A. Improvement Agreements: If all required improvements, and inspections are not satisfactorily completed before a parcel or final map is approved, the owner(s) of the subdivision shall, before the approval of the parcel or final map, enter as contractor into an improvement agreement with the council whereby in consideration of the acceptance by the council of the streets, easements, and any other land offered for dedication, the contractor agrees to furnish the equipment, labor, and material necessary to complete the work within the time specified in the agreement. In order to work within the public right of way, one must be a licensed contractor in the state of California.
B. Amount Of Security Required: To ensure that the work will be completed, improvement security shall be furnished to guarantee the performance of any act or improvement agreement in the following amounts and for the following purposes:
1. An amount, not less than one hundred percent (100%) of the total estimated cost of the improvement or of the act to be performed, conditioned upon the faithful performance of the required act or improvement agreement.
2. An additional amount, not less than fifty percent (50%) nor more than one hundred percent (100%) of the total estimated cost of the improvement or the performance of the required act, securing payment to the contractor, to the subcontractors, and to persons furnishing labor, materials, or equipment to them for the improvement or the performance of the required act.
3. Whenever an entity required to furnish security in compliance with this section is a California nonprofit corporation, funded by the United States Of America or one of its agencies, or funded by this state or one of its agencies, the entity shall not be required to comply with subsections B1 and B2 of this section, if the following conditions are met:
a. The contractor installing the improvements has bonded to the nonprofit corporation and the town as co-obligee the amount of one hundred percent (100%) of the contract for the faithful performance of the work, and has further bonded to the nonprofit corporation and the town as co-obligee an amount of not less than fifty percent (50%) of the contract for the payment of labor and materials, and those bonds comply with the provisions of this section.
b. All monies payable to the contractor by the nonprofit corporation are deposited in a depository complying with the provisions of the subdivision map act 1 and out of which progress payments are conditioned upon:
(1) The contractor's certification to the nonprofit corporation that all labor performed in the work and all materials furnished to and installed in the work, have been paid for in full to the date of the certification.
(2) The written approval of the nonprofit corporation.
(3) The review and approval of progress payment billings by director. The term "progress payment" as used in this section shall mean payment made in compliance with the schedule of partial payments agreed upon in the contract for the work. No less than ten percent (10%) of the total contract price shall be retained for the sixty (60) days following the filing of the notice of completion.
(4) Final payment to the contractor not being made until sixty (60) days shall have expired after the filing and recording of the notice of completion of the work and written acceptance of the work by the town.
c. All certifications as to progress payments shall be delivered through the U.S. mail to the nonprofit corporation.
4. An amount as determined by the director, but not more than twenty five percent (25%) of the total estimated cost of improvements or performance of the required act necessary for the guarantee and warranty of the improvement for twelve (12) months following the completion and acceptance, against any defective work or labor done, or defective materials furnished.
5. As part of the obligation guaranteed by the security and in addition to the face amount of the security, there shall be included costs and reasonable expenses and fees, including reasonable attorney fees incurred by the town in successfully enforcing the obligation secured.
C. Type Of Security Required:
1. The furnishing of security in connection with the performance of any act or improvement agreement shall be one of the following, at the option of and subject to the approval of the town council:
a. Bond or bonds by one or more duly authorized corporate sureties;
b. A deposit, either with the town, responsible bank or trust company, at the option of the town, of money or negotiable bonds of the kind approved for securing deposits of public monies; and
c. A letter or other 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 improvement agreement are on deposit and guaranteed for payment.
2. Bonds to secure faithful performance and for the benefit of laborers and material of any agreement, shall be in substantially the forms as shown in the subdivision map act 1 . The money, negotiable bond, or instrument of credit shall be a trust fund to guarantee performance and shall not be subject to enforcement of a money judgment by any creditors of the depositor until the obligation secured thereby is performed to the satisfaction of the town. (Ord. 242, 9-3-2013)
Notes
| 1 | 1. GOV § 66473 et seq. |
| 1 | 1. GOV § 66473 et seq. |