General Improvement Performance Bond - City of Los Angeles, CA in California

Brief Summary

There is no fixed figure for this bond. The City Engineer sets it from the estimated cost of your street, sewer or other public improvements, then adds a contingency and a cost increase factor. Posting a surety bond lets you get the construction B-Permit issued without tying up that full amount in cash for the life of the job.

The City of Los Angeles requires a General Improvement Performance Bond before it issues a construction Class B permit for public improvements that are not part of a tract or parcel map. The Bureau of Engineering sets the amount at the City Engineer's construction estimate plus a 15% contingency factor and a 50% cost increase factor. The bond guarantees the work is built to Board of Public Works standards by the completion date and stays in force until the City Engineer signs a Certificate of Acceptance.

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How to Apply for a General Improvement Performance Bond:

• Get your construction B-Permit application and bond estimate from the Bureau of Engineering, including a construction material takeoff.
• Request the General Improvement Performance Bond form from the Bureau's Bond Control Section, which prepares it.
• Provide the permit owner's exact legal name, since it must match the bond principal.
• Complete the surety application and review the quoted premium for the estimated bond amount.
• Have all principal and surety signatures notarized and attach the surety's power of attorney.
• Return three fully executed copies to Bond Control so the bond can be sent to CAO Risk Management for approval before the permit issues.

Detailed Information About the California General Improvement Performance Bond:

When the bond comes up

Los Angeles splits public works permits into Class A and Class B under LAMC 62.106. B-Permits cover the bigger jobs, such as street widening, grade changes, sewers, storm drains, street lighting and traffic signals. The Bureau of Engineering will not issue a construction B-Permit until the applicant files suitable security with the City Engineer. A design or plan check B-Permit does not need a bond.

The City's bond form lists the situations that lead to it. The principal has applied for a building permit, zone change, zone variance, conditional use, street or alley vacation or legal lot access, or has offered to dedicate or improve public easements, and has agreed to build the listed public improvements as part of that approval.

How the amount is set

The amount is not published as a flat number because it depends on the work. Per the Bureau of Engineering, the security must cover the City Engineer's estimate of construction plus a fifteen percent contingency factor and a fifty percent cost increase factor. The Bureau needs a construction material takeoff to prepare the estimate, and for simple jobs the estimate usually takes five to ten working days. Large projects need preliminary plans before an estimate can be given.

If the improvements are a condition of a subdivision (tract or parcel map), a different subdivision bond applies and state law adds labor and material security. The general improvement bond is for B-Permit work outside a subdivision.

What the bond guarantees

The principal promises to build and install the listed improvements under Board of Public Works permits, to Board standards and to the City Engineer's approval, by the completion date on the bond or any lawful extension. It also guarantees compliance with Articles 2 and 7 of Chapter 1 and Sections 62.105 through 62.118 of the Los Angeles Municipal Code. The obligation ends when the City Engineer delivers a Certificate of Acceptance to the principal and surety, or exonerates or cancels the bond.

Paperwork details people miss

The Bureau's Bond Control Section prepares the bond form for you. The permit owner must be the same person or entity as the bond principal. Every signature must be notarized, corporations need two officers to sign and affix the seal, and the surety's attorney in fact must attach a current power of attorney. Three fully executed copies go back to Bond Control. The bond is not exonerated until all permit fee charges have been totaled and paid after final inspection.

Eligibility and Requirements for a California General Improvement Performance Bond:

• A surety authorized by the California Insurance Commissioner and listed in the Federal Register.
• Bond amount equal to the City Engineer's construction estimate plus 15% contingency and 50% cost increase factor.
• City of Los Angeles named as obligee on the Bureau of Engineering General Improvement Performance Bond form.
• Principal name identical to the B-Permit owner.
• Underwriting review of the principal's credit and, on larger amounts, financial statements and work history.

California General Improvement Performance Bond FAQs:

Official and Additional Resources for the California General Improvement Performance Bond: