§ 6.5-177. Performance and completion security.

(a)

A service provider or system owner or operator granted a franchise under this article shall provide to the city a performance bond or other security executed by a surety licensed to do business in the state, or if deemed necessary by the city council a cash deposit or irrevocable letter of credit in the name of the city, in an amount totaling at least twenty-five thousand dollars ($25,000.00) and not exceeding one hundred thousand dollars ($100,000.00). The purpose of the security is to ensure performance and compliance with the requirements and provisions of this article and may be called or drawn upon, as appropriate, to recompense the city for losses, damages and fully-allocated costs incurred by the city as a result of the failure to comply with this article, up to the monetary limits of the security. If the city draws on a performance bond, cash deposit or irrevocable letter of credit as a result of a service provider's or system owner's or operator's failure to fully and timely discharge its obligations under this article, then the service provider or system owner or operator shall, upon written notice by the city, be required to replenish the security to the previous level within thirty (30) days of the withdrawal, call or draw down.

(b)

The specific amount of the performance security shall be determined based upon, but shall not be limited to, such matters as the history of performance in the city or in other municipalities.

(c)

At the sole discretion of the council, upon request by the service provider or system owner or operator, the performance security may reduced for good cause shown, such as for a record of full compliance with this article and a franchise over three (3) years. However, the burden of proving the appropriateness of a reduction shall rest solely with the petitioner.

(d)

The performance bond or other security shall be in force at all times, unless relief is granted or a schedule of reduction is detailed in a separate agreement executed between the service provider or system owner or operator and the city council.

(e)

In addition to the performance security required in subsection (a) of this section, primarily based upon its record of performance and operation in the city and other municipalities, a service provider or system owner or operator may be required to furnish to the city a construction or completion bond or other approved security prior to the time it commences any construction, upgrade, rebuild, or repair/maintenance project that has a capital construction cost or outlay exceeding one hundred thousand dollars ($100,000.00) or that involves crossing a street or other public way or where the amount of system involved in the project exceeds one quarter (¼) mile in length. In determining the cost, the cost of the entire project shall be used, and a service provider or system owner or operator shall not avoid the requirements of this section by separating or segregating the project into smaller component parts or portions, such as listing geographical sections of the city as separate projects, whether or not they are to be done simultaneously or consecutively. The amount of the bond or other security shall equal at least seventy-five (75) per cent of the projected capital cost. Any component parts or portions of a project subject to the requirements of this subsection that are undertaken within a twelve (12) month period shall be deemed the same project.

(f)

To minimize and control the disruption of the normal and usual use of the streets and rights-of-way in the city and any property adjoining or adjacent to such, any construction or completion bond or other permitted form of security shall expressly guarantee that a service provider or system owner or operator will in a timely manner abide by the schedule for the project as approved by the city council or administrator and that the service provider or system owner or operator will complete the project in a timely manner.

(g)

If the city council draws on a completion bond or other permitted form of security as a result of a service provider's or system owner's or operator's failure to timely and fully discharge its obligations and complete any project subject to this subsection, then the affected service provider or system owner or operator shall be required to replenish the completion and performance bond or security to the previous level within thirty (30) days of the date of the draw down.

(h)

In lieu of a performance bond and/or a construction or completion bond, at its sole discretion the city council may accept alternative forms of security, including a written guarantee of a service provider or system owner or operator pledging the full faith and credit of the affected service provider's or system owner's or operator's ultimate parent.

(Ord. No. A-177, § 27, 3-13-2000)