Prior to commencing construction, applicants are required to furnish a Performance, Labor and Material Payment, and Maintenance Bond with Loudoun Water named as beneficiary.  The bond may take the form of a surety, a letter of credit, or cash to be held by Loudoun Water.  Recommended forms for sureties and letters of credit may be found below.  

Bonds are required on all land development jobs where a contractor will be working on Loudoun Water’s public utilities. The amount of the bond is listed on the project’s approval letter and is needed for permitting the project.

Loudoun Water offers three processes for posting a surety based on the applicant type.  The applicant may choose which process they wish to utilize, depending on the schedule and type of development proposed:

  1. Standard Bond (available to all projects)
  2. Extension Bond (available to projects subdividing land)
  3. Site Plan Bond (available to site plans)

Review the different bonding processes offered at Loudoun Water on the Bond Process Summary flowchart.

Facilities Requiring 100% Guarantee
The bond will be in the amount of 100% of the estimated cost of the public water, sanitary sewer, and reclaimed water improvements, for all installations of the following facilities:

  1. Offsite facilities.
  2. Facilities needed to develop a subdivision, where the resultant lots are being created prior to substantial completion of the facilities.
  3. Facilities needed to enable the future extension of the public water or sewer system through and across the development area.

The amount of the bond will be 100% of the estimated cost of the public water and sewer improvements, except where a lesser amount is approved as in the instances below. To calculate the estimate of construction costs please use the Estimate of Construction Cost form below.

Extension Bond with Subdivision of Land
Alternately to furnishing a bond in the amount of 100% of the estimated construction cost, the applicant may elect to begin construction when submitting construction plans as part of an application for a subdivision of land by posting a lesser Extension Bond, an amount adequate to cover Loudoun Water’s exposure at the locations of extension from the existing public system.

However, when posting a lesser Extension Bond the recordation of the subdivision plat will not be allowed, until Loudoun Water’s remaining exposure has been reassessed, and a sufficient amount of bond has been posted to cover the remaining exposure by means of a rider on the original Extension Bond amount.

Site Plan Bond with a Multifamily, Commercial, or Industrial Site Plan
Alternately to furnishing a bond in the amount of 100% of the estimated construction cost, the applicant may elect to begin construction when submitting construction plans as part of an application for any multifamily, commercial, or industrial site plan by posting a lesser Site Plan Bond. 

 The procedure for determining bond amounts for site plans are as follows:

  • Pass-through: Defined as one or more offsite  parcels dependent on the site’s infrastructure for connection to Loudoun Water’s system
    • Segments of infrastructure determined by Loudoun Water as pass-through and serving offsite or other parcels must be posted at 100%
  • Onsite:  Defined as no offsite development/parcels dependent on the site’s infrastructure for connection to Loudoun Water’s system
    • Segments of infrastructure determined by Loudoun Water as onsite and serving the subject site only may be posted at 35%
  • The minimum bond is $10,000

Submission requirements when proposing the site plan bond:

Bond Reductions
Once the installed facilities are substantially complete, and have successfully undergone testing, the corresponding bond may be reduced, at the applicant’s request.  Tiers of reduction are as follows:

Reduction to 50% of Estimated Construction Cost
Where the majority of the proposed water and sewer facilities by a project have successfully undergone testing, the applicant may request a reduction in the amount of the bond to 50% of estimated construction cost.  Beneficial Use Inspection is not required prior to making such a request.  To make such a request, the applicant must provide:

  1. A written request citing the project name, Loudoun Water Project ID Number, bond number, and requested bond reduction percentage
  2. Lien releases and affidavits of payments, demonstrating that contractors and suppliers have been paid.
  3. Payment of the Record Drawing Fee, if not paid prior.
  4. An administrative processing fee.

Upon receipt of the items listed above, the Project Engineer and Project Inspector will verify that at least 50% of the work has been completed.  Upon successful verification, a letter stating the reduced bond amount will be sent to the applicant, to serve as basis of the reduction rider.

Reduction to 20% of Estimated Construction Cost
Where all proposed water and sewer facilities by a project have successfully passed a Beneficial Use Inspection, the applicant may request a reduction of the bond to 20% of estimated construction cost.  To make such a request, the applicant must provide:

  1. A written request, citing the project name, Loudoun Water Project ID Number,  bond number, and requested bond reduction percentage.
  2. Lien releases and affidavits of payments, demonstrating that contractors and suppliers have been paid.
  3. Payment of the Record Drawing Fee, if not paid prior.

Reduction to 5% of Estimated Construction Cost
Once the installed facilities are fully complete and successfully undergo a Final Inspection, Loudoun Water will provide a letter to the applicant, outlining the paperwork needed for final acceptance and bond release.  In accordance with the agreement for the project, Loudoun Water requires that a maintenance bond remain in effect for a period of one year, beginning at the date of the passing of the Final Inspection and acceptance of the facilities, to serve as a warranty against future defects in the work.  The amount of the maintenance bond is 5% of the cost of the facilities.

If the performance and payment bond in effect has been written to also accomplish the maintenance function, then it may simply be reduced to remain in effect during the warranty year.  Alternately, where such is not the case, a maintenance bond must be furnished prior to release of the performance and payment bond.

Review the different stages and amounts required for bonding: Bond Amount Graph

Additional Bond Information and Forms

Please feel free to contact Julie Atwell (jatwell@loudounwater.org) in regards to any inquiries in regards to bonds.