(A) Franchise fee.
(1) The administration of this chapter or the franchise agreement imposes upon the town additional regulatory responsibility and expense and in consideration for permission to use the public rights-of-way of the town for the construction, operation and maintenance of a cable system within the town, a grantee of any franchise hereunder shall pay to the town a franchise fee in an amount as designated in the franchise agreement, up to the maximum amount allowed by applicable law. To the extent that applicable law changes the maximum authorized franchise fee, the town reserves the right to change the franchise fee as stated in the franchise agreement, by adopting an ordinance establishing the new franchise fee rate and allowing reasonable notice to the grantee for administration of the change. The town shall hold a public hearing prior to adopting any change in the franchise fee.
(2) Payments due the grantor under this section shall be computed quarterly, for the preceding quarter. Each quarterly payment shall be due and payable no later than 45 days after the end of the preceding quarter. Each payment shall be accompanied by a brief report by a grantee showing the basis for the computation and a “franchise fee worksheet” listing all of the sources of revenues attributable to the operation of grantee’s system in the town. All these payments shall be certified as correct by an officer of the grantee.
(3) No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall the acceptance of payment be construed as a release of any claim grantor may have for further sums payable under the provisions of this chapter or a franchise agreement. All amounts paid shall be subject to audit and recomputation by grantor or its designee at any time during any calendar year (but not more than once per calendar year) upon 20 calendar days’ notice, which shall include a request for any documents sought to be reviewed. Audits shall be at the expense of the grantee if the additional amount due is greater than 2% of the amount paid. Any additional amount due to the town as a result of the audit shall be paid within 60 days following written notice to the grantee by the town which notice shall include a copy of the audit report. Grantor’s right to audit and grantee’s obligation to retain records related to the franchise fee audit, shall expire three years from the date on which the most recent franchise fee payment by the grantee was due from the time of written notice.
(4) In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, the grantee shall pay as additional compensation an interest charge, computed from the due date, at the annual rate equal to the commercial prime interest rate of the town’s primary depository bank during the period that the unpaid amount is owed.
(B) Performance bond. Each grantee shall maintain a performance bond with the town to ensure compliance with this chapter and the applicable franchise agreement, in an amount and in a manner as set forth in the grantee’s franchise agreement.
(C) Penalties procedure.
(1) Whenever the grantor has reason to believe that a grantee has violated any material provision of a franchise agreement or this chapter, the grantor shall first notify the grantee of the material violation and demand correction within a reasonable time, which shall not be less than 20 days in the case of the failure of a grantee to pay any sum or other amount due the grantor under a franchise agreement, and 30 days in all other cases. If a grantee fails to correct the violation within the time prescribed, or if a grantee is unable to correct the violation and fails to commence corrective action within the time prescribed and to diligently remedy the violation thereafter, the grantee shall then be given written notice of not less than 20 days for public comment. The notice shall indicate with reasonable specificity the violation alleged to have occurred.
(2) At the public hearing, the Board shall hear and consider all relevant evidence and thereafter render findings and a decision based upon the evidence. Any hearing must, at a minimum, provide the grantee a full and fair opportunity to be heard by the Board.
(3) In the event the Board finds that a grantee has corrected the violation or promptly commenced correction of the violation after notice thereof from the grantor and is diligently proceeding to fully remedy the violation, or that no violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed.
(4) In the event the Board finds that a violation exists and that a grantee has not corrected the same in a satisfactory manner or did not promptly commence and diligently proceed to correct the violation, the Board may impose liquidated damages to be collected from the performance bond, as set out in the franchise agreement.
(5) If the Board elects to assess liquidated damages, then that election shall constitute the grantor’s exclusive remedy for a period of 60 days. Thereafter, if a grantee remains in noncompliance, the grantor may pursue any other available remedy.
(6) In the event that a franchise is cancelled or terminated by reason of the default of a grantee, the performance bond deposited pursuant to a franchise agreement shall remain in effect and available to the grantor until all pending claims or penalties are resolved or settled, after which point any remaining amounts in the performance bond shall revert to the grantee.
(7) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor, whether reserved by a franchise agreement, this chapter or authorized by law, and no action, proceeding or exercise of a right with respect to the performance bond shall affect any other right grantor may have.
(8) In instances of repeated violations, whether remedied or not, the grantor shall serve special notice outlining additional remediation requirements. Failure to cure, as measured by repeated instances of the same violation, is evidence of an evasive practice and may lead to revocation under § 113.10(A).
(9) Grantee acknowledges that noncompliance with the provisions of the franchise agreement and the master ordinance will harm subscribers and the town and the amounts of actual damages will be difficult or impossible to ascertain. The town may therefore assess the following liquidated damages against grantee for unexcused noncompliance with the requirements of the franchise agreement and master ordinance. Grantee acknowledges that the liquidated damages set forth below are a reasonable approximation of actual damages and that this provision is intended to provide compensation and is not a penalty. All damages provided shall be cumulative, unless expressly stated.
(a) For failure to materially complete construction or extend service in accordance with the ordinance and the franchise agreement: $250/calendar day for each day the violation continues;
(b) For failure to materially comply with requirements for access channels: $250/calendar day for each day the violation continues;
(c) For failure to comply with the material requirements of the I-net provisions of the ordinance/franchise agreement: $250/calendar day for each day the violation continues;
(d) For repeated, wilful or continuing failure to submit reports, maintain records, provide documents or information: $250/calendar day for each day the violation continues;
(e) For failure to comply with the material requirements of the customer service standards: $250/calendar day for each day the violation continues;
(f) For failure to comply with the transfer provisions: $250/calendar day for each day the violation continues; and
(g) For violation of other material provisions of the ordinance and the franchise agreement: up to $250/day for each day the violation continues.
(10) For the purposes of calculating the amount of liquidated damages, time periods shall be tolled for such time as grantee is found to be diligently working to remedy the violation.
(D) Bonds, indemnification and insurance. Each grantee shall maintain bonds and insurance with the town in amounts and in a manner as set forth in the grantee’s franchise agreement. Each grantee also shall be required to indemnify the town in a manner as set forth in the grantee’s franchise agreement.
(Ord. eff. 10-8-2001)