Chapter 16.32 — SECURITY

Before a subdivision map is approved for recordation, all required improvements shall be installed and inspected by staff for acceptance by the director of public works. The subdivider shall enter into an undertaking agreement pursuant to which the improvements are guaranteed by a form of security acceptable to the city. The agreement is a contract between the developer and the city to insure satisfactory performance of the installation or construction of improvements in accordance with the conditions of the tentative map.

(Ord. 754 § 1 (Attach. A § 25), 1999: Ord. 661 § 1 (800.010), 1994)

A.

An undertaking agreement, contract or act required or authorized by the Subdivision Map Act or this title for which security is required shall be secured in accordance with Section 66499 et seq. of the Subdivision Map Act and as provided in this section.

B.

No final subdivision map shall be signed by the city or recorded until all improvement securities required by this section have been received and approved by the director of public works.

C.

The obligations secured shall include the faithful performance of the terms of the undertaking agreement, the payment for labor, materials and equipment of the subdivider's, contractors as well as persons furnishing labor, material or equipment for the installation and guarantee of the improvements against defects for a warranty period of one year following the city's acceptance of improvements. Security shall be deposited with the city in the form and amount required by the Subdivision Map Act and this title.

D.

Amount of Security. A subdivider shall provide security for the obligations set forth in the undertaking agreement in the following amounts:

1.

Faithful Performance Security. The subdivider shall provide security to guarantee the faithful performance of all work, including the city's inspection of work, in the amount of one hundred (100) percent of the total estimated construction costs to guarantee the construction or installation of all improvements.

2.

Labor and Materials Security. An additional fifty (50) percent of the estimated construction costs shall be required to guarantee payment to the subdivider's contractors, subcontractors, and to persons furnishing labor, materials or equipment for the construction or installation of improvements.

3.

Warranty Security. As more fully set forth in Section 16.32.090, the subdivider shall provide security in the amount required by the city engineer, but in no event shall such security be less than ten (10) percent of the estimated construction cost, to guarantee the improvements against any defective work, labor done, or defective materials used in the construction of the improvements for one year following the city's acceptance of the improvements.

4.

As part of the obligation guaranteed by the security, and in addition to the full amount of security, there shall be included costs and reasonable expenses for fees incurred by the city in enforcing the obligations secured.

5.

The subdivider shall submit an estimate of the improvement cost on the "Bond Estimate Form" (DPW 0080) to the city engineer for approval prior to obtaining the performance security. Both the faithful performance and the labor and materials securities shall be submitted at the same time to the city engineer.

E.

Authorized Form of Securities.

1.

The form of security shall be one or a combination of the following at the option of, and subject to, the approval of the city engineer:

a.

Bond. A bond by a duly authorized corporate surety which shall be in accordance with the "Faithful Performance Bond" (DPW 0055). Only one performance bond is allowed per project.

b.

Certificate of Deposit. A deposit of money or negotiable bonds of the kind approved for security deposits of public moneys along with a certificate of such deposit will be deposited with the finance director.

c.

Letter of Credit. Letters of credit may be furnished pursuant to Section 66499 of the Subdivision Map Act. Such letters shall be an irrevocable letter of credit from a financial institution regulated by the state or federal government pledging that the funds necessary to carry out the act or agreement for payment are on deposit and guaranteed for payment. The letter of credit shall be approved by the finance director.

d.

Cashier's Check. The city engineer shall approve the security amount and the cashier's check. The original check shall be deposited with the finance director.

e.

Security Interest in Real Property. The city council may request an agreement with the owner to allow the filing and recordation of a lien against the subdivision.

f.

Any other type of security approved by the finance director.

g.

The city shall not accept personal or company checks for project securities.

2.

If the subdivider deposits savings and loan certificates, the subdivider also shall assign such certificates to the city and such deposit and assignment shall be subject to all of the provisions and conditions of Section 66499 of the Subdivision Map Act and all other regulations.

3.

Special assessments furnished under authority of the Subdivision Map Act and all faithful performance bonds, referred to in this title shall be:

a.

Furnished by a surety company authorized to write the same in the state of California;

b.

Subject to the approval and acceptance by the city council of the city.

F.

Securities for Other Improvements.

1.

Water Mains. If the subdivider shows to the satisfaction of the city engineer, that the subdivider has entered into a contract with a water utility to construct water mains as defined in Ordinance No. 407, the Water Ordinance (Chapter 13.12), and has deposited securities with the county of Los Angeles to secure the installation of the water utility, the subdivider will not have to provide securities to secure construction of such water mains with the city. The city engineer shall authorize any reductions or the release of such securities by any agency.

Monuments. The undertaking agreement shall be accompanied by a cash deposit or cashier's check in a sum determined by the city engineer, which equals the cost of setting such monuments, guaranteeing the faithful performance of all such work of setting monuments and furnishing notes, and in every respect complying with such agreement.

G.

The city may refuse to accept securities from any surety company which has previously failed or has been slow to perform in accordance with the guarantees made on projects within the city, or which his forced the city to go to court to recover the funds necessary to complete the project.

H.

Any security deposited with the city shall not relieve the subdivider or developer of the responsibility to install any of the improvements required by the conditions for the development.

I.

The security shall only be released upon receipt of written instructions from the city engineer.

(Ord. 754 § 1 (Attach. A § 26), 1999; Ord. 661 § 1 (800.020), 1994)

16.32.030 - Construction.

A.

Construction Methods. The construction methods and materials for all improvements shall conform to the "Standard Specifications for Public Works Construction" as adopted by city council resolution.

B.

Construction Commencement. Construction shall not commence until the required improvement plans have been approved by the city engineer and all securities and agreements have been posted and permits issued.

C.

Inspection. All improvements shall be inspected by the city engineer to ensure that the improvements comply with the approved plans and with the "Standard Specifications for Public Works Construction."

D.

Final Inspection and Deficiency List.

1.

Upon completion of the subdivision improvements, the developer shall apply in writing to the city engineer for a preliminary final inspection. The city engineer shall then schedule a preliminary final inspection.

2.

A deficiency list shall be compiled during the inspection, noting all corrections or any additional work required. If the number of items is excessive or the subdivision appears incomplete, the preliminary final inspection may be halted and rescheduled to a later date as determined by the city engineer.

3.

When the preliminary final inspection has been completed, a copy of the deficiency list shall be transmitted to the developer for correction.

4.

Upon having completed all corrections or additional work as outlined by the deficiency list, the developer shall certify in writing that all corrections have been completed satisfactorily and request a final inspection. The city engineer shall then make a final inspection.

5.

Upon finding that all items on the deficiency list have been satisfactorily corrected and upon receipt of "asbuilt" improvement plans, the subdivision shall be considered for acceptance by the director of public works.

6.

The completion of corrections indicated by the deficiency list shall not relieve the developer from the responsibility of correcting any deficiency not shown on the list that may subsequently be discovered.

(Ord. 754 § 1 (Attach. A § 27), 1999; Ord. 661 § 1 (800.030), 1994)

The city engineer may authorize in writing the release of a portion of the security in conjunction with the acceptance of the satisfactorily completed portions of the improvements. However, in no event shall the security be reduced to less then ten (10) percent of the total security amount for faithful performance.

A.

Grading Security Reductions. Reductions shall not be allowed for grading securities. The city shall retain one hundred (100) percent of all grading securities until final grading work is completed to the satisfaction of the city engineer. Final grading work shall mean that the grading around the completed structure is accomplished and the grading engineer of record has certified the same to the building division on a form acceptable to the building official.

B.

Final Grading Certificate. The building division shall not accept a final grading certificate on any lot or parcel where partially constructed structures exist, or on any vacant lot or parcel which has not been graded. All vacant parcels shall be maintained weed free and partially constructed parcels may be fenced as deemed necessary by the building official.

C.

Performance Security Reduction. Performance securities may be given a one-time reduction of up to fifty (50) percent of the approved security amount deposited for streets. This reduction will be allowed only after the first lift of asphaltic concrete pavement has been installed to the satisfaction of the city engineer.

D.

To obtain a performance security reduction, the subdivider shall submit a written request to the city engineer. The city engineer shall respond to the request within fifteen (15) working days from receipt of the request.

(Ord. 661 § 1 (800.040), 1994)

16.32.050 - Reduction in labor and materials securities.

Security given to secure payment to the contractor, subcontractors and persons furnishing labor, materials, or equipment for the construction of the improvements shall after the passage of 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 B of the Civil Code and offer acceptance of the work be reduced to an amount

equal to the total claimed by the claimants for whom claims of lien have been recorded and notice given in writing to the director of public works. This reduction shall not apply to the warranty security nor to costs reasonable expenses and fees, including reasonable attorney fees.

(Ord. 754 § 1 (Attach. A § 28), 1999: Ord. 661 § 1 (800.050), 1994)

16.32.060 - Extension of the undertaking agreement.

A.

The subdivider may request that the city engineer extend the completion date of the undertaking agreement.

B.

The request shall be made in writing at least thirty (30) days before the expiration of the undertaking agreement.

C.

The subdivider shall submit adequate evidence to justify the extension along with a projected time frame clearly indicating the time of completion.

D.

The director of public works shall determine whether or not good cause has been demonstrated to entitle the subdivider an extension of the undertaking agreement.

E.

The director of public works may request an agreement between the property owner and the city to allow the filing and recordation of a lien against the subdivision.

F.

In consideration of an extension of an undertaking agreement, the following may be required:

1.

Revision of improvement plans to provide for current design and construction standards when requested by the city engineer; and

2.

Revised improvement construction cost estimates to reflect current costs as approved by the city engineer; and

3.

Increase of improvement securities in accordance with revised construction cost estimates; and

4.

Increase of inspection fees to reflect current construction cost estimates; and

5.

Additional requirements as recommended by the city engineer or as the director of public works may deem necessary as a condition of its approving any time extension for the completion of improvements.

(Ord. 754 § 1 (Attach. A §§ 29, 30), 1999; Ord. 661 § 1 (800.060), 1994)

16.32.070 - Request to substitute the security for a subdivision.

A.

The applicant's request to substitute a security for a subdivision shall be considered by the director of public works. The director of public works shall determine whether or not good cause has been demonstrated to entitle the subdivider to modify the security. In consideration of the request to substitute the security for a subdivision, the following may be required:

1.

Revision of improvement plans to provide for current design and construction standards when required by the city engineer;

2.

Revised improvement construction estimates to reflect current improvement costs as approved by the city engineer;

3.

Increase of improvement securities in accordance with revised construction estimates;

4.

Inspection fees may be increased to reflect current construction costs but shall not be subject to any decrease or refund.

B.

The director of public works may impose additional requirements as recommended by the city engineer or as the director of public works may deem necessary. Acceptance of a portion of the improvements shall not relieve the developer from any other requirements imposed by this title.

(Ord. 754 § 1 (Attach. A § 30), 1999: Ord. 661 § 1 (800.070), 1994)

A.

When the subdivider has constructed all improvements, corrected all deficiencies, and submitted "as-built" drawings of the improvements, the director of public works shall consider the subdivision improvements for acceptance.

B.

The director of public works shall either accept the offer of dedication for recordation purposes, or accept the offer of dedication for maintenance.

C.

If the final subdivision map contains an offer of dedication and the director of public works accepts the offer for maintenance, the city engineer shall file an acceptance of public improvements with the county recorder.

D.

All improvements shall be warranted for a period of not less than one year. The one-year warranty period shall cover one year from the date of acceptance of the last secured improvements.

(Ord. 754 § 1 (Attach. A § 31), 1999; Ord. 661 § 1 (800.080), 1994)

Upon release of the subdivision improvements by the director of public works, the subdivider shall provide warranty security in the amount as required by the city engineer to guarantee the improvements against any defective work or labor or defective materials used in the performance of the improvements throughout the warranty period. The warranty period shall cover one year from the date of acceptance of all improvements by the director of public works.

A.

Grading Security Release. Grading security shall not be released until the building official is satisfied that all grading is complete in accordance with the approved grading plans as specified in Section 16.32.040. Prior to obtaining a grading security release the applicant shall submit the following information:

1.

The applicant shall submit a final grading certificate to the building official.

2.

The building official will give written notice to the applicant if the grading requirements are not completed in a satisfactory manner.

3.

Once the applicant has received written notice, the applicant has fifteen (15) working days to complete the unfinished requirements or the original request to release the grading permit is invalid.

4.

Once the city engineer has ascertained that the final grading certificate has been submitted to and accepted by the building official, the city engineer shall approve the release of the grading security.

5.

On partially built lots or vacant lots there shall be no release of the grading security.

B.

Performance Security Release. Performance securities shall not be released until the city engineer is satisfied that all public improvements are complete and in accordance with the approved improvement plans. To obtain a security release the applicant shall do the following:

1.

The applicant shall submit a written request to the city engineer.

2.

The city engineer will determine if the improvement requirements have been completed and the property owner will be notified in writing within fifteen (15) calendar days of receipt of request to the city engineer.

3.

The owner has twenty-eight (28) days to complete the unfinished requirements before the original request for release of performance bonds shall expire. The owner must then submit a new written request.

4.

Upon completion of all performance requirements to the satisfaction of the city engineer, the city engineer will provide notification to the subdivider of the release of the performance security.

5.

Upon acceptance of all the subdivision improvements by the director of public works, the city may release up to ninety (90) percent of the performance securities. The balance will be held by the city to guarantee corrective work throughout the warranty period. The warranty period shall cover one year from the date of acceptance of the last secured improvement.

C.

Material and Labor Release. Ninety (90) days after the acceptance of the last secured improvement by the director of public works, the security given to secure payment to the contractor, subcontractors, and to persons furnishing labor, materials, or equipment may be reduced to an amount equal to the amount of all claims therefore filed and of which notice has been given to the director of public works. The balance of the security shall be released upon the settlement of all such claims and obligations for which the security was given.

D.

Warranty Security. The city may release the warranty security upon satisfactory completion of the warranty period provided:

1.

All deficiencies appearing on the warranty deficiency list for the subdivision have been corrected.

2.

One year has elapsed since the director of public works acceptance of the last secured improvement.

(Ord. 754 § 1 (Attach. A § 32), 1999: Ord. 661 § 1 (800.090), 1994)

16.32.100 - Forfeiture on failure to complete.

A.

Upon the failure of a subdivider to complete any improvement within the time specified in the undertaking agreement, the director of public works may determine that the improvement work or partial improvement work is incomplete and is subject to foreclosure of the security.

B.

Prior to foreclosing on the security, the city shall serve a written notice upon the person, firm or corporation signing the contract advising the responsible party that within ten (10) days the city shall foreclose on the security, or the city shall send by certified mail a written notice to the last known address of the person, firm or corporation signing such contract, advising the responsible party that within twenty (20) days the city shall foreclose on the security.

C.

The security given for the faithful performance of work may be forfeited to the city as necessary to complete the improvement work.

(Ord. 754 § 1 (Attach. A § 33), 1999; Ord. 661 § 1 (800.100), 1994)

A.

Subdivisions of Four or Less Parcels. If the planning commission deems it appropriate, the improvements along existing streets of a parcel map may be deferred until development occurs. Deferral may be allowed when the planning commission finds that construction is impractical due to physical constraints, or the surrounding neighborhood is absent of similar improvements. The owner of the real property shall enter into an agreement with the city in a form acceptable to the city engineer for the installation of street improvements at a future time to be specified by the city. The agreement shall provide that:

1.

The owner shall begin construction of improvements within ninety (90) days of receipt of the notice to proceed from the city engineer, or as mutually agreed upon in writing; and

2.

In the event of default by the owner, the city is authorized to cause construction to be completed and charge the entire cost and expense to the owner, including interest from the date of notice of the cost and expense until paid; and

3.

The agreement shall be recorded with the county recorder at the expense of the owner and shall constitute a lien in such amount necessary to fully reimburse the city, including interest as provided above, subject to foreclosure in the event of a default in payment. The obligation under the agreement shall run with the property and constitute a lien against it; and

4.

In the event of litigation occasioned by default of the owner, the owner agrees to pay all costs involved, including reasonable attorney's fees. Those costs shall become a part of the lien against the real property.

B.

Remainders. Where remainders are made part of a final subdivision map, the city may enter into an agreement with the subdivider to construct improvements within the remainder at some future date and prior to the issuance of a permit or other grant of approval for development. The fulfillment of construction requirements for improvements is not required until the city is ready to issue a permit or other approval for development of the remainder parcel or until the construction of improvements is required under an agreement between the subdivider and the city. The remainder shall be maintained weed free and fenced if deemed necessary by the building official, with properly constructed silt basins as approved by the city engineer. In the absence of an agreement, the city may require fulfillment of the construction requirements

within a reasonable time following approval of the final map and before the issuance of a permit or approval for development of a remainder parcel upon a finding by the city that fulfillment of construction requirements is necessary for the reasons of:

1.

The public health, safety, welfare; or

2.

The required construction is a necessary prerequisite to the orderly development of the surrounding area; or

3.

If a designated remainder is subsequently sold, the subdivider or owner must obtain a certificate of compliance or conditional certificate of compliance.

(Ord. 754 § 1 (Attach. A § 34), 1999; Ord. 661 § 1 (810.000—810.120), 1994)

Chapter 16.36 - CONDOMINIUM CONVERSIONS