A.    Indemnity Required. No franchise shall be valid or effective until and unless the city obtains an adequate indemnity from the franchisee. The indemnity must:

    1.    Release the city from and against any and all liability and responsibility in or arising out of the construction, operation or maintenance of the cable communications system. Each cable communications system operator must further agree not to sue or seek any money or damages from the city in connection with the above mentioned matters.

    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 or repair of the system.

    3.    Provide that the covenant and representations relating to the indemnification provision shall survive the term of the franchise or other authorization and continue in full force and effect as to the party’ s responsibility to indemnify.

    B.    Insurance Required. A franchisee (or those acting on its behalf) shall not commence construction or operation of the system without 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 rights-of-way. If the franchisee, its contractors, or subcontractors do not have the required insurance, the city may order such entities to stop operations until the insurance is obtained and approved.

    C.    Proof. Certificates and endorsements of insurance, reflecting evidence of the required insurance and other proofs as the city may find necessary, shall be issued to the city. For persons issued franchises after the effective date of the ordinance codified in this chapter, certificates and other required proofs shall be filed within thirty days of the issuance of a franchise, prior to the commencement of construction, at policy renewal, and whenever there is any change in coverage. For entities that have facilities in the public rights-of-way as of the effective date of this article, the certificate and endorsements shall be issued within sixty days of the effective date of this article, at policy renewal, and whenever there is any change in coverage, unless a pre-existing franchise provides for filing of certificates in a different manner. In the event that the insurance will terminate or lapse during the term of the franchise or license, then in that event, the cable communications system operator shall furnish, at least thirty days prior to the expiration of such insurance, a new or renewed certificate of insurance as proof that the required coverage has been obtained.

    D.    Endorsement Contents. Endorsements shall contain a provision that coverages afforded under these policies will not be canceled, modified, suspended or nonrenewed unless at least thirty days’  prior written notice has been given to the city. Endorsements shall name the city and its officers, employees, agents and volunteers as additional insureds and shall specify that the franchisee’ s policy is primary, the city’ s insurance is excess and non-contributing and shall contain a cross-liability clause. The endorsement shall also declare its "SIR" or deductibles, which amounts must be acceptable 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" VII in the latest edition of "Bests Key Rating Guide," published by A.M. Best Guide, or as otherwise approved by the city administrator.

    E.    Insurance Amounts. A cable communications system operator (and those acting on its behalf to construct or operate the system) shall maintain the following minimum insurance.

    1.    Comprehensive general liability insurance to cover bodily injury, death and property damage. Exposures to be covered are: premises, operations, products/completed operations, and certain contracts. Coverage must be written on an occurrence basis, with the following limits of liability:

    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 this contract 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. The following minimum limits must be maintained:

    3.    Comprehensive Auto Liability.

    Coverage shall include owned, hired, and non-owned vehicles. In every franchise or license agreement the city shall reserve the right to require any other insurance coverage it deems necessary depending upon exposures.

    F.    Construction Bonds. Every operator of a cable communications system shall obtain and maintain bonds during periods of rebuild or upgrade of the cable system to ensure the faithful performance of its responsibilities under this article and any franchise. The amount of the performance and payment bonds shall be set by the city administrator, but shall not be less than ten percent of the estimated cost of constructing or (in the case of existing systems) upgrading the system, and including a sufficient amount to cover the removal of facilities and/or restoration of city facilities within the right-of-way. The bond is not in lieu of any additional bonds that may be required through the permitting process. The bond shall be in a form acceptable to the city attorney. Bonds must be obtained prior to the effective date of any franchise, transfer or franchise renewal, unless the city administrator specifically provides otherwise.

    G.    Security Fund. Every cable communications system operator shall establish and maintain a cash security fund or provide the city with an irrevocable letter of credit in the amount of seventy-five thousand dollars to secure the payment of fees owed, to secure any other performance promised in a franchise, and to pay any taxes, fees or liens owed to the city. The letter of credit shall be in a form and with an institution acceptable to the city administrator and in a form acceptable to the city attorney. Should the city draw upon the cash security fund or letter of credit, the cable communications system operator shall, within fourteen 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, license, transfer or franchise renewal, unless a franchise specifically provides otherwise. (Ord. 645 § 1 (part), 2004)