TABLE OF CONTENTS

DEFINITIONS
SECTION 100      - PURPOSE
SECTION 100.01 - PERFORMANCE AGREEMENT
SECTION 100.02 - FORMS OF SECURITY
SECTION 100.03 - FORMS
SECTION 100.04 - EXTENSIONS AND REBONDING OF AGREEMENTS
SECTION 100.05 - SECURITY REDUCTIONS
SECTION 100.06 - SECURITY AND AGREEMENT RELEASE PROCEDURES
SECTION 100.07 - MAINTENANCE SECURITY
SECTION 100.08 - DEFAULT PROCEDURES
SECTION 100.09 - DEBARMENT OF SURETY

For the purpose of this policy, terms used herein shall be interpreted and defined as follows: Words used in the present tense shall include the plural, and the plural the singular unless the natural construction of the word indicates otherwise; the word "shall" is mandatory and not discretionary; the word "approve" shall be considered to be followed by the words "or disapprove".  All gender-oriented references shall include male and female genders.

AGENT:  The County Administrator of Stafford County or his designee.

DEVELOPER: An individual, corporation, trustee, joint venture, partnership or other entity having legal or equitable title to any tract or parcel of land to be developed or improved who submits plans pursuant to the Site Plan, Subdivision, Erosion and Sediment Control, Utility Ordinances of Stafford County, or the successor(s) in interest to such individual corporation, trustee, joint venture, partnership or other legal entity.

PERSON:  The word person shall extend, and be applied to associations, firms,   partnerships and bodies politic and corporate as well as to individuals.

PROJECT:  The term project shall include all subdivisions, site plans, utility plans, erosion and sediment control plans, and storm water management plans or sections thereof required to be submitted for approval under the STAFFORD COUNTY CODE.  The term project shall not include individual house site plans submitted for the issuance of building permits.

SECURITY:  The term security as used in this policy means cash escrow, certified checks, cashier's checks and letters of credit and insurance company bonds.

SURETY:  An individual, corporation, bank, savings and loan, firm, or partnership who undertakes to pay money in the event the developer fails to complete his obligation.

VDOT:  The Virginia Department of Transportation.

SECTION 100.       PURPOSE

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To obtain an acceptable guarantee of performance to assure the timely construction and completion of site and subdivision physical improvements in accordance with approved plans and profiles, current County standards and specifications, and County and State requirements.

SECTION 100.01   PERFORMANCE AGREEMENT

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An agreement and security shall be required for all projects, which shall obligate the developer to construct required improvements in approved subdivisions or site plans, in a timely manner and in accordance with all applicable standards.

A.      The maximum period of the agreement shall be twelve (12) months, with the exception of the following

        1.  Agreements relating to landscaping shall be for a period of two (2) years; 
                        and
        2.   Agreements relating to telecommunications facilities shall be for a maximum period of five (5) years.

B.         The agreement shall be between the developer and the Board of Supervisors.

C.        Any and all forms of security shall be at least equivalent to one hundred and twenty-five per cent (125%) of the estimated cost of improvements as determined by a Licensed Engineer with the approval of the Agent.

D.        Notwithstanding the requirements of Paragraph C of this section, security for erosion and sediment control measures on individual building lots shall be $2,000 for each single family lot and $500 for each townhouse lot.

SECTION 100.02    FORMS OF SECURITY

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Cash, Cash Escrow, Certified Checks, Cashier's Checks and Letters of Credit are the required forms of security; however, for the period of time to begin August 18, 1992, and end August 18, 1993, bonds issued by insurance companies satisfactory to the County may be accepted by the Agent to secure erosion and sediment control measures on individual building lots in a cumulative amount not to exceed $10,000 for each developer.  Whatever its form, the security is designed to guarantee the County a fund for completion of required improvements in the event the developer fails to discharge the obligations of his performance agreement.  The shared obligation of all sureties is to pay the designated funds on demand.

A.        Cash Escrow:

The face amount of the security shall be submitted to the Agent who shall deposit same with the Treasurer of Stafford County.  The funds shall be deposited in interest bearing accounts.

B.         Letters of Credit:

Letters of Credit shall meet the following minimal conditions:

1.         The lending institution shall be insured by an agency of the United States government.

2.         There shall be no minimum time for which security is posted; with the exception of landscaping, which shall be for two (2) years; provided, however, that securities shall always extend three (3) months beyond the expiration of the agreement.

3.         A minimum of a ninety (90) day notification period of a lending institution's election not to extend the letter of credit is required and shall be sent by certified mail to the Agent.  Failure to give notice as required shall automatically extend the letter of credit for an additional six (6) month period.  Such provision shall be stated in the letter of credit.

4.         All lending institutions must at all times be satisfactory to the County in accordance with rating criteria reported in the Sheshunoff Quarterly Ratings for Banks and Savings and Loan Associations (Sheshunoff).  Standby letters of credit will be acceptable initially, and thereafter on a continuing basis, only from lending institutions assigned a composite peer group rating of 25 or better in the most recent issue of Sheshunoff.

5.         Notwithstanding paragraph 4 above, the County may accept a standby letter of credit issued by a non-qualifying lending institution, where that institution causes to be issued to the Board of Supervisors as beneficiary, an additional letter of credit of equal value from a qualifying institution;  which letter of credit shall serve as additional collateral to secure project involved.

6.         Letters of credit shall not be accepted from a lending institution:

a.    That has declined to honor a Letter of Credit issued to the County;

            or

b.   That has defaulted on a Performance Agreement with the County;

            or

c.  That is also the developer of the project for which the Letter of Credit is offered.                                            

C.        Insurance Bonds:

1.         Bonds to secure erosion and sediment control measures on individual building lots shall be acceptable initially, and on a continuing basis, only when issued by insurance companies satisfactory to the County.  Such satisfactory insurance companies shall be those companies that at all times are rated A+ or A++ by the A.M. Best Company.

2.         Insurance bonds shall be issued for a period that always extends three (3) months beyond the date of the agreement.

SECTION 100.03    FORMS

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The Agent shall approve and may amend, from time to time, standard forms which may be used for any performance agreement and security.  No form shall be used unless approved by the County Attorney for conformity with the intent of this policy and all applicable requirements.

SECTION 100.04    EXTENSIONS AND REBONDING OF AGREEMENTS

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A.        When a developer enters into an agreement with the County, it is understood that all the necessary physical improvements shall be completed in the specified time.  Should a developer need additional time to complete the required public improvements he may request an extension of his agreement by making a request of the Agent.  If all the physical improvements are not completed within the time specified, and no extension has been obtained, or a replacement agreement has not been submitted and approved with a new expiration date, the agreement shall be in default.

B.         The developer shall be granted the option to obtain an extension of time in accordance with the requirements of this policy if the physical improvements are not completed within sixty (60) days prior to the expiration of the agreement and provided that the developer has exhibited good faith in the progress of the construction.

C.        The developer shall make a written request to the Agent for an extension no later than thirty (30) days prior to the expiration date of the agreement.  The maximum period for an extension shall be one year, unless otherwise stated in Section 100.01A.  The developer shall state the reasons and conditions which have precluded him from completing the required physical improvements.  The developer shall obtain the written consent of all sureties to the extension request.

D.        If the developer has requested an extension or a substitute agreement and security, the Agent shall review an inspection report prepared by the appropriate County Department on the project and the request submitted by the developer.  The factors considered by the Agent shall include the following:

Percent of project completed.

Number of homes completed, occupied, and served by public facilities.

Rate of construction activity.  Any extension or rebonding approval may be conditioned upon adjustment of the face amount of the security to reflect changes in the estimated cost of completion.

E.         Agreements relating to erosion and sediment control measures on individual building lots only, may indicate only the total number of single-family and/or townhouse lots in Stafford County to which such agreements apply, without further designation.  The specific building lots covered by any given agreement shall be indicated in records maintained by the County's Department of Code Administration.  Such designated building lots may vary from time to time as erosion and sediment control measures are completed on certain of the lots and other building lots are added. 

SECTION 100.05   SECURITY REDUCTIONS

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A.        Any security required by this policy may be reduced in accordance with the provisions of Section 22-131, Article VI, Chapter 22 of the Stafford County Code.  The amount of security retained shall be one hundred twenty-five per cent (125%) of work remaining to be done.

B.         No reduction shall be approved if the performance agreement is in default; however, a reduction request may be considered concurrently with an extension request.

C.        A developer seeking partial release of any security shall submit a written security reduction request to the Agent.   No request shall be deemed received unless it is submitted in accordance with this section and meets the following minimum requirements:

1.         If an extension of a performance agreement is sought, every requirement for an extension request shall be met, including, but not limited to the submission of written consent by the surety to any such request.

2.         The developer's request shall identify the project, performance agreement, security, and completion date; and the request shall specify the reduction sought.  Such request shall also certify the percentage of the project completed, and summarize the nature and cost of the work remaining, together with the projected timetable for completion.

3.         The developer shall furnish a certificate of completion from a duly licensed engineer that the work described has been performed in conformity with approved plans or in accordance with as-built plans submitted therewith, and that the work meets all applicable standards.

4.         The Agent shall approve or disapprove any reduction request within thirty (30) days of receipt.  If the request is disapproved, the Agent shall notify the developer in writing of the specific reasons for disapproval.

SECTION 100.06    SECURITY AND AGREEMENT RELEASE PROCEDURES

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A.        After all physical improvements required by the STAFFORD COUNTY CODE are completed, the developer shall notify the Agent and request an inspection by the appropriate County department(s) and/or State agency(s). Upon receipt of a request for inspection, the Agent shall notify all parties and set a date for a joint field inspection.

1.         The agent shall prepare a punch list of those items requiring correction.

2.         The developer shall be sent a copy of the punch list and shall have thirty (30) days to complete necessary improvements.  This punch list does not relieve the developer of liability for defective work later discovered.  If the punch list corrections are not completed within thirty (30) days, the entire project shall be subject to reinspection.

3.         The developer shall notify the Agent that he has completed the punch list items and requests final inspection.  The Agent shall then set a date for joint inspection with the appropriate department(s) and/or agency(s) and   the developer.

B.         After the joint inspections, if all improvements have been satisfactorily completed, the following steps shall be taken:

1.         The County department(s) and/or State agency(s) shall forward a letter to the Agent indicating that the inspection disclosed that the project meets County and/or State standards.  The Agent shall, upon receipt of such letter(s), prepare the necessary resolution for consideration of the Board of Supervisors if the security covers road improvements.

2.         If the security covers road improvements, the Agent shall notify applicable State Agencies and County Departments of the completed inspections and the pending request for a Board Resolution.  The Agent shall contact all applicable agencies and the County Departments for written confirmation that:

a.         All appropriate Code enforcement complaints are satisfied.

b.         All utility appurtenance and as-built plans have been accepted by the County.

c.          All as-built plans of roads and drainage facilities have been accepted.

d.         All fees have been collected.

e.         All contributions for off-site drainage, sewer, or other improvements have been made.

f.          All physical improvements covered by agreements have been approved and accepted.

g.         All collateral agreements have been satisfied.

3.         Following the adoption of the resolution for road acceptance by the Board of Supervisors, copies shall be forwarded to the Virginia Department of Transportation and other applicable County Departments.  For all other required improvements, all applicable stipulations of Section 100.06 must be met.

a.         The Agent shall then process the paper work necessary for the release of the security, and shall release the security upon receipt of notification of street acceptance by the Highway Commission in Richmond or when all stipulations pertinent to the required improvements are met, as set forth by this Section.

b.         In the event any dedicated road cannot be taken into the State System for reasons other than quality of construction, the developer may seek release in accordance with the provisions of this section, provided that he shall comply with the requirements of Section 100.07 "Maintenance Security".

SECTION 100.07    MAINTENANCE SECURITY
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A.        Whenever the County has accepted a dedication of a road for public use and such road, for reasons other than quality of construction, is not eligible for acceptance into the State Highway System, the developer may request the release of his performance agreement and security and post in lieu therefore a maintenance and indemnifying security meeting the requirements of this section, provided that all requirements for release are otherwise met.

B.         The maintenance security shall be in an amount equivalent to the surety required by the VDOT fee schedule published in Table III, Subdivision Street Requirements, or ten percent (10%) of the original certified engineers cost estimate for the required improvements, whichever is greater.

SECTION 100.08   DEFAULT PROCEDURES

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A.        If the developer fails to complete the required public improvements in the time specified in the agreement or any approved extension thereof, the developer shall be in default.

B.         Upon default, the Agent shall make a demand of the surety for payment.  Upon receipt of the funds the Agent shall complete the required public improvements.

SECTION 100.09   DEBARMENT OF SURETY

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A.        Any person otherwise qualified under the terms of this policy to act as surety for any security may be disqualified from acting in such capacity to any agreement to which the Board of Supervisors is a party in accordance with the provisions of this section.

B.         Whenever the Agent shall recommend to the Board that any person be disqualified from acting as surety, the Board shall proceed as follows:

1.        Notice of such recommendation shall be served by certified mail on such person. Such notice shall apprise such person of the grounds from which such recommendation is made and of the person's right to appear before the Board and be heard on the matter in Executive Session on a date certain.

2.         Following the hearing, the Board may:

a.      declare such person ineligible from acting as surety satisfactory to the Board;

b.      defer its finding on such terms and conditions as it deems appropriate;

c.      dismiss the recommendation of the Agent; and shall apprise the person of its decision.

C.        Any matter tending to establish that the funds guaranteed by the surety will not be made available in accordance with the terms of the surety contract commitment shall be grounds for disqualification.  Specific reasons for disqualification shall include, but not be limited to:

        Surety is insolvent, subject to a bankruptcy petition, or has been placed in the hands of a receiver.

        Surety is presently in default of one or more securities to which the County is obligee, or, having breached in the past, fails to give reasonable assurances that it will discharge its obligations under the security.

        Surety fails to qualify as satisfactory to the County as provided by paragraph B.4 and C. of Section 100.02 of this Policy.