The performance guaranty shall be approved by the
governing body as to form, sufficiency and execution. Such performance
guaranty shall run for a period to be fixed by the governing body,
but in no case for a term of more than three years. However, with
the consent of the owner and the surety, if there is one, the governing
body may by resolution extend the term of such performance guaranty
for an additional period not to exceed three years. The amount of
the performance guaranty may be required by the governing body by
resolution when portions of the required improvements have been installed.