(A) (1) If required by the franchise agreement, within 30 days after the effective date of the franchise, the grantee shall deposit into a bank account, established by the grantor and maintain on deposit through the term of this franchise, the sum specified in the franchise agreement, as security for the faithful performance by it of all the provisions of the franchise, and compliance with all orders, permits and directions of any agency of the grantor having jurisdiction over its acts or defaults under this ordinance, and the payment by the grantee of any claims, liens, and taxes due the grantor which arise by reason of the construction, operation, or maintenance of the system.
(2) The security fund may be assessed by the grantor for purposes including, but not limited to, the following:
(a) Failure of grantee to pay grantor sums due under the terms of the franchise;
(b) Reimbursement of costs borne by the grantor to correct franchise violations not corrected by the grantee, after due notice; and
(c) Monetary remedies or damages assessed against grantee due to default or violation of franchise requirements.
(B) At the grantor’s sole option, all or some portion of the security fund may be provided in the acceptable form of an irrevocable letter of credit, in lieu of a cash deposit.
(C) Within 30 days after notice to it that any amount has been withdrawn by the grantor from the security fund pursuant to division (A) above, the grantee shall deposit a sum of money or increase the letter of credit in an amount sufficient to restore such security fund to the original amount.
(D) The security fund or letter of credit provided pursuant to this subchapter shall become the property of the grantor in the event that the franchise is revoked for cause by reason of the default of the grantee in accordance with the procedures of § 115.034. The grantee, however, shall be entitled to the return of such security fund, or portion thereof, as remains on deposit no later than 90 days after the expiration of the term of the franchise, provided that there is then no outstanding default on the part of the grantee.
(E) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor whether reserved by this chapter or authorized by law, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the grantor may have.
(Prior Code, § 115.062) (Ord. D-1485, § 6.3, passed 6-3-1985, effective 6-13-1985)