TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Quinn Barrow, City Attorney
Marisa Lundstedt, Community Development Director
SUBJECT:Title
Additional Research Regarding Surety Bonds and Numerical Limitations on Residential Construction Permits (Community Development Director Lundstedt).
PROVIDE DIRECTION
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council review and provide direction.
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FISCAL IMPLICATIONS:
There are no fiscal implications associated with this action.
BACKGROUND:
On July 2, 2013, and August 6, 2013, staff provided presentations to the City Council on the rules and procedures to alleviate construction impacts in residential neighborhoods. Staff was then directed by Council to implement additional construction rules and meet with the Board of Building Appeals to discuss adding more construction rules. Staff conducted meetings with the Board of Building Appeals on September 11, 2013, November 14, 2013, and January 30, 2014.
On March 4, 2014 staff provided a follow up presentation to the City Council, and introduced the additional rules and procedures to alleviate construction impacts in residential neighborhoods. City Council requested an update report showing statistical numbers in 6 months. Additionally, Council directed staff to explore the implementation of a “surety bond” requirement for all projects as a protective measure for properties adjacent to active construction sites.
On November 5, 2014 staff provided a status report and presentation on construction rules, surety bonds and construction parking permits. After considerable discussion, the City Council adopted a motion directing staff to (1) reach out to the California League of Cities and Southern California Government Cities to see if there are any cities that have a successful surety bond program; (2) explore the implementation of additional construction rules or procedures that might help reduce the impacts of construction; and (3) research language mandatory mediation.
On September 1, 2015 the City Council directed staff to implement a Construction Management Plan for all construction sites in the Residential Districts III and IV (and other impacted areas, as needed); prepare a more detailed progressive disciplinary program; and return with more information about the current mediation program and how it might be strengthened.
DISCUSSION:
Surety Bond Research
Based on the Council directive, staff reached out to the California League of Cities and Southern California Government Cities, and City Attorney Listserve to see if there are any cities that require surety bonds to ensure against damage to adjacent private property caused by construction on private property. Based upon our research and the responses we received from the Listserve, no other city currently requires surety bonds to repair adjacent private property if construction causes damage to the surrounding private properties.
The City of Piedmont had a surety bond program to protect homes that are located on hillsides from abandoned and incomplete construction sites. This is also a similar program to what Beverly Hills has in place for hillside construction. For a number of reasons, including the fact that Manhattan Beach does not have steep hillsides or active liquefaction zones in residential areas, those programs would not apply here. The Piedmont City Attorney informed staff that the City has not required a surety bond for at least the last four years for a number of reasons, primarily because the City did not want to get involved in what is essentially a private matter between private property owners. Staff has found no other cities that require surety bonds to repair adjacent private properties.
Staff at the Santa Monica Planning & Community Development informed us that they are not aware of any policy under which an applicant for a building permit must obtain a surety bond. The forms on the Department of Planning & Community Development website appear to confirm the statements of city staff, as the building permit forms and checklists available online do not make any reference to surety bonds. Please note that under a previous version of the Santa Monica Municipal Code, the City could require an applicant for a Use Permit to furnish a surety bond to ensure that “the use and development of the property conform with a site plan, architectural drawings, or statements submitted in support of the application, or in such modifications thereof as may be deemed necessary to protect the public health, safety, and general welfare and secure the objectives of the General Plan.” However, the Council repealed such provision (and others) on June 23, 2015. The City’s new Zoning Ordinance does not make any reference to surety bonds. As is true in Manhattan Beach, the City can require surety bonds in other contexts, such as in connection with work in the public right-of-way.
Mandatory Mediation
During its discussion of additional construction rules on September 1, 2015, the City Council considered requiring an owner/contractor to submit to mediation in the event the Building Official confirms that an adjacent property has been damaged by the construction, and the owner/contractor does not repair the damage. Councilmember Lesser inquired about the existing use of mediation services and whether any data was available pertaining to construction sites. After discussion, the Council agreed to defer imposing the requirement until staff gathered further data on the efficacy of the City’s mediation program.
Limitations on Number of Construction Permits Issued
As part of earlier Council discussions, staff was asked to determine whether other cities limit the issuance of construction permits in certain geographical areas in order to minimize construction impacts on adjacent neighbors.
Staff reached out to the California League of Cities, Southern California Government Cities and City Attorney Listserve. Based upon our research and the responses we received from the Listserve, no other city currently limits the amount of construction permits for Single Family Dwellings in geographical areas; however, Santa Monica limits construction projects to one multi-family project within a 500 foot radius. This restriction applies for 15 months after issuance of a building permit.
The following are some of the challenges that property owners may encounter by delays caused by limiting the issuance of permits:
1. Increased carrying and financial costs.
2. Parity and equality.
3. Exacerbating construction impacts by prolonging construction in certain areas for years.
On September 1, 2015 the Mayor referred to the Neighborhood Bill of Rights from the early 1990s. One of the Bills of Rights includes a numerical limitation on construction permits. There will be future staff report on the Neighborhood Bill of Rights.
CONCLUSION:
Staff will return with additional data concerning mediation and its evaluation of the Neighborhood Bill of Rights.