18.100.125 Financial responsibility

18.100.125 Financial responsibility.

When the developer elects to obtain final plat approval prior to the full installation of improvements required by HBC 18.100.090, the commission shall require the developer to guarantee the installation of such improvements by one or a combination of the methods specified below. This is to encourage development by allowing the developer to proceed with final plat approval in order to allow the sale of lots prior to construction of all required improvements.

In all such methods guaranteeing installation of improvements, the borough shall estimate the cost of the improvements and shall require the installation of improvements within one year of date of final plat approval. The use of any method of financial guarantee allowed by this section shall require the developer to pay a $250.00 nonrefundable administrative fee to the borough for administrative costs.

A. Performance and Payment Bond. The developer may furnish and file with the borough a corporate surety bond or cash bond to provide performance and payment bonding equal to the 120 percent of the estimated cost of the improvements to assure the actual construction of such improvements. In cases where the developer chooses to furnish a cash bond, such funds shall be deposited in an interest-bearing account by the borough, with any interest accrued to be refunded to the developer upon refund of the bond.

B. Re-Conveyance Agreement. The developer may convey to the borough a lot or lots, the value of which is equal to, or greater than, 120 percent of the estimated costs of improvements. The property to be conveyed must be marketable property adjacent to both an improved public street and installed public utilities or DEC-approved utilities. The conveyance shall be accompanied by a policy of title insurance showing title in the borough, free and clear of liens and encumbrances, naming the borough as the insured and a re-conveyance agreement containing the terms of re-conveyance of the lots to the developer after completion of the improvements. The borough assessor shall determine the value of the property. All submittals must be approved as to form by the borough attorney. The developer shall pay all legal review and document preparation costs, as well as title report, recording fees and any other fees associated with a re-conveyance agreement; provided, that work performed by borough staff is paid by the administrative fee established in this section. Re-conveyance will occur after the borough certifies that all improvements have been satisfactorily completed within the required time period, or any extensions thereto.

1. Upon conditional acceptance of the improvements by the borough, the developer shall furnish and file with the borough a corporate surety or cash bond in an amount equal to five percent of the cost of improvements for payments of any reconstruction or repair of improvements that may be necessary within one year from the conditional acceptance.

2. Method of Compliance. When in the judgment of the borough, the improvements are in need of reconstruction, repair or maintenance during the first year after date of installation, the borough shall notify the developer, in writing by certified mail, stating the area of discrepancy and the recommended remedial action. Within 20 days of receipt of a letter stating the need for repair or maintenance, the developer shall furnish to the borough, in writing, a schedule for completion of the necessary repair or maintenance.

D. Default. In the event the subdivider defaults or fails or neglects to satisfactorily install the required improvements within the agreed-upon time or to repair and maintain the required improvements during the warranty period, the borough assembly may declare the bond or other guarantee forfeited, and the borough may install or contract to have installed the required improvements or perform or contract to have performed the required maintenance, using the proceeds from the collection of the bond, deposit or other guarantee to defray the expense thereof.

E. Acceptance and Release of Surety. The release of financial guarantees shall utilize the following procedures:

1. Conditional acceptance of the whole or a part of the required improvements shall be given after installation and written approval thereof from the manager. The bond or other guarantee may then be released in whole or in part. Partial releases shall be made in installments no smaller than 25 percent of the amount originally posted. The final 10 percent or such other amount as may be remaining upon completion of the improvements shall be retained by the borough until a maintenance bond is posted in accordance with subsection (C) of this section.

2. If the developer has not completed installation of the required improvements within one year of the date of final plat approval, the developer shall forfeit to the borough all bonds, cash or property provided to secure installation of the improvements. Upon such forfeiture, the borough shall proceed to install, or contract to install, the required improvements using the proceeds from the collection of the bond or other guarantee to defray the expense thereof.