(A) Prior to a franchise becoming effective and on each anniversary date thereafter during the franchise term including the date of termination, the franchisee shall post with the County Clerk sufficient funds to serve as a cash security deposit to be used as a security fund to ensure the franchisee’s faithful performance of and compliance with all provisions of this chapter, the franchise agreement and other applicable law and compliance with all orders, permits and directions of the county, and the payment by the franchisee of any claims, liens, fees or taxes due the county which arise by reason of the construction, operation or maintenance of the system. The amount of the security fund on deposit shall be equal to 3% of the franchisee’s projected annual gross revenues for the upcoming year, or in the instance of the final deposit, 3% of the actual gross revenues for the preceding year.
(B) In lieu of a cash security fund, a franchisee may file and maintain with the County Clerk an irrevocable letter of credit with a surety acceptable to the county in the amount specified in division (A) of this section to serve the same purposes as set forth therein. Said letter of credit shall remain in effect for the full term of the franchise plus an additional six months thereafter, or longer if there is any outstanding obligation or default on the part of the franchisee, as determined by the County Board. The franchisee and its surety shall be jointly and severally liable under the terms of the letter of credit for the franchisee’s failure to ensure its faithful performance of and compliance with all provisions of this chapter, the franchise agreement and other applicable law, and compliance with all orders, permits and directions of the county, and the payment by the franchisee of any claims, liens, fees or taxes due the county which arise by reason of the construction, operation or maintenance of the system. The letter of credit shall provide for 30 days’ prior written notice to the county of any intention on the part of the franchisee to cancel, fail to renew or otherwise materially alter its terms. Neither the filing of a letter of credit with the county, nor the receipt of any damages recovered by the county thereunder, shall be construed to excuse unfaithful performance by the franchisee or limit the liability of the franchisee under the terms of its franchise for damages, either to the full amount of the letter of credit or otherwise.
(C) The rights reserved to the county with respect to the security fund are in addition to all other rights of the county, whether reserved by this chapter or authorized by other law or a franchise agreement, and no action, proceeding or exercise of a right with respect to such security fund or letter of credit will affect any other right the county may have.
(D) The following procedures shall apply to drawing on the security fund and letter of credit.
(1) If the franchisee fails to make timely payment to the county of any amount due as a result of a franchise, fails to make timely payment to the county of any amounts due under a franchise agreement or applicable law, fails to make timely payment to the county of any taxes due, or fails to compensate the county within ten days of written notification that such compensation is due for any damages, costs or expenses the county suffers or incurs by reason of any act or omission of the franchisee in connection with its franchise agreement or the enforcement of its franchise agreement, the county may withdraw the amount thereof, with interest and any penalties, from the security fund or from funds available under the letter of credit.
(2) Within three days of a withdrawal from the security fund or under the letter of credit, the county shall mail, by certified mail, return receipt requested, written notification of the amount, date and purpose of such withdrawal to the franchisee.
(3) If at the time of a withdrawal from the security fund and under the letter of credit by the county, the amounts available are insufficient to provide the total payment towards which the withdrawal is directed, the balance of such payment shall continue as the obligation of the franchisee to the county until it is paid.
(4) No later than 30 days after mailing of notification to the franchisee by certified mail, return receipt requested, of a withdrawal under the security fund or letter of credit, the franchisee shall deliver to the county for deposit in the security fund an amount equal to the amount so withdrawn or shall restore the letter of credit. Failure to make timely delivery of such amount to the county or to restore the letter of credit shall constitute a material violation of the franchise.
(5) Upon termination of the franchise under conditions other than those stipulating forfeiture of the security fund, the balance then remaining in the security fund shall be withdrawn by the county and paid to the franchisee within six months of such termination, provided that there is then no outstanding obligation or default on the part of the franchisee.
(E) In addition to or in lieu of a security fund or letter of credit, a franchise may require such guarantees as the county deems to be in the public interest.
(1993 Code, § 72.170) (Ord. 96-12, passed 10-16-1996)