(A) In lieu of prior construction of the improvements required by this subchapter, the village may, for the purpose of approving a final plat, accept a guarantee from the subdivider that such improvements will be carried out according to the village's specifications at his expense.
(1) Type. The type of the performance guarantee shall be at the election of the developer. The term “PERFORMANCE GUARANTEE” means any of the following forms of guarantee:
(a) Surety bond issued by any company authorized to do business in this state.
(b) Letter of credit issued by any financial institution licensed to do business in this state.
(c) Other form of guarantee that provides equivalent security to a surety bond or letter of credit.
(1a) Duration. The duration of the performance guarantee shall initially be one year, unless the developer determines that the scope of work for the required improvements necessitates a longer duration. In the case of a bonded obligation, the completion date shall be set one year from the date the bond is issued, unless the developer determines that the scope of work for the required improvements necessitates a longer duration.
(1b) Extension. A developer shall demonstrate reasonable, good-faith progress toward completion of the required improvements that are secured by the performance guarantee or any extension. If the improvements are not completed to the specifications of the village, and the current performance guarantee is likely to expire prior to completion of the required improvements, the performance guarantee shall be extended, or a new performance guarantee issued, for an additional period. An extension under this subdivision shall only be for a duration necessary to complete the required improvements. If a new performance guarantee is issued, the amount shall be determined by the procedure provided in division (A)(3) below and shall include the total cost of all incomplete improvements.
(2) Release. The performance guarantee shall be returned or released, as appropriate, in a timely manner upon the acknowledgement by the village that the improvements for which the performance guarantee is being required are complete. The village shall return letters of credit or escrowed funds upon completion of the required improvements to its specifications or upon acceptance of the required improvements, if the required improvements are subject to local government acceptance. When required improvements that are secured by a bond are completed to the specifications of the village, or are accepted by the village, if subject to its acceptance, upon request by the developer, the village shall timely provide written acknowledgement that the required improvements have been completed.
(3) Amount. The amount of the performance guarantee shall not exceed 125% of the reasonably estimated cost of completion at the time the performance guarantee is issued. The village may determine the amount of the performance guarantee or use a cost estimate determined by the developer. The reasonably estimated cost of completion shall include 100% of the costs for labor and materials necessary for completion of the required improvements. Where applicable, the costs shall be based on unit pricing. The additional 25% allowed under this division (A)(3) includes inflation and all costs of administration regardless of how such fees or charges are denominated. The amount of any extension of any performance guarantee shall be determined according to the procedures for determining the initial guarantee and shall not exceed 125% of the reasonably estimated cost of completion of the remaining incomplete improvements still outstanding at the time the extension is obtained.
(3a) Timing. The performance guarantee shall be posted at the time the plat is recorded.
(4) Coverage. The performance guarantee shall only be used for completion of the required improvements and not for repairs or maintenance after completion.
(5) Multiple guarantees. The developer shall have the option to post one type of a performance guarantee as provided for in division (A)(1) above, in lieu of multiple bonds, letters of credit, or other equivalent security, for all development matters related to the same project requiring performance guarantees.
(6) Exclusion. Performance guarantees associated with erosion control and stormwater control measures are not subject to the provisions of this section.
(B) The village shall require a bond guaranteeing utility taps, curbs, gutters, sidewalks, drainage facilities, water and sewer lines, and other improvements against defects for one year. This bond shall be in the amount determined by the Village Council and shall be in cash or be made by a surety company authorized to do business in North Carolina.
(C) The Village Council shall secure from all subdividers a letter in which said subdivider shall agree to maintain the backfill and improvements located thereon and therein and any ditch or drain tile which has been dug or installed in connection with the installation of such improvements. Such letter shall be binding on the subdivider for a period of one year after the acceptance of such improvements by the Village Council. The subdivider shall notify the buyer of the nature, extent, and location of these improvements and shall include such notice as a part of the written sales transaction. The buyer is to assume maintenance and upkeep for these improvements and this responsibility for maintenance of such improvements on all such lands until sale thereof is made.
(D) No final plat will be accepted for review by the Village Council unless this section has been complied with.
(Ord., passed 6-2-77; Am. Ord., passed 11-20-85; Am. Ord., passed 6-23-21)