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Attachment 1 296 SECTION 10. FRANCHISE FEE. 297 298 10.1. Form. During the term of the franchise hereby granted, and in lieu of any permit or 299 other fees being imposed or that the City has a right to impose on Company, the City may 300 charge the Company a franchise fee by collecting the amounts the parties have agreed to as 301 indicated in a Fee Schedule set forth in a separate franchise fee ordinance from each customer in 302 the designated Company Customer Class. The fee may be (i) a percentage of gross revenues 303 received by the Company for its operations within the City, or (ii) a flat fee per customer, 304 or (iii) a fee based on some other basis as agreed to by the parties. The method of imposing 305 the franchise fee, the percentage of revenue rate, or the flat rate may differ for each 306 customer class or combine the methods described in (i) - (iii) above in assessing the fee. 307 The City shall seek to use a formula that provides a stable and predictable amount of fees. 308 If the Company claims that the City-required fee formula is discriminatory or otherwise 309 places the Company at a competitive disadvantage, the Company shall propose a formula 310 that will produce a substantially similar fee amount to the City. 311 312 10.2. Separate Ordinance. The franchise fee shall be imposed by a separate franchise 313 fee ordinance duly adopted by the City Council, which ordinance shall not be adopted until 314 at least ninety (90) days after written notice enclosing such proposed ordinance has been 315 served upon Company by certified mail. The fee shall not become effective until the 316 beginning of a Company billing month at least ninety (90) days after written notice 317 enclosing such adopted ordinance has been served upon Company by certified mail. 318 Section 2.5 shall constitute the sole remedy for solving disputes between Company and the 319 City in regard to the interpretation of, or enforcement of, the separate ordinance. No action 320 by the City to implement a separate ordinance will commence until this Ordinance is 321 effective. 322 323 10.3. Collection of Fee. The franchise fee shall be payable not less than quarterly and 324 shall be based on the amount collected by Company during complete billing months of the 325 period for which payment is to be made by imposing a surcharge equal to the designated 326 franchise fee for the applicable customer classification in all customer billings for electric 327 service in each class. The payment shall be due the last business day of the month following 328 the period for which the payment is made. The franchise fee formula may be changed by 329 ordinance from time to time; however, each change shall meet the same notice 330 requirements and the fee may not be changed more often than annually. Such fee shall not 331 exceed any amount that the Company may legally charge to its customers prior to payment 332 to the City. The time and manner of collecting the franchise fee is subject to the approval 333 of the Commission. No franchise fee shall be payable by Company if Company is legally 334 unable to first collect an amount equal to the franchise fee from its customer in each 335 applicable class of customers by imposing a surcharge in Company’s applicable rates for 336 electric service. Such fee is subject to subsequent reductions to account for uncollectibles, 337 customer refunds incurred by the Company, and correction of erroneous billings. The 338 Company agrees to make available for inspection by the City at reasonable times all records 8 Qbhf!218!pg!384