§ 16.12

Whenever this chapter authorizes or requires the furnishings of security in connection with the performance of any act or agreement, such security shall be one of the following at the option of, and subject to the approval of, the city:

A.

A bond or bonds by one or more duly authorized corporate sureties;

B.

A deposit, either with the city or a responsible escrow agent or trust company, at the option of the city, of money or negotiable bonds of the kind approved for securing deposits of public moneys; or

C.

An instrument of credit from one or more financial institutions subject to regulation by the state or federal government, pledging that the funds necessary to carry out the act or agreement are on deposit and guaranteed for payment.

(Ord. 338 § 2 (part), 1975)

Bonds. A bond or bonds by one or more duly authorized corporate sureties to secure the faithful performance or for the security of laborers and material men shall be in substantially the form prescribed by Sections 66499.1 and 66499.2 of the Subdivision Map Act.

(Ord. 338 § 2 (part), 1975)

16.12.030 - Amount of security.

A.

The improvement security shall be in the amounts set forth as follows:

1.

An amount which equals one hundred percent of the total estimated cost of the improvement or of the act to be performed, conditioned upon the faithful performance of the act or agreement.

2.

An additional amount which equals one hundred percent of the total estimated cost of the improvement or performance of the required act, securing payment to the contractor, his subcontractors and to persons

furnishing labor, materials or equipment to them for the improvement or the performance of the required act.

3.

An amount determined by the director of public works necessary for the guarantee and warranty of the work for a period of one year following the completion and acceptance thereof against any defective work or labor done or materials furnished.

B.

If the improvement security is other than a bond or bonds furnished by duly authorized corporate surety, an additional amount shall be included as determined by the city council as necessary to cover the cost and reasonable expenses and fees, including reasonable attorney's fees, which may be incurred by the city in successfully enforcing the obligation secured.

C.

The improvement security shall also secure the faithful performance of any changes or alterations in the work to the extent that such changes or alterations do not exceed ten percent of the original estimated cost of the improvement.

(Ord. 338 § 2 (part), 1975)

In the event the required subdivision improvements are financed and installed pursuant to special assessment proceedings, the subdivider may apply to the city council for a reduction in the amount of the improvement security required hereunder up to an amount corresponding to the amount of a faithful performance and labor and material bonds required by the special assessment act being used. The city council may grant such reduction if it finds that such bonds have been in fact provided and that the obligations secured thereby are substantially equivalent to that required by this title.

(Ord. 338 § 2 (part), 1975)

The improvement security required hereunder shall be released in the following manner:

A.

Security given for faithful performance of any act or agreement shall be released by the director of public works only upon the final completion and acceptance of the act or work by the city. No partial release of the security as the work progresses shall be permitted.

B.

Security securing the payment to the contractor, his or her subcontractors and to persons furnishing labor, materials or equipment shall, after passage of the time within which claims of lien are required to be recorded pursuant to Article 3 (commencing with Section 3114) of Chapter 2 of Title 15 of Part 4 of Division

3 of the Civil Code and after acceptance of the work, be reduced to an amount equal to the total claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the city, and if no such claims have been recorded, the security shall be released in full.

Such release shall not apply to any required guarantee and warranty period nor to the amount of the security deemed necessary by the city for such guarantee and warranty period nor to costs and reasonable expenses and fees, including reasonable attorneys' fees. The balance of the security shall be released upon the settlement of all such claims and obligations for which the security was given.

C.

Security given for the guarantee or warranty of work shall be released upon the expiration of the period for which it is given.

(Ord. 519, 1987)

• For state law concerning release of security, see Government Code Section 66499.7. For the time periods governing filing of lien claims, see Civil Code Section 3114 et seq.

Chapter 16.14 - STANDARDS AND REQUIREMENTS