§ 32-169. Guarantee of public improvements

(a) Property owner's guarantee. Before approving the final plat of a subdivision located all or partially within the city or its extraterritorial jurisdiction, the city council must be satisfied that all required public improvements have or will be constructed in accordance with the approved engineering plans and with the requirements of this chapter and applicable law.

(b) Improvement agreement and guarantee. The city council may waive the requirement that the applicant complete and dedicate all public improvements prior to approval of the final plat, and may permit the property owner to enter into an improvement agreement by which the property owner covenants to complete all required public improvements no later than two years following the date upon which the final plat is approved. The city council may also require the property owner to complete or dedicate some of the required public improvements prior to approval of the final plat, and prior to entering into an improvement agreement for completion of the remainder of the required improvements during such two-year period. The improvement agreement shall contain such other terms and conditions as are agreed to by the property owner and the city.

(c) Security. Whenever the city permits an applicant to enter into an improvement agreement, it shall require the applicant to provide sufficient security, covering the completion of the public improvements. The security shall be in the form of cash escrow or, where authorized by the city, a performance bond or irrevocable letter of credit or other security acceptable to the city manager and the city attorney, as security for the promises contained in the improvement agreement. Security shall be in an amount equal to 100 percent of the estimated cost of completion of the required public improvements and lot improvements. The issuer of any surety bond and irrevocable letter of credit shall be subject to the approval of the city manager and the city attorney.

(d) Performance bond. If the city council authorizes the applicant to post a performance bond as security for its promises contained in the improvement agreement, the performance bond shall comply with the following requirements:

(1) All performance bonds must be in the forms acceptable to the city manager and the city attorney;

(2) All performance bonds must be executed by such sureties as are named in the current list of "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies," as published in Circular No. 570, as may be amended, by the Financial Management Service, Surety Bond Branch, U.S. Department of the Treasury;

(3) All performance bonds must be signed by an agent and must be accompanied by a certified copy of the agent's authority;

(4) All performance bonds shall be obtained from surety or insurance companies that are duly licensed or authorized in the state to issue performance bonds for the limits and coverage required; and

(5) The performance bond shall be in favor of the city, or name the city as a dual-obligee.

If the surety on any performance bond furnished by the applicant is declared bankrupt, or becomes insolvent, or its right to do business in terminated in the state, or the surety ceases to meet the requirements listed in Circular No. 570, the developer shall, within 20 calendar days thereafter, substitute another performance bond and surety, both of which must be acceptable to the city.

(e) Irrevocable letter of credit. If the city council authorizes the applicant to post an irrevocable letter of credit as security for its promises contained in the improvement agreement, the irrevocable letter of credit shall:

(1) Be irrevocable;

(2) Be for a term sufficient to cover the completion, maintenance and warranty periods, but in no event no less than two years; and

(3) Require only that the city present the issuer with a sight draft and a certificate signed by an authorized representative of the city certifying to the city's right to draw funds under the irrevocable letter of credit.

(Ord. No. 549, § 10.261, 12-22-2009)