ARTICLE 17-9
Security for Performance

Section

17-9-1    Performance bond/irrevocable letter of credit or assurances

17-9-1 PERFORMANCE BOND/IRREVOCABLE LETTER OF CREDIT OR ASSURANCES.

(A) Each applicant for an initial license shall file with its application and maintain in full effect at all times thereafter until the filing of a final order of completion pursuant to § 17-3-7 a corporate surety bond issued by a surety licensed by the State of Arizona and approved by the City Manager or an irrevocable letter or credit or other assurance approved by the City Council in an amount equal to the greater of:

(1) The licensee’s reasonable estimate of the total cost of construction of the cable system within the city; or

(2) The product of the number of miles of plant, to the nearest one tenth of a mile, in the city multiplied by the current prevailing costs for installation or construction thereof for each mile or portion thereof of proposed cable as shown on the maps required by this chapter to be on file with the city.

(B) Upon the issuance of a final order of completion pursuant to this chapter, the amount of the aforesaid corporate surety bond, irrevocable letter of credit or other assurance shall be reduced to $10,000 and maintained at such an amount at all times thereafter during the term of the license.

(C) This article and replacements thereof shall be effective for the entire term of the license and renewal thereof and conditioned that in the event the licensee shall fail to comply with any one or more of the provisions of the license, then there shall be recoverable jointly and severally from the principal and surety of such bond or letter of credit or other assurance by the city any damages, delinquent license fees, penalties, compensation and costs of repairing or completing the cable system and cost of removal or abandonment of property and repair of streets and other public improvements, up to the full amount of the bond or letter of credit; said condition to be a continuing obligation for the duration of the license and thereafter until licensee has satisfied all of its obligations which may have arisen from the acceptance of the license or from the exercise of any privileges thereunder. The surety bond or letter of credit shall provide that the obligations of the surety or letter of credit shall not cease for any reason until 30 days after receipt by the city of written notice of cancellation, or intent not to renew, and shall contain the following endorsement:

This letter of credit (bond) may not be canceled or allowed to lapse until thirty days after receipt by the city, by certified mail, return receipt requested, of a written notice from the issuer of the letter of credit of its intent to cancel or not to renew.

(D) Neither the provisions of this article, nor the terms of any bond or letter of credit accepted by the city, nor the recovery of any damages under the bond or letter of credit, shall be construed to excuse faithful performance by the licensee or to limit the liability of the licensee for damages.

(E) In the event of the lapse of the bond or other assurance provided for in this section without the prior replacement thereof is not cured by licensee within five business days after such lapse, such lapse shall be deemed a material default in the obligations of licensee.

(Prior Code, § 17-9-1)