A. Purpose of this section:
1. To ensure that all required improvements of development are completed pursuant to the land use and development regulations adopted by City of Holladay and are subject to warranty;
2. To set forth the requirements for improvement competition agreements and financial warranty assurance including, for construction improvements after, or prior to, recording a plat or obtaining a building permit; and
3. To comply with the provisions of the Utah Municipal Land Use, Development, and Management Act by, among other things, setting forth forms of acceptable improvement completion assurance and a method of partial release.
B. Definitions: The following words and phrases, when used in this Section, shall have the meanings ascribed to them in this Subsection, except where the context clearly indicates a different meaning:
CITY ENGINEER’S CALCULATION (“CALCULATION”): | A document prepared by the City Engineer that shows a list of Improvements for which financial assurance is required, the quantity, unit type, unit cost, and extended cost of each item, as well as a total dollar amount for all the items listed on the Calculation. The unit prices are intended to be the cost of construction and to include the cost of materials, overhead, mobilization, traffic control, special inspections, testing, audits by third parties, reasonable contingencies and all other expenditures needed for the completion of the Improvements listed on the Calculation. The Calculation determines the dollar amount of the improvement completion assurance. |
COST OF CONSTRUCTION: | The estimated cost of completing the Improvements plus reasonable contingency, as determined by the City Engineer. |
IMPROVEMENT: | Permanent public infrastructure, items, structures, facilities, systems, or landscaping required as a condition to recording a subdivision plat, obtaining a building permit, or developing a commercial, office, industrial, mixed use, or multifamily-residential Development. |
IMPROVEMENT COMPLETION ASSURANCE (“GUARANTEE”): | A cash bond, escrow bond, or letter of credit required by City to guarantee the proper completion of public Improvements required as a condition precedent to: (a) recording a subdivision plat; or (b) development of a commercial, office, industrial, mixed use, or multifamily project. |
C. Applicability: The provisions of this Section shall apply to all development requiring improvements. As a condition precedent to recording a plat, obtaining a building permit, or commencing development, the following are required:
1. An improvement agreement is to be executed for all required improvements.
2. A guarantee for all improvements that have not been inspected and accepted by the City, and that are:
a. Publicly owned and maintained;
b. Public landscaping improvements;
c. Essential or required to meet the building code or fire code;
d. Required to meet natural hazard mitigation and stormwater management requirements;
e. Required to meet street standards and access requirements; or
f. Essential to public safety requirements adopted in a land use regulation, as determined by the City Engineer or Director.
D. Improvement Agreement and Guarantee: Prior to recording a plat or commencing any development, the developer shall provide to the City an improvement agreement and a guarantee in accordance with the following requirements.
1. Developer Responsibility. The developer is responsible for compliant completion and warranty of all improvements. Developer shall timely complete the improvements and guarantee the improvements be free of defects in materials and workmanship in accordance with this Title, the improvement agreement, and all other applicable approvals, regulations, standards, and specifications.
2. Forms, Duration, Terms. The developer shall execute an improvement agreement and guarantee using forms that are acceptable to the City. The guarantee shall run to the benefit of the City and shall remain in effect until the City approves a partial release. The improvement agreement and guarantee shall contain language that promises and ensures compliant completion and warranty of the improvements by the developer. The guarantee shall contain a provision for unconditional payment of the face amount of the guarantee within ten business days from the date the City makes a written declaration of developer’s failure to perform pursuant to this Section.
3. Improvement Assurance Warranty Period; Improvement Warranty Guarantee.
a. Developer shall provide an unconditional warranty that improvements comply with the City’s standards for design, materials, and workmanship and will be free of defects in materials and workmanship for 12 months following the date when the improvements are inspected and approved by the City Engineer, unless the City Engineer determines, for good cause, that a 12- month period would be inadequate to protect the public health, safety, and welfare; or has substantial evidence, on record of prior poor performance by the developer; or has substantial evidence that the area upon which the improvements will be constructed contains suspect soil and the City has not otherwise required the applicant to mitigate the suspect soil. Improvements listed on the same calculation shall have the same improvement warranty period.
b. Financial assurance shall be required for the duration of the improvement warranty period, in the amount set forth in this Section, to secure performance of replacement and repairs of improvements in accordance with developer’s unconditional warranty.
4. Amount of the Guarantee and Improvement Warranty Guarantee.
a. The amount of the guarantee shall be determined by the City Engineer. The amount of the guarantee shall be 100 percent of the cost of construction plus ten percent (10%) of that amount to cover administrative costs incurred by the City to complete the improvements, if necessary.
b. During the improvement warranty period the amount of the improvement assurance warrantee guarantee shall be either (a) ten percent (10%) of the amount shown on the calculation or (b) ten percent (10%) of the developer’s reasonable proven cost of completed improvements, whichever is less, except the guarantee for the Storm Water Pollution Prevention Plan requirements shall not be reduced and shall remain at 100 percent.
5. Developer Shall Complete Improvements in a Timely Manner. All improvements shall be completed to the satisfaction of the City Engineer within one year from the date the guarantee is posted with the City, unless the developer requests an extension in writing, and the extension is approved by the Director and City Engineer for good cause. The developer shall execute an improvement agreement promising completion within the required time, and the improvement agreement shall be amended accordingly.
6. Sequence for Completion of Improvements. To protect the health, safety and welfare of the City and its residents from traffic, flood, drainage or other hazards, the City Engineer may require that the improvements be completed or repaired in a specified sequence and/or within a specified period of time, which may be less than one year. The City Engineer will notify the developer in writing of that requirement if the City Engineer deems such action necessary.
7. Failure to Complete Improvements in a Timely Manner. If the developer fails to satisfactorily complete the improvements within one year from the date when the guarantee is posted, or within the shorter time period specified by the City Engineer in order to protect the health, safety and welfare of the City and its residents from traffic, flood, drainage or other hazards, or as extended by the City Engineer pursuant to this Section, the City may, in its sole discretion, pursue all lawful remedies, including without limitation, declaring the developer in default of the improvement agreement, declaring the guarantee forfeited by the developer, and demanding payment pursuant to the terms of the guarantee. The City may spend the funds to pay for construction, replacement, or repair of incomplete or defective improvements, as well as the City’s administrative overhead and any other associated costs incurred by the City. The City may take any other action it deems appropriate to enforce the improvement agreement, collect on the guarantee, recover amounts not covered by the guarantee and any other civil or criminal remedies allowable by law, which may include liens.
8. Initiating Inspections. The developer on record shall request inspections when installed improvements are complete, at the end of an improvement warranty period, and/or after correcting deficiencies noted in a prior inspection. The request shall contain a statement affirming that all improvements are complete and/or all deficiencies have been corrected. Inspections will be scheduled by the City Engineer upon receiving the developer’s written request. The City Engineer may schedule an inspection, without a written request from the developer, upon determination that the time for completion of an improvement warranty period has expired.
9. Developer Shall Correct Deficiencies in a Timely Manner. The developer shall correct any deficiencies noted by City inspectors within 30 days from the time the inspector notifies the developer. Extensions may be authorized by the City Engineer for good cause beyond the developer’s control after receipt of a written request and explanation from the developer.
10. Partial Release of Guarantee. Upon completion of the improvements listed on an individual calculation, and inspection and approval of those improvements by the City Engineer, the City may release up to 90 percent (90%) of the portion of the calculated guarantee amount.
11. Final Release of Guarantee. Upon completion of the improvements warranty period for the improvements listed on an individual calculation, and the subsequent inspection and approval of those improvements by the City Engineer, the City will release all remaining portions of the guarantee amount shown on that calculation.
12. Acceptable Types of Guarantees. Guarantees shall be approved by the City and may be either:
a. An irrevocable letter of credit, containing information required by the City, from a bank or credit union chartered under the laws of the State of Utah or the United States of America, licensed and regulated by the Department of Financial Institutions of the State of Utah or its successor, insured by the Federal Depository Insurance Corporation or National Credit Union Share Insurance Fund, and having an office in the State of Utah. The letter of credit shall be signed by the guarantor, with the signature notarized and attested and shall be automatically extended upon expiration, unless released by a letter issued by the City Engineer;
b. An escrow bond, submitted on forms provided by the City, having as a guarantor an organization licensed and regulated by the Department of Financial Institutions of the State of Utah, or its successor, having an office in the State of Utah, and which is insured by the Federal Depository Insurance Corporation or National Credit Union Share Insurance Fund. Escrow bonds shall consist of a letter of commitment, signed by both the guarantor and the developer, with the signatures notarized and attested; or,
c. A cash bond, submitted on forms provided by the City and signed by the developer, with the signature notarized and attested.
13. Developer’s Certification of Notification to Subcontractors. The developer may be required to sign a statement that certifies that the developer has or will notify all contractors and subcontractors that the City will not release any portion of the guarantee until all improvements on a calculation are completed and the work has been inspected and accepted by the City Engineer, at which time the City will release no more than the portions allowed under this Section.
E. Construction of Improvements Prior to Plat Recordation or Issuance of Building Permit. If the developer desires to complete the improvements prior to recording a subdivision plat or prior to receiving a building permit, the developer may post an alternative guarantee in accordance with the following requirements.
1. The alternative guarantee shall be in an amount determined by the City Engineer to remove incomplete improvements and restore disturbed property, including, without limitation, a base rate of $10,000 per disturbed acre (rounded up to the full acre), and $10,000 per stormwater main line connection.
2. After posting the alternative guarantee, the developer may complete all improvements, except that no plat will be recorded, and no building permit will be issued by the City.
3. When the improvements have been completed, inspected and approved by the City Engineer, the developer shall provide the improvement warranty guarantee as set forth in D.4.b. Upon the developer posting the improvement warranty guarantee, the City will release the subdivision plat to be recorded, or the City will issue the building permit, provided all other City requirements have been satisfied.
F. Fee In Lieu Of Required Improvements:
1. Where present conditions exist which make it unfeasible or impractical to install any required public improvements, the city may require the subdivider to pay to the city a fee equal to the estimated cost of such improvements as determined by the director of community development. Upon payment of the fee by the developer, the city shall assume the responsibility for future installation of such improvements.
2. The City Manager or designee shall establish a special account for such fees and shall credit to such account a proportioned share of interest earned from investment of city monies. Records relating to identification of properties for which fees have been collected, fee amounts collected for such properties and money transfer requests shall be the responsibility of the community development department.
G. Waiver For Political Subdivisions: When the developer is a school district, municipality, service area, special purpose district or other political subdivision of the state, the city may waive the bond and accept a letter from the governing body guaranteeing installation of the improvements. Before approving any such waiver, the city shall receive a recommendation from the Community and Economic Development Director. (Ord. 2012-15, 9-20-2012; amd. Ord. 2021-08, 4-8-2021; Ord. 2023-10, 9-7-2023)