City of Fremont Encroachment Permit Annual Performance Bond

What is the Purpose of the Encroachment Permit Annual Performance Bond?

The City of Fremont requires contractors performing construction involving encroachment work to obtain an Encroachment Permit Annual Performance Bond. The bond represents a financial guarantee by the contractor and the issuing surety company to the City of Fremont that all contracted work will be completed on time and the jobsite will be returned to its original condition.

How Much Does the Bond Cost?

Per Municipal Code 12.05.300, prior to the effective date of any encroachment permit, the city engineer may require the permittee to deposit a sum specified as security (“security fund”) for the faithful performance by permittee of all of the provisions of any encroachment permit, compliance with this chapter, with all orders, permits and directions of the city engineer.

As an alternative to a security fund, the permittee may furnish a bond or certificate of deposit. The provisions of this subsection shall be satisfied if similar security is provided in compliance with a city franchise or other written agreement.

The bond cost for the contractor is typically between 1%-7.5% depending on the contractor’s personal credit score.

*Prices shown are based on several factors. Not all available pricing tiers are shown. Rates do not constitute an offer of bonding and are subject to change at any time.

How Does the Permit Application Process Work With the City of Fremont?

The following items are required with each encroachment permit submission:

1. A completed, signed, encroachment permit application.
    
2. Traffic control application and plan if applicable.
    
3. Three copies of construction plans.
    
4. Acceptable forms of surety include: an automatically renewable Certificate of Deposit from a Bay Area bank or an annual bond through a surety company. Amount determined by the City of Fremont ($1,000 minimum).
5. All required insurance must be on file in the Engineering Department. 

Does CCIS File the Bond for Applicants?

City of Fremont requires wet signatures** on filed bond documents. This means both parties must physically sign the bond prior to sending it in to the City of Fremont. The original bond form issued by CCIS needs be mailed to or dropped off at the following location by the contractor once signed:

**Properly review bond forms to confirm if notarization is required. Failure to adhere to document requirements may lead to rejection of the bond form by the City of Fremont.

Does This Bond Expire?

The permit bond expires upon the specified expiration date, typically one year from the date of issuance. A new permit bond will need to be purchased should the project take longer than one year.

Claims Information

If the City of Fremont files a claim against the Encroachment Permit Annual Performance Bond, the Surety company will investigate the legitimacy of the claim and proceed accordingly. CCIS does not handle surety claims in office, however, claims contact information will be provided to the contractor, to move the claims process forward.

If the claim is found to be legitimate, the Surety company will payout to the City of Fremont, up to the limit of the bond. 

Unlike insurance policies that protect contractors from unforeseen events, this bond protects the City of Fremont, its laborers, and suppliers from the actions of a contractor. Contractors are responsible for their actions and therefore must reimburse the Surety company for any claims paid. Failure to do so will significantly inhibit a contractor’s ability to obtain a surety bond for future jobs.