11.330 Guarantees and Bonds

(Amended 02/13/01; 3/11/03; 11/18/03; 11/15/05; 05/22/07; 01/08/08:07/28/09; 04/26/11; 02/28/17; 06/11/24) A. Based on a cost estimate submitted by the developer’s or owner’s engineer, the City Engineer or designee shall prepare the bond estimate, revising the costs as required to match prevailing conditions for the construction and installation of all required public improvements as well as all private improvements required pursuant to the site plan approval process, and including a ten percent contingency fee. A bond shall be posted by the developer or owner guaranteeing the construction of all required public improvements and private landscaping. The bond shall be in the form of an Escrow Bond or Irrevocable Letter of Credit. The form must be approved by the City Attorney and must be issued by a financial institution insured by the Federal Deposit Insurance Corporation or National Credit Union Association. The form shall be acceptable to the City, unless otherwise approved by the City Council due to extraordinary circumstances. The properly issued and executed bond, together with all required inspection fees, shall be submitted to Lehi City before any building permits will be issued. The bond shall be held for a two-year construction period, unless extended in writing by Lehi City. B. The amounts stated in the bond estimate shall be considered separate with respect to releases by Lehi City, but each amount shall be applicable to every other part in the event of the developer’s or owner’s failure to perform one or more of the improvements as required by the Code. Notwithstanding the itemization of type and cost of improvements, any sum available pursuant to the bond may be used by the City, and not released to the developer for any other improvement covered by the bond as well as the specified improvement. C. The City Engineer or designee shall have authority to release to the developer or owner any funds held by the City. The City Engineer shall not release, prior to final acceptance, any amount for each specified improvement in excess of 90% thereof. The City Engineer shall authorize through the normal inspection process two base releases per each line item in the bond. For bonds over one million dollars, an additional release per line item shall be authorized for each additional million dollars in the bond. D. After final acceptance, ten percent of the amount pertaining to all specified improvements shall be held for a period of one year from the date of final acceptance, notwithstanding the provisions referring to the two-year obligation. The ten percent may be released any time after six months have passed at the discretion of the City Engineer, the purpose being to guarantee the materials and workmanship of the completed improvements. E. The City shall have the power to require payment to the City of all amounts remaining in the bond upon certification by the City Engineer that the developer or owner has failed to comply with an obligation to install public improvements and private landscaping in a manner satisfactory to the City Engineer, or that the developer or owner is in default, whether the two-year period has elapsed or not. Any such funds shall be segregated by the City Treasurer in a special account and expended for the purposes set forth in the public improvements and private landscaping contract entered into by the developer or owner. Should an emergency arise the City may, after providing the developer or owner with a 30-day notice period, complete the required improvements and be compensated from all bond amounts plus 15% to recover overhead and other costs incurred by the City to complete the required improvements. F. Bonds required by this section are for the sole benefit of the City. The bonds are not for the individual benefit of any citizen or identifiable class of citizens, including the owners or purchasers of lots or units within a PUD. The bonds are not for the purpose of ensuring payment of contractors, subcontractors or suppliers of labor or materials, and no contractor, subcontractor or supplier of labor or materials shall have a cause of action against the City or the bond. G. Developments requiring a site plan shall complete all required private improvementsprior to the certificate of occupancy being granted. H. Residential developments shall complete all required private improvements prior to commencing construction on units totaling more than 80% of the allowed units in the development.