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ARTICLE 3 FRANCHISE FEE, NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM FEE, VEHICLE IMPACT FEE, & ADMINISTRATIVE FEE In addition to any other consideration set forth herein, as part of its consideration for entering into this Agreement, and for the exclusive Franchise, right and privilege to provide Solid Waste Handling Services as specified herein, Contractor shall provide the following: 3.1 Franchise Fee Contractor shall pay to the City a Franchise Fee based on the Gross Receipts received by Contractor from Customers direct -billed by Contractor. The Franchise Fee is now agreed to be an amount equal to the higher of eight million dollars ($8,000,000) per contract year (July 1 to June 30) or 17.9% of said Gross Receipts for Customers direct - billed by Contractor. This amount may be increased by resolution of the City Council and, whenever said Franchise Fee is increased by resolution of the City Council, Contractor shall be permitted to pass through to Customers direct -billed by Contractor one hundred percent (100%) of the amount of such increase. Invoices submitted to Customers by Contractor shall not reference the aforementioned Franchise Fee. The Parties acknowledge that this Franchise Fee reflects the reasonable value of the public right-of-way franchise rights granted to Contractor pursuant to this Agreement, as determined through good -faith negotiation of this Agreement. Concurrent with each Franchise Fee payment, Contractor shall provide an accounting worksheet showing the breakout of receipts by line of service and calculation of the Franchise Fee in a format approved by the City. 3.2 National Pollutant Discharge Elimination System (NPDES) Fee The City has an established National Pollutant Discharge Elimination System (NPDES) program that is designed to minimize any pollutants discharged into the City s storm drain system. The City conducted a study and found a nexus between the NPDES program and its storm drain infrastructure maintenance and cleaning to Solid Waste Collection. Refuse and debris that is generated on residential and non-residential parcels and not placed in appropriate containers for pick-up, is carried through the City's curb and gutter system to catch basins where it is captured by trash screen devices or ends up in the storm drain infrastructure, where it is extracted and disposed August 17, 2021 36 City of Santa Ana