(A) Within ten days after execution of the franchise agreement, the grantee shall deposit with the City Clerk, and maintain on deposit through the term of the franchise, the sum of $10,000 as security for the faithful performance by it of all the provisions of the franchise and compliance with all orders, permits and directions of any agency of the grantor having jurisdiction over its acts or defaults under the franchise, and the payment by the grantee of any claims, liens and taxes due the grantor which arise by reason of the construction, operation or maintenance of the system.
(B) Within ten days after notice that any amount has been withdrawn from the security fund deposited pursuant to division (A) of this section, the grantee shall pay to, or deposit with, the City Clerk a sum of money sufficient to restore the security fund to the original amount of $10,000.
(C) If the grantee fails to pay to the grantor any compensation within the time fixed herein; or fails after ten days notice to pay to the grantor any taxes due and unpaid; or fails to repay to the grantor within the ten days, any damages, costs or expenses which the grantor shall be compelled to pay by reason of any act or default of the grantee in connection with the franchise; or fails after three days notice of the failure by the grantor to comply with any provision of the franchise which the grantor reasonably determines can be remedied by an expenditure of the security, the City Clerk may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon the withdrawal, the City Clerk shall notify the company of the amount and date thereof.
(D) The security fund deposited pursuant to this section shall become the property of the grantor in the event that the franchise is canceled by reason of the default of the grantee. The grantee, however, shall be entitled to the return of the security fund, or portion thereof, as remains on deposit at the expiration of the term of the franchise, provided that there is then no outstanding default on the part of the grantee. Interest earned by the investment of the security fund will accrue to the grantee.
(E) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor, whether reserved by the franchise or authorized by law, and no action, proceeding or exercise of a right with respect to the security fund shall affect any other right the grantor may have.
(Ord. 2314, passed 1-25-2006) Penalty, see § 120.999