In lieu of the completion of any improvements required as a condition for the final approval of a plan, including improvements or fees required pursuant to Section 509(i) of the MPC, which addresses development in stages over a period of years, the applicant shall deposit, prior to plan recordation, financial security in an amount sufficient to cover the costs of such improvements or common amenities, including, but not limited to, roads, stormwater detention and/or retention basins and other related drainage facilities, parking facilities, recreational facilities, open space improvements, or landscaping or screen plantings which may be required. The applicant shall not be required to provide financial security for the costs of any improvements for which financial security is required by and provided to the Pennsylvania Department of Transportation in connection with the issuance of a highway occupancy permit pursuant to Section 420 of the Act of June 1, 1945 (P.L. 1242, No. 428), known as the "State Highway Law." Improvement construction guarantees shall contain item descriptions of the improvements which the guarantee covers, including any improvements or activities of a temporary nature, and shall be subject to acceptance by the City. The applicant shall provide an improvement construction guarantee prior to the Commission signing the final plan.
A. Form of financial security. The following are acceptable forms of guaranties. All other forms of guaranties must be individually approved by the Commission.
(1) Surety performance bond. A bond from a surety bonding company authorized to do business in the Commonwealth of Pennsylvania. Bonds shall be payable to the City.
(2) Escrow account. A deposit of cash, either with the City, or held in escrow with a federal or commonwealth-chartered financial institution. Any interest earned by moneys deposited with the City shall be retained by the City to manage the account. In the case of an escrow account with a financial institution, the applicant shall file, with the City, an agreement between the financial institution and the applicant guaranteeing the following:
(a) That the funds of said escrow account shall be held in trust until released by the City, and may not be used or pledged by the applicant as security in any other matter during that period;
(b) In the case of a failure on the part of the applicant or developer to complete said improvements, the institution shall immediately make the funds in said account available to the City for use in the completion of those improvements.
(3) Letter of credit. An irrevocable commercial letter of credit provided by the applicant from a federal or commonwealth-chartered financial institution or other reputable institution. This letter shall be deposited with the City and shall certify the following:
(b) In case of failure on the part of the developer to complete the required improvements within a time period specified in a written agreement or the letter of credit, the City shall take action to have the creditor pay to the City, immediately and without further action, upon presentation of a sight draft drawn on the issuing lending institution in an amount to which the City is entitled, or upon presentation of the original letter of credit, such funds as are necessary to finance the completion of those improvements, up to the limit of credit stated in the letter.
(c) The letter of credit is irrevocable and may not be withdrawn, or reduced in amount, until release or partially released by the City.
(4) Loss of security. Failure to maintain a current acceptable form of financial security shall cause the City to suspend the issuance of any permits or certificates of occupancy.
B. Amount of guaranty.
(1) The amount of financial security to be posted for the completion of the required public and private improvements shall be equal to 110% of the anticipated construction and installation costs, which may or may not include prevailing wage rates, which costs shall be approved by the City. Costs shall be estimated as of 90 days following the date scheduled for completion by the developer. The City may adjust the amount of financial security annually by comparing the actual cost of the improvements which have been completed and the estimated cost for the completion of the remaining improvements as of the expiration of the 90th day after either the original date scheduled for completion or a rescheduled date of completion. Subsequent to said adjustment, the applicant or developer shall post additional security in order to assure that the financial security equals said 110%. Any additional security shall be posted by the applicant or developer in accordance with this subsection.
(2) The amount of financial security required shall be based upon an estimate of the cost of completion of the required improvements, submitted by an applicant or developer, and prepared by a professional engineer licensed as such in this commonwealth and certified by such engineer to be a fair and reasonable estimate of such cost. The City, upon the recommendation of the City Engineer, may refuse to accept such estimate for good cause shown. If the applicant or developer and the City are unable to agree upon an estimate, then the estimate shall be recalculated and recertified by another professional engineer licensed as such in this commonwealth and chosen mutually by the municipality and the applicant or developer. The estimate certified by the third engineer shall be presumed fair and reasonable and shall be the final estimate. In the event that a third engineer is so chosen, fees for the services of said engineer shall be paid equally by the applicant or developer and the City.
(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 an additional 10% for each one-year period beyond the first anniversary date from each 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 estimating procedure.
C. Protection of final phases. In the case where development is projected over a period of years, the Commission may authorize submission of final plans by section or stages of development, subject to such requirements or guaranties as to improvements in future sections or stages of development as it finds essential for the protection of any finally approved section of the development.
D. Record drawings. After final plan approval and upon completion of all required improvements, the developer shall submit record drawings showing the location, dimension and elevation of all improvements. Such plans shall indicate that the required grading, drainage structures and/or drainage systems and erosion and sediment control practices have been installed in substantial conformance with the previously approved final plan. The record drawings shall specify all deviations from the previously approved drawings. One paper set of plans shall be submitted to the City for review and approval. After approval is granted, one copy of all plans shall be submitted to the City in mylar form along with any deed of dedication for public property or easement. If required by the Planning Bureau, revised mylars shall be recorded by the developer so as to supersede the previously recorded final plan in order to provide an accurate public record of the location of required improvements; and evidence of such recording shall be provided to the City.
E. Partial release of funds. As the work of installing the required improvements proceeds, the party posting the financial security may request the City to release or authorize the release of, from time to time, such portions of the financial security necessary for payment to the contractor or contractors performing the work. Any such requests shall be in writing addressed to the Planning Bureau. The City shall have 45 days from receipt of such request to certify, in writing, that such portion of the work has been completed in accordance with the approved plan. Upon such certification, the City shall authorize release by the bonding company or lending institution of an amount fairly representing the value of the improvements completed. If the City fails to act within said forty-five-day period, the request for release of funds shall be deemed to have been approved. Prior to final release at the time of completion and certification by the City Engineer, the City may require retention of 10% of the estimated cost of the aforesaid improvements.
F. Release from improvement bond guaranty.
(1) When the developer has completed all of the necessary and appropriate improvements, the developer shall notify the Planning Bureau, in writing, by certified or registered mail, of the completion of the aforesaid improvements and shall send a copy thereof to the City Engineer. The Planning Bureau shall, within 10 days after receipt of such notice, direct and authorize the City Engineer and designated inspection staff to inspect the improvements. Within 30 days of authorizing the City Engineer to inspect the improvements, the Planning Bureau shall mail a report to the developer by certified or registered mail. The report shall either indicate acceptance of the work or shall identify improvements which are not approved and shall describe what corrective actions the developer must undertake. If all required improvements are accepted, the full amount of the financial guarantee including any retainage shall be returned to the developer.
(2) Should there be any question on the performance of an improvement, the full amount of the guarantee posted in the form or a bond or letter of credit may be released and replaced by a cash guarantee in an amount determined by the Planning Bureau to be sufficient to cover replacement costs of any questionable improvements. The developer and City may agree to retain a fixed amount as a guarantee for 12 months to assure that improvements perform as expected. In the case of improvements dedicated to the City, §
265-57, Maintenance guaranty, shall apply.
(3) If the Planning Bureau fails to comply with the time limitation provisions contained herein, all improvements will be deemed to have been approved and the applicant or developer shall be released from all liability, pursuant to the performance guaranty bond or other security agreement.
(4) If any portion of the said improvements shall not be approved or shall be rejected, the developer shall proceed to complete the same and, upon completion, the same procedure of notification, as outlined herein, shall be followed.
(5) Nothing herein, however, shall be construed in limitation of the applicant's or developer's right to contest or question, by legal proceedings or otherwise, any determination.
(6) Improvements accepted by the City Engineer shall not become public until dedication occurs, as specified under §
265-56.