§ 114.14 PROTECTION OF CITY AND RESIDENTS.

(A) Indemnity required . No franchise shall be valid or effective until and unless the city obtains an adequate indemnity from the franchisee. The indemnity must:

(1) Release the city from and against any and all loss, damage, expense, cost (without limitation the cost of litigation) liability and responsibility in or arising out of the construction, operation or maintenance of the cable communications system. Each cable communications system operator must further agree not to sue or seek any money or damages from the city in connection with the above mentioned matters.

(2) Indemnify, hold harmless, and defend the city, its elected and appointed officers, agents, and employees, from and against any and all liability, loss, damage, cost, claims, demands or causes of action of any kind or nature, and the resulting losses, costs, expenses, reasonable attorneys' fees, liabilities, damages, orders, judgments or decrees sustained by the city or any third party arising out of, or by reason of, or resulting from or of the acts, errors or omissions of the cable communications system operator or its agents, independent contractors or employees related to or in any way arising out of the construction, operation or repair of the system.

(3) Provide that the covenants and representations relating to the release, indemnification, and hold harmless provision shall survive the term of the franchise or other authorization and continue in full force and effect as to the party's responsibility to indemnify.

(B) Insurance required. A franchisee (or those acting on its behalf) shall not commence construction or operation of the system without obtaining insurance in amounts and of a type reasonably satisfactory to the city. The required insurance must be obtained and maintained for the entire period the franchisee has facilities in the public rights-of-way. If the franchisee, its contractors, or subcontractors do not have the required insurance, the city may order such entities to stop operations until the insurance is obtained and approved.

(C) Proof . Certificates of insurance and endorsements, reflecting evidence of the required insurance and naming the city as an additional insured, and other proofs as the city may find reasonably necessary, shall be filed with the city. For persons issued franchises after the effective date of this chapter, certificates and other required proofs shall be filed within 30 days of the issuance of a franchise, prior to the commencement of construction, once a year thereafter, and whenever there is any change in coverage. For entities that have facilities in the public rights-of-way as of the effective date of this chapter, the certificate and endorsements shall be filed within 60 days of the effective date of this chapter, annually thereafter, and whenever there is any change in coverage, unless a pre-existing franchise provides for filing of certificates and/or endorsements in a different manner. In the event

e. For entities that have facilities in the public rights-of-way as of the effective date of this chapter, the certificate and endorsements shall be filed within 60 days of the effective date of this chapter, annually thereafter, and whenever there is any change in coverage, unless a pre-existing franchise provides for filing of certificates and/or endorsements in a different manner. In the event

that the insurance certificate and/or endorsements provided indicates that the insurance shall terminate or lapse during the term of the franchise or license, then in that event, the cable communications system operator shall furnish, at least 30 days prior to the expiration of the date of such insurance, a renewed certificate of insurance and endorsement as proof that equal and like coverage has been or will be obtained prior to any such lapse or termination during the balance of the franchise or license under which the cable communications system operates.

(D) Certificate contents . All certificates and/or endorsements shall contain a provision that coverages afforded under these policies will not be canceled until at least 30 days' prior written notice has been given to the city. Policies shall be issued by companies authorized to do business under the laws of the State of California. Financial ratings of the insurer shall be no less than “A” VII or better in the latest edition of “Best's Key Rating Guide”, published by A.M. Best Guide.

(E) Insurance amounts . A cable communications system operator (and those acting on its behalf to construct or operate the system) shall maintain the following minimum insurance. The city shall be named as an additional insured by endorsement on the general liability and automotive policies; those insurance policies shall be primary and contain a cross-liability clause.

(1) (a) Comprehensive general liability insurance to cover liability, bodily injury, and property damage. Exposures to be covered are: premises, operations, products/completed operations, and certain contracts. Coverage must be written on an occurrence basis, with the following limits of liability:

1. Bodily injury:

• a. Each occurrence: $1,000,000

• b. Annual aggregate: $3,000,000

2. Property damage:

• a. Each occurrence: $1,000,000

• b. Annual aggregate: $ 3,000,000

3. Personal injury:

Annual Aggregate: $3,000,000

(b) Completed operations and products liability shall be maintained for two years after the termination of the franchise or license (in the case of the cable communications system owner or operator) or completion of the work for the cable communications system owner or operator (in the case of a contractor or subcontractor).

(c) Property damage liability insurance shall include coverage for the following hazards: X - explosion, C - Collapse, U - underground.

(2) Workers' compensation insurance shall be maintained during the life of this contract to comply with statutory limits for all employees, and in the case any work is sublet, each cable communications system operator shall require the subcontractors similarly to provide workers' compensation insurance for all the latter's employees unless such employees are covered by the protection afforded by each cable communications system operator. Each cable communications system operator and its

contractors and subcontractors shall maintain during the life of this policy employers liability insurance. Workers' compensation insurance shall include a waiver of subrogation clause in favor of the city. The following minimum limits must be maintained:

• (a) Workers' compensation: Statutory

• (b) Employer's liability: $500,000 per occurrence

• (3) Comprehensive auto liability:

• (a) Bodily injury:

1. Each occurrence: $1,000,000

2. Annual aggregate: $3,000,000

• (b) Property damage:

1. Each occurrence: $1,000,000

2. Annual aggregate $3,000,000

Coverage shall include owned, hired, and non-owned vehicles. In every franchise or license agreement the city shall reserve the right to require any other insurance coverage it deems necessary depending upon exposures.

(F) Performance bond . Every operator of a cable communications system shall obtain and maintain a performance bond to ensure the faithful performance of its responsibilities under this chapter and any franchise. The amount of the performance bonds shall be set by the city franchise, but shall not be less than 10% of the estimated cost of constructing or (in the case of existing systems) upgrading the system, and shall include a sufficient amount to cover the removal of facilities and/or restoration of city

facilities within the right-of-way. The bond is not in lieu of any additional bonds that may be required through the permitting process. The bond shall be in a form reasonably acceptable to the City Attorney and Risk Manager. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise specifically provides otherwise.

(G) Security fund . Every cable communications system operator shall establish and maintain a cash security fund or provide the city an irrevocable letter of credit in the amount of $100,000 to secure the payment of fees owed, to secure any other performance promised in a franchise, and to pay any taxes, fees, penalties or liens owed to the city. The letter of credit shall be in a form and

with an institution acceptable to the city. Should the city draw upon the cash security fund or letter of credit, the cable communications system operator shall, within 14 days, restore the fund or the letter of credit to the full required amount. This security fund/letter of credit may be waived or reduced by the city for a franchisee where the city determines in its discretion that a particular franchisee's operations are sufficiently limited that a security fund/letter of credit is not necessary to secure the required performance. The city may from time to time require a Franchisee to change the amount of the required security fund/letter of credit to reflect changed risks to the city and to the public, including delinquencies in taxes or other payments to the city. The cash security fund or letter of credit must be obtained prior to the effective date of any franchise, license, transfer or franchise renewal, unless a franchise specifically provides otherwise.

(Ord. 678-C.S., passed 4-20-04)