1. Within 60 days after the effective date of the franchise agreement, and in lieu of a security fund, the Grantee shall establish and provide to the City a corporate surety bond (the “surety bond”) in a form reasonably acceptable to the City Attorney, in the amount of $12,000 as security for the faithful performance by Grantee of the provisions of the franchise agreement. Grantee agrees that the surety bond may be assessed and drawn upon in part or in total by the City in accordance with subsection 2 of this section and the terms of the surety bond. The surety bond shall be maintained at the $12,000 level until such time as the City and the Grantee mutually agree to terminate the surety bond. In addition, during any review session pursuant to Section 112.16 of this chapter, the City and Grantee can mutually agree to terminate the surety bond. If the surety bond is reduced to $6,000, the Grantee agrees to restore the surety bond to its original level within 30 days after any amount has been paid to the City from the surety bond; provided, however, the maximum amount Grantee shall be obligated to restore shall be $18,000 during the life of the franchise.
2. The City may draw on the surety bond to ensure the Grantee’s faithful performance of and compliance with the franchise agreement. Should the Grantee fail to comply with any provisions of this chapter, which failure the City determines can be remedied by an expenditure from the surety bond, the City may, after fifteen (15) calendar days’ written notice to the Grantee, and after giving Grantee an opportunity cure during said 15 days, or such time as reasonably necessary to cure the default, withdraw an amount equal to $100.00 per day for each day the default is not cured, or in the alternative, withdraw an amount equal to the actual expense necessary to cure the default.
3. If the surety bond is assessed in accordance with subsection 2 of this section and the terms of the surety bond, Grantee agrees not to withhold these funds from the City or refuse to restore the surety bond if required pursuant to subsection 1 or attempt through litigation to prevent or inhibit the City from taking such funds. Grantee’s recourse, in the event Grantee believes any taking of funds from the surety bond is improper, shall be through legal action, after the surety bond has been drawn upon.
4. If the City’s action or taking is found to be improper by any court or agency of competent jurisdiction, Grantee shall be entitled to a refund of the funds plus interest.
5. The collection by the City of funds from the surety bond shall not affect any other right or remedy available to the City, nor shall any act or failure to act by the City pursuant to this section be deemed a waiver of any right of the City pursuant to this chapter or otherwise.