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Council approves Reynolds Construction pay application; staff outlines retainage escrow plan
Summary
The council approved Pay Application No. 2 from Reynolds Construction; staff said the contractor requested $127,500 but the payment to the contractor this period will be $123,675 after $3,825 retainage, and staff are working to move retainage into a three-way escrow once a lender capable of the arrangement is secured.
The Town of Newburgh on June 10 approved pay application No. 2 for Reynolds Construction on the wastewater treatment plant project while staff explained retainage and a pending escrow arrangement.
Town staff presented that Reynolds Construction requested approval for $127,500 for pay application No. 2. Staff later clarified that the amount being paid to the contractor at this time is $123,675, with a retainage amount of $3,825 remaining to be held. "This form says $3,825," staff said while reading the retainage figure during the discussion.
Council approved the pay application by voice vote. During discussion staff explained they are negotiating an escrow arrangement so that the retainage may be held in a three-way escrow account at a bank rather than by the sewer department. "They're allowed under statute to ask for a separate escrow account with a bank... we're working to find another lender," staff said, noting the town will hold the retainage at the sewer department until the escrow agreement is in place.
The council approved the payment. Staff said they will continue to work with the contractor and the sewer office to finalize the escrow arrangement and will report back to council on the mechanics of the retainage transfer once a suitable lender and three-way agreement are secured.
