(A) Before the issuance of any building permit, the subdivider shall furnish the city with a maintenance bond, or other surety instrument such as a letter of credit or escrow account. The purpose of the maintenance bond/surety instruments is to assure the quality of materials and workmanship and maintenance of all required improvements including the city’s costs for collecting the guaranteed funds and administering the correction and/or replacement of covered improvements in the event the subdivider defaults. The maintenance bond or other surety instrument shall be satisfactory to the city as to form, sufficiency and manner of execution. For water and sewer related improvements, the bond or other instrument shall be in an amount equal to 20% of the cost of improvements verified by the city Engineer and shall run for a period of one calendar year. Bonds or other instruments for streets and drainage facilities shall be in an amount equal to 40% of the improvements verified by the city Engineer and shall run for a period of two calendar years. Effective time frame for bonds or other instruments will be measured from the date of release of the performance surely instrument, or signing and recording of the final plat whichever is later. In an instance where a maintenance bond or other surety instrument has been posted and a defect or failure of any required improvement occurs within the period of coverage, the city may declare the bond or surety instrument to be in default and require that the improvements be repaired or replaced.
(B) Whenever a defect or failure of any required improvement occurs within the period of coverage, the city shall require that a new maintenance bond or surety instrument be posted for a period of one full calendar year, except streets and drainage channels and structures which will be for two calendar years. The amount of the bond or instrument will be equal to the amount required to correct the fault or failure. Effective time frame for the new maintenance bond or other instrument shall begin on the date the city inspects and approves the required correction.
(Ord. 2010-08, passed 3-9-10)