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HomeMy WebLinkAboutItem VII (H) Dissussion re: Subdivision Close Out and Maintenance Bonds for Repairs Agenda 09-07-04 Item VEIL of Good r CITY OF OCOEE AGENDA ITEM COVER SHEET Date: August 31, 2004 Meeting Date: September 7, 2004 Subject: Maintenance Periods for Constructed Developments Issue: The City Commission requested an evaluation of the two-year maintenance period, which is currently in use on constructed development projects. The questions are what is the City's program and what about the possibility of increasing the maintenance period up to three years. Recommendation: Staff recommendation is to keep the maintenance period at two years at this time. However, staff would continue to monitor the issue and should the industry standard increase toward three years, then staff would bring back the change to the City's standards for Commission approval at that time. Background Summary: All projects that go through the large scale development review process are reviewed and approved by both the Community Development and Public Works Departments for compliance with the City's Land Development Code, Utility Standards, and any Conditions of Approval placed upon that particular project. These types of projects include design and construction of infrastructure that is turned over to the City to operate and maintain. That infrastructure may include but not be limited to water, wastewater, and reuse systems, roadways, common area sidewalks and stormwater collection and retention/detention systems. Before the two year maintenance period runs out, Ocoee inspections again walks the project and prepares a punch list of deficiencies. This inspection also includes a television inspection of the sanitary sewer collection system and a visual inspection of the stormwater collection system. Once the deficiencies have been corrected and approved by the Public Works Department, the maintenance bond is returned to the developer. During the period of time when the home builder(s) are constructing the homes, inspections to fmal a Certificate of Occupancy for a house include looking at the surrounding infrastructure for possible damage caused by the home builder (ie: broken curb, broken water meter installation, etc.). These types of deficiencies are required to be repaired and/or paid for prior to the issuance of the buildings Certificate of Occupancy. The Public Works Department works in conjunction with the Building Department at this time. In checking with other Cities and Counties, their standard maintenance periods are either one or two years. The one-year maintenance entities are the City of Winter Garden, Orange County, City of Kissimmee/Osceola County/Toho Water Authority, City of Apopka, Town of Oakland, and City of Winter Springs. The two-year maintenance entities are Seminole County and City of Ocoee. Fiscal Impacts: There are no fiscal impacts to the City in regards to the length of time for the maintenance period on development projects. The fiscal impact for the maintenance bonds or letter of credit furnished by the developer is born by the developer. However, the City does assume financial responsibility of the infrastructure when it assumes full beneficial use of the facilities when the maintenance period expires. Commission Action: Reviewed by City Manager Reviewed by City Attorney See 47,71,,1 ed N/A Reviewed by Community Developme t 6 • N/A Reviewed by4‘. N/A Wheeler, David From: Rosenthal, Paul [PRosenthal@foley.com] Sent: Wednesday, September 01, 2004 9:30 AM To: Wheeler, David Subject: RE: Staff Report Report is okay. You may attach my signature or type my name as approval. Paul E. Rosenthal Foley & Lardner LLP - Orlando prosenthal@foley.com Original Message From: Wheeler, David [mailto:dwheeler@ci.ocoee.fl.us] Sent: Wednesday, September 01, 2004 8:55 AM To: Rosenthal, Paul Subject: Staff Report IMPORTANT NOTICE: The preceding message may be confidential or protected by the attorney- client privilege. It is not intended for transmission to, or receipt by, any unauthorized persons. If you believe that it has been sent to you in error, do not read it. Please reply to the sender that you have received the message in error. Then destroy it. Thank you. 1 Mayor cestex of Good LiCommissioners S. Scott Vandergriftecs.e '71Danny Howell. District 1 Scott Anderson. District 2 City Manager "' ' ' Rusty Johnson. District 3 Robert Frank Y Nancy J. Parker. District 4 STAFF REPORT TO: The Honorable Mayor and City Commissioners FROM: David A. Wheeler,P.E.a 4 / Director of Public Works DATE: August 30,2004 RE: Project Close Out, Inspections and Maintenance Bonds ISSUE The City Commission has asked for an evaluation of the two-year maintenance period, which is currently in use on constructed development projects. The questions are what is the City's program and what about the possibility of increasing the maintenance period up to three years. BACKGROUND/DISCUSSION All projects, whether residential or commercial follow the same program, with minor differences. Those differences are when platting occurs and when construction on platted lots occurs. Commercial projects are typically platted during the development review and approval process, while residential projects are usually platted towards the end of the infrastructure construction phase. Both types of projects are required to furnish a performance bond for all work that has not been constructed at the time the project is platted. For commercial projects that plat during the development review process, sometimes a commercial establishment will start construction shortly after the infrastructure begins construction (ie: Walgreens in the Olympia PUD development). For residential projects, the start of model home construction can not start until the plat has been approved. All projects that go through the large scale development review process are reviewed and approved by both the Community Development and Public Works Departments for compliance with the City's Land Development Code, Utility Standards, and any Conditions of Approval placed upon that particular project. These types of projects include design and construction of infrastructure that is turned over to the City to operate and maintain. That infrastructure may include but not be limited to water, wastewater, and reuse systems, roadways, common area sidewalks and stormwater collection and retention/detention systems. Ocoee provides inspection of this infrastructure through the Public Works Department throughout the duration of the construction of the infrastructure. If the water and wastewater systems are to be Orange County Utilities, then Orange County provides their own inspections of their infrastructure systems. During construction, the inspectors will point out deficiencies that need correction while monitoring the progress of construction of the project's infrastructure in accordance with the project plans. Towards the end of construction the contractor will start asking for preliminary inspections for items that need correction and then will move to the formal semi-final inspection that generates a written punch list of deficiencies needing correction. Once the contractor has completed correcting the punch list items a final inspection is conducted to ensure that all punch list items have been corrected and that no new deficiencies have arisen. Once the project's infrastructure is deem to have been constructed in accordance with the plans and specifications, the project's Certificate of Completion is issued and the two- year maintenance period begins. The developer furnishes the City with a bond in the amount of 115% of the constructed value of the infrastructure to be returned over to the City. Orange County requires the same for their infrastructure. Before the two year maintenance period runs out, Ocoee inspections again walks the project and prepares a punch list of deficiencies. This inspection also includes a television inspection of the sanitary sewer collection system and a visual inspection of the stormwater collection system. Once the deficiencies have been corrected and approved by the Public Works Department, the maintenance bond is returned to the developer. The maintenance period was extended from one year to two years a number of years ago. This extension was because the development would normally take about two years to get to build out and many of the problems would arise in or be caused in the that two year period. It is my understanding that the developers complained a little when this extension was put in place but have calmed down since. During the period of time when the home builder(s) are constructing the homes, inspections to fmal a Certificate of Occupancy for a house include looking at the surrounding infrastructure for possible damage caused by the home builder (ie: broken curb, broken water meter installation, etc.). These types of deficiencies are required to be repaired and/or paid for prior to the issuance of the buildings Certificate of Occupancy. The Public Works Department works in conjunction with the Building Department at this time. In checking with other Cities and Counties, their standard maintenance periods are either one or two years. The one-year maintenance entities are the City of Winter Garden, Orange County, City of Kissimmee/Osceola County/Toho Water Authority, City of Apopka, Town of Oakland, and City of Winter Springs. The two-year maintenance entities are Seminole County and City of Ocoee. In talking with John Horan, of Foley & Lardner, he says there are no legal requirements for either option or to make or not to make the maintenance bond period any set length of time. The issue of lengthening the maintenance period to three years would be an economical question to be answered by developers. Does a developer want to pay more money for a longer maintenance period that would be passed into the house costs or does the developer choose to develop elsewhere where the maintenance period is less in length and cost. The option of not starting the two year maintenance period until after the last lot is constructed and the Certificate of Occupancy is issued would mean that the developer would be bonding the infrastructure for more than two years to possibly as long as possibly five years. Or in the case of some of the older subdivisions that finally seeing the remaining lots built on, that maintenance period could be ten or more years that the overall developer has to maintain. This option may be cost prohibitive. One of the concerns with this option would be that most overall site developers sell off the lots to home builders and only remains in the project until the maintenance period runs out and his obligation ends. As an addition, many of the develops are multi-phased and the City has gotten the developer to go back to previous phases or previous developments to repair deficiencies even after the two year maintenance period has run out. RECOMMENDATION Staff recommendation is to keep the maintenance period at two years at this time. However, staff would continue to monitor the issue and should the industry standard increase toward three years, then staff would bring back the change to the City's standards for Commission approval at that time.