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operating costs which includes the rate of return allowed under this franchise agreement (or the sum of five hundred dollars ($500), whichever is greater) derived from monthly service charges to defray the cost of regulation and for use of County rights-of-way and public places. The Utility shall pay the 6% franchise fee quarterly. said fee shall be shown as a separate additional charge on utility bills. Escrow Charges In the event of an acquisition by the County, or the utilization of the County's own plants, the County shall receive the water distribution and/or wastewater collection system free of cost and in good repair, wear and tear excepted. The Utility agrees to grant to the County any easements necessary to connect the water and/or wastewater system to the County's water/wastewater systems without charge. The Utility shall pay all escrowed impact fees upon acquisition or upon connection to county's own plants. ROMML & ACCOUNT Two and one half percent (2h$) of the operating cost of the Utility shall be placed in an interest bearing renewal and replacement account for purposes of renewal and/or replacement of the capital assets of the water and/or wastewater system of the Utility. Additionally, the Utility shall initially fund said account with two thousand dollars ($2,000) which will also be reserved for capital maintenance items. Interest shall accumulate in said account until the account reaches ten thousand dollars ($10,000); thereafter interest shall be paid to the Utility annually. Said funds shall be used as a sinking fund and applied only for renewal and/or replacement of the water and/or wastewater system by the Utility as the need arises; the percentage required to be placed in the renewal and replacement account may be amended after review by the County as necessary to maintain a sufficient account balance taking into account the general condition of the system. The County is granted the right to make necessary repairs using said funds in the event of default on the part of the Utility in maintaining the quality standards established herein. In the event that the County purchases the corporation's utility system pursuant to the provisions of this franchise as stated above, then any funds in said renewal and replacement account shall vest in the County. 11. Section 15 of Resolution No. 74-15 is hereby amended to read as follows: SBCTION 15 The Utility shall supply the County with a copy of the Utility's annual report and financial statements. All records and all accounting 10 �J UN 26 1995 acox 61 r,,cE 3i®