23.17.010 Improvement security.
A. General. Any improvement agreement, contract or act required or authorized by the Subdivision Map Act or this title, for which security is required, shall be secured in accordance with Cal. Gov’t. Code §§ 66499 et seq. of the Subdivision Map Act and as provided below.
No final map or parcel map shall be signed by the County Surveyor or recorded until all improvement securities and improvement agreements required by this section have been completed and accepted by the county or responsible agency.
B. Form of Security. The form of security shall be one of or the combination of the following at the option and subject to the approval of the county.
1. Bond or bonds by one or more duly authorized corporate sureties. The form of the bond or bonds shall be in accordance with Cal. Gov’t. Code §§ 66499.1 and 66499.2 of the Subdivision Map Act.
2. A deposit, either with the county or a responsible escrow agent or trust company, at the option of the county, of money or negotiable bonds of the kind approved for securing deposits of public moneys.
3. An instrument of credit or letter of credit from one or more financial institutions subject to regulation by the state or federal government and pledging that the funds necessary to carry out the act or agreement are on deposit and guaranteed for payment.
4. A lien upon the property to be divided, created by contract between the owner and the local agency, if the Board of Supervisors finds that it would not be in the public interest to require the installation of the required improvement sooner than two years after the recordation of the map.
5. Security interests in real property, found to be acceptable to the Board of Supervisors.
Any contract or security interest in real property entered into as security for performance pursuant to subsections (B)(4) or (B)(5) of this section shall be recorded with the County Recorder of the county in which the subject real property is located. From the time of recordation of the written contract or document creating a security interest, a lien shall attach to the real property particularly described therein and shall have the priority of a judgment lien in an amount necessary to complete the agreed-to improvements. The recorded contract or security document shall be indexed in the grantor index to the names of all record owners of the real property as specified on the map and in the grantee index to the local agency approving the map.
6. Any other form of security as provided in Cal. Gov’t. Code § 66499 of the Subdivision Map Act.
C. Security for Performance. The form of security shall comply with Cal. Gov’t. Code § 66499.1.
D. Amount of Security. A performance bond or other security in the amount of 100 percent of the total estimated construction costs to guarantee the construction or installation of all improvements shall be required of all subdivisions. An additional amount of 50 percent of the estimated construction cost shall be required to guarantee payment to subdivider’s contractor, subcontractors, and to persons furnishing labor, materials or equipment for the construction or installation of improvements. As a part of the obligation guaranteed by the security, and in addition to the full amount of the security, there shall be included costs and reasonable expenses and fees, including attorneys’ fees, incurred by the county in enforcing the obligations secured.
The estimate of improvement costs shall be as approved by the Director of the Department of Public Works and shall provide for:
1. Not less than five percent nor more than 10 percent of the total construction costs for contingencies.
2. Increase for projected inflation computed to the estimated midpoint of construction.
3. All utility installation costs or a certification acceptable to the Department of Public Works from the utility company that adequate security has been deposited to ensure installation.
E. Warranty Security. Upon acceptance of the subdivision improvements by the county, the subdivider shall provide security in the amount as required by the Department of Public Works to guarantee the improvements against any defective work or labor done or defective materials used in the performance of the improvements throughout the warranty period which shall be the period of one year following completion and acceptance of the improvements. The amount of the warranty security shall not be less than 15 percent of the cost of the construction of the improvements.
F. Reduction in Performance Security. The Department of Public Works may authorize in writing the release of a portion of the security in conjunction with the acceptance of the satisfactory completion of a part of the improvements as the work progresses upon application by the subdivider, but in no case shall the security be reduced to less than 15 percent of the total improvement security given for faithful performance. The amount of reduction of the security shall be determined by the Department of Public Works; however, in no event shall the Department of Public Works authorize a release of the improvement security which would reduce security to an amount below that required to guarantee the completion of the improvements and any other obligation imposed by the Subdivision Map Act, this title or the improvement agreement.
G. Release of Improvement Security.
1. Performance Security. The performance security shall be released only upon acceptance of the improvements by the county and when an approved warranty security has been filed with the Department of Public Works. If a warranty security is not submitted, performance security shall be released 12 months after acceptance of improvements and correction of all warranty deficiencies.
2. Material and Labor Security. Security given to secure payment to the contractor, subcontractors and to persons furnishing labor, materials or equipment may, six months after the completion and acceptance of the improvements by the county, be reduced to an amount equal to the amount of all claims therefor filed and of which notice has been given to the Board of Supervisors. The balance of the security shall be released upon the settlement of all claims and obligations for which the security was given.
3. Warranty Security. The warranty security shall be released upon satisfactory completion of the warranty period, provided:
a. All deficiencies appearing on the warranty deficiency list for the subdivision have been corrected.
b. Not less than 12 months have elapsed since the acceptance of the improvements by the county.
H. Alternative Release of Improvement Security. If and when subdivision improvements are financed and installed by special assessment proceedings, the Director of Public Works may permit a reduction in the subdivider’s security in an amount equal to the contractor’s bonds for faithful performance, labor and material.
I. In all cases where the performance of the obligation for which the security is required is subject to the approval of another agency, the Department of Public Works shall not release the security until the obligation is performed to the satisfaction of such other agency. Such agency shall have two months after completion of the performance of the obligation to register its satisfaction or dissatisfaction. If at the end of that period it has not registered its satisfaction or dissatisfaction, it shall be conclusively deemed that the performance of the obligation was done to its satisfaction. (Formerly 23.17.001)