A subdivider may file a parcel or final map before completion of all the improvements required by this title and conditions of approval of the tentative map, only when the subdivider first obtains council approval of a subdivision improvement agreement executed and submitted for council review by the subdivider, and provides the city performance security as required by this section. Improvement agreements and required security shall also comply with Chapter 5 of the Map Act.
(1) Contents of Improvement Agreement. A subdivision improvement agreement shall be submitted on a form provided by the city engineer and approved by the city attorney and shall include the following provisions.
(A) Description of Improvements. A description of all improvements to be completed by the subdivider, with reference to the approved subdivision improvement plans.
(B) Time Limit for Construction. The period within which all required improvements will be completed to the satisfaction of the city engineer.
(C) Completion by City. Provide that if the subdivider fails to complete all required improvements within the specified time, the city may elect to complete the improvements and recover the full cost and expenses thereof from the subdivider or the surety, including any attorney and legal fees associated with enforcement of the agreement.
(D) Surety Requirement. Require the subdivider to secure the agreement by furnishing security to ensure full and faithful performance and to insure payment to laborers and material suppliers, as specified in subsection (2) of this section. The amount of surety shall be based on an engineer's cost estimate submitted by the subdivider as provided by subsection (2) and approved by the city engineer. The total cost of improvements to be guaranteed shall be as provided in the approved engineer's cost estimate.
(E) Phased Construction. Provisions for the construction of improvements in units, at the option of the subdivider.
(F) Time Extensions. Provisions for an extension of time under conditions specified therein, at the option of the subdivider, consistent with the requirements of subsection (4) of this section.
(G) Progress Payments or Partial Release. Provide for progress payments from surety deposits, or partial release of the surety filed to ensure faithful performance of the contract, at the option of the subdivider, in compliance with the requirements of subsection (3) of this section; provided that no progress payment or partial release shall be construed to be acceptance by the city of any portion of the required improvements or any defective work or improper materials.
(2) Security Required to Guarantee Improvements. A subdivision improvement agreement or a subdivision road maintenance and repair agreement shall be secured by adequate surety in a form approved as to form and sufficiency by the city attorney, as follows:
(A) Type of Security. Subdivision improvement agreements shall be secured by all of the following:
(i) A guarantee for "faithful performance," in the amount of one hundred percent of the engineer's estimate;
(ii) A guarantee for "materials and labor," in the amount of one hundred percent of the engineer's estimate;
(iii) Five thousand dollars for survey; and
(iv) A one-year guarantee and warranty for work in the amount of ten percent of the engineer's estimate.
(B) Form of Security. The required surety shall consist of one or more of the following forms selected by the city engineer for the full amounts specified in subsection (2)(A) of this section.
(i) A deposit, either with the local agency or a responsible escrow agent or trust company, at the option of the local agency, of money or negotiable bonds of the kind approved for securing deposits of public moneys;
(ii) A bond or bonds executed by one or more duly authorized corporate sureties;
(iii) An instrument of credit from an agency of the state, federal or local government when any said agency provides at least twenty percent of the financing for the portion of the act or agreement requiring security, or from one or more financial institutions subject to regulation by the state or federal government pledging that funds necessary to carry out the act or agreement are on deposit and guaranteed for payment or a letter of credit issued by such a financial institution;
(iv) A lien upon the property to be divided, created by contract between the owner and the city, where the review authority finds that it would not be in the public interest to require the installation of the required improvement sooner than two years after the recordation of the map; or
(v) Any form of security, including security interests in real property, which is acceptable to the local agency.
(3) Progress Payments or Partial Release. No progress payment or partial release of the surety filed to ensure faithful performance of the contract shall be made except when the city engineer has certified that the work required to qualify for payment or release has been satisfactorily completed and the payment or release has also been approved by the city engineer. No certificate given, progress payment made or release of surety, except the final certificate of acceptance, shall be considered as any evidence of the performance of the agreement either wholly or in part. There shall be no partial acceptance of any improvements.
(4) Time Extensions. An extension of time for completion of improvements under a subdivision improvement agreement shall be granted by the council only as follows:
(A) Public Works Report. The city engineer notifies the council that either the subdivider is proceeding to do the work required with reasonable diligence or is not yet ready to develop the subdivision, and has given satisfactory evidence of being able and willing to complete all required work within the time of the requested extension.
(B) Agreement by Sureties. The sureties agree in writing to extend for the additional period of time at the original amount of the bond or other surety, or if recommended by the city engineer, at an increased amount.
(C) Council Action. The council approves the extension by at least a four-fifths vote. As a condition of granting a time extension, the council may impose whatever additional requirements the council deems reasonable to protect the public interest.
(5) Acceptance of Improvements. Before acceptance for maintenance or final approval by the council of subdivision improvements, the city engineer shall verify that the improvement work has been completed in substantial compliance with the approved plans and specifications.
(Ord. 1308 § 5, 2000; Ord. 1495 § 1, 2014)