#2 Directing Kennedy Homes to install sidewalks (File Res. #2009-587)
ADMINISTRATIVE SERVICES MEMORANDUM
March 18, 2009
TO: City Council
FROM: Jacob J. Winzenz, Director of Administrative Services
SUBJECT: Action on a Proposed Resolution Directing Kennedy Homes to
Install Sidewalks at the Ridges of Rock County (File Res. 2009-
587)
Summary
On July 10, 2006, the City Council approved the final plat of the Ridges of Rock
County Plat Number 1 being developed by Kennedy Homes, and on August, 14,
2006, the City Council accepted the Waiver of Special Assessment notices. To
guarantee the construction of the sidewalks Kennedy Home paid 15% of the
sidewalk assessment in cash and provided a bond for the remaining 85% of the
assessment. The sidewalks have not yet been installed and Kennedy Homes is
facing financial difficulties making it unlikely they will proceed with this
development. In order to collect on the bond guaranteeing the remaining 85% of
the sidewalk assessments, the City Council must, by resolution, direct Kennedy
Homes to install sidewalks in The Ridges of Rock County.
Staff Recommendation
In order to guarantee that sidewalks will be constructed in accordance with the
approved plat, staff recommends that the City Council draw on the performance
bond by ordering Kennedy Homes to install the sidewalks as required.
Suggested Motion
Move to adopt File Resolution 2009-587
Background
On July 10, 2006, the City Council approved the final plat of the Ridges of Rock
County Plat Number 1 being developed by Kennedy Homes, and on August, 14,
2006, the City Council accepted the Waiver of Special Assessment notices. Due
to the scale of this development many of our traditional development and
assessment practices were modified through a development agreement. As part
of this development agreement Kennedy Homes agreed to install and construct
the sidewalks themselves. To guarantee the construction of the sidewalks
Kennedy Home paid 15% of the sidewalk assessment in cash and provided a
bond for the remaining 85% of the assessment. The total sidewalk assessment
for this development was $$770,400.00. The sidewalks have not yet been
installed and Kennedy Homes is facing financial difficulties making it unlikely they
will proceed with this development or install sidewalks in accordance with the
agreement.
Under our traditional development practices the developer would have been
required to pay 100% of the sidewalk assessment when the plat was recorded.
Sidewalks would then have been constructed either by the property owner or by
the City. The sidewalk assessments collected at the time of platting would then
be used to either reimburse the property owner, or pay the City costs of hiring a
contractor. This practice assures that funding is available to construct planned
sidewalks in new developments eliminating problems associated with later
assessments.
Analysis
Approval of File Resolution 2009-587 finds that Kennedy Homes has failed to
install or pay for sidewalks in accordance with their agreement and directs that
such sidewalks be installed. This will allow the City to collect on the performance
bond which serves as the financial guarantee for the construction of the
sidewalks. Since very few homes have been constructed in this subdivision, it is
our position that the Guarantor shall deposit with the City the funds necessary to
pay for the future construction of the sidewalks.
If we do not draw on this performance bond, sidewalks may still be installed in
the future in accordance with the plat, however, property owners would need to
be assessed for the improvements. This is the situation past City Councils have
tried to avoid by requiring that sidewalk assessments be paid by the developer at
the time the plat is recorded. This will once again raise the issue of the ability of
individual property owners to pay the sidewalk assessment.
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RESOLUTION NO. 2009–587
A RESOLUTION DIRECTING KENNEDY HOMES TO INSTALL SIDEWALKS AT THE RIDGES OF ROCK COUNTY
SUBDIVISION AND CALLING FOR PAYMENT UNDER A PERFORMANCE BOND UPON KENNEDY’S FAILURE TO
DO SO.
WHEREAS, Kennedy Homes II Limited Partnership, is an Illinois Limited Partnership,
conducting its principal business at 14 Executive Court, South Barrington, IL 60010
(“Kennedy Homes”); and
WHEREAS, Kennedy Homes duly executed and filed a certain Waiver of Special
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Assessment Notices, dated the 7 day of August, 2006, pursuant to Wis. Stats. §§ 66.0703
and 66.0703(7)(b) for the installation of public sidewalks in Kennedy Homes The Ridges of
Rock County Subdivision; and
WHEREAS, Kennedy Homes, as part and condition of the Janesville Plan Commission
and Common Council Subdivision, Land Division, and plat review and approval process,
promised to install the sidewalks; and
WHEREAS, this promise was also set forth and agreed to by Kennedy Homes in the
Engineering Plans for the Ridges of Rock County (“Plans”); and
WHEREAS, to guarantee and insure the sidewalk installation, Kennedy Homes
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provided to the City of Janesville, “Obligee,” a certain Subdivision Bond, dated the 3 day of
August, 2006, in the face amount of One Million Four Thousand Eight Hundred Forty and
00/100 Dollars ($1,004,840.00) (”Bond”), issued by Surety Lexon Insurance Company, an
Illinois Corporation (“Lexon”); and
WHEREAS, In the Bond, Kennedy Homes, the “Principal” on the Bond, by Kennedy
Construction, Inc., its general contractor, “has agreed to construct in Ridges of Rock County,
Phase 1, in the City of Janesville, the following improvements: grading and sidewalks
described in the Engineering Plans for Ridges of Rock County, prepared by Combs and
Associates and last revision dated June 2, 2006, a copy of said plans and specifications are
on file with the City Engineer and marked Ridges of Rock County; and
WHEREAS, the Bond provides that if Kennedy Homes fails to grade and construct the
sidewalks, Lexon shall pay to the City the cost of such construction and shall save the
Obligee, City, harmless from any loss, cost or damage by reason of [Kennedy’s] failure to
complete said work; and
WHEREAS, the Bond further provides in part: “… and the Surety, upon receipt of a
resolution of the City Council indicating that the improvements have not been well and truly
installed, completed, or paid for, within the time provided, will, at the option of the City,
complete the improvements or pay to the Obligee such amount up to the principal amount of
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this Bond which will allow the Obligee to compete the improvement or pay the person who
has completed the improvement”; and
WHEREAS, Kennedy Homes has failed to perform the grading and sidewalk
construction the Ridges of Rock County, under the Bond, the Plan, or the Plat; and
WHEREAS, Kennedy Homes, upon information and belief, has abandoned the Ridges
of Rock County, does not plan to grade or install the sidewalks, and has no intent to do so;
and
WHEREAS, this project dates back to 2006 and more than a reasonable period of time
has elapsed without performance or compliance by Kennedy Homes; and
WHEREAS, this Resolution is in the best interest of, and benefit to, the City,
Community, and its taxpayers, as well as future owners of lots in The Ridges of Rock County.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Janesville, as follows:
1. Each and every of the above recitals is hereby reiterated, restated, and
incorporated herein as it fully set forth verbatim; and
2. Kennedy Homes is hereby directed to fully, completely, and in strict accord with
City standards and directives, forthwith grade and install all sidewalks in The Ridges of Rock
County, as set forth in the Plan, the Plat, and the Bond no later than noon on August 18,
2009; and
3. This writing constitutes the notice to the Surety of the Resolution, and the
“Resolution of the City Council indicating that the improvements have not been well and truly
installed, completed, or paid for, within the time provided [by Kennedy Homes and the Surety,
who], will, at the option of the City, complete the improvements or pay to the Obligee such
amount up to the principal amount of this Bond which will allow the Obligee to complete the
improvement or pay the person who has completed the improvement”; and
4. The Resolution satisfies all conditions precedent for performance by Kennedy
Homes and Lexon under the Bond; and
5. The City Administration is hereby directed to forthwith proceed expeditiously and
diligently to take all actions and efforts necessary and/or desirable, as the City Manager
and/or his designee(s) in his/their sole judgment and discretion, from time to time and at any
time, may determine or decide, to recover all amounts due to the City from the Surety under
the Bond; and
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BE IT FURTHER RESOLVED, that the City Manager and his designee(s), on behalf of
the City of Janesville, is/are hereby jointly and severally authorized and empowered to
negotiate, draft, review, revise, modify, amend, execute, enter into, file and/or record
additional agreements, amendments, documents and letters of understanding concerning this
matter, and to take whatever additional other actions that the City Manager may determine in
his sole discretion, from time to time and at any time, necessary and/or desirable in the public
interest to effectuate the intent of this Resolution without the necessity for any additional
review or authorization by the Common Council.
ADOPTED: Motion by:
Second by:
Councilmember Aye Nay Pass Absent
APPROVED:
Brunner
Eric J. Levitt, City Manager
Loasching
McDonald
ATTEST:
Rashkin
Steeber
Truman
Jean Ann Wulf, City Clerk-Treasurer
Voskuil
APPROVED AS TO FORM:
City Attorney
Proposed by: City Clerk-Treasurer and Engineering Divisions
Prepared: City Attorney Wald Klimczyk
Shared/Kennedy Homes Lexon Resolution.doc.docx
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