16-04-035 DEFINITIONS: BOND

“Bond” “Bond of Indemnity” or “Performance Bond” shall mean: a. A cash deposit with the City in an interest bearing account, b. A letter of credit, in a form approved by the City Attorney, issued by an approved financial institution registered and licensed to do business in the State of Utah, or c. A performance/payment bond issued by a surety company who is registered and authorized to transact business as a surety in the State of Utah and having an agent designated for service in the state. Said surety company shall possess least an “A” policy holder’s rating and at least a “V” financial rating as determined by the most current edition of the “Best’s Ratings” for Surety & Insurance Companies or a reasonable equivalent thereto. d. A cashier’s check or a bank issued check paid to the order of the City of Enterprise, to be held in trust without interest, when the duration of the project is not expected to exceed thirty (30) days and when the project cost estimate does not exceed twenty thousand dollars ($20,000.00). All bonds shall be in an amount no less than the cost of the improvements or repairs being performed plus twenty five percent (25%) as determined by: a. An estimate of costs prepared by an engineer registered and licensed to practice in the State of Utah, paid for by the requesting party and approved by the City’s Engineer, or b. An estimate or contract for construction of said improvements or repairs prepared by a contractor licensed in the State of Utah containing a fixed contract price for a period of at least six (6) months, which is reviewed and approved by the City’s Engineer or designated official of the City. Except for item “d.” above, the duration of said bonds shall be a period of two (2) years from the date of issuance with fifteen percent (15%) remaining in effect for an additional period of one year after the improvements or repairs are deemed completed by the City Engineer or a designated official of the City as a “warranty bond” against defective workmanship and materials. When option “d.” above is exercised, the City may retain fifteen percent (15%) as a “warranty bond” for a period of one year after completion of the improvements or repairs at its sole discretion according to the nature and complexity of the project. The City may release parts of the bond posted, at its sole discretion, upon request from the party posting the bond, only after the portion requested for release is reviewed by the City Engineer or a designated official of the City and determined to be a reasonable reflection of the percentage of the cost of work already completed. In the event the party required to post the bond fails to install or complete the improvements or repairs necessitating the bond, the City may declare the bond to be in default and request that it be forfeited and paid to the City who in turn shall pay all liens relating to the improvements or repairs and may utilize the remainder of the bond proceeds to complete the improvements or repairs. (Ord. 2006-03, 2006)