The Borough, through provisions of this article, hereby incorporates the provisions of § 638 of the Insurance Company Law, 40 P.S. § 638, as amended, which provides the Borough with the authority to require security in the form of insurance proceeds from an insurance company, association or exchange (hereinafter the “insuring agent”), doing business in Pennsylvania, for the removal, repair and securing of fire damaged buildings and other structures subject to fire loss claims.
The Borough Manager, or such official’s designee, shall be the designated officer authorized to carry out all responsibilities and duties stated herein. Any reference to “Borough Manager” or “Manager” shall be defined to include the Manager and/or the Manager’s official designee.
No insuring agent shall pay a claim of a named insured for fire damage to a structure located within the Borough where the amount recoverable for the fire loss to the structure under all policies exceeds $7,500 unless the insuring agent is furnished with a municipal certificate from the Borough Manager pursuant to § 638(b) of the Insurance Company Law, as amended, and unless there is compliance with the provisions of this article.
A. 
Issuance of certificate where delinquent taxes or charges are due and/or costs have been incurred by the Borough related to the fire damaged building or structure. Where, pursuant to § 638(b)(1)(ii) of the Insurance Company Law, as amended, the Borough Manager is requested to issue a certificate to the insuring agent regarding property that is subject to delinquent taxes, assessments, penalties and user charges, the Manager shall issue such certificate along with a bill showing the amount of delinquent taxes, assessments, penalties and user charges against the subject property that have not been paid as of the date of the Manager’s certificate and also showing, as of the date of the Manager’s certificate, the amount of the total costs, if any, certified to the Manager that have been incurred by the Borough for the removal, repair or securing of a damaged building or other structure on the property.
(1) 
The Borough shall be responsible for certifying to the Manager any such costs incurred by the Borough for removal, repair or securing of a damaged building or other structure on the property.
(2) 
The insuring agent shall, upon receipt of such certificate and bill, return the bill to the Borough Manager and transfer to the Manager an amount from the insurance proceeds necessary to pay the taxes, assessments, penalties, charges and costs as shown on the bill.
(3) 
The Borough shall, upon receipt of such amount, apply or credit the amount to payment of the items shown on the bill.
B. 
Issuance of certificate where no delinquent taxes or charges are due and no costs have been incurred by Borough related to the fire damaged building or structure. Where, pursuant to § 638(b)(1)(i) of the Insurance Company Law, as amended, the Borough Manager is requested to issue a certificate to the insuring agent, or, at the discretion of the Borough Manager, a verbal notification confirmed in writing by the insuring agent, regarding property that is not subject to delinquent taxes, assessments, penalties or user charges, the Manager shall issue such a certificate which indicates that there are no delinquent taxes, assessments, penalties or user charges against the property, and that, as of the date of the Manager’s certificate or verbal notification, the Borough has not certified any amount as total costs incurred by the Borough for the removal, repair or securing of a damaged building or other structure on the property, and the insuring agent shall pay the claim of the named insured; provided, however, that if the loss as agreed upon by the named insured and the insuring agent equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or other structure, the insuring agent shall transfer proceeds, as security, to the Borough in accordance with Subsections C and D, which conform to § 638(c) and (d) of the Insurance Company Law, as amended.
C. 
Transfer of proceeds. In accordance with § 638(c) of the Insurance Company Law, as amended, the insuring agent shall transfer from the insurance proceeds, as security, to the Borough Manager:
(1) 
An amount in the aggregate of $2,000 for each $15,000 of a fire loss claim and for each fraction thereof; however, if the amount of such claim is $15,000 or less, the amount transferred to the Borough shall be $2,000.
(2) 
If at a time of the loss report the named insured has submitted a contractor’s signed estimate of the costs of removing, repairing or securing the building or other structure that is in an amount less than the above formula, the insuring agent shall transfer to the Borough the amount specified in the estimate.
D. 
Pro rata transfer. The transfer of proceeds shall be on a pro rata basis by all companies, associations or exchanges insuring the damaged building or structure.
E. 
Post transfer contractor’s estimate. After the transfer of proceeds, the named insured may submit a contractor’s signed estimate of the costs of removing, repairing or securing the damaged building or other structure, and the Borough Manager shall return the amount of secured proceeds in excess of the estimate to the named insured, if the Borough has not otherwise commenced removing, repairing or securing the damaged building or other structure.
F. 
Accounting procedure for transferred proceeds. Upon receipt of security under this section, the Borough shall conform to the following procedure, pursuant to § 638(d) of the Insurance Company Law, as amended:
(1) 
The Borough Manager shall place the proceeds in a separate fund to be used solely as security against the total costs of removing, repairing, or securing the damaged building or structure incurred by the Borough. Such costs shall include, without limitation, any engineering, legal or administrative costs incurred by the Borough in connection with such removing, repairing or securing of the building or any procedure related thereto.
(2) 
When transferring the proceeds, it is the obligation of the insuring agent to provide the Borough with the name and address of the named insured, whereupon the Borough Manager shall contact the named insured, certify that the proceeds have been received by the Borough and notify the named insured that the procedures under this section and § 638(d) of the Insurance Company Law, as amended, shall be followed.
(3) 
The proceeds shall only be returned to the named owner upon the following stated occurrences: the damaged building or other structure has been properly repaired, removed or secured in accordance with all applicable laws, regulations and requirements of the Borough; the requisite proof of such completion has been received by the Borough Manager; and the Borough has not incurred any costs associated with repairing, removing or securing the damaged building or other structure.
(4) 
If the Borough has incurred costs associated with repairing, removing or securing the building or other structure, such costs shall be paid from the secured funds. If excess funds remain, the Borough Manager shall transfer the remaining funds to the named insured.
(5) 
Any interest earned on proceeds held by the Borough that are not returned to the named insured shall belong to the Borough. Any interest earned on proceeds that are returned to the named insured shall be distributed to the named insured at the time said proceeds are returned.
G. 
Borough’s ability to recover deficiency. Nothing in this article shall be construed to limit the ability of the Borough to recover any deficiency.
H. 
Agreement with named insured. Nothing in this section shall be construed to prohibit the Borough and the named insured from entering into an agreement which permits the transfer of funds to the named insured if some other reasonable disposition of the damaged property has been negotiated.
The Borough Council may by resolution adopt procedures and regulations to implement § 638 of the Insurance Company Law, as amended, and this article, and may by resolution fix reasonable fees to be charged for municipal activities or services provided pursuant to § 638 of the Insurance Company Law, as amended, and this article, including, but not limited to, issuance of certificates and bills, performance of inspections and opening separate fund accounts.
A. 
Any person, firm or corporation who violates a provision of this article, or who fails to comply therewith, or with any of the requirements thereof, shall be, upon conviction thereof, sentenced to pay a fine of not less than $300 nor more than $1,000 for each violation, plus costs, and, in default of payment of said fine and costs, to imprisonment to the extent permitted by law for the punishment of summary offenses.
B. 
A separate offense shall arise for each day or portion thereof in which a violation is found to exist or for each section of this article found to have been violated. All fines and penalties for the violation of this article shall be paid to the Borough Treasurer.
C. 
The Borough may also commence appropriate actions in equity, at law or other to prevent, restrain, correct, enjoin, or abate violations of this article.