(a) Performance bond. Within 60 days of execution of a franchise agreement or competitive video service agreement, the provider shall deposit with the city a surety bond in the amount of $50,000 in a form reasonably acceptable to the city’s Director of Law (the “performance bond”). The performance bond shall be conditioned on and ensure the faithful performance by the company of all terms and conditions of this chapter and any franchise agreement or competitive video service agreement, and the payment by the provider of any claim, liens, costs, expenses and taxes due the city that arise by reason of the operation or maintenance of the facilities for the purposes described in this chapter. The performance bond shall be maintained at $50,000 during the entire term of the provider’s agreement with the city, regardless of withdrawals which may be made under this section. The rights reserved to the city with respect to the performance bond are in addition to all other rights the city may have under this chapter or any law. The provider providing such bond must be authorized to do business in the state.
(b) Procedure for notice of breach and imposition of liquidated damages payments.
(1) Whenever the city finds that the provider has allegedly violated one or more terms, conditions or provisions of this chapter of its respective agreement with the city, a written notice shall be given to the provider. The written notice shall describe in reasonable detail the alleged breach so as to afford the provider an opportunity to remedy the violation(s). The provider shall have 30 days subsequent to receipt of the breach notice in which to correct the violation(s) before the city may assess liquidated damages against the provider and/or assert a claim against the performance bond. The time for the provider to correct any alleged violations shall be extended by the city if more than 30 days are required to correct the alleged violation(s); provided, however, the provider must commence the corrective action within 15 days of receipt of the notice and thereafter use reasonable diligence, as determined by the city, to correct the violation(s).
(2) Within 15 days after receipt of written notice of the alleged violation(s), the provider may request to be heard by the city on the issue of the violation(s) alleged in the notice. The provider’s request for a hearing on the alleged violation(s) shall be in writing and shall specify with particularity the matters the provider disputes. Upon receipt of such request, the city shall notify the provider of the date, time and place of such hearing, which shall not be scheduled for a date that is less than 30 days from the date of the provider’s request for a hearing. At the hearing, the provider shall be permitted to furnish evidence that:
A. Demonstrates that corrective action has been, or is being actively and expeditiously pursued, to remedy the violation or noncompliance;
B. Rebuts the alleged violation or noncompliance; and/or
C. Disputes the amount.
(3) Upon completion of the hearing, the city shall issue a written decision, including findings of fact, determining whether the provider is in violation of this chapter and/or its agreement. If the city determines that the provider is in violation of this chapter and/or its agreement following hearing, or if the provider fails to correct the violation and fails to request a hearing, then the city may assess liquidated damages of $300,000 per day against the provider, which shall accrue from the date on which the city first provided the provider with written notice of the violation(s), and/or may draw against the performance bond for the liquidated damages.
(4) The city shall stay or waive the imposition of any liquidated damages set forth above upon a finding that any failure or delay is a result of an act of God or due to circumstances beyond the reasonable control of the provider.
(5) The provider shall not be excused from complying with any of the terms or conditions of this chapter or its agreement by any failure of the city upon any one or more occasions to insist upon or to seek compliance with any such terms or conditions.
(Ord. 2007-106, passed 5-21-2007)