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Article 13-9 Fees, Bonds, Letters of Credit, Liquidated Damages and Appeals

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A. License Fee.

1. In consideration of the fact the streets of the Town will be used by a licensee in the operation of its cable system within the boundaries of the Town and said streets are valuable properties acquired and maintained by the Town at great expense to its taxpayers, and in consideration of the costs incurred by the Town in regulating and administering each cable license, the licensee shall pay to the Town 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 thirty (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. Except as provided in subsection (A)(7) of this article, the payment required pursuant to this article shall be in addition to any other tax or payment owed to the Town pursuant to any other applicable ordinance or chapter of the Town code, regulation or law of the county, state or federal government.

4. A license fee not received in full by the Town within thirty (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. The Town 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 in accordance with A.R.S. § 9-1445. Upon examination of such information, the Town Manager has the right to recompute any and all amounts paid under a license. In the event that an inspection or audit results in additional monies owed the Town 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.

6. 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.

7. There shall be allowed as an offset against the license fee due under this article any amounts licensee paid to the Town during the prior quarter in privilege license (sales) taxes; provided, however, that there shall be no offset to the extent that licensee made payments of privilege license (sales) taxes on any gross income (within the meaning of the privilege license [sales] tax ordinance) which is not included in gross revenues under this chapter.

B. Performance Bond.

1. Within thirty (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 Town Manager a performance bond, or a letter of credit in a form acceptable to the Town Attorney, in the Town’s favor in the amount of $50,000.00, or as specified in the license agreement. In the event that licensee fails to comply with any provision of this chapter or the license agreement, then there shall be recoverable jointly and severally from the principal and surety any and all damages or costs suffered by the Town. These damages or costs shall include but not be limited to attorney’s fees, cost of any action or proceeding and including the full amount of any compensation indemnification, cost of removal or abandonment of any property or other costs due and owing the Town up to the full amount of such bond.

2. At such time as ninety-five percent (95%) of planned construction in the Town is complete, as specified in license agreement, the Council may, at licensee’s request, reduce or eliminate the performance bond requirement.

3. The bond shall be issued by a surety company authorized to do business in the State of Arizona and shall be in a form approved by the Town attorney, and contain the following endorsement:

This bond may not be canceled, or allowed to lapse, until sixty 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.

4. The rights reserved by the Council 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.

C. Irrevocable Letter of Credit.

1. Within thirty (30) days after written notification of the award of license by the Council, the selected applicant shall provide the Town Manager a letter of credit from a financial institution licensed to do business in Arizona in the amount of $10,000.00, or as specified in the license agreement, as security for the faithful performance by licensee of all provisions of this chapter and compliance with all orders, permits and directions of any department of the Town.

2. The form and content of such letter shall be approved by the Town attorney and contain the following endorsement:

This letter of credit may not be canceled or allowed to lapse until thirty days after receipt by the Town manager, by certified mail, return receipt request, of a written notice from the issuer of the letter of credit of its intent to cancel or not to renew.

In the event the letter of credit is insufficient to pay the Town for any compensation, damages, penalties, costs or expenses owed it pursuant to this chapter or the license agreement, the licensee’s performance bond may be drawn upon by the Town Manager for any amount due the Town over and above the amount of the letter of credit.

3. Within fifteen (15) days after written notice to licensee by the Town Manager that the Town Manager has withdrawn any amount from the letter of credit, licensee shall deposit or pay to the Town Manager a sum of money sufficient to restore such letter of credit to the original amount of $10,000.00, or as specified in the agreement.

4. If a licensee fails to pay the Town: any compensation within the time fixed by this chapter or the license agreement; any taxes due; or any damages, costs or expenses which the Town incurs by reason of any act or default of the licensee; or if the licensee fails to comply with any provision of the license agreement which failure the Town Manager determines can be remedied or partially cured by demand on the letter of credit, the Town Manager may, following ten (10) days’ notice to the licensee, withdraw from the letter of credit the amount so claimed by the Town Manager if within such period the licensee has not remedied the matter. The Town Manager shall immediately notify licensee of any such withdrawal, the date and amount.

5. The rights reserved to the Town Manager with respect to the letter of credit are in addition to all other rights it may have under this chapter, the license agreement and any other law.

6. Failure to maintain the letter of credit as required shall constitute a violation of the provisions of this chapter. (19-18, Amended, 12/03/2019)