A. Within ten days after the award of a franchise, a grantee shall deposit with the city a letter of credit from a financial institution approved by the city comptroller in an amount as specified in the franchise. The form and content of such letter of credit shall be approved by the corporation counsel. The letter of credit shall be used to insure the faithful performance by the grantee of all provisions of the franchise and this chapter; and compliance with all orders, permits and directions of any agency, commission, board, department, division or office of the city having jurisdiction over its acts or defaults under the franchise or this chapter and the payment by the grantee of any penalties, claims, liens and taxes due the city or other governmental entities which arise by reason of the construction, operation or maintenance of the system.
B. If a grantee fails to pay to the city any compensation due the city within the time fixed herein; or, fails after ten days' notice to pay to the city any taxes due and unpaid; or fails to repay the city within ten days, any damages, costs or expenses which the city is compelled to pay by reason of any act or default of a grantee in connection with the franchise; or, fails after three days' notice of such failure by the grantee to comply with any provisions of the franchise or this chapter while the city reasonably determines can be remedied by demand on the letter of credit, the city may immediately request payment of the amount thereof, with the interest and any penalties, from the letter of credit. Upon such request for payment, the city shall notify the grantee of the amount and date thereof.
C. The letter of credit shall be maintained at the amount specified in the franchise during the entire term of the franchise. In the event that amounts are withdrawn pursuant to subsection A or B of this section, a grantee, if necessary, shall take any action required to maintain the letter of credit at said full amount within three days of the notification by the city of its withdrawal against the letter of credit.
D. The rights reserved to the city with respect to the letter of credit are in addition to all other rights of the city, whether reserved by the franchise or authorized by law and no action, proceeding or exercise of a right with respect to such letter of credit shall affect any other right the city may have.
E. The letter of credit shall contain the following endorsement:
It is hereby understood and agreed that the surety will not cancel or refuse to renew this letter of credit without giving to the City Comptroller written notice, by registered mail, of its intention to cancel or not to renew, at least thirty (30) days prior to such action.
(Prior code § 113.1-19; Amend Coun. J. 12-9-92, p. 25465; Amend Coun. J. 4-24-12, p. 23998, § 1)
Editor's note – Coun. J. 4-24-12, p. 23998, § 1, repealed former § 4-280-150, which pertained to grantor's right to assign, and renumbered this section, which was formerly § 4-280-190.