Chapter 3.72
RETAINAGE BONDS

Sections:

3.72.010    Public works retainage bonds.

3.72.010 Public works retainage bonds.

A. To the extent required by Chapter 60.28 RCW, the city shall release earned retained percentages held by the city at the request of a contractor provided the contractor first submits a bond that: (1) is substantially in the following form; (2) is approved by the city attorney; (3) is from a surety meeting the qualifications described in this section; and (4) otherwise complies with the requirements of this section.

B. The bond shall be substantially in the following form:

Bond No. ____________

KNOW ALL MEN BY THESE PRESENTS, that [Contractor], a corporation organized under the laws of the State of _________, and registered to do business in the State of Washington as a contractor, as Principal, and [Surety], a corporation organized under the laws of the State of __________ and registered to transact business in the State of Washington as surety, as Surety, their heirs, executors, administrators, successors and assigns, are jointly and severally held and bound to the City of Sultan, Washington, hereinafter called “City”, and are similarly held and bound unto the beneficiaries of the trust fund created by RCW Chapter 60.28, in the sum of ______________ and ____/100’s Dollars ($_____________), the payment of which, well and truly to be paid, we bind ourselves, our heirs, executors and successors, jointly and severally, formally by these presents.

THE CONDITIONS OF THE ABOVE OBLIGATION ARE THAT:

WHEREAS, on [date], the Principal executed a contract (the “Contract”) with the City known as:

Project Name: _____________________

Contract Number: ___________________

And,

WHEREAS, said Contract and RCW Chapter 60.28 require the City to withhold from monies earned by the Principal during the progress of the construction, hereinafter referred to as “earned retained funds”; and

WHEREAS, the Principal requested that the City release _______ and ___/100’s Dollars ($_____________) of the earned retained funds, as allowed under RCW Chapter 60.28;

NOW, THEREFORE, the condition of this obligation is such that the Surety is held and bound to the City to indemnify, defend and hold the City harmless from any and all loss, costs or damages that the City may sustain by reason of release of said earned retained funds to Principal, then this obligation to be null and void, otherwise to remain in full force and effect.

PROVIDED, HOWEVER, it is expressly understood and agreed that:

1. Any suit or action under this bond must be instituted within the time period provided by applicable law. The bond shall be subject to all claims and liens provided for by law or Contract against the earned retained funds and in the same manner and priority as set forth for retained percentages in RCW Ch. 60.28 and the Contract.

2. The Surety hereby consents to and waives notice of any extension in the time for performance of the Contract, assignment of obligations under the Contract, or Contract alteration, termination, amendment or change order.

3. Until written release of this obligation by the City, this bond may not be terminated or canceled by the Principal or Surety for any reason. Any extension of time for the Principal’s performance on the Contract, assignment of obligations under the Contract, or Contract alteration, amendment or change order shall not release the Surety from its obligation under this bond.

4. RCW Ch. 60.28 authorizes the City to substitute a retainage bond in lieu of earned retained funds and the Surety hereby waives any defense that this bond is void or otherwise not authorized by law.

5. Any claim or suit against the City to foreclose the liens provided for by RCW Ch. 60.28 shall be effective against the Principal and Surety and any judgment under RCW Ch. 60.28 against the City shall be conclusive against the Principal and the Surety.

6. The laws of the State of Washington shall apply to the determination of the rights and obligations of the parties hereunder. Venue for any dispute or claim hereunder shall be the state courts of Washington in Snohomish County, Washington.

C. The city attorney may, in his or her discretion, waive conditions of the bond as appropriate.

D. The bond must be duly executed by the contractor and a surety that is (1) authorized to do business as a surety in the state of Washington and (2) rated at least “A” or better and with a numerical rating of no less than seven by A.M. Best Company. The bond must be accompanied by a fully executed power of attorney appointing the signer for the surety as the surety’s attorney-in-fact. (Ord. 789-02 § 1)