(a) Commencing with the effective date of the franchise, the grantee shall post a letter of credit or other financial security with the Village, in a form approved by the Village Attorney, in the sum of ten thousand dollars ($10,000) as a cash escrow security fund for the faithful performance by the grantee of all the provisions of the franchise agreement; the grantee's compliance with all orders, permits and directions of the grantor having jurisdiction over the acts and defaults under the franchise; and the payment by the grantor of any claims, liens and taxes due the grantor which arise out of the construction, operation or maintenance of the system. After the initial construction of the system is completed, the Village shall, upon the request of the grantee, reduce the deposit to five thousand dollars ($5,000) and return to the grantee any overages existing at that time. At the end of two years after such completion date, the grantee may petition the Village for a reduction of such funds, and if the Village finds that the performance of the grantee has been such as to make it reasonably unnecessary to retain such funds for the purposes specified in this section, the Village may permit the requested reduction or any portion thereof. The remaining sum shall stand during the term of such franchise as the security fund in full compliance with this section.
(Ord. 605. Passed 12-13-82.)
(b) The sum shall be maintained on deposit throughout the term of the franchise on a quarterly basis, in an account bearing the maximum interest permitted by law, which interest shall be payable to the grantee. The grantee may withdraw the interest on the security fund at any time. However, during the existence of the security fund, the grantee must agree not to withdraw any part of the principal amount required at that time as the security fund. The amount of the security fund shall be subject in all respects to the provisions of Section 814.10.
(c) If the grantee fails, after ten days notice, to pay to the Village any tax due and unpaid or any lien, claim, damage or cost or expense which the Village may be compelled to pay for reason of any act or default of the grantee in connection with the franchise, or fails, after thirty days notice of such failure, to comply with any provision of the franchise which the Village determines can be remedied by the expenditure of the security, the Village may immediately thereafter withdraw the amount thereof from the security fund. In such event, the grantor shall notify the grantee of the amount withdrawn and the amount necessarily required to replenish the security fund.
(d) The security fund, once established, shall become the property of the grantor if the franchise is cancelled by reason of the default of the grantee or revoked for cause.
(Ord. 593. Passed 7-12-82.)