(A) The license must post with the town a security deposit, performance bond, or irrevocable letter of credit in the amount specified in the license agreement before the license is effective. The town must hold the security deposit as security for:
(1) Faithful performance of all applicable provisions of law and the license agreement;
(2) Compliance with all orders, permits, and directions of the town; and
(3) Payment by the licensee of any claims, liens, or taxes due to the town because of the construction, operation or maintenance of the system.
(B) The town shall place any such security deposit in an interest bearing account such as those in which the town general funds are located. The interest will accrue to the benefit of the licensee but may not be withdrawn. All interest is added to and becomes part of the original security deposit during the term of the license.
(C) The town may immediately withdraw an appropriate amount, including interest and penalties, from the security deposit if:
(1) After ten days notice the licensee fails to pay to the town any fees or taxes due and unpaid, damages, or costs or expenses that the town is compelled to pay by reason of any act or default of the licensee in connection with this license, unless licensee contests the matter within the ten-day notice period; or
(2) After 30 days notice to the licensee, the licensee fails to comply with any provision of the license that the town reasonably determines can be remedied by an expenditure of the security deposit. The town must promptly notify the licensee of the amount and date of any withdrawal.
(D) No automatic replenishment. If the amount is contested then there needs to be a resolution of that issue first. The parties shall agree to negotiate in good faith about any replenishment should the initial security fund be depleted.
(E) The town must return the security deposit to the licensee after the license is terminated if there is no outstanding default or unpaid amounts owed to the town by the licensee.
(F) The rights reserved to the town with respect to the security deposit are in addition to all other rights of the town under this chapter or other law. An action, proceeding, or exercise of a right with respect to the security deposit does not affect any other right the town may have.
(Prior Code, Ch. 18, Art. V, § 18-318) (Ord. 343-04, passed 6-21-2004; Ord. 366-05, passed 3-7-2005)