PERFORMANCE AGREEMENTS AND SURETY

• Action Request
• Performance and Maintenance Agreement/Sureties Guidelines
• Administrative Action Date and Deadlines Schedule
• FAQ

For more complete information concerning the entire performance and maintenance agreement process, please click here.

 

Agreements

A legally binding notarized contract signed by the applicant that requires specific improvements be built according to the plan approved by the Franklin Municipal Planning Commission (FMPC). Agreements are prepared by the Planning Department after the applicant supplies the information requested in the approval letter.

Approval Letter

A letter sent to the applicant following FMPC approval that states the amount of sureties that shall be posted. If the applicant will use a letter of credit for the surety, the approval letter should be forwarded to the applicant’s bank to aid in preparation of the letter of credit. As stated in the approval letter, the applicant should contact (615) 591-5631 to provide the following information so the performance agreement can be prepared:

• Type of surety
• Legal name of company
• Type of charter and what state is company chartered in (example: Tennessee LLC, Georgia Corporation, etc.)

Surety

The applicant may choose between an irrevocable standby letter of credit or cash:

• Cash shall be posted in the form of a certified or cashiers check made payable to the City of Franklin. Funds are deposited in a City of Franklin non-interest bearing escrow account; therefore, no interest shall be paid to the applicant for the time funds are held.
• See the bullet points below under “Frequently Asked Questions by Banks” for information regarding requirements for letters of credit.

Improvement

Anything required by the FMPC approval of a site plan or final plat to be constructed or planted for that project. Examples: water lines, sewer lines, sidewalks, streets, traffic signals, stormwater drainage/detention, landscaping, etc.

Maintenance

A mandatory one-year agreement that is required following the release of the performance agreement, to ensure the quality of the workmanship and materials used in constructing the improvements. Generally, a smaller amount of surety is held during the maintenance period.

Performance

The initial agreement phase that the applicant enters into which ensures the improvements required by the conditional approval of the FMPC are constructed according to the approved plan. The performance agreement remains in effect until each individual improvement is complete, although each improvement is considered independently from the others. Example: if the sewer improvements are complete before any other improvements, the sewer improvements may be released from performance and enter the maintenance agreement phase prior to any other improvements being complete. See the section labeled “Action Request” for information regarding what is required from the applicant to request a release of the performance agreement.

Inspections

Inspections are regularly performed by City personnel, depending on the individual cycles of each improvement. All improvements shall be inspected a minimum of once per year.

Action Request

A form that the applicant fills out to tell the Planning Department how far along in the construction phase they are for each individual improvement. The choices available to the applicant are extend, reduce and extend, and release. Each request for either a reduction or release MUST be signed/sealed by the applicant’s project engineer or landscape architect (for landscaping improvements). If it is time for a regular agenda for an improvement, an Action Request will be sent to the applicant. The applicant may also print a blank Action Request from this website for use in requesting an earlier agenda, if the improvements are complete prior to the next regularly scheduled agenda.

Call

If the project is not progressing in a manner acceptable to the FMPC, the improvements may be called. If a letter of credit is posted for the surety, it will be presented to the issuing bank for payment, and the funds will then be used by the City to complete the improvements according to the approved plan. If the surety posted is cash, then the cash will be used to complete the improvements according to the approved plan.

Extension

Extensions can be requested and may be granted if improvements are not complete prior to the deadline for a scheduled agenda.

Release

When an improvement is completed according to the plan approved by the FMPC, the applicant would request a release via their project engineer or landscape architect (see Action Request). The improvement would then be placed on the next available inspection list/agenda, and the City’s inspector would inspect the improvement to verify satisfactory completion. If the improvements are found to be complete, the performance agreement is released and a mandatory one-year maintenance agreement is established. The applicant is still responsible for the improvements during the maintenance phase. Towards the end of the one-year period, the improvements are again inspected by the City. If the improvements are found to be in the same condition as when released from performance, the maintenance agreement is released and the applicant’s obligation for the improvement is complete.

Frequently Asked Questions

 

By Banks:

Q: What information needs to be printed in a letter of credit?

A: First, you should ask your customer for a copy of the approval letter with specific information regarding preparation of the letter of credit for the individual project that they would have received from Paula Kortas in the Planning Department. The approval letter is sent to the applicant following the Franklin Municipal Planning Commission approval. The following information must be in each letter of credit:

• Beneficiary shall be “City of Franklin and/or the Franklin Municipal Planning Commission”
• A presentation location physically located in Williamson and/or Davidson County, Tennessee. A specific branch address may be given, or the letter of credit can state that “draw documents may be presented at any (insert name of bank) branch location in Williamson and/or Davidson County, Tennessee.”
• An auto-renewal clause shall be printed in the letter of credit. The following statement is not required to be verbatim; however, verbiage must accurately reflect all significant elements of the statement: “This letter of credit shall be renewed without amendment from this or any future expiration date unless at least sixty (60) days prior the any expiration date we notify the Beneficiary by receipted overnight courier or receipted certified mail that we elect not to renew this letter of credit. Upon receipt of such notification, Beneficiary has the right to draw on the full amount of the letter of credit.”
• The letter of credit must also contain a verbatim statement that will be in the above-mentioned approval letter sent to your customer following the Franklin Municipal Planning Commission approval. This statement is specific to each project. For additional information, please contact the Planning Department at (615) 591-5631.

By Owners/Applicants:

Q: What do I do following approval of my site plan or final plat by the FMPC?

A: An approval letter and Performance and Maintenance Agreement/Sureties Guidelines will be sent to you within a week of approval, unless your project was approved with some “to be determined” amounts. Following your submission of revised plans which will allow the “to be determined” amounts to be calculated, the amounts will be forwarded to the Planning Department by the appropriate City department. At that time, your approval letter will be sent to you. Please click on the link labeled “Performance and Maintenance Agreement/Sureties Guidelines” for more information.

 

Q: What are Performance/Maintenance Agreements and Surety (cash, letters of credit)?

A: A Performance Agreement is legally binding, notarized contract signed by an applicant that requires specific improvements to be constructed or installed according to the site plan or final plat approved by the FMPC. Once the applicant satisfactorily completes the improvements, the Performance Agreement is released and a mandatory one-year Maintenance Agreement is established to ensure the workmanship and materials. The applicant shall choose to post either cash or an irrevocable standby letter of credit as the surety that will secure the Performance/Maintenance Agreement. For additional information, click here or call (615) 550-6736.

 

Q: What are Improvements?

A: Anything required by the conditional FMPC approval of a site plan or final plat to be constructed or installed for that project. Examples: Streets, sidewalks, water lines, sewer lines, traffic signalizations, landscaping improvements, etc.

By Residents:

Q: How can I find out if the developer is still responsible for specific improvements in my subdivision or at a commercial site near my home?

A: Contact the Planning Department at (615) 591-5631. If possible, provide the name and section number of the subdivision you reside in or the name and location of the commercial site. If sureties are still being held for improvements you are concerned about, you can also find out when the next scheduled date is for inspections and agendas.

 

Q: What can the City do to compel a developer to do something that the residents consider important?

A: With regard to improvements, the City is only able to enforce what is provided for on an approved plan, and based in a requirement of the zoning ordinance, subdivision regulations or municipal code, or a condition of approval by the Planning Commission. The City is able to enforce completion of these improvements according to the plan approved by the Franklin Municipal Planning Commission, assuming that there are still sureties being held. If the agreement/sureties have been previously released and the improvement in question has degraded since that time, it is possible that other departments, such as the Codes, the Streets, may be able to help.