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City of Mounds View Staff Report July 5, 1997 Page 4 • and we do not regard it as practical. The only time development contracts are being required now is for projects which have been through City Council approval and a condition requiring a development contract is included in the approval. There are some practical difficulties with the current wording in the Municipal Code, and staff is suggesting the following revisions. Public Improvements: Most developers are accustomed to providing surety for public improvements, and staff would urge that this practice continue to protect the public interest. Staff would suggest that the provision from Minnesota State Law be added to the City's Subdivision Regulations (Section 1200) so it is clear that surety is required for public improvements in land subdivisions. For someone unfamiliar with the City's Code, it appears that the City does not require such guarantees unless one knows to look in the section on Building and Development Regulations (Section 1000). Staff would also suggest that acceptable surety be defined as a cash deposit, certified check or letter of credit, and not a surety bond because they are more difficult to collect. Private On-Site Improvements: Staff does not regard it as necessary, however, to require surety for private, on-site improvements which will completed during the course of construction of the project unless they are unfinished at the time the developer wants an occupancy certificate. Most . developers regard a requirement to post surety for such improvements as illogical since they need the funds to build the improvements, and the only practical time to build them is during the construction of the project. To require them to reserve money before the project starts means they will have to tie up twice as much money as the project requires. The City continues to have the occupancy permit as a means to assure that improvements are done. Only if the developer wants the occupancy permit in advance of completing improvements should surety be required. The ability to post surety in lieu of completing improvements should be limited to items affected by weather such as landscaping, concrete work and asphalt paving, and only if delaying these improvements does not create a safety hazard. Otherwise the project should be complete upon occupancy. Homeowner Improvements: These situations are the most difficult, because applicant's financial resources are smaller, and the City must balance between encouraging property improvements to be done and making sure that the work gets done. Some of the problems evident at the last Council meeting could be overcome if staff explains the requirement for a development contract and surety early in the process. There is no escaping, however, that if the City wants a guarantee, it will involve tying up funds for a period of time. Staff is suggesting that the Municipal Code be revised as follows: • Surety always be required for public improvements, and the surety be cash, certified funds or letter of credit. A section be added to the Subdivision Regulations to make this • requirement clear.