A performance bond is posted by the applicant
to guarantee to the Town that he/she will faithfully construct or
cause to be constructed the required public improvements which were
an integral part of the approved final plat and, further, that the
construction shall be completed within a reasonable period of time.
A.
Performance bond estimate. The amount of the undertaking,
secured by cash or certified check or other acceptable surety, will
be based upon the Town Engineering Office's estimate of the total
cost of the required capital improvements, including but not limited
to road clearing, trail clearing, landscaping and drainage, plus a
reasonable estimate of anticipated increased construction cost during
the period of the life of the bond.
B.
The Planning Board shall pass a resolution either
approving or modifying the performance bond estimate as recommended
by the Superintendent of Highways.
C.
The Town Board shall approve or disapprove the performance
bond, subject to the review and approval of the Town Attorney. If
the performance bond is approved, it shall be filed with the Town
Clerk, and the Town Clerk shall notify the Planning Board, in writing,
of the Town Board's action.
D.
The Chair of the Planning Board shall not sign a final
plat until notification by the Town Clerk of the Town Board's approval
of the performance bond.
E.
After construction of the public improvements covered
by the performance bond and prior to the release of the bond, the
developer shall prepare a set of the approved drainage plans and street
profiles amended to indicate as-constructed information. The developer
then may apply to the Town Engineering Office and/or Superintendent
of Highways for a final inspection of the work. When the work has
been completed to the satisfaction of the Town Engineering Office
and/or Superintendent of Highways, they shall recommend to the Planning
Board that the performance bond be released. If the Planning Board
is in agreement with the recommendation, the Planning Board shall
recommend to the Town Board that the performance bond be released.
[Amended 5-8-1973]
A.
At the time of the release of the performance bond, a maintenance bond shall be furnished by the developer to guarantee upkeep and the workmanship and materials of all required improvements for a period of one year from the date of release of the performance bond by the Town. This bond shall be in an amount which is one-third of the performance bond estimate. If the improvements are not taken over by the Town, an annual maintenance bond shall be required, annually updated and running until the improvements are dedicated to the Town. The amount of this bond shall be determined by the Superintendent of Highways, and the form shall be in accordance with § 240-34.
B.
Where dedication of required improvements has not
been accepted by the Town Board, maintenance inspection shall be made
annually by the Town Engineering Office and/or Superintendent of Highways.
In the event that such required improvements are not maintained according
to the Department of Highway specifications, the Town Engineering
Office and/or Superintendent of Highways shall recommend to the Town
Board that such maintenance bond be declared in default and the offer
of dedication shall be accepted by the Town Board.
A.
Form of security. Any security to a bond must be provided
pursuant to a written security agreement with the Town, approved by
the Town Board and also approved by the Town Attorney as to form,
sufficiency and manner of execution, and shall be limited to:
(1)
The deposit of funds in a savings passbook or a certificate
of deposit (CD) issued by a bank or trust company located and authorized
to do business in the State of New York and maintaining an office
for the transaction of its business in the Town of Southold. The Town
Board may require that the savings passbook or CD be accompanied by
an executed withdrawal slip made payable to the Town of Southold and/or
an assignment of the right to the funds upon a default. Each passbook
or CD shall also be accompanied by a letter from the bank acknowledging
the use of the passbook or CD as security to a bond and that no funds
will be released unless authorized by a resolution of the Town Board.
(2)
An unconditional and irrevocable letter of credit
from a bank or a corresponding bank located and authorized to do business
in the State of New York. The letter of credit shall certify the following:
(a)
That the creditor does guarantee funds in an
amount equal to the performance bond estimate.
(b)
That, in the case of failure on the part of
the applicant to complete the specified improvements within the required
time period, the creditor shall pay to the Town Board immediately,
and without further action, such funds as are necessary to finance
the completion of those improvements, up to the limit of credit stated
in the letter.
(c)
That the letter of credit may not be withdrawn,
or reduced in amount, until released by the Town Board.
(d)
That the term of the letter of credit shall
extend at least six months past the term of the bond.
(3)
Obligations of the United States of America.
(4)
Any obligations fully guaranteed as to interest and
principal by the United States of America, having a market value at
least equal to the full amount of the security required.
(5)
Upon the recommendation of the Planning Board, the
Town Board may accept a deed, transferring the fee title of real property,
free and clear of any mortgage or lien, having a value established
by the Town Tax Assessor of at least 150% of the amount of the security
required, such title to be held by the Town in escrow only for the
purpose of securing the performance or maintenance required. The Town
Board shall retain the right to reject the use of a property escrow
where there is no benefit to the Town or it may reject the use of
any property when the value of such property is sufficiently unstable,
when it believes that the property will be unusually difficult to
sell or for other reasons such as will inhibit the Town from exchanging
the property for a sufficient amount of money to complete the required
improvements. Said deed shall be accompanied by the following:
(a)
All documents necessary for recording of the
deed in the Suffolk County Clerk's Office.
(b)
An agreement with the Town Board, to be filed
in the Office of the Suffolk County Clerk, stating the following:
[1]
That, in the event of default in performance or maintenance for which the undertaking shall be given, the Town Board may accept the property on behalf of the Town of Southold. In such a case, the Town may record the deed in the office of the Suffolk County Clerk, sell such real property and apply the net proceeds of the sale in the same manner as if the funds had been held in a deposit or certificate described in Subsection A(1) above.
[2]
That the grantor shall pay all real property
taxes on the property held in trust during the term of the bond.
[3]
That the property to be placed in trust as an
improvement guarantee will not be used for any other purpose, or pledged
as a security in any other matter, unless and until released by the
Town Board.
[4]
That upon the completion of the work or maintenance
period or when the benefit to the Town shall have been received or
the purpose of accepting this form of security is deemed unnecessary
by the Town Board, the deed and/or title to the subject property shall
be released or conveyed to the grantor or such other person as may
be entitled to the same, free and clear of any liens or defects, except
those in existence at the time of the delivery of the deed to the
Town and which continue in existence or which may have thereafter
been placed thereon with the knowledge and consent of the owner.
[5]
Affidavit of title or title certification affirming
that the property to be used as a guaranty is free and clear of any
encumbrances or liens at the time it is to be put into trust.
[6]
Notwithstanding the aforementioned provisions,
the Town Board may, in its discretion, accept such other security
as may be allowed by law, where there is a benefit to the Town.
[7]
If the term of the performance bond will expire
prior to the completion of the public improvements, the Town Engineering
Office and/or Superintendent of Highways shall recommend to the Planning
Board either that the term of the bond be extended to permit completion
of the work by the applicant or that the bond be declared in default.
The Planning Board shall advise the Town Board, by resolution, if
its recommendation is for the extension or default of the bond. The
Town Board shall act on the extension or declaration of default on
the performance bond.
[8]
The performance bond shall have a term of two
years. The term and requirements of a performance bond may be extended
or modified by the Planning Board, in consultation with the Town Engineering
Office and the Superintendent of Highways, with the approval of the
Town Board.
B.
Default. In the event that any required improvements
have not been installed as provided in this section within the term
of such security agreement, the Town Board may thereupon declare the
said performance or maintenance bond or security agreement to be in
default and collect the sum remaining payable thereunder; and upon
the receipt of the proceeds thereof, the Town shall install such improvements
as are covered by such security and as commensurate with the extent
of building development that has taken place in the subdivision but
not exceeding in cost the amount of such proceeds.
