Compensation

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(a)(1) The franchise agreement shall establish the compensation which the District of Columbia government shall receive under the franchise agreement. The franchisee shall pay to the District of Columbia, on a quarterly basis:

(A) A fee of 10% of its gross advertisement receipts for the first 5 year period; and

(B) A fee of 15% of its gross advertisement receipts for the second 5 year period.

(2) Gross advertisement receipts shall be defined as payments received by the franchisee, its agents or designees, less commission paid to the advertisement brokerage agencies involved, in connection with the display of advertising material on the bus shelters. The Mayor may require the franchisee to maintain specific records and accounts which the Mayor shall have the right to inspect to ascertain the correctness of amounts paid to the District of Columbia.

(b) Notwithstanding the above provisions, the franchisee will guarantee to the District of Columbia government a minimum payment of $300 per year per bus shelter for the first 5 years of the franchise agreement and $450 per year per bus shelter for the second 5 years of the franchise agreement. The Mayor may establish the appropriate minimum payment levels to be included in any franchise effective after the 10 year period.

(c) As further security for performance by the franchisee of its obligations, the franchisee shall deposit into an escrow account, every 3 months, beginning 6 months after the effective date of the franchise, a sum equal to 1/10% of its gross revenues until said fund reaches a total of $100,000. This fund shall be maintained at such depositories designated by the Mayor pursuant to the District of Columbia Depository Act of 1977, effective October 26, 1977 (D.C. Law 2-32 [repealed]) and shall bear interest to the franchisee. The fund shall be used to reimburse the District of Columbia for any financial loss incurred by reason of a default by the franchisee, or for the cost of moving bus shelters if the franchisee does not move them when required to do so. Upon the expiration of the term or the renewed term, the unobligated sum on deposit shall be returned to the franchisee.

(May 10, 1980, D.C. Law 3-67, § 6, 27 DCR 1266.)


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