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Resolution 2023-11 Resolution No. 2023-11 RESOLUTION APPROVING AN 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 Municipalities and the DuPage Water Commission (the "Commission") is a county water commission and public corporation under Division 15 of Article I 1 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. 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 not be limited to engineering, property acquisition, and easement acquisitions (the "Commission Expenses"); and, Resolution No.2023-11 Page 1 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 Escrow Intergovernmental Agreement. NOW,THEREFORE,BE IT RESOLVED by the Mayor and City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section 1. The recitals set forth above are incorporated into this Resolution as if fully restated herein. Section 2. Escrow Intergovernmental Agreement Among the United City of Yorkville, Village of Oswego, Village of Montgomery and the DuPage Water System, 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. Resolution No. 2023-11 Page 2 Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this 251" day of April, A.D. 2023. I 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 `Z Y1 day of A.D. 2023. j MAYOR Attest: CLERK Resolution No. 2023-11 Page 33 Exhibit A ESCROW INTERGOVERNMENTAL AGREEMENT This Escrow Intergovernmental Agreement(the"Escrow Agreement") is dated the 2nd day of May 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 2027, 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; ESCROW INTERGOVERNMENTAL AGREEMENT Page 2 of 9 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, 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 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: AGREEMENT 1. The recitals contained in the Preamble above will become a part of this Escrow Agreement as if fully set forth herein. 2. Escrow Account. Montgomery, Oswego, and Yorkville will each pay the Commission, within thirty (30) days of execution of this Escrow Agreement, Two Hundred Thousand Dollars and No Cents ($200,000.00) for a total of Six Hundred Thousand Dollars and No Cents ($600,000.00) in the form of cash to be held by the Commission in escrow ("Escrow Account"). ESCROW INTERGOVERNMENTAL AGREEMENT Page 3 of 9 a. 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. b. 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. c. 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. d. The Municipalities and the Commission will resolve any Escrow Account disputes using the dispute resolution procedure in Paragraph 6. 3. Termination and Return of Escrow. This Escrow Agreement will terminate, and any monies not paid or incurred for Commission Expenses, including any interest therein will be returned to the Municipalities, unless mutually extended by the Municipalities and the Commission, upon the earlier of: 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; or c. Upon the Municipalities' written notification to the Commission that they are no longer ESCROW INTERGOVERNMENTAL AGREEMENT Page 4 of 9 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. 4. Replenishment of Escrow. If at any time during the term of this 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. 5. Progress Review: The DWC 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. 6. Dispute Resolution. All claims, disputes, and other matters in question among the Municipalities and the Commission arising out of, or relating to, this 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. 7. Default. 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 ESCROW INTERGOVERNMENTAL AGREEMENT Page 5 of 9 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. 8. No Third-Party Beneficiaries. There are no third party beneficiaries of this Agreement and nothing in this 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. 9. Notices. Any notices under this 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: Paul D. May, P.E., General Manager DuPage Water Commission 600 E. Butterfield Road Elmhurst, IL 60126 Email: i , With a copy to: Phillip A. Luetkehans Luetkehans, Brady, Garner& Armstrong ESCROW INTERGOVERNMENTAL AGREEMENT Page 6 of 9 105 E. Irving Park Road Itasca, IL 60143 Email: 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 10. Miscellaneous. a. Except as provided herein, the Municipalities and the Commission will assign this Escrow Agreement or any right or privilege any Municipalities and the Commission may have under this Escrow Agreement without the prior written consent of all Parties hereto, not to be unreasonably withheld conditioned or delayed. b. This Escrow Agreement will be governed by the internal laws of the State of Illinois. ESCROW INTERGOVERNMENTAL AGREEMENT Page 7 of 9 c. The person(s) executing this 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 Escrow Agreement on behalf of said Municipality or the Commission; (iii) by so executing this Escrow Agreement, such Municipality and the Commission are formally bound to the provisions and conditions contained in this Escrow Agreement; and (iv) the entering into this 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 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 Escrow Agreement. e. This 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 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. ESCROW INTERGOVERNMENTAL AGREEMENT Page 8 of 9 ATTEST: DuPage Water Commission 4 BY: • ATTEST: Village of Montgomery BY: �- ATTEST: Village of Oswego /D B Y: ATTEST; United City of Yorkville T BY: ESCROW INTERGOVERNMENTAL AGREEMENT Page 9 of 9