3.50.110 Compensation.
(1) Franchise Fee. In consideration of permission to use the streets and rights-of-way of the City for the construction, operation, and maintenance of a telecommunications system within the franchise area, the franchisee shall pay to City during the term of this franchise an amount equal to seven percent of the franchisee’s gross revenues (“franchise fee”). Any net uncollectibles, bad debts or other accrued amounts deducted from gross revenues shall be included in gross receipts at such time as they are actually collected. Revenue from point to point or multi-point services is based on the pro-rata share of the revenue from those services. Notwithstanding any provision to the contrary, the City and franchisee may mutually agree to allow franchisee to pay the compensation owing under this section in an in-kind exchange, in whole or in part, as long as the in-kind exchange complies with the following requirements:
(a) The in-kind exchange must have a value equal or greater than the required compensation to be paid to the City under subsection (1) of this section and shall include at minimum franchisee’s provision of 100MB internet access to City Hall located at 4222 NE Old Salem Road, not including nonrecurring charges.
(b) If the in-kind exchange is at any time reasonably and mutually determined by the City and franchisee to have a value less than the required compensation to be paid under subsection (1) of this section, the franchisee shall pay the difference, such that the total amount paid to the City to be equal to the compensation required under subsection (1) of this section.
(c) The in-kind exchange does not create a competitive inequity in violation of any communications services, or franchisee’s equal protection rights under the Telecommunications Act.
(2) Modification Resulting from Action by Law. Upon 30 days’ notice and in the event any law or valid rule or regulation applicable to this franchise limits the franchise fee below the amount provided herein, or as subsequently modified, the franchisee agrees to and shall pay the maximum permissible amount and, if such law or valid rule or regulation is later repealed or amended to allow a higher permissible amount, then franchisee shall pay the higher amount commencing from the date of such repeal or amendment, up to the maximum allowable by law.
(3) Payment of Franchise Fees. Payments due under this provision shall be computed and paid quarterly for the preceding quarter, as of March 31st, June 30th, September 30th, and December 31st, each quarterly payment due and payable no later than 45 days after such dates. Not later than the date of each payment, the franchisee shall file with the City a written statement, in a form satisfactory to the City and signed under penalty of perjury by an officer of the franchisee, identifying in detail the amount of gross revenue received by the franchisee, the computation basis and method, for the quarter for which payment is made.
(4) The franchise fee includes all compensation for the use of the City’s rights-of-way. Franchisee may offset against the franchise fee the amount of any fee or charge paid to the City in connection with the franchisee’s use of the rights-of-way when the fee or charge is not imposed under a generally applicable ordinance or resolution. The franchise fee shall not be deemed to be in lieu of or a waiver of any ad valorem property tax which the City may now or hereafter be entitled to, or to participate in, or to levy upon the property of franchisee. (Ord. 139 § 11, passed 11-13-2018)