(A) Conformance required; prerequisite to approval of maps.
(1) Any agreement, or act required or authorized by the Subdivision Map Act, for which security is required, shall be secured in accordance with Section 66499 of the State Subdivision Map Act and as provided herein.
(2) No final map or parcel map shall be signed by the City Engineer or recorded until all improvement securities required by this section have been received and approved.
(B) Form of security.
(1) The form of security shall be one or the combination of the following at the option and subject to the approval of the City Engineer.
(a) Bond or bonds by one or more duly authorized corporate sureties.
(b) A deposit, either with the local agency or a responsible escrow agent or trust company, at the option of the city, or money or negotiable bonds of the kind approved for securing deposits of public monies.
(c) An instrument of credit from one or more financial institutions subject to regulation by the state or federal government and pledging that the funds necessary to carry out the act or agreement are on deposit and guaranteed for payment.
(d) A lien upon the property to be divided, created by contract between the owner and the city, if the local agency expressly finds that it would not be in the public interest to require the installation of the required improvement sooner than two years after the recordation of the map.
(e) A lien in the form of deed of trust upon the real property if approved by the City Engineer.
(2) The provisions of the bond or bonds shall be in accordance with Sections 66499.1 and 66499.2 of the State Subdivision Map Act.
(C) Real property liens.
(1) The City Engineer shall have the discretion to accept or reject liens upon real property offered as good and sufficient subdivision security.
(2) In considering offered liens, the City Engineer may consider any factor he finds relevant and may require the subdivider to submit such information as he deems necessary.
(3) An application to the City Engineer shall contain the following:
(a) Two current appraisals prepared by an independent appraiser commonly accepted by financial institutions.
(b) A current preliminary title report.
(c) A current credit report.
(d) A contract for the installation of the subdivision improvements unless the subdivider is licensed to perform such work.
(e) A loan commitment or other source of funding the construction.
(f) Two copies of the tentative map and letter of approval.
(g) An application fee in the amount set by resolution.
(4) Subdivision real property liens shall be senior to all other liens and in the case of subdivision of four or fewer parcels shall not exceed 50% and in the case of subdivision of five or more lots shall not exceed 30% of the appraised unsubdivided value of the property.
(5) Upon approval, an escrow shall be opened providing for the preparation of the deed of trust, issuance of a standard form title policy in favor of the city in the amount of the lien, closure of escrow within 45 days and payment of all escrow cost fees and expenses by the subdivider.
(D) Amount of security.
(1) A performance bond or security in the amount of 100% of the estimated construction cost to guarantee the construction or installation of all improvements shall be required of all subdivisions. An additional amount of 50% of the estimated construction cost shall be required to guarantee the payment to the subdivider's contractor, subcontractors, and to persons furnishing labor, materials or equipment for the construction or installation of improvements.
(2) The estimate of improvement costs shall be as approved by the City Engineer and shall provide for:
(a) No less than 5% nor more than 10% of the total construction cost for contingencies.
(b) Increase for projected inflation computed to the estimated midpoint of construction.
(c) All utility installation costs or a certification acceptable to the City Engineer from the utility company that adequate security has been deposited to insure installation.
(d) In addition to the full amount of the security, there shall be included costs and reasonable expenses and fees, including attorney's fees, incurred in enforcing the obligation secured.
(E) Warranty security. Upon acceptance of the subdivision improvements by the City Council, the subdivider shall provide security in the amount as required by the City Engineer to guarantee the improvements throughout the warranty period. The amount of the warranty security shall be not less than 10% of the cost of the construction of the improvements for the one-year warranty period.
(F) Reduction in performance security. The City Engineer may authorize in writing the release of a portion of the security in conjunction with the acceptance of the satisfactory completion of a part of the improvements as the work progresses upon application by the subdivider. The amount of reduction of the security shall be as determined by the City Engineer; however, 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 improvements and any other obligation imposed by this chapter, the Subdivision Map Act, or the improvement agreement.
(G) Release of improvement securities.
(1) Performance security. The performance security shall be released only upon acceptance of the improvements by the city and when an approved warranty security has been filed with the City Engineer.
(2) Material and labor security. Security given to secure payment to the contractor, subcontractors and to persons furnishing labor, materials or equipment may, six months after the completion and acceptance of the improvements by the City Council, be reduced to an amount equal to the amount of all claims therefore filed and of which notice has been given to the City Council. The balance of the security shall be released upon the settlement of all such claims and obligations for which the security was given.
(3) Warranty security. The warranty security shall be released upon satisfactory completion of the warranty period provided:
(a) All deficiencies appearing on the warranty deficiency list for the subdivision have been corrected.
(b) Not less than 12 months have elapsed since the acceptance of the improvements by the City Council.
('63 Code, § 10-4.808) (Ord. 416-C.S., passed 12-6-84; Am. Ord. 440-C.S., passed 1-16-86; Am. Ord. 444-C.S., passed 4-17-86; Am. Ord. 710-C.S., passed 3-20-07)