Irvine Municipal Code Ch. 12 Improvement Agreements; Improvement Security

Any improvement agreement or contract required by the Subdivision Map Act (Government Code § 66410 et seq.) or this division shall be secured by one of the following:

A. A bond or bonds by one or more duly authorized corporate sureties in the form prescribed by the Subdivision Map Act (Government Code § 66410 et seq.).

B. A deposit, either with the City or a responsible escrow agent or trust company selected by the City, of cash or negotiable bonds of the kind approved for securing deposits of its public monies.

C. An irrevocable instrument of credit or letter of credit from an agency of the State, federal, or local government when any agency of the State, federal, or local government provides at least 20 percent of the financing for the portion of the act or agreement requiring security, or from one or more responsible financial institutions regulated by federal or State government and pledging that the funds are on deposit and guaranteed for payment on demand by the City.

D. A lien upon the property to be subdivided, created by contract between the owner of the property and the City, when the City finds that it is not in the public interest to require installation of the required improvement sooner than two years after the recordation of the map.

E. Any other form of security, including security interests in real property, which the City Engineer shall determine to be acceptable.

(Ord. No. 09-03, § 5, 4-28-09)

A. Except as provided in Government Code § 66499.3, the improvement security shall be provided in the amount of:

1. One hundred percent of the total estimated cost of the improvement or act to be performed conditioned upon the faithful performance of the act or agreement;

2. One hundred percent of the total estimated cost of the improvement or act to be performed securing payment to the contractor, the subcontractors and to persons furnishing labor, materials or equipment to them for the improvement or the performance of the required act;

3. The amount determined by the City Engineer necessary to guarantee or warranty the work for a period of one year following completion or acceptance thereof against any defective work or labor done, or defective materials furnished in the performance of the improvement agreement;

4. The improvement security shall include costs and reasonable expenses and fees, including reasonable attorneys' fees, which may be incurred by the City in successfully enforcing the obligation secured.

B. 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 10 percent of the original estimated cost of the improvement.

(Ord. No. 09-03, § 5, 4-28-09)

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

(Ord. No. 09-03, § 5, 4-28-09)

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 upon the final completion and acceptance of the act or work subject to the provisions of Paragraph B hereof.

B. The City Engineer may release a portion of the security in conjunction with the acceptance of the performance of the act or work as it progresses, upon application therefor by the subdivider; provided, however, that no such release shall be for an amount less than 30 percent of the total improvement security given for faithful performance of the act or work and that the security shall not be reduced to an amount less than 10 percent of the total improvement security given for faithful performance until final completion and acceptance of the act or work. In no event shall the City Engineer authorize a release of the improvement security which would reduce such security to an amount below that required to guarantee the completion of the act or work and any other obligation imposed by this division, the Subdivision Map Act (Government Code § 66410 et seq.) or the improvement agreement.

C. Security given to secure payment to the contractor, his or her subcontractor 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 Civil Code div. 4, pt. 6, tit. 2, ch. 4 (Civil Code § 8400 et seq.) and after acceptance of the work, be reduced to an amount not less than the total claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the City. If no such claims have been recorded, the security may be released in full.

D. No security given for the guaranty or warranty of work shall be released until the expiration of the period thereof.

E. The release provisions of this section shall not apply to the amount of the security deemed necessary by the City Engineer to cover costs and reasonable expenses on fees, including reasonable attorneys' fees, which may be incurred by the City in successfully enforcing an obligation secured.

(Ord. No. 09-03, § 5, 4-28-09)

Upon the failure of the subdivider to complete any improvement, acts or obligations within the time specified, the City Engineer may, upon notice in writing of not less than 10 days served upon the person responsible for the performance thereof or upon notice in writing of not less than 20 days, served by registered mail addressed to the last-known address of such person, determine that the subdivider is in default and may cause the improvement security or such portion thereof as is necessary to complete the work or act and any other obligations of the subdivider secured thereby to be forfeited to the City.

(Ord. No. 09-03, § 5, 4-28-09)