Newsletters
Municipal News November 2008
Security for Public Improvements - Don't Let a Developer Build Without It!
By Attorney Jeffrey L. Rehmeyer II & Summer Associate Tabitha D. Burke
Failure of a developer or contractor to complete work on public improvements in a subdivision or land development may leave a municipality at risk for the funding and completion of the improvements. When a developer provides security for public improvements, it guarantees that the municipality will have the money available to complete the improvements at no cost to itself and its taxpayers. Financial security protects a municipality by ensuring funds are available, and the security acts as a guarantee that the work will be completed prior to final approval by the municipality.
As a safeguard for municipalities, the Pennsylvania Legislature has enacted financial security requirements in the Pennsylvania Municipalities Planning Code, 53 P.S. 10509 ( 509). Specifically, 509(c) authorizes letters of credit and escrow accounts as a type of financial security. Municipalities may also accept financial security in the form of a corporate surety bond. The corporate surety bond requires that one party be a surety for the developer so that in the event the improvements are not completed, the surety is obligated to either pay the municipality in an amount that sufficiently covers the remaining improvements or to complete the improvements itself.
On the other hand, a letter of credit is an irrevocable promise by a bank to pay the municipality upon failure by the developer to complete the improvements. While 509(c) grants the municipality the power to determine which type of financial security it will receive, a municipality is prohibited from enforcing blanket provisions that exclude one or more forms of security. The court in Scherersville Development Corp. v. Twp. of Whitehall held that all propositions of financial security must be reviewed on a case-by-case basis, because to prohibit one type of security through a blanket provision is "unreasonable and illegal."
When securing the completion of improvements, 509(f) authorizes a municipality to require 110% of the estimated cost of completion to be posted prior to commencement of the project. Before approving financial security, a municipality must be sure to secure all improvements that may be required. If a municipality fails to secure any required improvement, it may, at the expiration of the security, find itself responsible to fund and complete any improvements not secured. The court in Setzer v. Mercer County held that the township breached its duty to the public by failing to secure the completion of the roads and, upon expiration of the bond, was therefore responsible for funding and completing the improvements.
For public improvements in your municipality, be sure to obtain appropriate security to ensure completion. If you have questions about security for public improvements or the cases referenced above, please contact a member of the CGA Law Firm Municipal Law practice group for assistance.
Clean Indoor Air Act Affects Municipalities
By Attorney Margaret "Mieke" Driscoll and Anthony T. Bowser
On September 11, 2008, the Clean Indoor Air Act took effect. Under the Act, smoking or permitting others to smoke in a public place that is subject to the ban as well as failing to post a required sign indicating whether smoking is allowed in the facility is punishable by civil and criminal penalties ranging from $250 to $1,000.
Pursuant to the Act, smoking is prohibited in public places, which the act defines as an enclosed area which serves as a workplace, commercial establishment or an area where the public is invited or permitted. This includes restaurants, schools, hospitals, train stations and vehicles used for mass transportation (including, taxicabs, chartered buses and limousines). The Act applies to indoor areas that serve as a place of employment, occupation, business, trade, craft, professional or volunteer activity.
Accordingly, most places of employment will be covered, with the exception of outdoor worksites. Note that the Act covers work vehicles when one or more passenger is in the vehicle, even if all passengers agree to allow smoking. There is no municipal work space or public facility that falls into any exception under the Act, save for open air worksites. The Act, therefore, applies generally to all municipal facilities without exception.
The Act also requires that signs are prominently posted at every entrance to any public place, indicating whether smoking is permitted at the facility (for the most part, smoking will not be permitted). These signs include "Smoking", "No Smoking", or the ubiquitous "No Smoking" symbol.
Under the Act, employers are prohibited from refusing to hire, terminating, or otherwise discriminating against a worker for exercising his or her "right to a smoke-free environment." Interestingly, the Act does not specifically address whether a private right of action exists under this provision, so it remains to be seen whether an employee may obtain damages for a violation.
The Act specifically provides that a good faith effort to prohibit smoking constitutes an affirmative defense to liability. Accordingly, all municipalities should review their policies and document all efforts made to comply with the smoking ban.
CGA Law Firm’s attorneys are available to answer specific or more detailed questions about the Act and to help develop policies and strategies for ensuring compliance.
Disclaimer: This publication is not intended to provide legal advice on specific matters, but rather to provide thoughtful insight into recent and timely legal developments or issues. Actual resolution of legal issues depends upon many factors, including variations of facts and state laws. The reader should always consult with legal counsel before taking any action related to matters covered by this communication.
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