Division IV. Administration
Chapter 18.72
PERFORMANCE GUARANTEES
Sections:
18.72.020 Type and amount of guarantee.
18.72.030 Duration of guarantee.
18.72.040 Partial release permitted.
18.72.050 Final disposition and release.
18.72.070 Durability retainage.
18.72.010 Application.
Wherever a performance guarantee is required under the terms of this code, said guarantee shall be submitted in conformance with this chapter. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-1.]
18.72.020 Type and amount of guarantee.
The performance guarantee shall be one of the following:
A. A deposit of cash in a separate escrow account in an amount not less than 125 percent of the estimated cost of performing the work for which the guarantee is required. Said account shall be made with a financial institution acceptable to the town and shall be established in such a manner that any release therefrom shall require the advance written consent of the town. Any interest derived from the account shall inure to the benefit of the developer.
B. A performance bond in an amount not less than 125 percent of the estimated cost of performing the work for which the guarantee is required, as established by the town.
C. An irrevocable letter of credit from a financial institution acceptable to the town, in an amount not less than the sum of 100 percent of the estimated cost of performing the work and 10 percent of the amount of the bond to cover administrative costs incurred by the town to complete the improvements if necessary. The letter of credit shall be established in such a manner that any release of funds to the developer shall require the advance written consent of the town. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-2.]
18.72.030 Duration of guarantee.
The duration of the performance guarantee shall be for the period of time specified for each particular type of development or activity (see MMC 18.68.260) and any extensions to such period as may have been approved by the town council. The date of beginning for the performance period shall be the date of final approval by the town. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-3.]
18.72.040 Partial release permitted.
Where a guarantee is posted for the purpose of insuring the timely installation of required improvements in a subdivision, planned unit development, or similar project, the town may authorize a release of a portion of the guarantee in an amount commensurate with the proportion of improvements completed. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-4.]
18.72.050 Final disposition and release.
At the completion of the work, or not less than 10 days prior to the release date of the bond or other assurance, the developer shall submit to the town one copy of a certificate of completion. Following receipt of the certificate, the town engineer shall make a preliminary inspection and shall submit a report to the town council setting forth the conditions of such facilities. If the condition of said improvements or activities for which the guarantee is required are found to be satisfactory, and all liens are paid, the council shall authorize release of the remainder of the guarantee except for that portion to be held as a durability retainer.
If the condition of material or workmanship shows unusual depreciation or does not comply with the acceptable standards of durability or if any outstanding liens are not paid, or the terms of the guarantee have not been satisfied, the matter shall be referred to the town council and, in accordance with the provisions of MMC 18.72.060, the council may declare the developer in default. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-5.]
18.72.060 Default.
Where, in the opinion of the town council, a developer fails or neglects to satisfactorily install the required improvements or make required corrections, or to pay all liens in connection with said improvements, or otherwise fails in carrying out the activity for which the performance guarantee was required, the town council may, after a public hearing with due notice on the matter, declare the performance guarantee forfeited and thereafter may install or cause the required improvement to be installed using the proceeds from the guarantee to defray the costs; provided, that the town shall not be responsible for work beyond the limits of the bond amount. Any funds remaining after completion of the required improvements will be returned to the developer. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-6.]
18.72.070 Durability retainage.
A retainage of not less than 25 percent of the total amount of the guarantee shall be retained by the town for a period of not less than one year following the date of final acceptance of the improvements by the town. Such retainage shall be a guarantee of the durability of said improvements. If during the one-year period, the durability of said improvements is found to be satisfactory, said retainage may be released following the procedure outlined under MMC 18.72.050. If, however, during said period, the condition of material or workmanship of the improvement or improvements fails or shows unusual depreciation, or if it becomes evident that certain work was not completed, or that said improvements do not otherwise comply with accepted standards of durability, said condition shall be corrected by the person giving the performance guarantee. If the corrections are not made within a reasonable time, the town council, in accordance with MMC 18.72.060, may declare such person in default and use the retainage to defray the cost of any required work. At the conclusion of the durability guarantee period, the retainage may be released by the town in accordance with the release procedure outlined under MMC 18.72.050. [Ord. 2024-1 § 1 (Exh. A); Ord. 1998-99-A § 10-8-7.]
18.72.080 Prohibitions.
A. The town may not require a performance guarantee for:
1. Public landscaping improvements or an infrastructure improvement that the municipality has previously inspected and accepted;
2. Infrastructure improvements that are private and not essential or required to meet the building code, fire code, flood or storm water management provisions, street and access requirements, or other essential necessary public safety improvements adopted in a land use regulation;
3. In a municipality where ordinances require all infrastructure improvements within the area to be private, infrastructure improvements within a development that the municipality requires to be private; or
4. Landscaping improvements that are not public landscaping improvements, as defined in Utah Code Section 10-9a-103, unless the landscaping improvements and completion assurance are required under the terms of a development agreement.
B. The town may not require or offer the option of a completion assurance bond for the landscaping of residential lots or the equivalent open space surrounding single-family attached homes, whether platted as lots or common areas. [Ord. 2024-1 § 1 (Exh. A).]