Hartselle amends bond policy for developers
By Deangelo McDaniel
HARTSELLE — Calling it a move to be development friendly, a unanimous Planning Commission voted to change how the city handles performance bonds.
The amendment to the city's subdivision regulations will let developers request that Hartselle reduce their bonds as much as 80 percent, if work is completed.
"This will save developers a lot of money, especially when they go to the bank to renew bonds," said Jeff Johnson of the Department of Development.
If a developer has a $1 million bond, for example, banks typically charge 1 percent of the cost of the project.
"If we reduce the bond, that lowers the cost of the bond when it is renewed," said Johnson, who also serves on the Planning Commission.
"I support this because I think this is being friendly to development," commission member Larry Hannah said.
The developers of Ausley Bend, a mixed-use development on Ausley Bend Road, wasted no time in using the policy change.
They requested, and the commission agreed, to reduce their bond from $1.38 million to $276,880. Although the developers have less than $100,000 left on the project, the policy revision does not allow the commission to reduce any bond below 20 percent of its original value.
City Planner Jeremy Griffith said the city will not rubber stamp requests. After a developer submits a request in writing, he said, at least two city employees and the city engineer will make sure work is complete before making a recommendation to the commission.
"It won't be a big deal to calculate how much work has been done, and we will include in the request what needs to be completed," Johnson said.
Griffith said Hartselle Utilities, which handles the infrastructure part of developments, supports the change.
In response to a question from Councilman Bill Smelser, Griffith said developers must still post a security bond after the project is complete.
"This is essentially a 13-month warranty in case something goes wrong," he said. "It's typically street work that we worry about."
Until about six years ago, Hartselle allowed developers to reduce bonds. A former city planner, however, opposed reducing bonds because she thought it slowed developers from completing projects.
"We're going back to Hartselle's original concept, but the commission will have the final vote on any request," Johnson said.
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