3.65.020 Qualification in lieu of bonding.
A. The bonds required by KIBC 3.65.010 shall be waived for any project having a total value of less than $50,000 if the contractor qualifies as provided in this section prior to the time for award of the contract and deposits with the borough by cash, postal money order, certified check, or cashier’s check a sum equal to five percent of the contract amount in lieu of a performance bond and sum equal to five percent of the contract amount in lieu of a payment bond.
B. If the following four criteria apply, a contractor is qualified for a waiver of bond requirements:
1. The contractor has maintained a business office within the borough for a continuous period of not less than six calendar months prior to the application for qualification;
2. A statement is submitted to the borough, prepared and signed by a certified public accountant or the manager or other qualified officer of a federal or state chartered bank, savings and loan association, or credit union, demonstrating that the contractor has a current net worth of a stated amount not less than twice the total value of the contract or $100,000, whichever is less, and that the liquid assets of the contractor are a stated amount of not less than 25 percent of the total value of the contract or $12,500, whichever is less. The statement shall be dated not more than 60 days prior to application for qualification;
3. The contractor is recommended by the owners of not fewer than five projects completed by the contractor or on which the contractor completed specified portions of the project under one or more contractors; and
4. The contractor submits not fewer than three references establishing his good credit standing in the community.
C. Contracts awarded without bonds shall be signed guaranteed by the following persons, in their individual capacities, in addition to the authorized signature of the contractor:
1. Each general partner, if the contractor is a partnership; and
2. Each officer or general manager and each shareholder holding 10 percent or more of the common stock, if the contractor is a corporation.
D. Upon completion of the project, the contractor shall submit an affidavit of payment of all sums due or claimed to be due for labor or materials on the project. Final payment shall be made following receipt of this affidavit and, if no claims for labor or materials have been received by the borough within 90 days after acceptance of the project, the deposit made in lieu of a labor and material payment shall be released to the contractor.
E. The deposit made in lieu of a performance bond shall be retained for a period of one year unless the assembly determines to release the deposit after a shorter time upon the recommendation of the engineering/facilities department director. The recommendation of the engineering/ facilities department director shall be based upon consideration of the nature and complexity of the project. [Ord. 98-03 §2, 1998; Ord. 97-05 §6, 1997; Ord. 84-42-O §2, 1984. Formerly §3.40.020].