The performance guarantee for completion of
required improvements shall meet the following requirements:
A. Security.
(1) The guarantee shall be secured by the credit of any
of the following:
(a)
An irrevocable and unconditional letter of credit
of a federal or state-chartered lending institution;
(b)
A restrictive or escrow account in a federal
or state-chartered lending institution; or
(c)
Such other financial security approved by Borough
Council (which approval shall not be unreasonably withheld), but not
including a second or third mortgage on the unimproved lands.
(2) Such approved security shall provide for, and secure
to the public, the completion of any improvements which may be required
within one year of the date fixed in the development schedule for
the completion of such improvements.
(3) Such financial security shall be posted with a federally
issued or state-chartered lending institution chosen by the party
posting the financial security, or such other approved entity, provided
such institution or entity is authorized to conduct such business
within the state.
(a)
Borough Council may require that evidence be
provided that such institution or entity has sufficiently adequate
and secure assets to cover the security.
(b)
The Borough shall be the authorized signatory
on any account in which the escrow funds are held.
B. Amount of security.
(1) The amount of financial security to be posted for
the completion of the required improvements shall be equal to 110%
of the cost of completion estimated as of 90 days following the date
scheduled for completion by the developer in the official development
schedule and within the process for increases to cover inflation as
permitted by the Pennsylvania Municipalities Planning Code.
(2) The cost of the improvements shall be established
by an estimate prepared by a Pennsylvania-registered professional
engineer, which shall be reviewed by the Borough Engineer, within
the arbitration process permitted by the Pennsylvania Municipalities
Planning Code.
(3) If the party posting the financial security requires
more than one year from the date of posting of the financial security
to complete the required improvements, the amount of financial security
may be increased by a maximum of an additional 10% for each one-year
period beyond the first anniversary date from posting of financial
security or to an amount not exceeding 110% of the cost of completing
the required improvements, as reestablished on or about the expiration
of the preceding one-year period, by using the above procedure.
(4) Inspection fees. The amount of financial security
shall also include an additional 5% of the estimated cost of completion
of the work to guarantee payment of inspection fees and related engineering
costs.