Laguna Beach Municipal Code Art. V Finance and Insurance

(a) As compensation for any franchise to be granted, and in consideration of permission to use the streets and public ways of grantor for the construction, operation, maintenance, and reconstruction of a cable communications system, the grantee shall pay to the grantor such amounts as specified in the franchise.

(b) Payments due the grantor under this provision shall be computed quarterly for the succeeding quarter, and shall be paid within forty-five days of the close of each calendar quarter. The payment shall be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the grantor to determine the accuracy of a said payment.

(c) Failure to make required payment. In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, grantee shall pay as additional compensation the greater of the following:

(1) An interest charge, computed from such due date, at the annual rate equal to the prevailing commercial prime interest rate in effect upon the due date;

(2) A sum of money equal to two thousand dollars for each month or part thereof of delay which sum shall also bear interest from the due date at an annual rate equal to the prevailing commercial prime interest rate in effect upon the due date.

(Ord. 1176 § 6.1, 1989)

(a) Within thirty days after the effective date of the franchise, the grantee shall deposit into a bank account established by the grantor, and maintain on deposit through the term of the franchise, a sum specified in the franchise as security for the faithful performance by it of all of the provisions of the franchise, and compliance with this chapter, and compliance with all orders, permits and directions of any agency of the grantor having jurisdiction over its acts or defaults, and the payment by the grantee of any claims, fees, liens, taxes due the grantor which arise by reason of the construction, operation or maintenance of the system.

(b) Except as provided in the franchise agreement, if the grantee fails, after twenty days notice to pay to the grantor any fees due and unpaid, or fails to repay within such twenty days, any damages, costs or expenses which the grantor shall be compelled to pay by reason of any act or default of the grantee in connection with its franchise; or fails, after thirty days notice of such failure to comply with any provision of the franchise which the grantor reasonably determines can be remedied by an expenditure of the security, the grantor may immediately withdraw the amount thereof, with interest and any liquidated damages, from the security fund. Upon such withdrawal, the grantor shall notify the grantee of the amount and the date thereof.

(c) Within thirty days after notice to it that any amount has been withdrawn by grantor from the security fund, the grantee shall deposit a sum of money sufficient to restore such security fund to the original amount.

(d) Grantee shall be entitled to the return of such security fund, or portion thereof, with interest, as remains on deposit at the expiration of the franchise, or its termination, once all amounts due to the grantor have been paid.

(e) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the grantor may have.

(Ord. 1176 § 6.2, 1989)

Within thirty days after the effective date or the franchise, the grantee shall furnish proof of the posting of a faithful performance bond running to the grantor, with surety approved by the grantor in the sum specified in the franchise conditioned that the grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise, provided, however, that such bond shall not be required upon certification by grantor of completion of construction of grantee's cable system. As defined in the franchise agreement, during the course of construction, the amount of the bond may from time to time be reduced as provided in the franchise. Written evidence of payment of premiums shall be filed and maintained with the grantor.

(Ord. 1176 § 6.3, 1989)

(a) At the option of the grantor, it may allow, in lieu of security fund and/or faithful performance bond, an irrevocable letter of credit, issued by a bank approved by the grantor, in the amount specified in the franchise. Said letter of credit shall incorporate wording approved by the grantor enabling it to draw such sums from time to time as the grantor may find necessary to satisfy any defaults of grantee or to meet any payments due grantor under or in connection with grantee's franchise. Said letter of credit shall further provide for sixty days written notice by certified mail by its issuer to grantor of any pending expiration or cancellation, or other language acceptable to the city attorney, and said notice shall without further cause constitute reason for the grantor to draw the full sum to be held in its own accounts until such letter shall be reestablished in good and satisfactory form to grantor.

(b) If grantor shall require such a letter of credit, grantee shall pay all fees or other charges required to keep it in force and shall, without thirty days of any draw by grantor, restore its face value to the original amount.

(c) All provisions herein applying to bonds or security funds shall also apply to letters of credit.

(d) Draws on the letter of credit are subject to paragraph 11(C)(2) of the franchise agreement.

(Ord. 1176 § 6.4, 1989)