San Jose Municipal Code Part 4 Prerequisites to Effectiveness of Franchises

No franchise granted pursuant to the provisions of this chapter shall become effective unless and until the ordinance granting the same has become effective and, in addition, unless and until all things required of the grantee by the provisions of this Part 4, all of such things being hereby declared to be conditions precedent, are done and completed. In the event any of such things are not done and completed in the time and manner required, the council may declare the franchise null and void.

(Ord. 20601.)

Within twenty days after the adoption date of the ordinance granting a franchise, or within such extended period of time as the council in its discretion may authorize, the successful applicant or grantee shall file with the city clerk his written acceptance, in form satisfactory to the city attorney, of the franchise, together with his agreement to be bound by and to comply with and to do all things required of him by applicable provisions of the city's Charter, provisions of this chapter and provisions of the franchise. Such acceptance and agreement shall be acknowledged by the successful applicant before a notary public and shall in form and content be satisfactory to and approved by the city attorney or an authorized deputy.

(Ord. 20601.)

A. Within twenty days from and after the adoption date of the ordinance granting the franchise, or within such extended period of time as the council in its discretion may authorize, the grantee shall file with the city risk manager, and thereby deliver to the city, a faithful performance bond, executed by grantee as obligee and by one or more corporate sureties, authorized to engage in such business in the state of California, as surety, in the principal sum of five thousand dollars, embossed with the corporate seal of the bonding company, conditioned that in the event that grantee, during the term of said bond, shall fail to comply with and do all things required of him by applicable provisions of the city's Charter, by provisions of this chapter, by provisions of the franchise, or by provisions of any lawful requirement of the city, then said obligee and said surety shall be jointly and severally bound and liable to the city, and there shall be recoverable by the city from said obligee and surety, jointly and severally, any and all damages, up to the full amount of said bond, suffered by the city as a result thereof, including but not limited to the full amount of any franchise fee, compensation, indemnification or cost of removal or abandonment of property owing by grantee to the city pursuant to the provisions of this chapter, or of said franchise, for which grantee may be in default.

B. The term of said bond shall be the entire term of the franchise or, in lieu thereof, the grantee may file and deliver, successively, two or more such bonds, each for a term of not less than one year, unless the council authorizes otherwise, covering the entire term of the franchise. In the latter event the first such bond shall be filed and delivered as aforesaid within twenty days from and after the adoption date of the ordinance awarding the franchise, or within such extended period of time as the council in its discretion may authorize, and each subsequent bond shall be filed and delivered on or before the thirtieth day immediately preceding the date of expiration of the bond then in effect.

C. Neither the provisions of this section or any bond accepted by the city pursuant thereto, nor the recovery by the city of any damages shall be construed to excuse good faith performance by the grantee of all obligations which he may have under this chapter or under said franchise, nor excuse damages, either to the full amount of the bond or otherwise.

D. Each above-mentioned bond shall be in form satisfactory to and approved by the city risk manager.

(Ord. 20601.)

A. Within twenty days after the adoption date of the ordinance awarding the franchise, or within such extended period of time as the council in its discretion may authorize, the grantee shall furnish and file with the city risk manager, at grantee's sole cost and expense, all of the following insurance requirements or such other greater insurance requirements as may be required by any financial responsibility laws of the state of California, or by any ordinances or resolutions adopted by the council or by the City of San José, or by any amendments thereto:

1. Comprehensive automobile liability policy for bodily injury, property damage, and uninsured motorist with the following requirements and minimum limits per occurrence:

a. Bodily injury and property damage with a combined single limit of six hundred thousand dollars.

b. Uninsured motorists' coverage with a minimum limit of thirty thousand dollars combined single limit.

c. The above coverage is to apply for all owned, nonowned and hired vehicles.

2. Comprehensive general liability policy in the amount of five hundred thousand dollars combined single limit for bodily injury and property damage with the following coverage parts attached thereto:

a. Garagekeeper's legal liability, Division II with a minimum limit of five hundred thousand dollars combined single limit.

b. Broad form contractual liability coverage with a minimum limit of five hundred thousand dollars combined single limit.

3. Workers' compensation insurance policy:

a. This policy shall be written in accordance with the statutory laws of the state of California and cover all employees, as the term "employees" is defined by any and all applicable statutory or decisional law or administrative rules or regulations regarding workers' compensation.

b. One hundred thousand dollars (coverage B) "employer's liability" shall also be included in the workers' compensation policy.

c. It shall be the sole responsibility of the holder of an owner's license to secure workers' compensation insurance for all persons employed by said holder of an owner's license.

4. Each of the following four endorsements shall be made a part of the comprehensive automobile liability policy and the comprehensive general liability policy, and the garage liability policy in the exact language appearing below:

a. The city, its officers, employees, agents, contractors, and invitees are hereby added as additional insureds.

b. This policy shall be considered primary insurance as respects any other valid and collectible insurance the City of San José may possess, and any other insurance the city does possess shall be considered excess insurance only.

c. Thirty days' prior written notice shall be provided to the City of San José in the event of cancellation and/or reduction in coverage of any nature. Such notice will be sent to risk manager, City of San José, 801 North First Street, San José, California 95110.

d. This insurance shall act for each insured and additional insured as though a separate policy had been written for each. This requirement, however, will not act to increase the limit of liability of the insuring company.

The workers' compensation insurance policy will require only the endorsement contained in subsection 4, above.

B. A true, certified and correct copy of the entire policy including copies of all endorsements made a part thereof shall be mailed to the risk manager, City of San José, 801 North First Street, San José, California 95110, directly from the authorized agent, broker or insuring company, for each policy required under this section. All policies shall be on file and effective at the time the grant of franchise becomes effective. All policies and coverages shall be valid during the entire term of any franchise granted under this chapter. If at any time the entire insurance requirements or any portion thereof expires without immediate proof of renewal or is cancelled without proof of reinstatement prior to the effective date of cancellation, the franchise shall be immediately suspended, and the chief of police is hereby authorized to enforce such suspension after receiving written notice from the city risk manager that no proof of renewal or reinstatement has been submitted by the grantee.

C. All policies and coverages required by this section are subject to approval by the city risk manager as to content and form, and no franchise shall be valid until such approval is issued in writing to the city council and/or the chief of police by the city risk manager. If at any time in the judgment of the city risk manager said policies and/or coverages are not sufficient for any cause or reason, the city risk manager may require the grantee to replace said policies and/or coverages within ten days with other policies and/or coverages acceptable in accordance with this section. If said grantee fails to replace said policies and/or coverages within said ten-day period with good and sufficient policies and/or coverages as aforesaid, then, at the termination of said period, the franchise of the grantee shall be, by such failure, automatically suspended until such time as said requirement is complied with, and the chief of police is hereby authorized to enforce such suspension after receiving written notice from the city risk manager that said policies and/or coverages have not been replaced with good and sufficient policies and/or coverages.

D. Prior to the effective date of the ordinance granting a franchise pursuant to this chapter, the grantee shall submit to the city risk manager a signed agreement to indemnify, hold harmless and defend the City of San José against any claim, cause of action, disability, loss, damage, cost or expense for bodily injury or property damage or liability for workers' compensation of any person, including city, howsoever arising, which occurs by reason of activities of the grantee in the operation of the franchise and/or the grantee's tow car business, his agents, employees, contractors or invitees, except as arises from city's sole willful act or sole negligence; such liability shall be without apportionment for comparative fault.

(Ord. 20601.)