Chapter 16.20
AGREEMENTS AND SECURITIES
Sections:
16.20.020 Agreement – Contents.
16.20.030 Agreement – Approval.
16.20.040 Deferred improvement agreement.
16.20.060 Improvement security – Generally.
16.20.080 Amount and purpose of required security.
16.20.090 Reduction of security.
16.20.100 Substitution of securities.
16.20.110 Release of security.
16.20.010 Generally.
A. The construction of all public and private improvements required in this division as a condition of the approval of subdivisions, parcel maps, reversions, use permits, and other actions or procedures requiring City approval, shall be guaranteed to be installed, provided, and constructed by the execution of a suitable agreement between the City and the subdivider or developer in a form generally described in this division and approved by the City Attorney.
B. All such agreements shall contain the terms and conditions to be met by the subdivider or developer and shall specify a reasonable time in which to construct the improvements or perform the requirements and obligations of the agreement.
C. The time allowed for the completion of the work shall be as specified by the City Engineer and shall depend on the amount and complexity of the work involved, the type of development, and other factors as he may see fit.
D. All such agreements shall be executed by the owner, or the developer, or the subdivider of the property being developed or subdivided.
E. All such signatures shall be acknowledged before a Notary Public, and the agreements shall be accompanied by evidence substantiating the signer’s position, title, and authority to bind the person, company, partnership, corporation, or other business entity to the actions, obligations and responsibilities contained in the agreement.
F. A reasonable deposit shall be paid by the subdivider or developer prior to the City Engineer’s inspection and checking of the construction of such improvements, to cover the expenses thereof, in an amount and in the manner as set by City Council resolution. (Ord. 80 § 1, 1982; CC § 81.801)
16.20.020 Agreement – Contents.
Any performance shall contain and provide for:
A. Construction of all required improvements per the approved plans and specifications and an estimate of the cost;
B. Completion of all improvements within a specified time;
C. The right of the City to modify the plans and specifications if necessary for the public health and safety, for the orderly development of the surrounding area, or if field situations, changed conditions, design error or omission require such modifications;
D. Improvement security in the amounts and of the type required by this chapter;
E. Warranty of the construction by the subdivider or developer for specified time limits;
F. Payment of all necessary and required fees, deposits, assessments, and costs as specified in this division or any other applicable code, ordinance, or resolution;
G. Maintenance and repair of any defects in materials or workmanship;
H. Release of the City from all liability incurred by the development, and the subdivider’s or developer’s payment of all reasonable attorney’s fees that the City may incur because of any legal action arising from the agreement of subdivision or development;
I. All construction to be performed by contractors licensed in this State;
J. Workman’s Compensation insurance and liability insurance by the subdivider, developer, their contractors and subcontractors, in the amounts and limits specified;
K. The maintenance and upkeep of all improvements until such time as formally accepted by the City, and for the continued maintenance of private, nondedicated roads;
L. The monumentation of the boundary and property lines within the development, submittal of survey tic notes, and the guarantee thereof by the posting of a cash or surety bond. (Ord. 80 § 1, 1982; CC § 81.802)
16.20.030 Agreement – Approval.
A. All performance agreements as required in this chapter shall be presented to the City Council for approval at the same meeting at which any final subdivision map or final parcel map is submitted for final approval. Upon approval of the instrument by Council, it shall be executed by the Mayor or other authorized representative on behalf of the City. Upon execution, the City may require that the agreement be recorded with the County Recorder.
B. Other performance agreements required for boundary adjustments, use permits, and for other actions and procedures requiring City approval may be approved and executed on behalf of the City by the City Engineer; provided, however, that the estimated cost of the improvements or obligations secured is less than $100,000.
C. Prior to approval by the City, all performance agreements shall be reviewed and approved by the City Attorney. (Ord. 80 § 1, 1982; CC § 81.802.1)
16.20.040 Deferred improvement agreement.
A. In subdivisions of four or fewer parcels, or where a use permit or building permit is requested, or where improvements are required as condition of the approval of a boundary adjustment or merger or any other action requiring City approval, any public or private improvements so required may be deferred if it is determined by the City Council in the case of parcel maps or by the City Engineer in the other instances that their construction ahead of other adjacent improvements would cause a safety hazard, maintenance problem, drainage problem, or result in an inconsistent or unreasonably short reach or section of improvements, or that other special circumstances or physical constraints are present which preclude the construction of the improvements in a reasonable or timely manner. When improvements are deferred, the subdivider or developer shall enter into an agreement with the City for the installation of such improvements at some specified time in the future. Such agreement shall provide:
1. Construction of said improvements shall commence within 90 days of receipt of a notice to proceed from the City.
2. That in event of default by the owner, his successors or assigns, the City is authorized to cause said construction to be done and charge the entire cost and expense to the owner, his successors or assigns, including interest from the date of notice of said cost and expense until paid.
3. That the agreement be recorded in the office of the County Recorder, at the expense of the owner, which shall constitute notice to all successors and assigns of the title to said real property of the obligation set forth in this chapter, and also a lien in such amount as will fully reimburse the City, including interest as set forth in this chapter, subject to foreclosure in event of default in payment.
4. That in event of litigation occasioned by any default of the owner, his successors or assigns, the owner, his successors or assigns agree to pay all costs involved, including reasonable attorney’s fees, and that same shall become a part of the lien against said real property.
5. That the term “owner” includes not only the present owner but also his heirs, successors, executors, administrators and assigns, it being the intent of the parties hereto that the obligations undertaken in this chapter shall run with said real property and constitute a lien there against.
B. The agreement shall not relieve the owner from any other requirements specified in this division. The construction of deferred improvements shall conform to the provisions of this division and all applicable articles of the municipal code in effect at the time of construction.
C. Deferred agreements for parcel maps shall be approved by the City Council prior to recordation in the case of agreements pertaining to parcel maps, or by the City Engineer, as provided in PMC 16.20.030.
D. Notwithstanding the above provisions of this section, the City Council may require the construction of all said improvements as a condition of the approval of a final parcel map of four or fewer parcels if it finds that construction of said improvements are necessary for reasons of:
1. The public health and safety; or
2. The required construction is a necessary prerequisite to the orderly development of the surrounding area. (Ord. 80 § 1, 1982; CC § 81.802.2)
16.20.050 Remainders.
A. Where remainders are made part of a final or parcel map, the City may enter into an agreement with the subdivider to construction improvements within the remainder at some future date and prior to the issuance of a permit or other grant of approval for the development of a remainder parcel. Said improvements shall be at the developer’s expense. In the absence of such an agreement, the City may require fulfillment of such construction requirements within a reasonable time following approval of the map, upon a finding that fulfillment of the construction requirements is necessary for reasons of:
1. The public health and safety; or
2. The required construction is a necessary prerequisite to the orderly development of the surrounding area.
B. Remainder agreements shall contain the same general provisions as required in PMC 16.20.040, and shall be approved by the City Council prior to recordations. (Ord. 80 § 1, 1982; CC § 81.802.3)
16.20.060 Improvement security – Generally.
Improvement securities shall be required to be posted as the guarantee of any act, obligation, or agreement required as a condition of the approval of any tentative or final subdivision map, parcel map, reversion, boundary adjustment, consolidation, merger, deferral, remainder parcel, use permit, building permit, or other permit or process requiring the official City approval. No final map or parcel map shall be presented to the City Council for final approval nor shall any other instrument or map requiring such securities be approved until all securities required by this chapter have been received and approved by the City Attorney. (Ord. 80 § 1, 1982; CC § 81.803)
16.20.070 Form of security.
The form of improvement security shall be one or the combination of the following at the option of and subject to the approval of the City Engineer:
A. A bond or bonds from one or more duly authorized corporate sureties, authorized to do business and having an Agent for Service of process in this State, which surety or sureties shall be on the accredited list of the United States Treasury Department and/or having an “A” policyholder’s rating and a financial rating Class XI or better in accordance with the most current “Bests’ Rating”;
B. A time certificate of deposit, savings passbook, or other financial instrument either in the name of or assigned to the City, in a form approved by the City Attorney;
C. Cash deposited with the City;
D. A deposit with a responsible escrow agent or trust company in a form approved by the City Attorney;
E. Negotiable bonds of a kind approved for securing deposits of public moneys;
F. A Letter of Credit or a Set Aside Letter from one or more financial institutions subject to the regulation of the State or Federal government and pledging that the funds necessary to carry out the act, obligation, or agreement are on deposit with the institution and are available to the City upon demand if the act, obligation, or agreement is not carried out. (Ord. 80 § 1, 1982; CC § 81.803.1)
16.20.080 Amount and purpose of required security.
A. Performance. Security shall be placed to guarantee faithful performance of any act, obligation, or agreement, in an amount equal to 100 percent of the estimated total cost of the work or improvements to be done.
B. Labor and Materials. Security shall be placed to guarantee payment to any contractor, subcontractor and persons furnishing labor, materials, or equipment in an amount equal to not less than 50 percent of the estimated total cost of the work or improvements to be done.
C. Warranty. Prior to acceptance of any subdivision or parcel map improvements by the City, security shall be placed as a guarantee and warranty of the work for the period after acceptance and approval of the work as specified in the agreement against any defective work or labor done or defective materials furnished. Such security shall be in an amount not less than 10 percent of the estimated total cost of work or improvements to be done.
D. Monuments.
1. Security shall be placed to guarantee placement of final monuments along the exterior boundary of any subdivision or parcel map, and along the interior lot lines, and to guarantee the submittal of survey notes, centerline ties, and other survey monument information as required by the City Engineer and to guarantee payment by the subdivider of the Civil Engineer or land surveyor who set the monuments. The amount of such security shall be as specified by the responsible Civil Engineer or land surveyor, or in the absence of such, by the City Engineer.
2. The amounts of any of the securities described herein shall include costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by the City in successfully enforcing any of the obligations secured. (Ord. 80 § 1, 1982; CC § 81.803.2)
16.20.090 Reduction of security.
A. The City Engineer may reduce and partially release securities posted as a guarantee of any act, obligation, or agreement as follows:
1. Improvement security shall be reduced only upon written request by the subdivider or developer who posted such security.
2. The City Engineer shall consider requests for the partial reduction of security only twice for any one agreement.
3. Upon receipt of a written request for reduction together with detailed estimates of the value of the work remaining to be completed, the City Engineer shall make determination whether such requests exceed the number allowed and if the security is sufficient in amount to be reduced. If satisfied that the security may be reduced, the City Engineer shall inspect the improvements and verify the percentage and the value of work remaining to be completed. The City Engineer may then authorize a reduction in the amount of security as follows:
a. No reduction shall be made where more than 50 percent of the original value of work remains to be completed.
b. Whenever 50 percent or more of the work has been completed, the original security may be reduced to the current value of the remaining work as a contingency. No reduction shall result in a remaining security less than 10 percent of the original. Any reduction authorized herein shall not apply to any required guarantee and warranty period, nor to the amount of the security deemed necessary by the City Engineer for such guarantee, nor to costs and reasonable attorney’s fees therefor.
c. Upon a determination that the security may be reduced and where the security takes the form of a surety bond or a letter of credit, the City Engineer shall notify the subdivider in writing of the amount of reduction and that the reduction does not apply to the warranty or guarantee period or the amount of security deemed necessary for such warranty or guarantee, not to costs and reasonable expenses and fees including attorney’s fees.
d. When the security takes the form of cash or other negotiable instrument, the City Engineer shall notify the Director of Finance to release an amount of said deposit which is computed as provided above in this section, less amounts estimated by the City Engineer to be necessary for the guarantee or warranty period, costs and reasonable expenses and fees including reasonable attorney’s fees. The Director of Finance is authorized to release said amounts upon written notification by the City Engineer.
B. Reduction of securities shall only be construed as formal acceptance of any of the improvements completed at the time of reduction, but shall not be construed as acknowledgement by the City that a specified amount of construction has been completed. (Ord. 811 § 15, 2017; Ord. 80 § 1, 1982; CC § 81.803.3)
16.20.100 Substitution of securities.
A subdivider or developer who has furnished improvement security to guarantee any act, obligation, or agreement, pursuant to this chapter, may request in writing that the City Engineer accept in place of said security any different form of security as provided for in this chapter. Upon receipt of the different security, and subject to its approval by the City Attorney, the original security may be released by the City Engineer, or by any other City officer having custody of the security instrument. (Ord. 80 § 1, 1982; CC § 81.803.4)
16.20.110 Release of security.
A. Any and all securities required to be posted to guarantee performance, labor and materials, warranty, or monumentation within or in conjunction with any subdivision or parcel map, shall be released by the City Council.
B. All securities to guarantee performance, labor and materials, warranty, or other act, obligation, or agreement, posted in conjunction with any boundary adjustment, use permit, construction permit, or other action or process requiring City approval may be released by the City Engineer, upon his filing of a written instrument with the City Clerk; provided, however, that the estimated total cost of the improvements or work to be constructed or provided does not exceed $100,000. Securities for work in excess of $100,000 shall be released by the City Council. The City Engineer, at his discretion, may refer any project, regardless of the security amount, to the City Council for consideration of release. (Ord. 80 § 1, 1982; CC § 81.803.5)
16.20.120 Timing for release.
A. Performance Security. Performance security shall be released only upon completion of all of the required work and improvements, and after all acts, obligations, and agreements have been completed and complied with, and only after suitable warranty security has been provided.
B. Labor and Material Security. Security securing the payment to the contractor, his or her subcontractors, and to persons furnishing labor, materials, or equipment, may, after passage of time within which claims of lien are required to be recorded pursuant to Article 3 (commencing with Section 3114) of Chapter 2 of Title 15 of Part 4 of Division 3 of the State Civil Code and after acceptance of the work, be reduced to an amount not less than the total claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the City Clerk of the City, and if no such claims have been recorded, the security may be released in full.
C. Warranty Security. Security posted for the warranty and guarantee of the work against any defective work or labor done or defective materials furnished shall be released upon termination of the warranty period specified in the performance agreement provided that all defects, if any, have been satisfactorily corrected.
D. Monument Security. Security given to guarantee installation of monuments, preparation and submittal of survey tie notes, and payment of the responsible Civil Engineer or land survey for same, shall be released upon:
1. Submittal to the City Engineer of an affidavit, signed by the Civil Engineer or land surveyor, certifying that all of the monuments shown on the final subdivision map or parcel map have been set and placed as shown on said map, and that he has been compensated by the subdivider or developer for those services;
2. The submittal to the City Engineer of a set of survey tie notes, in a form approved by the City Engineer; and
3. Field verification by the City Engineer that the monuments have been set. (Ord. 80 § 1, 1982; CC § 81.803.6)