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.