Section 140. Surety and fees

A. Policy. Except as otherwise provided herein, the developer shall provide surety to guarantee the satisfactory performance of the street, a maintenance fee to offset the department's maintenance costs, and an administrative cost recovery fee to recover the department's costs associated with the review of subdivision plans, the inspection of new subdivision streets, and the administrative processing of the acceptance of new streets as determined in this section. All surety and fees collected under this section shall be based on the date of the local governing body's request and the aggregate mileage of new subdivision streets in that request, rounded up to the next tenth. In the event of extenuating circumstances beyond the developers control, the commissioner or his designee may waive all or a portion of any of the surety and fees.

B. Surety.

1. Type of surety and expiration. An acceptable surety, in accordance with this section, shall be provided by the developer to guarantee the satisfactory performance of the street for a period of one year from the date of its acceptance into the secondary system of state highways. In the event the developer fails to provide surety or any of the fees described in this section within the 30-day period following the local governing body's request for the department to accept the maintenance of a street, the department's previous final inspection of the street shall be considered void and a new inspection shall be required. Surety may be in the form of a performance bond, cash deposit, certified check, irrevocable letter of credit, third party escrow account, or other form mutually satisfactory to the department and the developer. Under no circumstances shall the department or any agency of the Commonwealth be named the escrow agent nor shall funds deposited with the department as surety be subject to the payment of interest.

2. Alternatives to surety.

a. In jurisdictions where the staff of the governing body administers a comprehensive subdivision construction inspection program that has been approved by the department, the surety may be waived upon certification by the governing body that the proposed addition has been constructed in accordance with approved plans and specifications.

b. If requested by the developer and subject to availability of departmental personnel, VDOT may perform the construction inspection of subdivision streets proposed to be added to the secondary system of state highways. In such cases, the developer shall bear all costs incurred by the department and the surety shall be waived.

3. Amount of surety. Surety shall be calculated at the rate of $2,000 per lane per tenth mile of street, or portion thereof, to be accepted by the department for maintenance as part of the secondary system of state highways.

C. Maintenance fee.

A maintenance fee, provided by the developer, shall be required for the acceptance of any street as part of the secondary system of state highways. The maintenance fee shall be calculated at the rate of $150 per lane per tenth mile or portion thereof.

D. Administrative cost recovery fee.

1. Application of the administrative cost recovery fee. To recover a portion of the department's direct costs associated with the review of subdivision plans, the inspection of new subdivision streets, and the administrative processing of the acceptance of new streets, an administrative cost recovery fee shall be required from the developer at the time the streets are accepted by the department. The amount of this cost recovery fee shall be based on the following:

a. For streets shown on subdivision construction plans approved prior to (the effective date of the regulation):

(1) No cost recovery fee will be collected for street additions requested by the local government before July 1, 2005; and

(2) The cost recovery fee structure described in subdivision 1 c of this subsection shall apply until July 1, 2007, after which the department's prevailing cost recovery fee structure will apply.

b. For streets shown on subdivision construction plans approved after the effective date of the regulation, the department's cost recovery fee structure in effect at the time of construction plan approval shall apply and be fixed for a period of three years from the date of said approval, after which the prevailing cost recovery fee structure shall apply.

c. The administrative cost recovery fee shall be computed at a base rate of $250 per lane, without regard to street length, plus $100 per lane per tenth mile, or portion thereof. However, in the event the surety for new streets is waived under the provisions of subdivision A 2 of this section, the administrative cost recovery fee shall be reduced 50%.

2. Alternatives to the administrative cost recovery fee. As an alternative to the administrative cost recovery fee, the department may use one of the following approaches to recover its direct costs:

a. For any subdivision, at the developer's request, the department may establish an account for the purpose of tracking these costs and billing the developer not more often than every 30 days;

b. For large, complex, multi-use developments, the department, at its option, may establish an account for the purpose of tracking these costs and billing the developer not more often than every 30 days. However, the cost recovery fee assessed under this provision shall not be greater than two times the prevailing cost recovery fee structure; or

c. If requested to provide plan review or inspection services or both for subdivision streets that are not intended for maintenance by the department, the department may establish an account for the purpose of tracking these costs and billing the developer not more often than every 30 days.

3. Administrative cost recovery fee, annual adjustments. The department shall have the option of adjusting the annual cost recovery fee, in which case it shall compile information regarding its costs for the review of subdivision plans, the inspection of new subdivision streets, and the administrative processing of the acceptance of new streets during the previous fiscal year and report this information to the commissioner by January 1 of each year. The commissioner may adjust the administrative cost recovery fee by not more than 25% of the fee structure in effect on July 1 of the previous calendar year but not greater than the department's average direct cost as established in the report.

If the commissioner deems that a change in the cost recovery fee structure is warranted, implementation of the change shall be made as follows:

a. Notice of the adjusted fee structure, including the report on which it is based or information about where the report may be viewed, will be published in the Virginia Register of Regulations in April of that year, and

b. The adjusted fee structure shall become effective on July 1 of that year.

Historical Notes

Derived from Volume 21, Issue 06, eff. January 1, 2005.

Statutory Authority

§§ 33.2-210, 33.2-241, 33.2-326, and 33.2-705 of the Code of Virginia.