A. Prior to exercising any of the rights granted under a franchise or undertaking any of the work, installation, improvements, construction, repair, relocation or maintenance authorized by a franchise, the grantee shall furnish a performance bond reasonably acceptable to the City in an aggregate amount sufficient to assure the grantee’s performance of all covenants, terms, conditions and obligations under the franchise. The performance bond shall be issued by a corporate surety authorized to do surety business in the State of Washington. The performance bond shall be maintained during the term of the franchise (including any extension thereof) and for a one-year period thereafter. The amount of the performance bond shall be established based upon the legal, financial, and technical qualifications of the grantee; provided, however, that the City may from time to time review the amount of surety and determine an appropriate level based upon the grantee’s performance of the covenants, terms, conditions and obligations under the franchise. In the event that the City elects to raise the amount of surety required, written notice shall be provided to the grantee setting forth the reasons for doing so.

B. The performance bond required by this section shall be in addition to any other bonds, which may be required by specific provisions of the Redmond Municipal Code, including, but not limited to, construction bonds for work or construction activities within rights-of-way.

C. The City may, at its discretion, require in a franchise that a grantee obtain a letter of credit. When and if the City should so require, the grantee shall deposit with the City a letter of credit from a financial institution chosen by the grantee and approved by the City in the amount of $50,000. The letter of credit may not be revoked or terminated during the term of the franchise plus an additional sixty days except with written approval of the City. The form and content of such letter of credit shall be approved by the City attorney. The letter of credit shall be used to insure the faithful performance by the grantee of all provisions of the franchise and this chapter, compliance with all orders, permits, and directions of any agency, commission, board, department, division, or office of the City having jurisdiction over its acts or defaults under the franchise, and the payment by the grantee of any costs, claims, liens, liquidated damages, and taxes due the City which arise by reason of the construction, operation, or maintenance of the cable system, or breach or termination of the franchise.

D. The letter of credit shall be maintained by the grantee at $50,000 even if funds are drawn against it pursuant to this chapter or the franchise.

E. At the City’s option, it may draw against the letter of credit for any unpaid liquidated damages, franchise fees or other amounts owing to it under the franchise. The rights reserved to the City with respect to the letter of credit are in addition to all other rights of the City, whether reserved by this chapter or related documents or authorized by law, and no action, proceeding or exercise of a right with respect to such letter of credit shall affect any other right the City may have. (Ord. 2546 § 2 (part), 2010: Ord. 2174 § 1 (part), 2003).