Requirement of Bond. Permits required by this Subtitle shall not be issued until the applicant, as principal, has posted a performance bond in favor of Prince George's County to ensure the satisfactory performance and completion of all work covered by the permit; and/or, where applicable, a payment bond to ensure timely payment to the County, subcontractors, and/or suppliers for work performed under the permit. Said payment bond shall be held by the Department until one (1) year after the date of final acceptance of the permit in order to adequately protect subcontractors and suppliers for work performed under the permit. However, notwithstanding the above, the Director (at his sole discretion) may release a payment bond earlier than the one-year period upon receipt of documentation which proves that all supplies and subcontractors have been paid. Where the estimated cost of the work is less than One Thousand Dollars ($1,000.00), no performance bond will be required. The limits for a labor and materialman's bond shall be as stated in Section 23-116(e)(2)(A). The acceptable forms of security are:
Irrevocable letter of credit from a financial institution with automatic renewal until released by the County;
Irrevocable assignment of funds in favor of Prince George's County;
Corporate surety bond;
Cash bond;
Irrevocable assignment of certificate of deposit or of savings certificate;
Irrevocable assignment of savings account; or
Certificate of guarantee as provided for in Section 2-463 of this Code.
Waiver of Bond for Public Utilities and Governmental Agencies and Authorities. The Director may waive the requirement for bond for any permit issued to a public utility, governmental agency, or authority where it is determined that the utility, agency, or authority has equivalent financial resources and responsibility.
Amount of Bond. Except as otherwise provided, the amount of any bond required to be posted under this Section shall be equal to, or greater than, the total cost of the project as estimated by the Department, including an additional twenty-five percent (25%) of the estimated cost for contingencies. The maximum amount of a restoration bond shall not exceed One Hundred Thousand Dollars ($100,000.00).
Conditions Imposed Upon Obligation of Permittee to Post Performance Bond. Notwithstanding the presence of a document identified as a performance bond and the terms of such document, if filed, the following conditions shall be a part of the terms of the performance bond posted by the applicant or permittee, as principal, with the County, and such performance bond may be forfeited in the entire amount of the value of the work remaining to be completed, including an additional twenty-five percent (25%) of the estimated cost for contingencies, upon breach of any of the following conditions by the permittee:
To comply with all of the applicable terms, conditions, provisions, requirements, standards, and specifications of this ordinance;
To faithfully and timely complete the work for which the permit was issued;
To save harmless the County from:
Any expense incurred because of noncompletion of the work;
Any damages growing out of the performance or nonperformance of the work; or
Any failure to pay any bills incurred by the County arising out of the work covered by the permit.
Types of Bonds. The following types of bonds shall be required, as applicable, in accordance with Subsection (g) of this Section:
Performance Bonds.
Restoration Bond. A restoration bond will be required to insure restoration of any damage done to existing curb, gutter, sidewalk, hiker-biker trail, driveway, pavement, sod, tree, or any other items within the right-of-way adjacent to the lots being developed or within the area of road adjacent to grading, filling, or mining sites.
A restoration bond shall also be required to gain the Department's concurrence for release of building permits in areas where roads are completed and maintained, or under permit to another developer, to insure restoration of any damage to the existing public facility as a result of the on-site construction, or for additions to an existing building, installation of in-ground swimming pools, or other types of construction where heavy equipment will cross the right-of-way. For minor work on a single lot, a letter from the property owner accepting responsibility for restoration of the facilities adjacent to the residential property may be acceptable to the Director in lieu of a bond.
Where restoration is required to repair damage within the right-of-way, it shall be the duty of the applicant to apply to the Department for a permit, pay the established fee, and post bond if a restoration bond was not posted previously, the bond amount posted is less than the value of the corrective work, or the work to be performed is beyond the scope of the bonds posted.
A restoration bond will be released when all damaged facilities, if any, have been restored to the satisfaction of the Director, in accordance with accepted standards.
Uncompleted Work Bond. Where the permittee cannot complete the work under a permit due to a future roadway construction project, uncompleted construction of a utility, inability to obtain adjacent rights-of-way, difficulties produced by the character of adjacent terrain, or other circumstances as the Director may determine, the permittee shall be required to post a bond for the uncompleted work plus a twenty-five percent (25%) contingency, including the cost as determined by the Director for acquisition of any required rights-of-way or easements.
The original bond and Department concurrence for building permits within areas adjacent to uncompleted work may be released after receipt of the uncompleted work bond by the Department.
In the event it becomes practical or feasible for the permittee, who posted the uncompleted work bond, to complete the work covered by the bond, the Director shall promptly notify the permittee to complete the work covered by the bond. Where the permittee fails to perform and complete the previously uncompleted work within two (2) years of the date of notification to proceed, the total value of the bond will be forfeited to the County.
If, after the permittee has posted bond for the uncompleted work, the Director determines that the work cannot be performed within three (3) years from the date of acceptance of the previously completed work, the total value of the bond may be released by the County.
Payment in Lieu of Construction. As an alternative to, or to replace an existing Uncompleted Work Bond in whole or in part, the Director may instruct the permittee to make a payment to the County in lieu of construction for all or part of the remaining work in an amount equal to the value of the work as currently estimated by the Department, plus the twenty-five percent (25%) contingency provided for by this Subtitle. The payment of the said Payment in Lieu of Construction shall satisfy all, or a portion of, the requirements of the permit depending on the amount of Bond to be either released or reduced in value to reflect the value of the remaining work.
Payment Bonds.
Labor and Materialman's Bond. A labor and materialman's bond shall be provided by the applicant prior to the issuance of a permit, and retained by the County to ensure payment of persons supplying labor or material for work performed under the permit. A labor and materialman's bond shall be posted whenever the form of security posted as a performance bond is a corporate surety bond and for all other types of security posted if the estimated cost of the work is Twenty-five Thousand Dollars ($25,000.00), or more. The labor and materialman's bond shall remain in full force and effect until such time as all outstanding bills and obligations for labor and materials supplied for performance of the work defined in the permit are paid for in full, and a certified release of liens and claims is received by the Department.
Reimbursement Bond. A reimbursement bond will be required where the permittee enters into a contract with the County for the County to perform work within the right-of-way which cannot be performed by the permittee, but which the permittee is obligated to perform. Said bond is to insure payment to Prince George's County for work performed by the County under this contract. At the time of completion of construction for work performed under this contract, the County will bill the permittee for the total cost of the work.
Traffic Signal Bond. If it is determined by the Director that a land development requires new, or impacts existing, traffic signal(s), a bond will be required to insure that the cost of the new or corrective work will be borne by the developer. The Director may authorize a permit applicant to design and install traffic control signals. The bond will be released when the traffic signals have been installed or reconstructed, accepted, and all expenses paid.
Overhead Structures Bond. The applicant, pursuant to the provisions of this Subtitle, shall be required to post a bond which shall indemnify the County, for a period of five (5) years from the time of completion of the construction, from any harm which the County may suffer as a result of the construction and maintenance of an overhead structure in a road. The amount of the bond shall be one hundred twenty-five percent (125%) of the estimated cost of demolition and removal of the structure as determined at the time the bond is posted. The bond shall be posted prior to the issuance of a permit.
Utility. Each public utility which is qualified as a public service company under Maryland law shall, at the time of issuance of the public utility permit, submit to the Director a letter of responsibility in lieu of a bond. Any other public or private utility shall be required to post a bond.
Approval of Bonds Required Before Issuance of Permit. Before the Department may issue a permit, or concur in the issuance of a permit, all required bonds shall be approved by the Director and the County Attorney.
Refund Agreements for Phases of Work Completed.
Cash, letters of credit, certificates of guarantee, and other instruments, not to include surety bonds, posted by the permittee and accepted by the County may be refunded upon request of the permittee on a prorated basis, depending on the value of the completed and approved work, as follows:
| % OF WORK COMPLETED |
% REFUND AMOUNT |
| 50 |
25 |
| 80 |
75 |
| Acceptance |
100 |
Reduction in the Amount of a Surety Bond Posted for Urban Road Classifications. When all work is completed on a permit except the placement of sod and the planting of trees, the permittee may request a reduction in the surety bond amount to fifty percent (50%) of the original amount or Twenty-five Thousand Dollars ($25,000.00), whichever is greater, provided that all of the storm water drainage systems have been constructed by the permittee and approved by the Director.
There shall be no reduction in the amount of a surety bond posted for rural road classifications.
Release of Claims. In no event shall any labor and materialman's bond be reduced or released until all claims by laborers and material suppliers have been paid, and a release of claims covering the work completed has been filed with the Department.
Release of Bonds. Bonds covering construction shall not be released until the construction covered by such bonds has been finally approved by the Director in accordance with this Subtitle and subject to such requirements to comply with Subsections (e)(1)(B) and (C) of this Section. Upon acceptance of the work by the Director, the security posted to insure performance shall be certified as discharged. Discharge of the security posted to insure performance shall not operate as a discharge of any other bond.
Action on Defaulted Permit.
Where the Director determines that a permit is in default and the work is guaranteed by a surety bond, the Department shall immediately notify the bonding institution or agent to undertake and complete the work in accordance with the permit.
Where the Director has determined that a permit is in default and the work is guaranteed by a form of bond other than a surety bond, and the bonding institution or agent fails to commit to undertake completion of the work within thirty (30) days of having been given notice by the Department, the Director shall immediately move to collect all performance bonds which have been posted.
Upon a decision to collect the bonds, the Director shall evaluate the work remaining to be done, determine whether the work covered by the permit should be completed, the work site should be restored to its original condition, or other modifications to the permitted work site should be made. The Director shall then determine whether the bonds posted are sufficient to carry out the required completion, restoration, or modified work.
After evaluating the work to be performed as specified above, the Director shall develop an estimate of the costs for said work, to include an amount equal to twenty-five percent (25%) of the anticipated construction cost as a contingency, and compare the estimated amount to the amount of bond posted by the permittee. If the amount of bond posted is in excess of the estimate, the Department shall immediately move to collect the bonds and carry out the necessary work. The entire amount of the bonds posted may be used either in or near the permit site as may be determined by the Director to be necessary.
If the bonds posted are not sufficient, the Department shall develop and implement a course of action as determined by the Director. The Department shall immediately move to collect all of the bonds which have been posted.
If the bonds which have been posted are in excess of the amount required to carry out the completion, restoration, or modified work determined by the Director to be necessary, the excess amount shall be released to the payer after all work has been finished by the Department and all costs of same have been accounted for.
Upon notification that a bond has been forfeited in accordance with this Subtitle, the bonding institution or agent providing the bond shall have thirty (30) days to issue payment to the County. If the bonding institution or agent fails to render payment within thirty (30) days of the notice from the Director to make payment, the bonding institution or agent may be barred from issuing any subsequent bonds for any other road construction work within the County for a period of five (5) years. The right to reissue bonds after having been previously barred shall be allowed only after all outstanding amounts have been paid, plus an amount equal to ten percent (10%) a year, compounded annually.