Township of West Windsor, NJ Article XVII Improvement Guaranties

§ 200-82 Guaranties required; surety; release.

[Amended 11-16-1981 by Ord. No. 81-35; 8-9-1982 by Ord. No. 82-34; 5-14-1984 by Ord. No. 84-15; 6-9-1986 by Ord. No. 86-10; 10-27-1986 by Ord. No. 86-27; 10-1-1990 by Ord. No. 90-24; 2-24-1992 by Ord. No. 92-02; 11-30-1992 by Ord. No. 92-33; 3-8-1999 by Ord. No. 99-02; 4-19-1999 by Ord. No. 99-07; 10-29-2018 by Ord. No. 2018-26]

A. For the purpose of assuring the installation and maintenance of on-tract improvements and buffer landscaping, as a condition of all final site plan, subdivision, and/or zoning permit approvals, the Board of jurisdiction and/or Zoning Officer shall require, as appropriate, and the Township Council shall accept, in accordance with the standards adopted hereinafter:

(1) Performance guarantee. The furnishing of a performance guarantee by the developer in favor of the Township in an amount not to exceed 120% of the cost of improvements required by an approval or developer's agreement, ordinance, or regulation to be dedicated to a public entity, and that have not yet been installed. The performance guarantee shall also include, within an approved development, privately-owned perimeter buffer landscaping, as required by local ordinance or imposed as a condition of approval. At the developer's option, the value of the privately-owned perimeter buffer landscaping improvements may be posted as a separate performance guarantee.

(2) Method of calculation. The cost of improvements shall be determined by the Township Engineer, based on an itemized cost estimate prepared by the developer for the review and approval of the Township Engineer, according to the method of calculation set forth in N.J.S.A. 40:55D-53.4, for the following improvements as shown on the approved plans or plat: streets, pavement, gutters, curbs, sidewalks, street lighting, street trees, surveyor's monuments, as shown on the final map and required by "the map filing law," P.L. 1960, c.141 (N.J.A.C. 46:23-9.9 et seq.; repealed by section 2 of P.L. 2011, c.217) or N.J.S.A. 46:26B-1 through 46:26B-8, sanitary sewers, community septic systems, drainage structures, public improvements of open space, the privately-owned perimeter buffer landscaping and any grading necessitated by the preceding improvements. The developer shall prepare an itemized cost estimate of the improvements covered by the performance guarantee for the review and approval of the Township Engineer, which itemized cost estimate shall be appended to each performance guarantee posted by the developer.

(3) Performance guarantees shall be approved by the Township Attorney as to form, sufficiency and execution. The developer shall execute any agreement(s) with the Township required by the Township Attorney confirming the conditions set forth herein prior to the Township's acceptance of said performance guarantee. A letter of credit shall be an acceptable form of performance guarantee, if approved by the Township Council, and only under the following conditions:

(a) It is irrevocable for an initial period of at least one year with automatic one-year renewals, unless the bank notifies the Township, in writing, at least 90 days before the initial date of expiration or each anniversary of such date that it will not be renewed.

(b) If the letter of credit is not renewed:

[1] The Township shall have the right to immediately draw a draft on sight if the developer's performance is not satisfactory as of that date, or to draw a draft 30 days after receipt of said notice if after notification by the municipality that the letter of credit will not be renewed the developer fails to submit a satisfactory replacement performance guarantee.

[2] The developer agrees to immediately cease and desist all such work upon receipt of notification from the municipality that the letter of credit will not be renewed, and until such time as a satisfactory replacement performance guaranty is submitted.

(4) Maintenance guarantee. As a condition precedent to the release of a performance guarantee, the developer shall furnish a maintenance guarantee in favor of the Township in an amount not to exceed 15% of the cost of the improvements which are being released, in addition to the following private site improvements: stormwater management basins, in-flow and water quality structures within the stormwater management system, and the out-flow pipes and structures of the stormwater management system, if any. Costs shall be determined by the Township Engineer according to the method of calculation set forth in N.J.S.A. 40:55D-53.4 based on an itemized cost estimate prepared by the developer for the review and approval of the Township Engineer, for any and all bondable items as permitted therein. The term of the maintenance guarantee shall be for a period not to exceed two years, and shall automatically expire at the end of the established term.

B. Temporary certificate of occupancy guarantee. In the event that the developer shall seek a temporary certificate of occupancy for a development, unit, lot, building, or phase of development, as a condition of the issuance thereof, the developer shall furnish in favor of the Township a temporary certificate of occupancy guarantee, in the amount of 120% of the cost of installing improvements which: remain to be completed or installed under the terms of the temporary certificate of occupancy; are required to be completed or installed as a precedent to the issuance of a permanent certificate of occupancy; and are not covered by an existing performance guarantee.

(1) Upon the posting of a temporary certificate of occupancy guarantee, all sums posted under a performance guarantee which relate to the improvements or items which remain to be completed or installed shall be released, so that a developer shall not be required to post more than one guarantee or bond of any type with respect to the same line item for the same unit, lot, building, or phase.

(2) Method of calculation. The scope and amount of such a guarantee will be determined by the Township Engineer, based on a preliminary itemized cost estimate prepared by the developer for those items to be included in the temporary certificate of occupancy guarantee. The request for a temporary certificate of occupancy by the developer is to indicate those items which the developer believes to be eligible for release from the existing performance guarantee, if any.

(3) The temporary certificate of occupancy guarantee shall be released upon the issuance of a permanent certificate of occupancy as to those improvements to which it relates.

C. Safety and stabilization guarantee. The developer shall furnish a safety and stabilization guarantee in favor of the Township to return the property to a safe and stable condition, or to otherwise implement measures to protect the public from access to an unsafe or unstable condition.

(1) A safety and stabilization guarantee shall be available to the Township 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 a written notice by the Township to the developer of the Township's intent to claim payment under the guarantee.

(c) The Township shall provide the written notice to a developer by certified mail or other form of delivery providing evidence of receipt. The Township shall not provide written notice of its intent to claim payment under this guarantee until the aforementioned sixty-day period has elapsed.

(2) Method of calculation. The amount of such a guarantee shall be $5,000 where the overall bonded improvements are $100,000 or less. Where the overall bonded improvements are $100,000 or more, then the Township Engineer shall calculate the bond amount 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% of bonded improvement costs in excess of $1,000,000.

(3) At the developer's option the safety and stabilization guarantee can be furnished as a line item in the performance guarantee in lieu of a separate guarantee.

(4) The Township shall release the safety and stabilization guarantee upon the Township Engineer's determination that the development of the project site has reached a point that the improvements installed are adequate to avoid any potential threat to public safety.

D. Other governmental agencies. In the event that other governmental agencies or public utilities will automatically own the utilities to be installed or the improvements are covered by a performance or maintenance guarantee to another governmental agency, no performance or maintenance guarantee, as the case may be, shall be required by the Township for such utilities or improvements.

E. The developer shall construct and install the improvements no more than three years from the date of the recording of the subdivision plat or deed, if a subdivision is involved, or complete execution of the performance guarantee agreement with the Township, whichever is earlier. The time allowed for installation of the bonded improvements for which the performance guarantee has been provided may be extended by the Township Council, by resolution upon recommendation of the Township Engineer. As a condition or as part of any such extension, the amount of any performance guarantee shall be increased or reduced, as the case may be, to an amount not to exceed 120% of the cost of the installation, which cost shall be determined by the Township Engineer according to the method of calculation set forth in N.J.S.A. 40:55D-53.4, based on an itemized cost estimate prepared by the developer for the review and approval of the Township Engineer, as of the time of the request of passage of the resolution of extension.

F. Failure to perform; municipal completion. If the required improvements are not completed or corrected in accordance with the performance guarantee, the developer and surety, if any, shall be liable thereon to the Township for the reasonable cost of the improvements not completed or corrected, and the Township may, either prior to or after the receipt of the proceeds thereof, complete such improvements. Such completion or correction of improvements shall be subject to the public bidding requirements of the Local Public Contracts Law, N.J.S.A. 40A:11-1, et seq.

G. Conformance with municipal standards. All improvements shall be in accordance with the design standards of the Township Code or as authorized by a design exception granted by the reviewing board, and shall be subject to inspection and approval by the Township Engineer.

H. Release or reduction of performance guarantee.

(1) Upon substantial completion of all required improvements, the developer may request of the governing body, in writing, by certified mail addressed in care of the Township Clerk, that the Township Engineer prepare, in accordance with the itemized cost estimate prepared by the Township Engineer and appended to the performance guarantee pursuant to this chapter, a list of all uncompleted or unsatisfactorily completed improvements. If such a request is made, the developer shall send a copy of the request to the Township Engineer and, where applicable, to the homeowners' association and each member of its Board of Directors, by certified mail. The request shall indicate which improvements have been completed and which improvements remain uncompleted in the judgment of the developer. Thereupon the Township Engineer shall inspect all improvements covered by the developer's request and shall file a detailed list and report, in writing, with the Township Council, and shall simultaneously send a copy thereof to the developer not later than 45 days after receipt of the developer's request.

(2) The list prepared by the Township Engineer shall state, in detail with respect to each improvement determined to be incomplete or unsatisfactory, the nature and extent of the incompleteness of each incomplete improvement or the nature and extent of, and remedy for, the unsatisfactory state of each completed improvement determined to be unsatisfactory. The report prepared by the Township Engineer shall identify each improvement determined to be complete and satisfactory together with a recommendation as to the amount of reduction to be made in the performance guarantee relating to the completed and satisfactory improvement, in accordance with the itemized cost estimate prepared by the Township Engineer and appended to the performance guarantee pursuant to this Chapter.

(3) The Township Council, by resolution, shall either approve the improvements determined to be complete and satisfactory by the Township Engineer, or reject any or all of these improvements upon the establishment in the resolution of cause for rejection, and shall approve and authorize the amount of reduction or release to be made in the performance guarantee relating to the improvements accepted, in accordance with the itemized cost estimate prepared by the Township Engineer and appended to the performance guarantee pursuant to this chapter. This resolution shall be adopted not later than 45 days after receipt of the list and report prepared by the Township Engineer. Upon adoption of the resolution by the Township Council, the developer shall be released from all liability pursuant to its performance guarantee, with respect to those accepted improvements, except for that portion sufficient to secure completion or correction of the improvements not yet approved; provided that 30% of the amount of the performance guarantee posted and safety and stabilization guarantee posted, as applicable, may be retained to ensure completion and acceptability of all improvements.

(4) For the purpose of releasing the developer from liability pursuant to its performance guarantee, the amount of the performance guarantee attributable to each approved bonded improvement shall be reduced by the total amount for each such improvement, in accordance with the itemized cost estimate prepared by the Township Engineer and appended to the performance guarantee pursuant to Subsection A of this section, including any contingency factor applied to the cost of installation. If the sum of the approved bonded improvements would exceed 70% of the total amount of the performance guarantee, then the municipality may retain 30% of the amount of the total performance guarantee and safety and stabilization 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 municipality below 30%.

(5) If any portion of the required improvements is rejected, the Township shall require the developer to complete or correct such improvements, and, upon completion or correction, the same procedure of notification, as set forth in this chapter, shall be followed.

(6) Any partial reduction granted in the performance guarantee pursuant to this Chapter shall be applied to the cash deposit in the same proportion as the original cash deposit bears to the full amount of the performance guarantee. The Township shall retain the entire value of any remaining safety and stabilization guarantee as cash.

(7) Nothing herein, however, shall be construed to limit the right of the developer to contest by legal proceedings any determination of the governing body or the Township Engineer.

I. Inspection fees. The developer shall reimburse the Township for all reasonably anticipated inspection fees paid to the Township Engineer for the inspection of improvements, as provided in Chapter 82, Fees, provided that the developer shall deposit with the Township all or a portion of the reasonably anticipated inspection fees to be paid to the Township Engineer for such inspection as outlined therein.

J. Phasing in sections. In the event that final approval is by stages or sections of development pursuant to Subsection a. of N.J.S.A. 40:55D-38, the provisions of this section shall be applied by stage or section.

K. Dedication and acceptance. To the extent that any of the improvements have been dedicated to the Township on the subdivision plat, site plan and/or zoning permit, the Township shall be deemed, upon the release of any performance guarantee required hereunder, to accept dedication for public use any improvements made thereunder, provided that such improvements have been inspected and have received final approval by the Township Engineer. Similarly, maintenance responsibility shall remain with the developer, to be governed by any conditions of final approval of a development application, until the final release of any performance guarantee required hereunder.

§ 200-82.1 Successor developer guarantee.

[Added 10-29-2018 by Ord. No. 2018-26]

A. If the property that is the subject of the approval and/or permit is sold or otherwise conveyed to a successor developer prior to the completion and acceptance of all improvements, an assignment of developer's agreement and replacement guarantee(s) as required by this chapter shall be required from the successor developer. As a condition precedent to the release of a permit update under the State Uniform Construction Code, for the purpose of updating the name and address of the owner of property on a construction permit, and all other changes to information previously submitted to the Township Division of Code Enforcement, an assignment of developer's agreement and replacement guarantee(s) and associated agreement as required by this chapter, shall be required from the successor developer and accepted by Township Council.

B. Within 30 days of its acceptance of an assignment of developer's agreement and replacement guarantee(s) and associated agreement as required by this chapter, the Township Council, by resolution, shall release the predecessor developer from liability pursuant to its guarantee.