16.50.015 Subdivision agreements for required improvements.
A. Completion of Improvements. Before a final plat of subdivision may be approved, all subdividers shall complete, in accordance with the preliminary plat and Chapters 15.70 and 15.80 KIBC, all street, sanitary, and other improvements required as a condition of the approval, or conditional approval, of the preliminary plat, or otherwise required by this title or law, and to dedicate the same free and clear of any and all liens and encumbrances on the property and public improvements so dedicated.
B. Agreement to Improve. The planning commission, in its sole discretion, may waive the requirement that the subdivider complete and dedicate all improvements prior to the approval of the final subdivision plat provided the subdivider enters into one of the agreements to improve provided in subsection (B)(1) or (B)(2) of this section and deposits the improvement security provided in subsection F of this section:
1. A written agreement with the borough to thereafter construct and to install all such improvements at the subdivider’s expense. Such agreement shall include, but not be limited to, the following provisions:
a. Designation of the required public improvements to be constructed;
b. Any performance or other schedule of completion required by the planning commission;
c. A provision providing the borough with an adequate guarantee for the completion of required public improvements and for warranties of all improvements for a period of one year from date of approval;
d. A warranty that the subdivider has title to the subdivision property and the authority to execute the subdivision agreement.
2. A written agreement with the borough to thereafter initiate and consummate local improvement district proceedings for the financing and completion of all such improvements, and if not completed under such local improvement district proceedings, to complete such improvements at the subdivider’s expense not later than the date required for improvements to be installed as provided in this title.
3. To assure the installation of required public improvements which are not completed and approved at the time the final plat is approved and recorded, the planning commission serving as the platting authority, and the agreement to improve, shall require the subdivider to guarantee the completion of all such improvements by one or more of the methods specified in subsection F of this section. The means of guarantee may be changed during the guarantee period through a written modification of the agreement to substitute another approved form of improvement security upon the mutual agreement of the borough and the subdivider. The amount of guarantee shall be determined on the basis of the subdivider’s cost estimate as approved by the engineering and facilities department director for subdivisions located outside cities and by the municipal clerk or municipal engineer for subdivisions located within a city. The guarantee shall remain in effect until final approval of the improvements and the posting of an acceptable security for the warranty period.
4. Cost Estimates. The subdivider’s cost estimate provided for in subsection E of this section shall state the estimated cost of completion for each required public improvement. Cost estimates for each required improvement must be approved by the engineering and facilities department director for subdivisions located outside cities and by the municipal clerk or municipal engineer for subdivisions located within a city. For the purposes of establishing the amount necessary for the guarantee of completion of public improvements, a percentage for overrun allowance, including inflation, shall be added to the total estimated cost of public improvements as follows:
|
Total Estimated Cost of Improvements |
Percentage for Overrun Allowance |
|---|---|
|
$0 – $500,000 |
20% |
|
$500,000 – $1,000,000 |
20% |
|
$1,000,000 and over |
20% |
C. Improvement Plans. In the event the subdivider enters into an agreement to construct and install improvements pursuant to this section, the subdivider shall prepare and deposit with the clerk of the borough detailed plans and specifications of the improvements to be constructed and such plans and specifications shall be made a part of any such agreement and of the improvement security. The subdivider shall be responsible for the costs of completion of the required improvements, regardless of whether the security posted under the subdivision agreement is adequate to cover those costs.
D. Completion Date. The improvements required under the terms of the subdivision agreement shall be fully completed for final approval within two years of the date of approval of the final plat by the planning commission serving as the platting authority unless upon a showing of good cause the date of completion is extended by the planning commission serving as the platting authority for an additional period not to exceed one year.
E. Cost of Required Public Improvements. The cost of any improvements shall be defined to include the cost of design, engineering, contract administration, inspection, testing and surveillance as well as all work, labor and materials furnished for the construction of the improvements.
The agreement to improve shall provide for payment of the cost of required improvements as provided below:
1. Administrative and Recording Costs Relating to Public Improvement Guarantees. The subdivider shall pay 100 percent of all costs incurred in supplying and administering any method of public improvement security and guarantee.
2. Inspection, Surveillance and Testing. The subdivider shall pay 100 percent of all costs relating to any inspection, surveillance and testing by the borough or city, as applicable, necessary for final approval of any required public improvement or during the warranty period. Surveillance shall be performed by the borough or a city during the course of construction and up to the point of final approval of the completed project. Inspection shall be performed by the borough or city during the warranty period.
F. Improvement Security. The agreement to improve shall include and be secured by one or more of the following methods to guarantee the construction and installation of required public improvements, which security will remain in place until improvements are approved and accepted:
1. Performance and Payment Bonds. The subdivider may elect to provide a performance and payment bond, or bonds, from a surety company authorized to do such business in the state of Alaska guaranteeing the construction, installation and payment for all required improvements, including monuments, and for all labor and materials for the construction and installation thereof. The bond or bonds shall be in an amount equal to the estimated cost of all required public improvements plus an overrun allowance as provided in subsection (F)(2)(b) of this section. The performance bond shall be payable to the municipality in the event that any required public improvements are not finally approved in accordance with the provisions of this title. The payment bond shall inure to the benefit of all persons who provide labor or materials for the construction or installation of the public improvements.
2. Letter of Credit. The subdivider may elect to provide from a bank or other responsible financial institution authorized to do such business in the state an irrevocable letter of credit. Such letter shall be filed with the borough and shall certify the following:
a. That the creditor irrevocably guarantees funds in an amount equal to the estimated cost of all required public improvements plus overrun allowances as provided in subsection (B)(4) of this section, for the completion of all such improvements; and
b. That in the case of failure on the part of the subdivider to complete any specified improvements within the required time period the creditor shall pay to the municipality immediately and without further action such funds as are necessary to finance the completion of those improvements up to the limit of credit stated in the letter.
G. Release of Guarantee. The borough shall release the obligation for performance guarantees only upon the acceptance of improvements under KIBC 16.70.030 of all the improvements covered by the agreement to improve and improvement security together with the posting of adequate security for warranty.
H. Effect of Final Approval by the Borough. Final approval by the borough of the construction and installation of required public improvements shall not obligate the borough thereafter to inspect, maintain or repair, or constitute an agreement or assumption by the borough of any duty or responsibility to thereafter inspect, maintain or repair any such improvements.
I. Warranty.
1. Required. The subdivider shall warrant and guarantee for a period of one year after final approval that the required improvements constructed under the agreement will remain in good condition and will meet operating specifications for the warranty period. Such warranty includes defects in design, workmanship, materials and any damage to improvements caused by the subdivider, his agents or others engaged in work to be performed under the agreement to improve.
2. Term – Security. To secure the warranty, the guarantee of performance shall remain in effect until the end of the warranty period, provided that the warranty period shall not expire without a determination by the engineering and facilities department director for subdivisions located outside cities, and by the municipal clerk or municipal engineer for subdivisions located within a city, that the warranty period has been successfully completed without uncorrected defects.
3. Form – Security. The subdivider furnishes the borough with a corporate surety bond, cash deposit or irrevocable letter of credit in an amount equal to the percentage of the total construction costs as set forth below. This security shall guarantee the payment of any reconstruction or repair costs which may be undertaken due to failures occurring during the warranty period. Responsibility for identifying the necessity of repairs or reconstruction of the improvements shall rest with the engineering and facilities department director for subdivisions located outside cities and by the municipal clerk or municipal engineer for subdivisions located within a city.
|
Total Construction Cost |
Percent to Secure Warranty |
|---|---|
|
$0 – $500,000 |
10% |
|
$500,000 – $1,000,000 |
7.5% |
|
$1,000,000 and higher |
5% |
4. Correction of Deficiencies. Within 30 days (or a reasonable extension at the sole discretion of the engineering and facilities department director for subdivisions located outside cities and by the municipal clerk or municipal engineer for subdivisions located within a city) of notification by the borough of the need for repair or reconstruction, the subdivider shall correct the deficiencies, satisfactory to the borough. Such notification shall be made by certified mail. If the subdivider fails to repair or reconstruct the deficiency within the time specified above, the borough will make the repairs at the subdivider’s and surety’s sole expense. The borough may declare the bond, deposit or other security forfeited and use such security to make repairs or may proceed to make the repairs and then bill the subdivider and surety for the cost thereof and bring suit and recover the same from the subdivider and the surety, jointly and severally, and the security; provided, however, the borough shall not be required to proceed first against the subdivider and may proceed directly against any surety or guarantor of the subdivider or bank or other person issuing any letter of credit, or holder of any security.
J. Exemption from Claims. Any money, instrument or letter of credit or other improvement security deposited or held as provided in this title shall not be subject to levy or attachment by any creditors of the depositor until the obligation secured thereby is performed to the satisfaction of the borough.
K. Default. In the event that the subdivider defaults on any obligation to construct and pay for all required public improvements or the obligation to warrant and repair such improvements, the borough shall demand immediate payment on the performance or warranty guarantee. In the case of a performance bond, deposits in escrow, or letter of credit, the borough shall demand immediate payment of all or any portion of all sums obligated for the performance or warranty of any improvement. All funds received by the borough shall be used for any construction, repair or reconstruction necessary to ensure:
1. That all required improvements are built to specifications as necessary to receive final approval; and
2. The improvements remain in good condition for the completion of the warranty period.
L. Enforcement. All provisions of this chapter are mandatory and may not be altered by the subdivision improvement agreement. The obligations contained in this chapter shall be enforceable by methods of enforcement of ordinance as well as contract. [Ord. FY2020-02 §7, 2019].