DPWES Letters to Industry
Land Development Services
12055 Government Center Parkway
Fairfax, VA 22035-5503
703-324-1780, TTY 711
December 21, 2005
Updates to Bonding Policies - Revised
Fairfax County is implementing a number of changes to enhance and streamline the county’s bond and project completion processes. The changes also are being implemented to ensure that a sufficient amount of security funds are available in the event the county must complete development obligations on a project that were not performed by a developer. The changes were developed in partnership with the Northern Virginia Building Industry Association and presented to the Fairfax County Development Process Committee on August 5, 2005. The following policy changes identified below will be implemented on February 6, 2006, unless noted otherwise.
1) Simplify the computations for the administrative portion of the developer’s security – Effective on February 6, 2006, the administration portion of the bond will be computed as 25% of the value of the first $1 million of bonded improvements and 10% of the amount of bonded improvements that are greater than $1 million. The new Surety Value Estimate form can be obtained from Plan and Document Control that is located on the fifth floor at 12055 Government Center Parkway, Suite 506 or Bonds and Agreements at 12055 Government Center Parkway, Suite 334. The new forms must be submitted with any new bond, replacement or reduction package that is submitted to the county for review and approval after February 6, 2006. Plan and Document Control can be contacted at 703-324-1730, TTY 711 or Bonds and Agreements at 703-324-1950, TTY 711 for additional information on how to acquire the new forms.
Staff will be adjusting the $1 million cutoff amount every five years to account for local construction inflation. The county will provide a notice to industry of any adjustments that are made to the 25% cutoff amount at least two months prior to any change.
2) Notification to banks and corporate sureties – The county has begun to send the corporate surety or bank that provided the security for a development agreement any letter that is sent to the developer regarding non-performance or the imminent expiration of the development agreement. Notification letters are sent to the developer approximately 60 days prior to the expiration of the agreement and approximately 30 days after the agreement has expired stating that our records indicate the project has not been completed. Both letters state that the developer may apply for an extension of the agreement by completing and returning an enclosed form. Developers are encouraged to contact the Bonds and Agreements Branch at 703-324-1950, TTY 711 if they have not received these letters.
3) New development agreement security policy – Cash or a letter of credit will be required for fourth and greater bond extension requests submitted to the county on or after February 6, 2006. This requirement may be waived with the approval of the Director for circumstances that are beyond the control of the developer. All requests for a wavier of this requirement should be submitted in a letter to the Chief of Bonds and Agreements Branch and attached to the extension request form. All requests for a wavier of this requirement will be presented and reviewed by the Fairfax County Bond Committee.
In order to minimize the number of development agreement extensions that are needed throughout the life of a project, the county is eliminating its policy that limits projects with bonds under $750,000 to having an agreement length of no more than two years and projects with bonds equal to or greater than $750,000 to having an agreement length of no more than three years. Effective immediately, the county will consider and encourages the establishment of initial development agreement and extension request lengths to more accurately reflect the actual time that is needed to complete the project. Establishing the length of the agreement or extension based on the realistic time that is needed to complete the project and any outstanding development obligations should minimize the number of extensions that may be required and thus avoid the need for a fourth or greater extension to the development agreement.
4) Bond reduction policy – In an effort to provide greater consistency in how bond reductions will be processed, the following bond reduction policy will be in effect for all bond reduction requests submitted on or after February 6, 2006.
Bonded items within the dedicated right-of-way or within public access easements:
Bonded items within the dedicated right-of-way or public access easements will be reduced following a request by the developer, when all of the required geotechnical test results and certifications have been submitted by the developer to the site inspector, utility relocations have been completed and all required easements or vacations are recorded. After those items have been completed, staff will process reduction requests in accordance with the following guidelines: An 80% maximum reduction can be processed for items within the right-of-way after public roadways have received a field inspection approval from the Virginia Department of Transportation. A 90% maximum reduction can be processed when the only remaining item is the Fairfax County Board of Supervisors resolution that the streets be accepted for maintenance by VDOT.
Bonded items within sanitary sewer easements:
Bonded items within sanitary sewer easements will be reduced following a request by the developer, when all of the required geotechnical test results and certifications have been submitted by the developer to the site inspector, utility relocations have been completed and all required easements or vacations are recorded. No more than a 50% reduction can be processed for items associated within a sanitary sewer easement until the Fairfax County TV inspection punch list has been completed. A 90% maximum reduction can be processed when the only item that remains is the final sanitary as-built approval and final acceptance.
Bonded items within storm drainage easements:
Bonded items within storm drainage easements will be reduced following a request by the developer, when all of the required geotechnical test results and certifications have been submitted by the developer to the site inspector, utility relocations have been completed and all required easements or vacations are recorded. No more than an 80% reduction will be processed for items within a storm drainage easement until they have received a field inspection approval by the site inspector. A 90% maximum reduction can be processed when the only item that remains is the final site as-built approval.
All appeals of the site inspectors recommended bond reduction amounts should be directed to the site inspector’s Field Supervisor. All disputes should be resolved at this level. In rare instances where disputes with proposed bond reduction amounts cannot be resolved at the Field Supervisor level, written justification and the basis for the appeal should be made to the General Superintendent, Environmental and Facilities Inspections Division that is responsible for the area where the project is located.
If you have any questions regarding these new policy changes please contact Craig Carinci, Director, Environmental and Facilities Inspections Division at 703-324-1950, TTY 711.