A. The applicant shall determine the form(s) of the performance guarantee, which shall be provided in one or more of the following forms:
1. Cash or Irrevocable (Evergreen) Letter of Credit.
a. The developer shall deposit cash or an irrevocable (or "evergreen") letter of credit either with the Town or in escrow with a North Carolina financial institution.
b. If cash or other instrument is deposited in escrow with a financial institution, an agreement between the financial institution and the developer shall be filed with the Town guaranteeing the following:
i. That the escrow account shall be held in trust until released by the Town and may not be used or pledged by the developer for any other matter during the term of the escrow; and
ii. That in case of a failure on the part of the developer to complete or repair the improvements, the financial institution shall, upon notification by the Town, immediately pay the funds deemed necessary by the Town to complete or repair the improvements 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.
iii. The financial institution holding the cash or other instrument shall indicate to the Town its notification requirements for release or payment of funds.
2. Surety Bond.
a. The developer shall obtain a surety bond from a surety bonding company authorized to issue surety bonds in North Carolina.
b. The bond shall be payable to the Town and shall be in an amount as required by this subsection.
3. Other Guarantee. The developer may provide another form of guarantee that provides equivalent security to a surety bond or letter of credit, as determined by the Town Attorney.
B. The performance guarantee shall distinguish between the portion of the guarantee provided for public infrastructure improvements as well as the portion of the guarantee provided for private site improvements, if applicable.
C. The performance guarantee shall be conditioned on the performance of all work necessary to complete the installation of the required improvements within the term of the guarantee.
(Ord. 2020-36, passed 12-2-2019)