(a)
Fee.
In partial consideration for the franchise, which provides for
the company’s use of City streets and other City property, which
are valuable public properties acquired and maintained by the City
at great expense to its residents, and in recognition that the grant
to the company of the use of City streets and other City property
is a valuable right, the company shall pay the City a sum equal to
three percent of all gross revenues. To the extent required by law,
the company shall collect this fee from a surcharge upon City residents
who are customers of the company.
(b)
Obligation
in Lieu of Fee.
In the event that the franchise fee specified
herein is declared void for any reason by a court of competent jurisdiction,
unless prohibited by law, the company shall be obligated to pay the
City, at the same times and in the same manner as provided in the
franchise, an aggregate amount equal to the amount which the company
would have paid as a franchise fee as partial consideration for use
of the City streets. To the extent required by law, the company shall
collect the amounts agreed upon through a surcharge upon utility service
provided to City residents.
(c)
Changes
in Utility Service Industries.
The City and the company
recognize that utility service industries are the subject of restructuring
initiatives by legislative and regulatory authorities, and are also
experiencing other changes as a result of mergers, acquisitions, and
reorganizations. Some of such initiatives and changes have or may
have an adverse impact upon the franchise fee revenues provided for
herein. In recognition of the length of the term of this franchise,
the company agrees that in the event of any such initiatives or changes
and to the extent permitted by law, upon receiving a written request
from the City, the company will cooperate with and assist the City
in modifying this franchise to assure that the City receives an amount
in franchise fees or some other form of compensation that is the same
amount of franchise fees paid to the City as of the date that such
initiatives and changes adversely impact franchise fee revenues.
(d)
Utility
Service Provided to the City.
No franchise fee shall
be charged to the City for utility service provided directly or indirectly
to the City for its own consumption, including street lighting service
and traffic signal lighting service, unless otherwise directed by
the City.
(a)
Remittance
Schedule.
Franchise fee revenues shall be remitted by
the company to the City as directed by the City in monthly installments
not more than 30 days following the close of each month.
(b)
Correction
of Franchise Fee Payments.
In the event that either the
City or the company discovers that there has been an error in the
calculation of the franchise fee payment to the City, it shall provide
written notice to the other party of the error. If the party receiving
written notice of error does not agree with the written notice of
error, that party may challenge the written notice of error pursuant
to Section 4.2(d) of this franchise; otherwise, the error shall be
corrected in the next monthly payment. However, if the error results
in an overpayment of the franchise fee to the City, and said overpayment
is in excess of $5,000, credit for the overpayment shall be spread
over the same period the error was undiscovered. All franchise fee
underpayments shall be corrected in the next monthly payment, together
with interest computed at the rate set by the PUC for customer security
deposits held by the company, from the date when due until the date
paid. In no event shall either party be required to fund or refund
any overpayment or underpayment made as a result of a company error
which occurred more than five years prior to the discovery of the
company error.
(c)
Audit
of Franchise Fee Payments.
(1)
Every
three years commencing at the end of the third year of this franchise,
the company shall conduct an internal audit to investigate and determine
the correctness of the franchise fee paid to the City. Such audit
shall be limited to the previous three calendar years. The company
shall provide a written report to the City Manager containing the
audit findings.
(2)
If
the City disagrees with the results of the audit, and if the parties
are not able to informally resolve their differences, the City may
conduct its own audit at its own expense, and the company shall cooperate
fully, including but not necessarily limited to, providing the City’s
auditor with all information reasonably necessary to complete the
audit.
(d)
Fee
Disputes.
Either party may challenge any written notification
of error as provided for in Section 4.2(b) of this franchise by filing
a written notice to the other party within 30 days of receipt of the
written notification of error. The written notice shall contain a
summary of the facts and reasons for the party’s notice. The
parties shall make good faith efforts to resolve any such notice of
error before initiating any formal legal proceedings for the resolution
of such error.
(e)
Reports.
Upon written request by the City, but not more than once per
year, the company shall supply the City with reports, in such formats
and providing such details as reasonably requested by the City, of
all suppliers of utility service that utilize company facilities to
sell or distribute utility service to residents and the names and
addresses of each such supplier.
Payment of the franchise fee does not exempt the company from
any other lawful tax or fee imposed generally upon persons doing business
within the City, including any fee for a street closure permit, an
excavation permit, a street cut permit, or other lawful permits hereafter
required by the City, except that the franchise fee provided for herein
shall be in lieu of any occupation, occupancy or similar tax for the
use of City streets and other City property.
