A. Performance Surety. The city may require permit applicants to provide a performance surety to ensure conformance with the plans, specifications and standards. The minimum amount of the performance surety shall be 125 percent of the estimated value of the work or the estimated cost to repair damage to existing improvements as determined by the director. The performance surety shall not be released until after final acceptance of the permitted work and receipt of a warranty deposit, if required.

B. Warranty Deposit. The city may require a warranty deposit to warrant the workmanship and the material of the constructed improvements in the right-of-way for a period of one year from the final inspection date. The minimum amount of the warranty deposit shall be 20 percent of the value of the actual construction costs.

C. Deposit Instruments. The deposit instrument for the performance or warranty deposit shall be cash, a nonrevocable letter of credit, assignment of funds, bond or other readily accessible source of funds approved by the city finance director. The deposit instruments shall be on a form acceptable to the city finance director. Any issuer of a deposit instrument shall pay invoices presented by the city pursuant to this chapter within 45 days. A bond will be accepted only for amounts over $1,000 or when state law requires a bond.

Interest on deposited funds will accrue to the benefit of the depositor, except any interest earned on a cash deposit will be retained by the city for account administration.

D. Notice of Incomplete or Defective Work. If the director determines permitted work to be incomplete or defective or observes a defect during the warranty period or other activities which do not comply with the permit and shall require corrective action by the permittee, the director shall notify the applicant in writing prior to applying proceeds of the deposit to correct the work. The notice will state:

1. Work that must be done to comply with the requirements of the permit or deposit;

2. The amount of time that the applicant has to complete the required work; and

3. If the work is not completed within the time specified, the city will use the proceeds of the deposit to have the required work completed.

E. Default on Deposit.

1. If the work covered by the deposit is not completed within the time specified in the notice given under this chapter, the city shall obtain the proceeds of the deposit and do the work covered by the deposit. The city may either have employees of the city or a contractor complete the work.

2. If, at any time, the director determines that actions or inactions associated with permit work have created an emergency situation endangering public health, safety or welfare, created a potential liability for the city or endangered city streets, utilities or property, and if the nature or timing of such an emergency precludes the notification of applicants as provided in this chapter while still minimizing or avoiding the effects of the emergency, the city may use the deposit to cover costs incurred by the city to correct the emergency situation. The city may either have employees of the city or a contractor complete the work. If the city uses the deposit, as provided by this section, the applicant shall be notified in writing within four working days of the commencement of emergency work. The notice must state which work was completed and the nature or timing of the emergency that necessitated the use of the deposit without prior notification.

3. The permittee is responsible for all costs incurred by the city in completing the work covered by the deposit. The city shall release or refund any proceeds of any deposit remaining after subtracting all costs incurred. The permittee shall reimburse the city for any amount expended by the city that exceeds the deposit.

4. If the city uses any of the deposit it shall, within 30 days, provide the owner of the permit an itemized statement of all proceeds and funds used. (Ord. 2014-24 § 2, 2014)