This section of code is subject to an Administrative Code Interpretation: CI-128

4-1-230 SURETIES AND BONDS:

A. CITY APPROVAL REQUIRED:

All sureties posted with the City shall be approved as to form by the City Attorney and approved by the appropriate Administrator as to amount and adequacy. Sureties for public works construction permits and future public works street/utility maintenance requirements shall be approved by the Public Works Administrator and all other sureties shall be approved by the Community and Economic Development Administrator. The City’s decision as to the acceptability of the security shall be conclusive. (Ord. 5676, 12-3-2012)

B. TYPES OF SECURITY ACCEPTED FOR PUBLIC WORKS CONSTRUCTION PERMITS AND FUTURE PUBLIC WORKS STREET/UTILITY MAINTENANCE REQUIREMENTS:

In order to ensure protection of City-owned facilities and ensure completion of required improvements to City standards, the City requires one of the following types of security in consideration of issuance of a public works construction permit:

1. Cash;

2. Letter of credit;

3. Set aside letter; provided, that the funds cannot be withdrawn, spent, or committed to any third party;

4. Savings account assigned to the City and blocked as to withdrawal by the secured party without the City’s approval; or

5. Performance or maintenance bond.

C. TYPES OF SECURITY ACCEPTED FOR ALL OTHER PURPOSES:

The following security devices are acceptable for the purposes of deferral requests, occupancy permit requests in advance of installation of required landscaping or other improvements, critical areas mitigation performance, critical areas monitoring/maintenance, and landscaping maintenance:

1. Cash;

2. Letter of credit;

3. Set aside letter; provided, that the funds cannot be withdrawn, spent, or committed to any third party; or

4. Savings account assigned to the City and blocked as to withdrawal by the secured party without the City’s approval.

5. Performance or maintenance bond exclusively for the purpose of ensuring continued maintenance of on- or off-site landscaping. (Ord. 5917, 12-10-2018)

D. SECURITY REQUIREMENTS:

1. Payable to City: Any security device must be payable to the City upon demand by the City and not conditioned upon approval or other process involving the applicant.

2. Security Requirement Binding: The requirement of the posting of any security shall be binding on the applicant and the applicant’s heirs, successors and assigns.

3. Purpose of Security: Security must be unequivocally committed to the project being secured, and cannot be available for any other purpose.

4. Agreement Required: In case of any suit or action to enforce any provisions of this code, the developer shall pay the City all costs incidental to such litigation including reasonable attorney’s fees. The applicant shall enter into an agreement with the City requiring payment of such attorney’s fees and litigation costs.

5. Effect of Lapse of Security: Any security that, according to its terms, lapses upon a date certain, will cause the associated city approval (e.g., deferral, temporary occupancy permit, etc.) to lapse on that same date unless adequate substitute security has been posted prior to the termination date of the prior security.

6. Transfer of Responsibility: Whenever security has been accepted by the City, then no release of the owner or developer upon that security shall be granted unless a new party has been obligated to perform the work as agreed in writing to be responsible under the security, and has provided security. In the instance where security would be provided by a condominium owners association or property owners association, then it shall be necessary for the owners association to have voted to assume the obligation before the City may accept the security, and a duly certified copy of the minutes of the owners association shall be filed with the City along with the security to the City.

7. City Approval Required Prior to Transfer of Responsibility: The City shall not be required to permit a substitution of one party for another on any security if the Administrator feels that the new owner does not provide sufficient security to the City that the improvements will be installed when required. (Ord. 5676, 12-3-2012)

8. Default: In the event that improvements are not completed as required or maintenance is not performed satisfactorily, the Administrator shall notify the applicant/developer, property owner and guarantor in writing. The notice must state the specific defects that must be remedied and the date the work shall be completed.

9. Proceeding Against Security: In the event the applicant, developer, property owner, and/or guarantor fails to complete all improvement work required in compliance with this Title, and the City shall have to complete the improvements, the City reserves the right, in addition to all other remedies available to it by law, to proceed against the security for funds necessary to complete the improvements. If the amount of security shall be less than the expense incurred by the City, the applicant, developer, and/or property owner shall be liable to City for the difference.

10. Release of Sureties for Private/On-Site Improvements: Sureties for completed or partially completed private/on-site improvements shall not be released except upon written approval of the Administrator.

11. Release of Sureties for Public Improvements: Sureties for completed or partially completed public improvements shall not be released except under the following conditions:

a. The developer has submitted a schedule of improvements, the sequence for completion, and the value of each part of the public improvement for which a release of surety shall be sought.

b. Each segment of the public improvement shall be useable by itself without the completion of the remainder of the improvement.

c. Each segment of the public improvement shall receive final inspection and approval of the City before release of the surety for that part of the improvement.

d. All partial releases on each public improvement shall constitute no more than one hundred percent (100%) of estimated value of the entire completed improvement.

e. All releases of surety shall be approved in writing by the Administrator. (Ord. 5153, 9-26-2005)