The Town finds that the public rights-of-way of the Town, county, and state to be used by a grantee for the operation of a cable system are valuable public property acquired and maintained by the county, state, and Town at great expense to the taxpayers. The Town further finds that the grant of a franchise to use public rights-of-way is a valuable property right without which a grantee would be required to invest substantial capital.
As compensation for use of the public rights-of-way and in light of the scope of any franchise, in addition to providing channels, facilities and other support for public, educational and governmental use of the cable system, a grantee shall pay the Town a franchise fee. The amount of the fee shall be specified in a franchise agreement. The franchise fee shall be paid annually, provided that provisions for more frequent payments may be specified in a franchise agreement. At least once a year the grantee shall provide the Town a report setting forth the total of gross revenues for the year or other period in question and identifying the amount of revenues attributable to each category of gross revenues received by the grantee, including nonsubscriber gross revenues, and the number of subscribers receiving each category of cable service offered by the grantee.
A. 
Town right to request audit. The Town shall have the right to retain an independent auditor to audit the records of a grantee to verify the computation of amounts payable under this chapter or a franchise agreement and recompute any amounts determined to be payable under this chapter or a franchise agreement, whether the records are held by the grantee, an affiliate, or any other entity that collects or receives funds related to the grantee's operation in the Town, including, by way of illustration and limitation, any entity that sells advertising on the grantee's behalf.
(1) 
The grantee shall be responsible for all reasonable costs associated with any such audit, including the auditor's fees, as a cost incidental to the enforcement of the franchise and shall have no control over the identity or selection of the auditor. The Town shall have sole discretion in selecting the auditor and shall not be responsible for any costs associated with the audit.
(2) 
The Town shall have the right to review the auditor's report and methodology, including the right to obtain an explanation of all of the auditor's assumptions and calculations, and the right to challenge and request changes to any such assumptions and calculations. The Town shall not, however, be permitted to obtain copies of documents received by the auditor, with the exception of documents voluntarily provided by the grantee to the Town or subject to copying by the Town pursuant to § 46-73. The grantee shall be responsible for providing all such records to the auditor, without regard to by whom they are held. The records shall be maintained for a least three years.
(3) 
Any additional amounts due to the Town as a result of an audit shall be paid within 30 days following written notice to the grantee by the Town of the underpayment, which notice shall include a copy of the audit report. The Town may exercise its audit right no more frequently than once per year and only upon written notice to the grantee.
B. 
Maintenance of records.
(1) 
A grantee shall maintain its fiscal and financial records and have all relevant fiscal and financial records maintained by others on its behalf in such a manner as to enable the Town to:
(a) 
Determine the cost of assets of the grantee which are used in providing services within the Town for purposes of assessing any personal property or other taxes and for purposes of verifying any filings that may be made in connection with any cost of service proceedings; and
(b) 
Determine gross revenues.
(2) 
For purposes of assessing state and local taxes, the cost of assets shall be determined in accordance with any applicable provision of state law. For purposes of any cost of service proceedings, and for purposes of assessing state and local taxes if state law does not provide a method, the cost of assets shall be determined in accordance with FCC rules pertaining to cost of service proceedings.