16.30.030 Security mechanisms | Stanwood Municipal Code

16.30.030 Security mechanisms.

(a) As security the city may accept any of the following: bonds, irrevocable letters of credit from an insured bank, a secured account with an insured bank, or a cash deposit. Other forms of security may be accepted if approved by the city finance director in consultation with the city attorney.

(b) In each case where the city requires or allows an applicant to post a security, the public works director and/or his/her designee shall determine the type of security to be used.

(a) Except as provided in subsection (4) of this section, a performance security shall be required for any project to guarantee that a site can be closed and/or winterized if necessary, or that measures can be taken by the city to respond to weather-related emergencies.

(b) In addition, an augmented performance security may be required by the public works director to cover the cost of installing any public improvements that an applicant has agreed to install as part of his project where the lack of installation would cause the system to fail or not be completed in a timely manner.

(c) Performance securities may be presented to the city after preliminary approval of a project but in all circumstances shall be presented prior to any site work, including clearing, grading, or construction.

(d) Submission of a performance security may be waived by the public works director if, in his opinion, said guarantee of installation is not necessary.

(3) Completion Securities. In lieu of installing public improvements per this title or a condition of a permit, a developer may propose to post a security to ensure completion of the improvements within one year of issuance of the security. An extension not to exceed one year may be approved by the public works director upon extension of the security or submission of a new one.

(4) Maintenance Securities. Any applicant shall provide to the city a maintenance security to cover the cost of replacing or repairing any of the public improvements installed per this title or a condition of a permit. However, the public works director has the discretion of not requiring a maintenance security for projects under $25,000.

(a) The amount of a security shall be a percentage, as specified in this subsection, of the estimated cost of design, materials, and labor, based on the estimated costs, of installing, replacing, or repairing (whichever is appropriate) the improvements covered by the security.

(i) Performance. One hundred fifty percent of the costs specified in subsection (5)(a) of this section.

(ii) Completion. One hundred fifty percent of the costs specified in subsection (5)(a) of this section.

(iii) Maintenance. Twenty-five percent of the costs specified in subsection (5)(a) of this section.

(b) The public works director shall prepare the estimate and approve the final amount of a security under subsection (1) of this section. The applicant will be allowed to review the public works director’s estimate and may provide documentation for the public works director to consider in establishing the final cost estimate of the items to be covered by the security.

(6) Reduction of Securities. In those cases where improvement securities have been required, the amount of the guarantee may be reduced upon acceptance of the dedication of a portion of the required improvements. The amount of the reduction shall not exceed the percentage which the improvements just accepted for dedication made up of all originally required improvements. In no case, however, shall the guarantee be reduced to less than 15 percent of the original amount. Maintenance securities shall not be reduced.

(7) Duration of Securities. All securities shall be held until released by the public works director; however, the standard duration of the various securities shall be as follows:

(a) Performance. One year or until all improvements are installed and accepted by the city, whichever is greater.

(b) Completion. One year or until all improvements are installed and accepted by the city, whichever is greater.

(c) Maintenance. Two years; extendable by the city if repairs are made at the end of the bonding period which, in the opinion of the public works director, require additional guarantee of workmanship.

(8) Supplemental Administrative Costs. In addition to the security, the applicant shall pay the actual amount to the city covering the city’s actual expenses of administering, and if necessary, using the proceeds of the security. This charge will be set by council.

(9) Security Agreement. In each case where a security is posted, the applicant and the public works director shall sign a notarized security agreement, approved in form by the city attorney. This agreement shall be recorded with the Snohomish County auditor. The agreement shall, at a minimum, provide the following information:

(a) A description of the work or improvements covered by the security.

(b) Either the period of time covered by the maintenance security or the date after which the city will use the proceeds of the performance security to complete the required work or improvements.

(d) The rights and duties of the city and the applicant.

(e) An irrevocable license to run with the property to allow the employees, agents, or contractors of the city to go on the subject property for the purpose of inspecting and, if necessary, doing the work or making the improvements covered by the security.

(f) The mechanism by and circumstances under which the security shall be released. At a minimum, after the work or improvements covered by a performance security have been completed, or at the end of the time covered by a maintenance security, the applicant may request the city to release the security. If the applicant has complied with the security agreement, received acceptance of the improvements, and this code, the public works director shall release the security remaining. If the work has not been completed and accepted or repairs not made, then the city shall not release the security until such work is completed per subsection (10) of this section. Partial release of the security may be allowed; provided, that the developer provides a new security in the amount specified in subsection (5) of this section for the remaining work.

(a) If during the period of time covered by a maintenance security, or after the date by which the required work or improvements are to be completed under a performance security, the public works director determines that the security agreement has not been complied with, he/she shall notify the applicant in writing of this. The notice must state:

(i) The work that must be done or the improvements that must be made to comply with the security agreement; and

(ii) The amount of time that the applicant has to commence and complete the required work or improvements; and

(iii) That, if the work or improvements are not commenced and completed within the time specified, the city will use the proceeds of the security to have the required work or improvements completed.

(b) If the work or improvements covered by the security are not completed within the time specified in the notice, the city shall obtain the proceeds of the security and shall cause such work to be completed.

(c) The applicant is responsible for all costs incurred by the city in administering, maintaining, or making the improvements covered by the security(ies). The city shall release or refund any proceeds of a performance or maintenance security remaining after subtracting all costs for doing the work or making the improvements covered by the security. The applicant is responsible for and shall reimburse the city for any amounts expended by the city that exceed the proceeds of the security. The city may file a lien against the subject property for the amount of any excess.

(d) In each case where the city uses any of the funds of a security, it shall give the applicant an itemized statement of all funds used. (Ord. 1398 § 3, 2015).