Sec. 5-1020. Trust agreements for funds retained pending construction completion.
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Sec. 5-1020. Trust agreements for funds retained pending construction completion. Whenever any county has entered into a contract for the repair, remodeling, renovation or construction of a building or structure or the construction or maintenance of a road or highway (including any contract to which Section 5-409 of the Illinois Highway Code is applicable) or of a local improvement as defined in Division 5-32, as amended, which provides for retention of a percentage of the contract price until final completion and acceptance of the work, upon the request of the contractor and with the approval of the county, the amount so retained may be deposited under a trust agreement with an Illinois bank or savings and loan association of the contractor's choice and subject to the approval of the county.
The contractor shall receive any interest thereon.
Upon application by the contractor, the trust agreement must contain, as a minimum, the following provisions:
a. The amount to be deposited subject to the trust;
b. The terms and conditions of payment in case of default of the contractor;
c. The termination of the trust agreement upon completion of the contract; and
d. The contractor shall be responsible for obtaining the written consent of the bank trustee, and any costs or service fees shall be borne by the contractor.
The trust agreement may, at the discretion of the county and upon request of the contractor, become operative at the time of the first partial payment in accordance with existing statutes, ordinances and county procedures.
No bank or savings and loan association shall receive public funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.