(A) Performance Bond. Upon the effective date of the franchise, the grantee shall obtain and maintain during the entire term of the franchise and any extensions and renewals thereof, at its cost and expense, and file with the city, a corporate surety bond in an amount specified in the franchise to guarantee the faithful performance of the grantee of all its obligations provided under this chapter and the franchise. Failure to timely obtain, file and maintain said bond shall constitute a substantial violation within the meaning of this section.
(B) Conditions. The performance bond shall provide the following conditions:
(1) There shall be recoverable by the city jointly and severally from the principal and surety, any and all fines and liquidated damages due to the city and any and all damages, losses, costs, and expenses suffered or incurred by the city resulting from the failure of the grantee to: faithfully comply with the provisions of this chapter and the franchise,; comply with all orders, permits and directives of any city agency or body having jurisdiction over its acts or defaults; pay fees due to the city; pay any claims, liens or taxes due the city which arise by reason of the construction, operation, maintenance or repair of the cable system. Such losses, costs and expenses shall include, but not be limited to, attorney's fees and other associated expenses.
(2) The total amount of the bond shall be forfeited in favor of the city in the event:
(a) The grantee abandons the cable system at any time during the term of the franchise or any extension thereto; or
(b) The grantee assigns the franchise without the express written consent of the city.
(C) Reduction of Bond. Upon written application by the grantee, the city may, at its sole option, permit the amount of the bond to be reduced or waive the requirements for a performance bond subject to the following conditions: Reductions granted or denied upon application by the grantee shall be without prejudice to the grantee's subsequent applications or to the city's right to require the full bond at any time thereafter. However, no application for reduction shall be made by the grantee within one year of any prior application.
(D) Conditions. The city may draw upon the bond if the grantee fails to: faithfully comply with the provisions of this chapter or the franchise; comply with all orders, permits, and directives of any city agency or body having jurisdiction over its acts or defaults; pay fees due to the city; or pay any claims, liens, or taxes due the city which arise by reason of the construction, operation, maintenance, or repair of the cable system.
(E) Use of Performance Bond. Prior to drawing upon the performance bond or letter of credit for the purposes described in this section, the city shall notify the grantee in writing by certified or registered mail, return receipt requested, that payment is due and the grantee shall have 14 days from the receipt of such written notice to make a full and complete payment. If the grantee does not make the payment within 14 days, the city may withdraw the amount thereof, with interest and penalties, from the performance bond.
(F) Notification. Within three days of a withdrawal from the performance bond, the city shall send to the grantee, by certified mail, return receipt requested, written notification of the amount, date and purpose of such withdrawal.
(G) Replenishment of Performance Bond. No later than 30 days after mailing to the grantee by certified mail notification as described in division (F) above of a withdrawal pursuant to division (E) above, the grantee shall replenish the performance bond replenishment of such amount of the performance bond shall constitute a substantial violation of this chapter.
(H) Non-Renewal, Alteration, or Cancellation of Performance Bond. The performance bond required herein shall be in a form satisfactory to the city and shall require 30 days written notice of any non-renewal, alteration or cancellation to both the city and the grantee. The grantee shall, in the event of any such cancellation notice, obtain, pay all premiums for, and file with the city, written evidence of the issuance of replacement bond or policies within 30 days following receipt by the city or the grantee of any notice of cancellation, and failure to do so constitutes a substantial violation of this chapter.
(I) Inflation. To offset the effects of inflation the amounts of the bond provided for herein, shall be increased by the annual rate of inflation at the end of every three period of the franchise, applicable to the next three year period, upon the request of the city.
(Ord. 99-38, passed 7-6-99)