106-4-3 Guarantee Of Improvements

1. Financial guarantee for the completion of improvements. An applicant who desires to record any subdivision plat prior to the completion of subdivision improvements shall provide a financial guarantee to assure completion of incomplete improvements within a two year period. 1. Financial guarantee cost estimate. The applicant shall furnish and file with the City an escrow agreement or a letter of credit in an amount equal to 100 percent of the estimated future cost of the installation of incomplete improvements, plus a ten percent warrantee guarantee. The estimated future cost shall include a ten percent construction contingency that is separate from the ten percent warranty guarantee. The estimated cost shall be provided by the applicant's engineer and verified by the City Engineer. 2. Financial guarantee expiration and default. If the subdivision is not complete within two years, the financial guarantee is in default unless an extension of the financial guarantee is requested, in writing, by the applicant and approved by the City Engineer. An extension shall not be granted unless the applicant provides an updated estimated future cost for remaining improvements to be installed. At this time, the financial guarantee shall be reassessed and increased to reflect cost increases, if any. 3. Allowed financial guarantees. 1. Escrow agreement. An escrow agreement, and the associated funds, requires the approval of the City Engineer and City Attorney. Escrow funds shall be deposited with the City Treasurer at the time the escrow agreement is executed. 2. Letter of credit. An applicant may only use a letter of credit if the following conditions are met: 1. The engineer's cost estimate for installation of the improvements exceeds $1,000,000.00; 2. The applicant and, if applicable, the applicant's subsidiaries and the applicant's members or shareholders has a history of positive performance, with no incidences of negative performance, in its development related contractual obligations in the State of Utah, and has a history of positive performance, with no incidences of negative performance, in completing developments in the State of Utah. The Planning Director or City Engineer may require the applicant to provide a performance history from other jurisdictions; 3. The applicant's financial institution has a history of positive performance in fulfilling its financial obligations, as determined by the city treasurer and based on typical conventions of the financial industry; 4. The applicant's financial institution provides the letter of credit on a standard letter of credit form supplied by Ogden Valley City or in a form that provides equal or greater financial protection to the city, as determined by the City Attorney; 5. The City Attorney, City Treasurer, and City Engineer approve the letter of credit, which they shall do if all of the conditions above are met unless they have reasonable, objective indications of a substantial risk that either the applicant or the applicant's financial institution will not fulfill its obligations related to the completion of improvements or the financial guarantee; and 6. A cash escrow is deposited with the City Treasurer at the time the letter of credit is executed equal to the full cost to revegetate any removed vegetation in the event the applicant, their successors or heirs, or their financial institution fails to perform. 2. Acceptance of financial guarantee. A financial guarantee under this section is accepted when the City Engineer signs a standard subdivision improvement agreement and an escrow agreement or letter of credit. After the subdivision improvement agreement is approved and executed, the applicant may record the subdivision, as long as all other recording requirements have been met. The recording of the subdivision will allow the developer to sell the lots, but not allow building and/or land use permits to be issued until all improvements are installed, except as listed in this Title. 3. Partial release of financial guarantee. Unless otherwise specified by the terms of the subdivision improvement agreement, the City is only obligated to offer a partial release of the financial guarantee for an independent improvement system that is completed to the satisfaction of the City Engineer. An independent improvement system includes, but is not limited to, those improvements specified in Section 1064-2. At no time shall the balance of the financial guarantee be reduced below the actual cost to complete an incomplete improvement system, regardless of the engineer's cost estimate. If, in the opinion of the City Engineer, costs are increasing or have increased greater than anticipated by the initial engineer's cost estimate, the guarantee shall be reassessed and increased to reflect cost increases, if any. 4. Warranty guarantee, and conditional acceptance of improvements. 1. Upon satisfactory completion of all improvements, as determined by the City Engineer, the improvements shall enter a conditional acceptance period. At this time, remaining financial guarantee funds may be released except those necessary for the warranty guarantee, as specified in Subsection (c)(2) of this section. If street trees or other required landscaping, or driveway aprons, for lots with a Lot Width greater than 60 feet, are not installed by the time the rest of all the other required improvements meet satisfactory completion, then, at the discretion of the City Engineer, all other improvements may enter the conditional acceptance period. 2. Ten percent of the estimated cost of all improvements, using current market costs as approved by the City Engineer, shall be remitted or retained by the city for a warranty guarantee, for a period as defined by U.C.A. 1953, § 1727a-103. If any improvement fails within the warranty guarantee period, the failure shall be remediated by the developer, and the warranty guarantee period shall restart. At the discretion of the City Engineer, the warranty guarantee period, and conditional acceptance, may be restarted for individual improvements needing replacement or repairs, rather than restarting the entire warranty guarantee period. 5. Final acceptance of improvements. After the warranty guarantee period has expired, if the improvements have performed to the City Engineer's satisfaction, the City Engineer shall release the warranty guarantee. At this time the City Engineer may also offer final acceptance of the improvements. Final acceptance may be withheld if circumstances unforeseen at the time of conditional acceptance become known that expose the city or the public to unreasonable financial or safety risk. The City is not responsible for operations or maintenance of public improvements that have not received final acceptance. At the time of final acceptance of all other improvements, if street trees or other required landscaping is not satisfactorily installed or has not satisfactorily performed through the minimum warranty period, then the appropriate amount of financial guarantee shall be retained by the City in an amount sufficient to satisfactorily install the trees or other landscaping, and to ensure proper performance of the trees or other required landscaping through the duration of the minimum required warranty period. If the amount of remaining financial guarantee and warranty guarantee is not sufficient to pay for the City's current cost to install the street trees, an updated engineer's cost estimate and financial guarantee shall be retained by the City. 6. City's authority under default. If a financial guarantee authorized by this section is defaulted, the City shall have the authority, in its sole discretion, to use the remaining defaulted funds to make whatever improvements the City deems necessary to bring the subdivision into or closer to compliance with the requirements of this Land Use Code. For any subdivision that has a defaulted financial guarantee, the City is authorized, but not obligated, to release financial guarantee funds to a third party that performs the work that the City has deemed necessary.