<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
-------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
Commission File Number 0-13333
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Enstar Income Program 1984-1, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1581136
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10900 Wilshire Boulevard - 15th Floor
Los Angeles, California 90024
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 824-9990
--------------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Exhibit Index located at Page E-1
<PAGE> 2
PART I - FINANCIAL INFORMATION
ENSTAR INCOME PROGRAM 1984-1, L.P.
CONDENSED BALANCE SHEETS
==================================
<TABLE>
<CAPTION>
December 31, March 31,
1997* 1998
------------ -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 462,900 $ 570,700
Accounts receivable, less allowance of $28,000 and
$15,900 for possible losses 107,500 41,000
Insurance claim receivable 399,700 392,400
Prepaid expenses and other assets 135,800 169,200
Property, plant and equipment, less accumulated
depreciation and amortization of $10,477,900 and $10,596,800 3,387,200 3,570,700
Franchise cost, net of accumulated
amortization of $235,400 and $241,000 74,600 70,500
Deferred loan costs and other charges, net 128,400 118,800
----------- -----------
$ 4,696,100 $ 4,933,300
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
LIABILITIES:
Accounts payable $ 529,800 $ 476,100
Due to affiliates 754,200 745,000
Note payable - affiliate 250,000 250,000
----------- -----------
TOTAL LIABILITIES 1,534,000 1,471,100
----------- -----------
COMMITMENTS AND CONTINGENCIES
PARTNERSHIP CAPITAL (DEFICIT):
General partner (41,100) (38,100)
Limited partners 3,203,200 3,500,300
----------- -----------
TOTAL PARTNERSHIP CAPITAL 3,162,100 3,462,200
----------- -----------
$ 4,696,100 $ 4,933,300
=========== ===========
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
2
<PAGE> 3
ENSTAR INCOME PROGRAM 1984-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
==================================
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Three months ended
March 31,
-------------------------------
1997 1998
----------- -----------
<S> <C> <C>
REVENUES $ 1,368,900 $ 1,330,000
----------- -----------
OPERATING EXPENSES:
Service costs 495,200 480,000
General and administrative expenses 197,300 180,900
General Partner management fees
and reimbursed expenses 138,500 167,500
Depreciation and amortization 136,500 178,400
----------- -----------
967,500 1,006,800
----------- -----------
OPERATING INCOME 401,400 323,200
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 11,600 4,500
Interest expense (29,000) (27,600)
----------- -----------
(17,400) (23,100)
----------- -----------
NET INCOME $ 384,000 $ 300,100
=========== ===========
Net income allocated to General Partner $ 3,800 $ 3,000
=========== ===========
Net income allocated to Limited Partners $ 380,200 $ 297,100
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 12.70 $ 9.92
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,940 29,940
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
ENSTAR INCOME PROGRAM 1984-1, L.P.
STATEMENTS OF CASH FLOWS
==================================
<TABLE>
<CAPTION>
Unaudited
-----------------------------
Three months ended
March 31,
-----------------------------
1997 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 384,000 $ 300,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 136,500 178,400
Amortization of deferred loan costs 6,100 7,300
Increase (decrease) from changes in:
Receivables, prepaid expenses and other assets (20,700) 40,400
Accounts payable (80,200) (53,700)
----------- -----------
Net cash provided by operating activities 425,700 472,500
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (122,600) (352,200)
Increase in intangible assets (12,800) (1,900)
----------- -----------
Net cash used in investing activities (135,400) (354,100)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to affiliates 108,900 (9,200)
Repayment of debt (500,000) --
Deferred loan costs -- (1,400)
----------- -----------
Net cash used in financing activities (391,100) (10,600)
----------- -----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (100,800) 107,800
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,004,400 462,900
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 903,600 $ 570,700
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
ENSTAR INCOME PROGRAM 1984-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the
three months ended March 31, 1998 and 1997 are unaudited. These condensed
interim financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Partnership's latest
Annual Report on Form 10-K. In the opinion of management, such statements
reflect all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of such periods. The results of
operations for the three months ended March 31, 1998 are not necessarily
indicative of results for the entire year.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
The Partnership has a management and service agreement with a wholly
owned subsidiary of the General Partner (the "Manager") for a monthly management
fee of 5% of revenues, excluding revenues from the sale of cable television
systems or franchises. Management fee expense approximated $66,500 for the three
months ended March 31, 1998.
In addition to the monthly management fee described above, the
Partnership reimburses the Manager for direct expenses incurred on behalf of the
Partnership and for the Partnership's allocable share of operational costs
associated with services provided by the Manager. All cable television
properties managed by the General Partner and its subsidiary are charged a
proportionate share of these expenses. The General Partner has contracted with
Falcon Holding Group, L.P. ("FHGLP"), an affiliated partnership, to provide
corporate management services for the Partnership. Corporate office allocations
and district office expenses are charged to the properties served based
primarily on the respective percentage of basic subscribers or homes passed
(dwelling units within a system) within the designated service areas. The total
amount charged to the Partnership for these services approximated $101,000 for
the three months ended March 31, 1998. Management fees and reimbursed expenses
due the General Partner are non-interest bearing.
Payments of management fees and reimbursed expenses were deferred in
prior years pursuant to restrictions in the note payable agreement. The
cumulative amount deferred was approximately $1,081,300. On September 30, 1997,
the Partnership obtained new financing and subsequently used such borrowings and
other available cash to pay $619,000 of previously deferred management fees and
reimbursed expenses. The remainder of these deferred amounts, $462,300, was
contributed as an equity contribution by the General Partner to Enstar Finance
Company, LLC ("EFC"), a subsidiary of the General Partner, and remains an
outstanding obligation of the Partnership.
The Partnership also receives certain system operating management
services from affiliates of the General Partner in addition to the Manager due
to the fact that there are no such employees directly employed by the
Partnership. The Partnership reimburses the affiliates for its allocable share
of the affiliates' operational costs. The total amount charged to the
Partnership for these costs approximated $8,300 in the three months ended March
31, 1998. No management fee is payable to the affiliates by the Partnership and
there is no duplication of reimbursed expenses and costs paid to the Manager.
5
<PAGE> 6
ENSTAR INCOME PROGRAM 1984-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (CONTINUED)
Certain programming services have been purchased through an
affiliate of the Partnership. In turn, the affiliate charges the Partnership for
these costs based on an estimate of what the General Partner could negotiate for
such programming services for the 15 partnerships managed by the General Partner
as a group. The Partnership recorded programming fee expense of $291,300 for the
three months ended March 31, 1998. Programming fees are included in service
costs in the statements of operations.
3. EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Earnings and losses per unit of limited partnership interest is
based on the average number of units outstanding during the periods presented.
For this purpose, earnings and losses have been allocated 99% to the Limited
Partners and 1% to the General Partner. The General Partner does not own units
of partnership interest in the Partnership, but rather holds a participation
interest in the income, losses and distributions of the Partnership.
4. RECLASSIFICATIONS
Certain 1997 amounts have been reclassified to conform to the 1998
presentation.
6
<PAGE> 7
ENSTAR INCOME PROGRAM 1984-1, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
The Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act") required the Federal Communications Commission ("FCC")
to, among other things, implement extensive regulation of the rates charged by
cable television systems for basic and programming service tiers, installation,
and customer premises equipment leasing. Compliance with those rate regulations
has had a negative impact on the Partnership's revenues and cash flow. The
Telecommunications Act of 1996 (the "1996 Telecom Act") substantially changed
the competitive and regulatory environment for cable television and
telecommunications service providers. Among other changes, the 1996 Telecom Act
provides that the regulation of cable programming service tier ("CPST") rates
will be terminated on March 31, 1999. Because cable service rate increases have
continued to outpace inflation under the FCC's existing regulations, the
Partnership expects Congress and the FCC to explore additional methods of
regulating cable service rate increases, including deferral or repeal of the
March 31, 1999 termination of CPST rate regulation. There can be no assurance as
to what, if any, further action may be taken by the FCC, Congress or any other
regulatory authority or court, or the effect thereof on the Partnership's
business. Accordingly, the Partnership's historical financial results as
described below are not necessarily indicative of future performance.
This Report includes certain forward looking statements regarding,
among other things, future results of operations, regulatory requirements,
competition, capital needs and general business conditions applicable to the
Partnership. Such forward looking statements involve risks and uncertainties
including, without limitation, the uncertainty of legislative and regulatory
changes and the rapid developments in the competitive environment facing cable
television operators such as the Partnership. In addition to the information
provided herein, reference is made to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1997 for additional information regarding
such matters and the effect thereof on the Partnership's business.
RESULTS OF OPERATIONS
The Partnership's revenues decreased from $1,368,900 to $1,330,000,
or by 2.8%, for the three months ended March 31, 1998 as compared to the
corresponding period in 1997. Of the $38,900 decrease, $84,300 was due to
decreases in the number of subscriptions for basic, premium, tier and equipment
rental services. The decrease was partially offset by a $35,600 increase due to
increases in regulated service rates that were implemented by the Partnership in
1997 and a $9,800 increase in other revenue producing items. As of March 31,
1998, the Partnership had approximately 11,100 basic subscribers and 4,700
premium service units.
Service costs decreased from $495,200 to $ 480,000, or by 3.1%, for
the three months ended March 31, 1998 as compared to the corresponding period in
1997. Service costs represent costs directly attributable to providing cable
services to customers. The decrease was principally due to lower copyright fees,
personnel costs, franchise fees and programming expense. Copyright and franchise
fees decreased due to decreases in revenues as described above. The decrease in
franchise fees also resulted from a non-recurring charge in the first quarter of
1997 related to 1996 franchise fee payments made during the quarter which
exceeded
7
<PAGE> 8
ENSTAR INCOME PROGRAM 1984-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
estimates recorded as of December 31, 1996. Personnel costs decreased due to
staff reductions. Programming expense decreased as a result of decreases in the
number of subscribers to certain premium channels.
General and administrative expenses decreased from $197,300 to
$180,900 or by 8.3%, for the three months ended March 31, 1998 as compared to
the corresponding period in 1997. The decrease was primarily due to decreases in
personnel costs and expenses allocated by an affiliate of the General Partner
that discontinued management of the Partnership's Tennessee operations in the
fourth quarter of 1997. Such services are now being provided by the General
Partner.
Management fees and reimbursed expenses increased from $138,500 to
$167,500, or by 20.9%, for the quarter ended March 31, 1998 as compared to the
corresponding period in 1997. Management fees decreased in direct relation to
decreased revenues as described above. Reimbursed expenses allocated by the
General Partner increased after system operating management of the Partnership's
Tennessee systems transferred from an affiliate to the General Partner.
Operating income before income taxes, depreciation and amortization
(EBITDA) is a commonly used financial analysis tool for measuring and comparing
cable television companies in several areas, such as liquidity, operating
performance and leverage. EBITDA as a percentage of revenues decreased from
39.3% to 37.7% during the three months ended March 31, 1998 as compared to the
corresponding period in 1997. The decrease was primarily due to decreases in
revenues and increases in reimbursed expenses as described above. EBITDA
decreased from $537,900 to $501,600 or by 6.7%, during the three months ended
March 31, 1998 as compared to the corresponding period in 1997. EBITDA should be
considered in addition to and not as a substitute for net income and cash flows
determined in accordance with generally accepted accounting principles as an
indicator of financial performance and liquidity.
Depreciation and amortization expense increased from $136,500 to
$178,400, or by 30.7%, for the quarter ended March 31, 1998 as compared to the
corresponding period in 1997. The increase was primarily due to asset additions
including expenditures in 1997 to replace segments of the Partnership's North
Carolina cable plant and subscriber connections that were damaged by a storm in
1996.
Operating income decreased from $401,400 to $323,200, or by 19.5%,
for the three months ended March 31, 1998 as compared to the corresponding
period in 1997, primarily due to a decrease in revenues and increases in
depreciation and amortization expense and reimbursed expenses as described
above.
Interest income decreased from $11,600 to $4,500, or by 61.2%, for the
three months ended March 31, 1998 as compared to the corresponding period in
1997. The decrease for the quarter was due to lower cash balances available for
investment.
Interest expense decreased from $29,000 to $27,600, or by 4.8%, for the
three months ended March 31, 1998 as compared to the corresponding period in
1997, due to lower average borrowings in the 1998 quarter.
8
<PAGE> 9
ENSTAR INCOME PROGRAM 1984-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
Due to the factors described above, the Partnership's net income
decreased from $384,000 to $300,100, or by 21.8%, for the three months ended
March 31, 1998 as compared to the corresponding period in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary objective, having invested its net
offering proceeds in cable systems, is to distribute to its partners all
available cash flow from operations and proceeds from the sale of cable systems,
if any, after providing for expenses, debt service and capital requirements. In
general, these requirements involve expansion, improvement and upgrade of the
Partnership's existing cable systems and were $352,200 in the first quarter of
1998. As of the date of this Report, substantially all of the available channel
capacity in the Partnership's systems is being utilized and each of such systems
requires an upgrade. The entire upgrade program is presently estimated to
require aggregate capital expenditures of approximately $8,000,000 and covers 12
franchise areas. These upgrades are currently required in two existing franchise
agreements. The cost to upgrade the two franchise areas is estimated to be
$2,336,000 and must be completed by December 2001 and February 2002,
respectively.
On September 30, 1997, the Partnership entered into a loan agreement
with EFC for a revolving loan facility of $7,481,700 (the "Facility") of which
$250,000 was advanced to the Partnership at closing. The Partnership's
management expects to increase borrowings under the Facility for the upgrade of
the Partnership's systems.
The Partnership's Facility will mature on August 31, 2001, at which
time all funds previously advanced will be due in full. Borrowings bear interest
at the lender's base rate (8.5% at March 31, 1998) plus 0.625%, or at an
offshore rate plus 1.875%. The Partnership is permitted to prepay amounts
outstanding under the Facility at any time without penalty, and is able to
reborrow throughout the term of the Facility up to the maximum commitment then
available so long as no event of default exists. If the Partnership has excess
cash flow and its ratio of debt to cash flow exceeds 4.25 to 1, or it receives
proceeds from sales of its assets in excess of a specified amount, the
Partnership is required to make mandatory prepayments under the Facility. Such
prepayments permanently reduce the maximum commitment under the Facility.
The Facility contains certain financial tests and other covenants
including, among others, restrictions on incurrence of indebtedness,
investments, sales of assets, acquisitions and other covenants, defaults and
conditions. The Partnership believes it was in compliance with the covenants at
March 31, 1998.
The Facility does not restrict the payment of distributions to
partners unless an event of default exists thereunder or the ratio of debt to
cash flow is greater than 4 to 1. However, due to the upgrade program discussed
above, the General Partner believes it is critical to conserve cash and
borrowing capacity and, consequently, has concluded that it is not prudent for
the Partnership to resume paying distributions at this time.
As disclosed in previous filings, the General Partner may seek a
buyer for the Snow Hill, North Carolina system as well as for the Kershaw, South
Carolina system; however, the General Partner is not actively seeking buyers at
this time. The sale of these systems would allow the Partnership to reduce its
debt
9
<PAGE> 10
ENSTAR INCOME PROGRAM 1984-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
or accelerate the rebuilding of its remaining systems. The Partnership is under
no obligation to sell these systems. Upon the sale of either or both of these
systems, the General Partner would evaluate the feasibility at that time of
resuming the payment of distributions. There can be no assurance that these
systems can be sold at an acceptable price, if at all.
Beginning in August 1997, the Partnership elected to self-insure its
cable distribution plant and subscriber connections against property damage as
well as possible business interruptions caused by such damage. The decision to
self-insure was made due to significant increases in the cost of insurance
coverage and decreases in the amount of insurance coverage available.
While the Partnership has made the election to self-insure for these
risks based upon a comparison of historical damage sustained over the past five
years with the cost and amount of insurance currently available, there can be no
assurance that future self-insured losses will not exceed prior costs of
maintaining insurance for these risks. Approximately 65% of the Partnership's
subscribers are served by its system in Brownsville, Tennessee and neighboring
communities. Significant damage to the system due to seasonal weather conditions
or other events could have a material adverse effect on the Partnership's
liquidity and cash flows. The Partnership continues to purchase insurance
coverage in amounts its management views as appropriate for all other property,
liability, automobile, workers' compensation and other types of insurable risks.
The "Year 2000" issue refers to certain contingencies that could
result from computer programs being written using two digits rather than four to
define the year. Many existing computer systems, including certain of the
Partnership's computer systems, process transactions based on two digits for the
year of the transaction (for example, "98" for 1998). These computer systems may
not operate effectively when the last two digits become "00," as will occur on
January 1, 2000.
The General Partner has commenced an assessment of the Partnership's
Year 2000 business risks and its exposure to computer systems, to operating
equipment which is date sensitive and to the interface systems of its vendors
and service providers. Based on a preliminary study, the General Partner has
concluded that certain of the Partnership's information systems were not Year
2000 compliant and has elected to replace such software and hardware with Year
2000 compliant applications and equipment, although the decision to replace
major portions of such software and hardware had previously been made without
regard to the Year 2000 issue. The General Partner expects to install
substantially all of the new systems in 1998, with the remaining systems to be
installed in the first half of 1999. The total anticipated cost, including
replacement software and hardware, will be borne by FHGLP.
In addition to evaluating internal systems, the General Partner has
also initiated communications with third party vendors and service suppliers to
determine the extent to which the Partnership's interface systems are vulnerable
should those third parties fail to solve their own Year 2000 problems on a
timely basis. There can be no assurance that the systems of other companies on
which the Partnership's systems rely will be timely converted and that the
failure to do so would not have an adverse impact on the Partnership's systems.
The General Partner continues to closely monitor Year 2000 developments with
vendors and service suppliers.
10
<PAGE> 11
ENSTAR INCOME PROGRAM 1984-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Operating activities provided $46,800 more cash in the three months
ended March 31, 1998 than in the corresponding period in 1997. Changes in
accounts receivable, prepaid expenses and other assets provided $61,100 more
cash in the first three months of 1998 due to differences in the timing of
receivable collections and in the payment of prepaid expenses. The Partnership
used $26,500 less cash for accounts payable due to differences in the timing of
payments.
The Partnership used $218,700 more cash in investing activities in
the three months ended March 31, 1998 than in the corresponding three months of
1997 due to a $229,600 increase in expenditures for tangible assets, partially
offset by a $10,900 decrease in expenditures for intangible assets.
Financing activities used $380,500 less cash in the first three
months of 1998 than in the comparable 1997 period. The Partnership used $500,000
less cash for the repayment of debt, partially offset by an increase of $118,100
for the payment of amounts owed to the General Partner and other affiliates.
INFLATION
Certain of the Partnership's expenses, such as those for wages and
benefits, equipment repair and replacement, and billing and marketing generally
increase with inflation. However, the Partnership does not believe that its
financial results have been, or will be, adversely affected by inflation in a
material way, provided that the Partnership is able to increase its service
rates periodically, of which there can be no assurance.
11
<PAGE> 12
ENSTAR INCOME PROGRAM 1984-1, L.P.
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.27 - Franchise Ordinance thereto granting
a non-exclusive community antenna television
franchise for Greene County, North Carolina.
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENSTAR INCOME PROGRAM 1984-1, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: May 14, 1998 By: /s/ Michael K. Menerey
--------------------------------
Michael K. Menerey,
Executive Vice President,
Chief Financial Officer and
Secretary
<PAGE> 14
ENSTAR INCOME PROGRAM 1984-1, L.P.
EXHIBIT INDEX
Exhibit
Number Description
10.27 Franchise Ordinance thereto granting a non-exclusive community
antenna television franchise for Greene County, North Carolina.
E-1
<PAGE> 1
WHEREAS, the County of Greene (County) has entered into a cable
television Franchise Agreement with Enstar Income Program 1984-1, L.P.
("Falcon"), which agreement expires on or about July 20, 1997; and
WHEREAS, the County deems it appropriate to continue the Cable TV
Franchise Agreement with Falcon;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS THAT THE
CABLE TV FRANCHISE AGREEMENT BETWEEN THE COUNTY AND ENSTAR INCOME
PROGRAM 1984-1, L.P. (d.b.a. Falcon) IS APPROVED AS FOLLOWS:
ORDINANCE NO. _____
FRANCHISE AGREEMENT
THIS AGREEMENT is made and entered into as of this the 2nd day of
February 1998, by and between the County of Greene, North Carolina, hereinafter
referred to as "County" and Enstar Income Program 1984-1, L.P., hereinafter
referred to as "Falcon."
SECTION 1. GRANT OF FRANCHISE.
Falcon is hereby granted for itself and its successors and assignees,
subject to the terms and conditions of this Franchise Agreement, the
right, privilege, and authority to construct, operate, maintain, and
reconstruct a cable communications system within the streets, alleys,
and public ways of the County for the purpose of providing cable
television service as defined by the N.C.G.S. 160A-319(b) and including
such other services as Falcon may legally provide on its cable
communications system, subject to current and future State, Federal,
and Local Laws and other regulations and the payment of any applicable
fees, services or other compensation directly or indirectly to the
County. Falcon shall provide State-of-The-Art, County-wide cable
communications system to the residents and institutions of the County
in accordance with this Franchise Agreement and Ordinance No. 96-01,
entitled the "County of Greene's Communications Ordinance," (the
"Ordinance") adopted February 16, 1996, and incorporated into this
Franchise Agreement by reference.
SECTION 2. RIGHT OF COUNTY TO ISSUE FRANCHISE.
Falcon acknowledges and accepts the legal right of the County to issue
this Franchise Agreement.
<PAGE> 2
SECTION 3. EFFECTIVE DATE OF FRANCHISE AND ACCEPTANCE.
The effective date of this Franchise Agreement shall be February 2,
1998, subject to acceptance by Falcon which acceptance shall be
received by the County not more than thirty (30) days after passage of
the ordinance, which shall incorporate this Franchise Agreement and the
Ordinance.
SECTION 4. FRANCHISE TERM AND RENEWAL
This Franchise Agreement shall take effect and be in full force from
and after the final passage hereof, subject to acceptance by the
Grantee as herein provided and the same shall continue in full force
and effect for a period of ten (10) years. Should the Grantee want to
renew this Agreement, the then federal, state or local rules for
renewal will be followed.
SECTION 5. SUPPLEMENT TO THE ORDINANCE. This Section supplements and updates
the Ordinance and takes precedence over the Ordinance:
(a) Definitions, changed and added:
3.55 added to read: State-of-The-Art means that the Grantee shall construct,
install and maintain its system in a manner which will continue to enable it to
add new services and associated equipment as they are developed, available and
when proved economically feasible and marketable to subscribers to the
reasonable satisfaction of the Grantee.
(b) Transfer of Ownership and Control:
Section 4.12F of the Ordinance applies to initial construction of a system and
does not apply to upgrade/rebuild of an existing system. If any transfer takes
place during upgrade/rebuild of a current system, the Transferee must agree to
complete the agreed upon upgrade/rebuild of the current system, under the terms
of the Franchise Agreement, before transfer of the Franchise Agreement will be
approved by the Grantor, unless other terms are mutually agreed upon by the
Transferee and the Grantor.
(c) Construction and Technical Standards:
Section 7.2 B(1) of the Ordinance requires a 750 MHz system. In view of changing
technology, e.g. digital compression and future changes to compression of
signals, the requirement for a specific number of MHz's in a system is not
required. The upgrade/rebuild terms of the Franchise Agreement shall apply.
Section 7.7 of the Ordinance requires monthly written updates on construction
progress. The referenced reports apply to initial construction of a cable
system. Reports on rebuild/upgrade of a current system will be as specified in
the Franchise Agreement.
Section 7.8 E. of the Ordinance requires certain tests and independent engineer
supervision of said tests.
2
<PAGE> 3
The intent of this requirement is that in cases where the Grantee is unwilling
or unable to resolve system-wide technical problems, then an outside consulting
engineer may be employed by the Grantee and at the Grantee's sole expense, to
solve the problem. The cost of the outside consulting engineer would be treated
as a cost of doing business under, the then, applicable FCC rules on rate
regulation.
(d) Service Provisions:
Section 8.4 E. which requires the Grantee to provide information to the Grantor
identifying subscribers by name is deleted in its entirety. Federal Subscriber
Privacy Rules do not allow disclosure of any information concerning subscribers.
SECTION 6. GRANT OF FRANCHISES.
(a) The County herein grants to the Grantee a nonexclusive, revocable-for-
cause as provided herein, Franchise Agreement to construct, operate and maintain
a cable communication system within the County, said Franchise Agreement shall
constitute both a right and an obligation to provide the services of a cable
communications system, as regulated by the provisions of this agreement.
(b) The Franchise Area shall be the entire unincorporated area of the
County, as defined in the Ordinance.
SECTION 7. ACCEPTANCE.
(a) By accepting this Franchise Agreement, the Grantee agrees to be bound
by all the terms and conditions in this Franchise Agreement and the Ordinance.
The Grantee also agrees to provide all services within the franchise area, with
the exception of experimental trials of new services on a limited basis.
(b) By accepting this Franchise Agreement, the Grantee acknowledges that it
does so relying upon its own investigation and understanding of the power and
authority of the County in connection with the system and this Franchise
Agreement and the Ordinance.
(c) By accepting the Franchise Agreement, the Grantee acknowledges that it
has not been induced to enter into this Franchise Agreement by any understanding
or promise or other statement not expressed therein, whether oral or written,
concerning any term or condition of this Franchise Agreement, regardless of
whether such statement was made by or on behalf of the County.
(d) By accepting this Franchise Agreement, the Grantee acknowledges that it
has carefully read the terms and conditions of the Franchise Agreement and the
Ordinance.
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SECTION 8. FRANCHISE FEES.
During the term of this Franchise Agreement, the Grantee shall pay to
the County for use of its streets, public places, and other facilities, as well
as the maintenance, improvements, and supervision thereof, an annual franchise
fee in the amount of five (5) percent, but the Greene Board of Commissioners
reserves the right to increase the annual fee up to that legally allowed by law,
upon passage of an ordinance including and stating the franchise fee rate and
upon proper notification of the Grantee. The franchise fee is stated as a
percentage of the annual Gross Subscriber Revenues received by the Grantee from
operations conducted within the County. This payment shall be in addition to any
other tax or payment owed to the County by the Grantee.
SECTION 9. PERFORMANCE EVALUATION.
In accordance with Section 5.4 B of the Ordinance and at the five year
anniversary of this Franchise Agreement, a specific review may be scheduled, in
open Board session, to discuss the telecommunications needs of the community,
advances in technology or other mutually agreeable items which may need to be
discussed.
SECTION 10. SERVICES TO SUBSCRIBERS AND USERS.
(a) The Grantee shall provide, when standard installation is possible,
basic cable and cable programming service, super station package and one (1)
free outlet to each of the following public facilities: all courthouses,
libraries, police and fire stations, municipal office buildings and schools. The
Grantee shall notify the County in writing when standard installation is not
possible. No monthly service fee shall be charged for the first outlet
installed. The Grantee shall provide service to new construction hereafter for
the above public facilities, provided they are within the standard installation
perimeters. Installation costs and fees for additional outlets and equipment
shall be charged to the County at the Grantee's prevailing rates.
(b) The Grantee shall, when technically feasible, provide and maintain, at
a minimum, at least one non-commercial community channel available on a
first-come, first-served, nondiscriminatory basis, at no cost to users.
(c) Community Channel.
(1) Grantee, or its successor, shall provide a Community Channel to
the County, consisting of Educational and Governmental Programming and Local
Origination Programming. Until such time as demand requires a separate channel
for education and a separate channel for Government, both parties to this
Franchise Agreement agree to the combination of the channels. The determination
on the need for separate channels will be mutually agreed upon by both parties.
(2) Falcon, will provide necessary facilities, personnel and
administrative support for operation of the Community Channel.
(3) Grantee to contribute necessary equipment and provide the
facilities to broadcast on the Community Channel the following: character
generated bulletin board with items of community interest as provided by the
County; pre-edited video of a community/education nature provided by the Board
of
4
<PAGE> 5
Education or their representative and the County; other items of interest as
provided by the Board of Education and the County as may be agreed upon, from
time-to-time, by Grantee and the Board of Education and the County.
(4) Grantee shall cooperate with the County staff in providing
promotional announcements on the availability of Community Programming.
(5) Grantee shall cooperate with school and government officials to
maximize use and benefit from Educational and Governmental Programming.
(6) Grantee agrees to make a one-time, lump-sum grant to the County
in the amount of $700.00 for such cable-related purposes as the County may from
time-to-time determine for support of the Community Channel. Both parties to
this Agreement agree that this grant money will not be passed on to the
subscribers in either a direct pass through or as a rate adjustment.
(d) In accordance with Section 8.4 A and Section 9.1 A, the following takes
precedence: The Grantee shall establish and maintain a business office and
repair facility for the purposes stated in Section 8.4 A, within the system
area.
(e) Emergency use of facilities. In accordance with Section 8.2 B of the
Ordinance the Grantee shall provide emergency alert capability pursuant the 1992
Cable Act Section 16 (b), Communications Act of 1934 Section 624 (g), 47 U.S.C.
544(g), as amended.
(f) Interconnectivity. In accordance with Section 5.3 D, of the Ordinance,
the Grantee shall make every effort to interconnect its cable system to any
other cable system within the franchise area, provided however that all parties
agree to the interconnection and it is economically feasible and legal under the
then current law and marketable for all parties concerned.
(g) Performance Bond. In accordance with Section 6.1 A, of the Ordinance,
the Grantee shall obtain and maintain during the entire term of the Franchise
Agreement and any extensions and renewals thereof, at its cost and expense, and
file with the County, a corporate surety bond in the amount of $25,000. The bond
will be provided within forty-five (45) days after the effective date of the
Franchise Agreement. Failure to timely obtain, file and maintain a bond shall
constitute a substantial violation of this Franchise Agreement.
(h) System Upgrade. In accordance with Section I of the Ordinance, the
following outlines the modernization of the cable system. Grantee will use the
most economically and technically feasible technology to upgrade the system to a
State-of-The-Art system. This may include a combination of technologies
including, but not limited to, fiber optic and coaxial technology, and a
combination of analog and digital technology depending on the application. The
upgraded system will meet or exceed all applicable FCC technical standards.
Grantee shall complete the upgrade of the system serving all areas of the County
with a minimum of 60 channel capacity. Grantee will meet, as scheduled, on a
quarterly basis with the franchise authority to provide an update on the system
upgrade schedule. The upgrade will be completed in two phases which will be
completed within forty-eight (48) months from the effective date of this
Agreement.
(1) Design/Make-Ready Phase. This Phase includes the base mapping and
electronic design used
5
<PAGE> 6
to obtain the necessary permits and agreement for actual construction of the
system. Completion of this phase is estimated to require twelve (12) to
twenty-four (24) months from the effective date of this Agreement and the
following shall be accomplished:
a. Complete mapping of the system.
b. Obtain necessary permits from all affected agencies
and complete negotiations for pole attachments.
c. Complete necessary action to provide material and
equipment for the construction of the upgrade
project, as per Falcon's inventory control system.
(2) Construction Phase. This Phase includes the actual construction
of the upgrade project. This Phase will be completed within eighteen (18) to
twenty-four (24) months of the completion of the Design/Make-Ready Phase. During
the Construction Phase the following will be accomplished: upgrade electronics,
as needed; inventory and replace, as needed, all taps; replace coaxial cable, as
needed, to meet the 60 channel capacity.
(3) Snow Hill Headend will be upgraded to deliver a minimum of 60
channel capacity. Grantee shall comply with the FCC regulations and requirements
for the transmission of broadcast digital television signals on its cable
system. When required by FCC ruling Grantee shall provide a cable system capable
of transmitting broadcast digital signals with no distortion.
SECTION 11. CUSTOMER SERVICES.
Grantee will meet the customer service standards as established in Appendix A,
as may be amended from time-to-time.
SECTION 12. REMEDIES.
In addition to the remedies indicated in Section 4.23 of the Ordinance, should
there be any unresolved issues pertaining to the performance of the Grantee
between the County and Grantee, the Grantee may recover material and liquidated
damages under the provisions of this Franchise Agreement, as well as all
provisions of the Act.
(a) Schedule of liquidated damages. Because Grantee's failure to
comply with certain material provisions of this Agreement will result in injury
to the County or to subscribers, and because it will be difficult to estimate
the extent of such injury, the County and Grantee hereby agree that liquidated
damages and penalties stated below represent both parties' best estimate of the
damages resulting from the specified injury. To maintain that estimate, the
parties agree that the liquidated damages amount is in 1997 dollars and shall be
increased each year by the increase in the US City Average of the Consumer Price
Index, if inflation from the date of this Agreement has exceeded twenty (20)
percent.
(b) Violations. For the violation of any of the following, the County
will notify Grantee in writing of the violation. The County shall provide
Grantee with detailed written notice of any Agreement violation upon which it
proposes to take action, and a ninety (90) day period within which Grantee may
6
<PAGE> 7
demonstrate that a violation does not exist or to cure an alleged violation or,
if the violation cannot be corrected in 90 days, to submit a plan satisfactory
to the County to correct the violation. If an alleged violation is proven to
exist, and no cure or action on a plan acceptable to the County has been
received by the County within ninety (90) days, such liquidated damages shall be
chargeable to the performance bond as set forth in this Agreement if not
tendered by Grantee within thirty (30) days of notification by the County.
Grantee may petition the County Board for relief for just cause. The imposition
of liquidated damages shall not preclude the County from exercising the other
enforcement provisions of this Agreement, including revocation, or other
statutory or judicially imposed penalties. No penalty shall be assessed if the
violation occurs without fault of the Grantee or occurs as a result of
circumstances beyond its control. Liquidated damages may be imposed as follows:
(1) For failure to materially complete construction or
extend service in accordance with the Agreement: $100.00
for each day the violation continues;
(2) For failure to materially comply with requirements for
Community Channel: $100/for each day the violation
continues;
(3) For transferring the Agreement without approval: One
time penalty of $2,500.
(4) For violation of the customer service standards measured
on an individual basis: $50 per violation. For
violations of applicable customer service standards for
which the operator's compliance is measured in annual
terms of its response to individual customers, $1,500.00
for any period during which it fails to meet applicable
performance standards.
(5) For failure to provide data, documents, record or
reports or any other information required by this
Franchise Agreement: $50.00/for each day the violation
continues.
(6) For failure to test, analyze and report on the
performance of the system following a request by the
County: $50.00/ for each day the violation continues.
SECTION 13. WAIVER.
The failure of the County at any time to require performance by Falcon of any
provision hereof shall in no way affect the right of the County hereafter to
enforce the same. Nor shall the waiver by the County of any breach of any
provision hereof be taken to be a waiver of any succeeding breach of such
provision, or as a waiver of the provision itself.
SECTION 14. CUMULATIVE PROVISIONS.
The rights and remedies reserved to the County by this Franchise Agreement are
cumulative and shall be in addition to and not in derogation of any other rights
or remedies which the County may have with respect to the subject matter of this
Franchise Agreement, and a waiver thereof at any time shall have no effect on
the enforcement of such rights or remedies at a future time.
SECTION 15. NO JOINT VENTURE.
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<PAGE> 8
Nothing herein shall be deemed to create a joint venture or principle-agent
relationship between the parties, and neither party is authorized to, nor shall
either party act toward third persons or the public, in any manner which would
indicate any such relationship with the other.
SECTION 16. ENTIRE AGREEMENT.
This agreement and all attachments hereto, as incorporated herein, represent the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof, supersede all prior oral negotiations between the
parties, and can be amended, supplemented, modified, or changed only by a
written document executed by the parties.
SECTION 17. FORCE MAJEURE.
Notwithstanding any provision of the contrary contained herein, neither the
County nor the Grantee shall be held liable for or suffer any penalty or
detriment for, any failure to comply with any provision of this Franchise
Agreement if such failure to comply accrues form any act of God or any other
condition not within the reasonable control of such non-complying person;
provided, however, that this provision shall not apply to Grantee's financial
obligations hereunder.
ADOPTED AND EFFECTIVE THIS THE 2ND DAY OF FEBRUARY 1998, after being introduced,
read and adopted during the two regularly scheduled meetings.
8
<PAGE> 9
FOR: Enstar Income Program 1984-1, L.P.
BY: /s/ Howard Gan
-----------------------------
Vice President
DATE: 4/6/98
-----------------------------
ATTEST: BY: /s/ Laura Dainko
-----------------------------
TITLE: Admin Asst
-----------------------------
DATE: 4/6/98
-----------------------------
Notary Certification
9
<PAGE> 10
APPENDIX A
Customer Service Standards
1. SUBSCRIBER PRIVACY
In accordance with the Act, the company shall abide by the provisions
of the Act; and no less than annually, provide notice in the form of a
separate written statement to subscribers the provision of the Act.
2. EMPLOYEE IDENTIFICATION
When calling in person, on subscribers or other residents, all
employees or authorized representatives of the Grantee, including
subcontractors, are required to display an employee identification card
with their name, photograph and signature, and a telephone number that
can be used for verification of the representative capacity with the
Grantee. All vehicles, including subcontractors, shall display the name
of the cable-telecommunication company.
3. OFFICE AND TELEPHONE AVAILABILITY
A. Knowledgeable, qualified company representatives shall be
available to respond to customer telephone inquiries Monday
through Friday during normal business hours. Additionally,
based on community needs, system shall staff telephone for
supplemental hours on weekdays and/or weekends.
B. Under normal operating conditions, telephone answer time by a
customer service representative, including wait time required
to transfer the call, shall not exceed 30 seconds. This
standard shall be met no less than seventy-five percent of the
time measured on an annual basis.
C. Under normal operating conditions, the customer shall receive
a busy signal less than three percent of the total time that
the cable office is open for business. This standard shall be
met no less than seventy-five percent of the time measured on
an annual basis.
D. Customer service center and bill payment locations shall be
open for transactions Monday through Friday during normal
business hours.
E. Grantee shall be responsible for adopting, publishing and
implementing subscriber complaint procedures. The procedures
shall be designed to resolve subscriber complaints in a timely
and satisfactory manner; to develop sensitivity and
responsiveness to subscriber needs on the part of the
franchise management; and to improve the quality and
dependability of services to subscribers by the Grantee.
Established Complaint Procedures shall include specific
provisions for registering subscriber repair service
complaints received by telephone twenty-four (24) hours each
day and seven (7) days each week; for permitting subscriber
repair service complaints to be received at the Grantee's
business office from 8:00 a.m. until 5:00 p.m. on Monday
through Friday of each week; and the address of the Grantee's
business office.
4. INSTALLATIONS, OUTAGE AND SERVICE CALLS
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<PAGE> 11
Under normal operating conditions, each of the following standards shall be met
no less than 75% of the time measured on an annual basis.
A. Standard installation, excluding underground, shall be performed within
seven business days after an order has been placed. "Standard"
installations are up to 188 feet from the existing distribution system.
This standard shall be met seventy-five percent of the time.
B. Excluding those situations beyond the control of the Grantee, the
Grantee shall respond to service interruptions promptly and no later
than 24 hours after the interruption becomes known to the Grantee.
Grantee must begin actions to correct service problems unrelated to
outages the next business day after notification to the Grantee of the
service problem.
C. The appointment window alternatives for installations, service calls
and other installation activities shall be (a) morning, (b) afternoon,
or (c) all day during normal business hours. Additionally, based upon
community needs, the Grantee shall schedule supplemental hours during
which appointments can be set.
D. If, at any time, an installer or technician is running late, an attempt
to contact the customer shall be made and the appointment rescheduled
as necessary at a time which is convenient for the customer.
E. The Grantee shall render efficient service, make repairs promptly and
interrupt service only for good cause and for the shortest time
possible.
F. Grantee shall receive customer calls twenty-four (24) hours per day and
respond to single customer outage complaint calls until 7:00 p.m. on
normal business days. After 7:00 p.m. on any day, trained technicians
shall respond to calls if three (3) or more complaints are received by
subscribers served in a common area.
5. COMMUNICATION, STATEMENTS, REFUNDS AND CREDITS
A. The cable company shall provide written information in each of
the following areas at the time of installation and at any
future time upon request (this standard shall be met no less
than ninety-five percent of the time measured on an annual
basis):
o products and services offered;
o prices and service options;
o installation and service policies;
o how to use the cable service
B. Statements (billing) shall be clear, concise and
understandable. The itemized charges identified on the
subscriber bill as the total charge for cable service must
include all fees and costs.
C. Refund checks shall be issued promptly, but no later than the
earlier of 45 days or the customer's next billing cycle
following the resolution of the request, and the return of the
equipment supplied by the cable company. This standard shall
be measured on an annual basis and shall be met ninety-five
percent of the time.
D. Customers shall be notified in writing a minimum of 30 days in
advance of any rate or channel change, provided the change is
within the control of the Grantee. This performance shall be
measured on an individual basis and shall be met one hundred
percent of the time.
E. Outage credit granted to subscribers as follows:
Should Grantee fail to correct a service problem,
pertaining to a service interruption, within 24 hours
after having been provided notice, upon request of
the subscriber, Grantee shall credit 1/30th of the
monthly charge for the affected tier or premium
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<PAGE> 12
service program to the subscriber for each 24-hour
period or fraction thereof following the first
24-hour period during which the subscriber
experiences reduced service. This performance is
measured on an individual basis.
6. COMPLAINT - APPEALS
A. Upon notification by a subscriber of an unresolved complaint,
the County Manager shall determine the facts of the complaint
by obtaining information from the subscriber and the Grantee;
and shall act to resolve the complaint in a manner consistent
with the authority granted the County Manager by the Board.
B. The County reserves the right to regulate the rates to the
maximum extent allowed by law, to include the filing of
complaints at the FCC, as may be permitted by applicable law.
12
<PAGE> 13
CALIFORNIA
ALL-PURPOSE
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
On 4/6/98 before me, Darcy B. Stamper, Notary Public,
--------------------------------------------------------
NAME, TITLE OF OFFICER - E.G. "JANE DOE, NOTARY PUBLIC"
personally appeared, Howard Gan
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Darcy B. Stamper
- ------------------------- (SEAL)
Notary Public Signature
OPTIONAL INFORMATION
TITLE OR TYPE OF DOCUMENT Franchise Ordinance for Greene, NC
DATE OF DOCUMENT 2/2/98 NUMBER OF PAGES 12
SIGNER(S) OTHER THAN NAMED ABOVE
------------------------------------------------
<PAGE> 14
IMPLEMENTATION OF FRANCHISE ORDINANCE
Section 2. Separability
If any provision of this franchise ordinance or any rule, regulations or order
thereunder of the application of such provision to any person or circumstances
is held invalid, the remainder of the franchise ordinance and the application of
such remaining provisions of the Ordinance or such rules, regulations or orders
to persons or circumstances other than those held invalid will not be affected
thereby.
This Amendment passed and adopted by the Board of County Commissioners, Greene
County, State of North Carolina, this the 2nd day of February, 1998.
/s/ Frank L. Walston, Jr.
- ------------------------------------
Frank L. Walston, Jr.
Chairman
Greene County Board of Commissioners
/s/ R. Erika Churchill
------------------------------------
R. Erika Churchill
Interim Clerk to Board
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 1998, AND THE STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 570,700
<SECURITIES> 0
<RECEIVABLES> 56,900
<ALLOWANCES> 15,900
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,167,500
<DEPRECIATION> 10,596,800
<TOTAL-ASSETS> 4,933,300
<CURRENT-LIABILITIES> 1,221,100
<BONDS> 250,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,933,300
<SALES> 0
<TOTAL-REVENUES> 1,330,000
<CGS> 0
<TOTAL-COSTS> 1,006,800
<OTHER-EXPENSES> (4,500)
<LOSS-PROVISION> 50,200
<INTEREST-EXPENSE> 27,600
<INCOME-PRETAX> 300,100
<INCOME-TAX> 0
<INCOME-CONTINUING> 300,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 300,100
<EPS-PRIMARY> 9.92
<EPS-DILUTED> 0
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