04i - Defaulting of Bonds

BOND DEFAULT DATES

GENERAL IMPROVEMENT:                         Use date indicated on Bond Form

IMPORT/EXPORT:                                              1.5 years after date approved

TREES:                                                                         3 years after planting

EXCAVATION:

                  GENERAL                                                 2 years after date approved

                  STREET LIGHT                                     2 years after date approved

                  SOIL BORINGS:                                   2 years after date approved

                  LATERAL SUPPORT:                       4 years after date approved

                  MONITORING WELLS:                  10 years after date approved

REVOCABLE PERMITS:                                   5 years after date approved

TRACT/PARCEL MAP:

                  MAP RECORDED:                              2 years after date map recorded

                  MAP NOT RECORDED:                 3 years after decision date on determination letter, or Date of most recent map extension

CITY ENGINEER AUTHORITY TO DEFAULT BONDS

Per the adopted Board Report dated September 8, 1997, the City Engineer is authorized to work directly with the City Attorney on bond defaults. The City Engineer to initiate defaults per the details below. If the Bond Default is controversial, BOE would inform the Hearing Officer immediately.

The first notice to the developer informs them that a bond rider is needed or that default proceedings will begin, will give the developer the opportunity to schedule a hearing before the Board's Hearing Officer. If this option is taken, then a full report would be presented for the specific case in question. If this delegation recommendation is adopted, the Bureau of Engineering would prepare a semiannual report to the Board summarizing all bond default proceedings.

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Subdivision Maps

1. For all tract maps and for parcel maps filed on property that adjoin or include unimproved (unpaved) streets (either existing or proposed street dedications), the required improvements shall be constructed or suitably guaranteed with the recordation of the map. The construction requirements are deemed necessary for either of the following reasons: (a) public health and safety, or (b} a prerequisite to the orderly development of the surrounding area. The improvements must be completed prior to the issuance of a Certificate of Occupancy. No changes are needed to existing laws or codes, but internal Bureau of Engineering procedures must be outlined in a Special Order.
2. For all parcel maps filed on property that adjoin or include improved (paved) streets only, the required improvements shall be constructed or suitably guaranteed prior to the issuance of a Building Permit. A covenant and agreement which states this requirement will be required with the recordation of the parcel map. The improvements must be completed prior to the issuance of a Certificate of Occupancy. No changes are needed to existing laws or codes, but internal Bureau of Engineering procedures must be outlined in a Special Order.
    

If an application has expired or has been terminated at the request of the applicant or the City, the improvement security shall be released to the subdivider/owner. In certain situations where the subdividers have not developed their property in accordance with the recorded subdivision map, none of the parcels or lots have been sold to individual owners, and the required public works improvements have been guaranteed but not constructed, the City Council, on its own motion or by petition of all of the owners of record of the real property within the subdivision, may initiate proceedings for reversion to acreage of the subdivided real property. If and when a reversion becomes effective, all fees and deposits shall be returned, and all improvement security released, except those retained that were necessary to accomplish the purposes of the processing of the reversion to acreage.

Private Street Applications

The required improvements shall be constructed or suitably guaranteed prior to the issuance of a Building Permit. A covenant and agreement which states this requirement will be required for the clearance of the private street application. The improvements must be completed prior to the issuance of a Certificate of Occupancy. No changes are needed to existing laws or codes. but internal Bureau of Engineering procedures must be outlined in a Special Order.

City Planning Cases

The required improvements shall be constructed or suitably guaranteed prior to the issuance of a Building Permit except for zone change cases that require the 'T' Tentative classification be removed by the recordation of a final tract map. A covenant and agreement which states this requirement will be required for the clearance of the City Planning Case. The improvements must be completed prior to issuance of a Certificate of Occupancy. No changes are needed to existing laws or codes, but internal Bureau of Engineering procedures must be outlined in a Special Order.

Street Vacations

The required improvements shall be constructed or suitably guaranteed prior to the preparation of the final resolution to vacate. If a Building Permit is issued on the subject property, the improvements must be completed prior to the issuance of a Certificate of Occupancy. No changes are needed to existing laws, codes or procedures.

Highway Dedication Ordinance

• For major work requiring a "B" Permit, the improvements shall be constructed or suitably guaranteed prior to issuing a clearance on the Building Permit to the Department of Building and Safety. The improvements must be completed prior to the issuance of a Certificate of Occupancy. No changes are needed to existing laws, codes or procedures.
• No guarantees will be required for minor improvements that can be constructed under an "A" Permit. No changes are needed to existing laws or codes, but internal Bureau of Engineering procedures must be outlined in a Special Order.

Voluntary Improvements

• For minor improvements done under an "A" Permit, guarantees are not required. No changes are needed to existing laws, codes or procedures. For major improvements done under a "B" Permit, guarantees will be required prior to the issuance of a "B" Penni! which covers construction. No changes are needed to existing laws, codes or procedures.

FORECLOSURE TIMING

The present practice is to give a two-year time limit on Subdivision Bonds and one to one and one-half year time limit on all other bonds. If an extension of time bond rider is not submitted, foreclosure proceedings are initiated three to three and one-half years after the expiration date. This is based upon the four-year statutory time limit to receive judgement.

We now propose that all bonds have a time limit of two years unless a bond rider is executed in a timely manner, or until the expiration of the Building Permit, whichever occurs first. The foreclosure process will be started immediately upon expiration of the bond. The later process start date should give the developer sufficient time to complete required improvements, and if a problem occurs a bond rider can be obtained.

FORECLOSURE COSTS

Per Section 66499.4. of the State Subdivision Map Act reads as follows:

"Bond to cover enforcement costs - As a part of the obligation guaranteed by the security and in addition to the face amount of the security, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by the local agency in successfully enforcing the obligation secured."

This section of the Map Act gives us the right to add the legal and administrative cost of defaulting a bond or returning a subdivision to acreage to the bond amount. We are now analyzing these costs and will include this amount in future estimates guaranteed by the security.