Wherever a performance guarantee is required under the terms of this chapter, said guarantee shall be submitted in conformance with the following.
(A) Escrow account. A deposit of cash in a separate escrow account in an amount not less than 110% of the estimated cost of installation of the improvements. Said account shall be made with a financial institution acceptable to the town, and shall be established in such a manner that any release therefrom shall require the advance written consent of the town. Any interest derived from the account shall be the property of the developer, and that the town may foreclose upon or otherwise claim the proceeds without the subdivider’s consent as set forth in this chapter.
(B) Performance bond. A performance bond, issued by a recognized bonding agency acceptable to the town, in an amount not less than 110% of the estimated cost of installation of the required improvements. The bond shall be established in such a manner that any release of funds to the developer shall require the advance written consent of the town, and that the town may foreclose upon or otherwise claim the proceeds without the subdivider’s consent as set forth in this chapter.
(C) Letter of credit. An irrevocable letter of credit from a financial institution acceptable to the town, in an amount not less than 110% of the estimated cost of installation of the required improvements. The letter of credit shall be established in such a manner that any release of funds to the developer shall require the advance written consent of the town, and that the town may foreclose upon or otherwise claim the proceeds without the subdivider’s consent as set forth in this chapter.
(D) Property bond.
(1) A commitment of real property having a value of not less than 125% of the estimated cost of installation of the required improvements, as determined by the Town Council. The Town Council may require a current appraisal prepared by a certified appraiser acceptable to the town.
(2) The property offered as a guarantee shall be free of any liens or other encumbrances, and shall be secured with a trust or other appropriate encumbrance in favor of the town. Use of the property bond option shall be limited to subdivisions containing four or fewer lots.
(Ord. 02-01-2021 SD, passed - -2021)