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HomeMy WebLinkAboutOrd 3382 11/15/1983 RDINANCE NO. AN ORDINANCE TO ADD A NEW SECTION 8.515 ENTITLED "LETTER OF CREDIT IN LIEU OF PERFORMANCE AND PAYMENT BONDS" TO ARTICLE V, CHAPTER 8 OF THE VILLAGE CODE OF MOUNT PROSPECT~ ILLINOIS PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES THE DAY OF , 1983. Published in pamphlet form by authority of the corporate authorities of the Village of Mount Prospect, Illinois, the __ day of , 1983. ORDINANCE NO. 3382 AN ORDINANCE TO ADD A NEW SECTION 8.515 ENTITLED "LETTER OF CREDIT IN LIEU OF PERFORMANCE AND PAYMENT BONDS" TO ARTICLE V, CHAPTER 8 OF THE VILLAGE CODE OF MOUNT PROSPECT, ILLiNOIS WHEREAS, the Village of Mount Prospect is a home rule municipality exercising the powers pertaining to its govern- ment and affairs which are given home rule communities by the Constitution of the State of Illinois; and WHEREAS, the Village deems it to be necessary with respect to its government and affairs to establish a re- quirement that contractors executing contracts with the Village for any public works provide an irrevocable letter of credit in lieu of a performance bond and a labor and materials payment bond; and WHEREAS, such requirement will tend to reduce administra- tive costs and alleviate the expenses of litigating con- tract performance or payment claims with a bonding company. NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: Article V entitled "Other Regulations" of Chapter 8 of the Village Code of Mount Prospect, Illinois (1981) as amended, is hereby further amended by adding thereto a new Section 8.515 to be entitled "Letter of Credit in Lieu of Performance and Payment Bonds" and to read as follows: "Sec. 8.515 Letter of Credit in Lieu of Performance and and Payment Bonds. Except when a materials and labor payment bond is required for any contract for public work wherein the State of Illinois or the Federal Government is an administering or funding party, the Village of Mount Prospect is hereby authorized to require that an irrevocable, standby, commercial letter of credit with a State or National banking association in a form acceptable to the Village Attorney be established in the name of and for the benefit of the Village in not less than the full contract amount by every contractor entering into a contract with the Village for the construction or installa- tion of any public work of any kind. Such letter of credit shall remain in force for a period of 6 months beyond the contract completion date, shall provide, as a minimum, that in the event that all of the described work is not completed to the satisfaction of the Village on or before a specific date and in accordance with the terms, plans, specifications and conditions of the contract entered into between the contractor and the Village, or in the event the contractor fails to pay all persons, firms and corporations the amounts due to them for performing labor or furnishing materials to the contractor, as subcontractor or otherwise, with respect to the performance of the contract for which this letter of credit is given, and such payment sight draft, accompanied by a resolution adopted by the corporate authorities of the Village in- dicating that the contractor has failed to satis- factorily complete the Work or has failed to make payment to persons, firms or corporations performing labor or furnishing materials to the contractor in performance of said contract, for such amounts as are necessary to complete the work to the satisfaction of the Village or to pay all just claims for labor performed or materials furnished with respect to said work. On all contracts wherein a letter of credit is required in lieu of a performance bond and a labor and materials payment bond, the Village shall make payment to the contractor and to all other persons, firms or corporations for work performed, (including labor and materials furnished) on said contract upon the receipt by the Village of a sworn contractor statement designating the persons and amounts to be paid proper lien waivers and a certificate by the Public Works Director or his authorized representative that such work, including labor and materials fur- nished thereon, has been properly completed, provided that the Village shall withhold from each said pay- ment made to the contractor an amount equal to ten percent (10%) thereof until the entire work has been completed. Every person furnishing material or performing labor, either as an individual or as a subcontractor for any contractor having a contract for public work with the Village shall have a right to file a claim for payment with the Village provided a verified notice of such claim for payment is filed with the Village within ninety (90) days after the date of the last item of work or the furnishing of the last item of materials by the claimant, with a copy of such verified notice of claim to be submitted to the con- tractor within ten (10) days of the filing thereof with the Village. Such claims shall be verified and shall contain the name and address of the claimant, the name of the contractor, the name of the person, firm or corporation by whom the claimant was employed or to whom he or it furnished materials, the amount of the payment claim, and a brief description of the public improvement sufficient for identification. All such payment claims shall be ,immediately referred by the Village to the Public Works Director or his authorized representative with a copy thereof forwarded to the contractor by certified mail (return receipt requested). If the Public Works Director or his authorized repre- sentative certifies that said payment is proper, the con- tractor shall have thirty (30) days from the date said claim notice is received by him to file with the Village a sworn statement and the necessary lien waivers to enable the Village to pay the claims out of funds on hand. If the contractor fails to supply the Village with the proper sworn state- ment and lien waivers during the thirty (30) day period provided therefor, or in the event that there are insufficient funds on hand with which to make payment to the claimant under the contract, then the Village shall adopt the proper resolution and obtain the necessary funds from the credit amount established by the contractor through an -2- esolution and obtain the necessary funds from the credit amount established by the contractor through an irrevocable letter of credit in the name of the Village pursuant to the provisions of this Section." SECTION TWO: This ordinance shall be in full effect upon its passage, ~pproval and publication form in accordance with law. force and in pamphlet PASSED AND APPROVED this AYES: Arthur, Floros, Murauskis, NAYS: None ABSENT: Farley 15th day of November Van Geem, Wattenberg , 1983. VILLAGE CLERK TILLAGE PRESIDENT -3-