Letter of credit

(a)

Within ten (10) days after the award of a franchise, the grantee shall deposit with the city a letter of credit from a financial institution in the amount of one hundred thousand dollars ($100,000.00). The form and content of the letter of credit shall be approved by the city attorney. The letter of credit shall be used to ensure the faithful performance by the grantee of all provisions of the franchise and this chapter and compliance with all orders, permits and directions of any agency, commission, board, department, division or office of the city having jurisdiction over its acts or defaults under the franchise or this chapter and the payment by the grantee of any penalties, claims, liens and taxes due the city, the designee, or other governmental entities which arise by reason of the construction, operation or maintenance of the system.

(b)

If the grantee fails to pay to the city any compensation due the city within the time fixed herein or fails, after ten (10) days' notice, to pay to the city any taxes due and unpaid or fails to repay the city within ten (10) days any damages, costs or expenses which the city is compelled to pay by reason of any act or default of the grantee in connection with the franchise or fails, after three (3) days' notice of the failure by the grantee, to comply with any provision of the franchise or this chapter which the city reasonably determines can be remedied by demand on the letter of credit, the city may immediately request payment of the amount thereof, with interest and any penalties, from the letter of credit. Upon request for payment, the city shall notify the grantee of the amount and date thereof.

(c)

The letter of credit shall be maintained at one hundred thousand dollars ($100,000.00) during the entire term of the franchise. If amounts are withdrawn pursuant to subsection (a) or (b), the grantee, if necessary, shall take any action required to maintain the letter of credit at the full amount within three (3) days of the notification by the city of its withdrawal against the letter of credit.

(d)

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

(e)

The letter of credit shall contain the following endorsement: "It is hereby understood and agreed that this letter of credit shall not be canceled by the surety nor the intention not to renew be stated by the surety until thirty (30) days after receipt by the city, by registered mail, of a written notice of such intention to cancel or not to renew."

(Code 1971, § 52-44; Ord. No. 7864-A, § 1(Art. IV, § 14), 1-28-82)