§ 12-13. Security fund.

(A)

The franchisee shall post and keep posted with the County a cash security deposit, a letter of credit or a surety bond in a form and in an amount acceptable to the County to be used as a security fund to ensure the franchisee's faithful performance of and compliance with all terms and provisions of this chapter, the franchise agreement and other applicable law, compliance with all orders, permits and directions of the County, the payment by the franchisee of any claims, liens, fees, or taxes due the County which arise by reason of the construction, operation or maintenance of the system, and to indemnify the County against all losses that it may suffer in the event the franchisee fails to comply with any term or provision of this chapter, the franchise agreement or other applicable law. The exact amount of the security fund shall be an amount necessary to protect the public, to provide adequate incentive to the franchisee to comply with this chapter and the franchise agreement, and to enable the County to effectively enforce compliance therewith. The franchise agreement shall provide for the procedures to be followed with respect to the security fund. Such procedures shall incorporate the procedures for notice and opportunity to cure set forth in Section 12-25 herein.

(B)

The security fund shall be maintained at the amount specified in subsection A, even if amounts have to be withdrawn and replenished pursuant to subsection D.

(C)

If the franchisee fails to pay the County any compensation within the time fixed herein, fails to pay any fines, fails to repay the County within ten (10) days any damages, costs or expenses which the County is compelled to pay by reason of any act or default of the franchisee in connection with the franchise, or fails, after fifteen (15) days notice by the County of failure to comply with any provision of the franchise agreement which the County reasonably determines can be remedied by demand on the security fund, the County may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the County shall notify the franchisee of the amount and the date thereof.

(D)

Within fifteen (15) days after notice to it that any amount has been withdrawn from the security fund deposited pursuant to subsection A above, the franchisee shall pay to, or deposit with, the County a sum sufficient to restore such security fund to the amounts specified in subsection A, whatever the case may be. Failure to replenish the security fund shall subject the franchisee to penalties. However, replenishment is without prejudice to the franchisee's right under Section 12-25 to contest the validity of the County's withdrawal of money from the security fund.

(E)

The rights reserved to the County with respect to the security fund posted pursuant to this section are in addition to all other rights and remedies the County may have under this chapter, the franchise agreement, or at law or equity, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right or remedy of the County.

(F)

The portion of the security fund deposited pursuant to this section necessary to compensate the County for damages and costs sustained shall become the property of the County in the event that the franchise is canceled or terminated by reason of the default of the franchisee. The franchisee, however, shall be entitled to the return of such security fund, or portion thereof, without interest, as remains on deposit with the County at the expiration of the term of the franchise, provided that there is then no outstanding default on the part of the franchisee.

(Ord. No. 98-20, § 1, 9-15-98; Ord. No. 2001-25, § 3, 12-18-01)