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Public Commenty ~ BRIGTHTON - ~ ~ ~ORPOR.ATION, .June 21,~201-1,p: ` - f It L~ ~i{ W . ~ -f 1 "~ ~; ~~ jf ,`~~.r ~G a ~~ ~ 'k i ~. ~~ ~ +i ~' VIA EMAIL P , Mayor,Tammy de Weerd ~ Meridian City Council ~ ' ~ -1 ;` , E . 'Meridian City Hall Meridian City Hall. ,~ I ~ -~' ~ 33 E. $r'oadway Avenue 33 E. Broadway Avenue, Suite 300 - ~ ~ , ~- Meridian, Idaho 83642 . Meridian, Idaho 83642 a - r mayortammy@meridianciry.org ~ bhoaglun@meridianciry.org, dzaremba@meridianciry.org, b; .i kbird@meridianciry.org do croundtree@meridiancity.org ' ~ ' , ,,. ~ ' '? °~ Dear Mayor andCouncil Members: 't °i' ~. i n ~ 1 The purpose of this letter is to request a remand to staff of the proposed"Performance and, ' u Warranty Surety for Public Infrastructure" ordinance, which the City plans to read and discuss in 1 . its City Council meeting tonight. Since I will be unable to attend the meeting, I am submitting ~ xhis letter with a partial list of my concerns with the proposed ordinance. ' `~ in the course of my business and. development career I have seldom been as displeased as I am. ' now about both the process and the content of this particular ordinance. Over the years I have ¢ ~ ~ i watched the City of Meridian grow from a small. town to a .major center of economic activity im ,, r the state andregian. You may remember a time, as~I do, when Meridian was viewed as a very difficultplace"to do business. That changed 'quickly and dramatically for the better with new political leadership that fostered a cooperative relationship with the business community. We ~ , , worked together to streamline processes; codes and even`'the customer service_approach of city ' a " a ' ~ personnel. Regrettably, I can t say the sa me for this p articular ordinance and. process.. If this ~ , r ordinance proceeds as written and on the timetable proposed I and many of my colleagues. will ~ '} ~ ~ -view this as a major step backward.for'the City. • ' ~; ' Regarding the process of the proposed ordinance, I,was invited along with several other + ~ .~ developers to participate in the City's development of the proposed ordinance. It is clear to me j _ ' now that the train had already left the station: In subsequent conversations witli`fell'ow ° ~ "I °' `... developers, none of us feel like our input was given any serious consideration After 2=3 `~" ~~ ~ ~ , meetings I was never advised of any course of action, never asked to review the ordinance, and never advised tfiat,the matter was scheduled for'hearing before Planning and Zoning. , With regard to the content of the ordiryance,'~I fully understand the City's"desire to protect itself ' from future problems or claims.. The ordinance, however, imposes an undue burden on -~ "' , businesses that may hamper economic `activity. We have consulted,with outside sources, ~ _ . including our own insurance company, Moreton & Company,-which is a large regional insurance ,~ • Brighton Corporation !2601 W. Explorer Drive, Suite 200, Boise,-Idaho 83713 ' www.briphtonco~.com Ted (208} 378-4000 Fax (208) 377-8962 ~~ 1` I ~, . .. .. a. ., a S ... -" ,~ _ ~ ~ + , -tontine+ed~-~ ~ ~, :r ' ~ a ,_ Mayor Tamnty'de Weerd - a ~ Meridian. City Council Me+nbers ~ ~ ' Page 2 ~ ~ t~ x ~ ' . a i; provider, to assist us. We have~suggested ways that we can aecomplish'the protection the City ~ ~ desires while avoiding undue burdetrs'°on the business community. Our.independent sources in ' , ' the insurance industry, including one that the City has also consulted, have told us, yes, we think -' ~ a ' ~ i some alEernative approaches can work. But each suggestion seems to be summarily rejected by ~ r' the City without being fully explored or even the most practical_of_questions being asked.. There ! may even be solutions that none of us have considered. .. _ ~ j ' The issue is somewhat c'omplex,and I frankly don't believe that I can adequately address it in a • . -letter or` public. testimony: ,For that reason, along with the concerns that I have raised about the ~ process, I request that you •remand this item back to staff with direction to come up with ~. I ~, solutions that are acceptable to the City and the development community:~I have alwa s tried to a f: ~ y give of my time and"other. resources when askedto help the City. I ask for your consideration of a~ , .this request in return. i ;k ~ ~ ~ Since ~ ly, '~ ~ ~ d ~ ' 4 + .David urnbull ~ , ` k . ' j k s 4 - ~ President ' ~~ I .,_,~ ~ o r -~ - ~ ~ ~ ~ ~ - ,. :r ,~ ,a ' a ~• s S:. ry V 1 ...iii J Y! ~ ~ .. ~ w + d ~ .. - _ r G,. ~ , .r .. c -r `.. y .. aL , 3 i r _ k. a a: f w Y d ` .. . « r ~ ~ . ~ ,_ ~ i _, r v ~ ~ . - .. - ~ 7 , :~ ~~ t ~~ ' .~ ~ ~'~ -. - _~~ ~ j ~ ~+ a • ~I W.H. MOORE C O M P A N Y Real Estate Development EI Dorado Business Campus 1940 S. Bonito Way, Suite 160 Meridian, Idaho 83642 P.O. Box 8204 Boise, Idaho 83101-2204 Date: June 28, 2011 To: Bruce Freckleton, Development Services Manager Meridian Public Works From: Jonathan R. Seel Subject: Warranty and Performance Surety Proposal TELEPHONE (2081323-19191 FAX 323-1523 We support the building department's recommendation to allow bonding as a surety option for development projects in Meridian. Currently, surety options are cash or irrevocable letters of credit. The former takes needed cash and the latter reduces lending limits. Simply put, both impact a developer's ability to fund a proj ect. The criteria for financing proj ects has only gotten more challenging and the current surety requirements only add to that burden, regardless of the developer's financial strength. Bonding has the advantage of providing the City with necessary protection while not reducing needed funds to develop a proj ect. In today's economic environment a developer needs to preserve their capital and bonding allows this. CAPITAL DEVELOPMEIITT, Inc. June 7, 2011 Mayor Tammy de Weerd Meridian City Council Members 33 E. Broadway Avenue Meridian, Idaho 83642 Re: Warranty and Performance Surety Thank you for the opportunity to comment on your proposed changes to Warranty and Performance Surety. As you gave me the opportunity to participate in the workgroup, I gained a greater understanding as to the challenge facing the City of Meridian. However, it was very apparent to me that the City's staff had an agenda and really did not listen to many of the comments made by the development community. Though a few items were considered, the most important concerns and solutions were not. The magnitude and timing of these changes are frankly too much for this industry to bear at this .time. Personally, the greatest challenge that I see is the requirement of warranty surety from-the developer. Many developers that do business in your City, including ours, simply cannot afford the added cost at this time and/or do not carry sufficient staff to implement this change. As I understand., the contractors doing the work can already provide such a bond, as is the case when doing work private development work with the Ada County Highway :District. I am opposed to requiring developers to provide a warranty. In my reading of the City's report, though the City sought benchmark data from cities in the region, it appears that the City has selected the highest standard in some of the cases for this proposal. For example, it appears very few cities require a warranty greater than one year, however the City is proposing to extend the warranty period to two years. I think an additional inspection prior to the warranty expiration makes sense, however, I am opposed to extending the warranty period for more than one year. Lastly, I am opposed to the City increasing the performance bond percentage to 125 percent of costs. We recognize in ahigh-inflation environment, an increase in the performance surety percentage could be necessary to protect the City. However, in today's environment, costs are stable and I do not believe the City has shown sufficient rationale to justify this change in today's envirorunent. I believe this proposal does not solve the City's potential problems with existing development, but rather it adds cost to future developments with the hope to minimize future problems for the City. It is my opinion that the warranty problems facing the City today are a direct result of developments built during the housing bubble, and no one anticipates this 6200 North Meeker Pface Boise, Idaho 83713 Office: (208) 377-3939 Fax: (208) 375-3271 type of growth in the future. Though some of the proposed changes have some merit, I have great concerns with other portions of the proposal. I believe the added cost and burden to the development community from some of these proposed changes outweigh the limited benefit the City may receive. I recognize that some of the proposed changes may help reduce some problems in the future, but they do not guarantee the City will never have problems. I respectfully request the City not approve this proposal at this time. Specifically, the three major concerns are: 1) extending the warranty period, 2) requiring the developer to provide a warranty surety, and 3) increasing the performance surety percentage to 125 percent. As to the other proposed changes that will result in an increase in the cost of doing business, I stated in the focus group meetings, I ask that you consider phasing these changes over time so that the costs can be accepted in an improved, more normal housing market. Again, I appreciate your consideration of my continents and I am hopeful that I can continue to do business in your city in the future. (Sincerely, Dave Yorgason Vice President Page 1 of 2 Jacy Jones From: .Peggy Gardner Sent: Monday, June 13, 2011 3:51 PM To: '8305048@gmail.com'; Jaycee Holman; Jacy Jones Cc: mayortammy; Charlie Rountree; David Zaremba; Brad Hoaglun; Keith Bird Subject: RE: Increased Development Bonding Requirements Dear Mr. Centers, Your comments have been received by the Mayor's Office. Thank you for taking time to write of your concerns. Because this will be heard by City Council, the Mayor is unable to respond outside the public meeting. I also forwarded your comments to our City Clerk to be included in the public record. Thanks again, Peggy Gardner Ad ministrative Assistant to Mayor Tammy de Weerd City of Meridian 33 East Broad way Aven ue Meridian, ID 83642 Phone 489-0529 From: meridian_appsClmeridiancity.org [mailto:meridian_apps~meridiancity.org] Sent: Saturday, June 11, 20114:02 PM To: Tammy de weerd; Charlie Rountree; David Zaremba; Keith Bird; Brad Hoaglun; Peggy Gardner Subject: Increased Development Bonding Requirements Request for Mayor and Council Name Jake Centers Last Name Centers Email Addr 8305048@gmail.com ess Street Address 1979 N Locust Grove City Meridian State ID Zip Code 83646 Increased S Development ub~ ect Bonding Requirements Message . RE: Increased Development Bonding Requirements Dear Mayor and Council Members, We have just gone through a once in a lifetime event that will, most likely, not occur again. We do not see the need to forever burden the companies that weathered the storm, and did the right thing, with these additional expenses. Because 6/13/2011 Page 2 of 2 this was never a problem in the past and very likely will not be in the future, I am opposed to the proposal: ?Requiring developers to provide a warranty bond when the sub-contractors that perform the work already provide it. ? To extend the warran . tY period to two years. ?Increasing the performance bond percentage to 125 percent of costs. We do not need to create additional costs and bureaucracy for aone-time event. If this continues to be a problem, then we would most certainly revisit the issue. Thank you for your attention. Sincerely, Jake Centers Tahoe Homes, LLC 6/13/2011 Page 1 of 2 Jacy Jones Subject: RE: Increased Development Bonding Requirements Dear Ms. Kelly, I believe this information also came through our online system. This is the response sent to Mr. Centers. Dear Mr. Centers, Your comments have been received by the Mayor's Office. Thank you for taking time to write of your concerns. Because this will be heard by City Council, the Mayor is unable to respond outside the public meeting. I also forwarded your comments to our City Clerk to be included in the public record. Pegg y Gard ner Administrative Assistant to Mayor Tarnmy de Weerd City of Meridian 33 East Broad way A ven ue Meridian, ID 83642 Phone 489.0529 From: Amy Kelly [mailto:8305048 a~ gmail.com] Sent: Saturday, June 11, 20114;03 PM To: mayortammy Subject; Increased Development Bonding Requirements RE: Increased Development Bonding Requirements Dear Mayor, We have just gone through a once in a lifetime event that will, most like) ,not occur y again, We do not see the need to forever burden the companies that weathered the storm, and did the right thing, with these additional expenses. Because this was never a problem in the past and very likely will not be in the future I am opposed to the proposal: . Requiring developers to provide a warranty bond when the sub- contractors that perform the work already provide it. • To extend the warranty period to two years. • Increasing the performance bond percentage to 125 percent of costs. 6/14/2011 Page 2 of 2 We do not need to create additional costs and bureaucrac for cone-time even ' Y t. If this ~ continues to be a problem, then we would most certainly revisit the issue. Thank you for your attention. Sincerely, Jake Centers Tahoe Homes, LLC 6/14/2011 ~~ CAPITAL DEVELOPMENT, Inc. June 7, 2011 Mayor Tammy de Weerd~ Meridian City Council Members 33 E. Broadway Avenue Meridian, Idaho 83 642 Re: warranty and Performance Surety Thank you for the opportunity to comment on your proposed changes to Warranty and Performance Surety. As you gave me the opportunity to participate in the workgrou , I .. .p . gained a greater understanding as to the challenge facing the City of Meridian. However, it was very apparent to me that the City's staff had an ,agenda and really did not listen to man y of the comments made by the development community. Though a few items were considered, the most important concerns and solutions were not. The ma nitude and. timin g g of these changes are frankly too much for this industry to bear at this .time. Personally, the greatest challenge that I see is the requirement of warrant Buret from the y Y ~ developer. Many developers that do business in your City, including ours, simply cannot afford the added cost at this time and/or do not carry sufficient staff to im lement this P change. As I understand., the contractors doing the work can already provide such a bond, as is the case when doing work private development work with the Ada Count Hi hwa Y g Y District. I am opposed to requiring developers to provide a warranty. In my reading of the City's report, though. the City sou ht benchmark data from cities in the g region, it appears that the City has selected the highest standard in some of the cases for this proposal. For example, it appears very few cities .require a warranty greater than one ear, . ~ y however the Clty 1s proposing to extend the warranty period to two years. I think an additional inspection prior to the,warranfiy expiration makes sense, however I am o osed to Ap .extending the warranty period for more than one year. Lastly, I am opposed to the City increasing the performance bond ercenta e to 125 ercent p g p of costs. We recognize in ahigh-inflation environment, an increase in the performance surety percentage could be necessary to protect the City. However, in toda 's environment Y costs are stable and I do not believe the City has shown sufficient rationale to justify this change in today's environment. I believe this proposal does not solve the City's potential problems with existing development, but rather it adds cost to future developments with the hope to minimize future problems for the City. It is my opinion that the warranty problems facia the Cit toda are g Y y a direct result of developments built during the housing bubble, and no one anticipates this ~'"'~ 6200 iVorth M~e~cer Piace poise, idaf~a 83? 13 C~ffice~ (208} 3??-3939 i=ax~ (2a8} 375-327 ~ type of growth in the future. Though some of the proposed changes have some merit, I have ~. great concerns with other portions of the proposal. I believe the added cost and burden to the development community from some of these pro osed chan es outwei h the limited benefit p g g the City may receive. I recognize that some of the proposed changes may help reduce some problems in the future, but they do not guarantee the City will never have problems. I respectfully request the City not approve this proposal at this time. Specifically, the three maj or concerns are; 1 }extending the warranty period, 2} requiring the developer to provide a warranty surety, and 3}increasing the performance surety percentage to 125 percent. As to the other proposed changes that will result in an increase in the cost of doin business I g stated in the focus group meetings, I ask that you consider phasing these changes over time so that the costs can be accepted in an improved, more normal housing market. Again, I appreciate your consideration of my comments and I am hopeful that I can continue to do business in your city in the future. lncerely, ~r ~~ ~~: ~~~ Dave Yorgason Vice President Comments on Warranty and Perfomance Surety Page 1 of 1 Jacy Jones From: Sonya Watters Sent: Wednesday, June 08, 2011 10:04 AM To: Machelle Hill; Jaycee Holman; Jacy Jones Subject: FW: Comments on Warranty and Perfomance Surety Attachments: warranty surety Itr to City Meridian.pdf Sorry....hit reply From: Dave Yorgason [mailto:dyorgason@cableone.net] Sent; Wednesday, June 08, 20119:31 AM To; Peter Friedman; Sonya Wafters Cc: Anna Canning Subject: Comments on Warranty and Perfomance Surety Pete and Sonya, I understand the City of Meridian is working on a change to its Warranty and Performance Surety policy. As I will be out of town on the 14th of June, I am hopeful that you can please forward the attached comments to the Mayor, Council and others prior to the upcoming meetings that are set to discuss this. I wish I could be there in person to express these comments as I realize the importance of this change. Unfortunately that is not possible. Thank you for your help. Sincerely, Dave Yorgason 6/13/2011 ~~i~E IDIAN~- Public ~ D A H O Works Department T0: Mayor Tammy de Weerd Members of the City Council FROM: Tom Barry, Director of Public Works CC: Bill Nary, City Attorney Anna Canning, Planning Director DATE: June 16, 2011 SUBJECT: Private Development Surety Evaluation and Proposal Mayor Tammy de Weerd Ci~y Coun~~l Membexs~ Keith Bird Brad Hoaglun Charles Rountree David Zaremba The public hearings for the proposed modifications to the City's current private development surety program (one for UDC changes and one for ordinance establishment} have been scheduled fortune 21st. These hearings represent the culmination of nearly 10 months of work, constituting more than 30 meetings with a wide variety of City representatives, specialists from the bonding, insurance, and legal fields, developers, builders, and elected officials. In preparation of these public hearings, please find attached the following documents: 1} the framework proposal detailing the recommended changes to our surety program previously distributed on April 7, 2011} Attachment A} 2} a description of the various types of sureties and their advantages/disadvantages Attachment B) I know that this information was shared with you in previous meetings and presentations, however, as a courtesy, I wanted you to have one complete packet of information for the hearings. You should also receive by separate transmittal from the City Clerk the following documents which are intricately related to this work: 1} From the Planning Department: a Planning Department Staff Report detailing the UDC text amendments and the Planning Commission's formal recommendation on those amendments 2} From the ~e~al Department: the proposed ordinance enabling the recommended changes Thank you for your time and consideration on this important issue. I and the team look forward to discussing this proposal with you next week. Please let me know if you have any questions, comments, or concerns in the interim.