§ 34-7. Bond, security fund, and liquidated damages.

(a)

Performance bond. Upon being granted a franchise, a grantee shall file with the chief financial officer of the city and shall thereafter during the period of the franchise maintain in full force and effect a corporate performance bond or other adequate surety agreement acceptable to the city, in its sole discretion, in the amount of $250,000.00 to guarantee grantee's performance of all obligations under the franchise. The bond shall be so conditioned that in the event that grantee, other than for reasons beyond grantee's control, shall fail to meet the yearly time schedule for the installation of all necessary equipment, as required herein, the city may call upon the surety to complete the installation work scheduled for that year.

(b)

Security fund.

(1)

Initial deposit. Immediately upon execution of a franchise, the grantee shall deposit with the chief financial officer (or upon direction to a designated depository as provided in the next succeeding paragraph) of the city, and maintain on deposit throughout the term of the franchise, the sum of $35,000.00 as security for the faithful performance by the grantee of all the provisions of the franchise, compliance with all orders, permits and directions of any agency of the city having jurisdiction over the grantee's acts or defaults under the franchise, and the payment by the grantee of any claims, liens and taxes due the city which arise by reason of the construction, ownership, operation or maintenance of the cable system.

The city shall cause the deposit of the security fund in an interest-bearing account, payable, in whole or in part, solely to the city only upon demand. Interest on the security fund, as accrued, shall be withdrawn and paid to the grantee semi-annually by the city; provided that, until paid, all such accrued interest shall be subject to withdrawal by the city for the same purposes for which the security fund is subject to withdrawal.

(2)

Withdrawal from security fund. If the grantee fails to pay the city any compensation within the time fixed herein; or, fails, after ten days' notice to pay to the city any taxes due and unpaid; or fails to repay to the city, within such ten days, any damages, costs or expenses which the city shall be compelled to pay by reason of any act or default of the grantee in connection with the franchise or this chapter; or fails to pay any liquidated damages after three days from receipt of a decision of an arbitration panel confirming said liquidated damages pursuant to section 34-7(c)(4) (below); the chief financial officer of the city may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the chief financial officer of the city shall notify the grantee of the amount and the date thereof.

(3)

Replenishment of security fund. Within 20 days after notice to it that any amount has been withdrawn pursuant to section 34-7(b)(2) above, from the security fund deposited pursuant to section 34-7(b)(1) above, the grantee shall pay to, or deposit with, the chief financial officer of the city, a sum of money sufficient to restore such security fund to the original amount of $35,000.00.

(4)

Disposition of security fund. Amounts received by the city from the grantee, whether directly paid by the grantee to the city or withdrawn from the security fund by the city, may be used by the city for any purposes it deems fit. The grantee shall be entitled to the return of the security fund, or such portion thereof as remains on deposit with the chief financial officer of the city, at the expiration of the term of the franchise, provided that there is no outstanding default on the part of the grantee. The city shall return the balance of the security fund to the grantee within 90 days of the expiration of the franchise.

(c)

Liquidated damages.

(1)

Determination and assessment. Upon a determination by the city that the grantee has violated any of the material provisions of the franchise, or has, after reasonable written notice from the city, repeatedly failed to comply with other provisions of the franchise or this cable ordinance, the city shall direct the grantee by written notice sent certified mail, return receipt requested, to correct such violation within a time and manner and upon such terms as are reasonable. Upon failure of the grantee to correct the violation within the reasonable time and upon the reasonable terms as the city may direct, the city may assess the grantee and the grantee agrees to pay to the city, liquidated damages in accordance with the schedule of liquidated damages set forth in section 34-7(c)(4). Because the grantee's failure to comply with certain material provisions of the franchise and this cable ordinance will result in injury to the city, its residents and/or to subscribers, and because it will be difficult to estimate the extent of such injury, the city and the grantee hereby agree that the liquidated damages stated herein represent both parties' best estimate of the damage resulting from the specified injury. Such assessment shall not constitute a waiver by the city of any other right or remedy it may have under this chapter, or under applicable law, including, without limitation, its right to recover from the grantee and its sureties such additional damages, losses, costs and expenses as may have been suffered or incurred by the city by reason of, or arising out of, such breach of this chapter.

(2)

Notification. Upon the city's assessment of liquidated damages pursuant to section 34-7(c)(1) above, written notice of such assessment shall be sent to the grantee by certified mail, return receipt requested, with a concise statement of the reason(s) therefor.

(3)

Arbitration. Within ten days after the grantee has received a notice from the city pursuant to section 34-7(c)(2) above, the grantee may request arbitration. Pendency of the arbitration procedure shall suspend payment of liquidated damages until three days after mailing to the grantee by first-class mail of the decision of the arbitration panel confirming said liquidated damages in whole or in part. The decision of the arbitration panel shall be final and binding upon the parties hereto.

Arbitrable matters shall be determined by a panel of three arbitrators. One arbitrator shall be appointed by the city, one by the grantee, and the third by the first two arbitrators appointed pursuant to this section. The expenses of the arbitration, including the fees of the arbitrators, shall be borne by the parties in such manner as the arbitrators may provide in their award. The determination of a majority of the arbitrators shall be binding on the parties.

(4)

Schedule of liquidated damages. Pursuant to section 34-7(c)(1) above, the following liquidated damages shall be chargeable to the security fund on a per day basis. The determination of the date of commencement of the liquidated damages shall be determined at the time of the decision by the arbitration panel:

a.

For failure to complete construction or extend service in accordance with franchise for reasons not beyond grantee's control: $1,000.00/day for each day the violation continues;

b.

For failure to make franchise fee payments as required: $375.00/day for each day the violation continues;

c.

For failure to comply with provisions of the franchise for public, educational and government access: $250.00/day for each day the violation continues;

d.

For failure to comply with provisions of the franchise for the municipal network for reasons not beyond grantee's control: $500.00/day for each day the violation continues;

e.

For violation of consumer protection requirements and customer service standards required by the franchise, this chapter, or by FCC regulation: $250.00/day per standard violated;

f.

For violation of the equal employment opportunity and equal business opportunity requirements of the franchise and this chapter: $250.00/day for each day the violation continues; and

g.

For violation of other material provisions of the franchise or this chapter: $250.00/day for each day the violation continues.

No damages shall be chargeable for violations which are minor, isolated, trivial or de minimis in nature, or which occur as a result of force majeure. As used herein the term "force majeure" shall mean, without limitation, the following: acts of God; strikes, orders of any kind of the city, of the government of the United States of America or the state or any of their respective departments, agencies or officials, or any civil or military authority; insurrections, riots; epidemics; landslides; lightning; earthquakes; fire; storms; floods; washouts; droughts; arrests; restraints of government and people; civil disturbances; explosions; partial or entire failure or unavailability of utilities; or any other cause or event not reasonably within the control of the franchisee (specifically, not including the availability of funding from any financing source).

(Ord. No. 2009-51.1(94-O-1777), § 7.0, 11-28-94)