18-6-101. PERFORMANCE BONDS.
(1) At the discretion of the Division, any Permittee may be required to provide an improvement bond to guarantee the construction or maintenance of any improvements required or permitted to be constructed under the provisions of this Title. All bonds, sureties or deposits (collectively referred to as a “bond”) required by the Division shall be filed with the City and shall guarantee the performance of all construction and/or the payment of all fees required under the terms of this Title. Said bond shall be accompanied by an agreement in a form approved by the City Attorney’s Office. The agreement shall include, but not be limited to, the following:
a. All data required to compute the cost of the improvements by the Public Works Department.
b. Completion of the improvements within a period of time not to exceed two years from the date the agreement is executed unless the Division agrees otherwise in its sole discretion.
c. The improvements shall be completed to the satisfaction of the Public Works Department and according to the City’s Engineering Standards and in accordance with the most current version of the APWA Utah Chapter, Manual of Standard Specifications.
d. The bond amount shall be equal to the Division’s estimated cost of the public improvements to be installed, plus the product of the current annual inflation rate, times the number of years the bond will be in effect, times the estimated cost of the public improvements to be installed.
e. The City shall have exclusive control over the bond proceeds and they may be released only upon written approval of the City.
f. The bond proceeds may be reduced upon request as the improvements are installed. The amount of the reduction shall be determined by the Division. Such requests may be made only once every 30 days and no reductions shall be authorized until such time as the Division has inspected the improvements and found them to be in compliance with City standards. No partial release shall constitute acceptance of the improvements by the City. Acceptance by the City shall not occur until all improvements are completed, inspected by the City in their completed condition, and are, in their entirety, accepted by written notice from the City to the Permittee.
g. If the bond proceeds are inadequate to pay the cost of the completion of the improvements according to City standards for whatever reason, including previous reductions, then the Permittee shall be responsible for the deficiency and no further building permits shall be issued to the Permittee until such improvements are completed or a new bond has been executed to insure completion of the remaining improvements.
h. In all cases, 10 percent of the bond amount for such improvements shall extend for a one-year period beyond the date the construction is completed to guarantee replacement of defects. The permittee or Person posting the bond shall be responsible for any substandard improvements if the 10 percent proceeds are inadequate. Said 10 percent bond may be posted by the Person actually constructing the improvements, upon approval by the Division.
i. If, upon written demand of the City after expiration of the time period specified in the bond agreement, the bond proceeds are not transferred to the City within 30 days of the demand, then the City’s costs of obtaining the proceeds, including the City Attorney’s Office costs or outside attorney’s fees and court costs, shall be deducted from the bond proceeds.
j. Upon receipt of the bond proceeds, after the expiration of the time period specified in the bond agreement, the costs of completion shall include reimbursement to the Public Works Department and all other City departments for the costs of administration of the completion of the improvements, and costs of obtaining the bond proceeds as outlined in subsection (1)(i) above.
k. The Permittee agrees to hold the City harmless from any and all liability which may arise as a result of the improvements which are installed until one year after the City accepts the improvements.
(2) At the discretion of the Division, any of the following types of bonds may be acceptable:
a. A surety bond with a surety company licensed to do business in the State of Utah.
b. An Irrevocable Letter of Credit issued by a federally or state insured financial institution.
c. A cashier’s check, cash, personal or company check, or a money market certificate made payable only to the City.
(3) The time period for the completion of the required improvements may be extended in the following manner:
a. Upon approval of the Division and City Manager, the time period may be extended an additional two years from the expiration date of the original bond agreement.
b. All approvals of extensions of the bond agreement shall be in a form approved by the City Attorney’s Office and in compliance with all the provisions of this Chapter.
c. Any additional extensions of the bond agreement shall be approved by the City Council.