July 17, 2024
By: Dwayne Page
What type of surety instrument, if any, should a developer secure to ensure infrastructure installation on a site before obtaining final plat approval by the county for a subdivision?
The DeKalb County Planning Commission again discussed the issue last Monday night, July 8 during its regular monthly meeting and was poised to make a move but postponed action to give Tommy Lee, Director of the Upper Cumberland Development District, who serves as UCDD staff planner and advisor to DeKalb County, more time to prepare specifics in writing for the commission to consider next month.
In June, the planning commission held a public hearing regarding the types of surety instruments the county should accept going forward in lieu of installed public improvements. No one showed up for the public hearing to express any comment.
“Currently we allow for final plat approval without infrastructure being fully installed if a surety is submitted to guarantee its installation. Currently we accept three types of surety instruments and those are as follows: We do accept the establishment of an escrow account in the full amount of the estimated cost of the required improvements plus 10%. We also currently accept a certified check in the full amount of the estimated cost of the required improvements plus 10%. Finally, we do accept an irrevocable letter of credit for the full amount of the estimated cost of the required improvements plus 10% from an approved bank. We also have forms that need to be filled out when we accept those surety instruments,” Lee explained.
The surety instrument issue stems from action taken by the planning commission in April to amend the county’s subdivision regulations with new provisions for developers. The aim is to better ensure that adequate road access for emergency vehicles and sufficient water supply for fire suppression are provided in new county residential developments with five or more lots prior to final plat approval by the planning commission. No new development over the last five years that has already received at least preliminary plat approval by the planning commission can be held to the new standards.
The new regulations, as amended, were primarily prompted as the result of a plat already approved for a subdivision called Silver Point Shores on Aunt Helen Road in DeKalb County near Silver Point which has been in development for at least two years. Concerns are that this subdivision has poor (narrow) road access into and through it especially for emergency vehicles such as fire trucks and ambulances and that there is no water source (wells) or fire suppression system in place for the 31 lots in the subdivision which have already been sold by the developer collectively for more than $3.5 million. Members of the planning commission also had concerns about whether the surety instrument of the developer in this case, a cashier’s check (good for up to 180 days but reportedly now expired) in the amount of $40,000 was sufficient.
County Mayor Matt Adcock initially asked Monday night that the planning commission going forward provide for no security instruments to ensure that developers have all subdivision infrastructure in place before final plat approval to guard against another Aunt Helen Road situation.
“If you go to that development on Aunt Helen Road right now and look, its all grown up,” said County Mayor Adcock. “They had a nice sign out there but its now gone. There are no wells. There is electricity but all the lots are grown up. He (developer) has made over three million dollars in sales so his surety instrument of $40,000 was just his cost of doing business. My recommendation is that we don’t do any sureties and that they (developers) do the complete and total project before we do anything (final plat approval) ,” he said.
County Mayor Adcock later modified his request about sureties after Lee raised a concern.
“If you don’t accept any surety instruments and make them (developers) build to county specs without any homes being built there, then when the county takes over the (subdivision) roads, the concrete trucks will start coming in (during housing construction) and those roads could be mashed to pieces,” said Lee.
The commission is considering amending the regulations similar to White County where no surety instruments are required except for the top coating (surfacing) of roads developed within a subdivision. That would force a developer to ensure that all other infrastructure work is done before the planning commission can give final plat approval. Under White County’s regulations, Lee explained “the only type of surety they accept now is a letter of credit from a bank 60 miles from their courthouse with automatic renewals and new approved costs estimates”.
“I’d like to make a motion that we only accept it (surety instruments) on roads and that it be at costs plus 100%,” said Planning Commission member Jack Barton.
Lee later asked that the motion be withdrawn and that action be postponed until next month to give him time to reduce the proposal in writing for clarity on the issue.