(A) Financial Guarantee Arrangements, Exceptions: In lieu of the actual installation of required public improvements, the City Commission on recommendation of the Planning Commission may permit the subdivider to provide a financial guarantee of performance in one or a combination of the following arrangements for those requirements which are over and beyond the requirements of the City, County Drain Commissioner, or any other agency responsible for the administration, operation, and maintenance of the applicable public improvement. In case these improvements are specified, completion shall be, required prior to the issuance of occupancy permits.
(1) Performance or Surety Bond:
a. Accrual: The Bond shall accrue to the regulatory agency covering construction, operation, and maintenance of the specified public improvement.
b. Amount: The bond shall be in an amount equal to the total estimated cost for completing construction of the specific public improvement, including contingencies, as estimated by the regulatory agency.
c. Term Length: The term length in which the bond is in force shall be for a period to be specified by the regulatory agency for the specific public improvement.
d. Bonding or Surety Company: The bond shall be with a surety company authorized to do business in the State of Michigan, acceptable to the regulatory agency,
e. Escrow Agreement: The escrow agreement shall be drawn and furnished by the regulatory agency.
(2) Cash Deposits, Certified Check, Negotiable Bond, or Irrevocable Bank Letter of Credit:
a. Treasurer, Escrow Agent or Trust Company. A cash deposit, certified check, negotiable bond, or an irrevocable bank letter of credit, such surety acceptable by the regulatory agency, shall accrue to the regulatory agency. These deposits shall be made with the regulatory agency, or deposited with a reasonable escrow agent, or trust company, subject to the approval of the regulatory agency.
b. Dollar Value: The dollar value of the cash deposit, certified check, negotiable bond, or irrevocable bank letter of credit, shall be equal to the total estimated cost of construction of the specific public improvement including contingencies, as estimated by the regulatory agency.
c. Escrow Time: The escrow time for the cash deposit, certified check, negotiable bond, or irrevocable bank letter of credit, shall be for a period to be specified by the regulatory agency.
d. Progressive Payment: In the case of cash deposits or certified checks, an agreement between the regulatory agency and the subdivider may provide for progressive payment out of the cash deposit or reduction of the certified check, negotiable bond or irrevocable bank letter of credit, to the extent of the cost of the accordance with a previously entered into agreement.
(B) Condition of City Approval of Final, Plat Financial Guarantees: With respect to financial guarantees, the approval of all final subdivision plats shall be conditioned on the accomplishment of one of the following:
(1) The construction of improvements required by this chapter shall have been completed by the subdivider and approved by the regulatory agency.
(2) Surety acceptable to the regulatory agency shall have been filed in the form of a cash deposit, certified check, negotiable bond, irrevocable bank letter of credit, or surety bond.
(C) Special Agreements: A special agreement shall be entered into between the subdivider and the regulatory agency where street trees and street lights have been required by the regulatory agency.
(D) Inspection of Public Improvements Under Construction: Before approving a final plat and construction plans and specifications for public improvements, an agreement between the subdivider and the regulatory agency shall be made to provide for checking or inspecting the construction and its conformity to the submitted plans.
(E) Penalty In Case of Failure to Complete the Construction of a Public Improvement: In the event the subdivider shall, in any case, fail to complete such work within such period of time as required by the conditions of any guarantee for the completion of public improvements, it shall be the responsibility of the regulatory agency to proceed to have such work completed. In order to accomplish this, the regulatory agency shall reimburse itself for the cost and expense thereof by appropriating the cash deposit, certified check, irrevocable bank letter of credit, or negotiable bond which the subdivider may have deposited in lieu of a surety bond, or may take such steps as maybe necessary to require performance by the bonding or surety company, and as included in a written agreement between the regulatory agency and the subdivider.
(F) Temporary Improvement: The applicant shall build and pay for all costs of temporary improvements required by the regulatory agency and shall maintain same for the period specified by the regulatory agency. Prior to construction of any temporary facility or improvement, the developer may be required to file with the regulatory agency a separate suitable bond for temporary facilities, which bond shall insure that the temporary facilities will be property constructed, maintained, and removed.
(G) Acceptance of Dedicated Officers: Acceptance of formal offers of dedication of streets, public areas, easements, and parks shall be by ordinance of the regulatory agency. The approval of the Planning Commission of a subdivision plat shall not be deemed to constitute or imply the acceptance by the local government of any street, easement, or park shown on said plat. The Planning Commission may require said plat to be endorsed with appropriate notes to this effect.
(H) Release or Reduction of Performance Bond:
(1) Certificate of Satisfactory Completion: The regulatory agency will not accept dedication of required improvements, nor release nor reduce a performance bond, until the City Engineer has submitted a certificate stating that all required improvements have been satisfactorily completed and until the applicant's engineer or surveyor has certified to the regulatory agency, through submission of a detailed as-built survey plat of the subdivision, indicating location, dimensions, materials, and other information required by the regulatory agency, that the layout of the line and grade of at public improvements is in accordance with construction plans for the subdivision and that a title insurance policy has been furnished to and approved by tile regulatory agency indicating that the improvements shall have been completed, are ready for dedication to the regulatory agency and are free and clear of any and all liens and encumbrances. Upon such approval and recommendation, the regulatory agency shall thereafter accept the improvements for dedication in accordance with the established procedure.
(2) Reduction of Performance Bond: A performance bond shall be reduced upon actual dedication of public improvements, to the ratio that the public improvement dedicated bears to the total public improvements for the plat. In no event shall a performance bond be reduced below twenty-five percent (25%) of the principal amount.
(Ord. 152, passed 1-19-99)