Article 8 — Improvement Security

Except as otherwise provided in Section 9-1.802 of this article, the improvement agreement required by the provisions of Section 9-1.712 of Article 7 of this chapter shall be secured by improvement security.

(Ord. 230, § 709)

If a subdivider shows, to the satisfaction of the City Engineer, that he or she has entered into a contract with a water utility to construct water mains, which contract makes the City a party thereto and provides that the contract may not be modified or rescinded without the consent of the City, except as required by the Public Utilities Commission of the State, and has deposited with the water utility security for the payment of the water utility, which security the City Engineer finds adequate, the subdivider need not accompany an agreement to install water mains with improvement security. (Ord. 230, § 710)

The agreement referred to in Subsection (d) of Section 9-1.524 of Article 5 of this chapter shall be accompanied by a bond or cash deposit, guaranteeing the faithful performance of the agreement, in an amount estimated by the City Engineer to be equal to the cost of setting the monuments and furnishing the notes.

(Ord. 230, § 716)

Improvement security shall be for the following amounts:

• (a) An amount estimated by the Council, upon the recommendation of the inspecting officer, to be equal to the cost of the improvements covered by the security, guaranteeing the faithful performance of the improvement work;

• (b) An amount estimated by the Council, upon the recommendation of the inspecting officer, to be equal to 50% of the cost of the improvements covered by the security, securing payments to contractors and subcontractors and to all persons renting equipment or furnishing labor or materials to them; and

• (c) An amount determined by the Council, upon the recommendation of the inspecting officer, 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 defective materials furnished.

• (Ord. 230, § 711)

Improvement security shall be in the following forms:

• (a) Bonds issued by a surety company authorized to write such security in the State; and

• (b) Deposits with the City of cash, negotiable bonds, letters of credit, or savings and loan certificates or shares. Savings and loan certificates or shares shall be assigned to the City.

As a part of the obligation guaranteed by the security and in addition to the face amount of the security, there shall be included the costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by the City in successfully enforcing the obligation secured. The bonds required by this section shall be substantially in the form set forth in Sections 66499.1 and 66499.2 of the Government Code of the State.

(Ord. 230, § 712)

Improvement security shall be subject to approval as to form by the City Attorney and shall be accepted by the Council.

(Ord. 230, § 713)

When a portion of an improvement has been fully completed, the Council, in its discretion, upon the recommendation of the inspecting officer, may authorize a reduction in improvement security given for faithful performance equal to the estimated cost of the completed portion of the improvement. (Ord. 230, § 714)

Upon the failure of a subdivider to complete an improvement within the time specified in an agreement, the Council, upon not less than 10 days' notice in writing served upon the person, firm, or corporation signing the contract or upon not less than 20 days' notice in writing served by certified mail, addressed to the last known address of the person, firm, or corporation signing the contract, may determine that the improvement work, or any part thereof, is incomplete and may cause to be forfeited to the City the portion of the sum of money or bonds given for the faithful performance of the work or may cash savings and loan certificates or shares deposited and assigned to assure the faithful performance of the work to complete the improvement work. (Ord. 230, § 715)