§ 184-39. Performance and maintenance guarantees., Article VI. Fees, Deposits, Guarantees and Other Payments, Part 1. Land Use Procedures, Chapter 184. Land Use, Part II. General Legislation, Code of Ordinances, Fanwood

Before recording of final subdivision plats or as a condition of final site plan approval or as a condition to the issuance of a zoning approval pursuant to this chapter, the Board may require and shall accept performance and maintenance guarantees for the purpose of assuring the installation and maintenance of on tract improvements. Such performance and maintenance guarantees shall be in accordance with the following standards:

(1)

Performance guarantees. The following standards shall apply to the administration of performance guarantees:

(a)

Amount of performance guarantee. The performance guarantee for the installation of those improvements required shall be in favor of the Borough in an amount equal to 120% of the cost of such improvements. The cost of said improvements shall be determined by the Borough Engineer based on documented construction costs for improvements prevailing in the general area of the Borough. The Borough Engineer shall prepare an itemized cost estimate of the improvements covered by the performance guarantee, which estimate shall be appended to each performance guarantee posted by the obligor.

(b)

Appeal of disputed performance guarantee amounts. The developer may appeal the Borough Engineer's estimate of the cost of improvements for purposes of furnishing a performance guarantee. Such appeal shall be made in accordance with the procedures set forth in § 184-37I.

(2)

Form of guarantee. At least 10% of the performance guarantee shall be in the form of cash or a certified check made payable to the Borough. The balance of the performance guarantee shall be in the form of any security issued by an institution authorized to issue such securities in the State of New Jersey and which may be accepted by the Borough and approved by the Borough Attorney, including but not limited to surety bonds, cash and letters of credit; provided that the Borough shall only accept an irrevocable letter of credit if it:

(a)

Constitutes an unconditional payment obligation of the issuer running solely to the Borough for an express initial period of time of at least one year but not more than two years from the date of final approval;

(b)

Is in the amount determined by the Borough Engineer or the Governing Body, as applicable, as provided herein, less the amount of any other forms of guarantee furnished;

(c)

Is issued by a banking or savings institution authorized to do and doing business in the State of New Jersey; and

(d)

Permits the Borough to draw upon the letter of credit if the obligor fails to furnish another letter of credit which complies with the provisions of this section 30 days or more in advance of the expiration date of the letter of credit or such longer period in advance thereof as is stated in the letter of credit.

(3)

Time allowed for completion of improvements. The performance guarantee shall state the time period within which all improvements are to be installed by the developer. No performance guarantee shall run for a term longer than two years, except as provided otherwise by this chapter.

(4)

Extension of time allowed for completion of improvements. The time allowed for installation of the improvements for which the performance guarantee has been provided may be extended by the Governing Body by resolution. As a condition or as part of any such extension, the amount of any performance guarantee shall be increased or reduced, as the case may be, to an amount not to exceed 120% of the cost of the installation at the time of the resolution. The cost of the installation shall be determined by the Borough Engineer as provided herein for the initial cost determination.

(5)

Failure to complete improvements within time specified. If the required improvements are not completed or corrected in accordance with the performance guarantee, the obligor and surety, if any, shall be liable thereon to the Borough for the reasonable cost of the improvement not completed or corrected. The Borough may, either prior to or after receipt of the proceeds thereof, complete such improvements or use said funds to restore the property to a safe condition so that the subject property in its unfinished development state does not adversely affect the public safety or adversely impact the environment. Such completion or correction of improvements shall be subject to the public bidding requirements of the Local Public Contracts Law.

(6)

Release of performance guarantee. Release of performance guarantees shall be in accordance with the following procedure:

(a)

Upon substantial completion of all required street improvements (except for the top course) and appurtenant utility improvements, and the connection of same to the public system, the obligor may request of the Governing Body that the Borough Engineer prepare a list of all uncompleted or unsatisfactory completed improvements. The request to the Mayor and Council shall be made in writing by certified mail addressed to the Borough Clerk, with a copy of the request to be sent to the Borough Engineer. The request shall indicate which improvements have been completed and which improvements remain uncompleted in the judgment of the obligor.

(b)

Upon receiving the obligor's request, the Borough Engineer shall inspect all improvements covered by the obligor's request and shall file a detailed list and report, in writing, to the Governing Body, and shall simultaneously send a copy thereof to the obligor not later than 45 days after receipt of the obligor's request.

(c)

The detailed list prepared by the Borough Engineer shall be in accordance with the itemized cost estimate prepared by the Borough Engineer, which estimate shall have been appended to the performance guarantee as required herein. The list prepared by the Borough Engineer shall state, in detail, with respect to each improvement determined to be incomplete or unsatisfactory, the nature and extent of the incompleteness of each incomplete improvement or the nature and extent of, and remedy for, the unsatisfactory state of each completed improvement determined to be unsatisfactory.

(d)

The report prepared by the Borough Engineer shall identify each improvement determined to be complete and satisfactory together with a recommendation as to the amount of reduction to be made in the performance guarantee relating to the completed and satisfactory improvement. The recommended reduction shall be in accordance with the itemized cost estimate prepared by the Borough Engineer, which cost estimate shall have been appended to the performance guarantee as required herein.

(e)

The Governing Body, by resolution, shall either approve the improvement determined to be complete and satisfactory by the Borough Engineer, or reject any or all of these improvements. The cause for any rejection shall be stated in the resolution. If any portion of the required improvements is rejected, the approving authority may require the obligor to complete or correct such improvements and, upon completion or correction, the same procedure of notification as required herein, shall be followed.

(f)

For accepted improvements, the Governing Body shall approve and authorize the amount of reduction to be made in the performance guarantee relating to the improvements accepted. Any authorized reduction shall be in accordance with itemized cost estimate prepared by the Borough Engineer, which cost estimate shall have been appended to the performance guarantee as required herein. The resolution shall be adopted not later than 45 days after receipt of the list and report prepared by the Borough Engineer.

(g)

Any partial reduction granted in the performance guarantee as provided shall be applied to the cash deposit in the same proportion as the original cash deposit bears to the full amount of the performance guarantee.

(7)

Failure of the Borough Engineer or the Governing Body to act.

(a)

If the Borough Engineer or the Governing Body fails to act on the request for release of a performance guarantee within the time required the obligor may apply to the court in the manner provided below; provided that nothing herein shall be construed to limit the right of the obligor to contest by legal proceedings any determination of the Governing Body or the Borough Engineer.

(b)

If the Borough Engineer fails to send or provide the list and report as requested by the obligor as required herein within 45 days from receipt of the request, the obligor may apply to the court in a summary manner for an order compelling the Borough Engineer to provide the list and report within a stated time. The cost of applying to the court, including reasonable attorney's fees, may be awarded to the prevailing party.

(c)

If the Governing Body fails to approve or reject the improvements determined by the Borough Engineer to be complete and satisfactory or reduce the performance guarantee for the complete and satisfactory improvements within 45 days from the receipt of the Borough Engineer's report, the obligor may apply to the court in a summary manner for an order compelling, within a stated time, approval of the complete and satisfactory improvements and approval of a reduction in the performance guarantee for the approvals complete and satisfactory improvements in accordance with the itemized cost estimate prepared by the Borough Engineer, which cost estimate shall have been appended to the performance guarantee as required herein. The cost of applying to the court, including reasonable attorney's fees, may be awarded to the prevailing party.