Whenever the Township Board permits or requires a performance guarantee as security for required improvements, the performance guarantee shall be in the form of a letter of credit, certified check or cash escrow. Any such security shall be in an amount equal to 120% of the estimated cost of completion of the required public improvements, including lot improvements. The issuer of the letter of credit or the escrow agent, as applicable, shall be acceptable to the township.
(A) Letter of credit. If the developer posts a letter of credit as security, the credit shall:
(1) Be irrevocable;
(2) Be for a term sufficient to cover the completion, maintenance and warranty periods specified in this chapter or in other ordinances or regulations for the specific improvement; and
(3) Require only that the township present the credit with a sight draft and an affidavit signed by an authorized representative of the township attesting to the municipality's right to draw funds under the credit.
(B) Cash escrow or certified check. If the developer posts a cash escrow or certified check as security, the escrow instructions shall provide that:
(1) The developer shall have no right to a return of any of the funds except as provided herein; and
(2) The escrow agent shall have a legal duty to deliver the funds to the township whenever an authorized representative of the township presents an affidavit to the agent attesting to the township's right to receive funds whether or not the developer protests the right.
(C) Release or reduction of security.
(1) Certificate of satisfactory completion.
(a) The Township Board shall not accept dedication of required improvements, or release or reduce the amount of any security posted by the subdivider until the Township Engineer has submitted a certificate stating that all required improvements have been satisfactorily completed and until:
1. The applicant's engineer or surveyor has certified to the Township Engineer, through submission of a detailed "as-built" survey plat of the subdivision, indicating location, dimensions, materials and other information required by the Township Engineer, that the layout of the line and grade of all public improvements is in accordance with construction plans for the subdivision; and
2. A title insurance policy has been furnished to and approved by the Township Attorney indicating that the improvements have been completed, are ready for dedication to the township and are free and clear of any and all liens and encumbrances.
(b) Upon the approval and recommendation by the Township Engineer and Township Attorney, the Township Board may accept the improvements for dedication in accordance with the established procedure.
(2) Reduction of escrowed funds and security. If the security posted by the subdivider was a cash escrow, the amount of that escrow shall be reduced upon actual acceptance of the dedication of public improvements and then only to the ratio that the cost of the public improvement for which dedication was accepted bears to the total cost of public improvements for the subdivision. In no event shall a cash escrow be reduced below 25% of the principal amount. Funds held in the escrow account shall not be released to the subdivider, in whole or in part, except upon express written instructions of the Township Attorney. At the end of the maintenance and warranty periods, all escrowed funds, if any, shall be released to the subdivider. If the security provided by the subdivider was a letter of credit, the Township Attorney shall execute waivers of the municipality's right to draw funds under the credit upon actual acceptance of the dedication of public improvements and then only to the ratio that the cost of the public improvement for which dedication was accepted bears to the total cost of public improvements for the subdivision. In no event shall waivers be executed that would reduce the security below 25% of it original amount.
(Ord. passed 3-18-1997)