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§ 115.100 FRANCHISE FEE.
   (A)   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 the franchise agreement by adopting a chapter 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.
   (B)   Payments due 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 payments shall be certified as correct by an officer of the grantee.
   (C)   No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall 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 3 years from the date on which the most recent franchise fee payment by the grantee was due from the time of written notice.
   (D)   In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, 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.
(Ord. passed - -) Penalty, see § 10.99
§ 115.101 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.
(Ord. passed - -) Penalty, see § 10.99
§ 115.102 PENALTIES PROCEDURE.
   (A)   Whenever grantor has reason to believe that a grantee has violated any material provision of a franchise agreement or this chapter, 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.
   (B)   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.
   (C)   In the event the Board finds that a grantee has corrected the violation or promptly commenced correction of the violation after notice thereof from 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.
   (D)   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.
   (E)   If the Board elects to assess liquidated damages, then the election shall constitute grantor's exclusive remedy for a period of 60 days. Thereafter, if a grantee remains in non-compliance, the grantor may pursue any other available remedy.
   (F)   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.
   (G)   The rights reserved to grantor with respect to the security fund are in addition to all other rights of 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.
   (H)   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 § 115.115.
   (I)   Grantee acknowledges that non-compliance 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 non-compliance with the requirement 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.
      (1)   For failure to materially complete construction or extend service in accordance with the chapter and the franchise agreement: $250/calendar day for each day the violation continues;
      (2)   For failure to materially comply with requirements for access channels: $250/calendar day for each day the violation continues;
      (3)   For failure to comply with the material requirements of the I-Net provisions of the chapter/franchise agreement: $250/calendar day for each day the violation continues;
      (4)   For repeated, willful or continuing failure to submit reports, maintain records, provide documents or information: $250/calendar day for each day the violation continues;
      (5)   For failure to comply with the material requirements of the customer service standards: $250/calendar day for each day the violation continues;
      (6)   For failure to comply with the transfer provisions: $250/calendar day for each day the violation continues; and
      (7)   For violation of other material provisions of the chapter and the franchise agreement: up to $250/day for each day the violation continues.
   (J)   For the purposes of calculating the amount of liquidated damages, time periods shall be tolled for time as grantee is found to be diligently working to remedy the violation.
(Ord. passed - -)
§ 115.103 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. passed - -)
REVOCATION AND FORECLOSURE; RECEIVERSHIP AND ABANDONMENT
§ 115.115 GROUNDS FOR REVOCATION.
   Grantor reserves the right to revoke the franchise, and all rights and privileges pertaining thereto, in the event that:
   (A)   A grantee substantially violates any material provision of this chapter or a franchise agreement;
   (B)   A grantee attempts to evade any of the material provisions of this chapter or a franchise agreement;
   (C)   A grantee practices an act of fraud or deceit upon the grantor;
   (D)   A grantee becomes insolvent, unable or unwilling to pay its debts, or is adjudged bankrupt;
   (E)   A grantee fails to provide or maintain in full force and effect the liability and indemnification coverage or the performance bond as required pursuant to its franchise; or
   (F)   A grantee violates any orders or rulings of any regulatory body having jurisdiction over the grantee relative to this chapter or the franchise and after notice thereof, shall continue the violation and not remedy the same within 60 days.
(Ord. passed - -)
§ 115.116 PROCEDURE.
   (A)   Whenever grantor has reason to believe that there may be grounds for revocation of a franchise, grantor shall first notify the grantee in writing of its basis for believing grounds for revocation exist. That notice shall indicate with reasonable specificity the grounds for revocation that are believed to exist so that the grantee may have a reasonable opportunity to cure or otherwise address the same. If a grantee fails to adequately cure or address the purported grounds for revocation within 30 days of the notice, then the grantor may, upon 30-days’ written notice to the grantee, commence a public administrative hearing to determine whether there exists any ground for revocation.
   (B)   The administrative hearing shall be conducted so as to protect the full due process rights of the parties and provide for, at a minimum, the right to have counsel, the right to call and cross-examine witnesses, and the right to a full transcript of the proceedings.
   (C)   After the close of the hearing, grantor or the designated hearing officer shall issue a written decision based on the record of the proceedings, stating with specificity the findings and reasons supporting the decision.
   (D)   Upon revocation, a grantee shall have a period of 120 days subsequent to the date of the formal adoption of a revocation of the franchise by the town within which to file an appeal with a court of competent jurisdiction.
   (E)   During the appeal period, the franchise shall remain in full force and effect.
(Ord. passed - -)
§ 115.117 FORECLOSURE.
   Upon the foreclosure or other judicial sale of all or a part of a system, a grantee shall notify grantor of that fact and notification shall be treated as a notification that a change in control of the grantee has taken place, and the provisions of this chapter governing the consent to transfer or change in ownership shall apply without regard to how transfer or change in ownership occurred.
(Ord. passed - -)
§ 115.118 RECEIVERSHIP.
   Apart from and supplemental to the right to revoke a franchise, grantor shall have the right to cancel a franchise agreement 120 days after the appointment of a receiver or trustee to take over and conduct the business of a grantee, whether in receivership, reorganization, bankruptcy or other action or proceeding, unless receivership or trusteeship shall have been vacated prior to the expiration of 120 days, or unless:
   (A)   Within 120 days after its election or appointment, the receiver or trustee has fully complied with all the provisions of grantee’s franchise agreement and this chapter and remedied all defaults thereunder; and
   (B)   The receiver or trustee within 120 days has executed an agreement, duly approved by a court having jurisdiction, whereby receiver or trustee assumes and agrees to be bound by each and every provision of this chapter and the applicable franchise agreement.
(Ord. passed - -)
PURCHASE OF SYSTEM; SALE OR TRANSFER
§ 115.130 UPON TERMINATION OF FRANCHISE TERM OR REVOCATION OF FRANCHISE.
   The grantor may, in accordance with and to the extent permitted by 47 U.S.C. § 547, upon the payment of a fair valuation, purchase, condemn, acquire, take over and hold the property and plant of a grantee, in whole or in part, on the following conditions:
   (A)   Upon revocation of a franchise, a fair valuation shall be an equitable value that shall not include any sum attributable to the value of the franchise itself, and plant and property shall be valued according to its book value at the time of revocation, or the system’s initial cost less depreciation and salvage.
   (B)   At the expiration of a franchise agreement and following a denial of renewal of the franchise agreement, a fair valuation shall be the fair market value of the plant and property, exclusive of the value attributed to the franchise itself.
   (C)   In the event grantor shall acquire a franchise pursuant to the provisions of this chapter or a franchise agreement, and commence operation of the system, grantor shall reimburse the grantee for the fair market value of the system.
(Ord. passed - -)
§ 115.131 SALE OR TRANSFER OF FRANCHISE.
   (A)   No grantee shall sell, transfer, lease, assign, sublet or dispose of, in whole or in part, an interest in or control of a franchise or cable system or any of the rights or privileges granted by a franchise agreement without the prior consent of the grantor, which consent shall not be unreasonably denied or delayed and may be denied only upon a good faith finding by the grantor that the proposed transferee lacks the legal, technical or financial qualifications to consummate the transaction and operate the system so as to perform its obligations under this chapter and the applicable franchise agreement. This section shall not apply to sales of property or equipment in the normal course of business. Consent from the grantor shall not be required for a transfer in trust, mortgage or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a transfer to a corporation, partnership or other entity controlling, controlled by or under common control with a grantee.
   (B)   The following additional events shall be deemed to be a sale, assignment or other transfer of an interest in or control of a grantee or its franchise or cable system requiring compliance with this section:
      (1)   The sale, assignment or other transfer of all or a majority of a grantee’s assets;
      (2)   The sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in a grantee by 1 or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in a grantee;
      (3)   The issuance of additional capital stock or partnership, membership or other equity interest by a grantee so as to create a new controlling interest in a grantee; and
      (4)   A grantee’s agreement to transfer management or operation of the grantee or the system. The term controlling interest as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised.
   (C)   In the case of any sale or transfer of ownership of an interest in or control of a grantee or its franchise or cable system, the town shall have 120 days to act upon any request for approval of sale or transfer that contains or is accompanied by information as is required in accordance with FCC regulations and the requirements chapter and the applicable franchise agreement, including information related to the legal, technical and financial qualifications, and the proposed transferee’s ability to operate the system in accord with this chapter and the franchise agreement. Failure to provide all information reasonably requested by the town as part of its review may be grounds for a denial of the proposed transfer. If the town fails to render a final decision on the request within 120 days after receipt by the town of all required information, request shall be deemed granted unless the grantee and the town agree to an extension of the 120-day period.
   (D)   The consent or approval of the town to any transfer of the grantee shall not constitute a waiver or release of the rights of the town in and to the public rights-of-way, and any transfer shall, by its terms, be expressly subject to the terms and conditions of this chapter and the franchise agreement.
   (E)   In the absence of extraordinary circumstances, the town will not approve any transfer or assignment of the franchise prior to completion of construction of the proposed initial system.
   (F)   Any approval by the town of a transfer shall be contingent upon the prospective new grantee becoming a signatory to the franchise agreement.
(Ord. passed - -)
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