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(a) Unless a license or franchise provides otherwise, as compensation for the rights and privileges herein conferred, licensee/franchisee shall pay to the city each calendar quarter during the term of this agreement a quarterly payment equal to five (5) percent of the total quarterly gross receipts (as defined below) received by the licensee/franchisee for services provided to customers within the corporate limits of the city from the provision of competitive telecommunications service within the city. During the initial fifteen (15) month buildout period or until licensee's/franchisee's core system is operational, the minimum fee payable hereunder shall be not less than three thousand dollars ($3,000.00) per quarter for the first four (4) quarters following execution of this agreement, and ten thousand dollars ($10,000.00) per quarter for every quarter thereafter. The quarterly payments required by this section shall be due and payable not later than noon of the last day of the month following the quarter for which payment is due. If the last day of the month following the quarter for which payment is due falls on a weekend or holiday, then the payment is due at noon on the last preceding business day prior to the last day of the month. The compensation set forth in this subsection (a) shall be exclusive of, and in addition to, any application fees or election costs or other costs established by the Code, chapter 7B, and all special assessments and taxes of whatever nature, including, but not limited to, business privilege, and ad valorem taxes. Notwith-standing the foregoing sentence, all license or franchise fees paid by licensee or franchisee pursuant to this section shall be credited towards the payment of the public utility tax levied pursuant to article III of chapter 19 of this Code. In the event any quarterly payment is not timely made, licensee/franchisee shall pay a late payment penalty of the greater of: (i) one hundred dollar ($100.00) per day or (ii) simple interest at ten (10) percent annual percentage rate of the total amount past due. As used in this section, gross revenues shall be as defined in section 7B-2, "gross annual revenues" of this chapter.
(b) Payment of money under this section shall not in any way limit or inhibit any of the privileges or rights of the city under any license or franchise or otherwise.
(c) Licensee/franchisee shall file annually with the city finance director, no later than four (4) months after the end of the licensee/franchisee's fiscal year, a statement of revenues (for that year) attributable to the operations of the licensee/franchisee's network within the city pursuant to this agreement. This statement shall present, in a form prescribed or approved by the city, a detailed breakdown of gross revenues and uncollectible accounts for the fiscal year. This statement shall be audited at no cost to the city by a certified public accountant chosen by licensee/franchisee whose report shall accompany the statement. The city may cause an additional audit to be performed by an auditor selected by the city not more frequently than every third year and licensee/franchisee shall reimburse the city for reasonable costs of such additional audit as determined by the city in the event the audit determines that additional revenues are due and owing to the city.
(d) Any transactions which have the effect of circumventing payment of required license or franchise fees and/or evasion of payment of license or franchise fees by noncollection or nonreporting of gross receipts, bartering, or any other means which evade the actual collection of revenues for business pursued by licensee/franchisee are prohibited.
(e) For the purpose of securing to the city the payments of license or franchise fees that may be owed, the city may require a licensee/franchisee to provide city with a bond, letter of credit or other evidence of security agreeable to city approximating the amount of license or franchise fees to be paid by licensee/franchisee for a two (2) year period. In the event of any default by licensee/franchisee in the payment of required license or franchise fees, such security shall be reviewed by city and a greater level of security agreed to and established for the remainder of the term of the license or franchise.
(f) For the further purpose of securing to the city the license or franchise fee payments that may be owed, the city shall have a lien and the same shall be a charge upon all of the property, estate, and effects of the licensee or franchisee, whatsoever, real, personal, or mixed, provided, however, that such lien shall remain inchoate until notice of default has been given by the city to the licensee or franchisee pursuant to section 7B-18 of this chapter, the licensee or franchisee has failed to take appropriate steps to remedy the default, and the city has filed an appropriate civil action to enforce such lien. Such lien shall be subordinate to any mortgage or deed of trust securing any bona fide indebtedness. The foregoing does not limit the city's rights to enforce the terms of a license and franchise as otherwise provided in chapter 7B of the Code.
(g) Nothing in this section shall be interpreted to require payment of any fee, or agreement to any franchise or license fee that the city is prohibited from enforcing under A.R.S. § 9-582.
(Ord. No. 8522, § 1, 6-12-95; Ord. No. 8545, § 10, 7-10-95; Ord. No. 9911, 11-10-03)