(a) No franchise shall be valid or effective until and unless the city obtains an adequate indemnity from the franchisee. The indemnity shall:
(1) Release the city from and against any and all liability and responsibility in or arising out of the construction, operation, maintenance or repair of the cable communications system. Each franchisee must further agree not to sue or seek any money or damages from the city in connection with the grant of that franchisee's franchise and also agree to abide by the city's laws.
(2) Indemnify and hold harmless the city, its elected and appointed officers, agents, and employees, from and against any and all claims, demands, or causes of action of any kind or nature, and the resulting losses, costs, expenses, reasonable attorneys' fees, liabilities, damages, orders, judgments, or decrees sustained by the city or any third party arising out of, or by reason of, or resulting from or of the acts, errors, or omissions of the franchisee, or its agents, contractors, subcontractors or employees related to or in any way arising out of the construction, operation, maintenance or repair of the system.
(b) A franchisee (or those acting on its behalf) shall not commence or cause the commencement of the construction, operation, maintenance or repair of the system without obtaining and maintaining insurance in amounts and of a type satisfactory to the city. The required insurance must be obtained and maintained for the entire period the franchisee owns, controls or manages facilities in the public rights-of-way. If the franchisee, its agents, contractors, and subcontractors do not have the required insurance, the cable coordinator may order such entities to stop operations until the insurance is obtained and approved.
(c) Certificates of insurance, reflecting evidence of the required insurance and naming the city as an additional insured, and other proofs as the city may find necessary, shall be filed with the city Clerk. For any person issued a franchise after the effective date of this chapter, the certificates and other required proofs shall be filed within thirty days of the issuance of a franchise, once a year thereafter, and whenever there is any change in coverage. For entities that have facilities in the public rights-of-way as of the effective date of this chapter, the certificates shall be filed within sixty days of the effective date of this chapter, annually thereafter, and whenever there is any change in coverage, unless a pre-existing franchise provides for the filing of certificates in a different manner.
(d) Certificates shall contain a provision that coverage afforded under these policies will not be canceled until at least thirty days' prior written notice has been given to the city. Only companies authorized to provide insurance coverage under the laws of the state of California must issue policies. Financial ratings must be no less than "A:VII" in the latest edition of Best's Key Rating Guide, published by A.M. Best Guide.
(e) A franchisee (and those acting on its behalf to construct or operate the system) shall obtain and maintain the following minimum insurance. The city shall be named as an additional insured on the general liability and automotive policies. Those insurance policies shall be primary and contain a cross-liability clause.
(1) Commercial general liability insurance to cover liability bodily injury and property damage. Exposures to be covered are premises, operations, products/completed operations, and certain contracts. Coverage must be written on an occurrence basis, with the following limits of liability:
Bodily Injury
1. Each Occurrence $1,000,000
2. Annual Aggregate $3,000,000
Property Damage
1. Each Occurrence $1,000,000
2. Annual Aggregate $3,000,000
Personal Injury
1. Annual Aggregate $3,000,000
Completed operations and products liability shall be maintained for two years after the termination of the franchise or completion of the work for the cable communications system owner or operator (in the case of a contractor or subcontractor).
Property damage liability insurance shall include coverage for the following hazards:
X - Explosion
C - Collapse
U - Underground.
(2) Workers' compensation insurance shall be obtained and maintained during the life of the franchise to comply with statutory limits for all employees, and in the case any work is sublet, each franchisee shall require its contractors and subcontractors similarly to provide workers' compensation insurance for all of the latter's employees unless such employees are covered by the protection afforded by the franchisee. Each franchisee and its agents, contractors and subcontractors shall obtain and maintain during the life of this policy employers liability insurance. The following minimum limits must be maintained:
Workers' Compensation
Statutory
Employer's Liability
$500,000 per Occurrence
(3) Comprehensive Auto Liability.
Bodily Injury
1. Each Occurrence $ 1,000,000
2. Annual Aggregate $ 3,000,000
Property Damage
1. Each Occurrence $ 1,000,000
2. Annual Aggregate $ 3,000,000
Coverage shall include owned, hired, and non-owned vehicles.
(f) Every franchisee shall obtain and maintain a performance bond to ensure the faithful performance of its responsibilities under this chapter and any franchise. The amount of the performance and payment bonds shall be set by the cable coordinator or may be set in a franchise ordinance in light of the nature of the work to be performed, but shall not be less than ten percent of the estimated cost of constructing or (in the case of existing systems) upgrading the system. The bonds are not in lieu of any additional bonds that may be required through the permitting process. The bond shall be in a form acceptable to the city attorney. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise.
(g) Every franchisee shall establish and maintain a security fund in cash or provide the city an irrevocable letter of credit in the amount of $100,000 to secure the payment of fees owed, to secure any other performance promised in a franchise, and to pay any taxes, fees or liens owed to the city. The letter of credit shall be in a form and with an institution acceptable to the director of administrative services and in a form acceptable to the city attorney. If the city should draw upon the security fund or the letter of credit, the franchisee shall, within fourteen days, restore the security fund or the letter of credit to the required full amount. This security fund or letter of credit may be waived or reduced by the city for a franchisee where the city determines in its discretion that a particular franchisee's operations are sufficiently limited that a security fund or a letter of credit is not necessary to secure the required performance. The city may from time to time require a franchisee to change the amount of the required security fund and letter of credit to reflect changed risks to the city and to the public, including delinquencies in taxes or other payments to the city. The security fund or the letter of credit must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise.
(Ord. 4636 § 7, 2000)