HomeMy WebLinkAbout5G Franchising Authority Report
Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: APRIL 16, 2018
AGENDA #: 5G
PREPARED BY: FRANK BOYLES, CITY MANAGER
PRESENTED BY: FRANK BOYLES
AGENDA ITEM: CONSIDER APPROVAL OF A REPORT APPROVING A CHANGE IN THE
CORPORATE COMPOSITION OF A CABLE TELEVISION FRANCHISE
HOLDER
DISCUSSION: Introduction
The purpose of this agenda item is to consider granting approval of a corporate
composition change to Integra Telecom pursuant to the terms of our cable TV
Franchise Agreement.
History
The city has entered into Cable Television franchise agreements pursuant to state
statute with both Mediacom and Integra Telecom. The terms of both agreements
are virtually identical. Both provide under Section 9 that if the corporate
composition of the franchise holder changes appreciably the city council as
franchisor must approve the change.
Current Circumstances
In a letter dated March 23, 2018, Mary Korthour, General Manager of Integra
Telecom dba Scott Rice Telephone Company and its sole shareholder Allstream
Business US, LLC have entered into a purchase agreement with New Ulm
Telecom to purchase all issued and outstanding capital stock. The letter goes on
to request acknowledgement of the city council’s approval by countersigning the
letter.
ISSUES: This is a typical provision in franchise agreements. The new owner will be
responsible for complying with the terms of the franchise agreement to the same
extent that Integra was.
FINANCIAL
IMPACT:
Since none of the terms or obligations under the franchise agreement change,
there should be no financial impact.
ALTERNATIVES: 1. Motion and second as part of the consent agenda to authorize the mayor and
city manager to countersign the letter acknowledging the corporate changes
set forth above.
2. Motion and second to remove this item from the consent agenda for additional
discussion.
RECOMMENDED
MOTION:
Alternative #1
0,,4690 Colorado Street S.E.
Prior Lake, Minnesota 55372
Telephone : (952) 226-7 OOO
Fax: (952) 447-6016rct
TELECOM
Re:
March 23,2018
City of Prior Lake
Attn: Frank Boyles
4646 Dakota Street SE
Prior Lake, MN 55372
City of Prior Lake ("Franchising Authority") Cable Television Franchise Ordinance No. I 15-08
dated as of March 23,2015 (the "Ordinance")
Dear Mr. Boyles:
Please be advised that Scott-Rice Telephone Co., a Minnesota corporation ("Company") and its
sole shareholder, Allstream Business US, LLC, an Oregon limited liability company ("Seller"), have
entered into a Stock Purchase Agreement (the "Purchase Agreement") with New Ulm Telecom, Inc., a
Minnesota corporation ("Buyer"). The Purchase Agreement provides that the Buyer will purchase from
the Seller all of the issued and outstanding capital stock of the Company (the "Transaction") as of the
closing of the Transaction (the "Closing").
Pursuantto Section 238.083 of the Minnesota Statutes, the change in control of ownership of the
Company that will result from the Transaction is a "fundamental corporate change" that requires the prior
written consent of the Franchising Authority. By this letter, the Company, Seller and Buyer respectfully
request that the Franchising Authority provide such consent as soon as possible.
By signing below, the Franchising Authority hereby consents to the transt'er by means of a
fundamental corporate change in accordance with Section 238.083 of the Minnesota Statutes. The
Franchising Authority agrees that the Ordinance shall remain in full force and effect following the
Closing in accordance with its terms.
Please sign a copy of this letter and fax or email a pdf copy of the same to the Company's
attorney at (612) 632-4468, attention Richard H. Bennett, or richard.bennett@gpmlaw.com. Please
forward the signed original to the following address:
Gray, Plant, Mooty, Moofy & Bennett, P.A
500 IDS Center
80 South 8tl'street
Minneapolis, MN 55402
Attn: Richard H. Bennett, Esq.
If for whatever reason the Transaction fails to close, the Company will notify you of the same as
soon as is reasonably possible. In the event that the Transaction fails to close, this consent to transfer by
means of a fundamental corporate change will become null and void.
Thank you in advance for your prompt attention to this matter and for your consent to the
contemplated fundamental corporate change as set forth above.
"Your local communications partner for home and business."
If you have any questions regarding this matter, please contact me by email at
mjkorthour@integratelecom.com or by telephone at (952) 226-9766.
Sincerely,
SCOTT.RICE
J , General Manager
co.
Acknowledged and Consented to this _ day of
CITY OF PRIOR LAKE
2018 by:
By:
Its: