Waste Collectors Performance Bond - Statewide in California
Table of Contents
Brief Summary
If a California city, county or special district is about to award you a hauling franchise, contract or permit, a performance bond is usually one of the last items it asks for. State regulations expect the local agency to collect one. Getting it lined up early keeps your start date from slipping.
California's solid waste standards, 14 CCR 17333, require any city, county or special district that authorizes a firm to collect solid waste through a contract, franchise, permit or license to obtain proof of the firm's financial resources, including a performance bond or equivalent security filed with the local government in a reasonable amount. The local agency is the obligee and sets the amount.
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How to Apply for a Waste Collectors Performance Bond:
- Get the required bond amount and form from the city, county or special district awarding the franchise, contract or permit.
- Provide your legal business name exactly as it appears on the agreement or permit.
- Share company financial statements and a summary of your collection experience with the surety.
- Complete the bond application and review the premium quote.
- Have the bond executed and file it with the local agency before service begins.
- Keep the bond in force for the full term of the franchise or permit.
Detailed Information About the California Waste Collectors Performance Bond:
Where this bond comes from
There is no single statewide waste hauler license with a fixed bond. The requirement runs through local government. Title 14, California Code of Regulations, section 17333 says that when a city, county or special district authorizes or designates a person or firm to provide solid waste collection services through a contract, franchise, permit or license, the local government shall obtain proof that the firm has adequate financial resources and experience. That proof includes the filing of a performance bond or equivalent security with the local government in a reasonable amount, plus evidence of experience given to the local government and the enforcement agency.
Who sets the amount
The local agency issuing the franchise, contract or permit decides the bond amount and the form. Some set it in the franchise agreement, others by council or board resolution under their municipal code. Because of that, the amount for one city can be very different from the next. Ask the agency for its bond form and required penal sum before you apply.
What the bond guarantees
A performance bond backs your promise to deliver the collection service the way the franchise, contract or permit requires. If you walk away from the route, stop service or fail to meet the agreement's terms, the agency can claim against the bond to cover the cost of getting the work done. The surety pays valid claims and then looks to you for repayment.
Things haulers miss
The bond is separate from the insurance and indemnity terms most franchise agreements also require. It usually has to stay in force for the life of the franchise or permit, and many agencies require advance written notice before the surety cancels. Confirm the current form, amount and filing steps with the city, county or district before the bond is issued.
Eligibility and Requirements for a California Waste Collectors Performance Bond:
- The local government agency named as obligee.
- Penal sum set by the agency in its franchise, contract, permit or ordinance.
- A surety admitted in California.
- Bond language matching the agency's form or agreement.
- Evidence of collection experience, which 14 CCR 17333 also requires the agency to obtain.
California Waste Collectors Performance Bond FAQs:
The requirement is tied to local authorization. Under 14 CCR 17333, a city, county or special district that grants a solid waste collection contract, franchise, permit or license must obtain a performance bond or equivalent security from the hauler.
The local agency sets a reasonable amount. It is usually stated in the franchise agreement, permit conditions or a council or board resolution, so check with the agency awarding your service area.
The regulation allows a performance bond or equivalent security. Whether the agency accepts cash or another instrument is up to that agency.
Sureties underwrite performance bonds like contract bonds. They look at your company's financial statements, credit, experience and the size and length of the contract, then price the bond from that review.
