Sec. 94-321. Procedures for approval of three party contract.

(a) Prior to the commencement of construction of any street or sewer improvements associated with subdivision development, site plan development, or any private construction project, involving the construction of streets or sewers which are to be dedicated to and maintained by the city, the construction of private sewers upon city property or street rights-of-way, or the construction of private streets or private sewer mains serving more than one building, the person desiring to construct such improvements shall make application to the city engineer for approval of the private construction contract pursuant to which the such improvements will be constructed. The application shall be in the form of a letter requesting approval and shall be accompanied by reproducible Mylars of engineering design drawings of such improvements approved by the city engineer, executed originals of all proposed contracts for the construction of such improvements, the contractor's surety bond for the performance, payment and maintenance of such work, and a certificate of insurance evidencing insurance coverages as required by the engineering department. The application shall also be accompanied by payment of an administrative fee for the City's costs of processing and approving the contract and accepting the work performed thereunder, together with an inspection and testing fee for the City's costs of inspecting and testing the work performed under the contract, said fees to be calculated upon the basis of the schedule of fees adopted by the City Council by resolution. All such proposed contracts shall be three-party contracts in substantially the form provided and required by the engineering department. Under such contract, the city is to be a named third-party beneficiary of the contractor's obligations and commitments with regard to the construction of the improvements and an obligee under the contractor's bond. Surety bonds and insurance certificates shall likewise be in substantially the form provided and required by the engineering department.

(b) Upon receipt of an application requesting approval accompanied by all required documentation, and upon payment of fees as required in (a) above, the city engineer shall make a recommendation to the city council as to the approval or rejection of the proposed contract, taking into consideration the following:

(1) The financial responsibility of the contractor.

(2) The past record of transactions and experience with the contractor, including the quality of workmanship; the number of liens, claims or complaints filed; and the number of repairs made on prior public improvement construction projects involving that contractor.

(3) The adequacy of the contractor's equipment and materials.

(4) The contractor's demonstrated ability to complete performance of the work.

(5) The conformity of the proposed contract and related documents with the requirements of this section.

(c) A proposed contract may be rejected upon a determination by the city council that the contractor has:

(1) Without good cause therefor failed to carry on or complete prior work under a three-party contract in an acceptable manner or refused to comply with a written order of the engineer with regard thereto within a reasonable time;

(2) Failed to perform prior work under a three-party contract in reasonably close conformity with the plans and specifications therefor or in reasonably close conformity with the city's design standards;

(3) Failed or refused to remove and replace materials or work found by the city engineer not to be in reasonably close conformity with the plans and specifications or city design standards, as applicable, or failed to correct such material or work so as to cause such materials or finished product to be reasonably acceptable work;

(4) Assigned or disposed of work or the contract or any part thereof without approval of the city engineer; or

(5) Offered or given gifts or gratuities to city employees in violation of state law or has had as its employee a person who was at the time also a city employee.

(d) If the city engineer determines to recommend rejection of the contract to the city council, the city engineer shall so notify the affected contractor. The notice shall set forth the reasons supporting rejection of the proposed contract, shall indicate that the contractor may appeal the city engineer's determination in that regard, and shall be sent to the contractor by certified mail, return receipt requested.