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Home My WebLink About11-1485 City Code Performance and Warranty Surety for Public InfrastructureCITY OF MERIDIAN ORDINANCE N0.11-1485 BY THE CITY COUNCIL: BIRD, HOAGLUN, ROUNTREE, ZAREMBA AN ORDINANCE OF THE CITY OF MERIDIAN, ENACTING A NEW SECTION, TITLE 8, CHAPTER 6, SECTION 1-4, RELATING TO PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Meridian finds that installation of water, sanitary sewer, reclaimed water, and stormwater infrastructure shall have surety in place prior to the commencement ofbuilding construction/installation to assure the City and the public that the project will be completed in a timely fashion; and WHEREAS the need has been demonstrated that the City and the public need adequate surety in place to guarantee the materials and workmanship of public infrastructure projects for a specified period of time following formal acceptance by the City, to assure that the public does not become responsible for repairs or restoration during the warranty period of the installed infrastructure; and WHEREAS the developer of the proj ect is best suited to provide surety for both performance of the infrastructure as well as warranty of the constructed/installed infrastructure once said infrastructure has been formally accepted by the City for ownership; NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF MERIDIAN, IDAHO: Section 1: That a new section of Title 8, Chapter 6, Meridian City Code, Section 1-4, shall be, and hereby is, enacted to read as follows: 8-6-1-Purpose 1. To establish a requirement for a Developer to provide a performance surety in lieu of the construction of public infrastructure projects including potable water, sanitary sewer, reclaimed water, and stormwater infrastructure and a warranty surety for the completed public infrastructure prior to the acceptance of the public infrastructure by the City. 2. To clarify that all infrastructure constructed/installed pursuant to the procedures set forth in this chapter shall become part of the City of Meridian's Water, Sanitary Sewer, Reclaimed Water, and Stormwater Systems. 3. To insure that new infrastructure is provided at a lesser initial risk to the City and accompanying rate payers, upon the City's acceptance of such infrastructure. PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE -MCC 8-6-1 THRU 4 - PAGE l OF 4 4. To insure a consistent standard is required for a guarantee for the performance of the initial construction/installation ofthe infrastructure. 5. To insure a consistent standard is required for warranty of the materials and work performed for the construction/installation ofpublic infrastructure improvements when the City takes ownership of the said public infrastructure. 8-6-2 -Definitions 1. Bond Formal, legally enforceable contract between a first party (the Developer), a second party (the City), and a third party (the surety, such as a bank, bonding company, or insurance company) whereby the surety guarantees payment of a specified maximum sum, or to otherwise compensate (indemnify), the City against damage or loss caused by the actions (or a failure to perform) of the Developer. 2. Cash or Cash E uivalent United States currency that maybe lawfully tendered in payment of a debt, such as paper money, Federal Reserve notes, or coins, certificate of deposit (CD), marketable security, negotiable financial instrument (such as a cashier's check), etc., that has a very high degree of convertibility into cash (liquidity). 3. City The City of Meridian, an incorporated City in the State of Idaho. 4. Develo er A person or entity that engages in development of land under the requirements of the City of Meridian Uniform Development Code and associated City of Meridian ordinances. 5. Development Any aspect of improving, constructing, subdividing, and/or investing inland capacity and infrastructure for the purpose of growing residential, commercial, industrial, or other community enhancement opportunities done under the requirements of the City of Meridian Uniform Development Code and associated City of Meridian ordinances. 6. Director The Director of the City of Meridian Public Works Department, and/or his or her esignee. PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE -MCC 8-6- I THRU 4 -PAGE 2 OF 4 7. Irrevocable Letter of Credit Firm commitment by an issuing bank to pay an accepting bank a specified sum in a specified currency, provided the conditions included in the Irrevocable Letter of Credit document are met within a specified timeframe. This Irrevocable Letter of Credit cannot be canceled (or its terms amended) without the City's (beneficiary's) prior written approval, and comes usually as a confirmed irrevocable letter of credit. 8. Performance Surety Cash, cash equivalent, irrevocable letter of credit, or bond in place prior to the commencement of construction that guarantees funds are available to complete the project if necessary. Surety method must be approved by the City prior to the commencement of work to be valid and acceptable as complying with this ordinance. 9. Public Infrastructure Potable water, sanitary sewer, reclaimed water, and stormwater mains and all associated components thereof including but not limited to service lines, piping, manholes, and va ving. 10. Warranty Surety Cash, cash equivalent, irrevocable letter of credit, or bond in place prior to the commencement of construction, or prior to formal acceptance of the constructed/installed infrastructure, that guarantees funds are available in the event of the need to repair or replace part of the infrastructure due to defect in materials and/or workmanship of the proj ect if necessary. Surety method must be approved by the City prior to final acceptance of the public infrastructure to be valid and acceptable as complying with this or mance. 8-6-3 -Surety Requirements 1. Performance Surety A. If the Developer does not construct the public infrastructure as required by the City for hisser development, than the Developer shall provide and be the responsible party for a performance surety with the City as the beneficiary in an amount equal to one hundred and twenty-five percent (125%) of the itemized contractor's bid for the development as approved by the City so as to provide performance surety for the project. B. The performance surety shall be in place throughout the entire construction and installation of the improvements. The surety may not be released until the improvements are accepted by the City. PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE -MCC 8-6-1 THRU 4 -PAGE 3 of 4 C. If a erformance surety is obtained by the developer and said performance surety ~_ p 20% of the includes a 2 ear warranty surety in the amount equal to twenty percent ( ) Y actual construction cost of the installed public infrastructure, than the developer would not need to obtain a se arate warrant surety. Under this circumstance, however, the p Y erformance suret would not be releasable until the conclusion of the warranty period. p Y 2. Warranty S_ ur_ety A. The Develo er shall provide and be the responsible party for a warranty surety with . p o the Cit as the beneficiary in an amount equal to twenty percent (20 /°) of the actual y construction cost of the installed public infrastructure as approved by the City so as to provide warranty surety for the project. B. The warranty surety shall be in effect for two (2) years from the date of acceptance by the City of the public infrastructure improvements. 8-6-4- Savings Clause If any provision of this ordinance shall be held to be invalid by a court of competent 'urisdiction, then such provision shall be considered separately and apart from the ~ ., remaining provisions of this ordinance, which shall remain in full force and effect. ~"` Section 2: This Ordinance shall be in full force and effect after passage and on or after January 1, 2012. PASSED BY THE CITY COUNCIL OF THE CITY OF MERIDIAN, IDAHO, this q day of , 2011. APPROVED BY THE MAYOR OF THE CITY OF MERIDIAN, IDAHO, this day of , 2011. APPROVED: ATTEST: By: 4~ Jace r-~ ~~ ~-"4 ~„. ~~ r j~ ,~ ~.. ~ , ~ ~~ ` ~~ r~ 1 ~ e•~ ra 4,3 u---t ~~~ ~ ~~~ e j =,i 4 °~~ s .u v , ae a ~ 9 ~ JyF ~ P R~ V* , ~ YV ,~~~ ~~P , ~~ 11r ~r ~'i, .! ~ ~~, r ,qi pjA};; ~._ ~ tp~ ~ ~~ ~, ~ Mayor ~= de Weerd PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE -MCC 8-6-1 THRU 4 -PAGE 4 OF 4 NOTICE AND PUBLISHED SUMMARY OF ORDINANCE PURSUANT TO I.C. § 50-901(A) CITY OF MERIDIAN ORDINANCE N0.11-1485 AN ORDINANCE OF THE CITY OF MERIDIAN, ENACTING A NEW SECTION, TITLE 8, CHAPTER 6, SECTION 1-4, RELATING TO PERFORMANCE AND WARRANTY SURETY FOR PUBLIC INFRASTRUCTURE; PROVIDING AN EFFECTIVE DATE OF 1/1/2012. An Ordinance of the City of Meridian amending Title 8, Chapter 6, Sectionl-4 of the Meridian City Code, relating to Performance and Warranty Surety for Public Infrastructure. A full text of this ordinance is available for inspection at City Hall, City of Meridian, 33 East Broadway Street, Mer~d~~r rho. This Ordinance shall become effective on the day of , ~9' ~ ~ ~ ~ - ~ T- ity of e di w Mayor an ity Council By: Jaycee L. Holman, City Clerk ' ~; ~ A } r ~ .~ , ~~ ~~ ..~,, First Reading: - ~a Adopted after first reading by suspension of the Rule as allowed pursuant to Idaho Code § 50-902: YES NO Second Reading: .~ 1 Third Reading: ~ STATEMENT OF MERIDIAN CITY ATTORNEY AS TO ADEQUACY OF SUMMARY OF ORDINANCE NO. 11-1485 The undersigned, William L.M. Nary, City Attorney of the City of Meridian, Idaho, hereby certifies that he is the legal advisor of the City and has reviewed a copy of the attached Ordinance No. 11-1485 of the City of Meridian, Idaho, and has found the same to be true and complete and provides adequate notice to the public pursuant to Idaho Code § 50-901A(3). . A ~-' DATED this JV day of , 2011 1. William. L.M. Nary City Attorney ORDINANCE SUMMARY - PERFORMANCE AND WARRANTY SURETY PUBLIC INFRASTRUCTURE- PAGE l OF 1