A. Policy:
1. Security Required:
a. In order to protect the town from the financial burdens resulting from damage to or increased maintenance costs for town facilities and infrastructure that may occur as a result of incomplete or inadequate site improvements on private construction projects or off site improvements performed by the developer as required by the town and as required through the market analysis and infrastructure impact review analysis processes as defined in chapter 1 of this title, it is the policy of the town to require that developers either complete all required on or off site improvements prior to occupancy, or if that is not possible, that adequate financial security for that completion, together with a right of entry to the property to complete that work, be granted to the town. It is specifically the intention of the town to require that storm drainage work, paving, curb and gutter, water and sewer facilities, soil retention structure, and landscaping as needed to control erosion, be completed according to standards adopted by the town, so that residents and taxpayers at large are not required to pay the costs of damage, repair or disproportionately increased maintenance for any of these facilities.
b. No plat will be approved, where required, and no certificate of occupancy granted, unless and until adequate financial security is posted in accordance with this section.
2. No Third Party Beneficiaries Intended: It is the intention of the town that this financial security given by the developer be limited to a contract between the town and the developer for the express purpose of providing for the protection of town facilities and elimination of conditions which could become public nuisances. It is not intended that this security be available for payment of subcontractors or material suppliers in the nature of a surety bond, or that the security provided become available to the purchasers of property to correct construction flaws or defects which are the fault of the developer. In no event will the funds be used for purposes other than those stated in this section and the time and manner of the expenditure, and prioritization of work performed shall rest in the sole discretion of the town.
B. Construction According To Approved Plans: All construction shall be completed according to the approved plans and specifications on which the building permits were issued. The approved plans shall also include the site improvements shown on the site plan. For purposes of this title, the term "site improvements" shall include all roads, sidewalks, curbs, gutters, drains, drainage works, grades, walls, landscaping, planting, paving, utility lines and related facilities, paths and trails, and similar improvements, as shown on the set of plans on which the final approval and building permits are based. "Off site improvements" shall refer to all facilities defined as "site improvements" in this subsection, above but off of the development parcel and required by the infrastructure impact review studies. These improvements will be constructed at the same time as the building development that required the improvements and will be constructed to town standards and approved, inspected and constructed under the authority of the town engineer or his/her representative. These two (2) types of improvements may be referred to collectively as "improvements". Deviations from the approved plans must be approved in advance by the town or its staff.
C. Security For Completion: No certificate of occupancy will be issued, nor any plat approved when plats are required by this title, unless the building and all required on and off site improvements are completed, or the developer has provided adequate security to guarantee timely completion of the improvements. When all of the improvements and the building cannot be completed simultaneously due to weather conditions or other factors beyond the control of the developer (excluding financial inability to complete the project), the town may grant plat approval for recording and/or issue certificates of occupancy for the project, provided the following conditions are met:
1. The building or buildings, or portions thereof, on the property to be platted or occupied have been constructed in accordance with the approved plans for those buildings, and are in full compliance with applicable building and fire codes, and are completed to the extent that only exterior site improvement work remains unfinished; and
2. The building official determines that occupancy of the buildings, or portions thereof, prior to completion of required site improvements is safe and that access for emergency vehicles is adequate with the site improvements unfinished; and
3. The developer posts adequate security for the benefit of the town to ensure completion of the site improvements in full compliance with the approved plans within one year from the date of plat approval (if required) or issuance of the certificate of occupancy, whichever occurs first.
D. Amount Of Security: The amount of the security to be posted by the developer shall be determined by the planning commission and/or town engineer and shall be equal to one hundred twenty five percent (125%) of the amount reasonably estimated by the town as being necessary to complete remaining on and off site improvements as shown on the approved plans. In the event that the developer disputes the cost estimate of the town, the developer may prove a lower construction cost by providing binding contracts between the developer and contractor or subcontractor appropriate to perform the required work at a stated, fixed price. These contracts must be supported by a one hundred percent (100%) performance bond, ensuring performance by the subcontractor or contractor. Bid proposals are not satisfactory for this purpose. If the contracts submitted are acceptable in form, the amount of security required shall be one hundred twenty five percent (125%) of the total contract price of all such contracts submitted, plus the estimated reasonable cost of performing any work not covered by the contracts. Specifications in such contracts shall be sufficiently clear to identify the work called for under the contract.
E. Terms Of Security: The terms of any security arrangement offered to the town shall state a date certain by which the developer agrees to have on and/or off site improvement work completed in accordance with the plans, and further provide that in the event that the developer has not completed required site improvement work by that date, the town may at its option and on its schedule, draw on the funds escrowed, or credit established, or such other security device by its own act, and shall not be required to obtain consent of developer to withdraw funds for completion of the work shown on approved plans. The town's actual costs in administering the completion of work in the event of a default by the developer shall be reimbursed from the escrow or other security arrangements in an acceptable and timely manner.
F. Form Of Security: Security arrangements offered in lieu of simultaneous completion at buildings and site improvements shall be in an amount fixed under the terms of subsection D of this section, and shall be in one or more of the following forms as approved by the town attorney:
1. An irrevocable letter of credit from a bank authorized to do business in the state, naming the town as the payee of funds drawn against that letter of credit and guaranteeing the availability of funds for one year; or
2. A deposit of cash with a third party escrow; or
3. An agreement with the construction lender providing that the lender will withhold funds in the construction loan in an amount equal to the amount calculated in subsection D of this section, and will disburse those funds only with the written consent of the town, and only for the completion of any required improvements. As improvement work is completed, the town will consent to the disbursement of the funds set aside by the lender.
4. Some combination of the above approved by the town.
G. Retainage: The amount in excess of the actual construction costs, but in no event more than twenty five percent (25%) of the actual construction cost, shall be held for a period of one year following final inspection and approval of the required on and/or off site improvement work by the town. No retainage shall be held for landscaping improvements once the installation of the required materials has been approved by the town. The retainage amount may be provided in any of the ways described in subsection F of this section. If the developer fails to provide new security instruments within thirty (30) days from the expiration of the security instruments provided for the initial construction under subsection F of this section, the town shall make a demand or draw on that security to the extent of the required retainage amount, and hold the proceeds in cash until and unless other adequate security, as provided in this title, is posted by the developer. Retainage will be used to replace or repair any site improvements which fail or appear to be defective during the one year retainage period. The corrective work may be done by the town or the developer. At the completion of that work, the retainage, or so much of it as remains, shall be released. Retainage amounts may be drawn and applied to any outstanding fees owed by the developer to the town; provided, that such fees are imposed by ordinance and the amount of the fees is not to be contested by the developer.
H. Modification Of Plans: A developer may, at its option, request modifications to plans covering on and/or off site improvement work by submitting revised plans to the town for review and action. Until the revised plans have received approval by the town, the developer shall be required to offer security, for the performance of the improvement work as shown on the last set of plans to have received town approval. Upon acceptance of revised plans by the town, the town shall release any cash, credit or other security held, which is in excess of one hundred twenty five percent (125%) of the completion cost (estimated) of work shown on the most recently revised plan. If the modification of the plan increases the cost of required improvements, additional security must be provided by the developer to cover the increased costs.
I. Payment Of Interest: Any interest accruing on escrowed funds shall, unless expended for completion of site improvements required, inure to the benefit of the developer upon release and not to the town, and the town shall not be required to pay interest to the developer on any funds escrowed for this purpose.
J. Detailed Improvement Plans And Specifications: Detailed on and/or off site improvement plans and specifications shall be presented, showing the location, design and nature of all streets, drainage, drainage works, utility pipelines, storage tanks, pumping systems and related facilities, grade changes, retaining walls and landscaping, together with any trails, paths or walkways that may be included or required under these or other provisions of the subdivision and master planned development code. All plans and supporting documentation must be approved by the town and/or its engineer before commencement of any work by the developer. The developer is responsible for all plan review fees that must be incurred by the town or its consultants.
K. Single-Family Homes: This provision shall apply to all construction in the town, including single-family homes, if improvements are required in the impact analysis; provided, however, that the amount of security required for single-family homes shall be the reasonably estimated cost to complete construction of any improvements and drainage works on a labor and materials basis, and the estimated cost to complete required landscaping (to the extent necessary to hold the soil in place and prevent erosion) on the basis of materials only.
L. Phased Projects And Concurrency: On and/or off site improvements applicable to each phase of a phased project or development shall be completed concurrently with the first phase of the project and appropriate securities shall be put in place to ensure that the total infrastructure is completed along with the first phase. Phasing of improvements may be allowed only under special circumstances as outlined by the planning commission and approved by the town council. If phasing is allowed, adequate security for completion of each phase must be provided to ensure that each phase of infrastructure is constructed and either platted or occupied. (Ord., 1-18-2005)