Resolution 2023-21 Resolution No. 2023-21
RESOLUTION APPROVING AN AMENDED AND RESTATED ESCROW
INTERGOVERNMENTAL AGREEMENT BY AND AMONG THE UNITED CITY OF
YORKVILLE,THE VILLAGE OF OSWEGO,THE VILLAGE OF MONTGOMERY AND
THE DUPAGE WATER COMMISSION
WHEREAS, the United City of Yorkville, Kendall County, Illinois (the "City'), the
Village of Oswego ("Oswego") and the Village of Montgomery ("Montgomery') are duly
organized units of government of the State of Illinois within the meaning of Article VII, Section
10 of the 1970 Illinois Constitution (collectively, the "Municipalities"); and
WHEREAS, the Constitution of the State of Illinois of 1970, Article VII, Section 10,
and the Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., authorize units of local
government to contract or otherwise associate among themselves to obtain or share services and
to exercise, combine, or transfer any power or function in any manner not prohibited by law; and
WHEREAS, the DuPage Water Commission (the "Commission") is a county water
commission and public corporation under Division 15 of Article I I of the Illinois Municipal
Code, 65 ILCS 5/11-135-1 et seq. and the Water Commission Act of 1985, 70 ILCS 3720/0.01
et seq.; and
WHEREAS, the Municipalities and the Commission are in the process of negotiating
contracts for the sale of Lake Michigan water to the Municipalities from the Commission's
Waterworks System; and
WHEREAS, the Commission will design, construct, own, operate and maintain the
water main(the "Project")required to transmit the water; and
WHEREAS, the Commission will incur expenses for the design and construction of the
Project and the eventual connections to serve the Municipal System, costs which will include but
Resolution No. 2023-21
Page 1
not be limited to engineering, property acquisition, and easement acquisitions (the "Commission
Expenses"); and
WHEREAS, the Municipalities and Commission mutually agree and desire to
commence the preliminary engineering design of the main and connections prior to the
execution of the water purchase and sale contracts and construction contract in order to
accelerate the schedule for the delivery of Lake Michigan water to the Municipalities; and
WHEREAS, the Commission requires the Municipalities to establish an escrow fund
with the Commission as stated herein to provide a funding source for the design engineering
portion of the Commission Expenses pursuant to the terms as stated in the attached Amended
and Restated Intergovernmental Agreement; and
WHEREAS, the Mayor and the City Council approved an Escrow Intergovernmental
Agreement Among the United City of Yorkville, Village of Oswego, Village of Montgomery
and the DuPage Water System on April 25, 2023; and
WHEREAS, the DuPage Water Commission has since approved a design engineering
agreement containing a projected total cost for the Project; and
WHEREAS, the Municipalities and Commission desire to enter into an amended
intergovernmental agreement reflecting additional payments to be made by the Municipalities to
the Commission to cover the projected total cost of the Project.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and City Council of the
United City of Yorkville, Kendall County, Illinois, as follows:
Resolution No. 2023-21
Page 2
Section 1. The recitals set forth above are incorporated into this Resolution as if fully
restated herein.
Section 2. Amended and Restated Escrow Intergovernmental Agreement, in the form
attached hereto and made a part hereof, is hereby approved; and, the Mayor and City Clerk are
hereby authorized to execute said Agreement.
Section 3. That this Resolution shall be in full force and effect from and after its passage
and approval as provided by law.
Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this
271h day of June, A.D. 2023.
Cl Y CLERK
KEN KOCH AYE DAN TRANSIER AYE
ARDEN JOE PLOCHER AYE CRAIG SOLING AYE
CHRIS FUNKHOUSER AYE MATT MAREK AYE
SEAVER TARULIS AYE RUSTY CORNEILS AYE
APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois
this Wday of A.D. 2023.
-T
MAYOR
Attest:
CITY CLERK
Resolution No. 2023-21
Page 3
AMENDED AND RESTATED ESCROW INTERGOVERNMENTAL AGREEMENT
This Amended and Restated Escrow Intergovernmental Agreement(the"Amended Escrow
Agreement") is dated the 241h day of July, 2023 between the Village of Montgomery
("Montgomery"), the Village of Oswego ("Oswego") and the United City of Yorkville
("Yorkville") (Oswego, Montgomery and Yorkville are collectively referred to herein as the
"Municipalities") and the DuPage Water Commission, (the "Commission") a county water
commission and public corporation under Division 135 of Article 11 of the Illinois Municipal
Code, 65 ILCS 5/11-135-1 et seq., and the Water Commission Act of 1985, 70 ILCS 3720/0.01 et
seq. (the "Acts").
WITNESSETH:
WHEREAS,the Commission has been organized under the Acts to supply water within its
territorial limits; and
WHEREAS, the Municipalities currently own and operate municipal drinking water
systems served by wells which extract source water from the Ironton-Galesville aquifer; and
WHEREAS, the Municipalities are within the territorial limits of the Commission; and
WHEREAS, the Municipalities intend to change from the Ironton-Galesville groundwater
source to Lake Michigan source water,through a future water purchase agreement(the"Customer
Agreement") with the DuPage Water Commission, and have applied to the State of Illinois
Department of Natural Resources, Office of Water Resources ("IDNR"), for a Lake Michigan
Water Allocation Permit("Permit"); and
WHEREAS, the Municipalities have conducted extensive study and have concluded that
the most sustainable alternative water source to serve the Municipalities through the municipal
waterworks systems currently serving the Municipalities, as well as any extensions or
improvements of those systems (collectively the "Municipal Systems") is Lake Michigan water
from the Commission; and
WHEREAS, the Commission owns and maintains a waterworks system as a supplier of
Lake Michigan water to member customers that contract for such service ("Commission's
Waterworks System"); and
WHEREAS, Oswego seeks to connect to Lake Michigan water through the Commission
in 2027, Yorkville in 2030, and Montgomery in 2032; and
WHEREAS, pending a Permit from the IDNR, the Municipalities seek to connect to Lake
Michigan through the DWC; and
WHEREAS, the Commission has entered into a water supply contract with the City of
Chicago to purchase Lake Michigan water sufficient to meet the water supply needs of the
Commission and its customers; and
WHEREAS, the Commission's water supply contract with the City of Chicago is set to
expire in 2024 and the Commission is 1) exploring an alternative solution to obtaining Lake
Michigan water and at the same time, 2) in discussions and negotiations with the City of Chicago
for a new water supply agreement; and
WHEREAS, the Municipalities and the Commission are in the process of negotiating
Water Purchase and Sale Contracts for the sale of Lake Michigan water to the Municipalities from
the Commission's Waterworks System; and
WHEREAS, the Municipalities and the Commission are in the process of negotiating a
Construction Contract for the construction of a transmission line and be directly connected to the
Commission's Waterworks System (the "Direct Connection"), through the construction and
extension of the Commission's water transmission infrastructure as preliminarily described in
Exhibit A (the "Transmission Main"), such that the Municipal Systems will connect through the
Transmission Main to the Commission's Waterworks System facilities directly; and
WHEREAS, the Commission will design, construct, own, operate, and maintain the
Transmission Main(the "Project"), and;
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WHEREAS, the Commission will incur expenses for the design and construction of the
Project and the eventual Direct Connections to serve the Municipal System, costs which will
include but not be limited to engineering, property acquisition, and easement acquisitions (the
"Commission Expenses"); and
WHEREAS, the Municipalities and Commission mutually agree and desire to commence
the preliminary engineering design of the Transmission Main and Direct Connections prior to the
execution of the Water Purchase and Sale Contracts and Construction Contract in order to
accelerate the schedule for the delivery of Lake Michigan water to the Municipalities, and;
WHEREAS, the Commission requires the Municipalities to establish an escrow fund with
the Commission as stated herein to provide a funding source for the design engineering portion of
the Commission Expenses; and
WHEREAS, the Commission has executed a contract with Lockwood, Andrews and
Newnam, Inc. ("LAN")to perform Phase I engineering services, including preliminary design and
determination of transmission main routings (the "Phase I Services"); and
WHEREAS, the cost of services to complete the Phase I Services from LAN by February
28, 2024, is in the amount of$4,263,649.00 plus reimbursable costs: and
WHEREAS,the Municipalities agree that they are ultimately responsible for full payment
of the Phase I Services; and
WHEREAS, pursuant to Article VII, Section 10 of the Illinois Constitution of 1970, and
the Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., the Commission and the
Municipalities are authorized to enter into this Amended Escrow Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual
covenants and agreements herein contained,the Municipalities and the Commission hereby agree
as follows:
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AGREEMENT
1. The recitals contained in the Preamble above will become a part of this Amended Escrow
Agreement as if fully set forth herein.
2. Montgomery, Oswego, and Yorkville will each make deposits into the Commission's escrow
account in accordance with the following schedule:
a. On or before June 16, 2023 - $200,000.00;
b. On or before July 21, 2023 - $800,000.00; and
c. On or before September 30, 2023 - $410,000.00.
for a total amount of$4,230,000.00 in the form of cash to be held by the Commission in escrow
("Escrow Account"). 3. The Commission will establish a segregated Escrow Account for the
sole purpose of funding the Commission Expenses. The Commission will draw from the Escrow
Account to pay for or reimburse the design engineering costs of Commission Expenses.
4. The Escrow Account will be insured and interest bearing,and the Commission will provide
the Municipalities with Quarterly Statements: 1) showing the starting and ending balances for that
quarter in the Escrow Account; 2) detailing the design engineering costs of Commission Expenses
incurred for that quarter including any amounts received or paid from the Escrow Account. The
Municipalities will have the right to conduct audits for three years after the termination of this
Escrow Agreement relative to the Escrow Account.
5. The Commission will keep a record of all pay requests from the Escrow Account for
reimbursement of Commission Expenses incurred (the "Pay Request") and sufficient
documentation of the Commission Expenses incurred in support of the Pay Request. The
documentation will be retained for review by the Municipalities upon request and included within
the Quarterly Statements issued by the Commission.
6. The Municipalities and the Commission will resolve any Escrow Account disputes using
the dispute resolution procedure in Paragraph 6.
7. This Escrow Agreement will terminate, and any monies not paid or incurred for
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Commission Expenses, including any interest therein will be returned to the Municipalities,unless
mutually extended by the Municipalities and the Commission, upon the earlier o£
a. Two years from the date of this Escrow Agreement;
b. Upon the signing of Water Purchase and Sale Agreements between the Commission and
the Municipalities for the purchase of water from the Commission;
c. Upon the Municipalities' written notification to the Commission that they are no longer
pursuing Water Purchase and Sale Agreements with the Commission for the purchase of
water from the Commission. Except for a reason other than the denial of a Permit from the
IDNR, any withdrawing Municipality will be responsible for any Commission Expenses
associated with engineering design incurred to modify engineering designs for the
remaining Municipalities, or
Any failure of one or more of the Municipalities to make any payment required under this
Agreement within seven days after being notified of the failure to pay. No monies will be
returned to the Municipalities until a full accounting has been completed of the
expenditures incurred under this Agreement.
8. If at any time during the term of this Amended Escrow Agreement, the balance in the
Escrow Account is less than Two Hundred Thousand Dollars($200,000.00),the Commission will
notify the Municipalities. Within thirty (30) days of the Commission notifying the Municipalities
under this Paragraph 4, Montgomery, Oswego, and Yorkville will each pay the Commission its
proportionate or equal share of the request but not to exceed One Hundred Thousand Dollars
($100,000.00) for deposit into the Escrow Account.
9. The Commission will follow generally accepted engineering principles and regularly
conduct Project progress meetings with the Municipalities to review and seek consensus of the
progress of the Project and at each engineering design milestone such as 30, 50, 90% completion.
10. All claims, disputes, and other matters in question among the Municipalities and the
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Commission arising out of, or relating to, this Amended Escrow Agreement shall be decided by
arbitration, in accordance with the Arbitration Rules of the American Arbitration Association,
unless the Municipalities and the Commission mutually agree otherwise. The award rendered by
the arbitrator shall be final, and judgment may be entered on it in accordance with applicable law
in the Eighteenth Judicial Circuit, DuPage County, Illinois. Demand for arbitration shall be made
in accordance with the notice provisions contained in Paragraph 9 below, with copies sent to the
American Arbitration Association.
11. If any Municipality or the Commission defaults in the full and timely performance of any
of its obligations hereunder,the non-breaching entity or entities,after first providing written notice
to the breaching entity of the event of default and providing the breaching entity ten (10) days to
cure the same,will be entitled to invoke its legal rights and remedies as a result thereof, including,
but not limited to, its equitable remedy of specific performance. THE FOREGOING
NOTWITHSTANDING, NO ENTITY WILL BE LIABLE TO ANOTHER ENTITY OR ANY
OF ITS AFFILIATES, AGENTS, EMPLOYEES OR CONTRACTORS FOR SPECIAL,
INDIRECT, EXEMPLARY, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES.
12. There are no third party beneficiaries of this Amended Escrow Agreement and nothing in
this Amended Escrow Agreement, express or implied, is intended to confer on any person other
than the Parties hereto (and their respective successors, heirs and permitted assigns), any rights,
remedies, obligations or liabilities 13.Any notices under this Amended Escrow Agreement will be
personally delivered, delivered by the deposit thereof in the U. S. Postal Service,postage prepaid,
registered, or certified, return receipt requested, or by overnight courier service to the Party at the
address listed below or at another address hereafter designated by notice or by email transmission.
Any such notice will be deemed to have been delivered and given upon personal delivery or
delivery by a nationally recognized overnight courier service, or deposit with the United States
Postal Service or upon receipt of written confirmation that facsimile or email transmission has
been successfully completed:
If to the Commission:
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Paul D. May, P.E., General Manager
DuPage Water Commission
600 E. Butterfield Road
Elmhurst, IL 60126
Email: maN-'(dpwc.org
With a copy to:
Phillip A. Luetkehans
Luetkehans, Brady, Garner& Armstrong
105 E. Irving Park Road
Itasca, IL 60143
Email: pal,�41bgalaw.com
If to the Municipalities:
Village Manager
Village of Oswego
100 Parkers Mill
Oswego, IL 60543
Village Manager
Village of Montgomery
200 N River Street
Montgomery, IL 60538
City Manager
United City of Yorkville
800 Game Farm Road
Yorkville, IL 60560
With a copy to:
Irene Schild Caminer
Caminer Law, LLC
2612 W. Sunnyside Ave.
Chicago, IL 60625
14. The Municipalities will jointly and severally hold the Commission harmless and
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defend the Commission from any claims or litigation that arise out of the Project Services due
to any of the Municipalities' failure to comply with the payment obligations arising under this
Amended Escrow Agreement.
15. Miscellaneous.
a. Except as provided herein, the Municipalities and the Commission will assign this
Amended Escrow Agreement or any right or privilege any Municipalities and the
Commission may have under this Amended Escrow Agreement without the prior written
consent of all Parties hereto, not to be unreasonably withheld conditioned or delayed.
b. This Amended Escrow Agreement will be governed by the internal laws of the State
of Illinois.
C. The person(s) executing this Amended Escrow Agreement on behalf of the Parties
hereto warrant that: (i) such each Municipality and the Commission are duly organized and
existing; (ii)the individual signing is duly authorized to execute and deliver this Amended
Escrow Agreement on behalf of said Municipality or the Commission; (iii)by so executing
this Amended Escrow Agreement, such Municipality and the Commission are formally
bound to the provisions and conditions contained in this Amended Escrow Agreement; and
(iv) the entering into this Amended Escrow Agreement by a Municipality and the
Commission does not violate any provision of any other agreement to which said
Municipality and the Commission is bound.
d. Each Municipality and the Commission acknowledge that it may be necessary to
execute documents other than those specifically referred to herein in order to complete the
objectives and requirements that are set forth in this Amended Escrow Agreement. Each
Municipality and the Commission hereby agree to cooperate with each other by executing
such other documents or taking such other actions as may be reasonably necessary to
complete the objectives and requirements set forth herein in accordance with the intent of
each Municipality and the Commission as evidenced by this Amended Escrow Agreement.
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e. This Amended Escrow Agreement is the entire agreement between the
Municipalities and the Commission regarding its subject matter and may not be changed
or amended except pursuant to a written instrument signed by each Municipality and the
Commission.
f. This Amended Escrow Agreement may be executed in any number of identical
counterparts each of which will be considered an original, but which together will
constitute one and the same Agreement.
IN WITNESS WHEREOF, each Municipality and the Commission hereto have caused
their respective corporate names to be subscribed hereto and their respective corporate seals to be
affixed hereto and attested by their duly authorized officers, all on the date set opposite their
respective corporate names.
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