1. The local governing body shall require the posting of a performance bond for the completion of the construction of the sewage-works system, and may require the posting of an additional bond or other guaranty for the payment of labor and material furnished in the course of such construction, and for the cost of retained engineering services to the local governing body or sewer agency.

Terms Used In N.Y. Transportation Corporations Law 119

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Local governing body: means the legislative body of a city, town or village authorized by law to establish a sewer district or otherwise to provide sewage-works facilities in such city, town or village wherein is located the area to be served by the sewage-works corporation. See N.Y. Transportation Corporations Law 115
  • Sewer district: means a county sewer district established pursuant to article five-A of the county law or a town sewer district established pursuant to article twelve or article twelve-A of the town law. See N.Y. Transportation Corporations Law 115
  • Sewer system: means all sewer pipes and other appurtenances which are used or useful in whole or in part in connection with the collection, treatment or disposal of sewage, and other waste, including sewage pumping stations and sewage treatment and disposal plants and sites. See N.Y. Transportation Corporations Law 115

2. The local governing body shall require a reasonable guaranty from the corporation that said corporation will continue to maintain and operate the system for a period of at least five years, in the form of a bond or other security acceptable to the local governing body in the amount of the estimated cost of the operation and maintenance of the sewage-works project, less the estimated revenues which are received from properties served, and to be utilized to defray such operation and maintenance costs, as reported by the licensed professional engineer or consulting engineering firm to the local governing body. The local governing body may, and on petition of the corporation shall, at any time review the adequacy of such bond or other security, to ascertain whether it should be modified on the basis of fiscal performance or other conditions.

3. (a) In addition to the guaranty, the stock of the corporation shall be placed in escrow and title thereto shall pass to the local governing body in the event of failure to complete the construction thereof, or in the event of abandonment or discontinuance of the maintenance and operation of the system by the corporation.

(b) In the county of Suffolk said stock placed in escrow may pass, with the consent of the local governing body and the board of supervisors to a county sewer agency in the event of failure to complete the construction of said sewer system, or in the event of abandonment or discontinuance of the maintenance and operation of said system by the corporation.

4. In the event of such abandonment or discontinuance of the maintenance and operation of the system, the local governing body shall have the right to continue the maintenance and operation of the system at the established rates, with the costs assessed against the users, and it may levy taxes, or sewer rents for such purposes in the same manner as if such facilities were owned by a city, town or village, as the case may be. The local governing body shall have such powers until such time as another corporation or agency may undertake to maintain and operate the sewer system, or until such time as it becomes a part of a municipal or sewer district system.

5. In Suffolk county in the event of an abandonment or discontinuance of the maintenance and operation of the sewer system, the county agency shall have the right to undertake to maintain and operate such sewer system, and it shall do so at the established rates, or such other rates as it may deem necessary, with the costs, including delinquent accounts, assessed against all of the users until such time as the sewer system is included in a sewer district which shall maintain and operate the sewer system.