Section 99-T. Contracts with banks or trust companies for the collection of water or sewer user fees, charges, rates or rentals, or certain special assessments

1. Notwithstanding any general, special or local law to the  contrary,  a  municipal  corporation  having  the responsibility for the
  collection of water or sewer user fees, charges, rates  or  rentals,  or
  special  assessments which are not collected together with real property
  taxes, may enter into a  contract  with  one  or  more  banks  or  trust
  companies,  as  those  terms  are  defined  in  paragraphs  d  and  e of
  subdivision one of section ten of this article, for  the  collection  of
  any  or  all  such user fees, charges, rates or rentals, or such special
  assessments. For purposes of this section, the term "special assessment"
  shall have the same meaning as in subdivision  fifteen  of  section  one
  hundred  two  of the real property tax law and shall be limited to those
  special assessments not collected together with real property taxes.
    2. Such bank or trust company shall collect payments of water or sewer
  user fees, charges, rates or rentals, or special  assessments,  pursuant
  to such contract, which contract shall contain provisions relating to:
    (a) the period during which payments may be collected;
    (b)  any  authorized  prompt payment discounts, penalties and interest
  for late payments, and acceptance of partial payments;
    (c) the furnishing of receipts to each person paying such  user  fees,
  charges, rates or rentals, or special assessments;
    (d)  the  deposit of all such user fees, charges, rates or rentals, or
  special assessments collected, immediately upon receipt, in the  account
  or  accounts  designated  by  the  municipal corporation in such bank or
  trust company, or in any other bank or trust company designated  by  the
  municipal corporation;
    (e)  the  maintenance  of  appropriate records of deposits showing the
  dates and amounts of all  user  fees,  charges,  rates  or  rentals,  or
  special  assessments  collected, and the individuals from whom such user
  fees, charges, rates or rentals, or special assessments were collected;
    (f) the transmission to the appropriate municipal official of a  daily
  report  of  the  user  fees,  charges,  rates  or  rentals,  or  special
  assessments collected, which report shall be accompanied by a  statement
  showing   the   deposits  credited  to  the  account  of  the  municipal
  corporation; and
    (g) the performance of such other duties, and the maintenance of  such
  other records, as the contract may provide.
    3.  (a) A bank or trust company which has entered into a contract with
  a municipal corporation pursuant to this section shall be liable to  the
  municipal  corporation  for  all loss or damage that may result from any
  failure of the bank's or trust company's officers, employees  or  agents
  to  discharge  their duties, or from any improper or incorrect discharge
  of those duties. The bank or trust  company  shall  save  the  municipal
  corporation  free  and  harmless  from any and all loss occasioned by or
  incurred in the performance of services under  a  contract  pursuant  to
  this section.
    (b)  A  bank or trust company which has entered into a contract with a
  municipal corporation pursuant  to  this  section,  and  which  receives
  moneys  from  an  individual  for  payment  of water or sewer user fees,
  charges, rates or rentals, or special assessments, shall  be  liable  to
  such  individual,  upon failure to properly credit such payment, for the
  amount  of  the  user  fees,  charges,  rates  or  rentals,  or  special
  assessments, plus interest and penalties imposed thereon.
    4.  Moneys  deposited  with  a  bank or trust company pursuant to this
  section shall be secured in the manner provided by section ten  of  this
  chapter.

    5.   The   statutory  powers  and  duties  of  the  municipal  officer
  responsible for collecting water or sewer user fees, charges,  rates  or
  rentals, or special assessments, including the authority to receive such
  user  fees,  charges, rates or rentals, or special assessments shall not
  be  affected  by  the  existence of a contract executed pursuant to this
  section, except that such official shall:
    a. notify the bank  or  trust  company  of  the  commencement  of  the
  collection period for such payments;
    b.  include  in  the  appropriate notices the fact that payment may be
  made to the bank or trust company;
    c. notify the  bank  or  trust  company  of  the  date  on  which  the
  interest-free or penalty-free collection period expires; and
    d.  make  the  appropriate  entries  in  the  official  records of the
  municipal corporation, upon receiving each daily report  of  user  fees,
  charges, rates or rentals, or special assessments, collected by the bank
  or trust company.
    6.  A  contract  executed pursuant to this section shall be subject to
  the requirements of article five-A of this chapter, and shall be  for  a
  term  not  to  exceed  five  years,  except  that it shall be subject to
  cancellation by the municipal corporation at any time upon  thirty  days
  notice to the bank or trust company.