You have to pay a release clause in one usually. Obviously it's better for accounting reasons to be able to spread that payment over years.
So I believe (based on intuition) that City are courteously bidding above the clause so that they can pay over multiple years, and also pay with bonus clauses at a later date. Villa are open to discussion because they know if they don't accept this offer we'll just undercut them and pay the clause. At least this way they get more money.
I have limited knowledge of how this accounting works and I haven't taken amortisation into account, so I could be completely wrong with my reasoning. But until I'm corrected I think I might be right. I have no reason to doubt that there is a release clause considering that there's been enough legitimate noise that there is one.
This is very common in Spanish football by the way. Pay a few million above they buyout clause to avoid paying it all up front.