty , 2014, by the _ act and deed of Comcast Corporation. Seal was acknowledged before me this day of of Comcast Corporation, to be the Notary Public