APPENDIX E.  CABLE FRANCHISE ORDINANCE

 

AN ORDINANCE GRANTING A CABLE FRANCHISE IN THE CITY OF DETROIT LAKES; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE FRANCHISE; PROVIDING FOR CERTAIN SERVICE REGULATIONS; AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS HEREIN

 

The City of Detroit Lakes ordains:

 

                                                                                    Statement of Intent and Purpose

 

The City intends, by the adoption of this Franchise, to renew the cable franchise ordinance previously issued by the City.  Continued cable service can contribute significantly to the communication needs and desires of residents of the City.  Further, the City may achieve better utilization and improvement of public services with the continued operation of a cable system.

 

                                                                                                Section 1.

                                                                                         Definition of Terms

 

            1.         Terms.  For purposes of this Franchise, the following terms, phrases, words, and their derivations shall have the meaning given herein.  When not inconsistent with the context, words in the singular number include the plural number.  The word “shall” is always mandatory and not merely directory.  The word “may” is directory and discretionary and not mandatory.

 

a.                  Affiliate” means an entity which owns or controls, is owned or controlled by, or is under common ownership with Grantee.

 

b.                 Basic Cable Service” means any service tier, which includes the lawful retransmission of local television broadcast signals and any public, educational, and governmental access programming required by the Franchise to be carried on the basic tier.  Basic Cable Service as defined herein shall not be inconsistent with 47 U.S.C. § 543(b)(7).

 

c.                  Cable Programming Service” means any video programming regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than Basic Cable Service or video programming offered on a pay‑per‑channel or pay‑per‑program basis.  Cable Programming Service as defined herein shall not be inconsistent with the definition as set forth in 47 U.S.C. § 543(1)(2) and 47 C.F.R.§ 76.901(b).

 

d.                 Cable Service” means: the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (iii) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.

 

e.                  Cable System” means a system of antennas, cables, wires, lines, towers, wave guides, or other conductors, converters, equipment or facilities located which operates the service of receiving and amplifying programs broadcast by one or more television or radio stations, and distributing those programs by wire, cable, microwave or other means, whether the means are owned or leased, to persons who subscribe to the service.

 

f.                   Channel” means a single full motion video channel.

 

g.                  City” means the City of Detroit Lakes, Minnesota.

 

h.                  Converter” means an electronic device, which converts signals to a frequency acceptable to a television receiver of a Subscriber and by an appropriate selector permits a Subscriber to view all Subscriber signals included in the service.

 

i.                    Drop,” means the cable that connects the ground block on the Subscriber’s residence to the nearest feeder cable.

 

j.                   FCC” means the Federal Communications Commission and any legally appointed, designated or elected agent or successor.

 

k.                 Franchise” or “Cable Franchise” means this ordinance and the contractual relationship established hereby.

 

l.                    Franchise Fee” means the fee or assessment imposed by the City on a Grantee solely because of its status as a franchisee.  The term “Franchise Fee” does not include: (i) any tax, fee or assessment of general applicability; (ii) capital costs which are required by this Franchise related to the provision of public, educational, or governmental access facilities;  (iii) requirements or charges incidental to awarding or enforcing this Franchise, including payments for bonds, security funds or letters of credit, insurance, indemnification, penalties or liquidated damages, or other regulatory costs specifically required herein in addition to the Franchise Fee; (iv) any fee imposed under Title 17 of the United States Code.

 

m.                Grantee” is Tekstar Cablevision, Inc., its agents and employees, lawful successors, transferees or assignees.

 

n.                  “Gross Revenues” means the following revenues received by the Grantee or its Affiliates from the operation of the Cable System to provide Cable Service in the City: 1) the monthly service fees for basic broadcast service (the One Star Plan); 2) expanded basic tiers (Two Star Plan) and pay television fees and pay-per-view service.  Gross Revenues shall not include: 1) fees derived from the lease of channels to providers unaffiliated with Grantee, to the extent such lease is required by law; 2) revenues received from telecommunications services as defined in state or federal law; 3) any taxes on Cable Services which are imposed directly or indirectly on any subscriber by any governmental unit or agency; 4) revenues received from national advertising carried on the system; 5)  revenues received from late  fees, or; 6) bad debt write-offs.    

 

o.                 Installation” means the connection from feeder cable to the point of connection with the Subscriber Converter.

 

p.                 Lockout Device” means an optional mechanical or electrical accessory, which inhibits the viewing of a certain program, certain channel, or certain channels.

 

q.                 Normal Business Hours” means those hours during which most similar businesses in the community are open to serve customers.  Normal Business Hours must include some evening hours at least one night per week and/or some weekend hours.

 

r.                   Normal Operating Conditions” means those service conditions, which are within the control of Grantee.  Those conditions which are not within the control of Grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are ordinarily within the control of Grantee include, but are not limited to, special promotions, pay‑per‑view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of Grantee’s facilities.

 

s.                  Person” is any person, firm, partnership, association, corporation, company, or other legal entity.

 

t.                   Right-of-Way” or “Rights-of-Way” means the area on, below, or above any real property in the City in which the City has an interest including, but not limited to any street, road, highway, alley, sidewalk, parkway, park, skyway, or any other place, area, or real property owned by or under the control of the City, including other dedicated Rights-of-Way for travel purposes and utility easements.

 

u.                  Right-of-Way Ordinance” means the ordinance adopted by the City creating requirements regarding regulation, management and use of Rights-of-Way, including registration and permitting requirements.

 

v.                  Standard Installation” means any residential installation, which can be completed using a Drop of 125 feet or less.

 

w.                Subscriber” means any Person who lawfully receives Cable Service from Grantee.

 

                                                                                                                 Section 2.

Grant of Franchise

1.                  Findings of Council.  In the review of the franchise renewal request by the Grantee and negotiations related thereto, and as a result of a public hearing, the Grantee’s technical, financial, legal qualifications and ability were considered and approved in accordance with state and federal law.  In addition, the Grantee’s plans for providing video services were considered and found adequate and feasible.  The Franchise granted herein is intended to comply in all respect with applicable Minnesota Statutes, federal laws and regulations.

 

2.                  Grant of Franchise.

 

a.                  This Franchise is granted pursuant to the terms and conditions contained herein.  The Grantee shall have the continued right and privilege pursuant to this Franchise to provide Cable Service and construct, reconstruct, operate and maintain a Cable System in the Rights-of-Way in the City.

b.                 Use of the Rights-of-Way to operate a Cable System and provide Cable Service shall not be inconsistent with the terms and conditions by which such Rights-of-Way were created or dedicated and is subject to all legal requirements related to the use of such Rights-of-Way, including the terms and conditions of the Right-of-Way Ordinance.

c.                  This Franchise shall be nonexclusive.  Additional Cable Franchises may be granted by the City.

3.                  Lease or Assignment Prohibited. No Person may lease Grantee’s Cable System for the purpose of providing Cable Service within the City, until and unless such Person shall have first obtained and shall currently hold a valid Franchise

4.                  Franchise Term.  This Franchise shall be in effect for a period of 15 years from the date of acceptance by Grantee. 

5.                  Compliance with Applicable Laws, Resolutions and Ordinances.  The Grantee shall at all times during the term of this Franchise be subject to all lawful exercise of the police power, local ordinance-making authority, and eminent domain rights of the City.  This Franchise shall comply with the franchise standards contained in Minnesota Statutes, Chapter 238.

6.                  Franchise Area/Service Area. 

a.                   This Franchise is granted for the corporate boundaries of the City, as it exists from time to time.  In the event of annexation by City or as development occurs, any new development within the City shall become part of the territory for which this Franchise is granted and for which Cable Service is authorized.

b.                  The Grantee shall be required to offer Service to all existing residential dwellings, within the City consistent with the line extension criteria of Section 2(6)(c) below. 

c.                   Whenever the Grantee shall receive a request for Cable Service from at least eight (8) residences within 1320 cable-bearing strand feet (one-quarter mile) of its trunk or distribution cable, it shall extend its Cable System to such Subscribers at no cost to said Subscribers for Cable System extension, other than the usual connection fees for all Subscribers; provided that such extension is technically feasible, and it will not adversely affect the operation of the Cable System.  Grantee shall extend Service within one hundred twenty (120) days of the date of request, unless technically impossible or prevented by weather conditions.

d.                  Service shall not be denied to any group of potential residential cable Subscribers because of the income of the residents of the area in which such group resides.

7.                  Written Notice.  All notices, reports, or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to any officer of Grantee or City’s Administrator of this Franchise or forty‑eight (48) hours after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to whom notice is being given, as follows:

If to Grantor:          City of Detroit Lakes

                                          Attention:  City Administrator

                                          1025 Roosevelt Avenue

                                          Detroit Lakes, MN  56501

 

With copies to:       City of Detroit Lakes

                                          Attention:  City Attorney

                                          114 West Holmes Street

                                          Detroit Lakes, MN  56501

 

            If to Grantee:          Tekstar Communications, Inc.

                                          Attention: Systems Manager 

                                          150 2nd Street SW

                                          Perham,  MN 56573

           

            With copies to:       Tekstar Communications, Inc.

                                          Attention: Director of Video Operations

                                          150 2nd Street SW

                                          Perham, MN 56573

 

Such addresses may be changed by either party upon notice to the other party given as provided in this Section.

Section 3.

                                                                                                            Construction Standards

1.                 Registration, Permits and Construction Codes.

a.                  Grantee shall strictly adhere to all state and local laws and building and zoning codes currently or hereafter applicable to location, construction, installation, operation or maintenance of the Cable System and other facilities used to provide Cable Service in the City.

b.                 The City shall have the right to inspect all construction or installation work performed pursuant to the provisions of the Franchise and to make such tests as necessary to ensure compliance with the terms of the Franchise and applicable provisions of local, state and federal law.

c.                  Nothing in this Franchise shall be construed to prevent the City from enforcing or amending the Right of Way Ordinance.

2.                 Drop Burial.  Grantee shall bury all Drops in a reasonable time period, which shall not exceed thirty (30) business days, subject to weather conditions.  In the event the ground is frozen, Grantee shall be permitted to delay burial until the ground is suitable for burial, which in no event shall be later than June 30th.

3.                 Permits.  Grantee shall obtain the appropriate permit or other required authorization as provided in the Right-of-Way Ordinance prior to any construction or work in or on the Right-of-Way, including construction of poles, conduits, amplifier boxes, similar structures, or other wire‑holding structures.  Facilities located on public and private property shall be subject to applicable zoning and other land use regulations.  All Cable System facilities to-be located in the Right-of-Way shall be subject to City approval with regard to location, height, type and other considerations.

4.                 Relocation of Facilities.  Grantee shall at its sole expense relocate or otherwise temporarily support, protect, or disconnect its Cable System in the Right-of-Way, or any part thereof, upon five (5) days notice from the City, in the event the City shall lawfully elect to change or alter the location or grade of any street, alley, easement or other Right-of-Way, or the City shall change, relocate, replace or remove utility poles at any time during this franchise, or when required for any other public purpose or public project.  Grantee shall, at the request of any person holding a moving permit, temporarily remove, raise or lower its Cable System, or any part thereof, to permit the moving of a building, provided: a) the expense shall be paid by said person(s) requesting same; and b) the Grantee receives no less than twenty (20) days written notice.  Nothing in this section is meant to limit any rights Grantee may have under applicable laws to be compensated for the cost of relocating its facilities from the Person that is requesting the relocation.      

5.                 Existing Poles.  Grantee shall use existing poles, conduits or other wire-holding structures to the extent feasible.

6.         Pole Rental Fee.  The City may require the Grantee to enter into a pole attachment agreement granting permission to use the City's utility poles.  In any event, Grantee shall pay the City Public Utilities Department for attachments to electric utility poles.  Such payment shall be in addition to the franchise fee required herein.  The per pole amount of the rental fee shall be established by Council Resolution.  The City may modify the pole rental fee every five (5) years.  Said pole rental fee shall be payable semi-annually in advance on the first day of January, and the first day of July of each year while this franchise remains in effect.  The payments shall be based on the number of poles upon which attachments are maintained, as determined by City.  Grantee may request a physical count of the poles upon which attachments are maintained.

7.         Undergrounding.  Grantee shall place its Cable System, or any portion thereof, underground in areas of the City where all other utility lines are placed underground.  Grantee shall relocate its Cable System, or any portion thereof, underground within a reasonable time after receiving written notice that all other utility facilities have been or are being placed underground.  Amplifier boxes and pedestal mounted terminal boxes may be placed above ground if existing technology reasonably requires, but shall be of such size and design and shall be so located as not to be unsightly or unsafe, all as may be approved by City in accordance with applicable requirements.  Grantee shall be entitled to proportionate reimbursement form the City for undergrounding costs to the same extent as other right-of-way users.  Nothing in this section is meant to limit any rights Grantee may have under applicable laws to be compensated for the cost of relocating its System underground from the Person that is requesting the relocation.

8.         Safety Requirements.

a.                  The Grantee shall at all times employ ordinary and reasonable care and shall install and maintain in use nothing less than commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries, or nuisances to the public.

b.                 The Grantee shall, upon completion of any work requiring the opening of any public or private property, restore the same to as good a condition as existed immediately prior to construction and in a manner and quality approved by City with regard to Right-of-Way, and shall exercise reasonable care to maintain the same thereafter in good condition.

c.                  The Grantee shall install and maintain its equipment and facilities in accordance with all federal, state and local laws and regulations, including the requirements of the National Electric Safety Code, and any applicable FCC or MPUC regulations, and in such manner that they will not interfere with private radio, police and fire communications or any installations of City or of any public utility serving City.

d.                 All facilities structures, and lines, equipment and connections in, over, under and upon the Rights-of-Way, wherever situated or located, shall at all times be kept and maintained in good condition, order, and repair so that the same shall not menace or endanger the life or property of the City or any Person.

e.                  The Grantee shall keep accurate maps and records of all its wires, conduits, cables and other property and facilities located, constructed and maintained in the City.  Grantee shall, without charge, furnish a copy of such maps and records of the location and character of the facilities from time to time as requested by the City.

9.         Tree Trimming.  The Grantee is authorized to trim any trees upon and overhanging the Rights-of-Way so as to prevent the branches of such trees from coming in contact with its Cable System.  The City may supervise tree-trimming activities and condition the authority to trim trees, as it deems appropriate.

 

Section 4.

System Design                                                    

            1.­         Channel Capacity.

a.                  Within twelve (24) months of acceptance of this Franchise, Grantee shall complete upgrade of the Cable System to 750 MHz capacity with capability of delivering a minimum of 80 analog (6 MHz) video channels.

b.                 All final programming decisions remain the discretion of Grantee in accordance with this Franchise, provided, that Grantee notifies City and Subscribers in writing thirty (30) days prior to any channel additions, deletions, or realignments, and to Grantee’s signal carriage obligations     hereunder and pursuant to 47 U.S.C. § 531-536, and to City’s rights pursuant to 47 U.S.C. § 545.  The initial broad categories of Video Programming are set forth in Exhibit B, attached hereto and incorporated herein by reference.  Location and relocation of the PEG Channels shall be governed by Section 6.

2.         Emergency Override/EAS Requirements.  The Grantee will implement emergency alert override capability consistent with all applicable federal and state regulations.  The Grantee shall immediately, upon request, make its System available to the City in the event of a local emergency.  At minimum, the Grantee shall ensure that all channels are capable of carrying a brief System-specific message upon demand, consistent with federal law.

 

                                                                                                            Section 5.

                                                                                                      Customer Service

1.                 Provision of Services.  The Grantee shall render good quality Cable Service, make repairs promptly, and interrupt Cable Service only for good cause and for the shortest time possible.  Such interruption, to the extent feasible, shall be preceded by notice to the City and Subscribers and shall occur during periods of minimum use of Cable Service.

2.                 Technical Standards.  The technical standards used in the provision of Cable Service shall comply, at minimum, with the technical standards promulgated by the FCC (47 C.F.R. 76.601 to 76.617), as may be amended or modified from time to time, which regulations are expressly incorporated herein by reference.

3.                 Performance Review and System Testing.  In the event City finds that there are signal or performance difficulties, which may constitute violations of applicable FCC technical standards or this Franchise, Grantee shall be notified and afforded ten (10) days to correct the problems or complaints.  If the performance difficulty is not resolved after the cure period has elapsed in City’s sole determination, City may require Grantee to demonstrate compliance via testing or other means selected by the Grantee.

4.                 FCC Reports.  Upon request, Grantee shall file with City all required FCC technical reports, which pertain to signal quality.

5.                 Regulation of Service Rates.

a.                  The City may regulate rates for the provision of Cable Service to the extent allowed under federal or state law(s).

b.                 A list of Grantee’s current residential Subscriber rates and charges shall be maintained on file with the City and shall be available for public inspection.  Grantee shall give the City and Subscribers written notice of any change in a rate or charge in accordance with any applicable FCC requirements, unless such change arises from changes in regulatory fees, franchise fees, access costs or franchise imposed costs.

6.         Sales Procedures.  Grantee shall not exercise deceptive sales procedures when marketing any of its services within City.  Grantee shall have the right to market consistent with local ordinances and other applicable laws and regulations.

7.         Telephone Inquiries and Complaints.

a.         Availability  Grantee will maintain local, toll‑free or collect call telephone access lines which will be available to its Subscribers 24 hours a day, seven days a week.  During Normal Business Hours, trained representatives of Grantee shall be available to respond to Subscriber inquiries.  Grantee will ensure that: (1) an adequate number of trained company representatives will be available to respond to customer telephone inquiries during Normal Business Hours, and; (2) after Normal Business Hours, the access line will be answered by a trained company representative or a service or an automated response system such as an answering machine.  Inquiries received after Normal Business Hours must be responded to by a trained company representative on the next business day.

b.         Telephone Answer Time and Busy Signals  Under Normal Operating Conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty (30) seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met no less than ninety (90) percent of the time under Normal Operating Conditions, measured on a quarterly basis.  Under Normal Operating Conditions, the customer will receive a busy signal less than three (3) percent of the time.  The Grantee will not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards in Sections 5.7(a) and (b) unless an historical record of complaints indicates a clear failure to comply.

8.         Installation, Outage and Service Calls.  Under Normal Operating Conditions which will exclude the initial deployment period, each of the following standards will be met no less than ninety five (95) percent of the time measured on a quarterly basis:  (1) Excluding conditions beyond the control of Grantee which prevent performance, Grantee will begin working on service interruptions promptly, and in no event later than twenty-four (24) hours after the interruption becomes known, and Grantee must begin actions to correct other service problems the next business day after notification of the service problem and resolve such problems as soon as is reasonably possible; (2) The “appointment window” alternatives for Installations, service calls, and other installation activities will be either a specific time or, at maximum, a four‑hour time block during Normal Business Hours.  The Grantee may schedule service calls and other installation activities outside of Normal Business Hours for the convenience of the customer; (3) Grantee may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment; (4) If a representative of Grantee is running late for an appointment with a customer and will not be able to keep the appointment as scheduled, the customer will be contacted. The appointment will be rescheduled, as necessary, at a time during Normal Business Hours, which is convenient for the customer.

9.                 Complaint and Other Service Records  Subject to Grantee’s obligation to maintain the privacy of certain information, at City's request Grantee shall prepare and maintain written records of all complaints received and the resolution of such complaints, including the date of such resolution.  Such written records shall be on file at the office of Grantee.  Upon request, Grantee shall periodically provide the City with a written summary of such complaints and their resolution.

10.             Subscriber Contracts.  Grantee shall provide to City upon request any standard form Subscriber contract utilized by Grantee.  If no such written contract exists, Grantee shall provide a document completely and concisely stating the length and terms of the Subscriber contract offered to customers.

11.             Billing and Subscriber Communications.  Grantee must give Subscribers thirty (30) days advance written notice with copy to City before any changes in rates, programming services, or channel positions.  Bills must be clear, concise, and understandable, with itemization including but not limited to, basic and premium charges and equipment charges.

12.             Refunds and Credits.  If Service is interrupted or discontinued for 24 or more consecutive hours and Grantee has notice of such interruption, Subscribers shall be credited pro rata for such interruption beginning with the date of notice of interruption.  In the event a Subscriber establishes or terminates Service and receives less than a full month’s Service, Grantee shall prorate the monthly rate on the basis of the number of days in the period for which Service was rendered to the number of days in the billing.  Refund checks will be issued promptly, but no later than thirty (30) days from the date of the return of the equipment supplied by the Grantee if Service is terminated.

13.             Local Office.  Grantee shall maintain a drop box within the service area for receiving Subscriber payments after hours.  Payments at Grantee’s drop box location shall be deemed received on the date such payments are picked up by Grantee, which shall occur no less than twice weekly.

14.             Additional Customer Service Requirements.  The City may adopt additional or modified customer service requirements to address subscriber concerns or complaints.

                       

                                                                                                SECTION 6.

                                                                                    INSTITUTIONAL SERVICES PROVISIONS

 

1.         Public, Educational and Government Access.

 

a.                  PEG Programming.  The Grantee shall operate, administer, and manage public, educational and governmental access programming pursuant to this Franchise.  The Grantee shall establish rules pertaining to the administration of the specially designated access channel.  Upon request, Grantee shall provide coverage of regular City Council meetings and such other governmental meetings held in City Hall as the City may direct.

 

b.                 PEG Channels.  Grantee shall dedicate one (1) channel for public, educational and governmental access programming use.  Nothing herein shall diminish the City’s rights to secure additional channels pursuant to Minn. Stat. § 238.084, which is expressly incorporated herein by reference.

 

c.                  PEG Availability.  Grantee shall provide to each of its Subscribers who receive all, or part of, the total Cable Services offered over its Cable System, reception on the access channel free of charge.  The specially designated access channel may be used by the public, local educational authorities and local government on a first-come, first-served, nondiscriminatory basis.  During those hours that the specially designated access channels are not being used by the public, local educational authorities or local government, the Grantee may lease time to commercial or noncommercial users on a first-come, first-served, nondiscriminatory basis if the demand for that time arises.  Grantee may also use the specially designated access channels for local origination during those hours when the channel is not otherwise in use.

 

d.                 Charges for Use.  Channel time and playback of prerecorded programming on the access must be provided without charge to the City and the public.

 

e.                  Spectrum.  The VHF spectrum shall be used for the specially designated access channel.

 

f.                   Access Equipment.  The Grantee provides the minimal equipment necessary to comply with Section 6.1.a above.  In addition, the Grantee shall make readily available for use, upon need being shown, at least the minimal equipment necessary to perform good quality playback of prerecorded programming and to make it possible to record programs at remote locations with battery operated portable equipment.  Need shall be determined by subscriber petition which, to be successful, must contain the signatures of at least 100 subscribers.

 

2.                 Service to Public Buildings.  Grantee shall provide, free of charge, a Drop, outlet and monthly basic and expanded basic Cable Service (currently marketed under One Star and Two Star Plans) to City Hall, 1025 Roosevelt Avenue, Detroit Lakes Library, 1000 Washington Avenue and the Police Department, 106 East Holmes Street. No redistribution of the free Cable Service provided pursuant to this Section shall be allowed without the Grantee’s prior written consent.

 

3.                 Activated Two-Way Capacity.  Grantee shall provide two-way activated capacity allowing live or recorded cablecast of programming from City Hall and such other site(s) as may be mutually agreed to by Grantee and the City.

 

                                                                                                            SECTION 7.

                                                                                    OPERATION AND ADMINISTRATION PROVISIONS

1.                  Administration of Franchise. The City shall have authority to administer the Franchise and to monitor the performance of the Grantee pursuant to the Franchise.  The City Manager or his designee shall have continuing regulatory jurisdiction and supervision over the Services described herein and the Grantee’s operation under this Franchise.

2.                  Franchise Fee.

a.                  During the term of this Franchise, Grantee shall pay to the City a Franchise Fee in an annual amount of up to 5 percent (5%) of its Gross Revenues.  The Franchise Fee shall initially be set at the amount identified in Exhibit A. The City may by Resolution annually modify the amount of the Franchise Fee.  The City shall provide notice of any modification in the Franchise Fee amount to Grantee on or before November 1st.  Any change in the Franchise Fee amount shall be effective on January 1st of the following year.

b.                 Any payments due under this provision shall be payable quarterly.  The payment shall be made within sixty (60) days of the end of each of Grantee’s current fiscal quarters together with a report in form reasonably acceptable to City and Grantee and which shows the basis for the computation.

c.                  All amounts paid shall be subject to audit and recompilation by the City and acceptance of any payment shall not be construed, as an accord that the amount paid is in fact the correct amount.