The subdivider shall have the responsibility for construction costs for street and utility improvements within a subdivision and for off-site utility extensions.
(1) Purpose.
The provisions of this chapter, as set forth in this section, are designed and intended to insure that, for all subdivisions of land within the jurisdiction of the city, all improvements as required herein are installed in a timely manner in order that:
a. The city can provide for the orderly and economical extension of public facilities and services; and
b. All purchasers of property within the subdivision shall have a usable, buildable parcel of land; and
c. All required improvements are constructed in accordance with the city’s applicable rules, regulations, standards, and specifications.
(2) Policy.
Upon approval of a final plat by the planning and zoning commission, and prior to it being signed by the chairperson of the planning and zoning commission, and before said final plat shall be allowed to be recorded in the plat records of Washington County, Texas the applicant requesting final plat approval shall, within the time period for which the final plat has been conditionally approved by the city:
a. Construct all improvements as required by this chapter, and provide a surety instrument guaranteeing their maintenance as required herein; or
b. Provide a surety instrument guaranteeing construction of all improvements required by this chapter, and as provided for herein.
c. In all instances, the original copy of the final plat, without benefit of required signatures of city officials, shall be held in escrow by the city and shall not be released for any purpose until such time as the conditions of this section are complied with.
d. Upon the requirements of this section being satisfied, the final plat shall be considered fully approved, except as otherwise provided for in this chapter, and the original copy of the final plat shall be signed by the appropriate persons and city staff shall record said final plat in the plat records of Washington County, Texas.
(3) Completion of improvements.
a. Prior to the signing of the approved final plat by the chairperson of the planning and zoning commission, the applicant shall complete all improvements required by this chapter in accordance with the approved construction plans and subject to the approval of the development services director or designee and acceptance by the city council, except as otherwise provided for in this chapter.
b. Alternative to completing improvements.
The development services director or designee may waive the requirement that the applicant complete all improvements required by this chapter prior to the signing of the approved final plat, contingent upon securing from the applicant a guarantee, as provided for by this section, for completion of all required improvements, including the city’s cost for collecting the guaranteed funds and administering the completion of improvements, in the event the applicant defaults. Such guarantee shall take one (1) of the following forms:
1. Performance bond.
The applicant shall post a performance bond with the city, as set forth herein, in an amount equal to one hundred ten (110) percent of the estimated construction costs for all remaining required improvements, using the standard city form.
2. Escrow account.
The applicant shall deposit cash, or other instrument readily convertible into cash at face value, either with the city, or in escrow with a bank, savings and loan or other financial institution acceptable to the city. The use of any instrument other than cash shall be subject to the approval of the city. The amount of the deposit shall equal one hundred ten (110) percent of the estimated construction costs for all remaining required improvements. In the case of any escrow account, the applicant shall provide the city with an agreement between the financial institution and the applicant, the form and substance of which is subject to approval of the city, guaranteeing the following:
(i) That the funds of said escrow account shall be held in trust until released by the city and may not be used or pledged by the applicant as security in any other matter during that period; and
(ii) That in the case of a failure on the part of the applicant to complete said improvements, the financial institution shall immediately make the funds in said account available to the city for use in the completion of those improvements.
3. Letter of credit.
The applicant shall provide an irrevocable letter of credit from a bank, savings and loan or other financial institution acceptable to the city. This letter shall be submitted to the city and shall certify the following:
(i) That the creditor does guarantee funds equal to one hundred ten (110) percent of the estimated construction costs for all remaining required improvements; and
(ii) That, in the case of failure on the part of the applicant to complete all remaining required improvements within the required time period, the creditor shall pay to the city immediately upon written request of the city, and without further action, such funds as are necessary to fully pay for the completion of those improvements, up to the limit of credit stated in the letter; and
(iii) That this letter of credit may not be withdrawn, or reduced in amount, until approved by the city according to provisions of this section.
4. Cost estimates.
A licensed professional engineer licensed to practice in the State of Texas shall furnish estimates of the costs of all required improvements to the development services director or designee for approval, who shall review the estimates to determine the adequacy of the guarantee instrument for ensuring the construction of all remaining required improvements.
5. Surety acceptance.
The bank, financial institution, insurer, person or entity providing any letter of credit, bond or holding any escrow account pursuant to this chapter shall meet or exceed the minimum requirements established by this chapter and all other applicable ordinances, laws and regulations, and shall be subject to the approval of the city.
6. Sufficiency.
Such surety shall comply with all statutory requirements, and all associated documents and instruments shall be subject to the approval of the city attorney as to form, sufficiency, and manner of execution. All such surety instruments shall be both a payment and performance guarantee.
c. Time limit for completing improvements.
The period within which required improvements must be completed shall be incorporated in the surety instrument and shall not in any event, without prior written approval of the city, exceed one (1) year from date of final plat approval.
1. The development services director or designee may, upon application of the applicant and upon proof of hardship, extend the completion date set forth in such bond or other instrument for a maximum period of one (1) additional year. An application for extension shall be accompanied by an updated estimate of construction costs prepared by a professional engineer licensed to engage in the practice of engineering in the State of Texas. A surety instrument for guaranteeing completion of remaining required improvements must be filed in an amount equal to one hundred ten (110) percent of the updated estimate of construction costs as approved by the development services director or designee.
d. Assurances for completion shall be posted or improvements shall be completed within two (2) years of final plat approval, unless otherwise approved by the city. In those cases where a surety instrument has been required and posted, and improvements have not been completed within the terms of said surety instrument, the city may declare the applicant and/or surety to be in default and require that all of the required improvements be installed.
e. Inspection and acceptance of improvements.
The development services and public utility departments shall inspect all required improvements, to ensure compliance with city requirements and the approved construction plans.
1. The applicant shall provide a certificate of compliance from the state department of licensing and regulation for all pedestrian improvements within the subdivision.
2. When all required improvements have been satisfactorily completed, the applicant shall request a final inspection.
3. The development services department shall have ten (10) working days to complete this inspection upon notification by the applicant that all required improvements have been completed and are ready for inspection by the city.
4. Within ten (10) working days after the date of inspection the development services department shall issue an inspection report including issuance of a punch list to the applicant denoting remaining items to be completed.
5. Provided that all improvements have been satisfactorily completed, the city council shall accept in writing the improvements having been satisfactorily completed. The city shall not accept dedications of required improvements or release or reduce a performance bond or other assurance until such time it is determined that:
(i) All improvements have been satisfactorily completed.
(ii) One (1) set of as-built plans measuring twenty-two (22) by thirty-four (34) inches has been submitted to and approved by the development services director or designee, along with a statement prepared by a professional engineer licensed to engage in the practice of engineering in the State of Texas that all improvements have been installed and constructed in accordance with the submitted as-built plans and the city’s applicable rules, regulations, standards, and specifications.
(iii) Copies of all inspection reports, shop drawings and certified test results of construction materials have been submitted to and approved by the development services director or designee.
(iv) Two (2) copies of the approved maintenance bond meeting the requirements of this chapter have been provided to the city.
(v) Electronic copy containing computed generated auto CAD drawings of all public improvements shown on the construction plans, and all lot lines shown on the plat, have been submitted to the development services department to update city maps.
(vi) An affidavit of all bills paid and a release of liens have been provided to the city.
(vii) An inventory of infrastructure including infrastructure type, location (latitude and longitude coordinates), length, size and dollar value has been provided, using the standard city form.
(viii) Any and all other requirements identified in the final plat process have been satisfied.
f. Reduction or release of improvement surety instrument.
1. The principal amount of a surety instrument may be reduced with the approval of the development services director or designee, and the city manager or designee, upon actual construction of required improvements by a ratio that the improvement bears to the total public improvements required for the subdivision, as determined by the development services director or designee.
2. Before the city may reduce said surety instrument, the applicant shall provide a new surety instrument in an amount equal to one hundred ten (110) percent of the estimated cost of the remaining required improvements, and such new surety instrument shall comply with this chapter and all other applicable ordinances, laws and regulations.
3. The substitution of a new surety instrument shall in no way change or modify the terms and conditions of the performance surety instrument or the obligation of the applicant as specified in the performance surety instrument.
4. In no event shall a surety instrument be reduced below ten (10) percent of the principal amount of the original estimated total costs of improvements for which surety was given, prior to completion and acceptance of all required improvements.
5. The city shall not release a surety instrument unless and until all of the requirements and conditions of this chapter have been fulfilled.
g. Maintenance bond required.
1. Before the release of any surety instrument guaranteeing the construction of all required subdivision improvements, or the signing of the final plat where subdivision improvements were made prior to the filing of the final plat for recordation, the applicant shall furnish the development services department with a maintenance bond or other acceptable surety to assure the quality of materials, workmanship, and maintenance of all required improvements including, but not limited to, the city’s costs for collecting the guaranteed funds and administering the correction and/or replacement of covered improvements.
2. The maintenance bond or other surety instrument:
(i) Shall be satisfactory to the city attorney as to form, sufficiency, and manner of execution.
(ii) Shall clearly state both the applicant as the principal and the city as the obligee.
(iii) Shall cover all improvements and facilities requested for city acceptance, including, but not necessarily limited to water, wastewater, gas, electric, street and drainage improvements.
(iv) Shall be in an amount equal to ten (10) percent of the cost of improvements for one (1) calendar year from the date of city council acceptance of operation and maintenance of the subdivision. A statement of construction value or final pay estimate shall be provided to the development services department to support said warranty and maintenance bond amounts.
(v) Shall require the surety to notify the city at least thirty (30) days prior to the expiration of the one (1) year maintenance period.
3. In an instance where a maintenance bond or other surety instrument has been posted and a defect or failure of any required improvement occurs within the period of coverage, the city may declare the principal on said bond or surety instrument to be in default of its repair and/or maintenance obligations. Surety shall, within thirty (30) days following written notice of default and request for performance from obligee:
(i) Notify obligee in writing of its election to correct all defects and workmanship in the subdivision improvements and shall commence and complete construction, re-construction, replacement, repair or maintenance of the subdivision improvements; or
(ii) Notify obligee in writing that surety elects not to complete, re-construct, replace, repair, or maintain the subdivision improvements.
(iii) If the surety fails to give such written notice, then it will be deemed to have elected not to complete, re-construct, replace, repair, or maintain the subdivision improvements. In either event, surety shall be obligated to pay obligee for all loss, cost and expense which the obligee incurs to correct all defects and workmanship in the subdivision improvements. In the event that surety elects to proceed under 3(i) above, the contractor selected by surety to perform such work shall be approved by obligee, which approval shall not be unreasonably withheld.
4. Whenever a defect or failure of any required improvement occurs within the period of coverage, the city shall require that a new maintenance bond or surety instrument be posted for a period of one (1) full calendar year sufficient to cover the corrected defect or failure.
Editor’s note(s)–Ordinance O-20-026, sec. 2, adopted Nov. 5, 2020, amended sec. 23-31; in its entirety, in effect repealing and reenacting said sec. 23-31 to read as set out herein. The former sec. 23-31, pertained to costs-payment for installation of improvements by subdivider and derived from Ordinance adopted March 19, 1998, sec. 1.
(Ordinance O-20-026, sec. 2, adopted 11/5/20)