21.10 PERFORMANCE BONDS

21.10.1.  As outlined in this Chapter, the applicant shall file with the Town Clerk or Treasurer a surety or cash bond, or letter of credit in an amount approved by the Town Engineer and the Town Council to cover up to one hundred percent (100%) of the total estimated cost of all required improvements.  Additionally, a labor and material security to cover up to fifty percent (50%) of the total estimated cost of all required improvements shall also be required as a condition of approval of the subdivision plat/map.  If the applicant fails to complete the subdivision improvements within the specified time limits, the Town Council may cause any or all uncompleted improvements to be completed and the parties executing the security or securities shall be firmly bonded for payment of all necessary and appropriate costs. 21.10.2.  Indemnification. In addition to the performance bond, the applicant shall also release the Town from all liability incurred by the applicant and payment for all reasonable attorney’s fees that the Town may incur because of any legal action resulting from the subdivision.  All such improvements shall be installed within a period of two (2) years and shall be installed in a manner satisfactory to the Town Representative and Town Council.  Upon completion of the improvements for which a surety, cash bond, or letter of credit has been filed, the applicant shall call for final inspection by the Town Representative, Engineer and Planning Commission. 21.10.3.  Surety bonds, cash bonds, or letters of credit are subject to the Town Council and Town Attorney as to final form, but should include the following basic language: Bond Form: Whereas, the Town Council of the Town of Leeds in Washington County in the State of Utah and _______________________ (hereinafter designated as “principal”) have entered into an agreement whereby principal agrees to install and complete certain designated public improvements, which said agreement, dated __________________, 2________, and identified as Project ________________, is hereby referred to and made a part hereof; and Whereas, said principal is required under the terms of said agreement to furnish a bond for the faithful performance of said agreement. Now, therefore, we, the principal and ________________________________as surety, are held and firmly bound unto the Town of Leeds hereafter called (“______________”), in the penal sum of _____________________dollars ($_________________) lawful money of the United States, for the payment of which sum will and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly be these presents. The condition of this obligation is such that if the above bounded principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and will and truly keep and perform the covenants, conditions and provisions in the said agreement and any alteration thereof made as therein provided,  on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless the Town of Leeds, its officers, agents, and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. As a part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by the town in successfully enforcing such obligations, all to be taxed as costs and included in any judgment rendered. The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder of the specifications accompanying the same shall in any-wise affect its obligations on this bond.  And it does hereby waive notice of any such change, extension of time, alteration of addition to the terms of the agreement or to the work or to the specifications. In witness thereof, this instrument has been duly executed by the principal and surety above named, on _______________. BONDS.  All bonds shall be executed by a surety company authorized to transact business as a surety, and have an agent for service in Utah, together with an “A” policy holder’s rating and a financial rating of at least “V” in compliance with the current “Best’s Ratings.”  The bond(s) shall contain the nearest street address of the institution providing the bond(s).   CASH DEPOSITS.  In lieu of the faithful performance and labor and material bonds, the principal may submit cash deposits of negotiable bonds of a kind approved for securing deposits of public monies with the Town for a responsible escrow agent or trust company under the conditions hereinafter described.  Disbursements from cash deposits shall be made in compliance with a separate agreement between the principal and the Town.  A bookkeeping fee of one percent (1%) of the total amount deposited with the Town for each cash deposit shall be submitted with each security.  Disbursements from a cash deposit in any instance shall not be permitted unless and until authorized in writing by the Mayor and Town Council.   LETTER OF CREDIT.  In lieu of faithful performance and labor and material bonds or cash deposits, the principal may submit an irrevocable instrument of credit subject to the Utah Commercial Code and under the conditions hereinafter described.  The letter of credit shall be issued by a financial institution organized and doing business in, and subject to regulations by, the state of Utah or Federal Government, in a form, content, and duration as approved by the Town Attorney and Town Council, and shall pledge that the funds necessary to meet the performance are on deposit and guaranteed for payment and can only be released upon written instruction from the Town, and shall become secured trust funds for the purpose set forth in the instrument.  The letter of credit shall contain the nearest street address of the institution providing the instrument of credit. Instrument of Credit Form: RE: Letter of Credit No. ______________ Effective Date __________________ Expiration Date _________________ Gentlemen: Please consider this letter an instrument of credit pledging that $_________________ is deposited by ________________________ and guaranteed for payment of improvements conditioned in the approval of  (name of subdivision-legal description should be attached as well as conditions of approval).  In compliance with the Leeds Subdivision Ordinance, we are regulated by the Federal or State Government, and agree that the funds designated by this instrument shall become a trust fund for the purpose set forth in this instrument. It is a condition of this letter of credit that sixty (60) days prior to any such expiration date we shall notify you by registered letter that we elect not to consider this letter of credit renewed.  Notice hereunder shall be deemed to have been given when received by you.  Upon receipt of such notice you may draw on said letter of credit. RESPECTFULLY SUBMITTED (Bank or Financial institution) By _______________________________________ (Title) By _______________________________________ (Title) Note:  Show bond identification and individual number for the letter of credit.  All signatures must be notarized. The Planning Commission, Town Engineer, Town Attorney, and Town Council shall not endorse or sign the “Certificate of Approval” contained on the Final Map unless and until improvements security as herein above specified has been posted. No Final Map shall be presented to the Town Council for acceptance until the requirements of this section have been met and until all charges established by the Council and pertaining to the property being subdivided have been paid.