(a) Construction bond. Prior to the commencement of any construction, a construction permittee, shall deposit with the Director an irrevocable, unconditional letter of credit and/or surety bond in an amount determined by the Director to be appropriate based upon fair and reasonable criteria. Unless a construction default, problem or deficiency involves an emergency or endangers the safety of the general public, the Director shall serve written notice to the construction permittee detailing the construction default, problem, or deficiency. If the Director determines that correction or repair of the construction default, problem, or deficiency has not occurred or has not been substantially initiated within ten calendar days after the date following service and notification and detailing the construction default, problem, or deficiency, then the city may attach the letter of credit or surety bond. Upon attachment, written notice shall be served on the construction permittee by the Director.
(b) Removal bond. Upon issuance of a right-of-way occupancy permit and continuously thereafter, and until 120 days after a permittee's facilities have been removed from the right-of-way, (unless the Director notifies the permittee that a reasonably longer period shall apply), a permittee shall deposit with the Director and maintain an irrevocable, unconditional letter of credit or surety bond in an amount equal to or greater than $100,000; the Director shall make all reasonable efforts to allow permittee a period of five calendar days after serving notification in writing to correct or repair any default, problem or deficiency prior to the Director attachment of the letter of credit or surety bond regarding the removal of facilities. Upon attachment, written notice shall be provided to the permittee by the Director.
(c) Blanket bond. In lieu of the construction bond required by division (a) of this section and the removal bond required by division (b) of this section, permittee may deposit with the Director of Public Works an irrevocable, unconditional letter of credit and/or surety bond in the amount of $5,000,000. Unless a construction default, problem, or deficiency involves an emergency or endangers the safety of the general public, the Director shall make all reasonable effort to allow permittee a period of five calendar days after sending notification in writing to correct or repair any default, problem or deficiency prior to Director attachment of the letter of credit or surety bond.
(d) Self bonding. In lieu of the construction bond required by division (a) of this section, the removal bond required by division (b) of this section and the blanket bond required by division (c) of this section, those permittees maintaining a book value in excess of $50,000,000 may submit a statement to the Director requesting to self-bond. If approval to self-bond is granted, a permittee shall assure the city that such self-bonding shall provide the city with no less protection and security than would have been afforded to the city by a third party surety providing permittee with the types and amounts of bonds detailed in the above named sections. This statement shall include:
(1) Audited financial statements for the previous year;
(2) A description of the applicant's self-bonding program; and,
(3) Other applicable and pertinent information as reasonably requested by the Director.
(e) Purposes. The bonds required by this section, and any self-bonding to the extent it has been permitted, shall serve as security for:
(1) The faithful performance by the permittee of all terms, conditions, and obligations of this chapter;
(2) Any expenditure, damage, or loss incurred by the city occasioned by the permittee or permittee's violation of this chapter or its failure to comply with all rules, regulations, orders, permits and other directives of the city issued pursuant to this chapter;
(3) The payment of all compensation due to the city, including permit fees;
(4) The payment of premiums (if any) for the liability insurance required pursuant to this chapter;
(5) The removal of facilities from the right-of-way pursuant to this chapter;
(6) The payment to the city of any amounts for which the permittee is liable that are not paid by its insurance or other surety; and,
(7) The payment of any other amounts which become due to the city pursuant to this chapter or the law.
(f) Form. The bond documents required by this section and any replacement bond documents shall contain the following endorsement: "It is hereby understood and agreed that this bond may not be canceled or not renewed by the surety nor the intention to cancel or not to renew be stated by the surety until ninety (90) days after completion of Construction of the Facilities and, notwithstanding the foregoing, shall in no case be canceled or not renewed by the surety until at least ninety (90) days' written notice to city of surety's intention to cancel or not renew this bond."
(Ord. 14-2018, passed 9-4-2018)