(A) Use of public ROW. In consideration for its use of the public ROW in accordance with the terms of this franchise, the grantee agrees to pay the city an amount equal to ½% of the gross revenue received by the grantee from its customers within the city. The payment for each year shall be based on the gross revenue collected by the grantee during the previous calendar year from the grantee’s customers, and shall be paid on an annual basis. To the extent permissible un der state law and regulation, the payment imposed by this division (A) shall be considered an operating expense of the grantee and shall not be itemized or billed separately to consumers within the city. However, should the percentage of gross revenue permitted to be considered an operating expense of the grantee be increased by regulation of the OPUC during the term of this agreement, the city shall retain the right to require the percentage amount paid by the grantee under this division (A) be increased, not to exceed the maximum amount permitted by regulation at that time.
(B) Property tax limitations do not apply. The payment described in this § 100.12 is not subject to the property tax limitations of Article XI, Sections 11(b) and 11(19) of the Oregon Constitution and is not a fee imposed on property or property owners by fact of ownership.
(C) Privilege tax. The city shall retain the right, as permitted by Oregon law, to charge at any time during the term a privilege tax based on a percentage of the gross revenue earned from the grantee’s customers within the city in addition to the payment amounts set forth in division (A) so long as the combined franchise fee and privilege tax do not exceed the maximum rate allowed under Oregon law. The city shall provide the grantee at least 90 days notice prior to such privilege tax becoming effective. The grantee shall follow state regulations regarding the inclusion of such privilege tax as an itemized charge on the electricity bills of its customers within the city.
(D) Remittance of annual payment. The grantee shall remit to the City Manager on or before the first day of April of each year, the annual 3-1/2% franchise fee payment, as well as payment of any additional privilege tax, to be made in such year. Payment must be made in immediately available federal funds. With its annual payment, the grantee shall provide the city a statement under oath showing the gross revenue for the preceding year.
(E) Acceptance of payment. Acceptance by the city of any payment due under this section shall not be a waiver by the city of any breach of this franchise occurring prior to the acceptance, nor shall the acceptance by the city preclude the city from later establishing that a larger amount was actually due, or from collecting the balance due to the city.
(F) Late payments. Interest on late payments shall accrue from the due date based on grantee’s cost of debt as approved by the OPUC as of the due date, and shall be computed based on the actual number of days elapsed from the due date until payment. Interest shall accrue without regard to whether the city has provided notice of delinquency. If the late payment is discovered as a result of an audit, § 100.13 shall apply.
(G) No exemption from other fees or taxes. Payment of the amounts described in this § 100.12 shall not exempt the grantee from the payment of any other license fee, tax or charge on the business, occupation, property or income of the grantee that may be lawfully imposed by the city or any other taxing authority, except as may otherwise be provided in the ordinance or laws imposing such other license fee, tax or charge.
(H) Direct access and volumetric methodologies. The city may, consistent with state law, direct that the payments made under this § 100.12 be based on volume-based methodologies as specifically described in O.R.S. 221.655 instead of the formula set out in § 100.12(A) and (C). Notice must be given to the grantee in writing for the subsequent payments to be made using volume-based methodology. The volumetric calculation shall apply to payments made in one calendar year (based on January 1 to December 31 billings from the previous calendar year). The choice to use volumetric methodology must be renewed annually by the city. No notice is necessary if the city chooses to remain on the revenue-based calculation.
(I) Payment obligation survives franchise. If prior to the expiration of this franchise the parties do not finish negotiation of a new franchise agreement, the obligation to make the payments imposed by this § 100.12 shall survive expiration of this franchise until a new franchise agreement becomes effective and supersedes this franchise. In the event this franchise is terminated before expiration, the grantee shall make the remaining payments owed, if any, within 90 days of the termination date.
(J) The grantee will provide detailed information with its payment explaining the basis upon which the compensation to the city was calculated.
(Ord. 2010-03-01, passed 3-10-2010; Ord. 2010-04-01, passed 5-13-2010)