Consider and take action on the Second reading of Ordinance 2025-07, amending the Texas City Code of Ordinances Title XV "Land Usage," Chapter 150 "Building Regulations; Construction"; Chapter 153 "Mechanical Regulations"; and Chapter 151 "Electricity" and Chapter 154 "Plumbing" to update the building permit requirements for insurance and surety bond.

The Texas City Code of Ordinances currently requires all contractors and builders undertaking projects that involve the construction, erection, or repair of buildings which necessitate a permit to maintain liability insurance in the amount of $300,000 and to name the City as the certificate holder to ensure proper accountability and risk management.  The proposed ordinance extends this requirement to licensed plumbing, electrical, HVAC and mechanical contractors.  TDLR, which licenses all of these trades, requires liability insurance in this amount.  The ordinance requires Texas City to be named as an additional insured.  

Current provisions allow a contractor to provide a surety bond in the amount of $5,000 instead of the liability insurance.  This provision needs revision because a bond is not the same as insurance.  Insurance does not cover a contractor's responsibility for the payment of goods and materials or for the completion of work in accordance with applicable laws, standards and building codes.   To protect the public and homeowners, contractors should provide both insurance and a surety bond.  It is recommended that the bond amount be a minimum of $10,000.  The surety bond serves as a financial guarantee for the completion of the project in accordance with local laws and standards and building code. The proposed ordinance requires the City Attorney's approval of the surety bond form to ensure its compliance with all legal requirements.

The City Engineer, Chief Building Official, and other City staff recommend approval of Ordinance 2025-07, which amends Chapters 150 ("Building Regulations"), 151 ("Electricity"), 153 ("Mechanical Regulations"), and 154 ("Plumbing"). to require minimum insurance coverage of $300,000, with the City of Texas City designated as an additional insured party and a surety bond of $10,000 as a condition for the issuance of building permits to licensed contractors, plumbers, HVAC/mechanical contractors and electricians for work performed in Texas City.