A. Franchise Fee:
1. Payment: A grantee of a franchise hereunder shall pay to the City an annual amount equal to five percent (5%) of the grantee's "gross revenues", as defined in Section 7-4-2 of this Chapter. This includes, but is not limited to, all subscriber payments, installation fees, converter boxes, local advertising, leased access channels, pay-per-view and cable service exchanged in barter agreements. This amount shall not include any taxes on cable service which are imposed directly or indirectly on any subscriber thereof by any governmental unit or agency which are collected by the grantee on behalf of such governmental unit or agency.
2. Quarterly Payments: Payment due to the City under this provision shall be made quarterly at the City Clerk's office not later than forty five (45) days following March 31, June 30, September 30 and December 31 of each year. Any fee not paid when due shall bear interest at a rate of one and one-half percent (11/2%) per month from the date due. Each payment shall be accompanied with a detailed report showing the basis for the computation, specific income categories, and such other relevant facts as may be required by the City. The acceptance of any payment shall not be construed as an accord that the amount paid is in fact, the correct amount; nor shall such acceptance of payment be construed as a release of any claim the City may have for additional sums payable by the grantee. All amounts paid shall be subject to audit and recomputation by the City.
3. Limitation Of Franchise Fee Actions: The period of limitation for recovery of any franchise fee payable hereunder shall be ten (10) years from the date on which payment by the grantee is due.
4. Audit: The grantee will fully cooperate with a franchise fee audit performed by a professional firm that is chosen by the City. The costs associated with the audit will be paid for by the City; provided, that the grantee shall pay for the costs if the audit shows an underpayment of franchise fees in excess of five percent (5%) or more. In addition, the City and grantee will design a mutually agreeable form to be used by the grantee that reflects a breakout of the items used to calculate the franchise fees paid to the City.
5. Increases: The City may request an increase in franchise fees at any time during the term of the franchise, equal to the maximum allowed by federal law. However, such request shall be made in writing and the grantee will not be liable for said increase until proper notice, as defined by Federal law, is given to its subscriber. Such changes in the franchise fee shall be implemented within ninety (90) days of notice from the City. Additionally, such increases shall not be implemented until grantee has had an opportunity to address said increase at a regularly scheduled meeting of the City Council.
B. Rates And Charges:
1. The franchising authority may regulate rates for the provision of basic cable and equipment as expressly permitted by section 623 of the Cable Act of 1992, as amended, and applicable law.
2. Any rate adjustments shall be filed with the City Clerk not later than thirty (30) days prior to the implementation of the adjustment.
C. Renewal Of Franchise: The franchising authority and the grantee agree that any proceedings undertaken by the franchising authority that relate to the grantee's franchise shall be governed by and comply with the provisions of section 626 in the Cable Act, as amended, unless the procedures and substantive protections set forth therein shall be deemed to be preempted and superseded by the provisions of any subsequent provision of Federal or State law.
D. Condition Of Sale:
1. If a renewal or extension of the grantee's franchise is denied or the franchise is lawfully terminated, and the franchising authority either lawfully acquires ownership of the system or by its actions lawfully effects a transfer of ownership of the system to another party, any such acquisition or transfer shall be at the price determined pursuant to the provisions set forth in section 627 of the Cable Act of 1992.
2. In the case of a final determination of a lawful revocation of the franchise, at the grantee's request, which shall be made in its sole discretion, the grantee shall be given a reasonable opportunity to effectuate a transfer of its system to a qualified third party. The franchising authority further agrees that during such a period of time, it shall authorize the grantee to continue to operate pursuant to the terms of its prior franchise. However, in no event shall such authorization exceed a period of time greater than six (6) months from the effective date of such revocation. If, at the end of that time, the grantee is unsuccessful in procuring a qualified transferee or assignee of its system which is reasonably acceptable to the franchising authority, the grantee and the franchising authority may avail themselves of any rights they may have pursuant to Federal or State law. The grantee's continued operation of its system during the six (6) month period shall not be deemed to be a waiver, nor an extinguishment of, any rights of either the franchising authority or the grantee.
E. Transfer Of Franchise:
1. The grantee's right, title, or interest in the franchise shall not be sold, transferred, assigned, or otherwise encumbered, other than to an entity controlling, controlled by, or under common control with the grantee, without the prior consent of the franchising authority. Such consent shall not be unreasonably withheld. No such consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation, or by assignment of any rights, title, or interest of the grantee in the franchise or system in order to secure indebtedness. Within thirty (30) days of receiving the request for transfer, the franchising authority shall, in accordance with FCC rules and regulations, notify the grantee in writing of the information it requires to determine the legal, financial and technical qualifications of the transferee. If the franchising authority has not taken action on the grantee's request for transfer within one hundred twenty (120) days after receiving such request, consent by the franchising authority shall be deemed given.
2. Prior approval of the City Council shall be required for the sale, transfer, or other disposition of interest in or right of control over the grantee or its assets whenever such sale, transfer, or disposition in itself or in an accumulated total of related transactions changes the interest in or control of the grantee by forty percent (40%) or more.
3. When the Grantor approves a transfer under this subsection, the new grantee shall indicate acceptance of the franchise as specified in subsection 7-4-4F of this Chapter.
4. It shall be a violation of this Chapter for any individual or group of individuals acting in concert to formally or informally authorize any other individual or group of individuals to act as their nominee or to mislead the Council in any way in regard to the sale, transfer, or disposition of interest in or control of the grantee.
5. The restrictions of this subsection shall be effective immediately upon execution of a franchise agreement.
F. Right Of Inspection Of Construction: The City shall have the right to inspect all construction or installation work performed subject to the provisions of the permit and to make such inspections as it shall find necessary to ensure compliance with the terms of this permit and other pertinent provision of law.
G. New Developments: The grantee is encouraged to upgrade its facilities, equipment, and service so that its system is as advanced as the current state of production technology will allow. Such new developments may be a topic of discussion at any review sessions and shall be a factor to be considered in connection with requests for rate adjustments. (Ord. 96-1, 2-5-1996)