The performance guarantee for completion of required improvements shall meet the following requirements.
(A) Security.
(1) The guarantee shall be secured by the credit of any of the following:
(a) An irrevocable and unconditional letter of credit of a federal or state chartered lending institution;
(b) A restrictive or escrow account in a federal or state-chartered lending institution; or
(c) Such other financial security approved by the borough (which approval shall not be unreasonably withheld), but not including a second or third mortgage on the unimproved lands.
(2) Such approved security shall provide for, and secure to the public, the completion of any improvements which may be required within one year of the date fixed in the development schedule (see division (B)(2) below) for the completion of such improvements.
(3) Such financial security shall be posted with a federally insured or state-chartered lending institution chosen by the party posting the financial security, or such other approved entity, provided such institution or entity is authorized to conduct such business within the state.
(a) The borough may require that evidence be provided that such institution or entity has sufficiently adequate and secure assets to cover the security.
(b) The borough shall be the authorized signatory on any account in which the escrow funds are held.
(B) Amount.
(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 in the official development schedule pursuant to a developer’s agreement, and within the process for increases to cover inflation as permitted by the Pennsylvania Municipalities Planning Code.
(2) The cost of the improvements shall be established by an estimate prepared by a state registered professional engineer, which shall be reviewed by the Borough Engineer, within the arbitration process permitted by the Pennsylvania Municipalities Planning Code.
(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 a maximum of an additional 10% or each one-year period beyond the first anniversary date from 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 procedure.
(4) Inspection fees: the amount of financial security shall also include an additional 5% of the estimated cost of completion of the work to guarantee payment of inspection fees and related engineering costs.
(C) Multi-year or multi-stage development. In the case where development is projected over a period of years, the borough may authorize submission of final plans by phases/stage of development subject to such requirements or improvement guarantees concerning future improvements as it finds necessary for the proper functioning of each phase and for the eventual development as a whole.
(Ord. 1432, passed 5-18-2015, Art. 6, § 604)