SR-501-002 (10)
Council Meeting: June 28, 2005 Santa Monica, CA
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Professional Services Contract with Rutan & Tucker, LLP for Outside
Legal Services and Financial Analysis related to the Adelphia transfer to
Time Warner for Cable Television Services
Introduction
This report recommends that the City Council authorize the City Manager to negotiate
and execute a contract with Rutan & Tucker, LLP for outside legal services and financial
analysis on behalf of the City related to the transfer application of Adelphia Cable to
Time Warner to ensure the applicant company is financially, legally, and technically
qualified for the provision of Cable television in the City of Santa Monica.
Background
Time Warner Inc. and Comcast Corporation recently announced a definitive agreement
to acquire substantially the assets of Adelphia Communications Corporation. As a
result Time Warner will acquire Century-TCI (ada Adelphia) in Santa Monica. Staff
received the FCC form 394 transfer application to the new operator on June 14, 2005.
Under applicable law, including the Cable Communications Policy Act of 1984, review of
requests for franchise renewal and transfer include, among other things, consideration
of the legal, technical and financial qualifications of the company. In addition, the
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renewal and transfer process may be used to require that issues of non-compliance with
the franchise be resolved.
The City?s interest is to ensure the Franchisee?s ability to perform, and to guarantee the
performance itself, i.e. to ensure that service is not suspended and construction in the
public right-of-way is not disrupted because of financial problems.
The Rutan & Tucker contract will provide specialized legal analysis and negotiation
assistance in the transfer process. It will also include provision for expert services to
review the financial situation of the acquiring company before and after the business
combination including the cash flow, debt, ability to meet construction needs and
impacts on consumer rates. The contract will not exceed $60,000.
Discussion
Rutan and Tucker, LLP is the City?s California outside counsel in cable, rate, antenna
and FCC related matters. This contract will cover costs associated with the transfer of
Adelphia to Time Warner and related cable rate matters.
Budget/Financial Impact
Funds of $60,000 are available in account number 01202.555060.
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Recommendation
Staff recommends that the City Council authorize the City manager to negotiate and
execute a professional services contract with Rutan & Tucker in an amount not to
exceed $60,000.
Prepared by: Kathryn Vernez, Assistant to the City Manager for Government Relations
Steve Stark, Director of Finance
Joseph Lawrence, Assistant City attorney
Robin Gee, Cable TV Manager
(Reference Contract No. 8488 (CCS).
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