Chapter 20.06
CONSTRUCTION PLANS, BONDS AND SUBDIVISION IMPROVEMENT AGREEMENTS
Sections:
20.06.020 Construction plans – Engineering review permit (ERP).
20.06.030 Completion of public facilities and other improvements.
20.06.050 Subdivision improvement agreement.
20.06.060 Temporary improvements.
20.06.070 Cost of improvements.
20.06.080 Acceptance of dedication offers.
20.06.090 Inspection and acceptance of improvements.
20.06.010 Purpose.
The purpose of this chapter is:
A. To require the subdivider’s submission of construction plans for development of the subdivision to the city for review and approval of specific construction details for all public facilities;
B. To ensure that the public facilities required as part of approvals granted under this title are built according to city standards;
C. To allow subdivision improvement agreements between the city and property owners for phasing of a preliminary plat or to address any other situation in NMC 20.06.050;
D. To address bonds and subdivision improvement agreements between the city and property owners/subdividers, allowing a limited deferral for the construction of public facilities associated with the approval; and
E. To ensure that the required public facilities and public utilities are ready and available for use when needed by the users of the subdivision. (Ord. 2021-633 § 2).
20.06.020 Construction plans – Engineering review permit (ERP).
A. An engineering review permit (ERP) is required prior to grading and construction of any improvements associated with any division or redivision approved under this title. Following approval of a preliminary plat, preliminary binding site plan, or short plat, the applicant shall submit the applicable engineering plans and ERP review fees to the city engineer, pursuant to the submittal requirements of Chapter 17.08 NMC. Engineering plans shall be prepared by an engineer registered in the state of Washington, showing all public facilities or other improvements required by the plat approval. The applicant shall identify, either on the plans or by separate document, the engineer retained by the applicant to provide certification of all public facilities and improvements.
B. ERP applications shall not be accepted prior to plat approval. Because preliminary plat, short plat or binding site plan approval will inform a plat’s layouts and associated engineered improvements, an ERP application shall not be accepted until after the preliminary plat or short plat has been approved. Engineering details submitted with the ERP will then be reviewed to ensure consistency and compliance with the approved plat and any associated conditions of plat approval.
C. The city engineer’s review of the plans shall not be subject to the permit processing requirements of Chapter 36.70B RCW, NMC Title 19, or this title. Such plans must be approved by the city engineer prior to the initiation of any work, including grading, on the subject site. Approval of the construction plans shall expire according to the deadlines established in this title for the underlying application.
D. After the ERP permit has been approved by the city engineer, the applicant may proceed as follows:
1. Prior to the submission of a final plat or final binding site plan application for approval, or a short plat for recording, all streets, alleys, sidewalks, pedestrian/bike connections, landscaping, storm drainage, utilities, monumentation, street lights, trees, and any other public facilities or required improvements shall be installed to the satisfaction of the city engineer, in conformance with the city street standards and this title.
2. The applicant’s engineer shall provide two sets of as-built drawings (sheet size 22 inches by 34 inches) and an electronic submittal of all public facilities, and all other improvements to be dedicated to and maintained by the city, to the city engineer for approval, in conformance with the public works standards and this chapter. (Ord. 2021-633 § 2).
20.06.030 Completion of public facilities and other improvements.
Before a short plat can be recorded or a final plat of a subdivision or final binding site plan approved, all applicants are required to install all of the public facilities or other improvements, as specified in the short plat, preliminary plat or preliminary binding site plan approval, the municipal code or other applicable city standards. As an alternative to such installation, the applicant may post a bond or a subdivision improvement agreement with appropriate security in order to record the short plat or obtain approval of the final plat or binding site plan. Another prerequisite to such recording or approval is the dedication of those improvements to the city or other utility, free and clear of all liens and encumbrances on the dedicated property and public facilities. (Ord. 2021-633 § 2).
20.06.040 Bonds.
A. Performance Bond May Be Posted in Lieu of Construction. The city may, subject to the consideration factors of subsection (B) of this section, allow the applicant to post a bond to meet the requirement that the public facilities or other improvements and dedications be completed/satisfied prior to the recording of the short plat or approval of the final plat or final binding site plan, as long as the applicant posts a bond in accordance with this section. The city’s decision to allow the applicant to post a bond authorizes the applicant to apply for building permits for lots in the plat or binding site plan before the dedications have been made or the improvements constructed, subject to the following provisions:
1. Building permits shall not be issued until improvements necessary for vehicular access, emergency access, stormwater management, and general safety as determined by the city engineer and city public works director are constructed.
2. Sidewalks may be deferred under a performance bond to allow flexibility in the placement of driveways in relation to chosen house plans and to avoid damage to sidewalks during site development, provided that:
a. Sidewalks are installed along individual property frontages prior to occupancy of development on said property; and
b. Sidewalks for any undeveloped lots are installed when either (i) 90 percent of lots in the subdivision have been developed and there are no active permits for remaining vacant lot(s), or (ii) within three years of plat recordation, whichever occurs first.
B. When Performance Bond Is Appropriate. The city may consider a number of factors in the determination whether to allow a bond to be posted by an applicant, including, but not limited to:
1. The date of the applicant’s request to post a bond in light of the deadline for recording of the short plat, or the deadline for submission of final plat or final binding site plan applications, and the applicant’s progress to date toward the completion of the public facilities;
2. The consequences that could result from the applicant’s construction of the homes or other development contemplated by the proposed approval, before the necessary public facilities are completed/installed; and
3. Any other issues that may affect the public health and safety.
C. Acceptable Bonds. No bond shall be accepted by the city unless it is submitted on the form approved in advance by the city attorney and from a bonding company licensed to do business in the state of Washington. The city engineer shall determine the amount of the bond, which shall be no less than 150 percent of the estimated cost of the public facilities or improvements. The city engineer shall make a recommendation as to the length of the bond, which shall be no longer than two years after the final approval.
D. Warranty Bond. Once the public facilities have been constructed, the dedications made and city has inspected and approved the public facilities, the applicant shall provide the city with a warranty bond of an amount at least 20 percent of the cost of all public facilities meeting all the requirements of this section to ensure the successful operation of the public facilities, for a period of two years after such inspection and approval. (Ord. 2021-633 § 2).
20.06.050 Subdivision improvement agreement.
A. Purpose. A subdivision improvement agreement may be entered into by and between the city and the owner of property within the city, to allow phasing of a subdivision, and/or to ensure completion of the required public improvements in the subdivision within a specified time period following final subdivision plat approval. The subdivision improvement agreement shall be consistent with the applicable development regulations of the city. The consideration provided by the property owner for the city’s decision to enter into the subdivision improvement agreement may vary, depending on the benefits that the agreement will provide to the city and/or the public in general. The city may require a subdivision improvement agreement in those situations where the developer chooses to post a bond or other security, in order to ensure that the requirement for installation of the subdivision improvements is an obligation that runs with the subject property.
B. Duration. The subdivision improvement agreement shall have a duration of not longer than 10 years after short plat, preliminary or final subdivision plat approval. No subdivision improvement agreement may extend the deadlines for recording of a short plat in NMC 20.03.080, or for submission of a final plat in NMC 20.04.090, or for submission of a final binding site plan in NMC 20.07.080, unless the subdivision improvement agreement pertains to a phased plat as provided under subsection (J) of this section. Execution of a subdivision improvement agreement as provided in this section or posting of a performance bond does not eliminate the requirement for the applicant to post a warranty bond, pursuant to NMC 20.06.040(D). However, the property owner may choose to address the requirement for a maintenance bond in the subdivision improvement agreement, as provided below.
C. Form. All subdivision improvement agreements shall be on the standard form, approved in advance by the city attorney.
D. Effect. Subdivision improvement agreements are not project permit applications and are not subject to the permit processing procedures in Chapter 36.70B RCW and NMC Title 19. A subdivision improvement agreement shall constitute a binding contract between the city and the property owner (and/or subsequent owners of any later-acquired interests in the property identified in the subdivision improvement agreement). A subdivision improvement agreement governs the construction of the project identified in the agreement during the term of the agreement, or for all or that part of the build-out period specified in the agreement. A permit or approval granted by the city after execution of a valid subdivision improvement agreement must be consistent with the agreement.
E. Limitations. Any provision of the subdivision improvement agreement which requires the city to: (1) refrain from exercising any authority; (2) forgo adoption of any development regulations affecting the property identified in the agreement; (3) allow vesting beyond the applicable deadlines for a phased development; shall be limited to a period of 10 years. The agreement shall also contain a proviso that the city may, without incurring any liability, engage in action that would otherwise be a breach of the agreement if the city makes a determination on the record that the action is necessary to avoid a serious threat to public health and safety, or if the action is required by federal or state law.
F. Termination and Modification. Every subdivision improvement agreement shall have an identified, specific termination date. Upon termination, any further development of the property shall conform to the development regulations applicable to the property. The city shall not modify any agreement by extending the termination date except in certain limited circumstances where additional consideration has been provided to the city. Any request for modification of the agreement, and any required application revision, shall be consistent with the city’s development regulations applicable to the property at the time of the request, not the original execution date of the agreement or earlier, and shall be deemed a major modification.
G. Application Requirements. A complete application for a subdivision improvement agreement shall consist of the following:
1. Name, address, telephone number and email address of the property owner. If the applicant is not the property owner, the applicant must submit a verified statement from the property owner that the applicant has the property owner’s permission to submit the application;
2. Address, parcel number and legal description of the property proposed to be subject to the subdivision improvement agreement;
3. Recent title report confirming that the property identified in the application is owned by the applicant/property owner signing the verified statement;
4. SEPA checklist;
5. Identification of the application that is related to the subdivision improvement agreement;
6. A completed application form and application fee established by the city in a resolution adopted for this purpose;
7. Any other information requested by the community development director relevant to the processing of the subdivision improvement agreement.
H. Covenants Recorded Against the Property. The subdivision improvement agreement must be signed by the owner(s) of the property, shall run with the land and bind all heirs or successors of the property.
I. Security Required. The city may require that the developer provide a letter of credit or cash escrow as security for the promises contained in the subdivision improvement agreement. Either security shall be in an amount equal to 150 percent of the estimated cost of completion of the required public improvements.
1. Letter of Credit. If the applicant chooses to post a letter of credit, as security for the subdivision improvement agreement, such form shall be approved in advance by the city attorney. The letter of credit shall be (a) irrevocable; (b) be for a term sufficient to cover the completion, maintenance, and warranty periods for the improvements; and (c) require only that the city present the letter of credit with a sight draft and an affidavit signed by the city attorney, attesting to the city’s right to draw funds under the letter of credit.
2. Cash Escrow. If the applicant posts a cash escrow as security for the subdivision improvement agreement, such form shall be approved in advance by the city attorney. The escrow instructions shall provide that (a) the subdivider will have no right to a return of any of the funds except as provided herein; and (b) that the escrow agent shall have a legal duty to deliver the funds to the city whenever the city attorney presents an affidavit to the agent, attesting to the city’s right to receive funds, whether or not the subdivider protests that right.
3. Residual Funds as Maintenance Security. If and when the city accepts the offer of dedication for the last completed required public facility, the city shall execute a waiver of its right to receive all but a pre-arranged amount of the “residual” portion of the funds. The residual funds shall be security for the applicant’s covenant to maintain the required public facilities and to warrant that the same will be free from any defects for the required two-year period.
J. Phased Development.
1. In order to phase a project to extend the vested rights associated with an underlying project permit application, a subdivision improvement agreement is required. This ensures the availability of public facilities and services to all of the property in the identified individual phases, allows tracking of the available capacity of public facilities and utilities during each phase of construction, and with the extension of the vested rights associated with the project, provides certainty to the developer in the subsequent development approval process.
2. The deadlines in this title for recording final plats shall be consulted to establish the baseline vesting period. The city is not required to extend these vesting periods. If the city decides to do so in a subdivision improvement agreement, it must be in exchange for the property owner’s provision of corresponding benefits to the city in the form of, for example, contributions to public facilities and amenities over and above what would normally be required. In any event, the city shall not allow vesting to extend beyond the 10-year period established in subsection (D) of this section.
3. A subdivision improvement agreement for a phased development shall include (in addition to the requirements for a complete application in subsection (F) of this section), all of the following:
a. Identification of the phasing schedule;
b. Identification of the number of phases and lots included in each phase;
c. Identification of the approximate dates for construction of public streets, public utilities, and other improvements in each phase;
d. Identification of the approximate dates for commencement of development of each lot, lot sales and building occupancy;
e. Identification of the benefits that the property owner will provide to the city in exchange for permission to phase the development according to the proposed schedule;
f. Establishment of the deadline for the property owner to submit development applications;
g. A description of the manner in which each phase is designed such that all site requirements are satisfied independently of phases yet to be given final approval and constructed; and
h. A description of the manner in which the property owner will ensure that adequate public facilities are available when the impact of development occurs. The property owner shall acknowledge in the subdivision improvement agreement that if the demand for public facilities or services needed to accommodate a subsequent development phase increases following the issuance of a development permit for a prior phase in the approval process, or if public facilities or services included in a concurrency or SEPA determination are not constructed as scheduled in the city’s capital facilities plan, final development approval may have to be delayed for future phases pending the achievement of the adopted levels of service.
K. Processing Procedures.
1. Consolidation. Whenever possible, the subdivision improvement agreement should be consolidated for processing with an underlying project permit application or other application for approval. If consolidated, the property owner must agree to waive the deadline for a final decision on the underlying project permit application, as well as the prohibition on no more than one open record hearing and one closed record hearing on the underlying project permit application in RCW 36.70B.060(3) and 36.70B.080.
2. Public Hearing. While the director or the planning commission may provide a recommendation on a subdivision improvement agreement (even if the director or planning commission makes the final decision on the underlying project permit application), the city council shall make the final decision whether to approve the agreement by ordinance or resolution after a public hearing. Modifications to the agreement shall be in writing, signed by the duly authorized representatives of the parties, be consistent with this title and follow the same procedures set forth in this title.
3. Appeal. A subdivision improvement agreement associated with an underlying project permit application may be appealed in the same manner and within the same deadline as the underlying project permit application. (Ord. 2021-633 § 2).
20.06.060 Temporary improvements.
The applicant shall pay for and build all temporary improvements required by any approval, and shall maintain those improvements as set forth in the approval. Prior to the construction of any temporary improvement, the applicant shall provide a bond, or subdivision improvement agreement with a cash escrow or cash set aside in an amount established by the city engineer to ensure that the temporary facilities/improvements will be properly constructed, maintained, and timely removed. (Ord. 2021-633 § 2).
20.06.070 Cost of improvements.
All required public facilities or other improvements shall be constructed by the applicant/property owner, at its expense, without reimbursement by the city, unless otherwise specified in the project permit approval or subdivision improvement agreement with the city. As authorized by law, the city may form or cause to be formed a local improvement district or latecomers’ agreement for the construction and financing of the required public facilities, excluding on-site improvements on individual lots. If such district is formed or latecomer agreement signed, the applicant/property owner shall not be released from its obligation (as set forth in the bonds, cash escrow or cash set aside) to construct the public facilities until complete or the city is satisfied that a subsequent guarantee will cover performance. (Ord. 2021-633 § 2).
20.06.080 Acceptance of dedication offers.
Acceptance of formal offers of dedication of streets, public areas, easements, and parks, as defined in RCW 58.17.020(3), shall be by ordinance or resolution approving the final plat by the city council or approval of the short subdivision by the director. (Ord. 2021-633 § 2).
20.06.090 Inspection and acceptance of improvements.
A. General Procedure. The subdivider/property owner shall pay an inspection fee based on the estimated cost of the inspection, which fees shall be due and payable upon inspection. No building permits or certificates of occupancy shall issue until the fees are paid. If the city engineer finds that one or more of the required public facilities or other improvements have not been constructed in accordance with the city’s approval of the plans and specifications or the applicable standards and/or approval, the subdivider/property owner shall be responsible for any corrections and completion of the improvements.
B. Release of Security. The city will not accept dedication of required public facilities or improvements, nor release nor reduce the amount of any security posted by the subdivider, until the city engineer has submitted a certificate stating:
1. That all required public facilities or other improvements have been satisfactorily completed; and
2. The subdivider’s engineer or surveyor has certified to the city engineer, through the submission of a detailed “as built” survey plat of the subdivision, indicating location, dimensions, materials, and other information required by the city’s public works standards, that the layout of the line and grade of all transportation facilities, public facilities or other improvements is in accordance with the approved construction plans for the subdivision or binding site plan.
C. City’s Acceptance. Upon recommendation of approval by the city engineer, acceptance of the improvements for dedication in a final plat shall be adopted in an ordinance or resolution.
D. Maintenance of Improvements. The subdivider/property owner shall be required to maintain all required public facilities until the dedication of same is formally accepted by the city. Following the acceptance of the public facilities, the subdivider shall provide a warranty bond or other security to the city as required by NMC 20.06.040(D).
E. Issuance of Building Permits and Certificates of Occupancy. When a bond and/or other security with a subdivision improvement agreement have been accepted by the city for the construction of public facilities or other improvements in a short plat, final plat or final binding site plan, the city may issue building permits for development within the subdivision, but the city shall not issue a certificate of occupancy for any building in the development prior to the completion of the required public facilities or improvements and the acceptance of the dedication of those facilities or improvements by the city. The city engineer may authorize the issuance of up to 50 percent of the building permits for the lots in the subdivision if: (1) the applicant is not in default of the subdivision improvement agreement; and (2) the applicant has constructed and the city has inspected/accepted the public facilities or other improvements necessary to serve the lots for which such building permit applications have been submitted. (Ord. 2021-633 § 2).