§ 14.06.140. Warranty and security requirements.

A.

Warranty. An applicant for maintenance must warrant and guarantee that the road(s) submitted for certification were constructed consistent with RSA Road Standards and/or any plans or agreements approved by the RSA director or designee and that the road(s) shall remain in reasonably good condition and continue to meet all applicable road standards and/or approved plans or agreements for one year. The warranty shall include defects in design, workmanship, materials, and any damage caused to the road by the applicant or the applicant's agents.

B.

Construction Cost Statement. The applicant for maintenance certification shall complete an RSA Maintenance Application Form that includes a statement of costs of road construction. The statement of costs must be supported by invoices or be estimated and certified by a licensed civil engineer and approved as reasonable by the RSA director based on historical costs within the geographic location.

1.

The applicant may appeal any disagreement between the applicant's submitted cost estimate and the RSA director's determination of reasonable construction costs to the RSA board by filing a notice of appeal with the RSA director within 30 days of the date of notice of the RSA director's denial of the applicant's submitted cost.

C.

Financial Security for Warranty. Applicants for maintenance of roads preliminarily approved for maintenance must provide the RSA with security to guarantee the payment of any repair or reconstruction costs undertaken by the RSA or its agents due to any road failures, defects, or deficiencies that occur during the warranty period. Once acceptable security is received, the road will be certified for maintenance.

1.

The RSA will notify the applicant in writing of preliminary approval of the applicant's road(s) for maintenance at the applicant's last known address. Within 30 days after notification of approval for maintenance is sent, the applicant must furnish the RSA with acceptable security for the warranty to remain in effect for one year.

2.

If acceptable security is not furnished within the applicable time frame, the road will not be certified for maintenance, and the applicant cannot reapply for maintenance certification for the same road(s) until the following calendar year.

3.

Security covering ten percent of the construction costs for the project shall be accepted in any one of the following forms:

a.

A bond in the required security amount issued by a qualified corporate surety licensed to do business in Alaska. The bond shall be payable to the Borough in the event that any reconstruction or repairs are required for road failures, defects, or deficiencies that occur during the warranty period.

b.

A cashier's check or certified check in the required security amount. The funds shall be held in trust and returned after the expiration of the warranty period less any costs necessary for reconstruction or repair of any road failures, defects, or deficiencies that occur during the warranty period.

c.

A deposit of a cash sum in the required security amount into an escrow account with a responsible financial institution authorized to do such business in Alaska. The applicant shall provide an escrow agreement to the Borough that includes the following terms: the funds shall be held in trust until released by the Borough; the funds may not be used or pledged as other security; and the funds shall be available to the Borough for any costs incurred for reconstruction or repair of any road failures, defects, or deficiencies that occur during the warranty period.

d.

A letter of credit in the required security amount from a bank or other responsible financial institution authorized to do such business in Alaska and acceptable to the borough finance director that is irrevocable until the Borough authorizes the revocation and guarantees the creditor shall pay to the Borough immediately and without further action the funds necessary for reconstruction or repair of any road failures, defects, or deficiencies that occurred during the warranty period.

D.

Warranty Period. During the warranty period the applicant for road maintenance shall be responsible for all required road repairs, improvements, or reconstruction as long as the need for such repairs, improvements, or reconstruction was not caused solely by RSA maintenance activities. If the applicant for maintenance fails to make sufficient repairs, improvements, or reconstruction in a reasonable amount of time as determined by the RSA director, the RSA or its agent may do the required work at the applicant's expense and may bill the applicant or apply funds securing the warranty to pay for the work.

E.

End of Warranty Period. The RSA shall inspect the applicant's road(s) at the end of the warranty period. All deficiencies except those caused solely by borough maintenance activities must be corrected prior to the release of any warranty security.

1.

If the final inspection reveals the road is sufficient, the borough shall release any and all remaining securities to the applicant.

2.

If the road is insufficient, the applicant shall be provided an opportunity to correct any and all deficiencies at the applicant's cost within a reasonable time as prescribed by the RSA director. If the applicant does not correct all deficiencies within the prescribed time, the RSA or its agent may do the required work and secure immediate payment from the security to pay for any repair, improvement, or reconstruction costs in addition to any other remedies that might be available to the borough for the applicant's breach of warranty.

F.

Other Remedies Not Excluded. Nothing in this section shall preclude the Borough from recovering additional costs to complete road improvements if the security is not sufficient.

G.

Implementation. The road service area board may by resolution adopt policies and procedures to implement these provisions.

H.

Road Improvement Assessment Districts (RIADs). RIADs are exempt from KPB 14.06.140 warranty and security requirements.

(Ord. No. 2008-05(S), § 1, 5-6-08)