Last week, the Warren County Commission approved revisions to the county’s subdivision regulations. However, the issue of holding developers financially accountable to complete their work in a difficult economy has yet to be resolved.
Dave Mick of the county engineer’s office was prepared to review the matter with county commissioners during its May 6 meeting, but the matter was tabled for a few weeks at the request of the Home Builders Association.
HBA officials want to review the proposed changes and develop a solution.
Mick said the HBA has agreed to most of the proposed changes except for the requirement of a cash bond or an escrow account for the uncompleted portions of the project.
“This is a sticking point with the Cincinnati HBA,” Mick said. “The Dayton HBA shrugged it off.”
Currently, developers have to put up a conventional bond greater than 130 percent of the development cost of items yet to be constructed, including the top course of asphalt on subdivision streets, or 20 percent of the total construction cost once 80 percent of the subdivision is built out.
However, the county wants cash bond for 130 percent of the cost of items yet to be constructed, plus a conventional bond for 20 percent of the total construction cost.
The cash bond would be released when those items are completed.
Among the other proposed changes are:
• To combine water and sewage bonds and street and sidewalk bonds into one bond;
• To accept surety bonds from companies rated A- or better as determined by A.M. Best Company;
• To keep letters of credit as an option but not as a primary form of surety; and
• To include a reference for townships in snow and ice agreements in the overall county security agreement with developers.
Mick said there are a number of financially troubled, incomplete subdivisions.
“Why not set aside the cash to put in the top course of asphalt and have it available if we needed it?” Mick asked. “The developers say they understand our point, but they’re getting crunched from everywhere.”
Betsey Kelly, director of government affairs for the Cincinnati HBA, said representatives of her organization plan to meet with county officials by the end of the month to come up with something that’s workable.
“Our main concern is that having the cash is hard to come by in these difficult economic times,” she said. “There are other methods of surety and cash could be left as an option. We’re open to consider any creative solutions the county and home builders can come up with.”
Kelly said other methods could be bonds or letters of credit.
“Cash doesn’t make sense because credit is so tight right now,” she said.
Mick said some developers have gone bankrupt, and cited the 21 Oaks subdivision in Hamilton Twp. as an example in which the county received $47,500 for uncompleted roadwork and another $6,160 for uncompleted waterline work. Mick said he hopes to get projects completed by the end of the construction season.
“Developers are trying to hang on in hope the economic recovery comes,” he said.
Contact this reporter at (513) 696-4504 or erichter@coxohio.com.
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