A franchisee, as compensation for the privilege granted under a franchise for the use of the public rights-of-way to construct and operate a cable system to provide cable service, shall pay to the City a franchise fee in an amount up to a maximum of either: (i) five percent (5%) of the franchisee’s gross revenues derived from the operation of its cable system within the City during the term of its franchise gross revenues; or (ii) if a greater amount than that specified in (i) above, the maximum amount permitted by the Cable Act, as amended or other applicable law. The amount of compensation is based upon the nature of the services to be provided. If a franchise, either specifically or as a matter of law, permits a franchisee to provide services in addition to cable service, then the City may require the franchisee to pay additional compensation.
Unless otherwise specified in a franchise agreement, a franchisee shall pay the franchise fee due to the City on a quarterly basis. Payment for each quarter shall be made to the City not later than thirty (30) days after the end of each calendar quarter.
Any person providing cable service or any communications service over a cable system for which charges are assessed to subscribers but not received by a cable operator shall pay a fee equal to five percent (5%) to the City of such person’s gross revenues derived from the provision of such service over the cable system.
Unless a franchise agreement provides otherwise, a franchisee or other entity subject to a fee under this provision shall file with the City within thirty (30) days of the end of each calendar quarter a financial statement showing the franchisee’s or such entity’s gross revenues during the preceding quarter and the number of subscribers served.
No acceptance by the City of any franchise fee payment shall 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.
A franchisee or other entity subject to a fee under this provision shall file within ninety (90) days following the end of each of its fiscal years a statement setting forth the computation of gross revenues used to calculate the franchise fee for the preceding year and a detailed explanation of the method of computation including, without limitation, a detailed analysis of franchise fee payments made by the franchisee, or any affiliate, during the life of the franchise, showing:
(A) 
Total gross revenues, by category (e.g., basic, pay, pay-per-view, advertising, installation, equipment, late charges, miscellaneous, other);
(B) 
What revenues, by category, were included in the calculation of the franchise fee, so that it is clear what, if any, revenues were not included and the dollar value of those exclusions;
(C) 
The value of any noncash compensation received (e.g., trades for advertising spots), showing what amounts of noncash compensation were included in the franchise fee calculation;
(D) 
What, if any, deductions were made from revenues in calculating the franchise fee (e.g., bad debt), and the amount of each deduction;
(E) 
If an outside agency was used to collect revenue (e.g., a collection agency, an advertising agency paid on the basis of percentage of sales), how much revenue was received by these agencies; and
(F) 
The total amount of revenues included for purposes of the franchise fee calculation.
The statement shall be certified by a certified public accountant or the chief financial officer of the person or persons paying the fee. The franchisee will bear the cost of the preparation of such financial statements. To the extent that franchisee submits financial statements that are prepared by other than an independent certified public accountant, the City may require franchisee to submit to the City, but no more than once in a three (3) year period, a report of an independent certified public accountant which verifies the accuracy of the financial statements submitted by the franchisee during the previous three (3) year period.
The City may, from time to time, and upon reasonable notice, inspect and audit any and all books and records relevant to the determination of gross revenues and the computation of franchise fees due, and may recompute any amounts determined to be payable. If, as a result of the audit, the City determines that the franchisee has underpaid the franchise fees owed in an amount exceeding three percent (3%) of the franchise fees actually paid, the cost of the audit shall be borne by the person responsible to pay the fee. The audit shall be performed in the City, and it shall be the responsibility of the person subject to the fee to have all books and records necessary to satisfactorily perform the audit readily available to the auditors.
In the event that a franchise fee payment is not received by the City on or before the due date set forth in SJBMC 5-20-1005, or is underpaid, the person subject to the fee will be charged interest from the due date at an interest rate equal to three percent (3%) above the rate for three (3) month federal treasury bills at the most recent United States Treasury Department sale of such treasury bills occurring prior to the due date of the franchise fee payment. In addition, the person subject to the fee will pay a late charge of five percent (5%) of the amount of the unpaid or underpaid franchise fee payment.
When a franchise terminates for whatever reason, the franchisee shall file with the City, within ninety (90) calendar days of the date its operations in the City cease, a financial statement, certified by a certified public accountant or the franchisee’s chief financial officer, showing the gross revenues received by the franchisee since the end of the previous fiscal year. Adjustments will be made at that time for franchise fees due to the date that the franchisee’s operations ceased.