(A) Agreement and security required. In lieu of requiring the completion, installation and dedication of all improvements prior to final plat approval, the town may enter into an agreement with the subdivider whereby the subdivider shall agree to complete all required improvements. Once the agreement is signed by both parties and the security required herein is provided, the final plat may be approved by the Town Commissioners if all other requirements of this ordinance are met. To secure this agreement, the subdivider shall provide, subject to the approval of the Town Commissioners, either one
or a combination of the following guarantees, not exceeding one and one-fourth times the entire cost as provided herein:
(1) Surety performance bond(s). The subdivider shall obtain a performance bond(s) from a surety bonding company authorized to do business in the state. The bonds shall be payable to the town and shall be in an amount equal to one and one-fourth times the entire cost, as estimated by the subdivider and approved by the Town Commissioners, of installing all required improvements. The duration of the bond(s) shall be until a time as the Town Commissioners accept the improvements.
(2) Cash or equivalent security. The subdivider shall deposit cash, an irrevocable letter of credit or other instrument readily convertible into cash at face value, either with the town or in escrow with a financial institution licensed to do business in the state of North Carolina. The use of any instrument other than cash shall be subject to the approval of the Town Commissioners. The amount of deposit shall be equal to one and one-fourth times the cost, as estimated by the subdivider and approved by the Town Commissioners, of installing all required improvements.
(B) Security requirements. If cash or other instrument is deposited in escrow with a financial institution as provided above, then the subdivider shall file with the Town Commissioners an agreement between the financial institution and himself or herself guaranteeing the following:
(1) The escrow account should be held in trust until released by the Town Commissioners and may not be used or pledged by the subdivider in other matters during the term of escrow; and
(2) In the case of a failure on the part of the subdivider to complete the improvements, the financial institution shall, upon notification by the Town Commissioners and submission by the Town Commissioners to the financial institution of an engineer’s estimate of the amount needed to complete the improvements, immediately either pay to the town the funds needed to complete the improvement, up to the full balance of the escrow account, or deliver to the town any other instruments fully endorsed or otherwise made payable in full to the town.
(C) Default. Upon default, meaning failure on the part of the subdivider to complete the required improvements in a timely manner as spelled out in the performance bond or escrow agreement, then the surety, or the financial institution holding the escrow account shall, if requested by the Town Commissioners, pay all or any portion of the bond or escrow fund to the town up to the amount needed to complete the improvements based on an engineering estimate. Upon payment, the Town Commissioners, in its discretion, may expend a portion of the funds as it deems necessary to complete all or any portion of the required improvements. The town shall return to the subdivider any funds not spent in completing the improvements.
(D) Release of guarantee security. The Town Commissioners may release a portion of any security posted as the improvements are completed. Within 45 days, the Town Commissioners shall approve or disapprove the improvements. If the Town Commissioners approve the improvements, then they shall immediately release any security posted on that portion.
(E) Defects guarantee. The Town Commissioners shall require a bond from the subdivider guaranteeing utility taps, curbs, gutters, street construction including pavement, sidewalks, drainage facilities, seeding and grading of road shoulders, water and sewer lines and other required improvements for one year. The one year shall begin from the date of approval of improvements by the Town Commissioners.
(Ord. passed 2-10-2009, § 14.25; Ord. passed 7-6-2022, § 2.27)