|
|
|
|
|
|
|
|
|
|
|
TO: |
Mayor and Members of Council |
|
|
|
|
FROM: |
Alan Brown, Director of
Engineering |
|
|
|
|
PREPARED BY: |
Phil Watts Manager of Development Engineering Kevin Young, Manager of Municipal
Inspections |
|
|
|
|
DATE OF MEETING: |
2003-Feb-18 |
|
|
|
|
SUBJECT: |
Policy - Master Letter of Credit for Public Works |
|
|
|
RECOMMENDATION:
That the report entitled “Master Letter of
Credit for Public Works”, dated February 18, 2003, be received;
And that a policy for the utilization of a
Master Letter of Credit for multi-phased developments as outlined in the report
be endorsed;
And that the Mayor and Clerk be authorized to
execute agreements with developers for a Master Letter of Credit for public
works in multi phased developments, in a form satisfactory to the CAO and Town
Solicitor;
And that the CAO be authorized to update the
Master Letter of Credit Policy and conditions and terms of the Master Letter of
Credit Agreement as required.
PURPOSE:
The
purpose of this report is to follow up on a trial program conducted for a
Master Letter of Credit and to seek council’s approval for a Policy for Master
Letter of Credits for multi-phased developments.
EXECUTIVE SUMMARY:
There
are large residential blocks (i.e. Markham Centre, Cornell, Minto, Woodbine
North, etc.) in Markham where a developer phases its development requiring
individual subdivision agreements and letters of credit. Council in 1998 approved a Master Letter of
Credit Format and agreement for the Woodbine North plans of subdivision. Staff are satisfied that based on the 1998
trial program this concept can be applied to other multi phased development
blocks and recommend a policy to establish such.
BACKGROUND:
Under an initiative in 1998, arising from a developer request, a single Master Letter of Credit was provided in a trial exercise as approved by Council. It was the developer’s contention that one Master Letter of Credit would be more readily administered by all parties, as opposed to several which would ordinarily be required under separate subdivision agreements of a multi-phase development.
To that end, a separate agreement was made
between the Town and the Developer which replaced existing letters of credit
and combined these obligations with those of future development phases into a
single letter of credit.
In general, this exercise was found to be
successful from the standpoint that the Town works were fully secured in
accordance with Town policy while there was greater ease of administration for
the parties.
There are other upcoming developments in
Secondary Plans in which a developer will phase the agreements and for which it
may be suitable to establish a Master Letter of Credit at the outset. In particular, the future Remington and
Cornell developments would be appropriate to consider for this approach. Also, the developers of existing Minto/IBM
lands development would like to reduce to a single letter of credit rather that
continue to administer 5 or 6 letters of credit until completion. This development could also be accommodated
in this approach.
The use of a Master letter of Credit to secure
the value of public works (sewers, watermain, roads etc.) within multi-phased
residential developments is recommended as an alternative to the developer
depositing separate public works Letters of Credit for each phase of
development.
The proposed policy and conditions as outlined
in Attachment ‘A’ will ensure that the Town has sufficient security to complete
any outstanding public work for the various registered development phases. The concept of the Master Letter of Credit
is that by the time the next phase wishes to proceed, the last phase would have
substantially been completed and the letter of credit obligation reduced
accordingly so that the Master Letter of Credit value would be sufficient to
secure both financial obligations.
The benefits of the recommended policy to the Town:
These policies for the application of a Master
Letter of Credit as outlined in Attachment ‘A’ will form the basis of a
separate agreement. A copy of the 1998
agreement with Metrus Development is attached for information purposes.
FINANCIAL CONSIDERATIONS:
There
are no financial implications to the Town of Markham.
BUSINESS UNITS CONSULTED AND AFFECTED:
Requirements
of the Legal and Financial Services Departments will be satisfied in
establishing a Master Letter of Credit Agreement with a developer.
ATTACHMENTS:
Attachment B – November 19, 1998,
Master Letter of Credit Agreement
|
|
|
|
|
Alan Brown, C.E.T. Director of Engineering |
|
Jim Baird, M.C.I.P., R.P.P. Commissioner of Development Services |
