Chapter 15.35
PERFORMANCE GUARANTEES AND WARRANTIES
Sections:
15.35.010 Performance guarantees.
15.35.040 Termination date for guarantee.
15.35.050 Time extensions to performance guarantees.
15.35.060 Utilization of funds provided by guarantees.
15.35.070 Reimbursement of City’s costs incurred to obtain funds provided by guarantees.
15.35.010 Performance guarantees.
All performance guarantees except for Erosion Control and Street Invasion Control (per subsection B of this section) shall be for 150 percent of a written estimate of the cost of construction of the required improvements associated with any development project. Said written cost estimate shall be provided by the developer and is subject to review and acceptance by the City.
A. The following forms of guarantees may be accepted by the City to require completion of required improvements associated with any development project; provided, that the funds cannot be withdrawn, spent, or committed to any third party, or, for any escrow or bank account assigned to the City, cannot be blocked as to withdrawal by the secured party without the City’s approval, unless required by court order:
1. Bond;
2. Escrow or assigned bank account;
3. Approved set aside letter from bank;
4. Certified or cashier’s check;
5. Cash deposit to the City of Mountlake Terrace;
6. Local Improvement District (LID) subject to City Council approval;
7. Letter of credit; or
8. A combination of the above.
B. Special Provisions for Erosion Control and Street Invasion Control Performance Guarantees.
1. Erosion Control Performance Guarantee. In addition to any other required performance and maintenance guarantees, and in conjunction with a clearing and grading permit, the developer shall be required to make a cash deposit to the City for assurance of proper erosion/siltation control and protection of creeks and improved public right-of-way during the course of a development project. The cash deposit shall be made prior to the issuance of any clearing and grading permit. The amount of the deposit shall be in accordance with the adopted City fee schedule. The City shall give the developer 24 hours’ notice of any required corrective or clean-up work related to erosion/siltation control, except that this shall be reduced to a four-hour notice if there is obvious hazard to health, safety or water quality. If the developer fails to adequately respond within the given time frame, the City will perform the work and any costs incurred will come out of the cash deposit. If there is any possibility of reoccurrence of similar problems, the City shall then give the developer written notice to replenish the cash deposit to its original level within five calendar days. If the developer fails to replenish as required, the City reserves the right to stop any work on the project that could contribute to such problems.
2. Street Invasion Performance Guarantee. In addition to any other required performance and maintenance guarantees, and in conjunction with associated utility construction permit(s), the developer shall be required to make a cash deposit to the City for assurance of proper street invasion controls to protect improved public rights-of-way during the course of a development project. The developer shall make a deposit for each invasion of a public street in accordance with the adopted City fee schedule. Said cash deposit shall be made prior to issuance of any associated utility construction permit. The City shall give the developer 24 hours’ notice of any required corrective or clean-up work related to street invasion episodes, except that this shall be reduced to a four-hour notice if there is obvious hazard to health and safety. If the developer fails to adequately respond within the given time frame, the City will perform the work and any costs incurred will come out of the cash deposit. If there is any possibility of reoccurrence of problems associated with the street invasion incident, the City shall then give the developer written notice to replenish the cash deposit to its original level within five calendar days. If the developer fails to replenish the cash deposit as required, the City reserves the right to stop any work on the project that is related to the street invasion incident. (Ord. 2599 § 3, 2012; Ord. 2185 § 1, 1998; Ord. 1659 § 1, 1986).
15.35.020 Maintenance guarantees and warranty guarantees against defects in materials and/or workmanship.
All maintenance and warranty guarantees shall be for 20 percent of the estimated cost of construction of the required improvements associated with any development project. The following forms of guarantees are acceptable to the City to assure proper maintenance of required improvements associated with any development project, or to assure good quality materials and workmanship for required improvements:
1. Bond;
2. Escrow or assigned bank account;
3. Cash deposit to the City of Mountlake Terrace;
4. A combination of the above. (Ord. 1659 § 2, 1986).
15.35.030 Exceptions.
Any state agency or local unit of government shall be exempt from the requirements of this chapter to provide a financial security device for assuring performance or maintenance as a condition of issuing a permit to that entity for a construction project. The agency or government shall provide written assurance to the City that adequate provisions have been made to guarantee the required performance or maintenance. (Ord. 2103, 1996; Ord. 1659 § 3, 1986).
15.35.040 Termination date for guarantee.
Regardless of the form or type of guarantee, the City shall establish a termination date for the guarantee. The maximum time period for a performance guarantee shall be 12 months. The maximum time period for a maintenance guarantee or a warranty guarantee against defects in materials and/or workmanship shall be two years. An extension of the guarantee may be allowed pursuant to MTMC 15.35.050. (Ord. 2599 § 4, 2012; Ord. 2103, 1996; Ord. 1659 § 4, 1986).
15.35.050 Time extensions to performance guarantees.
A. Intent and Purpose. The intent and purpose of this section is to establish minimum performance criteria to allow consideration by the Community and Economic Development Director of requests for time extensions to performance guarantees while required improvements or repairs are being completed.
B. Extension Requirements and Criteria.
1. All of the following must be satisfied in order for any element covered by the time extension request to receive consideration for approval:
a. The request must be made in writing to the Community and Economic Development Director in the form of a letter. The letter shall identify the project, the length of time extension requested up to, but no longer than, six months, and address all time extension requirements, as set forth in the remainder of subsection B and, when applicable, subsection D of this section; and
b. Satisfactory description of the unforeseen circumstances or conditions beyond the control of the applicant/developer that necessitate the extension; and
c. Sufficient description of why an extension will not cause substantial detriment to existing uses on or in the immediate vicinity of the subject property; and
d. A demonstration that the public health, safety, and general welfare of the public is not compromised; and
e. A complete and sufficient application as determined by the Community and Economic Development Director is received a minimum of 15 days prior to the expiration of the current time limit; and
f. Application is accompanied by the required fee.
2. Evaluation and action on the extension request may include review of the SEPA environmental determination, if any, for the proposal. If necessary, adequate mitigation measures may be added in order to minimize any potential adverse impact associated with the proposed time extension.
3. Economic hardship or market conditions shall not be considered as criteria for approval.
C. Review and Approval. All extension requirements must be met for approval to be considered. After reviewing the proposed time extension for conformance with the extension requirements, the Community and Economic Development Director shall issue a determination of approval, partial approval or denial of the time extension request. The determination shall be made in writing within 15 days of a receipt of a complete and sufficient written request. The extension granted may be for only portions of the outstanding work and for less than six months. Any items not accepted for a time extension must be completed within the original time frame permitted by the guarantee. Under no circumstances shall any time extension approval become effective until and unless a performance guarantee is submitted for review and acceptance by the City prior to the expiration of the previous guarantee.
D. Limitations on Extension. No more than two extensions may be granted. The second extension may be granted if, and only if:
1. The requirements listed in subsection B of this section are met; and
2. The applicant has demonstrated reasonable diligence in attempting to complete items covered by the performance guarantee within the specified time. (Ord. 2599 § 5, 2012; Ord. 2103, 1996; Ord. 1659 § 5, 1986).
15.35.060 Utilization of funds provided by guarantees.
A. Performance Guarantees. If the required improvements associated with a development project are not completed by the termination date of the performance guarantee, the City shall use said guarantee to construct the improvements in accordance with the City’s standards. In the case of Erosion Control and Street Invasion Control performance guarantees, if the developer fails to adequately respond within the specified time frame of the City’s notification of required corrective or cleanup work, the City shall apply these funds toward the cost of performing this work.
B. Maintenance Guarantees. In the event that required improvements are not properly maintained during the required maintenance guarantee period, the City shall notify the developer/owner. If the developer/owner fails to correct the problem within a period of 15 days, the City shall use said maintenance guarantee to perform the maintenance work.
C. Warranty Guarantees Against Defects in Materials and/or Workmanship. Should any failures occur in regard to required improvements associated with a development project within the warranty period, the City shall require the developer/owner to correct all failures. Should the developer/owner fail to perform within a period of 15 days, the City shall use said warranty guarantee to correct any failures. (Ord. 2103, 1996; Ord. 1659 § 6, 1986).
15.35.070 Reimbursement of City’s costs incurred to obtain funds provided by guarantees.
If the City finds it necessary to utilize funds provided for any guarantee, and incurs expenses in obtaining and administering such funds, a portion of these monies shall also be used to reimburse the City for such costs. If the guarantee is not adequate to cover all necessary costs, the developer/owner shall be required to make up the deficit in cash within 30 days of receipt of written notice from the City. (Ord. 2103, 1996; Ord. 1659 § 7, 1986).
15.35.080 Administration.
This chapter shall be administered by the Community and Economic Development Director. (Ord. 2599 § 6, 2012; Ord. 2103, 1996; Ord. 1659 § 8, 1986).