(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 county, 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 county jointly and severally from the principal and surety any and all fines and liquidated damages due to the county and any and all damages, losses, costs, and expenses suffered or incurred by the county 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 county agency or body having jurisdiction over its acts or defaults; pay fees due to the county; pay any claims, liens, or taxes due the county 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 county 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 county.
(C) Reduction of bond. Upon written application by the grantee, the county 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 county'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) Letter of credit. In lieu of the performance bond required pursuant to division (A) above, the grantee may obtain, maintain, and file with the county an irrevocable letter of credit from a financial institution licensed to do business in the state in the amount specified in the franchise, naming the county as beneficiary. The form and content of such letter of credit shall be approved by the county and shall be released only upon expiration of the franchise or upon the replacement of the letter of credit by a letter of credit by a successor grantee. Failure to obtain the letter of credit within the time specified herein shall constitute a substantial violation within the meaning of this chapter.
(E) Conditions. The county may draw upon the letter of credit if the grantee fails to:
(1) Faithfully comply with the provisions of this chapter or the franchise;
(2) Comply with all orders, permits, and directives of any county agency or body having jurisdiction over its acts or defaults;
(3) Pay fees due to the county; or
(4) Pay any claims, liens, or taxes due the county which arise by reason of the construction, operation, maintenance, or repair of the cable system.
(F) Use of performance bond and letter of credit. Prior to drawing upon the performance bond or letter of credit for the purposes described in this section, the county shall notify the grantee in writing by certified or registered mail, return receipt requested, that payment is due, and the grantee shall have ten days from the receipt of such written notice to make a full and complete payment. If the grantee does not make the payment within ten days, the county may withdraw the amount thereof, with interest and penalties, from the performance bond or the letter of credit.
(G) Notification. Within three days of a withdrawal from the letter of credit or performance bond, the county shall send to the grantee, by certified mail, return receipt requested, written notification of the amount, date, and purpose of such withdrawal.
(H) Replenishment of letter of credit and performance bond. No later than 30 days after mailing to the grantee by certified mail notification as described in division (G) above of a withdrawal pursuant to division (F) above, the grantee shall replenish the performance bond and/or letter of credit in an amount equal to the amount so withdrawn. Failure to make timely replenishment of such amount to the letter of credit and/or performance bond shall constitute a substantial violation of this chapter.
(I) Non-renewal, alteration, or cancellation of letter of credit or performance bond. The performance bond or letter of credit required herein shall be in a form satisfactory to the county and shall require 30 days written notice of any non-renewal, alteration, or cancellation to both the county and the grantee. The grantee shall, in the event of any such cancellation notice, obtain, pay all premiums for, and file with the county, written evidence of the issuance of replacement bond or policies within 30 days following receipt by the county or the grantee of any notice of cancellation, and failure to do so constitutes a substantial violation of this chapter.
(J) Inflation. To offset the effects of inflation, the amounts of the bond or letter of credit provided for herein shall be increased by the annual rate of inflation at the end of every three-year period of the franchise, applicable to the next three-year period, upon the request of the county.
(Ord. passed 12-2-96)