9.
City Council Work Session
- Meeting Date:
- 01/27/2015
- Co-Submitter:
- Rick Barrett, City Engineer
- From:
- Michelle D'Andrea, City Attorney
TITLE:
Discussion of possible changes to the City Code regarding Subdivision Assurances.
RECOMMENDED ACTION:
Discuss amendments to the City Code primarily to clarify that successor developers are responsible for posting sufficient assurances to allow for construction of subdivision infrastructure when necessary; provide direction.
Executive Summary:
This is an opportunity to discuss whether the Council would like to adopt changes to the City Code regarding subdivision assurances for the primary purpose of clarifying that successor developers are accountable for constructing infrastructure (streets, utilities, landscaping, etc.) in new subdivisions or providing adequate assurances, such as bonds, to ensure that the infrastructure will be constructed when it is necessary.
Financial Impact:
The proposed changes to the City Code would have a positive financial impact, especially in bad financial times when subdivisions may fail.
Connection to Council Goal and/or Regional Plan:
Goal LU.7. Provide for public services and infrastructure.
Previous Council Decision on This:
Council provided direction to the City Attorney's Office during an executive session on September 30, 2014.
Options and Alternatives:
After discussion, adopt the proposed changes to the City Code.
Revise the proposed changes to the City Code.
Take no action.
Background/History:
The City of Flagstaff and other Arizona communities faced problems with partially completed subdivisions during the Great Recession. One such subdivision in the City was Presidio in the Pines. The County faced a similar situation with a subdivision in Bellemont.
Key Considerations:
Often during challenging financial times developers go bankrupt or sell their subdivision property to others due to financial problems. Sometimes the subdivisions are partially constructed when the property changes hands. Other times the subdivision is not at all constructed, but the roads in the subdivision are needed to connect other properties. In these instances the City would be better protected by clear language in its Code that requires successor developers to post financial assurances to provide funds for completion of subdivision infrastructure when the City determines that it is beneficial to complete or partially complete construction of the infrastructure.
The proposed amendment to the Code would also make several minor changes:
1. It would allow the City to enter into a Third Party Trust agreement in lieu of an agreement for assurances. The Third Party Trust agreement prevents a developer from selling the subdivision or a portion of a subdivision to anyone before the infrastructure is completed and accepted by the City.
2. It clarifies that the City may require assurances for private amenities included in subdivision plats such as clubhouses, pools, etc.
3. It clarifies that assurances are not required if the infrastructure has been constructed and accepted by the City Engineer.
4. It allows the City Engineer to require separate assurances for different types of infrastructure or to secure the site.
5. It allows the City Engineer to require larger assurances if estimates related to franchise utilities are underestimated.
6. It allows the City to hold a portion of the assurance until the one-year warranty period for the infrastructure expires.
7. It clarifies that the City may deduct its costs for administering an assurance from the proceeds if necessary.
8. It allows the City Engineer to increase the amount of the assurance due to change in circumstances when granting a time extension for completion of the infrastructure.
The proposed amendment to the Code would also make several minor changes:
1. It would allow the City to enter into a Third Party Trust agreement in lieu of an agreement for assurances. The Third Party Trust agreement prevents a developer from selling the subdivision or a portion of a subdivision to anyone before the infrastructure is completed and accepted by the City.
2. It clarifies that the City may require assurances for private amenities included in subdivision plats such as clubhouses, pools, etc.
3. It clarifies that assurances are not required if the infrastructure has been constructed and accepted by the City Engineer.
4. It allows the City Engineer to require separate assurances for different types of infrastructure or to secure the site.
5. It allows the City Engineer to require larger assurances if estimates related to franchise utilities are underestimated.
6. It allows the City to hold a portion of the assurance until the one-year warranty period for the infrastructure expires.
7. It clarifies that the City may deduct its costs for administering an assurance from the proceeds if necessary.
8. It allows the City Engineer to increase the amount of the assurance due to change in circumstances when granting a time extension for completion of the infrastructure.