§ 22-602.   Financial Security and Improvement Guarantee.
   1.   General.
      A.   The administration of the financial security shall comply with the provisions of Article V, Section 509 the PA Municipalities Planning Code, Act 247, as amended, and other applicable laws of the Commonwealth of Pennsylvania.
      B.   Such financial security shall provide for, and secure to the public, the completion of any improvements which may be required on or before the date fixed in the formal action of approval or in the developer’s agreement for completion of the improvements. (See Appendix D)
   2.   Submission of Improvements Guarantee. Final plan applications that include public improvements that have not been installed shall include an improvement guarantee in the form of financial security.
      A.   Type of Financial Security.
         (1)   Without limitation as to other types of financial security which the Borough may approve, which approval shall not be unreasonably withheld, Federal or Commonwealth chartered lending institution irrevocable letters of credit and restrictive or escrow accounts in such lending institutions shall be deemed acceptable financial security for the purposes of this section.
         (2)   Such financial security shall be posted with a bonding company or Federal or Commonwealth chartered lending institution chosen by the party posting the financial security, provided said bonding company or lending institution is authorized to conduct such business within the Commonwealth.
         (3)   Such bond, or other security shall provide for, and secure to the public, the completion of any improvements which may be required on or before the date fixed in the formal action of approval or accompanying agreement for completion of the improvements.
      B.   Amount of Financial Security.
         (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. Annually, the Borough may adjust the amount of the financial security by comparing the actual cost of the improvements which have been completed and the estimated cost for the completion of the remaining improvements which have been completed and the estimated cost for the completion of the remaining improvements as of the expiration of the 90th day after either the original date scheduled for completion or a rescheduled date of completion. Subsequent to said adjustment, the Borough may require the developer to post additional security in order to assure that the financial security equals said 110%. Any additional security shall be posted by the developer in accordance with this subsection.
         (2)   The amount of financial security required shall be based upon an estimate of the cost of completion of the required improvements, submitted by the applicant prepared by a professional engineer licensed as such in Pennsylvania and certified by such engineer to be a fair and reasonable estimate of such cost. The estimate submitted to the Borough shall be organized and itemized to provide a detailed line by line estimate of costs of all public improvements required. The Borough, upon the recommendation of the Borough Engineer, may refuse to accept such estimate for good cause shown. If the applicant and the Borough are unable to agree upon an estimate, then the estimate shall be recalculated and recertified by another professional engineer licensed as such in Pennsylvania and chosen mutually by the Borough and the applicant. The estimate certified by the third engineer shall be presumed fair and reasonable and shall be the final estimate. In the event that a third engineer is so chosen, fees for the services of said engineer shall be paid equally by the Borough and the applicant.
         (3)   If the party posting the financial security requires more than 1 year from the date of posting of the financial security to complete the required improvements, the amount of financial security may be increased by an additional 10% for each 1 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 remaining required improvements as reestablished on or about the expiration of the preceding one-year period.
         (4)   In the case where development is projected over a period of years, the Borough may authorize submission of final plans by section or stages of development subject to such requirements or guarantees as to improvements in future section or stages of development as it finds essential for the protection of any finally approved section of the development.
      C.   Developer’s Agreement. The applicant shall declare the intent to provide an improvement guarantee by executing the developer’s agreement included in this Chapter. The developer’s agreement shall be executed prior to the recordation of the final plan.
   3.   Plan Approval Conditioned Upon Financial Security. When requested by the developer, in order to facilitate financing, the governing body or the planning agency, if designated, shall furnish the developer with a signed copy of a resolution indicating approval of the final plan contingent upon the developer obtaining a satisfactory financial security. The final plan or record plan shall not be signed nor recorded until the financial improvements agreement is executed. The resolution or letter of contingent approval shall expire and be deemed to be revoked if the financial security agreement is not executed within 90 days unless a written extension is granted by the governing body; such extension shall not be unreasonably withheld and shall be placed in writing at the request of the developer.
   4.   Release of Financial Security.
      A.   As the work of installing the required improvements proceeds, the party posting the financial security may request the Borough to release or authorize the release, from time to time, of such portions of the financial security necessary for payment to the contractor or contractors performing the work. Any such requests shall be in writing addressed to the Borough, and the Borough shall have 45 days from receipt of such request within which to allow the Borough Engineer to certify, in writing, to the Borough that such portion of the work upon the improvements has been completed in accordance with the approved plan. Upon such certification the Borough shall authorize release by the bonding company or lending institution of an amount as estimated by the Borough Engineer fairly representing the value of the improvements completed or, if the Borough fails to act within said 45 days period, the Borough shall be deemed to have approved the release of funds as requested. The Borough shall always, prior to final release at the time of completion and certification by the Borough Engineer, require retention of a minimum of 10% of the estimated cost of the aforesaid improvements. Such funds will be released only after certification by the Borough Engineer that all required public improvements so guaranteed have been completed satisfactorily.
      B.   When the developer has completed all of the necessary and appropriate improvements, the developer shall notify the Borough, in writing, by certified or registered mail, of the completion of the aforesaid improvements and shall send a copy thereof to the Borough Engineer. The Borough shall, within 10 days after receipt of such notice, direct and authorize the Borough Engineer to inspect all of the aforesaid improvements. The Borough Engineer shall, thereupon, file a report, in writing, with the Borough, and shall promptly mail a copy of the same to the developer by certified or registered mail. The report shall be made and mailed within 30 days after receipt by the Borough Engineer of the aforesaid authorization from the governing body; said report shall be detailed and shall indicate approval or rejection of said improvements, either in whole or in part, and if said improvements, or any portion thereof, shall not be approved or shall be rejected by the Borough Engineer, said report shall contain a statement of reasons for such nonapproval or rejection.
         (1)   The Borough shall notify the applicant, within 15 days of receipt of the Borough Engineer’s report, in writing by certified or registered mail of the action of said Governing Body with relation thereto.
         (2)   If the Borough or the Borough Engineer fails to comply with the time limitation provisions contained herein, all improvements will be deemed to have been approved and the applicant shall be released from all liability, pursuant to this performance guaranty bond or other security agreement.
         (3)   If any portions of the said improvements are not approved or are rejected by the Borough, the applicant shall proceed to complete the same with the required corrections and, upon completion, the same procedure of notification, as outlined herein, shall be followed. Upon satisfactory completion of all required improvements, after consultation with the Borough Manager and the Borough Engineer, the Borough may release to the applicant any remaining financial security, including by not limited to, the withheld 10% minimum.
      C.   Nothing herein shall be construed as a limitation of the applicant’s right to contest or question by legal proceedings or otherwise, any determination of the Borough or the Borough Engineer.
   5.   Remedies to Effect Completion of Improvements. In the event that any improvements which may be required have not been installed as provided in this Chapter or in accordance with the approved final plan, the Borough is hereby granted the power to enforce any financial security by appropriate legal and equitable remedies. If proceeds of the financial security are insufficient to pay the cost of installing or making repairs or corrections to all the improvements covered by said security, the Borough may, at its option, install all or part of such improvements and may institute appropriate legal or equitable action to recover the funds necessary to complete the remainder of the improvements. All of the proceeds, whether resulting from the security or from any legal or equitable action brought against the applicant, or both, shall be used solely for the installation of the improvements covered by such security, and not for any other Borough purpose.
   6.   Other Effects of Financial Security. If financial security has been provided in lieu of the completion of improvements required as a condition for the final approval of a plan as set forth in this Section, the Borough shall not condition the issuance of building, grading or other permits relating to the erection or placement of improvements, including buildings, upon the lots or land as depicted upon the final plan upon actual completion of the improvements depicted upon the approved final plan. Moreover, if said financial security has been provided, occupancy permits for any building or buildings shall not be withheld following:
      A.   The application of the asphalt binder course the streets providing access to and from existing public roads to such building or buildings; as well as
      B.   The completion of all other improvements as depicted upon the approved plan, either upon the lot or lots or beyond the lot or lots in question if such improvements are necessary for the reasonable use of or occupancy of the building or buildings.
(Ord. 614, 5/11/2015)