Security fund.
Cape Coral Code of Ordinances § 15-11
in effect§ 15-11 - Security fund.
(a) A franchise agreement shall provide that, prior to the franchise becoming effective, the franchisee shall post with the city a cash deposit, performance bond, letter of credit or other form of security as determined by the city in its sole discretion and as set forth in a franchise agreement, to be used as a security fund to ensure the franchisee's faithful performance of and compliance with all provisions of this article, the franchise agreement, and other applicable law, and compliance with all orders, permits and directions of the city, and the payment by the franchisee of any claims, liens, fees or taxes due the city which arise by reason of the construction, operation or maintenance of the system.
(b) The amount of the security fund shall be set in the franchise, and shall be an amount that, under circumstances existing at the time, that is necessary to protect the public against financial loss, to provide adequate incentive to the franchisee to comply with this article and the franchise agreement, and to enable the city to effectively enforce compliance therewith; but in no event shall be less than $50,000. The city reserves the right to increase or decrease the minimum security fund amount required by this section as it may deem necessary from time to time, provided that the change shall not affect an existing franchise unless specifically so provided in a franchise agreement.
(c) The franchise agreement may provide for procedures to be followed with respect to the security fund which exceed the minimum requirements contained herein. Neither the posting of the cash deposit or filing of an indemnity bond or any form of surety bond with the city, nor the receipt of any damages recovered by the city thereunder, shall be construed to excuse faithful performance by the franchisee or limit the liability of the franchisee under the terms of its franchise for damages, either to the full amount of the security fund or otherwise.
(d) The rights reserved to the city with respect to the security fund or an indemnity bond are in addition to all other rights of the city, whether reserved by this article or authorized by other law or the franchise agreement, and no action, proceeding or exercise of a right with respect to the security fund or indemnity bond will affect any other right the city may have.
(e) If the franchisee fails to pay to the city any compensation within the time fixed herein or any fines, or fails to repay the city within 30 days any damages, costs or expenses which the city is compelled to pay by reason of any act or default of the franchisee in connection with the franchise, or fails, after ten business days written notice of the failure by the city to comply with any provision of the franchise agreement which the city reasonably determines can be remedied by demand on the security fund, the city may withdraw the amount thereof, with interest and any penalties, from the security fund. Upon the withdrawal, the city shall notify the licensee of the amount and the date thereof.
(f) Within 15 days after notice to it that any amount has been withdrawn from the security fund deposited pursuant to subsection (a) above, the franchisee shall pay to or deposit with the city a sum sufficient to restore the security fund to the amounts specified in subsection (a) above. Failure to replenish the security fund shall subject the franchisee to penalties as set forth in § 15-22 below, and interest on the amount in question shall accrue at the maximum rate under applicable law.
(g) That portion of the security fund deposited pursuant to this section necessary to compensate the city for damages and costs sustained shall become the property of the city in the event that a franchise granted pursuant to this article is canceled or terminated by reason of the default of the franchisee. The franchisee, however, shall be entitled to the return of the security fund, or portion thereof, with interest, as remains on deposit with the city at the expiration of the term of the franchise, provided that there is then no outstanding default on the part of the franchisee.
(h) In the event franchisee disputes or otherwise challenges an amount determined by the city to be a deficiency in the security fund under subsection (f) above, the amount in question shall be placed in an escrow account until the time as the dispute is resolved. The placement by franchisee of amounts in escrow pending resolution of a dispute under this section shall toll the accrual of penalties or interest under this section.
(Ord. 90-00, § 3, 9-11-2000)
Source: City of Cape Coral, Florida, Code of Ordinances, City Charter and Land Development Code (Municode Library, library.municode.com)URL: https://library.municode.com/fl/cape_coral/codes/code_of_ordinances?nodeId=CH15FR_ARTICACO_S15-11SEFUFetched: 11/4/2026