Resolution 2024-13 Resolution No. 2024-13
RESOLUTION APPROVING A SECOND 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 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.; 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
not be limited to engineering, property acquisition, and easement acquisitions (the"Commission
Resolution No. 2024-13
Page 1
Expenses"); and
WHEREAS, the Commission and the Municipalities previously entered into an Escrow
Intergovernmental Agreement for the first phase of engineering on the Project, this first phase
now having reached completion; and
WHEREAS,the Municipalities and Commission mutually agree and desire to commence
the necessary engineering for the second phase of engineering for the Project, including
conventional engineering activities associated with preparation of"issued for bid" construction
drawings and associated permits and contract documents, specifications, and estimates ("Phase
2 Services") 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 Phase 2 Services
portion of the Commission Expenses pursuant to the terms as stated in the attached Second
Escrow Intergovernmental Agreement.
NOW,THEREFORE,BE IT RESOLVED by the Mayor and City Council ofthe 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. Second 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.
Resolution No. 2024-13
Page 2
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
121h day of March, A.D. 2024.
CIT CLERK
KEN KOCH AYE DAN TRANSIER AYE
ARDEN JOE PLOCHER AYE CRAIG SOLING AYE
CHRIS FUNKHOUSER AYE MATT MAREK AYE
SEAVER TARULIS ABSENT RUSTY CORNEILS AYE
APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois
this (� day of "CA rG A.D. 2024.
MAYOR
Attest:
zy,L6
CITY LERK
Resolution No. 2024-13
Page 3
SECOND ESCROW INTERGOVERNMENTAL AGREEMENT
This Second Escrow Intergovernmental Agreement (the "Second Escrow Agreement") is
dated the 21st day of March, 2024 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 with the
Commission, and have applied to and been awarded a Lake Michigan Water Allocation Permit
from the State of Illinois Department of Natural Resources, Office of Water Resources("IDNR");
and
WHEREAS, the Municipalities, pursuant to a 2021 Intergovernmental Cost-Sharing
Agreement 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, since time is of the essence, the Municipalities agree to equally share in the
costs of this Second Escrow Agreement until the final cost-share allocation for construction is
determined by the Municipalities. It is the intent of the Municipalities that the engineering costs
paid into the escrow account pursuant to this Second Escrow Agreement will mirror the cost share
allocation for construction. The Municipalities, separate from the DWC, agree to; 1) include these
contributions in a cost-share agreement, 2)make an adjustment, accounting, or true-up at the time
of the cost-share agreement,and 3)use best efforts to finalize said agreement no later than January
1, 2025 The Commission will not be a party to the Municipalities' cost sharing agreement and
will not have any responsibility or liability as to the true-up or any adjusted accounting, as this
paragraph only applies to the Municipalities. 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, 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 Municipalities and the Commission are in the process of negotiating a
Construction Contract for the construction of a transmission line to be directly connected to the
Commission's Waterworks System (the "Direct Connections"), 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 Municipalities have each individually submitted a("Notice of Intent")for
financing through the Water Infrastructure Finance and Innovation Act ("WIFIA"), and are
currently assembling additional financing instruments which have not yet closed; and
WHEREAS, the Water Purchase and Sale Agreement will document the financing terms
including the disposition of construction costs among the participating Municipalities, which are
not yet fully established pending the assembly of financing instruments by the Municipalities; and
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 have previously entered into an Escrow
Intergovernmental Agreement for Phase 1 engineering services related to the preliminary
engineering design of the Transmission Main and Direct Connections (the "Phase 1 Services");
and
WHEREAS, the Phase I Services have been substantially completed by Lockwood,
Andrews and Newnam, Inc. ("LAN"); and
WHEREAS, in order to continue with the necessary engineering, including conventional
engineering activities associated with preparation of"issued for bid" construction drawings and
associated permits and contract documents, specifications, and estimates (the "Phase 2 Services")
prior to the execution of the Water Purchase and Sale Agreements and Construction Contract in
order to maintain the desired schedule for the delivery of Lake Michigan water to the
Municipalities, a contract will need to be executed with LAN to perform the Phase 2 Services; and
WHEREAS, the Municipalities and the Commission agree that the Phase 2 Services may
include some preliminary land acquisition soft costs, including but not limited to legal, survey and
title commitment; however, Phase 2 Services do not include costs for the actual acquisitions of
any easements or fee simple purchases of real estate as those types, of acquisition costs will be
subject to a separate agreement; and
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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 Phase 2 Services; and
WHEREAS, the Commission will execute a contract with Lockwood, Andrews and
Newnam, Inc. ("LAN")to perform the Phase 2 Services; and
WHEREAS,the cost of services to complete the Phase 2 Services from LAN is the amount
of$19,956,942 plus reimbursable costs; and
WHEREAS,the Municipalities agree that they are responsible for those expenses incurred
for Phase 2 Services performed and completed within the scope of services of the contract between
the Commission and LAN; 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 Second 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:
1. The recitals contained in the Preamble above will become a part of this Second
Escrow Agreement as if fully set forth herein.
2. Montgomery, Oswego, and Yorkville will each deposit $6,652,300 into the
Commission's escrow account for a total amount of$19,956,900 plus reimbursable costs in the
form of cash to be held by the Commission in escrow ("Escrow Account") in three payments as
follows:
• The First Payment will be due on or before March 21, 2024, in the amount of
$2,588,000
• The Second Payment will be due on or before September 1, 2024, in the amount of
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$1,844,000
• The Third Payment will be due on or before January 1, 2025, in the amount of
$2,220,300
3. Since time is of the essence,the Municipalities agree to equally share in the costs of this
Second Escrow Agreement until the final cost-share allocation for construction is determined by
the Municipalities. It is the intent of the Municipalities that the engineering costs paid into the
escrow account pursuant to this Second Escrow Agreement will mirror the cost share allocation
for construction. The Municipalities, separate from the DWC, agree to; 1) include these
contributions in a cost-share agreement, 2)make an adjustment, accounting, or true-up at the time
of the cost-share agreement, and 3)use best efforts to finalize said agreement no later than January
1, 2025The Commission will not be a party to the Municipalities' cost sharing agreement and will
not have any responsibility or liability as to the true-up or any adjusted accounting, as this
paragraph only applies to the Municipalities.
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. Any remaining funds
from the First Escrow Agreement will remain in the account and can be utilized for Phase II
activities.
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; and (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 Second 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
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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 set forth in Paragraph 10.
7. This Second 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 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; or
d. Any failure of one or more of the Municipalities to make any payment required under this
Second Escrow 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 Second Escrow Agreement.
9. The Commission will follow generally accepted engineering principles and
regularly conduct Project progress meetings with the Municipalities to ensure continuity between
the proposed water transmission main project and the municipal infrastructure;
10. All claims, disputes, and other matters in question among the Municipalities and
the Commission arising out of, or relating to, this Second 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
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in the Eighteenth Judicial Circuit, DuPage County, Illinois. Demand for arbitration shall be made
in accordance with the notice provisions contained in Paragraph 13 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 Second Escrow Agreement and
nothing in this Second 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 Second 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
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Email: nlay''c� wc.�rg
With a copy to:
Phillip A. Luetkehans
Luetkehans, Brady, Garner& Armstrong, LLC
105 E. Irving Park Road
Itasca, IL 60143
Email: p4'u lh,a1ai,N.c_um
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. Each Municipality will hold the Commission harmless and defend the Commission
from any claims or litigation that arise out of the Phase 2 Services due to that Municipality's failure
to comply with the payment obligations arising under this Second Escrow Agreement.
15. Miscellaneous.
a. Except as provided herein, the Municipalities and the Commission will not assign this
Second Escrow Agreement or any right or privilege any Municipalities and the
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Commission may have under this Second Escrow Agreement without the prior written
consent of all Parties hereto, not to be unreasonably withheld conditioned or delayed.
b. This Second Escrow Agreement will be governed by the internal laws of the State of
Illinois.
c. The person(s) executing this Second 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 Second
Escrow Agreement on behalf of said Municipality or the Commission; (iii)by so executing
this Second Escrow Agreement, such Municipality and the Commission are formally
bound to the provisions and conditions contained in this Second Escrow Agreement; and
(iv) the entering into this Second 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 Second 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 Second Escrow Agreement.
e. This Second 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 Second 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.
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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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