§ 14-240. Guarantee of improvements—Security agreements, collateral arrangements, bonds.

(a)

An agreement or contract setting forth the construction plan, method of construction, and parties responsible for the construction of any public improvements, together with adequate security or collateral acceptable to the city manager, shall be required prior to the commencement of construction of any public improvements. In addition thereto, no preliminary PUD plan or preliminary subdivision plat shall be approved until the applicant has submitted and the city manager has approved a PUD or subdivision improvements agreement guaranteeing to construct any required public improvements shown in the final PUD plan or the final subdivision plat, together with collateral which is sufficient in the judgment of the city manager to make reasonable provisions for the completion of the improvements in accordance with the design and time specifications. The types of collateral which may be used as security under this section are as follows:

(1)

Performance or property bond;

(2)

Private or public escrow agreement;

(3)

Letters of credit;

(4)

Assignments of receivables; or

(5)

Deposits of certified funds or other similar surety agreements acceptable to the city manager.

(b)

The city shall not require security agreements with collateral arrangements in excess of the city engineer's estimate of the cost of public improvements. Any security agreements, collateral arrangements or bonds furnished pursuant to this section shall not expire for a period of fourteen (14) months after the date upon which construction of public improvements is to be completed pursuant to the applicable improvements agreement; provided, however, a partial release of such security or collateral may be obtained pursuant to the procedures set forth in section 14-241.

(Code 1962, § 12-1-7(A))