Performance Guarantees for Government Permit-Granting Authorities (PAS 508)

By Wayne Feiden, FAICP, Raymond Burby

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This report describes financial and nonfinancial performance guarantees available to communities and explains the advantages and disadvantages of both.

Learn about state enabling legislation and get a summary of a survey of communities regarding sources of authority for use; structure and time limits for guarantees; and cost and collection issues, including releasing the permitee from the guarantee.

The report includes a glossary of performance guarantee terms as they relate to local government.

Product Details

Page Count
Date Published
Aug. 1, 2002
Adobe PDF

Table of Contents

1. Overview of the types and use of Performance Guarantees
Types of performance guarantees • Use of performance guarantees • Regulatory history • Permit systems

2. Nonfinancial Performance Guarantees
Final permit • Covenant-not-to-sell • Sequential approval • Special Assessments and homeowner associations • Irrevocable offer of dedication

3. Elements of Financial Performance Guarantees
Guarantee principal • Guarantee language • Guarantee monitoring and releases • Collecting guarantees

4. Types of Financial Performance Guarantees: Performace or Surety Bonds
Cash escrows and bank assignment of funds • Property escrows • Irrevocable letters of credit • Trust instruaments/improvement credit agreements • Liens/covenants • Summary

5. State Enabling Legislation and Authority
Uniform commercial code (U.C.C.) • Subdivision regulations/authorization • Statutes relating to municipal public buildings and projects • Other regulatory requirements

6. State of Practice: Use of Performance Guarantees
Authorization and use of performance guarantees • Structure and time limits of financial performance guarantees • Costing, collecting, and releasing financial performance guarantees

7. Conclusions

Appendix A. State Enabling Legislation and authority
Appendix B. Sample Ordinances, Regulations, and Guarantees
Appendix C. List