The local governing body may waive the requirements of § 159.065 of this chapter for all or part of the required improvements and permit the subdivider to provide one of the following guarantees.
(A) Surety performance bond. The subdivider shall obtain a security bond from a surety bonding company authorized to do business in the state. The bond shall be payable to the local government. The amount of the bond shall be a 100% surety and sufficient to cover one and one-half times the entire cost, as estimated by the subdivider and approved by the local government engineer, of installing all specified improvements. The duration of such bond shall be until such time as the improvements are accepted by the local government in accordance with § 159.069 of this chapter.
(B) Escrow account.
(1) The subdivider shall deposit cash, or other instrument readily convertible into cash at face value, either with the local government, or in escrow with a bank. The use of any instrument other than cash and in the case of an escrow account, the bank with which the funds are to be deposited, shall be subject to the approval of the local government. The amount of the deposit shall be at least equal to one and one-half times the cost, as estimated by the subdivider and approved by the local government engineer, of installing all required improvements.
(2) In the case of an escrow account, the subdivider shall file with the local government an agreement between the financial bank and himself or herself guaranteeing the following:
(a) That the funds of said escrow account shall be held in trust until released by the local government and may not be used or pledged by the subdivider for security in any other matter during that period; and
(b) And that in the case of a failure on the part of the subdivider to complete said improvements, then the bank shall immediately make the funds in said account available to the local government for use in the completion of those improvements.
(C) Letter of credit. The subdivider shall provide, from a bank or other reputable institution or individual, subject to the approval of the governing body, a letter of credit. This letter shall be deposited with the local government and shall certify the following:
(1) That the creditor does guarantee funds in an amount equal to one and one-half times the cost, as estimated by the subdivider and approved by the local government engineer, of installing all required improvements;
(2) That, in the case of failure on the part of the subdivider to complete the specified improvements within the required time period, the creditor shall pay to the local government immediately, and without further action, such funds as are necessary to finance the completion of those improvements, up to the limit of credit stated in the letter; and
(3) That this letter of credit may not be withdrawn, or reduced in amount, until released by the governing body.
(Prior Code, § 11-5-2) (Ord. 594, passed 8-5-1997)