Solano County Municipal Code Art. III Financial Insurance Requirements

(a) Grantee of a franchise shall pay to the Grantor a franchise fee in the amount and on the schedule set forth in the franchise agreement.

(b) Grantee shall furnish annually to Grantor a statement, within sixty (60) days of the close of the calendar year, either audited and certified by an independent certified public accountant or certified by a financial officer of the Grantee, reflecting the total amounts of gross receipts and all payments, deductions and computations for the period covered by the payment. Upon ten (10) days prior written notice, Grantor shall have the right to conduct an independent audit of Grantee’s records, in accordance with generally accepted accounting procedures, and if such audit indicates a franchise fee underpayment of two percent (2%) or more, the Grantee shall assume all reasonable costs of such an audit.

(c) No acceptance of any payment by the Grantor shall be construed as a release or as an accord and satisfaction of any claim the Grantor may have for further or additional sums payable as a franchise fee under this ordinance or for the performance of any other obligation of the Grantee.

(d) In the event that any franchise payment or recomputed amount is not made on or before the dates specified in the franchise agreement, Grantee shall pay as additional compensation:

(1) An interest charge, computed from such due date, at an annual rate equal to the average rate of return on invested funds of the Grantor during the period for which payment was due; and

(2) If the payment is late for forty-five (45) days or more, a sum of money equal to five percent (5%) of the amount due in order to defray those additional expenses and costs incurred by the Grantor by reason of delinquent payment.

(Ord. No. 1408, §1)

(a) Grantor may require Grantee to deposit into an interest bearing account established by Grantor and Grantee, a sum established in the Franchise Agreement as a security fund. This sum shall be held by a neutral party experienced in acting as an escrow agent, and shall be maintained on deposit for a term as provided in the Franchise Agreement, with any interest payable to Grantee.

(b) The security fund shall be available to Grantor as provided in Section 7.5-90 to satisfy any and all claims, liens, fees and/or taxes due Grantor from Grantee which arise by reason of construction, operation, or maintenance of the system, and to satisfy any actual or liquidated damages arising out of a franchise breach, subject to the procedures and amounts designated in the Franchise Agreement.

(c) Subject to Grantor approval, the security fund requirements may be satisfied by conveyance of an irrevocable letter of credit to the Grantor, or by provision of a corporate surety bond, in a form approved by Grantor and which meets Grantor’s standards for credit worthiness.

(Ord. No. 1408, §1)

(a) Grantee, as a condition of any franchise grant, shall indemnify, defend and hold Grantor, its officers, agents and employees harmless from any liability, claims, damages, costs or expenses, including reasonable attorney fees, arising from injury to persons or damages to property to the extent caused by any conduct undertaken by the Grantee, its officers, agents or employees, by reason of the franchise; and that Grantee shall at its sole cost and expense, upon demand of Grantor, appear in and defend any and all suits, actions or other legal proceedings, whether judicial, quasi-judicial, administrative, legislative or otherwise, brought or instituted or had by third persons or duly constituted authorities, against or affecting Grantor, it officers, agents or employees, and arising out of or pertaining to any conduct of the Grantee, its agents or employees which is within the scope of the indemnity.

(b) In the event that multiple franchises are granted, each new Grantee shall indemnify and hold Grantor harmless from and against any lawsuits which challenge Grantor’s issuance of a cable television franchise to the new Grantee under California Government Code Section 53066.6. In the event of any lawsuit alleging that Grantor violated Government Code 53066.3 in the issuance of a franchise to the new Grantee, Grantor shall:

(1) Promptly notify the indemnifying Grantee; and

(2) Cooperate fully with the Grantee; and

(3) Make no compromise or settlement of any such action without the prior written consent of the Grantee.

(c) The settlement of any claim or action by the Grantor without the Grantee’s prior written consent shall release the Grantee from its obligations contained in this Government Code 53066.3 indemnification. This indemnification shall continue in effect for a period of up to one (1) year following the effective date of any relevant franchise agreement; provided, that the Grantee shall continue that indemnification through the full period of litigation, should any such litigation take place.

(Ord. No. 1408, §1)

(a) On or before the effective date of any franchise, the Grantee shall obtain policies of commercial general and business auto liability, Workers’ Compensation and property insurance from companies authorized to transact business in California by the Insurance Commissioner of California.

(b) The policy of liability insurance shall:

(1) Be issued to Grantee and name Grantor, its elected or appointed officers, agents, volunteers and employees as additional insureds;

(2) Indemnify for all liability for personal and bodily injury, death and damage to property arising from activities conducted and premises used pursuant to this Chapter by providing coverage, including but not limited to coverage for:

Negligent acts or omissions of Grantee and its agents, servants and employees, committed in the conduct of franchise operations; and/or

Use of motor vehicles;

(3) Provide a combined single limit for commercial general liability and business automobile liability insurance in the amount provided for in the franchise agreement. Such insurance policy shall be subject to the review and approval of Grantor’s legal counsel; and

(4) Be noncancellable without thirty (30) days prior written notice thereof directed to Grantor.

(c) The policy of Workers’ Compensation Insurance shall:

(1) Have been previously approved as to substance and form by the California Insurance Commissioner;

(2) Cover all employees of Grantee who in the course and scope of their employment are to conduct the franchise operations;

(3) Provide for every benefit and payment presently or hereinafter conferred by Division 4 of the Labor Code of the state upon an injured employee, including vocational rehabilitation and death benefits.

(d) The policy of property insurance shall provide fire insurance with extended coverage on the franchise property used by Grantee in the conduct of franchise operations in an amount adequate to enable Grantee to resume franchise operations following the occurrence of any risk covered by this insurance.

(e) Grantee shall file with Grantor prior to commencement of franchise operations either certified copies of these insurance policies or a certificate of insurance and an endorsement in the form required by Grantor for each of the required policies executed by the company issuing the policy or by a broker authorized to issue such a certificate, certifying that the policy is in force and providing the following information with respect to said policy:

(1) The policy number;

(2) The date upon which the policy will become effective and the date upon which it will expire;

(3) The names of the named insureds and any additional insured required by this Chapter or the franchise agreement;

(4) The subject of the insurance;

(5) The type of coverage provided by the insurance; and

(6) Amount or limit of coverage provided by the insurance.

(f) A franchise shall not be effective until Grantee has complied with the aforementioned provisions of this Section.

(g) In the event Grantee fails to maintain any of the above-described policies in full force and effect, Grantor, after two (2) business days’ notice to Grantee, shall have the right to procure the required insurance and recover the cost thereof from Grantee. Grantor shall also have the right to suspend the franchise during any period that Grantee fails to maintain said policies in full force and effect.

(h) No more than once during any three (3) year period, Grantor may require Grantee to increase the amounts of the insurance coverage provided herein. Such increase may be required by Grantor after complying with the hearing procedure provided for in Section 7.5-82 herein. Increases in insurance coverage required by Grantor shall be based upon current prudent business practices of like enterprises involving the same or similar risks.

(Ord. No. 1408, §1)