Lazaro Aleman
ECB Publishing Inc.
City officials are relearning a lesson about the importance of requiring performance bonds and ensuring that these remain current in order to hold contractors and developers accountable and safeguard the taxpayers’ dollars.
Performance bonds are a subset of contract bonds that provide a guarantee that a contractor will fulfill all obligations under a construction agreement. If the contractor fails to do so, the Surety company is then responsible for completing the contract obligations, either by securing a new contractor to complete the work or by financial compensation.
At a recent Monticello City Council meeting, a resident of the Pecan Hills Subdivision off South Waukeenah Street approached the council members to ask if the city was aware of the damage being done to the subdivision’s sidewalks, streets and curbs by construction activity and if the city planned to repair the damage.
City Manager Seth Lawless acknowledged awareness of the situation, but said that
unfortunately, the city lacked the means to make the responsible party repair the damage.
“We don’t have the financial leverage to force the developer to fix the problem because the performance bond expired a long time ago,” Lawless said.
Consequently, he said, the city would have to do what repairs it could, at least to the sidewalks and curbs. He didn’t, however, give much hope for the city doing certain of the costlier repair work, he said.
In the future, however, the city would do well to ensure that developers secured performance bonds and abided by them, Lawless said.
In fairness, the construction activity that is causing the damage stems from a belated revisit of a massive subdivision originally platted in the 1990s or early 2000s in the southeast part of town. After constructing a handful of houses, the former developer of the Pecan Hills Subdivision ceased operations, a consequence of financial constraints and a downturned economy.
Like the Crooked Creek Subdivision to the east of town, the Pecan Hills development lay dormant until a few years ago, when the same developer that resurrected Crooked Creek purchased the property and began constructing houses. That developer is Jefferson Property Development, LLC (JPD).
The question never arose at the council meeting, nor did anyone volunteer to say why the new developer hadn’t been asked to submit a new performance bond when it proposed reviving the project.
JPD has since purchased and had rezoned an adjacent 32-acre property that was part of the original Pecan Hills plat and where it is planning to build 100-plus houses.