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; and
(c) Such other financial security approved by the Borough Council (which approval shall not be unreasonably withheld), but not including a second or third mortgage on the unimproved lands.
(2) Such bond, or other 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 for the completion of such improvements.
(3) Such financial security shall be posted with a bonding company or federally issued or state 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 state.
(a) The Borough Council may require that evidence be provided that such institution or company has sufficiently adequate and secure assets to cover the security.
(b) The borough shall be an authorized signatory on any account in which the escrow funds are held and all escrow funds from sales of lots shall be paid directly to such fund, and a monthly statement shall be furnished to the borough.
(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, and within the process for increases to cover inflation as permitted by the Municipalities Planning Code, 53 P.S. §§ 10101 et seq.
(2) The cost of the improvements shall be established by an estimate prepared by a state registered professional engineer, within the process established by the 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 shall be increased by an additional 10% for 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 bidding procedure.
(C) Multi-year or multi-stage development. In the case where development is projected over a period of years, the Borough Council may authorize submission of final plans by phases/stages of development subject to such requirements or guarantees as to improvements in future sections or stages of development as it finds necessary for the proper functioning of each phase and for the eventual development as a whole.
(Ord. passed 2-3-1992)