A. 
With submittal of the application for final plan approval, the applicant shall provide one of the following performance guarantees for an amount adequate to cover the total construction costs of all required improvements, taking into account the time span of the construction schedule and the inflation rate for construction costs:
(1) 
Either a certified check payable to the municipality or a savings account or certificate of deposit for the establishment of an escrow account in such form as permitted by law and approved as to form by the Town Attorney;
(2) 
An irrevocable letter of credit from a financial institution establishing funding for the construction of the subdivision, from which the Town may draw if construction is inadequate, approved by the Town Council or Town Attorney; or
(3) 
Any other performance guarantee approved by the Town Council and Town Attorney, provided that, in their opinion, such performance guarantees provide substantially similar financial protection for the Town as Subsection A(1) or (2).
B. 
The conditions and amount of the performance guarantee shall be determined by the Planning Board with the advice of the Town Engineer, Public Works Director, Town Council, and/or Town Attorney.
The performance guarantee shall contain a construction schedule, cost estimates for each major phase of construction, taking into account inflation, provisions for inspections of each phase of construction, provisions for the release of part or all of the performance guarantee to the developer, and a date after which the applicant will be in default and the Town shall have access to the funds to finish construction.
A cash contribution for the establishment of an escrow account shall be made by either a certified check made out to the Town, the direct deposit (or a functional equivalent) into a savings account, or the purchase of a certificate of deposit in such form as permitted by law and approved as to form by the Town Attorney. For any account opened by the applicant, the consent of the Town Manager shall be required for a withdrawal.
An irrevocable letter of credit from a bank or other lending institution shall indicate that funds have been set aside for the construction of the subdivision and may not be used for any other project or loan and may be released only upon written authorization of the Town Manager.
The Board may approve plans to develop a major subdivision in separate and distinct phases. This may be accomplished by limiting final approval to those lots abutting that section of the proposed subdivision street which is covered by a performance guarantee. When development is phased, road construction shall commence from an existing public way. Final approval of lots in subsequent phases shall be given only upon satisfactory completion of all requirements pertaining to previous phases.
The performance guarantee shall remain in force for the entire period during which development of the subdivision occurs (or, in the case of default, while the Town pursues its remedies for default) until the guarantee is released by the Town in accordance with § 275-67. If the time frame for constructing the improvements covered by the guarantee is extended, the performance guarantee shall also be extended.
Prior to the release of any part of the performance guarantee, the Planning Board shall determine to its satisfaction that the proposed improvements meet or exceed the design and construction requirements for that portion or phase of the subdivision for which the release is requested. The approval of the Planning Board shall occur at a regular meeting of the Board following the review of the request at a workshop meeting. The decision of the Planning Board shall be based upon the report of the Town Engineer or other engineer retained by the Director of Public Works and any other agencies and departments who may be involved.
If, upon inspection, the Town Engineer or other engineer retained by the Director of Public Works finds that any of the required improvements have not been constructed in accordance with the plans and specifications filed as part of the application, he or she shall so report in writing to the Director of Public Works, Planning Director, Town Manager, and the applicant or builder. The Town Manager shall take any steps necessary to preserve the Town's rights.
Performance guarantees shall be tendered for all improvements required to meet the standards of these regulations and for the construction of the streets, stormwater management facilities, public sewage collection or disposal facilities, public water systems, and erosion and sedimentation control measures.