(a) Agreement and security required. In lieu of completion of subdivision improvements prior to final plat approval, the subdivider may execute an agreement with adequate surety or security whereby the subdivider shall commit to completion of all improvements subsequent to final plat approval. Upon execution of an agreement by the subdivider, together with posting of adequate security or sureties as required in this chapter, the final plat shall be approved by the manager if otherwise in conformity to the requirements of this chapter. In conjunction with the agreement to complete subdivision improvements, the subdivider shall either provide a surety for the completion of the improvements or post a cash or equivalent security to secure completion of the subdivision improvements. The security or surety performance bond shall be in an amount of 1.25 times the cost of completion of all subdivision improvements as estimated by the village manager.
(1) Surety performance bond. The subdivider may obtain a performance bond from a surety bonding company authorized to do business in the state. The bonds shall be payable to the village and shall be in an amount equal to a minimum of 1.25 times the entire cost, as estimated by the village manager, of installing all required improvements. The duration of the bond shall be until such time as the improvements are accepted by the village.
(2) Cash or equivalent security. The subdivider shall deposit cash, an irrevocable letter of credit, or other instrument readily convertible into cash at face value or with the financial institution designated as an official depository of the village. The use of any instrument other than cash shall be subject to the approval of the village. The amount of deposit shall be equal to a minimum of 1.25 times the cost, as estimated by the village manager, of installing all required improvements. If cash or other instrument is deposited in escrow with a financial institution as provided above, then the subdivider shall file with the village an agreement between the financial institution, the subdivider, and the village in accordance with the following:
a. The cash or equivalent security shall be held by the financial institution in trust until release of the cash or equivalent security by the village. Such cash or equivalent security shall not be used or pledged by the subdivider in any manner, revoked, withdrawn or diverted until release of the sum by the village.Failure by the subdivider to complete all subdivision improvements pursuant to plans and specifications within the time limitations specified therefor and in conformity with this chapter shall be a default by the subdivider under its agreement. Upon notification by the manager of the subdivider's default and submission to the financial institution of an engineer's estimate of the amount needed to complete the improvements, the financial institution shall immediately pay to the village funds estimated to complete the improvements plus administrative fees up to the full balance of the cash or equivalent security. If the cash or equivalent security is in excess of the amount estimated by the engineer to complete the subdivision improvements plus administrative fees associated therewith, the financial institution shall continue to hold remaining portions of cash or equivalent security until notified by the manager that the improvements have in fact been completed. Once improvements have been completed by the village, the village may make additional demands of the financial institution for the total actual cost of completion of the improvements, together with administrative costs incurred by the village associated with default and completion of the subdivision improvements by the village. The financial institution shall thereupon pay from the cash or equivalent security all costs incurred by the village in completion thereof plus all administrative costs up to the full balance of the cash or equivalent security. Thereafter the financial institution may release to the subdivider any remaining cash or equivalent security.
(3) Default. If failure by the subdivider to complete all subdivision improvements pursuant to the plans therefor and pursuant to this chapter within the time frames set forth in the agreement, the manager shall notify the subdivider, the surety, the financial institution holding any security, and any other interested parties of the fact of default and the village's intent to complete all subdivision improvements. Upon such default the village shall undertake an engineer's estimate of the cost of completion of such improvements. The village may demand that the surety complete the improvements or may undertake the completion of the improvements itself. If the village shall elect to complete the improvements itself, the village may demand of the surety or the financial institution holding the cash or equivalent security an amount equal to the estimated cost of completion, together with all administrative costs, professional fees and any and all other costs anticipated to be incurred by the village in the completion of the improvements. Upon such demand the surety or the financial institution shall deliver funds in the amount of such estimated cost of completion to the village which shall then use such funds to complete the improvements; however, tender by the surety or the financial institution of estimated cost of completion to the village in an amount less than the surety's obligation or the cash or equivalent security shall not release the surety or financial institution from its obligations hereunder. If there remains any cash or equivalent security or any unused portion of the surety's bond after demand for the estimated cost of completion, the surety or financial institution shall retain such excess until completion of the improvements by the village. Upon completion of the improvements and ascertainment of the actual cost thereof, including all administrative or other costs incurred by the village in the completion of the improvements, the surety or financial institution shall tender to the village the actual costs incurred in completion of the improvements including administrative and other fees up to the maximum amount of the bond or cash or equivalent security. Upon completion of the project by the village and payment of the actual costs thereof by the surety or financial institution, the obligations of the surety or financial institution shall terminate and any cash or equivalent security held by any financial institution may be returned to the subdivider.
(4) Release of guarantee security. Upon successful completion of subdivision improvements by the subdivider, the village shall notify the surety or financial institution of the fact of successful completion of the improvements and the release of the subdivider from any further obligations under his agreement as well as the release of the surety or financial institution from the obligation of its bond or security agreement.
(Ord. No. 8A, art. VIII, § I(A), 7-17-1998)