This Agreement made and entered into this day of , 20 , by and between ( ) (“Developer”) and the CITY OF APACHE JUNCTION, an Arizona municipal corporation (“City”) (collectively, the “Parties”) for improvement guarantee for the project known as (the “Project”) located at (the “Property”).
RECITALS
A. The City requires a performance guarantee sufficient to complete the public improvements as shown on the Improvement Plans of the Project.
B. Both Developer and City desire that a Certificate of Deposit (“security”) be pledged to the City in the amount (“Improvement Guarantee Amount”) sufficient to insure and guarantee that certain improvements, as hereinafter described, are made to the Property. The Certificate of Deposit shall be based on the Construction Cost Estimate as set forth in Exhibit A provided by Developer’s Consulting Engineer and approved by the development services project engineer and made part of this Agreement.
C. The Parties desire to set in writing their Agreement regarding the holding and distribution of such funds and the guarantee of the improvements to be made as set forth below.
AGREEMENT
NOW, THEREFORE, the Parties hereto agree as follows:
1. Improvement Guarantee Amount. The Parties, and each of them, hereby direct (Financial Institution Name) (“Bank”) to pledge to City for the benefit of Developer and City the Improvement Guarantee Amount, a Certificate of Deposit which shall be an amount of ( words ) ($ ). It is the specific intent and desire of the Parties that such Improvement Guarantee Amount be pledged to City for the purpose of guaranteeing that Developer performs work on the public improvements to the Property, which improvements will be made in accordance with City’s engineering standards and any utility companies’ standards. The Improvement Guarantee Amount shall be held by Bank in an interest bearing account, which shall be an account established solely for the purposes set forth in this Agreement and shall be pledged to City by Bank specifically for such improvements. Such specific improvements to the Property are those listed on Construction Cost Estimate in Exhibit A.
2. Distribution of Funds. The Parties agree that the Improvement Guarantee Amount shall only be reduced by City in an amount or amounts equal to completed work as specified in Exhibit A when, and only when, City’s public works department and any utility companies verify that such work has been completed, approved and inspected. No partial payment for any line item in Exhibit A shall be allowed. Ten percent (10%) of the total amount set forth in Exhibit A must be retained for a 1 year Construction Warranty Period, which starts at the final acceptance of the entire project by the city engineer.
3. Authorization Documents. For Developer to be eligible for payment or reduction in the amount of security under the terms of this Agreement, it must submit the following documents to City (herein the “Authorization Documents”):
a. A written statement signed by Developer indicating that such improvements are completed and reduction in security is requested.
b. A written statement signed by city engineer or his applicable designee verifying that the construction improvements claimed to be performed by Developer have in fact been so performed as the case may be.
c. Written statements signed by the affected utility companies verifying that the construction improvements claimed to be performed by Developer have in fact been performed and accepted, as the case may be.
4. Instruction to City. City agrees to notify Bank of the amount of reductions to the security in accordance with the provisions set forth herein and in a timely manner once the Authorization Documents noted above have been received subject to the administrative procedures established by city engineer. City may rely upon the Authorization Documents as full authorization to make the reductions requested therein, and shall incur no liability for acting in accordance with such Authorization Documents. In the event of a dispute between Developer and city engineer concerning the reduction of the Improvement Guarantee Amount, City shall not be obligated to reduce any portion of the Improvement Guarantee Amount until City receives Authorization Documents signed by both Developer and city engineer and in accordance with the established administrative procedures.
5. Certification of Receipt of Funds. City further agrees that it shall certify to Developer in writing when City has received the funds set forth in Section 1 above. The Parties agree and understand that this Agreement shall not become effective until this certification has been received by Developer.
6. City Administrative Fee. City shall charge an administrative fee based on the amount set forth in Exhibit A to administer this Agreement. The administrative fee shall be as follows:
ADMINISTRATIVE FEE
(Per Exhibit ‘A’ - Construction Cost Estimate)
Cost Estimate | Fee |
$10,000 to $ 99,999 | $500 |
$100,000 to $ 499,999 | $1,000 |
$500,000 to $ 999,999 | $2,000 |
$1,000,000 to $4,999,999 | $4,000 |
$ 5,000,000 to $9,999,999 | $8,000 |
$10,000,000 or more | $10,000 |
7. Forfeiture of Improvement Guarantee Amount. It is agreed that once construction has started, in the event the improvements in the above described project are not completed, as evidenced either by a lack of work on the improvements for a period of sixty (60) calendar days, or improvements as constructed are not acceptable to the city engineer and not in compliance with City standards, and the Developer refuses to make satisfactory corrections, the City of Apache Junction may, upon certified letter to the said Bank, draw from the Certificate of Deposit the amount necessary to complete the improvements or make satisfactory corrections. In no event shall City be obligated to use City funds for any Public Improvements.
8. Indemnification. Developer agrees to indemnify, defend, and hold harmless City, its elected officials, appointees, officers, departments, divisions, employees and agents, from any and all claims, liabilities, disputes, expenses or lawsuits brought by any party as a result of any negligent acts or omissions of City, its elected officials appointees, officers, departments, divisions, employees, and agents involving the obligations under this agreement, including but not limited to attorney fees, court costs, damages, and all appellate proceedings expenses.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and year first above written.
DEVELOPER: FINANCIAL INSTITUTION:
(DEVELOPER NAME) (BANK NAME)
By: By:
Its: Its:
CITY:
CITY OF APACHE JUNCTION, an Arizona municipal corporation
By:
Its:
APPROVED AS TO FORM:
R. Joel Stern City Attorney
STATE OF ARIZONA )
)
COUNTY OF )
On , 20 , before me, , a Notary Public in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and sworn to me that he/she executed the same in his/her authorized capacity for (DEVELOPER NAME).
WITNESS my hand and official seal
Notary Public
(seal)
STATE OF ARIZONA )
)
COUNTY OF )
On , 20 , before me, , a Notary Public in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and sworn to me that he/she executed the same in his/her authorized capacity for (DEVELOPER NAME).
WITNESS my hand and official seal
Notary Public
(seal)