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A. The grantee, concurrently with the filing of an acceptance of award of any franchise granted under this chapter, shall file with the city clerk, and at all times thereafter maintain in full force and effect for the term of such franchise or renewal thereof, at grantee's sole expense, a corporate surety bond in a company and in form and content approved by the city attorney, in the amount of three hundred thousand dollars, renewable annually; provided, that upon certification by the city engineer, construction of the entire system has been satisfactorily completed, the amount of said bond may be reduced to fifty thousand dollars for the duration of the term of the franchise. The bond, both during construction and thereafter, shall be conditioned upon the faithful performance of grantee, and upon the further condition that in the event grantee fails to comply with any one or more of the provisions of this chapter, or of any franchise issued to the grantee hereunder, there shall be recoverable by city or any other governmental entity jointly and severally from the principal and surety of such bond:
1. Any amounts due to or expended by city or such other governmental entity by reason of such failure of grantee;
2. Any damages or loss suffered by city or any such other governmental entity as a result of any such failure;
3. Interest at ten percent per year from the date due as to the amount finally determined, whether liquidated or not in amount when due;
4. Any liquidated damages provided for hereunder; and
5. In the event of litigation, the reasonable attorney's fees, court costs and other expenses of city or any such other governmental entity in the event city or such other governmental entity is the prevailing party; all up to the full amount of the bond, provided that grantee's liability shall not be limited to said amount.
B. The condition of said bond shall be continuing obligation for the duration of such franchise and any renewal thereof and thereafter until the grantee has liquidated all of its obligations that may have arisen from the acceptance of said franchise or renewal by the grantee or from its exercise of any privilege therein granted. The bond shall not be subject to any disclaimer or limitation of liability. The bond shall provide that thirty days' prior written notice of intention not to renew, cancellation, or material change, be given to the city, in which event grantee shall provide a substitute bond complying with this section in form and content approved by the city attorney.
C. Neither the provisions of this section, nor any bond accepted by the city pursuant hereto, nor any damages recovered by the city hereunder, shall be construed to excuse faithful performance by the grantee or limit the liability of the grantee under any franchise issued hereunder of for damages, either to the full amount of the bond or otherwise.
D. In lieu of said bond, grantee may provide the city with a cash deposit, letter of credit, certificate of deposit, or other form of security in the foregoing amounts, in form and content approved by the city attorney, and subject to the same terms and conditions as provided herein for the bond and further subject to the approval of the city council.
In the event grantee shall fail to comply with any one or more of the provisions of this chapter or the franchise agreement, then the city shall have the right to draw upon the security for any damages suffered by the city as a result thereof, including the full amount of any compensation, liquidated damages, indemnification, or cost of removal or abandonment of property as prescribed by Section 13.12.245 which may be in default, up to the full amount of the security deposit. Grantee shall, as a condition of this section, maintain the balance in such a security deposit so that any amounts withdrawn by the city pertinent to this section shall be replaced by the grantee within fifteen days' notice of withdrawal by the city.
E. The amount of the bond or security deposit may be increased by the city at five-year intervals by an amount not exceeding thirty percent. The increase shall be determined by the city based upon grantee's performance and changes in the consumer price index.
(Ord. 85-07-950 § 1 (part))