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Home My WebLink About#07 - Royal Golf Security Reductions STAFF REPORT DATE: April 1, 2025 CONSENT TO: City Council FROM: Mike Rusenovich, Project Engineer AGENDA ITEM: Approve Security Reductions and Accept Improvements for Royal Golf 3rd, 5th, and 6th Additions REVIEWED BY: Nicole Miller, City Administrator Clarissa Hadler, Finance Director Jason Stopa, Community Development Director Marty Powers, Public Works Director Nate Stanley, City Engineer CORE STRATEGIES: ☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services ☐ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future ☒ Managed Growth ☒ Resilient Infrastructure BACKGROUND: Lennar Homes, Inc. entered into a development agreements with the City for the Royal Golf 3rd Addition; Royal Golf 5th Addition; and Royal Golf 6th Addition. Construction of the subdivision improvements in each phase has met the required milestone needed to be eligible for a reduction in the development security. ISSUE BEFORE COUNCIL: Should the City Council accept the improvements and reduce the security amounts as outlined in the respective Development Agreement for the Royal Golf 3rd Addition; Royal Golf 5th Addition; and Royal Golf 6th Addition? PROPOSAL DETAILS/ANALYSIS: Staff has received and processed a request to accept certain improvements and to process reductions in the applicable development security as follows: • Royal Golf 3rd Addition: Release the Public Sanitary Sewer and Watermain warranty security. All remaining utility security amounts will be released with the expiration of the 2-year warranty. • Royal Golf 5th Addition – Accept Public Sanitary Sewer and Watermain and Reduce the security. The sanitary sewer and watermain improvements have been constructed, tested, and verified. With the acceptance of the public sanitary sewer and watermain, the 2-year warranty period will be initiated as shown on the attached Certificate of Completion. Twenty-five percent (25%) of the original security amount will be retained until the warranty period has expired. The operation and maintenance of the public sanitary sewer and watermain becomes the responsibility of the City going forward. • Royal Golf 6th Addition – Accept Public Sanitary Sewer and Watermain and Reduce the security. The sanitary sewer and watermain improvements have been constructed, tested, and verified. With the acceptance of the public sanitary sewer and watermain, the 2-year warranty period will be initiated as shown on the attached Certificate of Completion. Twenty-five percent (25%) of the original security amount will be retained until the warranty period has expired. The operation and maintenance of the public sanitary sewer and watermain becomes the responsibility of the City going forward. These requests have been reviewed and are being recommended for approval in accordance with the approved Development Agreement for each addition. The Development Security amounts are recommended to be reduced as follows: Current Security Amount Proposed Security Amount 1. Royal Golf 3rd Addition $1,916,902 $1,582,819 2. Royal Golf 5th Addition $4,647,938 $2,894,550 3. Royal Golf 6th Addition $2,421,314 $1,276,551 FISCAL IMPACT: It is the City’s goal to retain at all times during the subdivision improvements a security amount that is adequate to ensure completion of all elements of the improvements as protection to the city tax payers against the potential of developer default. RECOMMENDATION: Staff is recommending that the City Council, as part of the Consent Agenda, accept the improvements and approve the security reductions as detailed in the attached respective worksheets for Royal Golf 3rd Addition, Royal Golf 5th Addition; and Royal Golf 6th Addition; contingent on the developer being current with all payments and obligations in accordance with the Development Agreements, including a positive escrow balance as required by the City. If removed from the consent agenda, the recommended motion for the action is as follows: Motion to accept the improvements and approve the security reductions as detailed in the attached worksheets for Royal Golf 3rd Addition, Royal Golf 5th Addition; and Royal Golf 6th Addition; contingent on the developer being current with all payments and obligations in accordance with the Development Agreement, including a positive escrow balance as required by the City. ATTACHMENTS: 1. Certificate of Completion – Royal Golf 5th Addition. 2. Certificate of Completion – Royal Golf 6th Addition. 3. Security Reduction Worksheet – Royal Golf 3rd Addition. 4. Security Reduction Worksheet – Royal Golf 5th Addition. 5. Security Reduction Worksheet – Royal Golf 6th Addition. CERTIFICATE OF COMPLETION DATE OF ISSUANCE: APRIL 1, 2025 OWNER: CITY OF LAKE ELMO, MN DEVELOPER: US HOME, LLC SUBDIVISION NAME: ROYAL GOLF 5TH ADDITION PROJECT NO.: 2022.109 This Certification of Completion applies to all work under the Development Agreement This Certification of Completion applies to the following specified parts of the Development Agreement Section 33.A – Public sanitary sewer and watermain Section 33.B – Public improvements including street construction, including concrete curb and gutter, sidewalks and trails, materials and equipment. I do hereby certify that the work to which this Certificate applies has been constructed in accordance with the Development Agreement dated March 16, 2023. The above-mentioned improvement is hereby declared to be complete and acceptance of this work is recommended. DATE OF COMPLETION: April 1, 2025 Mike Rusenovich Reg. No. 58717 Bolton and Menk, Inc. Section 33.A Warranty Period Begins April 1, 2025 and ends April 1, 2027 Section 33.B Warranty Period Begins and ends CERTIFICATE OF COMPLETION DATE OF ISSUANCE: APRIL 1, 2025 OWNER: CITY OF LAKE ELMO, MN DEVELOPER: US HOME, LLC SUBDIVISION NAME: ROYAL GOLF 6TH ADDITION PROJECT NO.: 2023.126 This Certification of Completion applies to all work under the Development Agreement This Certification of Completion applies to the following specified parts of the Development Agreement Section 33.A – Public sanitary sewer and watermain Section 33.B – Public improvements including street construction, including concrete curb and gutter, sidewalks and trails, materials and equipment. I do hereby certify that the work to which this Certificate applies has been constructed in accordance with the Development Agreement dated May 7, 2024. The above-mentioned improvement is hereby declared to be complete and acceptance of this work is recommended. DATE OF COMPLETION: April 1, 2025 Mike Rusenovich Reg. No. 58717 Bolton and Menk, Inc. Section 33.A Warranty Period Begins April 1, 2025 and ends April 1, 2027 Section 33.B Warranty Period Begins and ends ROYAL GOLF CLUB 3RD ADDITION October 31, 2022 DEVELOPMENT AGREEMENT AMOUNTS CATEGORY CONSTRUCTION 125%REMARKS #1 #2 #3 #4 #5 #6 Grading $924,460 $1,155,575 100%$1,155,575 Sanitary Sewer $485,113 $606,391 100%$454,793 $151,598 Watermain $583,951 $729,939 100%$547,454 $182,485 Storm Sewer $666,871 $833,589 50%$416,794 Streets and Sidewalks $884,687 $1,105,858 50%$552,929 Trails $44,125 $55,156 Surface Water Facilities $23,149 $28,936 Street Lighting $48,000 $60,000 Street Signs and Traffic Control Signs $5,779 $7,224 Landscaping $253,289 $316,611 Tree Preservation and Restoration NA NA Wetland Mitigation and Buffers NA NA Monuments $7,300 $9,125 Erosion Control $103,835 $129,794 Turn Lanes NA NA Record Drawings $5,000 $6,250 100% TOTALS $4,035,559 $5,044,448 RELEASED AMOUNTS:$3,127,546 $334,083 CUMMULATIVE AMOUNTS:$3,127,546 $3,461,629 SECURITY AMOUNT REMAINING:$1,916,902 $1,582,819 DATE: 3/7/2023 4/1/2025 Time of Performance: REDUCTIONS ROYAL GOLF CLUB 5TH ADDITION October 31, 2024 DEVELOPMENT AGREEMENT AMOUNTS CATEGORY CONSTRUCTION 125%REMARKS #1 #2 #3 #4 #5 #6 Grading $1,011,847 $1,264,809 Sanitary Sewer $704,429 $880,536 75%$660,403 Watermain $294,815 $368,519 75%$276,390 Storm Sewer $687,170 $858,962 50%$429,481 Streets and Sidewalks $619,383 $774,228 50%$387,114 Trails $37,500 $46,875 Surface Water Facilities $47,021 $58,776 Street Lighting $18,000 $22,500 Street Signs and Traffic Control Signs $700 $875 Landscaping $60,700 $75,875 Tree Preservation and Restoration NA NA Wetland Mitigation and Buffers NA NA Monuments $8,600 $10,750 Erosion Control $115,754 $144,693 20th Street Turn Lans $102,433 $128,041 Record Drawings $10,000 $12,500 TOTALS $3,718,352 $4,647,938 RELEASED AMOUNTS:$1,753,388 CUMMULATIVE AMOUNTS:$1,753,388 SECURITY AMOUNT REMAINING:$2,894,550 DATE: 4/1/2025 Time of Performance: REDUCTIONS ROYAL GOLF CLUB 6TH ADDITION October 31, 2025 DEVELOPMENT AGREEMENT AMOUNTS CATEGORY CONSTRUCTION 125%REMARKS #1 #2 #3 #4 #5 #6 Grading NA NA Sanitary Sewer $301,227 $376,534 75%$282,401 Watermain $339,060 $423,825 75%$317,869 Storm Sewer $301,958 $377,448 50%$188,724 Streets and Sidewalks $569,231 $711,539 50%$355,769 Trails $66,000 $82,500 Surface Water Facilities NA NA Street Lighting $30,000 $37,500 Street Signs and Traffic Control Signs $3,675 $4,594 Landscaping $151,000 $188,750 Tree Preservation and Restoration NA NA Wetland Mitigation and Buffers NA NA Monuments $9,200 $11,500 Erosion Control $57,700 $72,125 20th Street Turn Lans $100,000 $125,000 Record Drawings $8,000 $10,000 TOTALS $1,937,051 $2,421,314 RELEASED AMOUNTS:$1,144,763 CUMMULATIVE AMOUNTS:$1,144,763 SECURITY AMOUNT REMAINING:$1,276,551 DATE: 4/1/2025 Time of Performance: REDUCTIONS