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A. The city may at its discretion require in a franchise that a franchisee obtain a standby letter of credit. When and if the city should so require, the franchisee shall deposit with the city a letter of credit from a financial institution chosen by the franchisee and approved by the city in the amount set by the city, but not to exceed $50,000. The letter of credit may not be revoked or terminated during the term of the franchise plus an additional 60 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 franchisee 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 franchisee of any costs, claims, liens, liquidated damages, and taxes due the city which arise by reason of the construction, operation, or maintenance of the system, or breach or termination of the franchise.

B. The letter of credit shall be maintained by the franchisee at $50,000 or such lesser amount as the city shall determine during the entire term of the franchise, as the city may require, even if funds are drawn against it pursuant to this chapter.

C. The letter of credit shall contain the following endorsement:

It is hereby understood and agreed that this letter of credit may not be canceled by the surety nor the intention not to renew be stated by the surety until 30 days after receipt by the city clerk, by certified mail, of a written notice of such intention to cancel or not to renew.

D. 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 which are 30 days or more past due.

E. 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. 1708 § 1, 1997).