(a) Each Grantee shall provide insurance as specified in the Franchise Agreement.
(b) With respect to the initial construction of a Cable System, or any significant project to upgrade or rebuild more than fifty percent (50%) of a Cable System, Grantee shall provide to Grantor a construction performance and construction completion bond or, at Grantee's option, a letter of credit (hereinafter referred to as the "Construction Completion Bond") with a surety or financial institution in such form as reasonably approved by the Grantor's Law Director, in an amount equal to ten percent (10%) of the applicable estimated construction cost. Such amount, however, shall not exceed two hundred thousand dollars ($200,000). With respect to initial construction of the Cable System or the upgrade or rebuild project, when regular subscriber service is available to seventy-five percent (75%) of occupied dwelling units, the amount of the bond shall be reduced by fifty percent (50%) of the original amount. On the one-year anniversary of the initial construction of the Cable System or the upgrade or rebuild project, as the case may be, the bond may be canceled.
(c) On or before the effective date of any Franchise Agreement, the Grantee shall furnish and file with the Grantor a form of permanent security in the amount of fifty thousand dollars ($50,000) for the performance of the terms and conditions of the Franchise (the “Security Fund”). The form of security may be, at Grantee's option, a direct deposit with the Grantor in cash, an irrevocable and unconditional letter of credit issued by a financial institution doing business in the State of Ohio in a form approved by the Law Director, or a performance and penalty bond written by a corporate surety authorized to do business in the State of Ohio and acceptable to the Grantor. Grantee shall maintain the full value of the Security Fund as a continuing obligation during the entire term of the Franchise Agreement and thereafter until the Grantee shall have satisfied in full any and all obligations to the Grantor which arise out of or pertain to the Franchise, regardless of claims against the security fund made by or paid to the Grantor. The Security Fund shall insure the faithful performance of Grantee of all terms and conditions of this chapter and the Franchise Agreement and the payment by Grantee of any penalty or liquidated damages assessed thereunder and any claim, lien, costs, expenses and taxes due the Grantor which arise by reason of the construction, operation or maintenance of the Cable System and including provision of any Institutional Network. The Security Fund shall be maintained at the sole expense of the Grantee. The rights reserved to the Grantor with respect to the Security Fund are in addition to all other rights the Grantor may have under this chapter, the Franchise Agreement, or any law.
(d) A Security Fund issued in the form of a performance and penalty bond shall, among other things, contain language substantially the same as the following:
“This Performance and Penalty Bond is executed to comply with the terms of that certain Franchise Agreement (the “Franchise Agreement”) dated , 199 , by and between the City of Strongsville, Ohio (the “City”) and (the “Grantee”) pursuant to which a franchise has been granted to Grantee to use the public streets and places within the City's jurisdiction for the purpose of providing certain communication services within the City. This Bond guarantees that the Grantee will faithfully perform well, and truly observe and fulfill each term and condition of the Franchise Agreement, and in the event of Default by Grantee (as defined in the Franchise Agreement) the amount of this Bond shall be recoverable from the Principal and/or Surety by the City for all moneys and penalties due to the City under the Franchise Agreement and ordinances of the City, and all damages proximately resulting from the failure of the Grantee to well and faithfully observe and perform any provision of the Franchise Agreement, up to a maximum of fifty thousand dollars ($50,000).”
The Performance and Penalty Bond shall further contain the following endorsement:
“It is hereby understood and agreed that this bond may not be canceled without the consent of the City of Strongsville, Ohio until sixty (60) days after receipt by the City by registered mail, return receipt requested, of a written notice of intent to cancel or not to renew.”
(e) The Director of Finance of the Grantor may make immediate withdrawal from or demand for payment on the Security Fund if the Grantee fails to pay the Grantor any moneys due under the provisions of this chapter or the Franchise Agreement within the time(s) fixed for such payment, provided that, where a notice requirement and/or an administrative remedy is provided to a Grantee under the provisions of this chapter, such withdrawal or demand shall not be made until after the Grantee has been given such notice and/or exhausted or failed in a timely manner to pursue such administrative remedy.
Those moneys due include, but are not limited to, the following:
(1) Any taxes owed by the Grantee to the Grantor which are due and unpaid;
(2) Any damages, costs or expenses which the Grantor shall be compelled to pay by reason of any act, omission or default of the Grantee;
(3) Any sums which the Grantor reasonably determines are necessary to remedy a failure by the Grantee to comply with any provision of this chapter or the Franchise Agreement;
(4) Any sums assessed as a penalty or liquidated damages pursuant to the provisions of this chapter or the Franchise Agreement; and/or
(5) Any sums which the Grantor determines are reasonably necessary to complete the design and construction of an Institutional Network which the Grantee has failed to complete in accordance with specifications and time requirements set forth in a Franchise Agreement.
Upon such a withdrawal or payment from the Security Fund, the Finance Director shall notify the Grantee in writing of the amount and date thereof. In the event the Security Fund is insufficient to pay the Grantor the moneys due, the Grantee shall be and remain obligated to immediately pay to the Grantor the amount of the insufficiency.
(Ord. 1998-268. Passed 12-21-98.)