§ 6.5-36. Franchise fees.

Franchise fees shall be paid as required by state and federal law. In the absence of state or federal law preempting local imposition of franchise fees, the following franchise fees shall be paid.

For the use of the streets and for the purposes of providing revenue for the purpose of defraying the costs of regulation arising out of the granting of franchises under this chapter, and promoting, assisting and financing, educational, and governmental access programming, each grantee shall pay franchise fees in the amount prescribed in section 6.5-36.

(1)

Amount and payment of franchise fees. During the term of each franchise, each grantee shall pay to the county an amount equal to five (5) percent per year of the grantee's annual gross revenue, or such other percentage as adopted by the commission from time to time.

Said fees shall be paid quarterly not later than August 1, November 1, February 1, and May 1 for the preceding three-month period ending, respectively, June 30, September 30, December 31, and March 31. Not later than the date of each payment, each grantee shall file with the county manager, or a designee, a written statement signed under penalty of perjury by an officer of the grantee, which identifies in detail the sources and amounts of gross revenues received by a grantee during the quarter for which payment is made.

No acceptance of any 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 which the county may have for further or additional sums payable under the provisions of this section.

(2)

Interest on delinquent franchise fees. Any franchise fees which remain unpaid after the dates specified in this section above shall be delinquent and shall thereafter accrue interest at the maximum legal rate until paid.

(3)

Accounting standards. Not less than annually, the grantee shall provide the commission with a certification by an independent certified public accountant or an officer of the grantee certifying the accuracy of the quarterly franchise fee payments paid within the preceding twelve (12) months pursuant to section 6.5-36. Said certification shall be prepared in accordance with generally accepted accounting standards as established by the financial accounting standards commission.

(4)

Gross revenue calculations.

a.

For purposes of the gross revenue calculations required by section 6.5-36, the phrase "financial interest" shall include but not be limited to:

1.

Any contract in which the grantee or any named owner thereof is to receive a percentage of the net income of the other party to the transaction by reason of the activities encompassed by said contract;

2.

Any debt relationship in which the grantee or any named owner thereof as debtor borrows funds at a rate more advantageous than that generally available to similarly situated entities of similar credit worthiness;

3.

Any debt relationship in which the grantee or any named owner thereof as creditor receives a rate of interest exceeding that which would otherwise be paid by a similarly situated debtor of similar credit worthiness;

4.

Any option or warrant to purchase the stock or other equity interest in an entity or entity related to an entity which generates revenues arising from or attributable to the operation of the system;

5.

Any debt relationship which has conversion privileges to a form of equity of the nature described in subparagraph 4.

b.

For purposes of the gross revenue calculation required by section 6.5-36, the phrase "arising from or attributable to operation of the cable television system" shall include but not be limited to:

1.

Any activity, product or service, including rebroadcast of local television station signals, which generates revenue of any type whatsoever and which is offered to the subscribers of the cable television system by means of the system or any related service;

2.

Any activity, product or service which is revenue producing and is offered to the subscribers of the cable television system by any medium other than the system, including but not limited to direct mail and home delivery if the cable television system's subscriber list or any portion thereof is utilized for purposes of solicitation;

3.

Any activity, product or service in the production or provision of which any of the assets of the cable television system, including but not limited to cable, production facilities, and administrative facilities, are included, unless reasonable consideration is paid to the system for such utilization;

4.

Any television programming or other services offered to the citizens of [the county] within the term of the franchise by any means of delivery whatsoever where such programming or services are or could be offered by means of the cable television system.

(5)

Auditing and financial records. The county manager, or a designee, may, from time to time during the term of a franchise prescribe standards governing the nature, extent and type of accounting system and accounting procedures for franchise fee verification. If necessary to promote the efficient administration of the franchise fee requirements of this chapter, the county manager or designee may require changes in accounting standards or procedures utilized by a grantee. Any such standards shall be in writing, shall be filed in the office of the county manager, and shall be mailed to the grantee to whom directed. A grantee shall comply with all such standards within a reasonable time.

During the term of each franchise, the county manager may, not more frequently than once each year, conduct an audit of all of the books, records and accounts of the grantee for the purpose of determining whether the grantee has paid franchise fees in the amounts prescribed by section 6.5-36. The audit may be conducted by the county staff or by an independent certified public accounting firm retained by the county, and shall be conducted at the sole expense of the county. The party conducting the audit shall prepare a written report containing its findings, and the report shall be filed with the county manager, and mailed to the grantee. If the audit demonstrates that the grantee has underpaid the franchise fee which is required to be paid by this chapter by five (5) percent or more, the grantee shall pay to the county all costs of the audit, whether performed by the county staff or by an independent certified public accounting firm. The grantee shall pay to the county all unpaid franchise fees plus interest at the maximum rate permitted by law.

(Ord. No. 1994-14, § 36, 10-4-94; Ord. No. 2003-60, § 13, 7-1-03)