§ 78-292. Security fund.

(a)

Prior to a franchise becoming effective, the city shall require a franchisee to post with the city a cash security deposit to be used as a security fund to ensure the franchisee's faithful performance of and compliance with all provisions of this article, the franchise agreement, and other applicable law, and compliance with all orders, permits and directions of the city, and the payment by the franchisee of any claims, liens, fees, or taxes due the city which arise by reason of the construction, operation or maintenance of the cable system. The amount of the security fund shall be the amount that the city determines, under circumstances existing at the time, that is necessary to protect the public, to provide adequate incentive to the franchisee to comply with this article and the franchise agreement, and to enable the city to effectively enforce compliance therewith. The franchise agreement shall provide for the amount and the procedures to be followed with respect to the security fund.

(b)

In any franchise agreement entered into pursuant to this article, the city may agree in a franchise agreement that a franchisee may, in lieu of the security fund, file and maintain with the city a bond with an acceptable surety or an irrevocable letter of credit in the amount of no less than $200,000.00 to indemnify the city against any losses it may suffer in the event the franchisee fails to comply with one or more of the provisions of its franchise. Said bond shall be obtained at the sole expense of the franchisee and remain in effect for the full term of the franchise plus, at minimum, an additional six months thereafter. The franchisee and its surety shall be jointly and severally liable under the terms of the bond for any damages or loss suffered by the city as a result of the franchisee's nonperformance, including the full amount of any compensation, indemnification or cost of removal of any property of the franchisee in the event of default, a reasonable allowance for attorneys' fees and costs, up to the full amount of the bond. Any bond shall provide for 30 days' prior written notice to the city of any intention on the part of the franchisee to cancel, fail to renew, or otherwise materially alter its terms. Neither the filing of an indemnity bond with city, nor the receipt of any damages recovered by the city thereunder, shall be construed to excuse faithful performance by the franchisee or limit the liability of the franchisee under the terms of its franchise for damages, either to the full amount of the bond or otherwise.

(c)

The rights reserved to the city with respect to the security fund, indemnity bond or letter of credit are in addition to all other rights of the city, whether reserved by this article or authorized by other law or the franchise agreement, and no action, proceeding or exercise of a right with respect to such security fund or indemnity bond will affect any other right the city may have.

(Ord. No. 3806-04, § I, 10-25-2004)