§ 62-2844. Performance security.

(a)

Performance security: An applicant shall be required to secure its performance security of the construction required under this article by a surety bond, letter of credit, savings account, certificate of deposit or execution of a tri-party escrow agreement. Such security shall not be required if a certificate of completion has been issued for all the subdivision improvements prior to final plat recordation. Where security is required, the applicant shall deliver a contract, and bids from at least two qualified, licensed general construction contractors or an estimate certified by the professional engineer of record for the complete construction of all improvements in compliance with the approved construction plans and specifications, design of the final plat, and the requirements of this article. A performance bond will not be accepted should the county manager or his designee determine that all construction be completed prior to the recording of the final plat.

(b)

Release or reduction of performance security: No security shall be released until a certificate of completion has been posted under this article. The board upon the recommendation of the county development engineer, and upon recommendation from the public works department, may reduce the amount of required security upon the completion and acceptance by the appropriate governmental units of all utility installations for the subdivision or the completion and approval of all the roads and drainage systems. The amount of the reduction of the security shall be relative to the amount of the cost of the utilities or roads and drainage which constitutes the entire subdivision improvement cost estimate used for posting security under this article. Upon the reduction of the security after completion of the improvement, the applicant shall be required to post security for the maintenance of such improvement.

(c)

Maintenance security: Where a request is made for acceptance of maintenance by the county of public improvements, security for maintenance in the amount of 25 percent of the construction cost of such public improvements shall be posted with the county. The security shall provide that the county shall be indemnified if the applicant does not replace or fully repair any public improvements in the subdivision which are defective in materials or workmanship, or which were not constructed in compliance with the approved plans and specifications, the design of such final plat, or the requirements of this article. The terms of the security shall provide that the security shall expire two years from the date the improvement was accepted for maintenance by county, unless the county serves by mail to the applicant written notice of routine maintenance deficiencies, that the improvements are defective in materials or workmanship, or were not constructed in compliance with the approved plans and specifications, the design of such final plat, or the requirements of this article within the two years. The county shall require an extension of such maintenance security if construction of subsequent phases causes construction traffic upon the completed roads of the prior phase.

(d)

Nature of security: The applicant shall deliver performance security in the amount of 125 percent of the estimated construction costs of the improvements that such improvements will be built within two years according to the approved construction plans and specifications, the final plat and the requirements of this article. The applicant will file maintenance security in the amount of 25 percent of the initial security for the maintenance of public improvements on completion of construction for a period of two years. The applicant shall provide the board security as follows:

(1)

The applicant shall deliver to the board a good and sufficient surety bond guaranteeing the construction of the subdivision improvements, and that such improvements shall be free from defects in materials and workmanship.

The bonds required by this section shall be issued from a company licensed as a surety in the state, listed by the U.S. Treasury Department, and rated AAAAA in Best Insurance Guide. The form of the bond submitted under this section shall be approved and filed with the county; or

(2)

The applicant shall deliver to the board a good and sufficient letter of credit issued by a banking institution guaranteeing the construction of the subdivision improvements and that such improvements shall be free from defects in materials and workmanship; or

(3)

The applicant shall establish a tri-party escrow account or provide a certificate of deposit in a federally insured bank or savings and loan institution. The tri-party escrow account or certificate of deposit, or letter of credit shall specify that payment to the county shall be made on the written demand of the county to the bank or institution and notice to the applicant that subdivision improvements have not been completed as required or that such improvements are not free from defects in materials or workmanship.

The applicant shall execute a performance contract with the board and the bank or financial institution when a surety bond, letter of credit, certificate of deposit or tri-party escrow account is furnished as security. Any bond or letter of credit furnished the board shall contain an agreement that the surety or financial institution shall pay the board costs, including reasonable attorneys' fees if the board finds it necessary to commence legal action on the security.

(e)

Security for municipalities: If the applicant is required to construct a public water system which will be accepted by a municipality, the applicant shall furnish the municipality such security as the municipality may require, including security for both performance and maintenance as may be required.

(Ord. No. 95-30, § 1, 7-11-95; Ord. No. 97-14, § 1, 5-27-97; Ord. No. 10-20, 10-12-10)