(A) Guarantee of completion and compliance. For all subdivisions and PUDs, guarantees shall be provided to the city to assure that any public improvements required by § 159.09 this chapter shall be completed in compliance with the requirements thereof. Such guarantees shall be instruments of credit in the form provided for in division (C) of this section.
(B) Submittal of engineer's cost estimate. A detailed estimate of the costs for all public improvements required by § 159.09 this chapter shall be submitted to the Administrator for review and approval by the City Engineer. The estimate shall include a line item accounting of all public improvement costs, based on current costs for materials and labor. The approved engineer's cost estimate shall be used to determine the amount of the required instrument of credit.
(C) Instruments o f credit.
(1) Submittal of instruments of credit. The subdivider or developer shall submit to the Administrator a cash bond, an irrevocable letter of credit, a surety bond or a letter of commitment equal to 110% of the amount of the bid for the required public improvements. However, the city may not require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a subdivider or developer to guarantee completion of a project improvement when the builder or developer has filed with the city clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality accepting such security, in an amount equal to or greater than 110% of the amount of the bid on each project improvement. The city shall (i) register the cash bond, irrevocable letter of credit, or surety bond under the address of the project and the construction permit number and (ii) give the subdivider or developer a receipt for the cash bond, irrevocable letter of credit, or surety bond. The city shall establish and maintain a separate account for all cash bonds received from subdividers and developers to guarantee completion of a public improvements. Such instrument of credit shall be subject to the approval of the city's Corporation Counsel and Engineer, which approval shall be subject to the following conditions:
(a) For letters of credit and letters of commitment, the lending institution shall be acceptable to the Administrator.
(b) For surety bonds, the surety or insurance company shall be authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois.
(c) The letter of credit, surety bond or letter of commitment shall provide that it shall not be canceled without the prior written consent of the Administrator and shall not require the consent of the subdivider or developer prior to any draw by the Administrator.
(d) The letter of credit surety bond or letter of commitment shall include a guarantee that, and the cash bond shall be held until, all required public improvements shall be completed by the subdivider or developer not later than 24 months from the date of the recording of the plat or the issuance of a building permit, whichever occurs first.
(2) If at any time the letter of credit, surety bond or letter of commitment is due to expire within 45 days or less, and has not been renewed, the Administrator may, upon a determination that any required public improvements have not been satisfactorily completed by the subdivider or developer call and draw on the letter of credit, surety bond or letter of commitment without notice to the subdivider or developer, and without being required to take any further action of any nature whatsoever. Thereafter, the Administrator may either hold all proceeds from the letter of credit, surety bond or letter of commitment as security for the satisfactory completion of all required public improvements or use the proceeds to complete all such improvements and reimburse the city for any and all costs and expenses incurred by the city to complete such improvements, including legal fees and administrative costs.
(3) If at any time the Administrator determines that the funds remaining in the cash bond, letter of credit, surety bond or letter of commitment are not, or may not be, sufficient to pay in full the remaining unpaid cost of required public improvements then, within ten days following a demand by the Administrator, the subdivider or developer shall increase the amount of the cash bond, letter of credit, surety bond or letter of commitment to an amount determined by the Administrator to be sufficient to pay such unpaid costs. Failure to so increase the amount of the security shall be grounds for the Administrator to draw the entire remaining balance of the cash bond, letter of credit, surety bond or letter of commitment.
(4) If at any time the Administrator determines that the lending institution issuing the letter of credit or letter of commitment is no longer acceptable to the city or is in danger of being unable to honor the letter of credit or letter of commitment at any time during its tenn or the surety or insurance company issuing the surety bond is no longer authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois, the Administrator shall have the right to demand that the subdivider or developer provide a letter of credit or letter of commitment from a bank satisfactory to the Administrator, or a surety bond issued by a surety or insurance company authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois or may draw on the letter of credit or letter of commitment or declare a default under the bond in the Administrator's discretion. Any replacement letter of credit, letter of commitment or surety bond shall be deposited with the Administrator not later than ten days following such demand. Upon such deposit, the Administrator shall surrender the original letter of credit, letter of commitment or surety bond to the developer.
(5) The Administrator may, from time to time, authorize the release of some portion of the funds remaining in the cash bond, letter of credit, letter of commitment or surety bond as required public improvements are satisfactorily completed: provided, however, that no more than 75% of the funds remaining in the cash bond, letter of credit, letter of commitment or surety bond may be released by the city until such time as a public improvements have been fully completed and accepted by the City Council.
(6) Failure to complete. If the subdivider or developer fails or refuses to satisfactorily complete all required public improvements within the specified time periods, or in any way fails or refuses to meet fully its obligations under this chapter, the Administrator shall have the sole authority to draw on and retain all or any of the funds remaining in the cash bond, letter of credit, letter of commitment or surety bond. Thereafter, the Administrator shall have the further right to take any action deemed reasonable and appropriate to mitigate the effects of such failure or refusal. The proceeds of the cash bond, letter of credit, letter of commitment or surety bond shall be utilized to pay for all costs and expenses, including legal fees and administrative expenses, resulting from or incurred as a result of the subdivided or developer's failure or refusal to satisfactorily complete the required public improvements and fully meet its obligations under this chapter. If the funds remaining in the cash bond, letter of credit, letter of commitment or surety bond are insufficient to cover all such costs and expenses and to maintain an amount in the cash bond, letter of credit, letter of commitment or surety bond, sufficient to guarantee any remaining improvements or obligations during the entire time such cash bond, letter of credit, letter of commitment or surety bond should have been maintained by the subdivider or developer, then the subdivider or developer shall, upon demand of the Administrator, immediately increase the balance remaining in the cash bond, letter of credit, letter of commitment or surety bond and deposit such cash bond, letter of credit, letter of commitment or surety bond, with the Administrator, or the Administrator may initiate such remedies as are available to the city to collect any additional costs.
(7) Extension of instrument of credit. The Administrator, upon written proof of the subdivider's or developer's difficulty in satisfactorily completing the required public improvements in a timely manner, shall have the authority to grant one extension of the cash bond, letter of credit, surety bond or letter of commitment, not to exceed six months. The City Council may, upon written proof of such difficulty, grant additional extensions of the cash bond, letter of credit, surety bond or letter of commitment.
(D) Inspection of improvements.
(1) All materials and each part or detail of the required public improvements shall be subject, at all times, to inspection by the city or its authorized representatives, and the subdivider or developer shall be held strictly to the true intent of the specifications for such improvements as to quality of materials, workmanship and the diligent execution of the improvements. The city's inspections may include, but are not limited to, mill, plant or shop inspections, and any material provided shall be subject to such inspections. The city shall be allowed access to all parts of the subdivision or PUD, and shall be furnished with such information and assistance from the subdivider or developer as may be required to make a complete and detailed inspection.
(2) All required public improvements that have been rejected shall be repaired or removed and replaced in an acceptable manner by the subdivider or developer at its own expense. Upon any failure on the part of the subdivider or developer to comply with any order of the city made under the provisions of this chapter, the city shall, after giving written notice to the subdivider or developer, have the authority to cause defective improvements to be repaired or removed and replaced, and to draw on the letter of credit for the cost thereof or otherwise charge such costs to the subdivider or developer.
(E) Final acceptance of public improvements. Upon satisfactory completion of all required public improvements in the subdivision or PUD, the subdivider or developer shall notify the Administrator and City Engineer, in writing, that all such improvements have been satisfactorily completed and that final inspection thereof is requested. The subdivider or developer shall also forward to the Administrator two copies of as-built drawings showing all such improvements. Final inspection shall be made by the City Engineer and the subdivider or developer. When the final inspection shows that the required public improvements have been completed in a satisfactory and workmanlike manner, and substantially in accordance with the approved plans and specifications, the City Engineer shall so report to the City Council or such other governmental agency as may be applicable, in writing, and shall recommend that the required public improvements be accepted by the city or such other governmental agency. Upon the city's acceptance of improvements, the subdivider or developer shall execute a bill of sale conveying ownership and title to the required public improvements to the city, and the Mayor and City Clerk shall execute such bill of sale as evidence of the city's acceptance of such public improvements. Upon acceptance of improvements by any other governmental agency as may be applicable, the subdivider or developer shall execute any documentation required by such governmental agency to convey ownership and title to the required public improvements. Any items found to be deficient during the inspection shall be identified to the subdivider or developer, and final acceptance shall be withheld pending correction of any deficiencies. Within 60 days after the subdivider or developer notifies the city in writing of the completion of the public improvements , the cash bond, letter of credit, letter of commitment or surety bond required in this division shall be released to the subdivider or developer, but only upon receipt of the guarantee required in division (F) of this section. For these purposes of this section, COMPLETION means that the city has determined that the public improvements for which the cash bond, letter of credit, surety bond or letter of commitment was required is complete or a licensed engineer or licensed architect has certified to the subdivider or developer and the city that the public improvements have been completed to the applicable codes and ordinances. The city shall pay interest to the subdivider or developer, beginning 60 days after the subdivider or developer notifies the city in writing of the completion of the public improvements, on any bond not refunded to the subdivider or developer, at the rate of 1% per month.
(F) Guarantee after completion and acceptance of public improvements.
(1) In order to ensure the satisfactory condition and function, operation and maintenance of the required public improvements after acceptance by the City Council or such other governmental agency as may be applicable, the subdivider or developer shall provide a cash bond, letter of credit, surety bond or letter of commitment equal to 10% of the estimated cost of the required public improvements. The cash bond, letter of credit, surety bond or letter of commitment shall generally comply with the requirements of this section for the initial cash bond, letter of credit, surety bond or letter of commitment, or in lieu of providing a new cash bond, letter of credit, surety bond or letter of commitment, the subdivider or developer may provide and the city may accept retention of 10% of the cash bond, letter of credit, surety bond or letter of commitment originally provided to guarantee construction of required public improvements. All required public improvements must be guaranteed by the developer or subdivider for a period of at least two years after final acceptance by the city or such other governmental agency as may be applicable. For public improvements not to be owned by the city or such other governmental agency as may be applicable, such guarantee shall be for a period of at least two years after approval of the record drawings. Any warranty that is still in effect on materials accepted by the city or such other governmental agency as may be applicable shall be submitted to the Administrator at the time of acceptance.
(2) The full balance of funds in the cash bond, letter of credit, surety bond or letter of commitment shall be released at the end of the 24-month guarantee period, if no defects in materials (including dead landscape materials), workmanship, or design have become apparent. If defects are found, the balance of funds remaining in the cash bond, letter of credit, surety bond or letter of commitment shall be released after any draw by the city to reimburse itself for any costs expended by the city to correct defective improvements upon the subdivider's or developer's failure to do so. An inspection of the function and condition of the improvements shall be conducted by the City Engineer in the twenty-second month of the guarantee period.
(3) Establishment of property owner's associations. In order to guarantee the continued maintenance of public, semi-public and privately owned common areas, stormwater management facilities, and other public or common areas, an association of property owners or other comparable administrative body shall be established. Such association shall be responsible for the perpetual maintenance of all such areas. A declaration of restrictions and covenants shall be prepared by the subdivider or developer to establish the property owner's association and to require perpetual maintenance of such areas and a means of funding such maintenance, and such declaration shall be subject to the review and approval of the city's corporation counsel.
(Ord. 08-19, passed 9-9-08; Am. Ord. 13-31, passed 6-11-13)