Sec. 2-13

Construction Agreement and Bond

To secure approval prior to construction of the required improvements,
insofar as the construction of the project water system is concerned, the
subdivider shall enter into an agreement with the County or the Department
to make, install and complete all of the required improvements within a
specified time and file with the director a surety bond or other security,
as hereinafter specified, to assure the county or the department the actual
construction and installation of the improvements and utilities shown on the
approved construction plans.

The agreement shall specify, insofar as the project water system is
concerned, that the subdivider will complete the same to the satisfaction of
the director, and shall provide that if the subdivider shall fail to so
complete such work within the time specified, or such extension as may be
mutually agreed upon, the department may complete the same and recover the
full cost and expense thereof from the subdivider.

The bond or other security to be filed with the director with the aforesaid
agreement shall be one of the following (provided, that in all instances
where a surety bond is filed, it shall be executed by the subdivider, as
principal, and by a surety company authorized to transact a surety business
in the state, as surety):

  (a)    A surety bond in a sum equal to the cost of the work required to be
      done as estimated by the director; payable to the county or the
      department, and conditioned upon the faithful performance of all work
      required to be done by the subdivider, and upon the further condition
      that should the subdivider fail to complete all work required to be
      done within a specified time, the department may cause all work which
      is not finished to be completed, and the parties executing the bond
      shall be firmly bound for the payment of all costs thereof; or
  (b)    Where the subdivider has entered into a contract with a reputable
      contractor, and has filed with the director all three of the following:
      (1) a certified copy of his said contract and specifications, (2) a
      certified copy of the performance bond of his contractor, and (3) a
      surety bond in a sum equal to at least 50 percent of the cost of all
      work required to be done by the subdivider as estimated by the
      director and payable and conditioned as above set forth; or
  (c)    The subdivider shall make a deposit of money with the director, or
      a responsible escrow agent designated by the director as agent of the
      county or the department, in an amount equal to the cost of the
      construction of said improvements as estimated by the director.  Under
      this arrangement, the agreement may provide for approved progress
      payments to be made to the contractor for materials used and services
      and labor performed out of said deposit as the work progresses;
      provided that said progress payments shall at no time exceed the value
      of the completed portion of said improvements; or
  (d)    In lieu of said surety bond or deposit in escrow mentioned in
      paragraphs (a), (b), and (c) above, the subdivider may deposit with
      the director bonds or other negotiable securities acceptable to the
      director in the amount provided by paragraphs numbered (a), (b), and
      (c), respectively, of this section.