Borough of Belmar, NJ Guarantees, Inspections

[Ord. No. 1992-32 § 10.1]

Improvement guarantees shall be provided prior to the recording of final subdivision plats or as a condition of final site plan approval to ensure the municipality of the proper installation and maintenance of on-site and on-tract improvements.

Performance Guarantees.

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 determined by the Borough Engineer, not to exceed 120% of the estimated cost of constructing the improvement including: streets, curbs, grading, pavement, gutters, sidewalks, street lighting, shade trees, surveyor's monuments, water mains, culverts, storm sewers, sanitary sewers, drainage structures, soil erosion and sediment control devices, public improvements of open space and, in the case of site plans only, other on-site improvements and landscaping. The Borough Engineer shall prepare an itemized cost estimate of the improvements covered by the performance guarantee, which itemized cost estimate shall be appended to each performance guarantee posted by the obligor.

Performance guarantees shall be submitted in the following form:

(a)

A minimum of 10% of the performance guarantee must be posted in cash.

(b)

The remaining 90% 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 as a performance (or maintenance) guarantee, it shall constitute an unconditional payment obligation of the issuer running solely to the Borough for an express initial period of time in the amount determined pursuant to N.J.S.A. 40:55D-53; be issued by a banking or savings institution authorized to do so and doing business in the State of and permit 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 60 days or more in advance of the expiration date of the letter of credit.

(d)

An irrevocable standby letter must be in the following form:

IRREVOCABLE STANDBY LETTER OF CREDIT
LETTER OF CREDIT NUMBER:
DATE:
BENEFICIARY: Borough of Belmar, N.J. (from now on referred to as "Borough")
AMOUNT: $
INITIAL EXPIRATION DATE:
DEVELOPER:
(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 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 ______________, 20___ 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 installed 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 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 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 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 subsection 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 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 subsection shall not apply to the Bank.

DEVELOPER:

ATTEST: (Affix Seal)

____________________________ BY:

Secretary President

DATED DATED:

FINANCIAL INSTITUTION:

ATTEST: (Affix Seal)

__________ BY:

Secretary President

DATED: DATED:

STATE OF NEW JERSEY:

COUNTY OF

I certify that on __________, 20_____, 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, 20___.

NOTARY PUBLIC OF NEW JERSEY

My Commission Expires

(Impress Seal)

IF CORPORATE DEVELOPER

STATE OF NEW JERSEY:

COUNTY OF:

I certify that on __________, 20_____, personally came before me and this person acknowledged under oath, to my 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 _____, 20___.

NOTARY PUBLIC OF NEW JERSEY

My Commission Expires

(Impress Seal)

IF INDIVIDUAL DEVELOPER

STATE OF NEW JERSEY:

COUNTY OF:

I certify that on _______________________, 20_____, 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 ___________, 20___.

NOTARY PUBLIC OF NEW JERSEY

My Commission Expires

(Impress Seal)

(e)

All guarantees shall provide for construction of the required improvements within two years of the date of their posting or such other time as determined by the Municipal Agency. 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 or 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 which cost shall be determined by the Borough Engineer according to the method of calculation set forth in N.J.S.A. 40:55D-53.4 as of the time of the passage of the resolution.

(f)

All performance guarantees shall remain in effect until formally released by the governing body by a resolution.

(g)

All guarantees, sureties, and lending institutions are subject to the approval of the municipal attorney and the governing body.

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 Article 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 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.

(2)

Curb and gutter forms.

Curbs and gutters.

Road paving.

Sidewalk forms.

Sidewalks.

Drainage pipes and other drainage construction.

Street name signs.

Monuments.

Sanitary sewers.

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 of material testing.

(4)

The restoration by the developer of improvements disturbed by 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 owner and his contractor, if any.

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 if so required by the Municipal Agency. This agreement shall be of a form that is acceptable to the municipal attorney and one in which the developer agrees to abide by the terms and conditions of 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 pursuant to N.J.S.A. 40:55D-53.6, 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.

Release of Guarantees.

(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 in writing, by certified mail addressed in care of the Municipal Clerk that the Borough Engineer prepare, in accordance with the itemized cost estimate prepared by the Borough Engineer and appended to the performance guarantee pursuant to Subsection 40-10.1a1 above, a list of all uncompleted or unsatisfactory completed improvements. If such a request is made, the obligor shall send a copy of the request to the Borough Engineer. The request shall indicate which improvements have been completed and which improvements remain uncompleted in the judgment of the obligor. Concurrent with this notice the obligor shall forward a set of as-built plans for the following:

(1)

Roads (plan 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 underground electric, telephone and community antenna television (C.A.T.V.) conduits (plans and profiles) for facilities in roads and easements.

(b)

Thereupon the Municipal Engineer shall inspect all improvements covered by the obligor's request and shall file a detailed list and report, in writing, with the governing body, and shall simultaneously send a copy thereof to the obligor not later than 45 days after the obligor's request.

(c)

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. 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, in accordance with the itemized cost estimate prepared by the Borough Engineer and appended to the performance guarantee pursuant to Subsection 40-10.1a1 of this chapter.

(d)

The governing body, by resolution, shall either approve, the improvements determined to be complete and satisfactory by the Borough Engineer or reject any or all of these improvements upon the establishment in the resolution of cause for rejection, and shall approve and authorize the amount of reduction to be made in the performance guarantee relating to the improvements accepted, in accordance with the itemized cost estimate prepared by the Borough Engineer and appended to the performance guarantee pursuant to Subsection 40-10.1a1 above. This resolution shall be adopted not later than 45 days after the receipt of the list and report prepared by the Borough Engineer. Upon adoption of the resolution by the Borough Council, the obligor shall be released from all liability pursuant to its performance guarantee, with respect to those approved improvements, except for that portion adequately sufficient to secure completion or correction of the improvements not yet approved; provided that 30% of the amount of the performance guarantee posted is retained to ensure completion and acceptability of all improvements.

(e)

If the Borough Engineer fails to send or provide the list and report as requested by the obligor pursuant to Subsection (a), above, 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 and the cost of applying to the court, including reasonable attorney's fees, may be awarded to the prevailing party. 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 list and 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 approvable complete and satisfactory improvements in accordance with the itemized cost estimate prepared by the Borough Engineer and appended to the performance guarantee pursuant to Subsection 40-10.1a1 above; and the cost of applying to the court, including reasonable attorney's fees, may be awarded to the prevailing party.

(f)

In the event that the obligor has made a cash deposit with the Borough or approving authority as part of the performance guarantee, then any partial reduction granted in the performance guarantee pursuant to this subsection 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.

(g)

If any portion of the required improvement 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 set forth in this section shall be followed.

(h)

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 improvements not completed or corrected and the Borough may either prior to or after the receipt of the proceeds thereof complete such improvements. Such completion or correction of improvements shall be subject to the public bidding requirements of the "Local Public Contracts Law" P.L. 1971, c. 198 (C.40A:11-1 et seq.).

(i)

Any release of performance guarantees will be conditioned upon the provision of a maintenance guarantee to be posted with the governing body for a period not to exceed two years after the final acceptance of the improvement, in an amount equal to 15% of the cost of the improvement, which cost shall be calculated by the Borough Engineer. The Borough shall not require that the maintenance guarantee be posted in cash. A developer may however, at his option, provide the maintenance guarantee in cash. In the event that other governmental agencies or public utilities automatically will own the utilities to be installed or the improvements are covered by a performance or maintenance guarantee to another governmental agency, no performance or maintenance guarantee, as the case may be, shall be required by the Borough for such utilities or improvements.

(j)

In the event that the final approval is by stages or section of development pursuant to N.J.S.A. 40:55D-38, the provisions of this section shall be applied by stage or section.