Chapter 3.78
GUARANTEES AND BONDS FOR LAND USE AND PUBLIC IMPROVEMENTS
Sections:
3.78.040 Maintenance/warranty bonds.
3.78.010 Purpose.
This chapter provides a centralized location in the Sequim Municipal Code for information about the guarantees, bonds, and warranties that may be required by the city to ensure satisfactory completion and maintenance of required improvements and environmental protections. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))
3.78.020 Definitions.
“Maintenance bond” means a cash or surety bond guaranteeing satisfactory maintenance of a city-required improvement for a specified period after completion.
“Performance bond” means a cash or surety bond guaranteeing satisfactory completion of a city requirement.
“Warranty bond” means a cash or surety bond guaranteeing that a city-required improvement will remain free from defects in labor and materials for a specified period after completion. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))
3.78.030 Performance bonds.
A. The city requires performance bonds in the following circumstances:
1. To guarantee completion of required improvements in land use projects before city approval of final plats and binding site plans or city acceptance of utility or roadway improvements;
2. To guarantee completion of construction, alteration, or repair of a sidewalk, driveway, curb, or gutter within the city;
3. To guarantee satisfactory construction of a utility extension on public rights-of-way;
4. To guarantee full performance of required critical areas mitigation and monitoring and stormwater controls;
5. To guarantee satisfactory installation of sidewalks, pedestrian walkways, or urban trails within subdivisions; and
6. To assure compliance with the provisions of Chapter 18.72 SMC, Variances.
B. Performance bonds must be in the form(s) described in SMC 3.78.060. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))
3.78.040 Maintenance/warranty bonds.
A. Maintenance/warranty bonds are required in the following circumstances:
The city requires maintenance/warranty bonds to guarantee, for a minimum period of two years, the maintenance of improvements that were required by the city before approval of a plat, binding site plan, or variance, or acceptance of city-required improvements.
The city requires a warranty against defects in labor and material for a minimum period of two years to ensure that improvements required by the city remain free of such defects.
B. Maintenance/warranty bonds must be in the form(s) described in SMC 3.78.060. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))
3.78.050 Bonding of repairs.
If a maintenance/warranty bond is required to be acted upon due to a necessary repair, the repair will also need to remain free of defects of maintenance, labor, and/or materials for a minimum period of two years after the repair is completed. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))
3.78.060 General form of bonds – Cash or surety – Written agreement – Attorney approval required – Bond release form.
A. Performance bonds or maintenance/warranty bonds may be posted in cash or underwritten by a surety company. All bonds must be accompanied by a written agreement in a form acceptable to the city attorney. Bonds underwritten by a surety company must be in a form acceptable to the city attorney and the surety company must be licensed to do business in the state of Washington. Cash bond payments may be made in U.S. dollars or by personal or cashier’s check, as appropriate. Letters of credit and similar instruments are not acceptable.
B. The administrative services director is authorized to accept and release all bonds held by the city pursuant to this chapter and is responsible for accounting for any cash or check that is posted as part of a cash bond. Funds submitted for cash bonds will be deposited in a separately identified fund until such time as the bond is released.
C. All bonds, bond agreements, warranties, and bond release forms subject to this chapter will be retained electronically in the same manner as the city’s other contracts and agreements.
D. All bonds or warranties and the accompanying written agreement must describe with specificity the work or improvements required by the city, and the timeline for completion established by the city.
E. The administrative services director will release the bond upon receiving written authorization from the appropriate department director or designee that the bond or warranty period has expired or no further corrective action is needed. The bond will be released to the person or entity that posted it. A bond release form approved by the city attorney must be executed before release. (Ord. 2024-006 § 1 (Exh. A); Ord. 2021-021 § 1 (Exh. A))