§ 5.16.400. Protection of city and residents.

A.

No franchise shall be valid or effective until and unless the city obtains an adequate indemnity from the franchisee. The indemnity must, to the extent permitted by law:

1.

Release the city from and against any and all liability and responsibility in or arising out of the construction, operation, upgrade repair or maintenance of the cable communications system; and

2.

Indemnify and hold harmless the city, its trustees, elected and appointed officers, agents, and employees, from and against any and all 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, upgrade or repair of the system except those claims which arise out of the negligence or willful misconduct of the city.

B.

A franchise (or those acting on its behalf) shall not commence construction or operation of the cable communications system without first obtaining insurance in amounts and of a type 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 or on public property. If the franchisee, its contractors, or subcontractors do not have the required insurance, the city may order such persons to stop operations until the insurance is obtained and approved.

C.

Certificates of insurance, reflecting evidence of the required insurance and naming the city as an additional insured, and other proofs as the city may find 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 thirty (30) days of the issuance of a franchise, once a year thereafter, and whenever there is any expiration of or change in coverage. For persons that have facilities in the public rights-of-way as of the effective date of this chapter, the certificate shall be filed within sixty (60) days of the effective date of this chapter, annually thereafter, and whenever there is any expiration of or change in coverage, unless a pre-existing franchise ordinance expressly provides for filing of certificates in a different manner. Each franchisee's insurance coverage shall be primary insurance as respects the city. Any insurance or self-insurance maintained by the city shall be excess of the franchisee's insurance and shall not contribute with it.

D.

Certificates shall contain a provision that coverage afforded under these policies will not be canceled until at least thirty (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 must be no less than "A" in the latest edition of "Bests Key Rating Guide," published by A.M. Best Guide.

E.

A cable communications system operator (and those acting on its behalf to construct, operate or repair the system) shall maintain the following insurance, in the minimum amounts specified under the applicable franchise. The city shall be named as an additional insured on the general liability and automobile policies; those insurance policies shall be primary and contain a cross-liability clause.

1.

Commercial general liability insurance to cover liability from bodily injury and property damage. Exposures to be covered shall include: premises, operations, products/completed operations, and certain contracts. Coverage must be written on an occurrence basis.

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).

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 the franchise 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.

3.

Comprehensive auto liability coverage shall include owned, hired, and non-owned vehicles.

F.

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 ordinance. In the case of any franchise ordinance that requires the cable communications system operator to initially build, or to upgrade a system, the amount of the bond shall be specified in the franchise. The amount of the bond shall be reduced upon successful completion of the required construction. The amount of the performance bonds shall be set by the City Administrator or may be set in a franchise ordinance in light of the nature of the work to be performed pursuant to or under the franchise. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless a franchise ordinance specifically provides otherwise.

G.

Every cable communications system operator shall establish and maintain a cash security fund or provide the city an irrevocable letter of credit in a form mutually acceptable to the city and franchisee, in an amount specified in the franchise ordinance but no less than one hundred thousand dollars ($100,000.00) to secure the payment of fees owned, to secure any other performance promised in a franchise ordinance, and to pay any taxes, fees or liens owned to the city. The letter of credit shall be in a form and with an institution acceptable to the city's Director of Finance and in a form acceptable to the City Attorney. Should the city lawfully draw upon the cash security fund or letter of credit, the cable communications system operator shall, within fourteen (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, transfer or franchise renewal, unless a franchise ordinance specifically provides otherwise.

H.

A franchise ordinance may provide that the security fund requirements of Section 5.16.400(G) may be satisfied by a security bond in an amount provided in a franchise ordinance and in a form satisfactory to the city.

(Ord. 12729 § 1 (part), 2006)