(A) General.
(1) Any improvement agreement, contract or act required or authorized by the Subdivision Map Act or this title, for which security is required, shall be secured in accordance with Cal. Gov’t Code §§ 66499 et seq. and as provided below.
(2) No final or parcel map shall be signed by the County Engineer or recorded until all improvement securities required by this section have been received and approved.
(B) Form of security. The form of security shall be one of the following or a combination of the following subject to the approval of the county:
(1) A deposit, either with the county or a responsible escrow agent, bank acting as an escrow agent or trust company, at the option of the county, of money;
(2) A bond by one or more duly authorized corporate sureties in the form required by Cal. Gov’t Code §§ 66499.1 and 66499.2;
(3) An instrument of credit from any agency of the state, federal or local government when any agency of the state, federal or local government provides at least 20% of the financing for the portion of the act or agreement requiring security or an instrument of credit or letter 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; or
(4) If the security is material and labor security, then the security alternatively may consist of a security interest in real property represented by a deed of trust on the subdivision property, second in position only to the subdivision improvement construction loan, and securing the written obligation of the subdivider to pay claims of laborers and material persons in an amount provided for in division (C)(2) below, and providing the same obligation for payment as appears in the bond required by Cal. Gov’t Code § 66499.2; provided, however, that the second position trust deed obligation shall be subject to an obligation to subordinate the trust deed to additional advances as determined by an institutional lender to be required in order to complete the subdivision improvements upon which the recording of the final map is conditioned. In the exercise of the discretion of the County Engineer, the county may require substitute security at any time the county determines that the security interest in real property is inadequate to reasonably insure repayment of the obligations secured.
(5) In the event developer is a non-profit corporation as described in Cal. Gov’t Code § 66499.3(c), security may be in any form required by the Subdivision Map Act.
(C) Amount of security. Security to guarantee performance shall be in the following amounts.
(1) Performance security. One hundred percent of the total estimated construction cost to guarantee the construction or installation of all improvements.
(2) Material and labor security. An additional amount of 50% of the total estimated construction cost to guarantee payment to subdivider’s contractor, subcontractors and to persons furnishing labor, materials or equipment for the construction or installation of improvements, in the case of security provided in the forms specified in divisions (B)(1), (2) or (3) above. In the case of security provided in the form specified in division (B)(4) above, the amount of the security shall be an amount equal to 100% of the total estimated construction cost.
(3) Monument security. An amount equal to 100% of the County Engineer’s estimate of the cost of monuments.
(4) Warranty security. An amount as required by the County Engineer but in no event less than 10% of the estimated cost of construction of the improvements to guarantee the improvements against any defective work or labor done or defective materials used in the construction or installation of the improvements throughout the warranty period which shall be the period of one year following completion and acceptance of the improvements.
(5) Costs.
(a) As part of the obligation guaranteed by the security and in addition to the full amount of the security, there shall be included costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by the county in enforcing the obligations secured.
(b) The estimate of construction costs shall be as approved by the County Engineer and shall provide for:
1. Ten percent of the total estimated construction cost for contingencies; and
2. All utility installation costs or a certification acceptable to the County Engineer from the utility company that adequate security has been deposited to ensure installation.
(6) In the event developer is a non-profit corporation as described in Cal. Gov’t Code § 66499.3(c), security shall be in the amount required by the Subdivision Map Act, § 66499.3(c).
(D) Release of security.
(1) Performance security. The performance security shall be released only upon final completion and acceptance of the improvements by the county and when an approved warranty security has been submitted with the County Engineer. If a warranty security is not submitted, performance security shall be released 12 months after the acceptance of improvements and correction of all warranty deficiencies. The County Engineer may authorize, in writing, the release of a portion of the performance 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, but in no case shall the security be reduced to less than 10% of the total improvement security given for faithful performance. The amount of reduction of the security shall be determined by the County Engineer; however, in no event shall the County Engineer authorize a release of the improvement security which would reduce security to an amount below that required to guarantee the completion of the improvements and any other obligation imposed by the Subdivision Map Act, this code or the improvement agreement.
(2) Material and labor security.
(a) 1. Security securing the payment to the contractor, his or her subcontractors and to persons furnishing labor, materials or equipment shall, after passage of the time within which claims of lien are required to be recorded pursuant to Cal. Civil Code Article 3 (commencing with § 3114) of Chapter 2 of Title 15 of Part 4 of Division 3 and after acceptance of the work, be reduced to an amount equal to the total claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the legislative body, and if no such claims have been recorded, the security shall be released in full.
2. The release shall not apply to any required guarantee and warranty period required by Cal. Gov’t Code § 66499.9 for the guarantee or warranty nor to the amount of the security deemed necessary by the local agency for the guarantee and warranty period nor to costs and reasonable expenses and fees, including reasonable attorneys’ fees.
3. The County Engineer shall authorize release or reduction of the security in accordance with the conditions hereinabove set forth.
(b) In the event a subdivider gives county security for materials and labor in the form of that specified in division (B)(4) above, and the subdivider for whatever reason desires to change the form of security, the county shall release such security only upon the filing by subdivider of an authorized security in a form other than that specified in division (B)(4) and in an appropriate amount, as specified in this division (C)(2).
(c) In the event a subdivider gives county security for materials and labor in the form of that specified in division (B)(4) above, and the subdivider or a successor in the interest desires to sell one or more lots in the subdivision, the county shall release the security interest on the lots to be sold, upon the furnishing of security in the form specified in divisions (B)(1), (2) or (3), or any combination thereof, in an amount, for each lot proposed to be released, equal to 50% for materials and labor security in a sum determined by dividing the total estimated cost of construction remaining by the total number of lots shown on the recorded final subdivision map as to which there has been no prior security release.
(3) Warranty security. The warranty security shall be released upon satisfactory completion of the warranty period, provided that all deficiencies appearing on the warranty deficiency list for the subdivision have been corrected.
(4) Monument security. Monument security shall be released upon receipt of notices per Cal. Gov’t Code § 66497.
(1966 Code, § 17-71) (Ord. 617, § 2(part); Ord. 682, § 1)