HomeMy WebLinkAboutItem 15 - cc 11 18 14 Developer Escrow Release Procedures
MAYOR & COUNCIL COMMUNICATION
-- page 1 --
DATE: November 18, 2014 REGULAR ITEM # 15 AGENDA ITEM: Developer Escrow Release Procedures
SUBMITTED BY: Cathy Bendel, Finance Director
THROUGH: Cathy Bendel, Finance Director
REVIEWED BY: Finance Committee SUGGESTED ORDER OF BUSINESS:
- Questions from Council to Staff ............................................. Mayor Facilitates
- Report/Presentations…………………………………………….……City Staff
- Questions from Council to Staff……………………………..Mayor Facilitates
- Public Input, if Appropriate………………………………….Mayor Facilitates
- Call for Motion ............................................................... Mayor & City Council
- Discussion ....................................................................... Mayor & City Council
- Action on Motion .................................................................... Mayor Facilitates
POLICY RECOMMENDER: Finance Committee FISCAL IMPACT:
SUMMARY AND ACTION REQUESTED: At the November 12, 2014 Finance Committee meeting, a discussion was had on what could be done to strengthen the internal controls surrounding the release of Developer escrow funds. This
proposal is a result of that discussion.
STAFF REPORT: When a development is approved by the City Council, a Developer Agreement is executed which
outlines all components of the Development Project. A critical component of that agreement is
the security requirements section, which outlines the escrow requirements. These requirements are based on the projected construction costs. Also contained in the Developer Agreement is a
City Council Meeting [Regular Agenda Item 15]
November 18, 2014
-- page 2 --
reduction of security section which outlines the terms which must be met before the release of
the escrows. In the past, Developer escrows were released by staff without City Council approval. It is the belief of the Finance Committee that improvements can be made to the process by inserting an
official sign off form that would be reviewed by all City Department heads to insure that all
components of Development projects are complete prior to the release of Developer escrow funds. The Finance Department will be drafting up a form and bringing it back to the Finance Committee on December 10, 2014 for their approval.
Upon receipt of all approvals on this proposed developer escrow release form, a proposal to
refund the developer escrow would be brought to the City Council for their approval to release the funds. All Developer related escrow refunds must be approved by the City Council effective immediately.
Please note that release of other building permit escrows (road, pool, fence etc.) are not part of
this proposal. BACKGROUND INFORMATION (SWOT): Strengths Ensures that all department heads are surveyed to be sure there are
no pending issues needing to be resolved prior to the release of developer escrow funds. Weaknesses Obtaining multiple approvals may slow down the developer
escrow release process.
Opportunities Ability to strengthen the internal controls surrounding the developer escrow funds. Threats Developers may find issue with delay.
RECOMMENDATION:
It is recommended that the City Council approve Resolution No. 2014-89 as follows:
“Move to approve Resolution No. 2014-89 directing that effective immediately all developer
escrow refunds must be approved by the Lake Elmo City Council prior to release” ATTACHMENTS: 1. Resolution No. 2014-89