Financial Guarantees

This time of year requires the monitoring and renewing or closing out of the City held financial guarantees. City ordinances state that a subdivider may be required to enter into a developer's agreement and submit a financial guarantee that meets the requirements of City Code.
The Council has required most subdividers to install any public improvements needed for the new development at their cost and pay other City incurred costs associated with the development. To ensure construction to City standards and payment, the subdivider is required to execute a developer's agreement with the City and post a surety bond to ensure that the developer will make those improvements and pay the costs within a reasonable time and manner.
The development agreement may also spell out any additional requirements that the Council has determined that the subdivider is responsible for making, including alterations to any existing road ways and utilities serving the subdivision, provided the Council can find a rational relationship between the alterations and the subdivision.
The Performance Guarantee and Surety is designed to allow the City to complete the construction, repairing, replacing or installing of any required improvements, and cover any other costs associated with the performance of any other requirements in the developer’s agreement at the subdivider’s cost.
The amount of the Performance Guarantee and Surety is based, in part, on the estimated value of the public improvements at the time of approval of the subdivision. The amount is also designed to insure the City can gain access to adequate funds to satisfactory complete construction, installation, and dedication of any uncompleted or improperly constructed portions of the required improvements, as well as the satisfactory performance of any other requirements under the developer’s agreement.
The developer’s agreement is drafted by the City Attorney with consultation from the City Manager, Public Works Director, and the City’s consulting engineer, and upon final negotiations between the City Manager and developer. The form of the Performance Guarantee and Surety can be in the form of bonds or letters of credit, or assignments of certificates of deposit, as drafted by the City Attorney, upon consultation with the City Manager. The City requires the surety bonds and letters of credit to be issued by companies or financial institutions authorized and licensed to do business in the State of Wisconsin.