(a) Findings. The Borough finds that the streets and public rights-of-way of the county, state, and Borough to be used by a franchisee for the operation of a cable television system are valuable public property acquired and maintained by the county, state, and Borough at great expense to the taxpayers. The Borough further finds that the grant of a franchise to use the public streets and rights-of-way is a valuable property right, without which the franchisee would be required to invest substantial capital.
(b) Payment to Borough.
(1) The Borough shall be paid a franchise fee in an amount no less than 5% of a franchisee's gross annual revenues. In the event the maximum amount permitted under applicable law is greater than 5%, then the Borough reserves the right to reopen negotiations with the franchisee to address the greater amount, and any increase in the franchise fee to the maximum allowed by law.
(2) To the extent not inconsistent with applicable law, the franchise fee is in addition to all other taxes and payments that the franchisee may be required to pay under any federal, state, or local law and to any other tax, fee, or assessment imposed by utilities and cable operators for use of their services, facilities or equipment.
(3) To the extent not inconsistent with applicable law, payment of the franchise fee shall not be considered in the nature of a tax.
(4) No acceptance of any payment by the Borough shall be construed as a release or an accord and satisfaction of any claim the Borough may have for further or additional sums payable as a franchise fee under this chapter or for the performance of any other obligation of the franchisee.
(5) In the event any franchise fee payment or recomputation amount is not made on or before the date specified herein, the franchisee shall pay additional compensation and interest charges computed from such due date, at an annual rate equal to the commercial prime interest rate of the Borough's primary depository bank during the period such unpaid amount is owed.
(6) The franchise fee and any other costs assessed by the Borough against a franchisee shall be paid quarterly to the Borough and shall commence as of the effective date of the franchise. The Borough shall be furnished at the time of each payment with a statement certified by the franchisee's chief financial officer or an independent certified public accountant reflecting the total amount of quarterly gross revenues for the payment period. Quarterly payments shall be made to the Borough no later than 45 days following the end of each calendar quarter. Quarter computation dates are the last days of the months of March, June, September, and December. The Borough may require in a franchise agreement that an annual statement of gross revenues shall be furnished to the Borough by an independent certified public accountant, and that the franchisee shall provide an annual complete audit statement for each calendar year within 90 days from the end of that calendar year.
(7) The Borough shall have the right to inspect and copy the franchisee's records as is necessary to verify the accuracy of the franchisee's franchise fee payments and other possible levied taxes, and the rights to audit and to recompute any amounts determined to be payable under this chapter for a period of four years from the date of payment. Audits shall be at the expense of the Borough unless the audit discloses an underpayment of greater that 5% of the entire amount determined to be payable for the period being audited, in which case the costs of the audit shall be borne by the franchisee as a cost incidental to the enforcement of the franchise. Any additional amounts due to the Borough as a result of the audit shall be paid within 30 days following written notice to the franchisee by the Borough of the underpayment, which notice shall include a copy of the audit report, unless written notice of disagreement is filed by the franchisee with the Borough within such time period. In the case of a dispute, the issue shall be resolved through binding arbitration in accordance with the procedures of the American Arbitration Association.
(8) The Borough may require in a franchise agreement that the franchisee shall maintain its fiscal and financial records in such a manner as to enable the Board to determine the cost of assets of the franchisee which are used in providing cable services within the Borough.
(Ord. 920. Passed 7-14-97; Ord. 938. Passed 7-12-99.)