Res 2005-105 - Laserfiche WebLink

Home Browse Search

The City of San Marcos Facilities Service Contract ARTICLE XIV SECUffiTY FOR PERFORMANCE SECTION 14.1. OPERATIONS PERFORMANCE HOND. (A) Terms and Purpose. On or before the Commencement Date, the Company shall provide to the City an annual operations performance bond, equal to the full value of the first annual Service Fee (to be escalated each year in accordance with the Service Fee Adjustment Factor), for operations of the Facilities, in the form set forth in Transaction Form A (the "Operations Performance Hond"). The Operations Performance Hond shall secure the faithful performance of the Contract Services and the payment of labor, outside services, and supplies required for the Contract Services. The Operations Performance Bond may be provided on an annual basis and the liability to the surety for each period shall not be cumulative. The Operations Performance Bond shall: (1) be provided by a surety company approved by the City having a minimum rating of "A" in the latest revision of the A.M. Hest Company's Insurance Report; (2) be listed in the United States Treasury Department's Circular 570, "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Honds and as Acceptable Reinsurance Companies"; and (3) be properly registered and licensed to conduct business in the State. The Operations Performance Bond shall be provided to the City not later than 15 days after the Contract Date and in any case prior to the Commencement Date. Each subsequent bond shall be provided to the City not later than 15 days prior to the expiration of the then current bond. (H) Monitoring of Sureties. The Company shall be responsible throughout the Term of this Service Contract for monitoring the fmandal condition of any surety company issuing bonds under this Service Contract and for making inquiries no less often than annually to confirm that each such surety company maintains at least the minimum rating level specified in this Section. In the event the rating of any issuing surety company falls below such minimum level, the Company shall promptly notify the City of such event and shall promptly furnish or arrange for the furnishing of a substitute or an additional bond of a surety company whose rating and other qualifications satisfy all above requirements, unless the City agrees to accept the surety company or agrees to an alternative method of assurance. Upon such notice by the Company of such an event, the City shall not unreasonably withhold its approval of such assurance. SECTION 14.2. COST OF PROVIDING SECURITY FOR PERFORMANCE. (A) Inclusion in Service Fee. The cost and expense of obtaining and maintaining the Operations Performance Hond required under this Article as security for the performance of the Company's obligations hereunder shall be included as a Pass-Through Cost Component. 97