BACKGROUND:
Tract No. 28639-1, a 261 residential lot subdivision named “Rio Vista”, was recorded in 2001.
Upon recording of Tract No. 28639-1, the developer posted bonds to insure that the public improvements would be completed in conformance with the California Subdivision Map Act. A portion of this subdivision was re-subdivided as Tract No. 32559, a 70-lot residential tract, in 2005. The subdividers of both tracts failed to complete the required public improvements in these subdivisions. In 2018, HPH Homebuilders 2000, L.P. (HPH), a subsidiary of the D. R.
Horton company, purchased a number of vacant lots in both subdivisions, their “Takedown #1”, intending to build and sell single family residences. In consideration of the issuance of building permits and obtaining final building inspections, HPH executed an Improvement Agreement (Agreement) with the City, dated July 12, 2019, in which it agreed to complete the missing public improvements in the portions of the two tracts being developed by HPH. This work included the completion of public streets and alleys, sewer and water mains, water and sewer services, utilities and the improvement of three (3) park lots.
The City Council approved this Agreement with HPH in August 2019, and HPH secured its performance of the Agreement by the posting of faithful performance, labor and material bonds, and a cash bond to guarantee completion of missing monuments and property corners.
In anticipation of HPH acquiring more lots in the two tracts, the Agreement included a provision allowing its amendment to add any additional construction of missing improvements.
In 2019, HPH purchased additional lots in both tracts, representing “Takedown #2”, and the Improvement Agreement was amended by the execution of Amendment No. 1, in which HPH took on the obligation of constructing additional public improvements on the streets and alleys in the locations of the Takedown #2 lots. HPH secured its performance of that work by the posting additional bonds and cash securities.
All the improvements as required by the Agreement and Amendment No. 1 have been satisfactorily completed, with the improvements ready to be certified and accepted, and the securities released.
DISCUSSION:
A Notice of Completion (NOC) has been prepared and will be filed by the Director of Engineering/Public Works upon approval of the attached Resolution, noting all improvements have been completed. No claims have been filed with the City against any of the posted securities. Upon adoption of the Resolution, the surety bonds guaranteeing faithful performance will be released. Pursuant to State law, the surety bonds guaranteeing payment for labor and materials posted with the Improvement Agreement will be released by the Director of Engineering/Public Works ninety (90) days after recordation of the Notice of Completion.
The developer has posted one-year warranty bonds to guarantee repair of any defects in materials or workmanship to the public improvements in the development. These warranty bonds will be released by the Director of Engineering one year after adoption of this Resolution Commented [KF1]: In the following
sentences you mention that both tracts failed to
complete the required public improvements, but
you do not state when those improvements were
required (year) or when they were due by (year).
Add that information here.
Commented [JC2R2]: Subdivision Map Act
stuff. The lots are recorded, and these
improvements were bonded. There is a long
history here where the developer defaulted.
There is a long history here that is not relevant to
what is intended in the Staff Report. I changed
the wording to be somewhat applicable to your
intent.
Commented [JC3R2]:
provided no claims have been filed or problems arise due to problems with materials or workmanship.
Lastly, all the required monuments have been set in development and the surveyor of record has submitted evidence he has been compensated for those services. Therefore, the cash securities for monuments can be released.
The securities from Westchester Fire Insurance Company posted by the developer with the original Improvement Agreement to be released are in accordance with the terms of the Improvement Agreement and outlined in the Resolution as follows:
For Faithful Performance: $ 1,224,400 Bond # K 15403846 For Labor and Materials: $ 612,200 Bond # K 15403846 For Monumentation: $ 30,000 Cash deposit The securities from Harco National Insurance Company posted by the developer with Amendment No. 1 to the original Improvement Agreement to be released are in accordance with the terms of the Improvement Agreement and outlined in the Resolution as follows:
For faithful performance: $ 2,228,500 Bond # 0775146 For labor and materials: $ 1,114,250 Bond # 0775146 For monumentation: $ 24,475 Cash deposit The Rio Vista master Covenants, Conditions and Restrictions (CC&Rs) provide for the local Homeowner’s Association (HOA) to perform the maintenance of the alleys and landscaped park lots improved by HPH. Therefore, only the public streets listed in the Resolution (portions of Rio Felicita, Rio Oso, Rio Vista, Rio Madre, Rio Largo, Rio Guadalupe, and Rio Naches) are being accepted into the City’s maintained street system, as well as Lot QQ, for storm drain purposes.
FISCAL IMPACT:
With the adoption of this Resolution, there will be minimal fiscal impact upon the City. The public alleys and park lots listed will be maintained by the Homeowner’s Association, and the public street maintenance will be absorbed into the normal maintenance duties of the Public Works Department.