Diamond Bar Municipal Code Div. 3 Compensation to City

(a) As consideration for the franchise granted, the franchisee shall pay to the city in lawful money of the United States, during the life of the franchise, for each and every year, including the year of granting the franchise, according to the "franchise payment period" as defined in section 13.12.020, five percent of its gross revenues derived from the authorized franchise service areas, that are received by the franchisee pursuant to the definition of tiers of service as set out in section 13.12.020.

(b) The franchise fee shall be computed as follows:

(1) The franchisee shall pay a minimum monthly fee as provided in the ordinance granting the franchise; and

(2) Annually the franchisee shall pay the percentage fee of five percent of its gross revenues less the total minimum monthly fees paid during the franchise payment period.

(c) The franchisee shall make the monthly fee required in this section payable on the first day of each month during the life of the franchise. The franchisee shall make the annual percentage payment concurrently with the filing of the reports required by section 13.12.560.

(d) The franchise fee payments shall be distributed by the city as follows:

(1) Three percent of the gross revenues to the city; and

(2) Two percent of the gross revenues shall be placed in an interest-bearing trust fund account as approved by the auditor-controller.

(e) Commencing January 1 after the first full calendar year of operational service to subscribers, the amount of the minimum monthly fee shall be subject to an annual readjustment on each January 1 for the remainder of the term of the franchise. The franchisee shall recalculate the monthly fee amount to provide that the monthly fee amount shall be in an amount no less than 90 percent of the total franchise fee payment due to the city for the preceding calendar year, such 90-percent amount to be prorated by 12 to determine the monthly fee amount to be paid during the current year.

(f) The franchisee and the director may mutually agree to modify the method or amount of minimum monthly fee payments. Any such modification shall consider the annual franchise period as being based on a calendar year.

(g) Any overpayment of franchise fees paid during the previous annual payment period shall be credited to future franchise fees in succeeding franchise fee payment years, and shall be deducted from the monthly fee amounts or annual percentage amounts as required by the ordinance granting the franchise. At such time as overpayment has been made, the franchisee shall notify the auditor-controller of the franchisee's intention to deduct any overpayments from the current monthly fee amounts due and indicate the scheduling of any such deductions.

(h) In addition to the foregoing provisions of this section, the city reserves the right to change its fees if, after a public hearing, it determines good cause is found and such action is not in conflict with federal laws, FCC rules and regulations or the laws of the state.

(Ord. No. 14(1989), § 2(16.64.010), 6-27-89)

In addition to the franchise fee payments of section 13.12.810, the franchisee shall pay the department of public works, within 60 days after the end of each calendar year, during the life of the franchise, an initial construction charge for all new construction during the calendar year, calculated at a rate of $100.00 per mile or fraction thereof for all lines and cables laid during the preceding franchise payment period within the authorized franchise service area.

(Ord. No. 14(1989), § 2(16.64.020), 6-27-89)

If any amount paid is incorrect in the judgment of the auditor-controller, it may order the payment of such additional sum as it may find thereunder.

(Ord. No. 14(1989), § 2(16.64.030), 6-27-89)

If the franchisee fails to make any payments for the franchise on or before the dates due as provided in this division, the franchisee shall pay as additional consideration the following amount: a sum of money equal to ten percent of the amount due. For each period of late payment of any fee extending beyond 30 days of the due date, in addition to the ten percent late payment charge, an assessment of interest shall accrue at one percent per month. The added charges for late payment shall be added to and be due and payable with the next succeeding payment. The city shall not be obligated to notify the franchisee of the accumulation of late payment charges.

(Ord. No. 14(1989), § 2(16.64.050), 6-27-89)

(a) The franchisee shall keep and preserve, for a period of five years after the date of each franchise payment period, all records necessary to determine the amount of such franchise fees or other payments due under sections 13.12.810 and 13.12.820. The franchisee, upon demand by the city, shall make such records available for inspection and audit by the city or its authorized representative, within the city.

(b) At all reasonable times, the franchisee shall permit the city, or its duly authorized representative, to examine all property of the franchisee erected, constructed, laid, operated or maintained pursuant to the franchise, together with any appurtenant property of the franchisee, and to examine, audit, and transcribe any and all books, accounts, papers, maps and other records kept or maintained by the franchisee or under its control which relate to the operations, affairs, transactions, property or financial condition of the franchisee with respect to the franchise.

(Ord. No. 14(1989), § 2(16.64.060), 6-27-89)

If the report of gross revenues made by the franchisee should be found to be less than the amount of gross revenues disclosed by audit and observation, the franchisee shall pay the delinquent amount and all charges required by section 13.12.840 within 30 days of billing thereof. If the additional franchise fee amount due to the city exceeds two percent of the total amount which should have been paid as determined by such review or audit, and there is no reasonable basis for the failure to report or pay thereon, the franchisee shall pay the cost of the audit.

(Ord. No. 14(1989), § 2(16.64.070), 6-27-89)

The city reserves the right for cause to require the franchisee to obtain, at the franchisee's cost, an independent audit by a certified public accountant on an annual basis, or as otherwise required by the director. The certified public accountant shall be required to certify in the audit that the franchisee is in compliance with the ordinance granting the franchise. This right shall be in addition to the city's right to conduct audits.

(Ord. No. 14(1989), § 2(16.64.080), 6-27-89)