During the term of this franchise, there is hereby imposed upon Grantee, and by its acceptance of this franchise it agrees to pay the City a fee equal to two percent (2%) of the revenue from sales (defined as gross revenues less uncollectible accounts) derived from the sale of gas made by Grantee to city consumers.  There is also imposed upon Grantee, and by its acceptance of this franchise it agrees to pay the City a fee equal to two percent of the total cost, if known, of acquisition, transmission and distribution (wherever incurred) of gas sold to city consumers by suppliers other than Grantee and transmitted through Grantee's distribution system, or if the total cost is unknown, then upon the value of the gas as determined by presuming that the consumer's cost of gas is the same as if sold by Grantee under the terms of its effective tariff. The franchise fee is imposed to compensate the City for the Grantee's use of the streets, alleys and public ways for its mains, underground conduits, pipes and other Gas Utilities.  The City may, by ordinance exempt certain types of sales or adjust the fee imposed upon Grantee from time to time, but in no event shall the fee exceed two percent (2%) of the revenue from sales derived from the sale of gas and Gas Utilities made to city consumers during the term of this franchise.  The Grantee shall certify to the City, in a form acceptable to the City, records establishing such revenues from sales for each month and shall pay the franchise fee to the City within thirty (30) days following the last day of the preceding month.  In conjunction with the annual independent audit of Grantee's financial statements, Grantee's auditor shall provide a letter to the City that indicates that nothing came to the attention of the independent auditor that would indicate that Grantee was not in compliance with this Section 8 of the Franchise Agreement.

    The obligation to pay the fee imposed by this section is modified if:

    1. The City permits any other person to sell gas to city consumers and pay a franchise fee or its lawful equivalent at a lesser rate than provided in this section in which case Grantee shall pay at the lesser rate; or

    2. The City adds additional territory by annexation or consolidation and is unable to lawfully impose the franchise fee upon any person selling gas to consumers within the additional territory, in which case the franchise fee on the revenue from sales by the Grantee in the additional territory shall be equal to that of the lowest fee being paid by any other person selling gas within the additional areas.

    The further provisions of this section to the contrary notwithstanding, the Grantee shall be relieved of its obligation to pay to the City the franchise fee, effective as of the date specified below, with no liability therefore under each or any of the following conditions:

    1. The collection or payment of a franchise fee is ruled to be unlawful by the Supreme Court of Iowa, effective as of the date specified by the Court.

    2. The Iowa General Assembly enacts legislation which makes the collection or payment of a franchise fee unlawful, effective as of the date lawfully specified by the General Assembly.

    3. The Iowa Utilities Board, or its successor agency, denies the Grantee the right to collect a franchise fee from its customers provided such denial is affirmed by the Supreme Court of Iowa, effective as of the date of the agency order from which the appeal is taken.  (Ord. 92/U-610; S-32787, 1977).