1 / 12

FINANCIAL ASSURANCES Under the MINNESOTA WETLAND CONSERVATION ACT

FINANCIAL ASSURANCES Under the MINNESOTA WETLAND CONSERVATION ACT. Chuck Holtman Smith Partners PLLP January 30, 2013

dionysius-hilary
Download Presentation

FINANCIAL ASSURANCES Under the MINNESOTA WETLAND CONSERVATION ACT

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FINANCIAL ASSURANCESUnder theMINNESOTA WETLAND CONSERVATION ACT Chuck Holtman Smith Partners PLLP January 30, 2013 This presentation provides a general introduction and overview of the subject. Neither the presentation nor any related discussion constitutes legal advice or creates an attorney-client relationship. You are advised to consult with your legal counsel on all matters relating to managing and using financial assurances in WCA permitting.

  2. FINANCIAL ASSURANCE • Funds • Held by LGU or reliable third party • LGU can use to complete replacement

  3. FORMS OF FINANCIAL ASSURANCE • Cash escrow • Standby letter of credit (LOC) • Permit bond

  4. WCA FINANCIAL ASSURANCE RULE:Minnesota Rules 8420.0522, Subpart 9 • LGU decides need • LGU decides amount (construction, maintenance, monitoring, repair) • Replacement wetland size • Ecological setting & complexity • Partly done? • Responsible party history & reliability • Third party to assume responsibility • Amount: worst case or probable case? • May reduce amount after construction • Responsible party opportunity to cure before LGU uses • Release within 60 days after replacement plan completion

  5. CASH ESCROW • Responsible party’s property • LGU holds in trust account • Escrow agreement • When LGU may use • Notice & opportunity to cure • Right to enter property • Accounting & release of funds

  6. STANDBY LETTER OF CREDIT • Issued by bank • Obligation is bank to LGU • Almost absolute right to funds on demand • Funds within 7 business days • Bank has right to repayment by responsible party

  7. BOND • Issued by insurance company • Complete work vs. provide funds • Issuer may investigate, request meeting • Responsible party indemnifies issuer

  8. !!! POP QUIZ !!! What happens to your financial assurance if the responsible party goes into bankruptcy or dissolves?

  9. MANAGING the ASSURANCE • Lock & key • Tracking • Maintain log • Expiration date • Extension/replacement notice (60 days) • Request that counsel initiate draw (30 days) • Lapse is replacement plan violation • Return LOC/bond to issuer • Accounting for expenditures

  10. !!! POP QUIZ !!! What happens if the responsible party steps out and the new party does not have a financial assurance?

  11. !!! POP QUIZ !!! With the cash in hand can your contractor proceed onto the property and complete the work?

  12. ENTERING PROPERTY • Financial assurance provides for funds but does NOT create authority to enter property and do work • Permit or escrow agreement may do so • Otherwise will need responsible party’s agreement or court order • Draw on assurance • Consult with legal counsel

More Related