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1g. Triax Midwest Assoc: Public Hearing on Proposed Transfer.MEMORANDUM CITY OF -L j CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 TO: Mayor and City Council FROM: Don Ashworth, City Manager DATE: May 15, 1996 SUBJ: Call for Public Hearing on Proposed Transfer of Cable Television System, Triax Midwest Association We have received a request from Triax Television to ti this point, I am unsure as to whether the proposal repro sale. As can be seen from the attachments, we are reg information on the proposal. In the meantime, under fi hearing date to consider the proposal within very stringy In discussing this item with Brian Grogan, we both bel processing the franchise transfer request will be totally the new franchise. It is recommended that the consider the Triax proposa er their franchise to a new firm. At S a consolidation, merger, or outright ng that Triax provide additional al law, we are required to set a public timelines. the city costs associated with ;ed by Triax or the firm receiving council establish June 10 as will be asking Mr. Grogan to icial public hearing date to the public hearing. LAW OFFICES MOSS & BARNETT A PROFESSIONAL ASSOCIATION 4800 NORWEST CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MINNESOTA 55402 -4129 BRIAN T. GROGAN TELEPHONE (612) 347 -0300 TELECOPIER (612) 339 -6686 (612) 347 -0340 May 2, 1996 VIA FACSIMILE AND U.S. MAIL Mr. Don Ashworth City Manager 690 Coulter Drive P.O. Box 147 Chanhassen, MN 55317 Re: Proposed Transfer by and between Triax and DD Cable Partners Dear Don: Pursuant to our telephone conversation I understand the City of Chanhassen, Minnesota will be utilizing the services of Moss & Barnett to assist in reviewing the proposed transfer of ownership. As you may know, I am working with numerous communities to review this transaction and therefore I will be spreading the costs of my review over these many communities thereby reducing the cost to any one community. The services which I will provide to the City include a review of your local franchise documentation, a detailed analysis of the legal, technical and financial qualifications of the proposed buyer, preparation of a comprehensive transfer report, drafting of closing documentation for consideration by your City Council which will include a resolution, ordinance amendment, any necessary guarantees, and possibly an opinion of buyer's legal counsel if applicable. To the extent unique issues arise during the transfer process which require negotiations with the companies involved in this transaction, I will discuss with you arpropriate arrangements before any additional work is undertaken. As we discussed, I have enclosed herewith a draft letter which you may utilize to send to Triax placing them on notice that a public hearing will be called. I understand your City Council will order such a hearing at its May 9th meeting and that the hearing will be conducted at the June 10th meeting. Remember that the letter notifying the cable operator on the public hearing must be received by the operator no more than 30 days from the date the City received the request for transfer. I have also included herewith a form which you may utilize -to publish notice of the public hearing in a local paper. This notice should be published 10 to 14 days in advance of the June 10th public hearing date. In the meantime, I will be requesting �, IT. MAY 0 3 1996 Ci y Or CHANHASSEN MOSS & BARNETT A PROFESSIONAL ASSOCIATION Mr. Don Ashworth May 2, 1996 Page 2 information from both the seller and buyer to learn more about the transaction and the restructuring of Triax. If you should have any questions or if I can provide any additional information please feel free to contact me. Very truly yours, MOSS & BARNETT, A Professional Association Brian T. Grogan BTG /slo 31645/ fl01!.doc Enclosures [To be typed on City Letterhead] May 2, 1996 [OR LOCAL MANAGER] Bruce J. Stewart Vice President DD Cable Holdings, Inc. d/b /a Midwest Cablevision 235 Montgomery, Suite 420 San Francisco, CA 94104 Rea Proposed Transfer of Control Dear Mr. Stewart: On April / � , 1996 the City received a letter and numerous enclosures from DD Cable Holdings, Inc. d/b /a Midwest Cablevision and Triax Midwest Associates, L.P. ( "Triax "). This information related to a proposed transfer whereby Midwest Cablevision would be merged and combined with into a restructured Triax Midwest Associates, L.P. Pursuant to Minnesota Statutes Chapter 238.083 the City has determined that the proposed transfer may have an adverse impact on subscribers and therefore a public hearing will be necessary to address this issue. The City's public hearing will be held on June 10, 1996 and appropriate notice will be placed in a newspaper of general circulation in our area. We invite representatives from Midwest Cablevision and Triax to attend the meeting and present any information they should desire. The City has also determined to utilize the services of Brian T. Grogan at Moss & Barnett, A Professional Association, in Minneapolis, Minnesota. Mr. Grogan will advise the City regarding the proposed transaction and will prepare a report for the City addressing the legal, technical and financial qualifications of the restructured Triax. Mr. Grogan will be forwarding a request for supplemental information in the near future. Please direct all relevant correspondence regarding this matter to Mr. Grogan at Moss & Barnett, 4800 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota, 55402-4129,612-347-0340,6j2,339-6686 (facsimile). Should you have any further questions please feel free to contact either myself or Mr. Grogan. Very truly yours, 1 L ' 31392/_8001 !.DOC Don Ashworth cc: Mr. Brian Grogan CITY OF CHANHASSEN, MINNESOTA r r CITY OF CHANHASSEN, MINNESOTA NOTICE OF PUBLIC HEARING PROPOSED TRANSFER OF CABLE TELEVISION SYSTEM The City of Chanhassen, Minnesota, will hold a public hearing on June 10, 1996, at p.m., in the City Council Chambers of the City Hall to discuss issues regarding the proposed transfer of the Cable Television Franchise and system to a restructured Triax Midwest Associates, L.P. The City Hall is located at Any person may spew. the City concerning the proposed transfer at the time of the public hearing. Any person may submit written comments by addressing those comments to the City Clerk, . Any person who wishes to speak at the public hearing is requested to contact the City Clerk prior to the public hearing or to sign up to speak at the public hearing on a list which will be available in the City Council Chambers immediately prior to the hearing. The City Clerk's telephone number is Date this day of , 1996. CITY OF CHANHASSEN, MINNESOTA By: Its: 31452/_9_01 !.doe LAW OFFICES MOSS & BARNETT A PROFESSIONAL ASSOCIATION 4800 NORWEST CENTER 90 SOUTH SEVENTH STREET MINNEAPOLIS, MINNESOTA 55402 -4129 BRIAN T. GROGAN TELEPHONE (612 ) 347 -0300 TELECOPIER (612 ) 339 -6686 ( 612 ( 347 -0340 May 8, 1996 Ms. Jane Bremer Larkin, Hoffman, Daly & Lindgren 7900 Xerxes Avenue South Suite 1500 Bloomington, MN 55431 Re: Proposed Transfer Involving DD Cable Partners, L.P. et al. and Triax Midwest I Associates, L.P. Dear Jane: I Enclosed herewith please find a Transfer Questionnaire /Application regarding the above referenced transfer. This Application has been submitted on behalf of eight (8) separate communities as identified within the Application. Other communities have expressed interest in using Moss & Barnett to review this proposed transfer and I will inform you as soon as possible if additional communities are added to our client list on this matter. I have attempted to reduce the administrative burden of responding to these questions for each individual municipality by requesting a single response from Triax Midwest Associates, L.P. with respect to the eight (8) communities I am representing. Each of the eight (8) communities have informed me of their intent to require a public hearing pursuant to Minnesota Statutes Section 238.083, subd. 2. With this in mind, I am hopeful that I can review a response to the enclosed Application as soon as possible in preparation for these hearings. To that end, please provide a response to the enclosed Application on or before May 24, 1996. If this time frame can be accommodated, I anticipate the communities I represent will be able to move forward with this review process in an efficient an expeditious manner. r RECEIVED MAY 0 9 RECD ' CITY OF CHANHASSEN Re: Proposed Transfer Involving DD Cable Partners, L.P. et al. and Triax Midwest I Associates, L.P. Dear Jane: I Enclosed herewith please find a Transfer Questionnaire /Application regarding the above referenced transfer. This Application has been submitted on behalf of eight (8) separate communities as identified within the Application. Other communities have expressed interest in using Moss & Barnett to review this proposed transfer and I will inform you as soon as possible if additional communities are added to our client list on this matter. I have attempted to reduce the administrative burden of responding to these questions for each individual municipality by requesting a single response from Triax Midwest Associates, L.P. with respect to the eight (8) communities I am representing. Each of the eight (8) communities have informed me of their intent to require a public hearing pursuant to Minnesota Statutes Section 238.083, subd. 2. With this in mind, I am hopeful that I can review a response to the enclosed Application as soon as possible in preparation for these hearings. To that end, please provide a response to the enclosed Application on or before May 24, 1996. If this time frame can be accommodated, I anticipate the communities I represent will be able to move forward with this review process in an efficient an expeditious manner. r I MOSS & BARNETT A PROFESSIONAL ASSOCIATION Ms. Jane Bremer May 8, 1996 Page 2 If you have any questions regarding this letter or the enclosed Application please feel free to contact me. Very truly yours, MOSS & BARNETT, A Professional Association ' Brian T. Grogan ' BTG /slo 32842/PC @01 !.DOC Enclosure cc: Mr. Elliott Knetsch, Cannon Falls, MN (w /enc.) Mr. Don Ashworth, Chanhassen, MN (w /enc.) Mr. William Lavin, Granite Falls, MN (w /enc.) Mr. Robert Wolfington, Rushford, MN (w /enc.) Mr. Dana Young, St. Charles, MN (w /enc.) Ms. Jean Gramling, Savage, MN (w /enc.) Ms. Cathy Magnus, Slayton, MN (w /enc.) Mr. Dale Powers, Spring Valley, MN (w /enc.) MOSS & BARNETT A PROFESSIONAL ASSOCIATION RESTRUCTURED TRIAX MIDWEST ASSOCIATES, L.P. TRANSFER QUESTIONNAIRE /APPLICATIO May 8,1996 Prepared by Brian T. Grogan, Esq. (612) 347 -0340 MOSS & BARNETT A Professional Association 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 -4129 (These forms are not for distribution or other use without the advance written consent of Moss & Barnett) © Moss & Barnett, A Professional Association, 1996 32746/p9m01 !.doc I MOSS & BARNETT A PROFESSIONAL ASSOCIATION INTRODUCTION Moss & Barnett, A Professional Association, has been retained to represent the following communities regarding the proposed transfer by and between DD Cable Partners, L.P., DD Cable Holdings, Inc., and its wholly owned subsidiaries (collectively "DD Cable ") and Triax Midwest Associates, L.P. ( "Triax "). 1. Cannon Falls ' 2. Chanhassen 3. Granite Falls 4. Rushford ' 5. St. Charles 6. Savage ' 7. Slayton 8. Spring Valley ' Other cities also expressed interest in utilizing our services and may retain Moss & Barnett for this purpose. We will advise Applicant if other cities choose to participate in Moss & Barnett's review of this proposed transaction. This Transfer Questionnaire /Application will ' serve as a request on behalf of each of these cities for supplemental information regarding the proposed transfer. The above referenced eight (8) cities will hereinafter collectively be referred to as "City." Please clarify in your response issues unique to each given jurisdiction. If in your discretion you believe separate responses are necessary for each jurisdiction please respond accordingly. ' At the time of awarding their cable communications franchises and approving subsequent transfers of their franchises, the City considered and approved the technical ability, financial condition, legal qualifications and character of the current Grantee/Franchisee. These same qualifications will be considered and reviewed as a part of any transfer request. ' The Applicant for the transfer is requested to use the following forms in order to inform the City of the Applicant's legal, technical and financial qualifications. In addition to the qualifications, the Applicant is requested to identify any and all changes proposed to the cable ' communications System now serving the City, the operation of that System or the franchise document. The City recognizes that some of the information has already been included within FCC Form 394, however, the City prefers to review the responses of the parties to the proposed ' transaction in the format identified herein. In considering a request for transfer, the City will consider and review the legal, technical ' and financial qualifications of the Applicant together with any modifications requested by the Applicant. The City will comply with any and all state or federal procedural requirements. MOSS & BARNETT A PROFESSIONAL ASSOCIATION to: Please provide two (2) copies of this TRANSFER QUESTIONNAIRE /APPLICATION Brian T. Grogan Moss & Barnett 4800 Norwest Center 90 South Seventh Street Minneapolis, MN 55402 -4129 The Citv expressly reserves the right to request additional information DEFINITIONS Unless the context otherwise requires, when used in this Application, the terms listed in this section shall have the following meanings: A. The term "Affiliate ", when used in reference to the Applicant or a Principal of the Applicant, shall mean any Person that directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with the Applicant or the Principal of the Applicant. & The term "Applicant' shall mean the restructured Triax Midwest Associates, L.P. ( as identified in FCC Form 394 - please clarify if this is incorrect). Co The term "Person" shall mean any individual, corporation, general or limited partnership, joint venture, limited liability company, trust, association, or other entity. D. The term "Principal," when used in reference to the Applicant, shall mean (i) any officer, director, or beneficial owner of five percent (5 %) or more of any class of voting securities of the Applicant and any Affiliates of the Applicant, (ii) any Person who provides management or operational services with respect to the "System" (as hereinafter defined) and any officers, directors, or beneficial owners of five percent (5 %) or more of any class of voting securities of any such Person, (iii) any general or limited partner of the Applicant or any Affiliate of the Applicant and any officer, director, or beneficial owner of five percent (5 %) or more of any class of voting securities of any such partner, and (iv) any Person who or which serves in a capacity or stands in a relationship similar to any of the foregoing. E. The term "System" shall mean the cable communications systems covered by the Franchise Ordinances awarded by the above referenced cities, to which this Application relates. r 32746/p9m01 !.doc 2 I MOSS & BARNETT A PROFESSIONAL ASSOCIATION LEGAL QUALIFICATIONS 1. Identification of Applicant A. Applicant Name Address B. Representation This Application for transfer is submitted by the undersigned who has been duly authorized to make the representations within and on behalf of the Applicant. Applicant recognizes that the City is relying upon all of the Applicant's representations herein in evaluating the Applicant's request for transfer and, if any such representation is false or misleading, it may result in revocation of any franchise that may be transferred as a consequence of this Application. Consent is hereby given to the City and its representatives to make inquiry into the legal, character, technical, financial and other qualifications of the Applicant and its Principals by contacting any Person identified herein, or by any other appropriate means. Name Affiant's Signature Official Position 32746/p9m01 !.doc Date Subscribed and sworn to before me this day of , 1996. Notary Public 3 MOSS & BARNETT A PROFESSION L ASSOCIATION Ca Principal to Whom Inquiries Should be Made Name Title Address Telephone 2. Ownership Information A. Multiple Systems Operator Will any of the Applicant's Principals guarantee the payment and performance of the Grantee's obligations under this franchise? B. Contribution Agreement Please provide copies of all schedules to the Contribution Agreement dated April 5 1996. 4 32746/p9m01 !.doc MOSS & BARNETT A PROFESSIONAL ASSOCIATION TECHNICAL QUALIFICATIONS 1, Current Franchises List below cable communications Systems owned, operated or controlled by the Applicant or any Principal of the Applicant or any Principal of the Applicant. ( Please specify whether the systems below are owned and operated by Applicant or a parent or subsidiary of Applicant Name of Franchise Holder (Municipality /State) Contact Person and Phone Number Date Franchise Award (indicate with * if this is a Renewal or Extension) Number of Current Subscribers 32746/p9m01!.doc Wi MOSS & BARNETT A PROFESSIONAL ASSOc1ATION 2. Former Franchises List below every community where the Applicant or any Principal of the Applicant has received a cable television franchise or operated a cable System without a franchise and subsequently disposed of all or a majority of its interest in such franchise or System. Name of Franchise Contact Date of Date of Reason and Holder Person and Franchise Franchise Manner of (Municipality/ Phone Number Award Disposition Disposition State) 6 32746/p9mOP.doc MOSS & BARNETT A PROFESSIONAL ASSOCIATION 3. Potential Franchises List below communities where the Applicant or any Principal of the Applicant has submitted a request for an initial franchise or the approval for a transfer of ownership. Community in which Franchise Sought Date of Application Expected Date of Action Estimated Number of Subscribers Estimated Cost Municipal Contact Person & Phone 32746 /p9m01 !.doc 7 MOSS & BARNETT A PROFESSIONAL ASSOCIATION 4. Changes to the System Is the Applicant proposing or will the Applicant undertake any changes in the System j. Changes in the Operation of the System Is the Applicant proposing, or will the Applicant undertake any changes in the operation of the System including, but not limited to, the following areas: rate increases, programming, customer service practices, billing practices, Personnel, etc. 6o Future Plans Please provide any applicable information to help explain any future plans applicant may have regarding the implementation of new technologies into the system serving the City. How will the introduction of these new technologies impact the growth of the system in the City? 7. New Services Does the Applicant have any plans to add new services to the existing system? Please describe any potential services which Applicant may consider providing over the system. 8. Direct Broadcast Satellite Please briefly comment on the impact of direct broadcast satellite on the services offered by the system in the City. Will the acquisition of the system by Applicant have any impact on the competition which direct broadcast satellite poses? 8 32746/p9m01 !.doc t MOSS & BARNETT A PROFESSIONAL ASSOCIATION 9. Programming Line -up Does Applicant own an interest in any cable programming services? Will Applicant make any changes to the programming line -up in the City? Will Applicant consider changing the programming line -up in the future? If so, in what way? 10. Costs Increases Please comment on any projected cost increases to the current services offered by applicant over the next two (2) years. 11. Billing System Please describe any changes Applicant will make in the current billing system. Will subscribers see a new billing system and if so, what modifications or improvements will result due to a change in the billing format? 12. Customer Service Centers Please describe any planned cutbacks in staff, operations or locations for customer service centers. 32746/p9m01 !.doc E MOSS & BARNETT A PROFESSIONAL ASSOCIATION FINANCIAL QUALIFICATIONS 1. The Applicant and its Principals need to provide proof of financial qualifications. The information contained in FCC Form 394 is insufficient. therefore please provide the followings A. Annual Profit and loss Statements for the most recent three to five year period. B. Annual Balance Sheets for the most recent three to five year period. C. Annual Cash Flow Statements for the most recent three to five year period. D. Loan Agreements or a Commitment letter. E, A description of all sources of financing with supporting documentation for each source. For example, for limited partnerships, a proposed prospectus or offering circular; for a public corporation, registration statements and all other forms filed with the SEC. F. Pro forma Projections of annual operating data (i.e., homes passed, subscribers, rates, etc.) for the life of the franchise. & Pro forma Projections of annual revenue and operating expenses for the life of the franchise, d- - H. Pro forma Projections of annual capital expenditures for the life of the franchise. 1. Pro forma Projections of annual cash flow for the life of the franchise. 2. The existing Grantee/Franchisee also needs to supply the following financial information. A. A statement of annual operating results including households passed, basic service subscriber counts, pay TV subscriber counts, and subscriber rates. Monthly operating results for the most recent twelve month period (or portion thereof) should also be included. B. Annual Profit and Loss Statements including the operating expense detail for the balance of the franchise term. C. Annual Balance Sheets. D. Annual Cash Flow Statements. 10 32746/p9m01 !.doc