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r Item No. 110 Staff Report No. 1110 Meeting Date: July 7, 1997 Type of Business: Work Session WK: WorkSession;PH:Public Hearing; CA:Consent Agenda;CB:Council Business City of Mounds View Staff Report To: Mayor and City Council From: Pamela Sheldon, Community Development Director Item Title/Subject: Discussion of Policy on Requiring Surety . Date of Report: July 5, 1997 Issue: Staff has prepared a suggested policy and some ordinance changes on requiring surety for certain types of development projects, and to guarantee compliance with conditions of approval. Background: At the last City Council meeting, there was some discussion on whether to require surety from homeowners who have requested approvals from the City, to assure that the conditions of approval are met. The particular case in point was a request for a conditional use permit to construct an oversized garage, which also involved the removal of an existing driveway, the paving of the new driveway, and the removal of a shed from the property. Staff original • recommendation was to require the applicant to furnish a check to the City for $1,000, which would be held and returned upon completion of the work, to assure that these three items were. done. The homeowner objected to tying up this amount of money. There was also some discussion about whether the homeowner could obtain a surety bond or a letter of credit, in lieu of providing the check. Since then staff has done some research on the availability and cost of various forms of surety, in order to develop alternatives for the City Council to consider. In addition, we have resurrected an ordinance amendment from August, 1996 which has been waiting for attention, that is also related to this issue, and we are suggesting that a new section be added to the Subdivision Regulations to address surety as well. Discussion: • How Surety Works Staff spoke with Fidelity Bank and Western Bank, and with the Fairfield Company which offers surety and performance bonds to learn what types of surety are available and the costs involved. We wanted to know how difficult and expensive it is to get various types of surety for both developers and for homeowners, such as the homeowner who wants to build an oversized garage and needs to remove a shed. Companies providing surety and performance bonds are in effect guaranteeing that they will pay 41, for the improvements if their client defaults. So they require their applicants to provide financial statements and a credit report, and evidence that the money for the work exists and is being held