(a) Prior to the franchise becoming effective, the franchisee may be required to post with the City a cash security deposit in the minimum amount of ten thousand dollars ($10,000) or such other amount as specified in the franchise agreement to be used as a security fund to ensure the faithful performance of all provisions of law and the franchise agreement and compliance with all orders, permits and directions of the City, and the payment by the franchisee of any claims, liens or taxes due the City which arise by reason of the construction, operation or maintenance of the system.
(b) The City shall place the security deposit in an interest bearing account. The interest will accrue to the benefit of the franchisee but may not be withdrawn; all interest will be added to and become part of the original security fund during the term of the franchise.
(c) If a franchisee fails to pay the City any fees or taxes due, liquidated damages, damages, or costs or expenses incurred by the City by reason of any act or default of the franchisee, or if the franchisee fails to comply with any provision of the franchise agreement that the City reasonably determines can be remedied by an expenditure of the security fund, the City may, after ten (10) calendar days notice to the franchisee, withdraw that amount with any interest from the security fund. Upon such withdrawal, the City shall notify the franchisee of the amount and date of the withdrawal.
(d) Within thirty (30) calendar days after notice to it that an amount has been withdrawn by the City from the security fund, the franchisee must deposit a sum of money sufficient to restore the security fund to the original amount. If the franchisee fails to restore the security fund to the original amount within thirty (30) calendar days, the entire security fund remaining may be forfeited, and/or such failure may be considered a material breach of this chapter and may be grounds for revocation of the franchise.
The security fund will become the property of the City in the event the franchise is revoked. The franchisee is entitled to the return of the security fund that remains following termination of the franchise, provided that there is no outstanding default or unpaid amounts owed to the City by the franchisee.
(f) The rights reserved to the City with respect to the security fund are in addition to all other rights of the City whether reserved by this chapter or authorized by other laws, and no action, proceeding or exercise of a right with respect to such security fund will affect any other right the City may have.
(Ord. 75-89. Passed 6-26-89. )