Chapter 175 – BONDS
Sections:
175.05 User Guide
175.10 When May a Bond Be Used
175.15 Type of Bond
175.20 Amount of the Bond
175.25 Supplemental Administrative Costs
175.30 Bond Agreement
175.35 Irrevocable License Signed by the Owner of the Subject Property
175.40 Release of Bond and Cash Deposit
175.45 Use of Proceeds – Notice to Property Owner
175.50 Use of Proceeds – Work by the City
175.55 Use of Proceeds – Refund of Excess Charge for All Costs
175.60 Use of Cash Deposit
175.65 Itemized Statement
175.05 User Guide
Various places in this code state that the City either may or shall require an applicant to post a bond to ensure continued compliance with some aspect of this code. Bonds for this purpose are referred to as maintenance bonds. In addition there are circumstances where an applicant may wish to post a bond in lieu of doing certain site work prior to occupancy. Bonds for this purpose are referred to as performance bonds. This chapter provides the regulation regarding under what circumstances the City will accept a bond, the nature of the bond, and other information about administering and using bonds.
175.10 When May a Bond Be Used
1. Maintenance Bond – The Planning Official and/or Public Works Official may require an applicant to establish a maintenance bond only if another provision of this code or other ordinance specifically authorizes it.
2. Performance Bond – General – The Planning Official and/or Public Works Official may allow an applicant to establish a performance bond and obtain a certificate of occupancy or other permit in advance of completing all required work or improvements if the following criteria are met:
a. The applicant is unable to complete the work or improvements to be covered by the bond because of unavoidable circumstances that in no way resulted from the actions or inaction of the applicant.
b. It is reasonably certain that the applicant will be able to complete the work or improvements to be covered by the bond within a reasonable amount of time.
c. Granting the certificate of occupancy or other permit prior to completion of the work or improvements will not be materially detrimental to the City or the properties in the vicinity of the subject property.
(Ord. 3814 § 1, 2001)
175.15 Type of Bond
In each case where the City requires or allows an applicant to post a bond, the Planning Official and/or Public Works Official shall determine the type of bond that will be used, and shall select the type that will be least burdensome on the applicant while fully protecting the interests of the City.
(Ord. 3814 § 1, 2001)
175.20 Amount of the Bond
1. General – The Planning Official and/or Public Works Official shall determine the amount of the bond as follows:
a. For a maintenance bond the amount will be 30 percent of the cost of replacing the materials covered by the bond based on estimated costs on the last day covered by the device.
b. For a performance bond the amount will be 100 percent of the cost of the work or improvements covered by the bond based on estimated costs immediately following the expiration of the bond.
2. Assistance in Determining Estimated Costs – The Planning Official and/or Public Works Official may consult with one (1) or more persons with applicable special knowledge or expertise in determining the amount of a bond under subsection (1) of this section. The applicant shall pay the actual costs of this consultation prior to the Planning Official and/or Public Works Official accepting the bond and signing the bond agreement under KZC 175.30.
(Ord. 3814 § 1, 2001)
175.25 Supplemental Administrative Costs
In addition to the bond and any consultation fees under KZC 175.20, the applicant shall post a cash deposit with the City equal to the following percentages of the amount of the bond:
|
Amount of Bond |
Amount of Cash Deposit |
|---|---|
|
Up to $20,000 |
5% of the bond |
|
$20,001 to $50,000 |
4% of the bond |
|
$50,001 to $100,000 |
3% of the bond |
|
$100,001 and up |
2-1/2% of the bond |
This cash deposit will be used to cover the City’s actual expenses of administering, and if necessary, using the proceeds of the bond. The minimum amount of the cash deposit will be administratively set and updated.
(Ord. 4193 § 1, 2009)
175.30 Bond Agreement
In each case where the City requires or allows an applicant to post a bond, the applicant and the Planning Official and/or Public Works Official shall sign an agreement prepared by the City stating the following:
1. The work or improvements covered by the bond.
2. Either the period of time covered by the maintenance bond or the date after which the City will use the proceeds of the performance bond to complete the required work or improvements.
3. The amount and nature of the bond and the amount of the cash deposit.
4. The rights and duties of the City and the applicant as established in this chapter.
(Ord. 3814 § 1, 2001)
175.35 Irrevocable License Signed by the Owner of the Subject Property
In each case where the City requires or allows an applicant to establish a bond, the owner of the subject property shall give the City a signed notarized irrevocable license to run with the property to allow the employees, agents, or contractors of the City to go on the subject property for the purpose of inspecting and, if necessary, doing the work or making the improvements covered by the bond. The applicant shall file this license with the King County Recorder’s Office.
(Ord. 4491 § 11, 2015)
175.40 Release of Bond and Cash Deposit
After the work or improvements covered by a performance bond have been completed or, at the end of the time covered by a maintenance bond, the applicant may request the City to release the bond and refund the cash deposit. If the applicant has complied with the bond agreement and this code, the Planning Official and/or Public Works Official shall release the bond and the cash deposit remaining after any subtractions under KZC 175.55 and 175.60.
(Ord. 3814 § 1, 2001)
175.45 Use of Proceeds – Notice to Property Owner
If during the period of time covered by a maintenance bond or after the date by which the required work or improvements are to be completed under a performance bond, the Planning Official and/or Public Works Official determines that the bond agreement has not been complied with, he/she shall notify the applicant of this. The notice must state:
1. The work that must be done or the improvement that must be made to comply with the bond agreement; and
2. The amount of time, not to exceed 30 days, that the applicant has to commence and complete the required work or improvements; and
3. That, if the work or improvements are not commenced and completed within the time specified, the City will use the proceeds of the bond to have the required work or improvements completed.
(Ord. 3814 § 1, 2001)
175.50 Use of Proceeds – Work by the City
If the work or improvements covered by the bond are not completed within the time specified in the notice given under KZC 175.45, the City shall obtain the proceeds of the bond and do the work or make the improvements covered by the bond. The City may either have employees of the City do the work or make the improvements or, by using procurement procedures established by law, have a contractor do the work or make the improvements.
175.55 Use of Proceeds – Refund of Excess Charge for All Costs
The property owner is responsible for all costs incurred by the City in doing the work and making the improvements covered by the bond. The City shall release or refund any proceeds of a performance bond remaining after subtracting all costs for doing the work or making the improvements covered by the bond. The City shall release or refund any proceeds of a maintenance bond remaining at the end of the time covered by the bond after subtracting all costs for doing the work covered by the bond. The owner of the subject property shall reimburse the City for any amount expended by the City that exceeds the proceeds of the bond. The City may file a lien against the subject property for the amount of any excess.
175.60 Use of Cash Deposit
The City shall subtract all of its expenses incurred in administering and, if necessary, using the proceeds of the bond from the cash deposit. After the work or improvements covered by a performance bond have been completed or at the end of the time covered by a maintenance bond, the City shall refund any remaining funds. If the amount of the cash deposit is insufficient to cover the City’s costs in administering and, if necessary, using the proceeds of the bond, the property owner shall pay this amount to the City prior to the release of the bond. The City may file a lien against the subject property for this amount.