| | | | | | | |  | ITEM 5.
Community Development - Consent |
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| | | | | | | | | DATE: | December 7, 2021
| | DEPARTMENT: | Community Development
| | REQUESTER: | David Loveland
| | TITLE: | Approve Interlocal Agreement with Babcock ISD Regarding Infrastructure Bonding |
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| | | | | | | | | I. | MOTION REQUESTED | | | A) Approve the execution of an interlocal agreement with the Babcock Ranch Community Independent Special District providing for a waiver of bonds for construction of required infrastructure, landscaping and conservation area improvements with the provision of alternate financial assurance.
B) Authorize the Chairman to sign the agreement on behalf of the Board of County Commissioners.
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| | | | | | | | | II. | ITEM SUMMARY | | | Provides a mechanism for the Babcock Ranch Community Independent Special District (Babcock ISD) to provide an alternative form of financial assurance to ensure the completion of specified infrastructure improvements with each subdivision plat. The alternative surety would substitute for a standard bond as allowed in Sec.10-154(26) of the County’s Land Development Code and Administrative Code AC-13-19. The Babcock ISD was established by the Florida Legislature to construct improvements within Babcock Ranch including roads, surface water management systems, landscaping, utilities, conservation areas and plat monumentation, and has the authority to borrow money and issue bonds, certificates, warrants, notes or other forms of indebtedness, and levy taxes and assessments and enforce fees and other user charges as a means to pay for the improvements. The Babcock ISD has a similar arrangement with Charlotte County. |
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| | | | | | | | | III. | BACKGROUND AND IMPLICATIONS OF ACTION |
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| | | | | | | | | | A) | Board Action and Other History | | | |
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| | | | | | | | | | D) | Analysis | | | | Lee County Bonding Requirements
Lee County has a construction bond requirement for infrastructure and other improvements required in conjunction with a subdivision plat in order to make sure funds are available to complete the improvements in the event the entity developing the land and constructing the improvements is unable to complete them. Section 10-154 of the Lee County Land Development Code identifies additional required submittals for development orders. Subsection (26) reads as follows:
Assurance of completion of improvements. Assurance of completion of the development improvements as specified in this section will be required for all off-site improvements prior to commencing any off-site or on-site development. Assurance of completion of the development improvements for on-site subdivision improvements will be required prior to the acceptance of the subdivision plat. Those on-site subdivision improvements that have been constructed, inspected and approved by the Director of Development Services through the issuance of a certificate of compliance may be excluded from the requirements of this section.
a. Surety or cash performance bond. Security in the form of a surety or cash performance bond must be posted with the Board and made payable to the County in an amount equal to 110 percent of the full cost of installing the required improvements approved by the County. If the proposed improvement will not be constructed within one year of issuance of the final development order, the amount of the surety or cash performance bond must be increased by ten percent compounded for each year of the life of the surety or bond. Alternatively, the surety or cash performance bond may be renewed annually at 110 percent of the cost of completing the remaining required improvements if approved by the Director. Prior to acceptance, bonds must be reviewed and approved by the County Attorney’s Office. Surety instruments will be reviewed and approved in accord with the provisions set forth in Administrative Code 13-19.
b. Other types of security. The Board may accept letters of credit or escrow account agreements or other forms of security provided that the reasons for not obtaining the bond are stated and the County Attorney approves the document. Review and approval of surety instruments will be in accord with the guidelines set forth in Administrative Code 13-19.
County Administrative Code AC-13-19 outlines the technical requirements for plat approval, and subsection L explains the infrastructure surety requirements. It is worth noting that collecting on a construction bond to complete required improvements is typically a time-consuming process involving litigation against third party sureties, with all the unknowns and costs that go with that process.
Babcock Ranch Community Independent Special District Authority
The Babcock Ranch Community Independent Special District (Babcock ISD) was established via special act of the Florida Legislature for the purpose of planning, financing, installing, operating, and/or maintaining certain infrastructure, including roads, surface water management systems, landscaping, utilities, conservation areas, and plat monumentation within the Babcock Ranch property. The Babcock ISD was given the authority to borrow money and issue bonds and other financing instruments, to levy taxes and assessments on the properties within Babcock Ranch, and to charge, collect and enforce fees and other user charges.
Given that the Babcock ISD is a public governmental body and uses bonds to fund some of its infrastructure, and can issue additional bonds and assess lands within its boundaries, the ISD requested the ability to pledge its capabilities to ensure the completion of certain infrastructure in lieu of providing separate bonds to the County, and thereby allow County acceptance of plats requiring those improvements. The attached agreement establishes the process for the ISD to make alternative financial assurances for the construction of needed infrastructure improvements in lieu of bonds, similar to an arrangement already in place in Charlotte County. The Lee County Attorneys Office has reviewed the agreement and determined that the proposed alternative assurances and commitments of the ISD would meet the security requirements outlined in County codes. |
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| | | | | | | | | | A) | Current year dollar amount of item:
| No funding required. | | | B) | Is this item approved in the current budget? | N/A | | | C) | Is this a revenue or expense item? | N/A | | | D) | Is this Discretionary or Mandatory? | N/A | | | E) | Will this item impact future budgets?
If yes, please include reasons in III(D) above.
| No | | | F) | Fund:
Program:
Project:
Account Strings: | | | G) | Fund Type? | N/A | | | H) | Comments:
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| REVIEWERS: | | Department | Reviewer | Action | Date | | Community Development | Loveland, David | Approved | 11/17/2021 - 11:16 AM | | Budget Services | Henkel, Anne | Approved | 11/18/2021 - 6:53 AM | | Budget Services | Winton, Peter | Approved | 11/18/2021 - 11:30 AM | | County Attorney | Jacob, Michael D. | Approved | 11/18/2021 - 12:52 PM | | County Manager | Salyer, Glen | Approved | 11/19/2021 - 8:41 AM |
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