§129.0119 Bond Required for Construction Permit for Grading or Public Improvements

• (a) Persons performing work under Public Right-of-Way or Grading Permits issued in accordance with this article shall furnish a bond in accordance with the following provisions:

  • (1) The bond shall be issued by a surety company authorized to do business in the State of California and shall be approved by the City. The bond shall be in favor of the City of San Diego and shall be conditioned upon the completion, free of liens, of the work authorized by the permit in accordance with the requirements of this article and the conditions prescribed by the permit. The bond shall be conditioned upon the surety company completing the required work or in employing a contractor to complete the work.

  • (2) Whenever the City Manager finds that a default has occurred in the performance of any term or condition of work authorized by a permit, the department shall give written notice of the default to the principal and surety of the bond. The notice shall state the work remaining to be done and the estimated cost of completion of the work. After receipt of the notice, the principal or the surety must, within 21 calendar days, notify the City of its intent to complete the construction or, within 35 calendar days, deposit with the City Manager an estimate of the completion cost plus an additional sum equal to 25 percent of the cost, not to exceed the amount of the required bond.

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Chapter 12: Land Development Reviews

(10-2024)

• (3) If the principal or surety deposits the estimated cost plus 25 percent as set forth in the notice, the City Manager shall cause the required work to be completed. The unexpended money shall be returned to the depositor at the completion of the work, together with an itemized accounting of the cost. The principal and surety shall hold the City harmless from any liability in connection with the work so performed by the City or contractor employed by the City. The City shall not be liable in connection with the work other than for the expenditure of the money.

• (4) If the principal or surety fails to deposit the estimated cost plus 25 percent with the City, the City Manager may cause the required work to be completed. The principal and the surety shall be liable for the cost of completing all necessary work including all administrative costs, and overhead incurred by the City to complete the work and collect the costs. The City shall reserve the right to accept bonds from the surety companies as related to the future project.

• (5) If the principal or surety issues a notice of cancellation, the notice of cancellation shall be sent to the City Manager with sufficient information describing the project, permit type, permit number, date issued, and purpose of the permit.

• (6) The amount of the bond covering a specific project shall be approved by the City Manager based on the amount of the estimate of the cost of work and the following schedule:

• (A) Appurtenances: 100 percent of the estimated cost of private drainage structures or other grading appurtenances;

  • (B) Revegetation: 50 percent of the estimated cost of revegetation and irrigation systems;

  • (C) Grading : 100 percent of the estimated cost up to $5,000 and $5,000 plus 50 percent of the estimated cost above $5,000 and up to $50,000 and plus 25 percent of the estimated cost above $50,000;

  • (D) Public Improvements : 110 percent of the estimated cost of public improvements and structures ;

  • (E) Encroachments : 110 percent of the estimated cost of repair and restoration of the public right-of-way to its original condition.

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• (F) Shoring Restoration: 100 percent of the estimated cost of restoring site to the original condition, together with removal of all tie backs and shoring.

• (b) The permit holder may utilize an annual and continuing bond for more than one permit provided the total amount of the bond exceeds the aggregate bond amount of the permits outstanding. Annual and continuing bonds shall contain a clause providing the City Manager with 30 calendar days notice before cancellation.

• (c) In lieu of a bond, the permit holder may post a cash deposit, or other security acceptable to the City Manager, with the City Treasurer in an amount equal to the required bond. In the event of a default, the notice of the default as provided above shall be given to the principal and if the default is not corrected within the time specified, the City Manager shall proceed without delay and without further notice of proceeding to use the cash deposit or other security or any portion of the deposit or security to complete the required work. The balance, if any, of the cash deposit shall, upon completion of the work, be returned to the permit holder after deducting the cost of the work.

• (d) No bond, under the provisions of this article, shall be required from the State of California, its political subdivisions , or any governmental agency.

• (e) Permits issued directly to a contractor pursuant to an approved application by the State of California, any of its political subdivisions , or any governmental agency shall require a bond unless proof is submitted that the work is covered by a bond inuring to the benefit of the state or agency.

• (f) The City Manager may waive the requirement for a bond, as established in the Land Development Manual.

(Amended 6-12-2001 by O-18948 N.S.) (Amended 8-4-2011 by O-20081 N.S.; effective 10-6-2011.) (Amended 7-31-2012 by O-20187 N.S.; effective 8-30-2012.)

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San Diego Municipal Code (10-2024)

Chapter 12: Land Development Reviews