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<br />" <br /> <br />. <br />~ <br /> <br />City of Centerville <br />Council Meetings <br />March 27, 2002 <br /> <br />Council Member Broussard Vickers commented that the surety bond is harder for the <br />City to draw on than the letter of credit. City Attorney Hoeft agreed and indicated he <br />would provide comments when Mr. Runkle was finished speaking. <br /> <br />Mr. Runkle indicated there are other mechanisms for ensuring compliance such as <br />holding up permits for the next phase until the current phase is completed to the City's <br />satisfaction. He then said that Ground Development is not asking for anything strange or <br />unusual but simply wants to be allowed to follow the City's own ordinance, <br /> <br />Mr. Runkle commented that he has an issue with the developer's agreement calling for a <br />two-year warranty period because he did not see anything in the ordinance that specified <br />two years. <br /> <br />Mr. Runkle pointed out a typographical error on Page 8, the figure $9,600 should be <br />$39,600. <br /> <br />City Attorney Hoeft explained that the developer's agreement was a document that was <br />discussed and negotiated at length with Mr. Hannah. He then said if the developer is no <br />longer in agreement with the document the document could be completely renegotiated. <br /> <br />City Attorney Hoeft explained that a letter of credit is easier for the City to draw upon <br />because the bank agrees to issue that amount of credit to the developer and the developer <br />authorizes the City to draw upon that for noncompliance. If it is necessary for the City to <br />draw upon those funds, the City contacts the bank and the funds are released whereas a <br />surety bond is issued by a bonding company that banks on the fact that it will not have to <br />payout and is very reluctant to do so, The City would end up in a costly legal process to <br />eventually obtain those funds. <br /> <br />City Attorney Hoeft indicated the matter is not as simple as saying I do not like the <br />wording of this document and asking that it be changed here and there. The document <br />was negotiated and agreed to by both parties and, if the other party does not like the <br />agreement, then the City would start negotiations over again. He also commented that <br />the number error referred to would not have an impact on the City because the dollar <br />amount is spelled out in a formula just prior to the error. <br /> <br />Mayor Swedberg asked whether Mr. Hannah had resigned from Ground Development. <br />Mr. Runkle indicated that he had, <br /> <br />Mayor Swedberg said he did not envy Mr. Runkle's position but said the City had <br />discussed the issues at length with Mr. Hannah and had come to agreement. <br /> <br />Mr. Runkle said he based his requests on his background in the public sector and feels he <br />should be able to use the ordinance requirement of a surety bond and does not think it <br />should be necessary to completely renegotiate the document for two items, He then <br />commented that the effect of what the letter of credit does compounds because Ground <br />Development is developing in other communities as well. <br /> <br />Page II of 18 <br />