(a) 
If a developer wishes to record a subdivision plat prior to completing construction of required public improvements, the developer shall provide a financial guarantee of performance ensuring sufficient funds or a surety commitment will be available to construct the required public improvements. The plat shall not be recorded until the developer posts the guarantee with the department of planning and development.
(b) 
The developer may use either of the following forms of security for posting the guarantee:
(1) 
Irrevocable letter of credit.
(2) 
Surety bond.
(Ordinance 2022-52, § 1, adopted 12/21/2022)
(a) 
The security shall be in an amount equal to the total cost of the public improvements plus an additional 30 percent. The cost of public improvements shall be as estimated by the developer's engineer with final acceptance of the amount made by the city engineer in coordination with HWWS. The security instrument shall include a breakdown identifying amounts applicable to water and sewer improvements and amounts applicable to other public improvements.
(b) 
Construction documents for the public improvements defining the standard of performance shall be made part of the security instrument and shall conform to all applicable subdivision regulations of this chapter, the conditions of subdivision approval, and design standards of the city and HWWS.
(c) 
The security shall not expire until construction has been accepted by the city engineer and HWWS, and shall be conditioned upon completion of all public improvements in accordance with the criteria established and referenced under this chapter within 12 months from the date the plat is recorded. Where good cause exists, the city commission may extend the period of time for completion for an additional period of time not to exceed 12 months if the developer has not completed the required public improvements in compliance with this chapter.
(d) 
The security shall be issued for a term of 15 months. Any extension of time granted for construction of improvements shall be accompanied by a revised surety bond or letter of credit, as applicable, reflecting the time extension granted plus three months; failure of the developer to obtain an extension for incomplete work shall authorize the city to file claim on the security.
(e) 
For subdivisions within city limits or those in the ETJ for which the developer has formally requested annexation into the city, the security shall identify the city as sole beneficiary.
(f) 
For subdivisions wholly within the city's extraterritorial jurisdiction for which the developer has not formally requested annexation into the city, the security shall:
(1) 
Identify the City of Harlingen and Cameron County as beneficiaries; or
(2) 
Identify HWWS as beneficiary related to water and sewer improvements and Cameron County as beneficiary related to all other public improvements. Naming of Cameron County as beneficiary in lieu of the city related to public improvements other than water and sewer shall be conditioned upon the city having previously executed an interlocal agreement with Cameron County that imposes the obligation on the county to:
a. 
Accept bonds, letters of credit, or other financial guarantees that meet the requirements of this section;
b. 
Execute the construction agreement with the developer; and
c. 
Assume the obligations to enforce the terms of the financial guarantee under the conditions set forth therein and complete construction of the facilities identified in the construction agreement.
(g) 
Any surety bond or letter of credit must be reviewed and approved by the city attorney.
(Ordinance 2022-52, § 1, adopted 12/21/2022)
Irrevocable letters of credit submitted as financial guarantee shall:
(1) 
Be issued by an institution that is federally insured;
(2) 
Be in a form similar to the sample format shown in section 109-227, Exhibit G.
(Ordinance 2022-52, § 1, adopted 12/21/2022)
Surety bond posted as financial guarantee must meet the following requirements:
(1) 
The bond shall obligate the surety to cause construction of the required public infrastructure to be completed in accordance with the requirements of this chapter. Any option in the bond for cash payout to the city shall stipulate the amount shall be 130 percent of the approved estimated cost of construction.
(2) 
In lieu of a surety bond provided by the developer, a construction performance bond provided by the developer's contractor conforming to the requirements of this article shall also be acceptable.
(3) 
The bond shall be executed with sureties acceptable to the city. The city shall establish criteria for acceptability of the surety companies issuing bonds, which criteria may include without limitation:
a. 
Registration with the secretary of state and authorization to do business in Texas;
b. 
Authorization to issue bonds in the amount required; and
c. 
Rating of at least B from Best's Key Rating Guide; or if the surety company does not have any such rating due to the length of time it has been a surety company, the surety company must demonstrate eligibility to participate in the surety bond guarantee program of the small business administration and must be an approved surety company listed in the current United States Department of the Treasury Circular 570. Such bonds shall meet the criteria contained in the rules and regulations promulgated by the United States Department of Treasury.
(Ordinance 2022-52, § 1, adopted 12/21/2022)