HomeMy WebLinkAboutO-2813 - Repeals and replaces Ch. 19.51, security for performance and maintenance (Repealed by 2852)CITY OF MARYSVILLE
Marysville, Washington
ORDINANCE NO. 2.&/3
AN ORDINANCE OF THE CITY OF MARYSVILLE, WASHINGTON REPEALING THE
EXISTING CHAPTER 19.51 MMC, SECURITY FOR PERFORMANCE AND MAINTENANCE,
AND ADOPTING A NEW CHAPTER 19.51 MMC MAKING CHANGES IN ENFORCEMENT
OF THE SECURITY PROVIDED
WHEREAS, the Cty adopted Chapter 19.51 MMC by Ordinance 2785 in 2009; and
WHEREAS, parties subject to Chapter 19.51 MMC have had difficulty in obtaining security as required and the Cty
has received input from sureties on available tenns for security bonds; and
WHEREAS, the Ctydesires to provide an adequate level of security that is available;
NOW, TIIEREFORE, TIIE orrCOONOL OF TIIE orrOF MARYSVILLE, WASHINGTON DO
ORDAIN AS FOLLOWS:
Section 1. Chapter 19.51 MMC is hereby repealed.
Section 2. A new Chapter 19.51 MMC is hereby adopted in the following fonn:
Chapter 19.51
SECURITY FOR PERFORMANCE AND MAINTENANCE
Sections:
19.51.010 Purpose.
19.51.020 Security for perfonnance -Fonn.
19.51.030 Security for maintenance -Fonn.
19.51.040 Amount of obligation.
19.51.050 Adjustment to amount of obligation for type of security-Changed circumstances.
19.51.060 Enforcement against security.
19.51.070 Release of security.
19.51.080 Right to refuse security.
19.51.010 Putpose.
The purpose of this chapter is to establish consistent standards for the acceptance of security to insure the
completion of improvements associated with development and to insure warranty for the improvements
completed. This chapter should be liberally construed. It is the intent of the Cty to exercise the maximum
authority allowed under state law to protect the citizens of the Cty and to hold development accountable for
the timely completion and maintenance of improvements.
19.51.020 Security for penonnance -Fonn.
Whether in the fonn of a bond, irrevocable letter of credit, or assignment of cash deposit, the undertaking for
perfonnance shall contain the following provisions:
(1) A stated amount calculated in accordance with the requirements of this chapter;
(2) A detailed description of the improvements to be completed and the deadline by which completion
must occur;
(3) A provision reading as follows:
The security for perfonnance is obligated, bound and guarantees completion of the work by the
deadline. If the work is not fully completed by the deadline to Cty standards, then the party
bound shall within thirty days of demand from the Oty make a written commitment to the Oty
that it will either:
(a) Remedy the default itself with reasonable diligence pursuant to a time schedule
acceptable to the Oty; or
(b) Tender to the Oty within an additional fifteen (15) days the amount necessary, as
determined in good faith by the Oty, for the Oty to remedy the default, up to the total amount
of the security. Said estimate shall include reasonable Oty administrative overhead costs, legal
costs and attorneys fees.
Upon completion of the duties of the surety or party bound under either of the options above, the
party bound shall then have fulfilled its obligations under the security for performance. If the party bound
elects to fulfill its obligation pursuant to the requirements of subpart "b", the Oty shall notify the party
bound of the actual costs of the remedy, upon completion of the work The Oty shall retum, without
interest, any overpayment made by the party bound, and the party bound shall pay to the Oty any actual costs
exceeding the Oty's estimate, limited to the amount of the security for performance.
The security for performance shall extend to all of the Oty's administrative overhead costs and to all
legal costs and reasonable attorneys fees incurred in seeking performance by the principal and any other
obligated or bound party to the maximum value or penal sum of the security.
Any security for performance received by the Oty after the effective date of the ordinance codified in
this chapter shall be construed to contain the terms of subsections (1), (2) and (3) of this section, whether the
said provisions are expressly set out or not.
19.51.030 Security for maintenance -Fonn.
Whether in the form of a bond, irrevocable letter of credit, or assignment of cash deposit, the undertaking for
maintenance shall contain the following provisions:
(1) A stated amount calculated in accordance with the requirements of this chapter;
(2) A detailed description of the warranty, maintenance to be performed, and any monitoring and
reporting requirements, and the duration of each;
(3) A provision reading as follows:
The security for maintenance is obligated and bound to warrant, monitor, report, and maintain
the improvements for the stated duration. If Oty shall grant acceptance of some improvements
but not all improvements at the same time, the security for maintenance shall become effective
as to each improvement as and when that improvement is accepted and shall remain in effect for
the stated duration for each improvement from the date of its acceptance. If required
monitoring, reporting, maintaining and repair and replacement in accordance with warranty does
not occur in accordance with Oty standards, then the surety or party bound shall within thirty
(30) days of demand from the Oty, make a written commitment to the Otythat it will either:
(a) Remedy the default itself with reasonable diligence pursuant to a time schedule
acceptable to the Oty; or
(b) Tender to the Oty within an additional fifteen (15) days the amount necessary, as
determined in good faith by the Oty, for the Oty to remedy the default, up to the total amount
of the security. Said estimate shall include reasonable Oty administrative overhead costs, legal
costs and attorneys fees.
Upon completion of the duties of the surety or party bound under either of the options above, the
party bound shall then have fulfilled its obligations under the security for maintenance. If the party bound
elects to fulfill its obligation pursuant to the requirements of subpart "b", the Oty shall notify the party
bound of the actual costs of the remedy, upon completion of the work The Oty shall retum, without
interest, any overpayment made by the party bound, and the party bound shall pay to the Oty any actual costs
exceeding the Oty's estimate, limited to the amount of the security for maintenance.
The security for maintenance shall extend to all of the Oty's administrative overhead costs and to all
legal costs and reasonable attorneys fees incurred in seeking performance by the principal and any other
obligated or bound party to the maximum value or penal sum of the security.
Any security for maintenance received by the Oty after the effective date of the ordinance codified in
this chapter shall be construed to contain the terms of subsections (1), (2) and (3), of this section, whether the
said provisions are expressly set out or not.
19.51.040 Amount of obligation.
The amount of the security, either for perfonnance or maintenance, subject to adjustment under MMC
19.51.050, shall be calculated as follows:
(1) Security for Perfonnance. The principal amount of the security, whether in the fonn of a bond,
irrevocable letter of credit, or assignment of cash deposit, shall be calculated as follows:
Amount equals current fair market cost for performance adjusted for inflation for tenn of obligation,
multiplied by 1.5 to reflect City's cost if it must perfonn under competitive bidding and prevailing wage, plus
30 percent of the current fair market cost for perfonnance as City's administrative overhead costs and
anticipated legal costs and reasonable attorneys' fees, provided the total amount for administrative costs and
anticipated legal costs and reasonable attorneys' fees shall not exceed $100,000.
(2) Security for Maintenance. The principal amount of the security, whether in the form of a bond,
irrevocable letter of credit, or assignment of cash deposit, shall be calculated as follows:
Amount equals 10 percent of the fair market value of the improvement, with a minimum amount being
$5,000, plus 30 percent of the amount calculated for security for maintenance as City's administrative
overhead costs and anticipated legal costs and reasonable attorneys' fees, provided the total amount for
administrative costs and anticipated legal costs and reasonable attorneys' fees shall not exceed $100,000.
(3) Anticipated Legal Costs and Reasonable Attorneys' Fees. Anticipated legal costs and reasonable
attorneys' fees are those City costs incurred for securing compliance or collecting funds and any other legal
costs incurred through the completion of the work
(4) Administrative Overhead Costs. Administrative overhead costs are those internal costs incurred for
staff time in observing the condition of improvements or maintenance, and taking action to secure
compliance, together with costs incurred to consultants to observe, monitor and report concerning work or
mamtenance.
19.51.050 Adjustment to amount of obligation for type of security -Changed circumstances.
Notwithstanding the calculation of the amount of the security under MMC 19.51.040, the City shall have the
authority to modify the amount of obligation to reflect the City's experience and history in obtaining
perfonnance or required maintenance with the type of security offered, bond, irrevocable letter of credit, or
assignment of cash deposit. If the City's experience and history would require an increase in the amount of
the obligation by more than an additional 25 percent, the City shall refuse the security offered. Should the
security once received not provide adequate assurance of perfonnance due to changed circumstances,
including increased cost of performance, the City through the community development director may require
that the amount of security for performance or maintenance be increased to reflect then fair market costs of
performance.
19.51.060 Enforcement against security.
All legal actions to enforce either security for perfonnance or maintenance may be brought in the Superior
Court of Washington with venue in Snohomish County. The City shall be entitled to an award of legal costs
and reasonable attorneys' fees in any such proceedings against the principal and against the surety to the
maximum penal sum of the security held.
19.51.070 Release of security.
Upon full and timely perfonnance of the work, and!or full and timely perfonnance of maintenance,
monitoring, reporting, repair or replacement, the City shall release its security for perfonnance and!or
security for maintenance, as the case may be.
19.51.080 Right to refuse security.
The City reserves the right to refuse security for perfonnance and to require that perfonnance of work as a
condition of approval be completed prior to final acceptance.
Section 3. Severability. If any section, subsection, sentence, clause, phrase or word of this ordinance should be held to be
invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality thereof shall not affect
the validity or constituti ality of any other section, subsection, sentence, clause, phrase or word of this ordinance.
PASSED by the City Council and APPROVED by the Mayoe this I ph day of ]Onlk'l~ ,2010.
OTY OF MARYSVILLE
By. ~i!I.dJJ
NNIS KENDALL, MAYOR
Attest:
BY._~
Approved as to form:
BY.~/<W~
GRANT K. WEED, OTY ATIORNEY
Date of Publication: i I!l-fJ
I
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Effective Date: I / 1--S" /t eo (5-tys-af-t-1~<-r -pu-b-li-'c-at-io-n""')-