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 Subsection H, Phasing of developments, the deposit with the Borough of a financial security shall be required in the amount sufficient to cover the costs of such improvements or common amenities which may be required, including, but not limited to, roads, stormwater detention and/or retention basins and other related drainage facilities, recreational facilities, open space improvements, or buffer or screen plantings. All final documentation of the financial security shall be submitted to the Borough Solicitor for his review 14 days prior to the public meeting at which the plan will be submitted for final approval; otherwise, the plan will be denied.
A. Types of financial security. Without limitation as to other types of financial security which the Borough may approve, which approval shall not be unreasonably withheld, irrevocable letters of credit and restrictive or escrow accounts from federal- or commonwealth-chartered lending institutions shall be deemed acceptable financial security for the purposes of this chapter.
B. Posting of financial security. Such financial security shall be posted with a bonding company or federal- or commonwealth-chartered lending institution chosen by the party posting the financial security, provided said bonding company or lending institution is authorized to conduct such business within the commonwealth.
C. Action to facilitate financing.
(1) When requested by the developer, in order to facilitate financing, the Borough Council or the financing agency, if designated, shall furnish the developer with a signed copy of a resolution indicating approval of the final plan, contingent upon the developer's obtaining a satisfactory financial security.
(2) The final plan or record plan shall not be signed nor recorded until the financial improvements agreement is executed.
(3) The resolution or letter of contingent approval shall expire and be deemed to be revoked if the financial security agreement is not executed within 90 days, unless a written extension is granted by the Borough Council. Such extension shall not be unreasonably withheld and shall be placed in writing at the request of the developer.
D. Time period for completion of improvements. Such bond or other security shall provide for, and secure to the public, the completion of any improvements which may be required on or before the date fixed in the formal action of approval or accompanying agreement for completion of the improvements.
E. Amount of financial 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.
(2) Annually, the Borough may adjust the amount of the financial security 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.
(3) Subsequent to said adjustment, the Borough may require the developer to post additional security in order to assure that the financial security equals said 110%. Any additional security shall be posted by the developer in accordance with this subsection.
F. Establishment of improvement cost.
(1) 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 to be a fair and reasonable estimate of such cost.
(2) The Borough, upon the recommendation of the Borough Engineer, may refuse to accept such estimate for good cause shown.
(3) If the applicant or the developer and the Borough are unable to agree on an estimate, then the estimate shall be recalculated and recertified by another professional engineer licensed as such in the commonwealth and chosen mutually by the Borough and the applicant or developer. The estimate certified by the third engineer shall be presumed fair and reasonable and shall be the final estimate.
(4) In the event that a third engineer is so chosen, fees for the services of said engineer shall be paid equally by the Borough and the applicant or developer.
G. Increase in time period and amount of financial security for completion of improvements. 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 posting of the 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 procedure described in Subsection
E above.
H. Phasing of developments. In the case where development is projected over a period of years, the Council may authorize the submission of final plans by sections or phases of development, subject to such requirements or guarantees as to improvements in future sections or phases of development as it finds essential for the protection of any finally approved section of the development.
I. Notice of starting work. The Borough Engineer shall be given at least 24 hours' notice by the subdivider or developer prior to commencement of work at the site. Work shall not begin without such prior notification.
J. Inspection of improvements during construction. The Borough Engineer may make as many unannounced visits as he deems necessary to the site during normal working hours during the construction of improvements in order to inspect the construction work for conformance with the approved plans.
K. Filing of report.
(1) The Borough Engineer shall file a report, in writing, with the Council, with a copy to the Planning Commission, after each such inspection and shall promptly mail a copy of the same to the developer or subdivider by certified or registered mail.
(2) The report shall be made and mailed within five days of the inspection and shall indicate whether the improvements are being constructed in accordance with the approved plan or whether they have been found to be defective. The report shall contain a detailed statement of the defects found. A time schedule for correction of the defects shall be provided, and the subdivider or developer shall be notified that no further work will be conducted until the corrections are made and approved.
L. Release of portions of financial security.
(1) As the work of installing the required improvements proceeds, the party posting the financial security may request the Council to release or authorize the release, from time to time, of such portions of the financial security necessary for payment to the contractor or contractors performing the work.
(2) Any such request shall be in writing, addressed to the Council, and the Council shall have 45 days from receipt of such request within which to allow the Borough Engineer to certify, in writing, to the Council that such portion of the work upon the improvements has been completed in accordance with the approved plan.
(3) Upon such certification, the Council shall authorize release by the bonding company or lending institution of an amount, as estimated by the Borough Engineer, as fairly representing the value of the improvements completed. Failure of the Council to act within the said forty-five-day period shall be deemed an approval of the release of the funds requested.
(4) The Council may require retention of 10% of the estimated cost of the aforesaid improvements prior to final release at the time of completion and certification by its Engineer.
M. Financial security for maintenance of improvements.
(1) Where the Council accepts dedication of all or some of the required improvements following completion, it may require the posting of financial security to secure structural integrity of said improvements, as well as the functioning of said improvements in accordance with the design and specifications as shown on the final plan, for a term not to exceed 18 months from the date of acceptance of dedication.
(2) Said financial security shall be of the same type as otherwise required in this section with regard to installation of such improvements, and the amount of the financial security shall not exceed 15% of the actual cost of installation of said improvements.
N. Financial security for improvements under jurisdiction of public utility or municipal authority. If water mains or sanitary sewer lines, or both, along with apparatus or facilities related thereto, are to be installed under the jurisdiction and pursuant to the rules and regulations of a public utility or municipal authority separate and distinct from the municipality, financial security to assure proper completion and maintenance thereof shall be posted in accordance with the regulations of the controlling public utility or municipal authority and shall not be included within the financial security as otherwise required by this section.
O. Issuance of permits when financial security has been posted. If financial security has been provided in lieu of the completion of improvements required as a condition for final plan approval as set forth in this section, the Borough shall not condition the issuance of zoning, building, grading or other permits relating to the erection or placement of improvements, including buildings, upon the lots or land as shown on the final plan upon actual completion of the improvements shown on the approved final plan.
P. Certificates of zoning compliance (occupancy) not to be withheld under certain conditions. If said financial security has been provided, certificates of zoning compliance or occupancy permits for any building or buildings to be erected shall not be withheld following the improvement of the streets providing access to and from existing public roads to such building or buildings to a mud-free or otherwise permanently passable condition, as well as the completion of all other improvements as shown on the approved final plan, either upon the lot or lots beyond the lot or lots in question, if such improvements are necessary for the reasonable use of or occupancy of the building or buildings.
Q. Any ordinance or statute inconsistent herewith is hereby expressly repealed.