5.52.120 Franchise violations.
A. Remedies for Violations. If grantee fails to perform in a timely manner any material obligation required by this chapter or a franchise granted hereunder, following reasonable written notice from the grantor and a reasonable opportunity to cure such nonperformance in accordance with the provisions of Section 5.52.120 and the franchise, grantor may at its option and in its sole discretion:
1. Cure the violation and recover the actual cost thereof from the security fund established in this chapter if such violation is not cured within thirty days after written notice to the grantee of grantor’s intention to cure and draw upon the security fund;
2. Assess against grantee liquidated damages in an amount set forth in the franchise agreement for any such violation(s) if such violation is not cured, or if grantee has not commenced a cure, on a schedule reasonably acceptable to grantor, within thirty days after written notice to the grantee of grantor’s intention to assess liquidated damages. Such assessment may be withdrawn from the security fund, and shall not constitute a waiver by grantor of any other right or remedy it may have under the franchise or applicable law, including without limitation, its right to recover from grantee such additional damages, losses, costs and expenses, including actual attorney’s fees, as may have been suffered or incurred by grantor by reason of or arising out of such material breach of the franchise.
B. Procedure for Remedying Franchise Violations. Prior to imposing any remedy or other sanction against grantee specified in this chapter, grantor shall give grantee notice and opportunity to be heard on the matter, in accordance with the following procedures:
1. Grantor shall first notify grantee of the alleged violation in writing by personal delivery or registered or certified mail, and demand correction, or evidence of non-violation, within a reasonable time, which shall not be less than fifteen business days in the case of the failure of the grantee to pay any sum or other amount due the grantor under this chapter or the grantee’s franchise and thirty business days in all other cases. If grantee fails to:
a. Correct the alleged violation within the time prescribed; or
b. Commence correction of the alleged violation within the time prescribed and diligently remedy such alleged violation thereafter; or
c. Provide evidence that there is no violation; the grantor shall then give, by personal delivery or registered or certified mail written notice of not less than thirty days of a public hearing to be held before the council. Such notice shall set forth in detail each of the violations alleged to have occurred.
2. Subsequent to the public hearing, the council shall hear and consider all other relevant evidence, and thereafter render findings and its decision.
3. If the council finds that:
a. The grantee has corrected the alleged violation; or
b. The grantee has diligently commenced correction of such alleged violation after notice thereof and is diligently proceeding to fully remedy such alleged violation; or
c. No material violation has occurred, the proceedings shall terminate and no penalty or other sanction shall be imposed.
4. If the council finds that material violations exist and that grantee:
a. Has not corrected the same in a satisfactory manner; or
b. Has not diligently commenced correction of such violation after notice thereof and is not diligently proceeding to fully remedy such violation;
then the council may impose one or more of the remedies provided in this chapter and the franchise agreement as it, in its discretion, deems appropriate under the circumstances.
C. Grantor’s Power to Revoke.
1. Grantor may revoke any franchise granted pursuant to this chapter and rescind all rights and privileges associated with it in the following circumstances, each of which shall represent a default by grantee and a material breach under the franchise:
a. If grantee fails to perform any of its material obligations under this chapter or the franchise agreement and continues such failure to perform after receipt of due notice and a reasonable opportunity to cure;
b. If grantee fails to provide or maintain in full force and effect the insurance coverage or security fund as required in the franchise agreement;
c. If grantee violates any order or ruling of any regulatory body having jurisdiction over the grantee relative to the grantee’s franchise, unless such order or ruling is being contested by grantee in good faith in an appropriate proceeding;
d. If grantee knowingly practices any material fraud or deceit upon grantor;
e. If grantee becomes insolvent, unable or unwilling to pay its debts, or is adjudged a bankrupt.
2. After completing the procedures set forth in Section 5.52.120(B) above, the grantor may make a formal request before the council that the grantee’s franchise be revoked. The council shall cause to be served on the grantee written notice of its intent to consider revoking grantee’s franchise. Such notice shall be served on grantee at least thirty days prior to the date of the hearing on the issue. The notice shall contain the time and place of the hearing and shall be published at least once in a newspaper of general circulation within the franchise area ten days prior to the hearing date.
3. The council shall hear any person(s) interested in the revocation and within ninety days after the date of the hearing shall make its determination, based on a preponderance of the evidence, whether the grantee has committed a material breach of the franchise.
4. If the grantor determines that the grantee has committed a material breach then the grantor may:
a. Declare the franchise revoked and the security fund and bonds forfeited; or
b. If the material breach is curable by the grantee, direct the grantee to take appropriate remedial action within the time and manner and under the terms and conditions reasonably specified by the grantor.
The termination and forfeiture of the grantee’s franchise shall in no way affect any right of grantor to pursue any remedy under the franchise or any provision of law.
D. Appeal of Finding of Revocation. The grantee may appeal a finding of revocation made pursuant to Section 5.52.120(C) to an appropriate court of jurisdiction, which shall have the power to review “de novo.” Any such appeal must be taken by the grantee within sixty days of the issuance of the grantor’s decision to revoke the franchise. (Ord. 98-09 § 1, 1998)