Township of Elk, NJ Improvement Guarantees

In addition to a performance guarantee required pursuant to Subsection A of this section, a developer shall furnish to the Township a separate guarantee, referred to herein as a "safety and stabilization guarantee," in favor of the Township, to be available to the Township solely for the purpose of returning property that has been disturbed to a safe and stable condition or otherwise implementing measures to protect the public from access to an unsafe or unstable condition, only in the circumstance that:

(a)

Site disturbance has commenced and, thereafter, all work on the development has ceased for a period of at least 60 consecutive days following such commencement for reasons other than force majeure; and

(b)

Work has not recommenced within 30 days following the provision of written notice by the Township to the developer of the Township's intent to claim payment under the guarantee. The Township shall not provide notice of its intent to claim payment under a safety and stabilization guarantee until a period of at least 60 days has elapsed during which all work on the development has ceased for reasons other than force majeure. The Township shall provide written notice to the developer by certified mail or other form of delivery providing evidence of receipt.

The amount of a safety and stabilization guarantee for a development with bonded improvements in an amount not exceeding $100,000 shall be $5,000. The amount of a safety and stabilization guarantee for a development with bonded improvements exceeding $100,000 shall be calculated as a percentage of the bonded improvement costs of the development or phase of development as follows: $5,000 for the first $100,000 of bonded improvement costs, plus 2.5% of bonded improvement costs in excess of $100,000 up to $1,000,000, plus 1.0% of bonded improvement costs in excess of $1,000,000.

No more than 10% of the total performance guarantees shall be in cash, and the balance shall be in the form of a surety bond issued by a bonding company licensed to do business in the State of New Jersey and rated A+ or better by A.M. Best or a letter of credit issued by a banking institution licensed to do business in the State of New Jersey. Such bond or letter of credit must be approved and accepted by the Township governing body. The Township Engineer shall review the improvements required by the reviewing board which are to be bonded and itemize their cost. This itemization shall be the basis for determining the amount of the performance guarantees required by the Township and the inspection fees required by this Code. The Township Engineer shall forward his/her estimate of the cost of improvements to the applicant within 30 days after the date of receipt of a request sent by certified mail for this estimate. Any performance guarantee delivered to the Township Clerk pursuant to this section shall be for an initial term of not less than two years, shall provide for automatic one-year renewals and shall only be terminable on the date of expiration, either of the original period or any renewal period, upon not less than 60 days' advanced written notice. In the event that any of the improvements to be installed are covered by a performance guarantee to another governmental agency, no performance guarantee shall be required from the Township for such improvements.

If, at any time during the period of time between acceptance of the initial performance guarantee and the date of the Township Committee formally releases such performance guarantee, the Township Committee has reasonable cause to doubt the value, legality, enforceability or effectiveness of such guarantee, all development activity for which such guarantee was established shall be discontinued until such time as a substitute guarantee, in form and substance equivalent to the guarantee which was required to be in place at the time the status of the original guarantee was questioned, shall be delivered to and accepted by the Township Committee. By way of illustration and not limitation, the following shall be instances of reasonable cause to doubt the value, legality, enforceability or effectiveness of such guarantees:

The company issuing the bond shall cease to do business, declare insolvency or bankruptcy or be forced into involuntary bankruptcy.

The bank, savings and loan, credit union, mortgage banking company or other banking or banking-like entity issuing a letter of credit shall become insolvent, be taken over by any governmental or quasigovernmental agency or company or otherwise cease to do business.

The issuer of any performance guarantee shall serve on the Township notice of termination or cancellation of such guarantee.

The amount of any performance guarantee may be reduced by the Township Committee, by resolution, when portions of the improvements have been certified by the Township Engineer to have been completed. The time allowed for installation of the improvements for which the performance guarantee has been provided may be extended by the Township Committee by resolution. If the sum of the approved bonded improvements would exceed 70% of the total amount of the performance guarantee, then the Township may retain 30% of the amount of the total performance guarantee to ensure completion and acceptability of bonded improvements, as provided above, except that any amount of the performance guarantee attributable to bonded improvements for which a temporary certificate of occupancy guarantee has been posted shall be released from the performance guarantee even if such release would reduce the amount held by the Township below 30%.

If the required improvements are not completed or corrected in accordance with the finally approved development plans and approvals, the obligor and surety shall be liable thereon to the Township for the reasonable cost of the improvements not completed or corrected, and the Township, either prior to or after the receipt of the proceeds of the performance guarantee, may complete such improvements.

When all of the required improvements have been completed, the obligor shall notify the administrative officer, in writing, by certified mail, with a copy to the Municipal Clerk, of the completion of such improvements and shall send a copy thereof to the Township Engineer. Upon receipt of this notice, the Township Engineer shall inspect all of the improvements and shall file a detailed report, in writing, with the Administrative Officer, indicating either approval, partial approval or rejection of the improvements with a statement of reasons for rejection. If partial approval is indicated, the cost of the improvements rejected shall be set forth.

The Township Committee shall either approve, partially approve or reject the improvements on the basis of the report of the Township Engineer and shall notify the obligor, in writing, by certified mail, of the contents of the Township Engineer's report and the action of the Township Committee with relation thereto not later than 65 days after receipt of the notice from the obligor of the completion of the improvements. Where partial approval is granted, the obligor shall be released from all liability pursuant to the performance guarantee except for that portion adequately sufficient to secure completion of the improvements not yet approved. Failure of the Township Committee to send or provide such notification to the obligor within 65 days shall be deemed to constitute approval of the improvements and the obligor and surety, if any, subject to the requirements of § 96-13 below, shall be released from all liability pursuant to such performance guarantee.

If any portion of the required improvements is rejected, the obligor shall complete such improvements, and, upon completion, the same procedure of notification as set forth in this section shall be followed.

The obligor shall reimburse the Township for all reasonable inspection fees paid to the Township Engineer for the foregoing inspection of improvements, pursuant to § 96-15 below.

§ 96-13 Maintenance guarantees.

As a condition of the final release of all performance guarantees posted by an applicant with respect to any development approval within the Township, and/or as identified in § 96-12A, B or C, the applicant shall deliver to the Township Clerk, for the purpose of assuring that all improvements installed in accordance with such development approval have been installed in a good and workmanlike manner and that all materials are fit for their intended purpose, a maintenance guarantee in accordance with the following standards:

The maintenance guarantee shall be for a period of two years commencing on the date that the Township Committee finally accepts the improvements as being complete, in an amount not to exceed 15% of the total cost of the installation of the improvements as set forth on the Township Engineer's estimate for such improvements completed with § 96-12A, B or C.

The developer shall post with the Township, upon the inspection and issuance of final approval of the following private site improvements by the Township Engineer, a maintenance guarantee in an amount not to exceed 15% of the cost of the installation of the following private site improvements: stormwater management basins, inflow and water quality structures within the basins, and the outflow pipes and structures of the stormwater management system, if any, which cost shall be determined by the Township Engineer according to the method of calculation set forth in Section 15 of P.L. 1991, c.256.[1]

[1]

Editor's Note: See N.J.S.A. 40:55D-53.4.

In the event that other governmental agencies or public utilities automatically will own the utilities or improvements which are installed or the improvements are covered by a maintenance guarantee provided by the applicant to another governmental agency, no maintenance guarantee in favor of the Township shall be required for such utilities or improvements. Such maintenance guarantee shall be in the form of a surety bond issued by a surety licensed to do business in the State of New Jersey and rated A+ or better by A.M. Best or a letter of credit issued by a banking institution licensed to do business in the State of New Jersey. Such maintenance guarantee shall be approved and accepted by the Township Committee.

(4)

If at any time prior to the expiration of the maintenance guarantee the Township Committee has reasonable cause to doubt the value, legality, enforceability or effectiveness of such guarantee, the obligor must deliver to the Township Clerk a substitute guarantee, equivalent to the guarantee which was required to be in place at the time the status of the original guarantee was questioned. By way of illustration and not limitation, the following shall be instances of reasonable cause to doubt the value, legality, enforceability or effectiveness of such guarantees:

(a)

The company issuing the bond shall cease to do business, declare insolvency or bankruptcy or be forced into involuntary bankruptcy.

(b)

The bank, savings and loan company, credit union, mortgage banking company or other banking or banking-like entity issuing a letter of credit shall become insolvent, be taken over by any governmental or quasigovernmental agency or company, or otherwise cease to do business.

If the Township determines that any improvements which are covered by such maintenance guarantee have not been completed in a good and workmanlike manner, or that any materials which were incorporated into such improvements are not fit for their intended purpose and the obligor, under such maintenance guarantee, has not corrected the improvements to the satisfaction of the Township Engineer within 30 days after written notice of such defect, the obligor and the surety shall be liable on such guarantee to the Township for the reasonable cost of correcting and/or replacing such improvements, and the Township, either prior to or after the receipt of the proceeds of such guarantee, shall have the right, but not the obligation, to complete corrective work or replacements of such improvements which may be required.

§ 96-14 Developer's agreement required.

As a condition of final development approval, the reviewing board shall require the applicant to execute and deliver to the Township, along with the performance guarantee set forth in § 96-12, a developer's agreement in the form prepared by the reviewing board solicitor and approved by the Township Attorney. The time restrictions and conditions set forth in the developer's agreement shall be completed by the reviewing board engineer. All performance guarantees submitted with respect to any particular application shall reference such agreement by name, parties and date of execution. All applicants shall be given a copy of this code section and the then-current draft form of the developer's agreement with the application package. Any revisions to such agreement after the date of same is approved and accepted by the Township Committee shall be completed and approved by the reviewing board and then submitted to the Committee for approval and execution. The developer's agreement and any amendments thereto shall be recorded against the real property which is the subject of the application prior to the issuance of a zoning permit. Evidence in the form of a copy of the developer's agreement time stamped by the County Clerk shall be submitted to the Township Clerk. Upon completion of the improvements, release of the performance guarantee and submission and approval of the required maintenance guarantee, the Township shall execute a release of the developer's agreement, in recordable form. The preparation and recording of such release shall be borne by the applicant.

§ 96-15 Escrows.

Application escrow.

All fees other than application fees, inspection escrows and miscellaneous fees shall be escrow fees to pay the services of any professional personnel employed by the reviewing board or the Township Committee to process, review, inspect, study or make recommendations to such reviewing board or the Township Committee concerning the nature and substance of the applicant's application and/or to pay the services of any such professional personnel and the costs and expenses incurred by such professional personnel, the reviewing board and/or the Township Committee to create, amend or modify, including, but not limited to, the costs and expenses to draft, finalize and publish, the official Tax Map and/or Zoning Map[1] of the Township, which creation, amendment and/or modification is necessitated by the approval of the applicant's application.

[1]

Editor's Note: The Zoning Map is included at the end of this chapter.

If during the existence of this escrow account the balance of funds held by the Township shall be insufficient to cover vouchers submitted by the professionals, the applicant shall deposit additional sums with the Township to voucher the amount of the deficit and the anticipated amount to cover all remaining work within 10 days after receipt of written notice from the Township of the amounts owed. In the event that an applicant fails to deposit the additional escrow monies as required within the time set forth in this subsection, the Township, through its agents and employees, shall take whatever action it deems necessary in order to compel the payment of the escrow amount. In addition, the professional personnel may take any action individually as they deem necessary to satisfy the vouchers submitted. Notwithstanding the foregoing, any applicant who does not deposit such additional escrow monies within 30 days after receipt of written notice from the Township of the amounts owed shall be charged a late fee equal to 10% times the amounts owed from the date such sums were due pursuant to such notice until paid in full (including all accrued late fees). No permit, approval or certificate shall be issued to any applicant or property owner by the reviewing board, Zoning Officer, Township Committee, Township Clerk or any other agency of the Township unless all amounts owed pursuant to this section by such applicant or owner or with respect to the subject property are paid in full.

All excess monies in the escrow account will be returned, at the time of final release of maintenance guarantees for improvements completed as part of the development approval, to the applicant with a statement of money expended against the account. If at any time prior to final approval the applicant elects to withdraw his request for approval and abandon the project, any monies remaining in the escrow account, after all proper charges have been paid, will be returned to the applicant with a statement of money expended against the account.

Inspection escrows. The cost of all reasonable inspection fees by the Township Engineer shall be the responsibility of the applicant, and the applicant shall deposit the necessary inspection fees with the Township prior to the issuance of a building permit or zoning permit. The inspection fee escrow shall be in addition to the amount of any required performance or maintenance guarantees, application fees and application escrows and shall consist of a sum in escrow as follows:

Not to exceed, except for extraordinary circumstances, the greater of $500 or 5% of the cost of bonded improvements that are subject to a performance guarantee under Subsection A of this section; and

Not to exceed 5% of the cost of private site improvements that are not subject to a performance guarantee under Subsection A of this section, which cost shall be determined pursuant to Section 15 of P.L. 1991, c.256 (N.J.S.A. 40:55D-53.4).