8.27.20 Bonds Guaranteeing Construction of Improvements

(1) Definitions. (a) "Performance Bond" is an instrument, in a form approved by the Town of Daniel, with a sum not fixed as a penalty binding the developer to the Town of Daniel, to complete certain actions according to the standards in this code and the Wasatch County Standards Handbook, and any other applicable regulation or condition imposed by the Town of Daniel as a condition of approval, conditioned however, that the payment of the penalty may be avoided by the performance by the developer of the acts agreed to in the bond documents. The performance bond must include protection for the Town of Daniel against the developer's failure to perform all of the actions specified by the Town of Daniel legislative body. The bond may consist of one of the following: cash deposited with the Town of Daniel, an escrow fund, an irrevocable letter of credit, or a surety bond. Cash deposits, escrow funds, or irrevocable letters of credit must in an amount equal to one hundred ten (110) percent of actual cost of performance. Due to additional costs of collection, a surety bond must in an amount equal to one hundred fifty (150) percent of actual cost of performance and must be from a company licensed and in good standing with the Utah State Insurance Department and approved by the Town of Daniel. (b) "Warranty Bond" is an instrument, approved by the Town of Daniel, with a sum fixed guaranteeing the quality and/or conformance of completed and accepted improvements or other promised performance according to the standards in this code, the Wasatch County Standards Handbook, and any other applicable regulation or condition imposed by the Town of Daniel as a condition of approval. The warranty bond must provide that in the event the completed and accepted improvements or other promised performance covered by the bond fail, or are found to be less than the accepted standard during the term of the bond, that the Town of Daniel has the right to require repair and or replacement, and in the event of failure by the developer to adequately respond, the Town of Daniel shall have the right to recover against the warranty bond and repair or replace the covered improvements or other promised performance. (2) Performance Bonding Required. A performance bond shall be posted with the Daniel Planning Commission in a principal amount of one hundred ten (110) percent of the total estimated cost of any improvement or other performance required by or promised to the Town of Daniel as part of the development. The bond may consist of either cash or an irrevocable letter of credit on a form approved by the Town of Daniel. The estimated cost shall be based upon the estimate of the planning staff who shall take in to account some or all of the following factors when making his estimate: (a) The developer's engineering estimate; (b) The estimate of any reviewing engineer; (c) The average cost paid for the same type of performance in the past; and (d) Any other relevant information. (3) Failure of Performance, Extension of Time. In the event that any performance covered by a performance bond required is not completed within the time period allowed for under the performance bond, the developer may petition the Town of Daniel for an extension of time in which to complete the required performance. A one-year extension of time may be granted by the Town of Daniel upon application by the developer, upon a showing of good cause and diligent effort by the developer to complete the required improvements within the two year period, and provided such application is submitted at least sixty (60) days prior to the expiration of the performance bond, and the issuer of the bond is willing to extend the time of the assurance. The bond amount shall be increased ten (10) percent for each year extension granted by the Town of Daniel. If at the end of the performance bond term, the Daniel Planning Commission determines that the required improvements or other promised performance has not been completed according to the Town of Daniel, its ordinances, rules, policies and procedures, and other requirements placed upon the developer, the Town of Daniel, in its sole discretion, may: (a) Refuse to accept the improvement(s) or other performance and require the developer to bring the improvement(s) or other performance to Town of Daniel standards as outlined in the Town of Daniel standards; (b) Receive any part of the bond which is necessary to complete the promised performance or to repair any inadequate performance and proceed with work to bring the performance to Town of Daniel standards as outlined in the Town of Daniel standards; and (c) Release the performance bond and require an extended warranty on the improvement(s) or other promised performance as provided in this chapter. (4) Warranty Bonding. Upon completion of the required improvements or other performance subject to a performance bond, the developer shall petition the Town of Daniel for release of the performance bonds. The developer, prior to release of the performance bond, shall obtain a warranty bond warranting the required improvements or other promised performance for a minimum of two (2) years following the date of acceptance of the improvements, by the Town of Daniel. The warranty bond shall be in the amount of fifty (50) percent of the actual cost of the required improvement or other promised performance. In the event the required improvement or other promised performance is not completed in a satisfactory manner, the Town of Daniel may, at its discretion, for good cause, require an extended warranty of up to five (5) years. The warranty bond provided for herein shall be required in order to insure that the improvements are installed pursuant to the approved plans, are structurally sound, and that no further replacements or repairs are required. (5) Amount of Bonds. (a) Performance bonds required by this Section must have a face amount of at least one hundred ten (110) percent of the value of the Town of Daniel engineer's current estimate of the improvements to be completed. Developer may not draw against the bond for the completion of the required improvements or other promised performance. However, as work is completed, the developer may replace his performance bond with bonds from the Contractor who performed the work. The contractor's bonds shall name the Town of Daniel as a beneficiary. The developer's performance bond may be released in an amount equal to the approved contractor's bond. The Town of Daniel may approve partial releases of the performance bond prior to final release. Each release must be approved by the Town of Daniel planning director and the town attorney. When the number of releases exceed two (2), a one hundred dollar ($100.00) fee will be assessed for each release thereafter to cover any administrative costs. The releases approved by the Town of Daniel shall not exceed the contractor's bond and shall not exceed the percentage of work completed and, at no time prior to final acceptance of the improvements by the Town of Daniel may the total amount of bond be allowed to be reduced lower than one hundred ten percent (110%) of the value of the Town of Daniel engineer's estimate of the improvement(s) or other promised performance. (b) Warranty bonds required herein must have a face amount of at least fifty (50) percent of the value of the Town of Daniel engineer's current estimate of the improvements to be warranted. Developer may not draw against the warranty bond for any purpose other than the replacement or repair of improvements as required and approved by Town of Daniel. At no time prior to expiration of the warranty period warranty bond amount be allowed to be reduced by Town of Daniel approved draws lower than twenty five (25) percent of the value of the Town of Daniel planning staff's estimate of the improvements to be warranted. (6) Approval of Bonds. Any bond submitted to the Town of Daniel, pursuant to section 8.27.20 of the Daniel Municipal Code, must be on a form approved by the Town of Daniel and must be submitted to the Town of Daniel department requesting the bond and approved by such department as meeting the requirements of this code. Property bonds will not be acceptable in any form. (7) Duration of Bonds. (a) Performance bonds for infrastructure required by this section shall have duration of two (2) years from the date of final approval of the development by the mayor. Bonds for landscaping or other requirements may have a different duration. All improvements must be completed by the date set in the bond, according to Town of Daniel approved plans and specifications. (b) Warranty bonds required by this chapter shall have a period of two (2) years, or such longer time as required by the Town of Daniel pursuant to a condition attached to any approval. (8) Procedure for Filing Bonds. Applicants shall file a performance bond with the planning staff. This may be cash or an irrevocable letter of credit in a form approved by the Town of Daniel. The bond will be released according to the terms and the requirements of this chapter and upon application by the developer, and approval of the Town of Daniel planning staff that required the bond. (9) Supervision and Inspection. A representative of the Town of Daniel shall, from time-to-time, inspect or cause to be inspected all work done which is covered by a performance or warranty bond. Notification shall be given to the building official at least forty-eight (48) hours prior to any requested inspection. The performance or warranty bond shall not be released without an inspection made to determine satisfaction of all applicable provisions of this ordinance. (10) Landscaping, fencing, open space, amenities. Bonds shall be filed for improvement of landscaping, open space, fencing, and amenities. The planning staff shall only release bonds upon completion of improvements in conformance with the approved plans.