Catawba County High-Density Development Bond: A Comprehensive Guide

July 18, 2022

Catawba County High-Density Development Bond

This guide provides information for insurance agents to help their customers obtain a Catawba County High-Density Development bond

At a Glance:

  • Average Cost: Between 3% to 5% of the bond amount per year
  • Bond Amount: Developers must purchase two separate bonds with the following limits:
    • 125% of the estimated cost of constructing the stormwater control measure (SCM)
    • 15% of the cost of constructing the SCM or the estimated cost of maintaining it for a 10-year period, whichever is greater
  • Who Needs it: Developers seeking approval for a high-density development option that is located in a WS-IV watershed area
  • Purpose: To ensure the county will receive compensation for financial harm if the developer fails to install the SCM properly
  • Who Requires the Bond: Catawba County, North Carolina

Background

Catawba County Code of Ordinances 44-434.15 requires all developers to obtain a permit before constructing high-density developments in WS-IV watershed areas. The Catawba County Board of Commissioners enacted the permitting requirement to ensure that high-density developments are adequately protected against stormwater runoff. To provide financial security for the enforcement of the permit requirement, developers must purchase and maintain two surety bonds to be eligible for a high-density permit.

High-density option refers to developments where there are more than two dwelling units per acre, and the total built-upon area of the development exceeds 24%.

WS-IV watershed area refers to land that is within five miles and draining to the normal pool elevation of water supplies/reservoirs or within 10 miles upstream and draining to a river intake.

What is the Purpose of the Catawba County High-Density Development Bond?

Catawba County requires developers constructing high-density developments in WS-IV watershed areas to purchase surety bonds as part of the application process to obtain a permit. The bonds ensure that the county will receive compensation for financial harm if the developer fails to abide by the regulations outlined in Catawba County Code of Ordinances 44-434.15. Specifically, the bonds protect the county if the developer does not properly install and maintain the required SCM. In short, the bonds are a type of insurance that protect the public if the developer violates the terms of their permit.

Catawba County High-Density Development Bond Form

Catawba County High-Density Development Bond Form

How Can an Insurance Agent Obtain a Catawba County High-Density Development Surety Bond?

BondExchange makes obtaining a Catawba County High-Density Development Bond easy. Simply login to your account and use our keyword search to find the “Catawba County” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Catawba County Code of Ordinances 44-434.15 dictates that the bond amounts must be as follows:

  • 125% of the estimated cost of constructing the stormwater control measure (SCM)
  • 15% of the cost of constructing the SCM or the estimated cost of maintaining it for a 10-year period, whichever is greater

The county must approve all developers’ bond amounts and agree with their estimates.

Is a Credit Check Required for the Catawba County High-Density Development Bond?

Surety companies will run a credit check on the owners of the development company to determine eligibility and pricing for the Catawba County High-Density Development bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Catawba County High-Density Development Bond Cost?

The Catawba County High-Density Development bond will typically cost anywhere between 3% to 5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. Underwriters will examine the developer’s personal and business financial statements for bonds with limits greater than $50,000.

For a quote on your customer’s bond, call us at (800) 438-1162.

Who is Required to Purchase the Bond?

Catawba County Code of Ordinances 44-434.15 requires developers seeking to construct high-density developments in WS-IV watershed areas to purchase a surety bond as a prerequisite to obtaining a permit.

How Do Developers Apply for a Catawba County High-Density Permit?

Developers in North Carolina must navigate several steps to obtain a high-density permit. Below are the general guidelines, but permittees should refer to the permitting statutes for details on the process.

Step 1 – Contact the Planning and Parks Department

Developers should contact the county’s Planning and Parks Department before applying for a permit. The department will walk the developer through the application process, provide them with all required forms, and answer any questions they may have.

Step 2 – Create an Erosion and Sedimentation Control Plan

Developers must create an erosion and sedimentation control plan that outlines how they plan to ensure that their project does not lead to excessive erosion and sedimentation in the county. The plan must include the developer’s proposed SCM that has been designed by a qualified individual. Completed plans should be submitted with the developer’s permit application.

Step 3 – Purchase a Surety Bond

Developers must purchase two separate surety bonds; one to ensure the SCM is constructed and one to ensure it is maintained. The bond amounts must be as follows:

    • 125% of the estimated cost of constructing the stormwater control measure (SCM)
    • 15% of the cost of constructing the SCM or the estimated cost of maintaining it for a 10-year period, whichever is greater

The department must approve the developer’s estimates.

What are the Insurance Requirements for the Catawba County High-Density Permit?

Catawba does not require developers to purchase any form of liability insurance as a prerequisite to obtaining a high-density permit. However, they may be required to purchase insurance before receiving a business license or other building permit. Developers must purchase two separate surety bonds with the following limits:

  • 125% of the estimated cost of constructing the stormwater control measure (SCM)
  • 15% of the cost of constructing the SCM or the estimated cost of maintaining it for a 10-year period, whichever is greater

How Do Developers File Their Catawba High-Density Development Bonds?

Developers should submit their completed bond forms, including the power of attorney, to the Planning and Parks Department at the following address:

25 Government Drive
Newton, NC 28658

The surety bond requires signatures from the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:

  • Legal name of the entity/individual(s) buying the bond
  • Surety company’s name, state of incorporation, and address
  • Entity requiring the bond
  • Bond amount
  • Type of permit being applied for
  • Date the bond goes into effect and expires
  • Date the bond is signed

What Can Catawba County Developers do to Avoid Claims Made Against Their High-Density Development Bonds?

To avoid claims against their High-Density Development bonds, developers in Catawba County must ensure that they adequately install all SCMs and maintain them for a 10-year period.

What Other Insurance Products Can Agents Offer Catawba County High-Density Development Bondholders?

Most reputable developers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Catawba County High-Density Development Bond Customers?

Catawba County unfortunately does not provide a public database of active permits in. We suggest contacting the planning department to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-07-19T17:08:12-04:00