400-01
BONDS AND DEFERRALS

Department: PUBLIC WORKS/BUILDING

Effective Date:    10-1-87

Supersedes:    1-1-87

Prepared by:    R. Houghton

Approved by:    Barbara Y. Shinpoch

1.0 PURPOSE:

To establish a policy for the review and approval of deferred public or private improvements and the enforcement of bonds for said deferrals.

2.0 ORGANIZATIONS AFFECTED:

Public Works Department, Building and Zoning Department, Board of Public Works.

3.0 REFERENCES:

Renton Municipal Code:        Chapter 1, Title IV

Chapter 22, Title IV

Chapter 11, Title IX

4.0 POLICY:

The City of Renton desires to assure the timely and complete fulfillment of the requirements of its development ordinances. This policy provides for the proper approval, acceptance, and enforcement of improvements deferred in the construction process.

4.1    Administrative responsibility for bonds and deferrals.

4.1.1    The Public Works Department shall administer deferrals and bonds for off-site or on-site public improvements.

4.1.2    The Building and Zoning Department shall administer deferrals and bonds for on-site private improvements.

4.2    Covenants and Bonds. For all improvements required by the city’s development ordinances, the developer must either construct those improvements prior to occupancy or secure a deferral as outlined in this document.

4.2.2    A restrictive covenant running with the land, signed and properly recorded after City Attorney review, may be accepted as security in lieu of a bond if the covenant guarantees that the property will join in any future L.I.D. established to install the required improvements in addition to the following conditions:

a)    The restrictive covenant for deferrals occurs only for a single family development no larger than a short plat.

b)    There are no similar improvements in the vicinity and there is no likelihood that the improvements will be needed or required in the next five years.

c)    There will be no detrimental effect on the public health, safety or welfare if the improvements are not installed.

d)    There is no likelihood that the zoning or land use on or adjacent to the site will change to a higher classification within a five-year period, thus increasing the likelihood that the improvements will be needed.

4.2.2.1    A covenant approved by the board shall contain language that stipulates the property owner will immediately install the deferred improvements at his or her expense upon a determination of the Board of Public Works that the improvements have become necessary.

5.0 DEFINITIONS:

5.1    Deferral or Deferred Improvements:

The process by which a required improvement may be delayed to a time certain by the appropriate administrative authority.

5.2    Bond:

Monetary security insuring installation of deferred improvements. Bonds may include cash, performance bonds, letters of credit, and irrevocable set aside letters conforming to the City’s standard format.

5.3    Chronological Bond File:

A file extending 52 weeks in advance, providing for ready access to and reminder of the impending expiration of bonds and/or deferrals.

5.4    Off-site Improvements:

Per Section 9-1102-9.1 -- Subdivision Ordinance.

5.5    On-site Improvements:

Parking lot improvement specified by the Parking and Loading Ordinance, chapter 11, Title IV.

5.6    Covenant:

A pledge in writing, signed, notarized or the legal equivalent, and recorded, committing the applicants to perform or refrain from performing a certain act or acts.

6.0 PROCEDURES:

6.1    Administrative Authority:

The following persons or boards shall have administrative authority in accordance with ordinance provisions for the following bonds of deferral actions:

6.1.1    Street Break Permit - Public Works Director.

6.1.2    Plat Bond - Board of Public Works.

6.1.6    Deferred On-site Private Improvement - Board of Public     Works.

6.1.7    Street use Permit - Board of Public Works.

6.1.8    Mining, Excavation and Grading Bond - Building Director.

6.1.9    Street Clean-up (Grading Related) Bond - Building Director.

6.2    Bonds shall have a duration of twelve (12) months, unless a duration of less than twelve (12) months is established by the administrative authority.

6.3    Deferrals shall have an initial duration not exceeding eleven (11) months and may be extended by the administrative authority in accordance with ordinance provisions for periods up to twelve (12) months. Deferral durations shall be one (1) month less than the bond duration.

6.4    Requests for deferrals of improvements (other than temporary occupancy certificates).

6.4.1    Applications shall be made to the Public Works Director (DIRECTOR) in accordance with Section 6/1 of this policy.

6.4.2    The DIRECTOR shall circulate the deferral request for comment from affected departments.

6.4.3    The DIRECTOR shall determine that all required plans are complete and approved and that a required bond amount has been established.

6.4.4    The DIRECTOR shall request Board of Public works     (BOARD) consideration of the requested deferral.

6.4.5    When a date of BOARD action is established, the BOARD secretary shall inform the applicant of the time, date, and location for BOARD consideration.

6.4.6    If the BOARD approves the requested deferral, the applicant shall be informed by the DIRECTOR of:

A)    Duration of the deferral.

B)    Amount of the required bond.

C)    Any special conditions of approval.

D)    Posting of bond or letter of credit to take place within a 30-day period or deferral will be revoked and the process must start again.

6.4.7    The deferral shall commence upon a determination of the DIRECTOR that the bond and any special conditions of the     BOARD have been complied with.

6.5    Upon receipt of a bond in proper form, the DIRECTOR shall provide for filing of the ORIGINAL BOND with the FINANCE DIRECTOR WHO SHALL NOTIFY THE ESCROW AGENT. A copy of the bond denoting the applicant and project common name(s) and deferral duration, if applicable, shall be placed in the Chronological Bond File nine (9) weeks prior to expiration of the bond.

6.5.1    Bonds, Letter of Credit, or cash will be placed in escrow until the deferred improvements are completed or it is no longer necessary as recommended by the BOARD OF     PUBLIC WORKS. (An Escrow Agent is to be named by the city of Renton.) The cost of the escrow is to be borne by the recipient of the deferral.

6.5.2    A fee of $100 for escrow costs will be charged at the time the bond is presented to the PUBLIC WORKS     DIRECTOR. This will be a one-time charge.

6.6    Each week the DIRECTOR shall cause the Chronological Bond File to be checked to establish bonds expiring nine (9) weeks hence.

6.6.1    The DIRECTOR shall determine if the bond and/or deferral, if any, requires extension.

6.6.2    If extension of the bond and/or deferral is required, the     DIRECTOR shall inform the applicant of a date certain that such extension must be requested. This date should be at least twenty (20) days prior for bond or deferral expiration.

6.6.3    Upon receipt of a request for extension, the DIRECTOR shall act accordingly where authority rests with the     DIRECTOR. In the case of action requiring BOARD approval, BOARD action shall be sought. The BOARD secretary shall inform the applicant of the time, date, and location for BOARD consideration.

6.7    Upon approval of an extension for a bond or deferral, the DIRECTOR shall inform the applicant of:

A)    Duration of the extension.

B)    Amount of the revised bond.

C)    Any special conditions of the extension.

D)    Date certain to provide the updated bond and to comply with any special conditions.

6.8    Each week, the DIRECTOR shall cause the Chronological Bond File to be checked to establish bonds expiring three (3) weeks hence.

6.8.1    Any such bond requiring continuation, but not properly extended, shall be referred to the City Attorney for action to secure the value of the bond.

6.8.2    The DIRECTOR shall provide the City Attorney with any required documentation.

6.8.3    The DIRECTOR shall inform the applicant of the referral of the expiring bond to the City Attorney. The DIRECTOR shall seek compliance from the applicant prior to litigation.

6.9    Upon securing the bond amount from the City Attorney, the DIRECTOR shall seek installation of the improvements as quickly as practical.

6.9.1    The DIRECTOR shall seek compliance through the original applicant. Where compliance is not forthcoming within a reasonable period, the DIRECTOR shall provide for completion of the work by a private contractor hired by the     City.

6.9.2    Upon completion of the work, the city’s actual costs shall be deducted from any proceeds remaining from the bond.

6.9.3    Any remaining proceeds shall be refunded to the applicant.

6.10    If a deferral is being approved subject to a restrictive covenant rather than a bond, the deferral shall not take effect until:

a)    The restrictive covenant is prepared by the applicant and has been reviewed and approved by the City Attorney.

b)    The restrictive covenant has been signed by the legally authorized party representing the property.

c)    The restrictive covenant has been legally filed and recorded with the King County Records Division.