Ventura Municipal Code Art. 8 Insurance Indemnification and Security

Each franchisee must maintain adequate insurance during the entire term of the cable franchise against claims for injuries to persons or damages to property which in any way relate to, arise from, or are connected with the holding of the cable franchise, or the construction, operation or repair of the cable system by the franchisee, its agents, representatives, contractors, subcontractors and employees. Each franchisee must keep insurance in effect in accordance with the minimum insurance scope the city may set from time to time. The city may change insurance requirements after providing affected franchisees notice of the proposed changes and the opportunity to comment upon the proposed changes (Ord. No. 99-38, § 4, 10-18-99)

Each franchise agreement will specify the initial minimum amounts, form, quality, and proof of insurance that must be provided and maintained through the cable franchise term. (Ord. No. 99-38, § 4, 10-18-99)

Every cable franchise grant will state that the insurance provisions of the cable franchise grant are material terms. (Ord. No. 99-38, § 4, 10-18-99)

Each cable franchise grant will contain an indemnification provision that provides, to the extent permitted by applicable law, that the franchisee will, at its sole cost and expense, fully indemnify, hold harmless, and faithfully defend the city, its officials, boards, commissions, commissioners, agents, and employees, against any and all claims, suits, causes of action, proceedings, and judgments for damages or equitable relief arising out of:

A. Construction, repair, or operation of the franchisee’s cable system;

B. Any claim against the franchisee for invasion of the right of privacy, defamation of any person, firm or corporation;

C. Violation or infringement of any copyright, trade mark, trade name, service mark, or patent, or of any other right of any person, firm, or corporation, including a failure by the franchisee to secure consents from the owners, authorized distributors, or licensees of programs to be delivered by the cable system;

D. The conduct of the franchisee’s business in the city; or

E. In any way arising out of the franchisee’s enjoyment or exercise of a cable franchise, regardless of whether the act or omission complained of is authorized, allowed, or prohibited by applicable law or a franchise granted pursuant to this code. (Ord. No. 99-38, § 4, 10-18-99)

Notwithstanding the indemnification requirement in this article, the franchisee need not indemnify the city in cases where liability is:

A. Solely caused by the active negligence of the person or persons covered by the indemnity;

B. Results from programming contributed or produced by the city and transmitted over the cable system; or

C. Results from programming carried on any channel set aside for public, educational, or government use, or channels leased pursuant to 47 U.S.C. Section 532, except for programming contributed or produced by the franchisee. (Ord. No. 99-38, § 4, 10-18-99)

The city will notify the franchisee in writing of its duty to indemnify in any case subject to the indemnity in which the franchisee is not a named defendant or plaintiff. The franchisee will employ competent counsel, reasonably acceptable to the city attorney. (Ord. No. 99-38, § 4, 10-18-99)

Before a cable franchise becomes effective, the franchisee will post with the city a cash security deposit to be used as a security fund to ensure the franchisee’s faithful performance of and compliance with all provisions of a cable franchise granted pursuant to this code and any applicable law, compliance with all orders, permits, and directions of the city, and the payment by the franchisee of any claims, liens, fees, or taxes due the city which arise by reason of the construction, operation, or maintenance of the cable system. The amount of the security fund will be specified in the cable franchise grant. (Ord. No. 99-38, § 4, 10-18-99)

A. In lieu of a cash security fund, a franchisee may file and maintain with the city an irrevocable letter of credit with an acceptable surety in the amount specified in the cable franchise grant to serve the same purposes as set forth therein.

B. Such letter of credit will remain in effect for the full term of the cable franchise plus an additional six months thereafter.

C. The letter of credit will provide for 30 days’ prior written notice to the city of any intention on the part of the franchisee to fail to renew or otherwise materially alter its terms.

D. Neither the filing of a letter of credit with the city, nor the receipt of any damages recovered by the city thereunder, will be construed to excuse faithful performance by the franchisee or limit the liability of the franchisee under the terms of its cable franchise grant for damages, either to the full amount of the letter of credit or otherwise.

E. The rights reserved to the city with respect to the security fund are in addition to all other rights of the city, whether reserved by applicable law or the cable franchise grant, and no action, proceeding, or exercise of a right with respect to such security fund or letter of credit will affect any other right the city may have. (Ord. No. 99-38, § 4, 10-18-99)

The following procedures will apply to drawing on the security fund and letter of credit:

A. The city may, after 10 days’ prior notice, withdraw from franchisee’s security fund or letter of credit the amount the franchisee owes, with interest and penalties, if the franchisee:

1. Fails to make timely payment to the city of any amount due as a result of a cable franchise grant;

2. Fails to make timely payment to the city of any amounts due under its cable franchise grant or applicable law;

3. Fails to make timely payment to the city of any taxes due; or

4. Fails to compensate the city within 10 days of written notification that such compensation is due, for any damages, costs, or expenses the city suffers or incurs by reason of any act or omission of the franchisee in connection with its cable franchise or the enforcement of its cable franchise.

B. Within three days of a withdrawal from the security fund or under the letter of credit, the city will mail, by certified mail, return receipt requested, written notification of the amount, date, and purpose of such withdrawal to the franchisee.

C. If at the time of the city’s withdrawal, the amounts available are insufficient to provide the total payment toward which the withdrawal is directed, the balance of such payment will continue as franchisee’s obligation to the city until it is paid.

D. Not later than 30 days after mailing of notification to the franchisee by certified mail, return receipt requested, of a withdrawal from the security fund or under the letter of credit, the franchisee will deliver to the city for deposit in the security fund an amount equal to the amount so withdrawn or will restore the letter of credit. Failure to make timely delivery of such amount to the city or to restore the letter of credit will constitute a material violation of the cable franchise grant.

E. Franchisee’s recourse, in the event franchisee believes any taking of security funds is improper, will be through legal action after the security has been drawn upon. If the city’s action or taking is found to be improper by any court or agency of competent jurisdiction, franchisee will be entitled to a refund of the funds plus interest, payable at the same rate set forth in Section 6.460.745, and/or any other specific performance which such court or agency will order. (Ord. No. 99-38, § 4, 10-18-99)

A. Upon cable franchise termination, the balance remaining in the security fund will be withdrawn by the city and paid to the franchisee within 180 days of termination. The city may deduct the amount of any outstanding obligations secured by the security fund.

B. If a franchisee’s obligations are secured through a letter of credit, the city will authorize the franchisee to release the letter of credit within 180 days of termination, unless there are outstanding obligations secured by the letter of credit.

C. The security fund or letter of credit will be deemed forfeited if the cable franchise is revoked or the cable system is abandoned. (Ord. No. 99-38, § 4, 10-18-99)

Before any cable system construction, upgrade, or other work in public rights-of-way, a franchisee will obtain any required bonds in amounts and subject to such terms established by the city consistent with its normal practices. The terms and conditions of a performance bond secured pursuant to this article will be specified in every cable franchise granted pursuant to the provisions of this code. (Ord. No. 99-38, § 4, 10-18-99)

Every cable franchise grant will state that the security fund, letter of credit, or performance bond provisions of the cable franchise grant are material terms. (Ord. No. 99-38, § 4, 10-18-99)