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A. Application Fee. Each application for a license to be granted under the authority of this chapter shall be accompanied by a nonrefundable filing fee in the amount specified below, by certified or cashier’s check made payable to the city. Nonrefundable filing fees in the following amounts are required:

1. For an initial license or renewal: $5,000.

2. For consent to transfer or change ownership: $2,500.

3. For license modifications:

a. Pursuant to 47 U.S.C. Section 545: $2,500.

b. Any other modification: up to $2,000.

B. License Fee.

1. In consideration of the fact that the streets of the city will be used by a licensee in the operation of its cable system within the boundaries of the city and the streets are valuable properties acquired and maintained by the city at great expense to its taxpayers, and in consideration of the costs incurred by the city in regulating and administering each cable license, the licensee shall pay to the city up to five percent of the licensee’s gross annual revenue from all sources attributable to the operations of the licensee within the licensed area.

2. This payment shall be computed quarterly, for the preceding quarter, as of March 31st, June 30th, September 30th and December 31st of each year. Each quarterly payment shall be due and payable no later than 30 days after the relevant computation date. Each payment shall be accompanied by a financial report showing in detail the gross revenues of the licensee related to that quarter.

3. The payment required pursuant to this section shall be in addition to any other tax or payment owed to the city pursuant to any other applicable ordinance or provision of the city code, or regulation or law of the county, state or federal government.

4. A license fee not received in full by the city within 30 days of its due date shall be deemed delinquent and subject to a late fee. The late fee for delinquent payment shall be five percent of the amount overdue plus interest at the rate of one and one-half percent per month, or parts thereof.

5. Where the license fee is based on gross revenues, the licensee shall file, with each license payment, a statement of the gross revenues for the period on which the fees are based. Such a licensee must file within three months of the end of its fiscal year a statement of gross revenues for the preceding year which is either audited or certified as accurate by an officer of the licensee. Any payment of license fees to adjust for a shortfall in the quarterly payments for the preceding year must be made no later than the filing date for the audited annual statement of gross revenues. Adjustments for any overpayment will be credited to subsequent quarterly payments. Interest and late charges (as specified above) will not be imposed for any payment necessary as a result of the yearly adjustment if the payment to correct the shortfall does not exceed five percent of the total payments made during the preceding year. In the event such payment exceeds five percent, the licensee is liable for interest and late charges for the entire amount due.

6. The city manager shall have the right, upon reasonable notice, to inspect or audit during normal business hours a licensee’s records showing the gross revenues and other relevant underlying data and information. Upon examination of such information, the city manager has the right to recompute any and all amounts paid under a license. Any additional amounts due the city as a result of an audit shall be paid by the licensee within 30 days following written notice to the licensee by the council, which shall include a copy of the inspection or audit report. In the event that an inspection or audit results in additional monies owed the city in excess of five percent of the total paid, the licensee shall bear the total cost of the audit, and late charges and interest on the additional amount due.

7. No acceptance by the council 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 the council may have.

C. Performance and Security Bond.

1. Within 30 days after the execution of the license agreement and prior to any construction work in the public right-of-way, the licensee shall file with the city manager a performance and security bond, or a letter of credit in a form acceptable to the city manager, in the city’s favor in the amount of $75,000, or as specified in the license agreement. This performance and security bond shall serve as security for the faithful and reasonable performance by the licensee of all the material provisions of the license agreement including the construction of system facilities along public rights-of-way and easements.

2. The bond shall be issued by a surety company authorized to do business in the state and shall be in a form approved by the city manager, and contain the following endorsement:

This bond may not be canceled, or allowed to lapse, until 30 days after receipt by the council, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.

3. Unless contested by the licensee in good faith as provided for herein, in the event it is determined, after observation of the proceedings provided for herein, that a licensee has failed to comply with any of the material provisions of this chapter or the license agreement, then such bond may be surrendered to the city upon written demand of city as compensation for damages as set forth by the city in connection with performing or securing performance of the provisions of the license agreement by the licensee.

4. Such damages shall be recoverable jointly and severally by the city from either the principal or its surety, or both, for any and all damages and costs which the city may have suffered. These damages or costs shall include, but not be limited to, attorneys’ fees, costs of any action or proceeding, and the full and actual amount of any compensation, indemnification, cost of removal or abandonment of any property or other costs due and owing the city up to the full amount of such bond.

5. The rights reserved by the city with respect to the bonds required are in addition to all other rights and remedies the council may have under this chapter, the license agreement or any other law.

6. Failure to maintain the performance and security bond as required shall constitute a material violation of the provisions of this chapter.

7. At such time as 95 percent of planned construction in the city is complete, as specified in license agreement, the council may, at licensee’s request, reduce or eliminate the performance and security bond requirement.

D. Damage Claims Procedures.

1. All license agreements shall contain provisions for liquidated damages, in amounts as mutually agreed upon between the city and the licensee, for any failure by the licensee to comply with various requirements of this chapter or the license agreement.

2. All references to notices which are required as the result of the assessment or contemplated assessment of liquidated damages by the city, or of any intention by the city to draw upon the principal and surety of the performance and security bond as a result of such assessments, and such responses thereto by the licensee, shall be by certified or registered mail, return receipt requested.

3. Prior to assessing any of the liquidated damages set forth herein, the city manager shall give the licensee 30 days’ written notice of its intention to assess such damages. In the notice, the city manager shall set forth, at a minimum, the following:

a. Amount to be assessed;

b. Actual basis for such assessment;

c. Specific license provision alleged to have been violated; and

d. The provisions of this chapter or the license agreement under which the assessment is authorized.

Upon receipt of such notice, the licensee shall, during the 30-day period afforded by the notice, make a reasonable effort with the city to resolve and cure the violation. If the violation is not resolved within the period or within such other time agreeable to the city, the city manager shall then give the licensee written confirmation within 30 days of such resolution that the city intends to cancel its claim. If, however, the licensee disputes the intended assessment or that any violation has occurred, the licensee shall appeal the assessment within 15 days from the date of receipt of the city’s assessment letter in accordance with the provisions of subsection (F) of this section.

4. Liquidated damages will not be assessed or imposed by the city if the city manager finds, in his or her opinion, that a failure by the licensee resulted from conditions entirely beyond the licensee’s control. Liquidated damages may be reduced or eliminated by the city if the city manager finds that a failure by a licensee resulted, partially or entirely, from a misunderstanding of obligations or from an excusable oversight. The licensee shall bear the burden of proof in establishing the existence of such conditions or misunderstandings.

5. The imposition and collection of liquidated damages as set forth above shall not prevent the city from pursuing other remedies for other violations of either the city laws or regulations or the license agreement and for which liquidated damages have not been imposed and collected.

E. Liquidated Damages.

1. For failure to substantially complete major planned construction or line extensions as required, unless the council specifically approves a delay caused by the occurrence of conditions beyond the licensee’s control, the licensee shall pay $250.00 per day for each day, or part thereof, that the deficiency continues after licensee has been given notice of such deficiency and time to respond or cure the matter according to subsection (D) of this section.

2. For substantial failure or repeated failure to comply with any of the material provisions of this chapter or the license agreement, the licensee shall pay $200.00 per day for each day, or part thereof, that such noncompliance continues after licensee has been given notice of such noncompliance and time to respond or cure the matter according to subsection (D) of this section.

3. For failure to comply or remedy any other provision of this chapter or the license agreement, the licensee shall pay $100.00 per day for each day, or part thereof, that such noncompliance continues after licensee has been given notice of such noncompliance and time to respond or cure the matter according to subsection (D) of this section.

4. For failure to provide data, documents, reports and information in a timely manner as required, the licensee shall pay $50.00 per day, or part thereof, that each occurrence continues after the licensee has been given notice of such violation and time to respond or cure the matter according to subsection (D) of this section.

5. For failure or refusal to substantially comply with reasonable directives of the city manager which are in accordance with city laws or regulations, the license agreement or any police powers of the city, the licensee shall pay $50.00 per day for each day, or part thereof, that each occurrence continues after the licensee has been given notice of such noncompliance and time to respond or cure the matter according to subsection (D) of this section.

F. Appeals.

1. In the event that licensee contests the city manager’s assessment of liquidated damages or fails to respond to the above-mentioned notices, within 14 days the city manager shall convene an administrative hearing as specified in subsection (F)(1)(a) of this section. Licensee may pay the fine, proceed with this hearing or waive its rights to this administrative hearing and proceed directly to the public hearing before the council, as specified in subsection (F)(1)(b) of this section.

a. This shall be an administrative hearing, and licensee shall be afforded procedural due process including an opportunity to be heard and to present evidence. Within 14 days after the conclusion of such administrative hearing, the city manager shall issue a determination. In that determination the city manager may:

i. Find that licensee is not in violation of this chapter or the license agreement;

ii. Find that licensee is in violation of this chapter or the license agreement, but that the violation was with just cause and waive part or all of any penalty that might otherwise be imposed;

iii. Find that licensee is in violation of this chapter or of the license agreement, take corrective action and foreclose on all or any appropriate part of the performance bond provided for elsewhere in this chapter; and

iv. Find that licensee is in material violation of this chapter and the license agreement and recommend that the council declare the licensee in violation and terminate the license agreement, provided the council takes such action after a public hearing as set forth in subsection (F)(1)(b) of this section.

b. If a public hearing before the council is requested by a licensee or is held pursuant to subsection (F)(1)(a) of this section, it shall be de novo, and it shall convene within 30 days of the request thereof. The licensee shall be afforded full due procedural process including, without limitation, an opportunity to be heard and to present evidence. The council’s decision, which shall include findings of fact and conclusions, shall be made not later than 30 days after the conclusion of the hearing. In that decision the council may:

i. Find that the licensee is not in violation of this chapter or the license agreement;

ii. Find that the licensee is in violation of this chapter or the license agreement, but that the violation was with just cause and waive part or all of any penalty that might otherwise be imposed;

iii. Find that the licensee is in violation of this chapter or of the license agreement, take corrective action and foreclose on all or any appropriate part of the performance bond provided for elsewhere in this chapter; and

iv. Find that the licensee is in material violation of this chapter and the license agreement and declare the licensee in violation and revoke the license agreement pursuant to SCC 5.15.100.

2. In the event a licensee disputes the decision of the council to revoke or suspend its license agreement, the licensee may submit the matter to a court of competent jurisdiction for final determination.

3. When any part of this chapter or a license agreement is in dispute, or when any performance of a licensee or the city is in dispute, other than a decision to revoke or suspend a license, and after the applicable procedures of this section or any similar procedures of a license agreement have been fully exhausted, either the city or a licensee may elect to appeal the disputed matter to a court of competent jurisdiction for a final determination. [Code 2006 § 12-1-9. Ord. 91-20, 12-10-1991].