§ 6.2. Guarantee of Public Improvements.

a.

Property Owner's Guarantee. Before approving the final plat of a subdivision located all or partially within the City or its extraterritorial jurisdiction, the City must be satisfied that all required public improvements have been (or soon will be) constructed in accordance with the approved engineering plans and with the requirements of this Ordinance.

b.

Improvement Agreement and Guarantee. At the time of construction plat approval, the City Council may waive the requirement that the applicant complete and dedicate all public improvements prior to approval of the final plat, and may permit the property owner to enter into an improvement agreement by which the property owner covenants to complete all required public improvements no later than two (2) years following the date upon which the final plat is approved. The City Council may also require the property owner to complete or dedicate some of the required public improvements prior to approval of the final plat, and to enter into an improvement agreement for completion of the remainder of the required improvements during such two-year period. The improvement agreement shall contain such other terms and conditions as are agreed to by the property owner and the City.

c.

Improvement Agreement Required for Oversize Reimbursement. The City shall require an improvement agreement pertaining to any public improvement for which the developer shall request reimbursement from the City for oversize costs. The City Council has the authority to authorize the approval of such agreement as meeting the requirements of the City, and the City shall not withhold approval as a means of avoiding compensation due under the terms of this Ordinance. The City Engineer (or designee) is authorized to sign an improvement agreement on behalf of the City.

d.

Security. Whenever the City permits an applicant to enter into an improvement agreement, it shall require the applicant to provide sufficient security, covering the completion of the public improvements. The security shall be in the form of cash escrow or, where authorized by the City, a performance bond or letter of credit or other security acceptable to the City Council and the City Attorney, as security for the promises contained in the improvement agreement. Security shall be in an amount equal to one hundred percent (100%) of the estimated cost of completion of the required public improvements and lot improvements. The issuer of any surety bond and letter of credit shall be subject to the approval of the City Engineer and the City Attorney.

e.

Performance Bond. If the City Council authorizes the applicant to post a performance bond as security for its promises contained in the improvement agreement, the performance bond shall comply with the following requirements:

1.

All performance bonds must be in the forms acceptable to the City Engineer and the City Attorney;

2.

All performance bonds must be executed by such sureties as are named in the current list of "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies", as published in Circular 570, as may be amended, by the Financial Management Service, Surety Bond Branch, U.S. Department of the Treasury;

3.

All performance bonds must be signed by an agent, and must be accompanied by a certified copy of the authority for him or her to act;

4.

All performance bonds shall be obtained from surety or insurance companies that are duly licensed or authorized in the State of Texas to issue performance bonds for the limits and coverage required.

If the surety on any performance bond furnished by the applicant is declared bankrupt, or becomes insolvent, or its right to do business is terminated in the State of Texas, or the surety ceases to meet the requirements listed in Circular 570, the developer shall, within twenty (20) calendar days thereafter, substitute another performance bond and surety, both of which must be acceptable to the City.

The City may withhold building permits, certificate or occupancy permits or utility connections until such improvements are completed or other surety is provided to the City.

f.

Letter of Credit. If the City Council authorizes the applicant to post a letter of credit as security for its promises contained in the improvement agreement, the letter of credit shall:

1.

Be irrevocable;

2.

Be for a term sufficient to cover the completion, maintenance and warranty periods, but in no event less than two (2) years;

3.

Require only that the City present the issuer with a sight draft and a certificate signed by an authorized representative of the City certifying to the City's right to draw funds under the letter of credit; and

4.

The warranty period for the work shall be for two years beyond the time required to complete the improvements.

g.

[Reduction in Original Security.] As portions of the public improvements are completed in accordance with the TCSS and the approved engineering plans, the applicant may make written application to the Municipal Development Department to reduce the amount of the original security. If the City is satisfied that such portion of the improvements has been completed in accordance with City standards, the City Manager may, but is not required to, cause the amount of the security to be reduced by such amount that he or she deems appropriate, so that the remaining amount of the security adequately insures the completion of the remaining public improvements.