Chapter 8-3
PERFORMANCE BONDS
SECTION:
8-3-3: APPLICATION OF PROVISIONS
8-3-9: FINAL DISPOSITION AND RELEASE
8-3-10: PARTIAL RELEASE PERMITTED
8-3-1 TITLE:
This chapter shall be entitled the PERFORMANCE BOND ORDINANCE OF HUNTINGTON CITY, UTAH, and may be so cited and pleaded. (Ord. 3-99, 11-18-1999)
8-3-2 INTENT:
The intent of this chapter is to establish regulations governing the form and function of performance bonds submitted to the city intended to ensure that work approved by the city is completed in a timely manner and in conformance with accepted standards of durability and workmanship. (Ord. 3-99, 11-18-1999)
8-3-3 APPLICATION OF PROVISIONS:
Wherever a performance bond is required under the terms of any city ordinance, said bond shall be submitted in conformance with the provisions set forth herein. As to form and completeness, the city attorney shall approve every bond required or allowed by this chapter. (Ord. 3-99, 11-18-1999)
8-3-4 BOND AMOUNT:
For each development or subdivision, the developer shall prepare an itemized estimate of the cost of constructing all required improvements prepared by or under the direction of a licensed engineer. This estimate shall be used as the basis for setting the amount of the performance bond. (Ord. 3-99, 11-18-1999)
8-3-5 TYPE OF BOND:
Before any development or subdivision shall be given final approval by the city, the applicant shall comply with one of the following requirements:
A. Completion Of Improvements Or Cash Bond:
1. Complete all public improvements within the development or subdivision as shown on the approved engineering drawings, and in accordance with city specifications; and
2. Supply to the city proof of payment of labor and materials; and
3. Deposit with the city a cash bond, or a letter of credit and bond agreement, in the amount of ten percent (10%) of the construction costs of all such improvements; or
B. Performance Bond: Deliver to the city a performance bond of not less than one hundred ten percent (110%) of the estimated cost of all public improvements as required in this chapter, as shown on the approved engineering drawings and in accordance with city specifications, in one of the following ways:
1. A cash deposit in a separate escrow account. Said account shall be made with a financial institution acceptable to the city. Any interest derived from the account shall be the property of the developer;
2. A corporate surety bond from an acceptable bonding company authorized to do business in the state;
3. A letter of credit from a recognized financial institution, or other lender acceptable to the city;
4. A property bond where the bond proceeds are property which is actually deeded over to the city to be sold to the city, if necessary, to complete the improvements. The property deeded shall have a fair market value in excess of the bond amount specified in this chapter to ensure that the city will be able to sell the property quickly and obtain the necessary amount to complete the improvements. The city shall not be in any way responsible for obtaining fair market value for the property. The city's only responsibility is to obtain, if possible, the amount necessary to cover the costs of the required improvements which the bond guarantees; or
5. Other form as approved by the city. (Ord. 3-99, 11-18-1999)
8-3-6 CONDITIONS:
The applicant shall agree to the following conditions as outlined in the agreement:
A. The city shall have exclusive control over the bond proceeds and such proceeds may be released only upon written approval of the city;
B. If bond proceeds are inadequate to pay the cost of the completion of the improvements according to city standards for whatever reason, including previous reductions, then the applicant shall be responsible for the deficiency and no further permits shall be issued in the development or subdivision until improvements are completed or a new bond has been executed to ensure completion of the remaining improvements; and
C. The applicant agrees to hold the city harmless from any and all liability which may arise as a result of the improvements which are installed until such time as the city accepts the improvements. (Ord. 3-99, 11-18-1999)
8-3-7 DURATION:
A. Duration Specified: The duration of the bond or other assurance shall be for two (2) years from the date the plat is recorded. Where subdivision of land is not involved in the development, the duration of the bond or other assurance shall be for two (2) years from the date the building permit is issued.
B. Extension Of Time: An extension of time may be granted by the city council upon submission of a written request by the developer, provided:
1. The request is submitted at least sixty (60) days prior to the expiration of the bond period;
2. The issuer of the bond or other assurance agrees to extend the time of the assurance; and
3. The city council determines that failure to complete the specified improvements was due to conditions beyond the control of the developer. (Ord. 3-99, 11-18-1999)
8-3-8 DEFAULT:
In the event that the applicant is in default or fails or neglects to satisfactorily install the required improvements within two (2) years from the date of approval of the plat by the city council, or to obtain an extension of the time limit, or to pay all liens in connection therewith, the city council may declare the bond or other assurance forfeited, and the city may install the required improvements, or cause said improvements to be installed, using the proceeds from the collection of bonds or other assurance to defray the expense thereof. (Ord. 3-99, 11-18-1999)
8-3-9 FINAL DISPOSITION AND RELEASE:
The applicant shall be responsible for the quality of all materials and workmanship. At the completion of the work, or not less than ten (10) days prior to the release date of the bond or other assurance, the applicant shall submit to the city engineer one copy of the as constructed plans, as required by the applicable ordinance. Following receipt of the as constructed plans, the city engineer shall make a preliminary inspection of the improvements and shall submit a report to the city council describing the condition of the site. If all liens are paid, and the condition of the specified improvements is satisfactory, the city council shall authorize release of the bond or other assurance. If the condition of the material or workmanship shows unusual depreciation or does not comply with accepted standards of durability, or if any outstanding liens are not paid, the city council may declare the applicant in default. (Ord. 3-99, 11-18-1999)
8-3-10 PARTIAL RELEASE PERMITTED:
For any bond submitted in accordance with the provisions of this chapter, the city may authorize partial release of the performance bond in accordance with the following schedule:
|
Work Completed As A Percentage Of The Total Estimated Cost |
Amount Eligible For Release As A Percentage Of The Total Bond Amount |
|---|---|
|
25 |
20 |
|
50 |
45 |
|
75 |
70 |
|
100 |
90 |
(Ord. 3-99, 11-18-1999)
8-3-11 DURABILITY RETENTION:
A sum of not less than ten percent (10%) of the total amount of the bond shall be retained by the city for a period of not less than one year following the date of final acceptance of the improvements by the city. Such retention shall serve as a bond for the durability of all the improvements. If during the one year period, the durability of said improvements is found to be satisfactory, said retention may be released following the procedure outlined in section 8-3-9 of this chapter. If, however, during said period the condition or material or workmanship of the improvements fails or shows unusual depreciation, or if it becomes evident that specific work was not completed, or that said improvements do not otherwise comply with the accepted standards of durability, said deficiencies will be corrected by the developer. If the corrections are not made within a reasonable time, the city council, in accordance with section 8-3-8 of this chapter, may declare such person in default and use the retention to defray the cost of any required work. (Ord. 3- 99, 11-18-1999)