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A. Monthly Revenue Report. Company shall submit to the city along with its franchise fee payment a report showing the basis for computation of such fees showing the basis for the computation of the franchise fees and PEG fees paid during that period in a form and substance acceptable to the city. This report shall separately indicate revenues received by the company within the city including, but not limited to, such items as listed in the definition of gross revenues.

B. Quarterly Reports.

1. Within 45 calendar days after the end of each fiscal quarter of the company, it shall submit to the city along with its franchise fee payment a financial report showing the basis for computation of such fees. This report shall separately indicate revenues received by the company within the city from such items as basic service, pay TV service, and other sources of revenue.

2. Within 60 days after the end of each of the company’s fiscal quarters, it shall submit a written report to the city, verified by an officer of the company, which shall contain:

a. A statement of all revenues earned by company or any parent or affiliate (other than a programming affiliate), related to operation of the cable system in the franchise area, identified by source or type, e.g., basic, premium, pay-per-view, installation, advertising, etc. The statement shall be signed by an officer of company with an explicit certification by the officer that the reported amounts are an accurate reflection of the books and records of the company and are consistent with all provisions in the franchise;

b. An identification and explanation of any adjustment in the amount of gross revenues made in determining the franchise fee calculation base; and

c. A calculation establishing the franchise fee due and owing.

C. Annual Report. On an annual basis, no later than five months following the end of the company’s fiscal year, it shall present a written report to the city which shall include:

1. A summary of gross revenue and franchise fee calculations for the previous year;

2. An audited financial statement for its immediate parent company, if any;

3. A summary of the previous year’s activities for the franchise area served by the company including, but not limited to, the total number of subscribers for each category of service, the number of homes passed, miles of overhead and underground cable plant, other system facilities and equipment constructed, any services added or dropped, and any technological changes occurring in the system; and

4. A description of all significant changes and modifications to the system or services anticipated to occur in the ensuing five-year period.

D. Auditing and Financial Records.

1. The company shall manage all of its operations in accordance with a policy of keeping books and records open and accessible to the city. The city shall have the right as necessary or desirable for effectively administering and enforcing the franchise, to inspect at any time during normal business hours upon reasonable notice, all books, records, maps, plans, financial statements, service complaint logs, performance test results, records required to be kept by the company and any parent company pursuant to the rules and regulations of the FCC and other regulatory agencies, and other like materials of the company and any parent company which relate to the operation of the franchise. Access to the aforementioned records shall not be denied by company to representatives of the city on the basis that said records contain “proprietary” information. However, to the extent allowed by Washington law, the city shall protect the trade secrets and other confidential information of the company and any parent company. All books and records relating to the company’s activities under the franchise shall be, or upon request be made, available in the city of Bellingham.

2. The company agrees to meet with representatives of the city upon request to review its methodology of record keeping, financial reporting, computing franchise fee obligations, and other procedures the understanding of which the city deems necessary for understanding the meaning of reports and records.

3. The city or its authorized agent may at any time and at the city’s own expense conduct an independent audit of the revenues of company in order to verify the accuracy of franchise fees paid to the city. The company and each parent company shall cooperate fully in the conduct of such audit. In the event it is determined through such audit that the company has paid franchise fees in a lesser amount than was due the city, then it shall reimburse the city for the entire cost of the audit within 30 days of the completion and acceptance of the audit by the city.

4. The city agrees to request access to only those books and records, in exercising its rights under this section, which it deems reasonably necessary for the enforcement and administration of the franchise.

5. The city shall have the right to inspect the company’s income records and the right to recompute any amounts determined to be payable under this chapter; provided, however, that such audit shall take place within 36 months following the close of each of the company’s fiscal years. Any additional amount due to the city as a result of the audit shall be paid within 30 days following written notice to the company by the city, which notice shall include a copy of the audit report. [Ord. 2012-05-030].