The Village of Chittenango has occasion during construction projects
to obtain retainage funds from the contractors hired by the village, to assure
adequate performance of such contracts. During the course of such construction
contracts and pursuant to § 106 of the General Municipal Law, such
contractors have the opportunity to withdraw cash retained and to substitute
therefor bonds or notes of the United States of America, bonds or notes of
the State of New York or bonds of any political subdivision of the State of
New York. Thereafter, in the event that such substituted bonds are coupon
bonds, the Village Treasurer and/or Clerk is required to administratively
process such coupons for collection and remittance to the contractor, pursuant
to § 106 of the General Municipal Law. The processing of such coupons
and transmittal to the contractor requires time and effort of such village
employees which might otherwise be expended towards village activities and
accrues entirely to the benefit of the contractor. In order to recompense
the Village of Chittenango for the lost time required to process such coupons
and to fairly reflect the expense and time commitment thereof, this chapter
will impose an administrative fee comparable to that charged by financing
institutions in the local area for such service. It is also anticipated that
the fee charged for such service shall be modified hereafter, depending on
the change in the processing requirements or modification of the existing
charge by financing institutions to higher or lower rates, such that the charge
by the Village of Chittenango shall remain comparable with such other institutions.