June 12, 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 Regional Planning Commission Monday night held a public hearing during its regular monthly meeting 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. Following the public hearing the planning commission took no action but may revisit the issue again possibly next month.
During Monday night’s meeting, Tommy Lee, Deputy Director of the Upper Cumberland Development District, who serves as UCDD staff planner and advisor to DeKalb County, explained what the county currently accepts regarding surety instruments and the options available should the planning commission decide to amend the regulations.
“At the beginning of the year we had talked about reviewing the types of surety instruments that we accept in lieu of improvements or if we want to continue to accept surety instruments in lieu of improvements. We can leave it the way it is or we can decide to change it,” said Lee. “Currently we do 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 City of Smithville recently eliminated surety instruments. They don’t accept surety instruments anymore,” said Lee. “They (City of Smithville) ran into an issue where a gentleman sold a development before it was completely installed and then it slipped through the cracks somehow. It ended up getting built out the right way, but it could have ended up in disaster. That’s what led them (City of Smithville) to do this,” said Lee.
“White County where I am also the planner for, went down to only irrevocable letters of credit from a bank within 50 miles of the courthouse with an automatic renewal date. They went down to a letter of credit, but it renews every year unless they release it,” Lee continued.
“No matter what we do, we should put it in our regulations that sureties cannot have an expiration date and if they (developers) can’t get a surety without an expiration date we don’t need (can’t accept) their surety,” said Lee.
“I’ll bring you a copy of what White County has passed. You can see that and if you don’t like that you can go from there, Lee concluded.
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.
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 Fire Chief Donny Green first addressed both the planning commission and the county commission last fall with concerns. According to Chief Green, DeKalb County has grown in recent years with new residential developments, especially around the lake but with it has come rising worries about adequate infrastructure access to these subdivisions. Among the issues is fire truck and ambulance access to developments in the event of a fire or some other emergency because of many narrow and steep county roads leading to them. Water line infrastructure is also an issue in some places causing concerns about sufficient water pressure to fight a fire. Chief Green said his intention in raising this matter was not to point fingers at anyone, any developer, or any public official but to merely bring awareness to what appears to be a growing public service and public safety concern and to find ways to mitigate it going forward working with the planning commission and county commission.
While the amended regulations, adopted in April, now apply to any new developments going forward prior to final subdivision plat approval, Lee said 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 adopted in April state as follows:
“The following conditions shall apply to developments containing five (5) lots or more:
1.All lots must be served by a public water source.
2. All lots must be located within 1,000 feet of a fire hydrant installed on at least a 6″ water line, or a credited alternate water supply site (per ISO standards)
3.All roads public, private, or county owned must provide access to the proposed development from the nearest state route with a surface of at least double surface (chip and shoot) paving. These access roads shall have a surface width of at least nineteen (19) feet, and none shall have a grade of more than ten (10) percent. Any access road that does not meet these requirements shall be brought up to these standards at the cost of the developer. Plat shall not be approved until these standards have been achieved and the DeKalb County Road Supervisor has inspected and approved access roads and the roads of the development.
4. The DeKalb County Fire Chief shall give a recommendation for each plat by signatory line on the final plat, before Planning Commission approval, acknowledging proper access for emergency vehicles and adequate water supply is available for fire suppression for each new development.
5. A common mailbox area must be approved by the United States Postal services for all proposed roads within the development”.
Members of the Planning Commission are Rick Cantrell (citizen member), Danny Pirtle (citizen member), Harold Bain (citizen member), Alan Webb (citizen member), Jack Barton (citizen member), Beth Pafford (County Commissioner), Greg Matthews (County Commissioner), Andy Pack (County Commissioner), and Jeff Barnes (County Commissioner).