21.11 RELEASE OF SECURITY

Security provided may not be released.  In the case of a letter of credit, the issuing bank or association will receive a copy of the Notice of Completion. 21.11.1.  Progress Payments. Progress payments may be made to the developer and/or contractor from any deposit of money or letter of credit which the developer and/or contractor may have made in lieu of providing a security bond; provided however, that no progress payment shall be made for more than 90% of the value of any installment of work.  No progress payments from cash deposits shall be made except upon certification by the Town Engineer, the Town Representative and approved by the Town Council, and the developer and/or contractor that work covered thereby has been completed. 21.11.2.  Release Process. 21.11.2.1.  Inspection prior to release of bond. The Mayor or Town Council may at their option request an on site inspection within two (2) weeks of the being notified that the project is complete.  If it is found that the project is complete and the test results state that the job met all requirements then the bond will be released less twenty-five percent (25%) which will be held for one year as a guarantee following the next regularly scheduled Town Council meeting.  If completion is not satisfactory one of the following will apply; 1) If the completed work is unsatisfactory and is judged to be significant the developer shall redo the unsatisfactory work to the Leeds Standard Specifications for Design and Construction requirements before any bond can be released.  2) If it is determined that only minor portions of the project were not completed satisfactorily and that these do not pose a considerable risk to the town.  The Town with concurrence with the Town Engineer or Town Representative can estimate the amount of risk involved to correct the deficiencies or potential deficiencies and this amount will be added to the twenty-five percent (25%) guarantee as the amount of the bond to be held back.  The portion being held back can be released once the effort is completed or it is no longer considered a risk.  Release of any bond funds will be considered at the first regular Town Council meeting following the notification of the project being completed by the developer and the Towns two (2) week inspection period. 21.11.2.2.  If inspection shows that standards have been met in the completion of such improvements, the bonds shall be released pursuant to the conditions outlined within this Chapter. 21.11.2.3.  The labor and material bond shall be retained to secure payment to the contractor, the subcontractors, and to personal renting equipment or furnishing labor or materials for six (6) months after completion and acceptance of work.  Following the six (6) month period the labor and material security may be reduced to an amount not less than the total of all claims on which an action has been filed and notice given in writing to the Town. 21.11.3.  Maintenance Guaranty. The developer shall guarantee all public improvements for a period of one (1) year from the date of final acceptance and shall correct any and all defects of deficiencies arising during that period of limitation as a result of the acts or omissions of the developer, its agents, or employees.  This subdivision guaranty shall be backed by a bond or each deposit in the amount of twenty-five percent (25%) of the surety posted for improvements.  The Town shall provide written notice of the defects or deficiency.  In any instance where the developer fails to take action required to protect the public health, safety and/or welfare, the Town may cause the work to be performed and call on the surety for reimbursement.  The maintenance security shall be submitted prior to final acceptance of the public improvements by the Town. 21.11.4.  Forfeiture of Surety. In the event that developer/contractor fails to complete all improvement work in compliance with the provisions of this section, and the Town shall have to complete the same, the Town shall call on the security for funds necessary to complete from any cash deposit funds for reimbursement.  If the amount of any security shall be less than the cost and expense incurred by the Town, the developer/contractor shall be liable to the Town for such difference.  Any cash remaining in the possession of the Town after completion of the improvement shall be returned to the originator minus normal administrative costs.