Improvement guarantees shall be provided to ensure the municipality of the proper installation and maintenance of on-site and ontract improvements. The nature and duration of the guarantee shall be structured to achieve this goal while not adding unnecessary project costs.
a. Performance Guarantees.
1. Before the signing and recording of final subdivision plats the applicant shall have installed under the inspection of the Borough Engineer, all improvements required unless the applicant has posted and the Governing Body accepted, a performance guarantee providing for such installation. The amount of the guarantee shall be deter-mined by the Borough Engineer, not to exceed one hundred twenty (120%) percent of the estimated cost of constructing the improvement including but not limited to, streets, curbs, grading, pavement gutters, sidewalks, street lighting, shade trees, surveyors monuments, water mains, culverts, storm sewers, sanitary sewers, drainage structures, soil erosion and sediment control devices.
2. Performance guarantees shall be submitted in the following form:
(a) A minimum of ten (10%) percent of the performance guarantee must be posted in cash, certified check or irrevocable standby letter of credit.
(b) The remaining ninety (90%) percent of the performance guarantee amount may be posted in cash, certified check, irrevocable standby letter of credit or surety bond in the favor of the Borough.
(c) If the applicant elects to post an irrevocable standby letter of credit, it must be written in the following form:
IRREVOCABLE STANDBY LETTER OF CREDIT
LETTER OF CREDIT NUMBER:
DATE:
BENEFICIARY Borough of Keansburg, N.J. (from now on referred to as "Borough")
AMOUNT: $
INITIAL EXPIRATION DATE:
(from now on referred as "Developer")
ISSUING FINANCIAL INSTITUTION AND ADDRESS;
(from now on referred as "Bank")
The Bank submits to the Borough this Irrevocable Standby Letter of Credit (from now on referred to as "Letter of Credit") in the amount of $ , representing the cash performance guarantee required under the provisions of the Land Use Ordinances of the Borough of , to guarantee installation and completion of the improvements required by the Borough Planning Board or Zoning Board of Adjustment (from now on referred to in either case as the "Board") in connection with the following development:
The improvements required to be completed are set forth in the Borough Engineer's estimates dated , 19 attached to this Letter of Credit and incorporated herein.
The Bank hereby agrees with respect to this Letter of Credit as follows:
1. If:
(a) The improvements required by the Board have not been installed in accordance with the development approval and the attached Engineer's estimates, and
(b) The improvements have not been accepted by the Borough by a duly adopted Resolution releasing this Letter of Credit, or
(c) The Developer has failed to perform as required by the Developer's Agreement entered into between the Developer and the Borough, which Agreement shall be deemed incorporated herein and a part of this Letter of Credit:
Then, the Bank shall release funds under this Letter of Credit to the Borough, pursuant to Paragraph 3 hereafter, for:
(a) All costs of having the improvements installed, and upon receipt of the proceeds under this Letter of Credit, the Borough shall install or have such improvements installed as may be required, and /or
(b) All costs and/or damages resulting from the Developer not having complied with the Developer's Agreement, and/or
(c) All Borough costs (including reasonable attorney's fees and expert witness' fees) of any litigation brought as a result of the Developer's failure to have the improvements in-stalled and approved or as a result of Developer having failed to perform pursuant to the Developer's Agreement.
It is expressly understood that the liability of the Bank is limited to the draw down requirements as explained in this Letter of Credit hereafter.
2. This Letter of Credit shall be valid for a period of length of time commencing on the date set forth above and expiring on the initial expiration date set forth above, except as that initial expiration date may be extended as explained hereafter. If the required improvements have not been completed, approved and accepted at least sixty (60) days before the initial expiration date set forth above, then the Borough shall have the right to draw any amount which is then due up to the full amount of this Letter of Credit. This Letter of Credit shall be automatically extended, without amendment, for periods of one year each from the initial, or any future expiration date, unless sixty (60) days prior to the expiration date, the Bank notifies the Borough Clerk and the Borough Attorney by certified mail, return receipt requested, that the Bank elects not to extend. Upon receipt of such notice, the Borough may draw under this Letter of Credit by stating in writing that the Letter has not been renewed or extended and by the Borough complying with the provisions of Paragraph 3 hereafter.
The Developer, until a replacement Irrevocable Standby Letter of Credit in this form has been deposited with the Borough, will cease and desist any and all work on the development, unless the required improvements under the approval, this Letter of Credit and the Developer's Agreement have been completed and approved by the Borough Engineer and Borough Council. In the event any occupancy is taking place in any improvements in the development, such occupancy shall then be deemed illegal, shall cease and desist. The provisions of this paragraph apply only to the Developer.
3. In all circumstances, the release of money to the Borough under this Letter of Credit (sometimes referred to as a "draw" or "draw down") shall be accomplished by a written demand setting forth the Developer's failure to perform and signed by one of the following:
(a) Borough Engineer
(b) Borough Clerk
(c) Mayor
(d) Official authorized by written Resolution, duly adopted by the Borough Council, to act in the place of the Borough Engineer, Borough Clerk or Mayor
In addition to the written demand, the Borough shall present:
(a) This original Letter of Credit if demand is made for the full amount, or a copy of this Letter of Credit if the demand is for less than the full amount, and
(b) A certified true copy of the appointing Resolution if the demand is executed by a Borough official other than the Borough Engineer, Borough Clerk or Borough Administrator.
The written demand and any required accompanying documents shall be served on the Bank by either of the following two methods:
(a) Certified Mail, Return Receipt Requested, to the Bank at the address indicated on this Letter of Credit by depositing the documents in the United States mails, postage prepaid, no later than three (3) days before the expiration date, either initial or as extended, of this Letter of Credit; or
(b) Personal presentation of the documents by any Borough representative at the Bank at the address indicated on this Letter of Credit on or before the expiration date, either initial or as extended.
4. The Bank and Developer hereby irrevocably bind themselves, their heirs, successors, assigns and representatives to the full and faithful performance of the obligations contained in this Letter of Credit until all conditions for release as provided in this Letter of Credit are complied with. It is expressly understood that the obligation of the Bank shall terminate upon full release of this Letter of Credit by the Borough.
5. The use, i.e. draw down, of all or part of this Letter of Credit shall in no way be deemed to constitute a waiver of any other right the Borough may have under law or other documents delivered to the Borough by the undersigned Developer. It is expressly understood that the provisions of this paragraph shall not apply to the Bank.
ATTEST: (Affix Seal) DEVELOPER:
___________________________
Secretary
DATED:
___________________________
President
DATED:
FINANCIAL INSTITUTION:
ATTEST: (Affix Seal)
BY:
___________________________
Secretary
DATED:
___________________________
President
DATED:
STATE OF NEW JERSEY: ss
COUNTY OF :
I.certify that on ___________________, 19 _____, ______________________ personally came before me and this person acknowledged under oath, to my satisfaction, that:
(a) This person is the secretary of the financial institution in the attached documents;
(b) This person is the attesting witness to the signing of this document by the proper corporate officer who is , the President of the financial institutions;
(c) This document was signed and delivered by the corporation as its voluntary act duly authorized by a proper Resolution of its Board of Directors;
(d) This person knows the proper seal of the corporation which was affixed to this document; and
(e) This person signed this proof to attest to the truth of these facts.
Secretary
Sworn and Subscribed to before me this day of ,
19..
___________________________
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires
___________________________
(Impress Seal)
IF CORPORATE DEVELOPER
STATE OF NEW JERSEY: ss:
COUNTY OF :
I.certify that on , 19 , ___________________________ personally came before me and this person acknowledged under oath, to by satisfaction, that:
(a) This person is the secretary of the Developer named in the attached document;
(b) This person is the attesting witness to the signing of this document by the proper corporate officer who is the President of the Developer;
(c) This document was signed and delivered by the corporation as its voluntary act duly authorized by a proper resolution of its Board of Directors;
(d) This person knows the proper seal of the corporation which was affixed to this document; and
(e) This person signed this proof to attest to the truth of these facts.
___________________________
Secretary
Sworn and Subscribed to before me this day of ,
19..
___________________________
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires on
___________________________
(Impress Seal)
IF INDIVIDUAL DEVELOPER
STATE OF NEW JERSEY: ss
COUNTY OF :
I.certify that on , 19 , ___________________________ personally came before me and this person acknowledged under oath, to my satisfaction, that:
(a) This person is named in and personally signed this document; and
(b) This person signed, sealed and delivered this document as his act and deed.
Sworn and Subscribed to before me this day of , 19 .
___________________________
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires on
___________________________
(Impress Seal)
(d) All guarantees shall provide for construction of the required improvements within two (2) years of the date of their posting. This time period may be extended by the Governing Body, in the form of a resolution granting such extension provided the Municipal Agency has, if necessary, extended the period of protection pursuant to N.J.S.A. 40:55D-52a. As a condition of this extension the guarantee amount may be adjusted to one hundred twenty (120%) percent of the estimated cost to construct the improvements at that time.
(e) All performance guarantees shall remain in effect until formally released by the Governing Body by a resolution.
(f) All guarantees, sureties, and lending institutions are subject to the approval of the Municipal Attorney and the Governing Body.
3. Inspections.
(a) All site improvements shall be inspected during the time of their installation under the supervision of the Borough Engineer. Prior to the start of construction of any improvements, the applicant shall deposit by cash or certified check with the Borough Clerk the applicable inspection fee required by Section 22-3.
(b) In no case shall installation of underground facilities or any paving work be conducted without permission from the Borough Engineer.
(c) The Engineer's office shall be notified two (2) working days prior to commencement of each of the following phases of construction so that the Engineer or a qualified representative may be present to inspect the work.
(1) Road subgrade.
(3) Curbs and gutters.
(4) Road paving.
(5) Sidewalk forms.
(6) Sidewalks.
(8) Street name signs.
(9) Monuments.
(10) Sanitary sewers.
(11) Detention and/or retention basins.
(12) Topsoil, seeding, planting, shade trees.
(d) Any improvement installed contrary to the plan or plat approval by the Borough shall constitute just cause to void the municipal approval.
(e) Any improvements installed without notice for inspection shall constitute just cause for:
(1) The issuance of a "stop work" order by the Municipal Engineer pending the resolution of any dispute.
(2) Removal of the uninspected improvements.
(3) The payment by the developer of any costs for material testing.
(4) The restoration by the developer of any improvements disturbed during any material testing.
(f) Inspection by the Borough of the installation of improvements and utilities shall not operate to subject the Borough to liability for claims, suits or liability of any kind that may at any time arise because of defects or negligence during construction or at any time thereafter; it being recognized that the responsibility to maintain safe conditions at all times during construction and to provide proper utilities and improvements is upon the owners and his contractor, if any.
4. Developers Agreement.
(a) Prior to the signing and recording of final major subdivision plats and as a condition of final site plan approval in the case of a site plan, the developer shall enter into an agreement with the Governing Body. This agreement shall be of a form that is accept-able to the Municipal Attorney and one in which the developer agrees to abide by the terms and conditions of the Board approval, construct the required improvements in accordance with the approved plans, agree to maintain the constructed improvements including but not limited to, payment of street lighting charges, snow removal, maintenance of storm drainage, sewer and water facilities. The developer also shall agree that in the event the improvements are not maintained, the Borough can utilize the cash portions of the performance guarantees to immediately attend to items presenting a safety hazard.
5. Release of Guarantees.
(a) Upon substantial completion of required appurtenant utility improvements, and the connection of same to the public system, the obligator may notify the Governing Body in writing, by certified mail addressed in care of the Municipal Clerk of the completion of substantial completion of improvements and shall send a copy thereof to the Municipal Engineer. Concurrent with this notice the obligor shall forward a set of as-built plans for the following:
(1) Roads (plans and profiles).
(2) Surface and storm water drainage (plans and profiles) for facilities in roads and easements.
(3) Sanitary sewers including individual lot connections and cleanouts (plans and profiles) for facilities in roads and easements.
(4) Water mains, gas mains and under-ground electric, telephone and community antenna television (C.A.T.V.) conduits (plans and profiles) for facilities in roads and easements.
Thereupon the Municipal Engineer shall inspect all improvements of which such notice has been given and shall file a de-tailed report, in writing, with the Governing Body, indicating either approval or rejection of such improvements with a statement of reasons for any rejection. The cost of the improvements as approved or rejected shall be set forth.
(b) The Governing Body shall either approve, or reject the improvements, on the basis of the report of the Municipal Engineer and shall notify the obligor in writing, by certified mail, of the contents of said report and the action of said approving authority with relation thereto, not later than sixty-five (65) days after receipt of the notice from the obligor of the completion of the improvements. Where partial approval is granted, the obligor shall be released from all liability pursuant to its performance guarantee, except for that portion adequately sufficient to secure provision of the improvements not yet approved; provided that thirty (30%) per-cent of the amount of the performance guarantee posted is retained to ensure completion of all improvements. Failure of the Governing Body to send or provide such notification to the obligor within sixty-five (65) days shall be deemed to constitute approval of the improvements and the obligor and surety, if any, shall be released from all liability pursuant to such performance guarantee for such improvements.
(c) If any portion of the required improvements are rejected, the obligor is required to complete such improvements and, upon completion, the same procedure of notification, as set forth in this section shall be followed.
(d) Any release of performance guarantees will be conditioned upon the provisions of a maintenance guarantee to be posted with the Governing Body, in an amount equal to fifteen (15%) percent of the performance guarantee amount. (Ord. #1045, §10.1)
