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All requests to amend or assign an executed CFA must be submitted by the developer to the development coordination office. The developer must pay the CFA amendment fee set forth in § 2-321 of the city code to the city before an amendment or a consent to an assignment of a CFA will be executed by the city. An amendment or assignment of a CFA shall be at the discretion of the city.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019)
The developer must provide the city with adequate financial security to guarantee the developer's obligations under the CFA, which include, but are not limited to, the developer's obligations to construct all the community facilities contemplated by the CFA and the payment by the developer to all contractors and material suppliers with whom the developer has a contract for the project. No construction of community facilities shall ever begin until the financial guarantee has been delivered to and approved by the city and the CFA has been executed by the developer and the city.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019)
(a) One or more of the following types of financial guarantees shall be provided by the developer to the city to guarantee the developer's obligations under the CFA:
(1) Development bond. A development bond in the amount of 100% of the total amount of the developer's share of the construction costs in the CFA. The development bond shall be executed by the developer and guarantee that the developer will construct the community facilities and pay all contractors, material suppliers, and equipment suppliers for the project. The development bond must meet the requirements of Tex. Local Government Code Chapter 2253, and the Texas Insurance Code. The development bond may be required to cover the city's participation in the CFA if the construction contracts are not publicly bid;
(2) Cash deposit. A cash deposit with the city in the amount of 125% of the total amount of the developer's share of construction costs in the CFA. The additional 25% above the developer's share of the construction costs shall cover charge orders to the CFA. The city will not pay any interest on cash deposits made with the city;
(3) Letter of credit. A letter of credit in the amount of 125% of the total amount of the developer's share of the construction costs in the CFA. The additional 25% above the developer's share of the construction costs shall cover change orders to the CFA. The expiration date of a letter of credit shall be no less than 90 days after the term of the CFA expires;
(4) Escrow agreement. An escrow agreement between the city, the developer and a financial institution or escrow agent in the amount of 125% of the developer's share of the construction costs in the CFA. The additional 25% above the developer's share of the construction costs shall cover change orders to the community facilities agreement;
(5) Completion agreement. The completion agreement provides that the plat will not be filed until the community facilities are accepted by the city and the developer has submitted proof to the city that the developer has paid all contractors and material suppliers. Completion agreements will not be allowed:
a. For community facilities being constructed outside the boundaries of a plat;
b. For community facilities constructed inside the boundaries of a plat, when the plat is only conveying right-of-way or an easement;
c. When there is city participation in a CFA; or
d. for a primary project if there is a concurrent CFA; and
(6) Statement of appropriated funds. At the discretion of the city, written proof from a governmental entity that sufficient funding for the costs associated with the community facilities has been approved, appropriated, and set aside may be used as a financial guarantee. Only a governmental entity shall be allowed to use a statement of appropriated funds as a financial guarantee for a CFA.
(b) All financial guarantees must be on forms prescribed by or acceptable to the city.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019)
(a) The developer may request a reduction in the amount of a development bond, cash deposit, or letter of credit that is provided as the financial guarantee for a CFA if the initial term of the CFA is more than four months.
(b) No more than two reductions of a development bond, cash deposit or letter of credit may
be made for any CFA. The director of the Development Services Department may authorize more than two reductions of a development bond, cash deposit or letter of credit and establish the requirements that must be met for the additional reductions.
(c) The first reduction in a development bond, cash deposit, or letter of credit may only be made after:
(1) One-third of the value of community facilities being constructed pursuant to the CFA have been verified by the city's inspectors to have been constructed in accordance with the engineering plans; and
(2) The city has received an affidavit and release of lien executed by the contractor indicating that the contractor has been paid by the developer and the contractor has paid all subcontractors and material suppliers for one-third of the value of the community facilities being constructed pursuant to the CFA.
(d) After the city has confirmed that one-third of the community facilities have been constructed in accordance with the engineering plans and the city has received an affidavit and release of lien from the contractor in the amount of one-third of the value of the community facilities being constructed pursuant to the CFA, then the development bond, cash deposit, or letter of credit may be reduced in an amount that does not exceed one-third of the original amount of the development bond, cash deposit, or letter of credit.
(e) The second reduction in a development bond, cash deposit, or letter of credit may only be made after:
(1) Two-thirds of the value of community Facilities being constructed pursuant to the CFA have been verified by the city's inspectors to have been constructed in accordance with the engineering plans; and
(2) The city has received an affidavit and release of lien executed by the contractor indicating that the contractor has been paid by the Developer and the contractor has paid all subcontractors and material suppliers for two-thirds of the value of the community facilities being constructed pursuant to the CFA.
(f) After the city has confirmed that two-thirds of the community facilities have been constructed in accordance with the engineering plans and the city has received an affidavit and release of lien from the contractor in the amount of two-thirds of the value of the community facilities being constructed pursuant to the CFA, then the development bond, cash deposit, or letter of credit may be reduced in an amount that does not exceed two-thirds of the original amount of the development bond, cash deposit, or letter of credit if more than 30 calendar days have passed since the first reduction in the financial guarantee.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019; Ord. 25556-06-2022, § 1, passed 6-14-2022, eff. 6-15-2022)
(a) Every 30 days, the developer may request a reduction in the amount of an escrow agreement that has been provided as the financial guarantee for a CFA.
(b) The reduction in an escrow agreement may only be made after:
(1) The city's inspectors have verified the amount of the community facilities that have been constructed in accordance with the engineering plans; and
(2) The city has received an affidavit and release of lien executed by the contractor indicating that the contractor has been paid by the developer and the contractor has paid all subcontractors and material suppliers for the community facilities that have been constructed pursuant to the CFA.
(c) After the city has confirmed the amount of the community facilities that have been constructed in accordance with the engineering plans and the city has received an affidavit and release of lien from the contractor for the community facilities that have been constructed, then the escrow agreement may be reduced to an amount equal to 125% of the value of the community facilities that are remaining to be constructed that are guaranteed by the escrow agreement.
(Ord. 25556-06-2022, § 2, passed 6-14-2022, eff. 6-15-2022)
(a) In addition to the reductions in financial guarantees allowed by § 9-310, a developer may request a reduction in the financial guarantee when the only community facilities remaining to be constructed in a residential development are streetlights.
(b) To be eligible for a reduction in the financial guarantee under this section:
(1) The construction and final inspection of all Community facilities in the CFA, except streetlights, must be completed;
(2) The construction of all streetlights must be completed and the streetlights only require a connection to a permanent source of electrical power and final inspection by the city;
(3) The contract between the developer and the developer's contractor for the construction of streetlights must not include the construction of any other community facilities;
(4) The remaining financial guarantee for the CFA must cover 125% of the cost of constructing the streetlights; and
(5) The developer shall pay to the city the CFA amendment fee set forth in § 2-321 of the city code unless:
a. A separate financial guarantee for the streetlights, other than a completion agreement, was provided to the city when the CFA was executed; or
b. The developer previously provided a separate financial guarantee for the streetlights, other than a completion agreement, as authorized by this chapter.
(c) The developer shall connect the streetlights to the electricity provided by an electric utility company within 30 days of an electric utility company providing power to the development.
(d) The streetlights must pass a final inspection before the streetlights will be accepted by the city and the financial guarantee for the streetlights is released by the city.
(e) A reduction in a financial guarantee for streetlights:
(1) Allows the plat hold for the CFA to be released;
(2) Allows building permits to be issued if all other requirements of the city for the issuance of building permits have been met; and
(3) Allows the community facilities being constructed pursuant to a CFA, other than the streetlights, to be accepted by the city when all requirements for approval of those community facilities have been met.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019)
(a) The developer may request that a completion agreement be replaced with a different type of financial guarantee.
(b) The completion agreement may only be replaced after:
(1) The value of the community facilities that have previously been constructed pursuant to the CFA have been verified by the city's inspectors to have been constructed in accordance with the engineering plans; and
(2) The city has received an affidavit and release of lien executed by the contractor indicating that the contractor has been paid by the developer and the contractor has paid all subcontractors and material suppliers for the value of the community facilities that have previously been constructed pursuant to the CFA.
(c) The financial guarantee that replaces the completion agreement must be in the amount of 125% of the value of the remaining community facilities to be constructed pursuant to the CFA. If a development bond is used, the bond must be in the amount of 100% of the value of the remaining community facilities to be constructed pursuant to the CFA.
(d) The developer must pay the CFA amendment fee to the city before the completion agreement may be replaced with another type of financial guarantee.
(Ord. 23656-05-2019, § 1, passed 5-7-2019, eff. 6-1-2019)
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