§ 38.5.22. Fees.

(a)

Franchise Fee.

(1)

Each grantee, in consideration of the privilege granted under a franchise for operation of a cable system and the expense of regulation pursuant to the franchise incurred by the City, shall pay to the City five percent of its annual gross revenues during the period of its operation under the franchise granted; or the maximum amount as may be set from time to time by controlling federal or state law, whichever is greater. Such payment shall be in addition to and exclusive of any and all other customary payment, charge, permit fee or bond owed to the City by such grantee and shall not be construed as payment in lieu of real property or other taxes, fees, levies or assessments levied by the corporate authorities which are of general applicability.

(2)

Each grantee shall file with the City, within thirty (30) days after the expiration of each of the grantee's fiscal quarters, a financial statement clearly detailing the gross revenues received by such grantee from the franchise area during the preceding quarter, and shall simultaneously tender payment of the quarterly portion of the cable franchise fee. Each grantee shall also file within one hundred twenty (120) days following the conclusion of its fiscal year, an annual report which shall contain the following:

(A)

A copy of its annual report, if any and its parent's annual report;

(B)

A list of its officers, members of its board of directors, and general partners;

(C)

A list of stockholders or other equity investors holding five percent or more of the voting interest in such grantee and its parent;

(D)

A verified annual financial statement and certified by a certified public accountant which shall accurately present its annual gross revenues for the twelve (12) month period and all franchise fee payments for the twelve (12) month period.

(3)

The City shall have the right, consistent with the provisions of Section 38.5.11(l)(6), to inspect any grantee's income records, worksheets, journals, financial statements, and other financial books and records insofar as they relate to its franchise area operations, and the right to audit and recompute any amount determined to be payable under this Chapter. Any additional amount due the City as a result of the audit shall be paid within thirty (30) days following written notice to such grantee by the City, which notice shall include a copy of the audit report. The cost of such audit shall be borne by such grantee if it is determined that its annual payment due to the City for the preceding year is increased thereby by more than five percent.

(4)

If any franchise payment or recomputed amount is not made on or before the applicable dates specified in this Section, interest shall be charged from such due date at the annual rate of two percentage points over the prime rate given by First National Bank of Chicago to its most creditworthy borrowers of demand loans.

(5)

To the extent permitted by applicable law or cable regulations, franchise fees in excess of five percent may be enacted by appropriate amendment to this Article by the corporate authorities and collected by the City after sixty (60) days written notice to all grantees.

(6)

Upon termination of the franchise at the expiration of any term, or otherwise, a grantee shall continue to make the quarterly statements and certifications as provided in this Section until such time as all payments due the City under this Chapter have been paid and accounted for to the reasonable satisfaction of the City.

(b)

Costs. Each grantee shall, within thirty (30) days after written demand therefor, reimburse the City for all direct and indirect costs and expenses incurred by the City in connection with any modification, amendment, renewal or transfer of a franchise agreement.

(c)

Compensation for Use of Public Rights-of-Way and City Property. The City reserves its right to annually fix a fair and reasonable compensation to be paid for the property rights granted to a grantee; provided, that any compensation must be equitably imposed on cable system users of the public rights-of-way in a manner which is competitively neutral, and provided further that nothing in this Article shall prohibit the City and a grantee from agreeing to the compensation to be paid for the granted property rights.

(d)

Annual Fee. Unless otherwise agreed in a franchise agreement, each grantee shall pay an annual license fee to the City equal to ten dollars ($10.00) per mile of public right-of-way occupied by such grantee and certified by its professional engineer, as reimbursement for the City's costs in connection with reviewing, inspecting and supervising the use and occupancy of the public rights-of-way in behalf of the public and existing or future users.

(e)

Acceptance of Payment by City Not Accord. The acceptance by the City of any payment shall not be construed as an accord by the City that the amount of such payment is the correct amount due from a grantee pursuant to this Article or any applicable franchise agreement, and acceptance of any payment shall not be construed to be a release or waiver of any claim the City may have for further or additional sums due and payable pursuant to this Article or any applicable franchise agreement.

(f)

No Right of Setoff. All payments due to the City from a grantee pursuant to this Chapter shall be paid without counterclaim, setoff, deduction, or defense.

(Ord. 6-2000 § 2 (part))