A. Whenever this Title authorizes or requires the furnishing of security in connection with the performance of any act or agreement, the security shall be in the form and in the amounts as specified pursuant to the Subdivision Map Act.
B. Form of security: A bond or bonds shall be allowed by one or more duly authorized corporate sureties duly admitted and licensed to transact insurance business in the State of California, to secure the faithful performance or for the security of laborers and materialmen and shall be substantially in the form prescribed by the Subdivision Map Act. In the discretion of the City Council, security in lieu or in addition to a bond or bonds may be had by way a cash deposit, an instrument of credit or a first lien upon the property to be divided.
1. In the event a cash deposit is utilized as security, the deposit shall be made directly to the City and shall be held by the City without interest paid to the depositor, pending release of such security in accordance with the Subdivision Map Act. The deposit agreement between the City and the person depositing the funds as security shall be in a form acceptable to the City Attorney.
2. In the event an instrument of credit is utilized as security, the form of the instrument of credit shall be acceptable to the City Attorney as set forth in Section 16.12.050B.1.-4. In the case that either a cash deposit or instrument of credit is utilized as security, an amount equal to the greater of $100,000 or 10% of the amount to be secured or an amount determined by the City at its discretion based upon the cost of the City to complete the improvements at prevailing wage, and shall be withheld until all obligations secured have been satisfied, the amount shall be withheld to secure the costs and reasonable expenses, including reasonable attorney fees, incurred by the City in successfully enforcing the secure obligation.
3. In the event first lien on the property to be divided is provided as security, the person giving such security shall furnish, at their expense, a policy of title insurance wherein the City is the insured under the policy, the policy insuring that the City's lien on the property to be divided is in first position ahead of any other liens or encumbrances on the property. The amount of the title insurance shall be equal to 200% of the total estimated cost of the improvements.
4. In the event a first lien on the property to be divided is provided as security, the person giving such security shall furnish, at their expense, a policy of title insurance wherein the City is the insured under the policy, the policy insuring that the City's lien on the property to be divided is in first position ahead of any other liens or encumbrances on the property. The amount of the Title insurance shall be equal to 200% of the total estimated cost of the improvements.
C. The amount of security for the faithful performance of the act or agreement to be secured shall be based upon the total estimated costs of the improvement as determined by the City Engineer. Improvements security securing faithful performance of all work, including sufficient funds to insure construction staking and contract administration by the subdivider's consulting engineer, shall be in an amount equal to 150% of the estimated costs of improvement. All improvement security shall be maintained in full force and effect for a period of twelve (12) months following acceptance of all improvements by the City to assure the property completion or maintenance of the work; provided, that substitution or partial release of security may be authorized by the City Engineer if, in his/her opinion, the substitution or partial release is consistent with proper completion or maintenance of the work and protection of possible lien holders, and further provided that the amount of the continuing security shall in no case be less than 50% of the amount of the original security.
D. In addition to the amount of security specified in subsection C. of this section (for example, 150% of the total estimated cost of improvement to secure faithful performance of the act or agreement), there shall also be provided an additional amount for labor and suppliers securing the payment to the contractor, to the subcontractors and to the persons furnishing labor, materials or equipment to them for the improvement or the performance of the required act. The amount of the security shall be an amount equal to 150% of the total estimated cost of the improvements as determined by the City Engineer, except that if the security is in the form of a cash deposit, deposits, or instrument of credit, then the amount to secure payments pursuant to this subsection shall be equal to 50% of the total estimated cost of the improvements.
(Ord. 824-2016 § 4 (part), 2017)