With the recent financial uncertainties plaguing Adelphia Communications Inc., city officials in Hermosa Beach, Manhattan Beach and Redondo Beach said they don’t anticipate any drastic drop in service in the event the firm files for bankruptcy. Several newspapers Wednesday said that the firm had done just that.

Moreover, officials want to keep an open dialogue with Adelphia in the event their franchise agreements are transferred to a different cable firm. This, they say, could actually open the door to additional contract negotiations with each city.

Adelphia’s production and administration office, which is based in Hermosa Beach, provides service to all three beach cities. Shirley Orr, who acts as Adelphia’s general manager in the South Bay, declined to comment on any aspect of Adelphia’s financial status or its service to beach cities residents.

Adelphia, the biggest cable operator in Southern California, serves 250,000 local customers. Several newspapers Wednesday reported that the company had filed for bankruptcy following questionable accounting practices which could warrant a criminal investigation.

Adelphia’s financial difficulties intensified after the firm’s founders, the Rigas family, disclosed information related to a $3 billion loan backed by the company without the shareholders’ knowledge. The company has also defaulted on $7 billion in bank debt along with $100 million in interest and dividend payments.

Adelphia, the nation’s sixth-largest cable operator, had hoped to evade Chapter 11 by attempting to sell some of its assets, which could include the lucrative cable operations in Los Angeles.

The city of Los Angeles had threatened to revoke Adelphia’s franchise and said it would explore the idea of purchasing the company’s local assets if it fell into bankruptcy.

According to Hermosa Beach City Attorney Mike Jenkins, it is still unclear if bankruptcy is grounds for a contract revocation. Revocation usually comes in the form of either a default or a breach on the franchise such as the failure to make upgrades as outlined in the contract or paying franchise fees late. Jenkins added that Hermosa Beach will most likely have a new cable provider in the near future.

“A bankruptcy court will want to preserve the outset of the company and the franchise is an asset of great value,” explained Jenkins. “But one thing seems to be sure and that is we will have a new South Bay cable operator, but right now we have no way of knowing if it will be from a sale or from a bankruptcy.”

Adelphia recently paid Hermosa Beach $53,000 in franchise fees, a payment which was a month and a half overdue. The company also recently paid Manhattan Beach $80,000 in outstanding fees after the city sent Adelphia a letter threatening to draw on its letter of credit.

Adelphia spokesperson Jenny Brown said the company will continue giving residents in Los Angeles the best service.

“While Adelphia continues to resolve its financial situation, the company remains committed to providing customers of Los Angeles with the same high-quality cable and data services on an uninterrupted basis,” she said.

Hermosa Beach Community Resources Director Mary Rooney oversees cable franchise agreements with the city of Hermosa Beach. During her tenure, Rooney has observed the arrival and departure of many cable companies in town.

According to Rooney, the city’s franchise agreement is up for renewal in 2004 and it is now in what it calls the, “renewal phase” of the franchise process. Considering the current situation, this renewal schedule allows the city to negotiate from a fairly influential and powerful position.

“It is very good timing for us because if there happens to be a transfer, the new cable provider must meet the terms of the agreement,” Rooney said. “We are in a good position as a city in that regard. From my seat, I’m just here to make sure Adelphia is meeting the requirements of its franchise. Adelphia has been open with us every step of the way in as much as they know at a local level.”

Hermosa Beach anticipates the possibility of a transfer in cable service, but whether it faces this transfer or not, the general consensus among city officials is residents will probably not experience any significant declines in service.

“Ultimately, this is the last area Adelphia would want to interrupt because it’s a major source of cash flow,” added Rooney. “Transferring of the service might be a possibility and the city has anticipated that outcome. The best time for the city to exert its influence and authority is during the franchise renewal/transfer process.”

Like Hermosa Beach, Manhattan Beach officials are not expecting any major drop in service either. Manhattan Beach Assistant City Manager Sherilyn Lombos said the city has received only a slight increase in service complaints. She said any possible decline in service would probably be in the form of either installation or repair since Adelphia has had problems contracting out this type of work.

Manhattan Beach’s franchise agreement is up for a renewal in 2008. Lombos said if Adelphia does file for bankruptcy, the city of Manhattan Beach hopes to use that time to establish an open negotiating period with the company. In the meantime, city officials will wait to see what happens.

“We feel really comfortable that we are not going to go dark if Adelphia goes bankrupt,” said Lombos. “It is one of their largest revenue streams and they are going to do anything to protect it. What we are hoping for is that if there is a transfer or if Adelphia does go bankrupt, it will provide us with the opportunity for new negotiations. So the city is preparing a list of things it wants to negotiate in this hope.”

Adelphia recently paid its franchise fees to Redondo Beach. Maggie Healy, who is the assistant to City Manager Lou Garcia, said even if Adelphia does file for bankruptcy, the powers that be will probably make sure to continue with the company’s promise of service.

“If Adelphia does go bankrupt, we think the court will make sure someone is there to keep the business going,” Healy said.