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City Council Packet 2024 10-08-24 - revised information Have a question or comment about this agenda item? Call us Monday-Friday, 8:00am to 4:30pm at 630-553-4350, email us at agendas@yorkville.il.us, post at www.facebook.com/CityofYorkville, tweet us at @CityofYorkville, and/or contact any of your elected officials at http://www.yorkville.il.us/320/City-Council Ag Agenda Item Summary Memo Title: Meeting and Date: Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Agenda Item Notes: Revised the resolution for the water purchase and sale contract agreement: the waiver of bidding reference was removed. In addition, a Supermajority vote is no longer required. Reviewed By: Legal Finance Engineer City Administrator Community Development Purchasing Police Public Works Parks and Recreation Agenda Item Number Mayor’s Report #3 Tracking Number CC 2024-80 DuPage Water Commission Agreements City Council – October 8, 2024 Majority Approval Please see the attached memo. Bart Olson Administration Name Department Revised Information – distributed 10/4/24 Summary Consideration of four agreements that will cause Yorkville to join the DuPage Water Commission (DWC). Background This item was last discussed by the City Council at the September 24th City Council meeting, when the City Council approved an amendment to the second escrow agreement between the City and the DWC which allowed certain project costs to be covered by the existing escrow. Prior to that meeting, the City Council heard a verbal update at the September 10th meeting that the final DWC agreements were expected to be ready for consideration at the October 8th City Council meeting. The four companion agreements included in this agenda item are: 1) Water Purchase and Sale Contract / Yorkville Subsequent Customer Agreement a. This is the main agreement that allows Yorkville to join the DWC and receive Lake Michigan water. The terms of this agreement are relatively standard between all DWC communities, and so Yorkville’s will mirror the terms that were included in the agreement from Bartlett (the last community to join DWC before Yorkville). In general, the agreement covers sale of water to Yorkville, confirmation that the transmission pipe construction is expected to be complete in 2028 with commissioning of the system and use of the water by Yorkville immediately thereafter, that Yorkville will pay rates as established by the DWC, that Yorkville agrees to pay our share of the transmission pipe construction costs, and that Yorkville agrees to pay a ~$8.01m “capital cost recovery charge” (also known as a connection fee) to DWC. Said capital cost recovery charge is being financed by DWC at 0% interest rate and may be offset by costs associated with a future decision by the City to pay for a transmission main oversizing, as described more fully in the Capital Cost Recovery Charge intergovernmental agreement. b. Other items to note within this agreement: i. The City’s use of water is limited by: 1. Our current IDNR Lake Michigan allocation permit amount (or as modified by the City and IDNR in the future) 2. Any future DWC curtailment agreement, as contemplated by the DWC Board and all DWC communities Memorandum To: City Council From: Bart Olson, City Administrator CC: Date: October 3, 2024 Subject: DuPage Water Commission Agreements 3. The physical capacity of the system ii. Yorkville is required to maintain proper storage of water in the amount of 2x the City’s daily average water demand. This requirement is driving the consideration to build a water storage tank near the receiving stations and in future areas where the water system is being expanded (i.e. Eldamain Road). Costs of new water storage tanks related to the receiving stations have been included in prior Lake Michigan project cost estimates. Costs of new water storage tanks related to the Eldamain corridor are being estimated, with the intent to require future data center projects to cover the cost of the tanks. iii. The City will construct two receiving stations, one near the Grande Reserve water tower and water treatment plant, and one expected to be near Route 71 and 126 (site under discussion for acquisition). DWC will construct and operate two metering stations adjacent to the City’s receiving stations. iv. There are currently 13 DWC board members (2 board members from each DWC district and one at-large board member). The approval of this agreement will cause the DWC board member count to increase to 15, with both of the new DWC members coming from Kendall County. One of the board members will be chosen from Kendall County by the DuPage County Board Chair, and the other board member will be appointed by a majority vote of the Yorkville, Oswego, and Montgomery mayors. Any future towns added to DWC membership in the future will be put into the Yorkville/Oswego/Montgomery board district, and will share appointing authority with our mayors. 2) Waterlink Project Escrow Intergovernmental Agreement a. This is the main construction funding agreement for the transmission main project. These costs include land acquisition. This agreement requires Yorkville to fund its 40.22% share of the project costs in advance of DWC incurring costs (and at a schedule to be determined at a later date once bids have been received) and to replenish the escrow account anytime it drops below $30m. b. Other items to note within this agreement: i. DWC is offering each town a line of credit in the amount of $7m to use for construction funding. The interest rates for this line of credit are set at DWC’s highest interest rate on its investments plus 1% - and thus, it is unlikely to be a better option than WIFIA, state revolving loan fund, or even the City’s normal bonds. However, this line-of-credit could be used if any of the other financing options fall short or if the City misses a construction funding escrow payment. In the latter scenario, DWC would have the ability to charge the line-of-credit to offset the City’s non- payment. 3) Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service a. This project covers definitions and processes of the actual construction project for the transmission main: i. Defines what components are included in the different cost estimates for the project ii. Clarifies that DWC will be responsible for designing and constructing the connection facilities to be housed on the City’s receiving station properties iii. Declares DWC to be responsible for land acquisition, including eminent domain processes if needed iv. Confirms that DWC will do the project design, construction management, and final acceptance of the transmission main project and connection facilities 4) Intergovernmental Agreement concerning the Capital Cost Recovery Charge a. This agreement confirms Yorkville’s ~$8.01m connection fee to join DWC, gives Yorkville the ability to pay this connection fee at a 0% interest rate over the next 30 years, and to offset this cost through a future decision to pay for a transmission main oversizing on one section of pipe in the project from a 48” to a 54” pipe. b. This future decision on oversizing the pipe is on the table because DWC feels that other communities along this section of pipe may want to tie into the DWC system at a future date, and they have elected to direct the overall project to include this 54” pipe section even though it is not needed to serve Yorkville, Oswego, and Montgomery (i.e. we could be served with the smaller 48”pipe). Engineers have estimated that the incremental cost of the 54” pipe as compared to the 48” pipe will be roughly equal to all three communities connection fees. Thus, DWC has offered to trade the connection fee for the oversizing cost. If Yorkville elects to pay for the oversizing, both Yorkville and the DWC will calculate the value of the difference in interest between the 0% connection fee interest rate vs. an assumed WIFIA loan interest rate for the oversizing cost. The benefit to both entities is that DWC will not have to pay for the construction costs of oversizing the pipe, and Yorkville can push more of its costs into a WIFIA loan (but with an effective interest rate of 0% for this component). Recommendation Staff recommends approval of all four agreements: the water purchase and sale agreement; the escrow intergovernmental agreement; the development of connection facilities intergovernmental agreement; the capital cost recovery charge intergovernmental agreement. Approval of all four agreements by Yorkville follows Oswego’s unanimous approval of the agreements on October 1st, will lead the way for Montgomery to approve the agreements at their October 14th Village Board meeting, and for the DWC to take them up at their October 17th board meeting. Following DWC approval, project bids are slated to begin by the end of 2024 with some construction work expected in the region by early 2025. As a general reminder, EEI is finalizing water rate projections as part of our WIFIA loan, and these water rate projections are expected to be discussed by the City Council by the end of 2024. Finally, it should be noted that the approval of these agreements represents a significant milestone in a project to choose a new water source first discussed by the City Council more than a decade ago and resulting in a decision around 2016 to begin to move away from the aquifer. These documents represent thousands of hours of work by staff members, consultants, engineers, attorneys, lobbyists, elected officials, and others. This decision sets the community up with a sustainable water source for existing residents and businesses and allows us to recruit future commercial and industrial development into the area which should lower the tax burden for residents in the future. Resolution No. 2024-____ Page 1 Resolution No. 2024-_____ A RESOLUTION AUTHORIZING THE EXECUTION OF A WATER PURCHASE AND SALE CONTRACT BETWEEN THE DUPAGE WATER COMMISSION AND THE UNITED CITY OF YORKVILLE FOR THE UNITED CITY OF YORKVILLE UNIT SYSTEM WHEREAS, the United City of Yorkville, Kendall County, Illinois (the “City”) is a duly organized and validly existing non-home-rule municipality created in accordance with the Constitution of the State of Illinois of 1970 and the laws of the State; and WHEREAS, the DuPage Water Commission, DuPage, Cook, and Will Counties, State of Illinois (the “Commission”), is 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 3720/1 et seq.) (collectively, the “Acts”); 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 Commission has been organized under the Acts to supply water within its territorial limits; 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; and WHEREAS, the City currently owns and operates a municipal drinking water system served by wells that extract source water from an underground aquifer; and WHEREAS, the City is within the territorial limits of the Commission; and Resolution No. 2024-____ Page 2 WHEREAS, the City, together with the Village of Montgomery and the Village of Oswego (collectively the “WaterLink Communities”), conducted extensive study and concluded that the most sustainable alternative water source to serve the WaterLink Communities through the municipal waterworks systems currently serving the WaterLink Communities, as well as any extensions or improvements of those systems is Lake Michigan water from the Commission; and WHEREAS, the City has applied for and received from the State of Illinois Department of Natural Resources, Office of Water Resources, a Lake Michigan water allocation permit for the Yorkville Unit System; and WHEREAS, the City is in the process of designing and constructing the conversion of its waterworks system that will be owned and operated by the City and extended or improved from time to time to meet the potable water requirements of all residents and businesses to be served with water from the City; and WHEREAS, the Commission and the WaterLink Communities have entered into Escrow Agreements and have been taking steps to finance, study, engineer, design, and construct the facilities necessary for the WaterLink Communities to receive Lake Michigan water, and the Commission has been taking steps to study, finance, engineer, design, and construct facilities to deliver Lake Michigan water to the WaterLink Communities; and WHEREAS, the City desires that its waterworks system as well as any extensions or improvements of that system (the “Yorkville Unit System”) be served with water from the Commission as mutually agreed to by the parties and pursuant to the terms of the Water Purchase and Sale Contract (the “Contract”), attached hereto as Exhibit A; and WHEREAS, the Commission has entered various water supply contracts with the City of Resolution No. 2024-____ Page 3 Chicago to purchase Lake Michigan water sufficient to meet the water supply needs of the Commission and its customers (the “Water Supply Contract”) and most recently in 2024 and extends until 2041; and WHEREAS, at some point during the term of the Contract, the Commission may build alone or with others a water treatment, distribution, and transmission system to obtain Lake Michigan water directly from Lake Michigan that will serve the Commission; and WHEREAS, The Parties deem it to be in their best interests to approve this Water Purchase and Sale Contract for the Yorkville Unit System. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, as follows: Section 1. That the recitals set forth above are incorporated here by reference. Section 2. That the Mayor and City Council hereby approve the Water Purchase and Sale Contract with the DuPage Water Commission for the United City of Yorkville Unit System, and the Mayor and City Clerk are authorized and directed to execute on behalf of the United City of Yorkville the Water Purchase and Sale Contract for the United City of Yorkville Unit System substantially in the form attached as “Exhibit A.” Section 3. All Resolutions or parts of Resolutions in conflict with any of the provisions of this Resolution shall be, and the same hereby repealed to the extent of the conflict. Section 4. This Resolution and every provision thereof shall be considered severable. If any section, paragraph, clause or provision of this Resolution is declared by a court of law to be invalid or unconstitutional, the invalidity or unconstitutionality thereof shall not affect the validity of any other provisions of this Resolution. Section 5. This Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. [Remainder Intentionally Left Blank. Roll Call Vote to Follow] Resolution No. 2024-____ Page 4 Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ CITY CLERK KEN KOCH _________ DAN TRANSIER _________ ARDEN JOE PLOCHER _________ CRAIG SOLING _________ CHRIS FUNKHOUSER _________ MATT MAREK _________ SEAVER TARULIS _________ RUSTY CORNEILS _________ APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ MAYOR Attest: ______________________________ CITY CLERK Resolution No. 2024-____ Page 1 Resolution No. 2024-_____ A RESOLUTION AUTHORIZING THE EXECUTION OF WATERLINK PROJECT ESCROW INTERGOVERNMENTAL AGREEMENT BETWEEN THE VILLAGE OF MONTGOMERY, THE VILLAGE OF OSWEGO, THE UNITED CITY OF YORKVILLE, 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 “WaterLink Communities”); 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 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 Commission has been organized under the Acts to supply water within its territorial limits; and WHEREAS, the WaterLink Communities currently own and operate municipal drinking water systems served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the WaterLink Communities are within the territorial limits of the Commission; and Resolution No. 2024-____ Page 2 WHEREAS, the WaterLink Communities intend to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through water purchase and sale agreements with the Commission, and have applied for and been awarded Lake Michigan Water Allocation Permits from the State of Illinois Department of Natural Resources, Office of Water Resources for each discrete and non-contiguous service area served by each WaterLink Community’s Unit System; and WHEREAS, the WaterLink Communities have conducted extensive study and have concluded that the most sustainable alternative water source to serve the WaterLink Communities through the municipal waterworks systems currently serving the WaterLink Communities, as well as any extensions or improvements of those 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, the parties seek to complete the improvements necessary to connect the Commission’s Waterworks System to the WaterLink Communities’ individual Unit Systems in 2028; 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 2041, and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Resolution No. 2024-____ Page 3 Chicago for a new Water Supply Contract; and WHEREAS, the Commission will be required to incur certain costs, as defined in the attached Agreement, in pursuit of connecting the WaterLink Communities to the Commission’s Waterworks System (the “Connection Facilities Cost”); and WHEREAS, the Commission and the WaterLink Communities have previously entered into First and Second Escrow Intergovernmental Agreements (the “Prior Escrow Agreements”) for what is defined under those Prior Escrow Agreements as Phase 1 and Phase 2 Services; and WHEREAS, the Commission requires the WaterLink Communities to establish an additional escrow fund with the Commission to provide a funding source for the Commission Expenses beyond those incurred for the Phase 1 and Phase 2 Services, the WaterLink Project Escrow Agreement (the “Agreement”), substantially in the form attached hereto as Exhibit A; and WHEREAS, the WaterLink Communities will be responsible for the Connection Facilities Cost; and WHEREAS, the WaterLink Communities have previously agreed to each Municipality’s percentage share of the Connection Facilities Cost pursuant to an Intergovernmental Cost Share Agreement (the “Cost Share Agreement”) and the WaterLink Communities agree that the costs paid into the escrow account under this Agreement will mirror the Division of Financial Responsibilities/Allocation of Costs set forth in the Cost Share Agreement; and WHEREAS, the WaterLink Communities intend that certain provisions within this Agreement be used only to the extent that one or all of the WaterLink Communities have failed to properly fund this Agreement after notice has been provided in accordance with this Agreement; and Resolution No. 2024-____ Page 4 WHEREAS, the parties deem it to be in their best interests to approve this WaterLink Project Escrow 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. That the recitals set forth above are incorporated here by reference. Section 2. The Mayor and City Council hereby approve the WaterLink Project Escrow Agreement, and the Mayor and City Clerk are authorized and directed to execute on behalf of the United City of Yorkville the WaterLink Project Escrow Agreement for the United City of Yorkville substantially in the form attached as “Exhibit A.” Section 3. All Resolutions or parts of Resolutions in conflict with any of the provisions of this Resolution shall be, and the same hereby repealed to the extent of the conflict. Section 4. This Resolution and every provision thereof shall be considered severable. If any section, paragraph, clause or provision of this Resolution is declared by a court of law to be invalid or unconstitutional, the invalidity or unconstitutionality thereof shall not affect the validity of any other provisions of this Resolution. Section 5. This Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ CITY CLERK KEN KOCH _________ DAN TRANSIER _________ ARDEN JOE PLOCHER _________ CRAIG SOLING _________ CHRIS FUNKHOUSER _________ MATT MAREK _________ SEAVER TARULIS _________ RUSTY CORNEILS _________ Resolution No. 2024-____ Page 5 APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ MAYOR Attest: ______________________________ CITY CLERK Resolution No. 2024-____ Page 6 WATERLINK PROJECT ESCROW INTERGOVERNMENTAL AGREEMENT This WaterLink Project Escrow Intergovernmental Agreement (the “WaterLink Project Escrow Agreement” or this “Agreement”)) is dated the 17th day of October 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 “WaterLink Communities”) 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 WaterLink Communities currently own and operate municipal drinking water systems served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the WaterLink Communities are within the territorial limits of the Commission; and WHEREAS, the WaterLink Communities intend to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through water purchase and sale agreements with the Commission, and have applied for and been awarded Lake Michigan Water Allocation Permits from the State of Illinois Department of Natural Resources, Office of Water Resources for each discrete and non-contiguous service area served by each WaterLink Community’s Unit System (“Service Area”); and WHEREAS, the WaterLink Communities have conducted extensive study and have concluded that the most sustainable alternative water source to serve the WaterLink Communities through the municipal waterworks systems currently serving the WaterLink Communities, as well as any extensions or improvements of those systems, is Lake Michigan water from the Commission; and WaterLink Project Escrow IGA Page 2 of 14 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, the parties seek to complete the improvements necessary to connect the Commission’s Waterworks System to the WaterLink Communities’ individual Unit Systems in 2028; 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 2041, and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Chicago for a new Water Supply Contract; and WHEREAS, to carry out their duties and responsibilities, and desire to create a method of providing an adequate supply of Lake Michigan water to the Service Area, the Commission and each of the WaterLink Communities, contemporaneously with this Agreement are entering into Water Purchase and Sale Contracts (the “Water Purchase Agreements”) and this Agreement incorporates the defined terms of the Water Purchase Agreements unless otherwise specified herein; and WHEREAS, to become a member of the Commission and comply with the Water Purchase Agreements, each WaterLink Community must pay its proportional share of the costs for the property owned by the Commission; and WHEREAS, contemporaneously with this Agreement, the WaterLink Communities and the Commission are each entering into a Capital Cost Recovery Agreements that establish the terms and conditions for financing each WaterLink Community’s proportional share of the costs for the property owned by the Commission; and WaterLink Project Escrow IGA Page 3 of 14 WHEREAS, contemporaneously with this Agreement, each WaterLink Community and the Commission are entering into an Intergovernmental Agreement Concerning the Development of Connection Facilities to Implement Water Service (the “Development Agreement”); and WHEREAS, the WaterLink Communities intend that certain provisions within this Agreement be used only to the extent that one or all of the WaterLink Communities have failed to properly fund this Agreement after notice has been provided in accordance with this Agreement; and WHEREAS, the Commission will incur in connection with (i) the design, bidding, contracting, managing, and actual construction, installation, removal, relocation, replacement, extension, or improvement of the Connection Facilities, including without limitation equipment required for the operation of the Connection Facilities and all administrative, financing, supervisory, inspection, engineering, surveying, and legal fees, costs, and expenses associated therewith; (ii) the acquisition and divestment of lands, easements, and rights of way over lands and waters necessary for the construction, installation, removal, relocation, replacement, extension, or improvement of the Connection Facilities, and all administrative, title, surveying, and legal fees, costs, and expenses associated therewith; and (iii) the review and processing of plans and agreements for the construction, installation, removal, relocation, replacement, extension, or improvement of the Connection Facilities and in connection with the negotiation, preparation, consideration, and review of this Contract, including without limitation all legal, engineering, consulting, and administrative fees, costs, and expenses associated therewith; except as any of the above are included in Operation and Maintenance Costs (“Connection Facilities Cost”); and WHEREAS, the Commission and the WaterLink Communities have previously entered into First and Second Escrow Intergovernmental Agreements (the “Prior Escrow Agreements”) for what is defined under those Prior Escrow Agreements as Phase I and Phase 2 Services; and WHEREAS, prior to the execution of documents requiring the expenditure of Commission Expenses, the Commission requires the WaterLink Communities to establish an additional escrow fund with the Commission as stated herein to provide a funding source for the Commission Expenses beyond those incurred for the Phase 1 and Phase 2 Services; and WaterLink Project Escrow IGA Page 4 of 14 WHEREAS, pursuant to the Development Agreement, the WaterLink Communities will be responsible for the Connection Facilities Cost; and WHEREAS, the WaterLink Communities have previously agreed to each Municipality’s percentage share of the Connection Facilities Cost pursuant to an Intergovernmental Cost Share Agreement (the “Cost Share Agreement”). The WaterLink Communities agree that the costs paid into the escrow account under this WaterLink Project Escrow Agreement will mirror the Division of Financial Responsibilities/Allocation of Costs set forth in the Cost Share Agreement. Specifically, Montgomery commits and agrees to pay 24.42%, Yorkville commits and agrees to pay 40.22%, and Oswego commits and agrees to pay 35.36%. The Commission is not a party to the Cost Share Agreement and has no responsibility or liability as to any true-up or adjusted accounting between the WaterLink Communities; 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 WaterLink Communities are authorized to enter into this WaterLink Project Escrow Agreement. NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants and agreements herein contained, the WaterLink Communities and the Commission hereby agree as follows: 1. The foregoing recitals are by this reference incorporated herein and made a part hereof as if fully set forth herein. Further, to the extent any capitalized terms in this Agreement are set forth as a defined term in the Water Purchase Agreements, the capitalized terms in this Agreement shall have the same meaning in this Agreement as the definition in the Water Purchase Agreements. 2. The Commission will establish a segregated escrow account for the sole purpose of funding the Connection Facilities Cost (the “Waterlink Project Escrow Account”). The WaterLink Communities will each deposit into the Waterlink Project Escrow Account all payments necessary to fund the Connection Facilities Cost. Any remaining funds from the prior Escrow Agreements will remain in the related escrow account, and any funds not expended or necessary for Phase I and Phase II Services, when those phases are complete, may be transferred WaterLink Project Escrow IGA Page 5 of 14 to the WaterLink Project Escrow Account, unless otherwise directed by the WaterLink Communities. 3. The Commission will draw from the WaterLink Project Escrow Account to pay for or reimburse any Connection Facilities Cost incurred. 4. The WaterLink Project Escrow Account will be insured and interest-bearing, and the Commission will provide the WaterLink Communities with Quarterly Statements within twenty-one (21) days after the end of each quarter: (1) showing the starting and ending balances for that quarter in the WaterLink Project Escrow Account; and (2) detailing the costs of Connection Facilities Cost incurred for that quarter including any amounts received or paid from the WaterLink Project Escrow Account. The WaterLink Communities will have the right to conduct audits for three years after the termination of this WaterLink Project Escrow Agreement relative to the WaterLink Project Escrow Account. 5. The Commission will keep a record of all pay requests from the WaterLink Project Escrow Account for reimbursement of Connection Facilities Cost incurred (the “Pay Request”) and sufficient documentation of the Connection Facilities Cost incurred in support of the Pay Request. The documentation will be retained for review by the WaterLink Communities upon request and included within the Quarterly Statements issued by the Commission. If at any time during the term of this WaterLink Project Escrow Agreement, the balance in the WaterLink Project Escrow Account is less than Thirty Million Dollars ($30,000,000.00) (the “Minimum Balance Amount”), the Commission will notify the WaterLink Communities. Within thirty (30) days of the Commission notifying the WaterLink Communities under this Paragraph 5, the WaterLink Communities will each pay the Commission its proportionate share (as set forth in the Cost Share Agreement) of the request to ensure that the Minimum Balance is met. Failure to make such payment when required under this Paragraph 5 shall be considered a default of this Agreement by the WaterLink Communities. 6. The Commission will, after the execution and delivery of this Agreement, make available as a line of credit to the WaterLink Communities an amount not to exceed $21,000,000 WaterLink Project Escrow IGA Page 6 of 14 (the “Commitment Amount”) to pay a portion of the Connection Facilities Cost as defined in the Water Purchase Agreements. The actual amounts of money borrowed by each of the WaterLink Communities pursuant to the Commitment Amount will constitute the “Line of Credit.” 7. The WaterLink Communities will repay the principal balance of the Line of Credit, plus accrued and unpaid interest at the Interest Rate set forth in Paragraph 8 of this Agreement from the Interest Commencement Date through the Line of Credit Payment Commencement Date (the “Capitalized Interest”), as those terms are hereinafter defined on the unpaid principal balance, and any Capitalized Interest, of the Line of Credit from and after the Line of Credit Payment Commencement Date, as that term is hereinafter defined, in 240 monthly installments, commencing on the 10th day of every month (the “Monthly Payment Date”) commencing on the Line of Credit Payment Commencement Date as hereafter defined in Paragraph 9 and continuing in successive monthly installments on each Monthly Payment Date in each month thereafter, with the final payment of any unpaid interest and principal, if not sooner paid, on the 240th Monthly Payment Date. Each of the 240 monthly installments of principal on the Line of Credit will be determined as of the last day of the month preceding the Monthly Payment Date in any given year during the term of the Line of Credit (a “Principal Determination Date”) and will be determined by dividing the unpaid principal balance, and any Capitalized Interest, of the Line of Credit as of the applicable Principal Determination Date by the number of monthly installments of principal remaining to be paid during the term of the Line of Credit. The accrued and unpaid interest will be capitalized on a monthly basis until the Line of Credit Payment Commencement Date. There will be no penalty for prepayment. 8. Interest on the unpaid principal balance, and any Capitalized Interest, of the Line of Credit will accrue at a rate (the “Interest Rate”) that is equivalent to the highest yield to maturity interest rate earned by the Commission (based on all investments) as reported monthly on the Commission’s Schedule of Investments for the immediately preceding fiscal year (May 1 – April 30) as determined by the Commission (the “Earned Interest Rate”) plus one percent (1%). Interest will only accrue on money actually borrowed under Paragraph 6 of this Agreement and will begin to accrue when the Commission makes its first draw on the Line of Credit for the WaterLink Communities (the “Interest Commencement Date”). The Interest Rate for each year that the Line WaterLink Project Escrow IGA Page 7 of 14 of Credit remains outstanding will be calculated on the basis of a calendar year consisting of 360 days of twelve 30-day months and will be adjusted on May 1st of each year, and will be applied to the outstanding unpaid principal balance, and any Capitalized Interest, as determined on the most recent Principal Determination Date, will be paid commencing on the Monthly Payment Date, and continuing on the Monthly Payment Date each month thereafter until the principal balance of the Line of Credit and all interest thereon has been paid in full. 9. Payments of principal and interest, including Capitalized Interest, will begin no later than the 10th day of the first month after the first delivery of potable, filtered water drawn from Lake Michigan to any of the WaterLink Communities individual Unit Systems as that term is defined in the Water Purchase Agreement (the “Line of Credit Payment Commencement Date”). 10. Payments of the principal and interest will be made in lawful money of the United States of America in federal or other immediately available funds. 11. If at any time, the Commission receives invoices incurred arising out of the Connection Facilities Cost for which there are insufficient funds in the Construction Escrow Agreement, the Commission will pay the actual costs incurred from the Connection Facilities Cost Line of Credit. The Commission payments for the Connection Facilities Cost will be paid out of the Commitment Amount and will be immediately considered part of the Line of Credit. The Commission may make payments from the Line of Credit no more than once per month, on the 10th day of the month, provided that the Commission will give the WaterLink Communities notice (which notice must be received by the WaterLink Communities prior to 10:00 a.m., local time, 7 days prior to the requested borrowing date), specifying the amount to be paid and the payment date. It is anticipated that only a single borrowing will be requested each month. Each borrowing pursuant to this Agreement will be in an aggregate principal amount less than the Available Commitment. For purposes of this Paragraph 11, the Available Commitment at a particular time is an amount equal to the difference between the Commitment Amount and the aggregate principal balance of the Line of Credit then outstanding. 12. Subject to the limitations of Paragraph 12, the WaterLink Communities may, without premium or penalty, upon at least one business day’s irrevocable notice to the WaterLink Project Escrow IGA Page 8 of 14 Commission, specifying the date and amount of prepayment, make such prepayment; and the payment amount specified in such notice will be due and payable on the date specified therein. The proceeds of any such prepayment will be applied by the Commission first, to the payment of accrued and unpaid interest, if any, on the Line of Credit, and second, to the payment of the unpaid principal balance of the Line of Credit. The WaterLink Communities will not be entitled to, nor receive any credit for, interest on any such prepayment. 13. The proceeds of the Line of Credit will be devoted to and used with due diligence for the purpose of paying the Connection Facilities Cost identified in Exhibit A; provided, however, that where an unexpended balance remains in any one or more of the various cost components of the Connection Facilities Cost detailed in Exhibit A attached hereto, such balance may be transferred and expended, in whole or in part, to and for any other cost component of the Connection Facilities Cost detailed in Exhibit A attached hereto. 14. The Covenants set forth in Subsections 9A, 9B, 9C, and 9D of the Water Purchase Agreements are incorporated into this Agreement by reference. 15. This WaterLink Project Escrow Agreement will terminate, and any monies not paid or incurred for Connection Facilities Cost, including any interest therein will be returned to the WaterLink Communities, unless mutually agreed to by the WaterLink Communities and the Commission, upon the earlier of: a. upon written request by the WaterLink Communities, a written direction that is issued by the General Manager of the Commission that the funds are no longer needed for any Connection Facilities Cost, which direction shall not be unreasonably withheld; or b. upon the WaterLink Communities’ written notification to the Commission that they are no longer pursuing the purchase of Lake Michigan water from the Commission, and the payment of all the Connection Facilities Cost. No monies will be returned to the WaterLink Communities until a full accounting has been completed of the expenditures incurred under this WaterLink Project Escrow Agreement. WaterLink Project Escrow IGA Page 9 of 14 16. If any WaterLink Community 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. 17. There are no third-party beneficiaries of this WaterLink Project Escrow Agreement and nothing in this WaterLink Project 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. 18. Any notices under this WaterLink Project 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: may@dpwc.org WaterLink Project Escrow IGA Page 10 of 14 With a copy to: Phillip A. Luetkehans Luetkehans, Brady, Garner & Armstrong, LLC 105 E. Irving Park Road Itasca, IL 60143 Email: pal@lbgalaw.com If to the WaterLink Communities: Village Administrator Village of Oswego 100 Parkers Mill Oswego, IL 60543 Email: info@oswegoil.org With a copy to: David J. Silverman Village Attorney Mahoney, Silverman, & Cross, LLC 126 South Main Street Oswego, Illinois 60543 Village Administrator Village of Montgomery 200 N River Street Montgomery, IL 60538 Email: zoephel@montgomeryil.org With a copy to: Laura M. Julien Village Attorney Mickey Wilson, Weiler, Renzi, Lenert, & Julien, PC 140 Municipal Drive Sugar Grove, IL 60554 WaterLink Project Escrow IGA Page 11 of 14 City Administrator United City of Yorkville 800 Game Farm Road Yorkville, IL 60560 Email: bolson@yorkville.il.us With a copy to: Kathleen Field Orr & Associates Kathleen Field Orr 2024 Hickory Road, Suite 205 Homewood, IL 60430 With a copy to: Irene Schild Caminer Caminer Law, LLC 2612 W. Sunnyside Ave. Chicago, IL 60625 Email: Irene@caminerlaw.com 19. Each WaterLink Community will hold the Commission harmless and defend the Commission from any claims or litigation that arise out of the engineering, construction, property acquisition, and easement acquisitions for the Connection Facilities being constructed for the WaterLink Communities due to one of all of the WaterLink Communities’ failure to comply with the payment obligations arising under this WaterLink Project Escrow Agreement. 20. Miscellaneous. a. This WaterLink Project Escrow Agreement shall be deemed to supplement the Water Purchase Agreements in connection with the supply of Lake Michigan water to the Waterlink Communities’ individual Unit Systems. If there is any other conflict or inconsistency between the terms of this Agreement and the terms of the Water Purchase Agreements, then the terms of this WaterLink Project Escrow Agreement shall control. The WaterLink Communities shall at all times comply with all terms and conditions of the Water Purchase Agreements except as otherwise provided in this Agreement. WaterLink Project Escrow IGA Page 12 of 14 b. Except as provided herein, the WaterLink Communities and the Commission will not assign this WaterLink Project Escrow Agreement or any right or privilege any WaterLink Communities and the Commission may have under this WaterLink Project Escrow Agreement without the prior written consent of all Parties hereto, not to be unreasonably withheld conditioned or delayed. c. This WaterLink Project Escrow Agreement shall be governed by and construed exclusively under the applicable laws, but not the conflict of laws rules, of the State of Illinois. Venue for any litigation arising out of this Agreement shall only be proper in the Eighteenth Judicial Circuit Court, DuPage County, Illinois. d. The person(s) executing this WaterLink Project Escrow Agreement on behalf of the Parties hereto warrant that: (i) each WaterLink Community and the Commission are duly organized and existing; (ii) the individual signing is duly authorized to execute and deliver this WaterLink Project Escrow Agreement on behalf of said WaterLink Community or the Commission; (iii) by so executing this WaterLink Project Escrow Agreement, such WaterLink Community and the Commission are formally bound to the provisions and conditions contained in this WaterLink Project Escrow Agreement; and (iv) the entering into this WaterLink Project Escrow Agreement by a WaterLink Community and the Commission does not violate any provision of any other agreement to which said WaterLink Community and the Commission is bound. e. Each WaterLink Community 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 WaterLink Project Escrow Agreement. Each WaterLink Community 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 WaterLink Community and the Commission as evidenced by this WaterLink Project Escrow Agreement. WaterLink Project Escrow IGA Page 13 of 14 f. This WaterLink Project Escrow Agreement is the entire agreement between the WaterLink Communities and the Commission regarding its subject matter and may not be changed or amended except pursuant to a written instrument signed by each WaterLink Community and the Commission. g. This WaterLink Project 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 WaterLink Community 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. ATTEST: DuPage Water Commission _________________________ BY: ________________________ ATTEST: Village of Montgomery _________________________ BY: ________________________ ATTEST: Village of Oswego _________________________ BY: ________________________ ATTEST: United City of Yorkville _________________________ BY: ________________________ WaterLink Project Escrow IGA Page 14 of 14 EXHIBIT A CONNECTION FACILITIES COST WATERLINK PROJECT ESCROW INTERGOVERNMENTAL AGREEMENT EXHIBIT A CONNECTION FACILITIES COST ESTIMATE (1) CONSTRUCTION (including 25% contingency) $210,389,827 PROPERTY INTERESTS/LAND ACQUISITION $17,477,530 LEGAL & ADMINISTRATIVE $1,000,000 ENGINEERING $28,000,000 $256,867,357 COST ESCALATION OVER PROJECT DURATION $26,699,000 ESTIMATED PROJECT COST (2) $283,566,357 (1) COST ESTIMATE IS BASED UPON FORECASTED PROJECT COSTS AS OF THE DATE IDENTIFIED BELOW AND IS PROVIDED FOR REFERENCE ONLY. ACTUAL PROJECT COSTS WILL BE BASED UPON AWARDED PROJECT CONTRACT(S) AND ACTUAL REALIZED UNIT PRICE AND LUMP SUM COSTS, INCLUDING PROPERTY ACQUISITION, ENGINEERING, LEGAL AND COMMISSIONING COSTS, ALL OF WHICH HAVE BEEN ESTIMATED HEREIN BUT WILL NOT BE FINALLY DETERMINED UNTIL THE COMPLETION OF THE PROJECT AND FINAL COMMISSIONING. (2) BASED UPON ESTIMATES INCLUDED IN THE PROJECT DEVELOPMENT REPORT DATED FEBRUARY 1, 2024 Resolution No. 2024-____ Page 1 Resolution No. 2024-_____ A RESOLUTION AUTHORIZING THE EXECUTION OF AN INTERGOVERNMENTAL AGREEMENT CONCERNING DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE BY AND BETWEEN THE VILLAGE OF MONTGOMERY, THE VILLAGE OF OSWEGO, THE UNITED CITY OF YORKVILLE, 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 “WaterLink Communities”); 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 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 Commission has been organized under the Acts to supply water within its territorial limits; and WHEREAS, the WaterLink Communities currently own and operate municipal drinking water systems served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the WaterLink Communities are within the territorial limits of the Commission; and Resolution No. 2024-____ Page 2 WHEREAS, the WaterLink Communities intend to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through water purchase and sale agreements with the Commission, and have applied for and been awarded Lake Michigan Water Allocation Permits from the State of Illinois Department of Natural Resources, Office of Water Resources for each discrete and non-contiguous service area served by each WaterLink Community’s Unit System; and WHEREAS, the WaterLink Communities have conducted extensive study and have concluded that the most sustainable alternative water source to serve the WaterLink Communities through the municipal waterworks systems currently serving the WaterLink Communities, as well as any extensions or improvements of those 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, the WaterLink Communities seek to connect their individual Unit Systems to the Commission’s Waterworks System; and WHEREAS, beginning in 2028 the WaterLink Communities seek to have completed the improvements to certain of their WaterLink Communities’ individual Unit Systems necessary to connect to the Commission’s Waterworks System (the “Connection Facilities”); 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 (“Water Supply Contract”); and Resolution No. 2024-____ Page 3 WHEREAS, the Commission’s Water Supply Contract with the City of Chicago is set to expire in 2041 and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Chicago for a new Water Supply Contract; and WHEREAS, the construction of certain improvements to the Commission’s Waterworks System will enable the WaterLink Communities to provide water to the Individual Unit Systems (the “Improvements”); and WHEREAS, to carry out their duties and responsibilities, and desiring to create a method of providing an adequate supply of Lake Michigan water to the Individual Unit Systems, the Commission and the WaterLink Communities, contemporaneously with this Agreement, are entering into a Water Purchase and Sale Contract dated October 17, 2024 (the “Water Purchase Agreement”); and WHEREAS, it is in the best interests of the Commission and the WaterLink Communities to coordinate and implement the supply of Lake Michigan water to the Individual Unit Systems in accordance with the Water Purchase Agreement; and WHEREAS, the Commission and the WaterLink Communities desire to set forth their understanding regarding such coordination and implementation in an Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service, substantially in the form attached hereto as Exhibit A; and WHEREAS, the matters set forth in this Agreement will serve the public interest and assure that the residents of the Individual Unit Systems are provided safe water to the greatest extent possible; and WHEREAS, contemporaneously with this Agreement, the WaterLink Communities Resolution No. 2024-____ Page 4 and the Commission are entering into other agreements including but not limited to a WaterLink Project Escrow Intergovernmental Agreement to fund the construction of the Connection Facilities; and WHEREAS, the WaterLink Communities have previously agreed to each Municipality’s percentage share of the Connection Facilities Cost pursuant to an Intergovernmental Cost Share Agreement (the “Cost Share Agreement”). The WaterLink Communities agree that the costs paid for the Connection Facilities will mirror the Division of Financial Responsibilities/Allocation of Costs set forth in the Cost Share Agreement; and WHEREAS, the parties deem it to be in their best interests to approve this Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, as follows: Section 1. That the recitals set forth above are incorporated here by reference. Section 2. The Mayor and City Council hereby approve the Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service, and the Mayor and City Clerk are authorized and directed to execute on behalf of the United City of Yorkville the Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service, substantially in the form attached as “Exhibit A.” Section 3. All Resolutions or parts of Resolutions in conflict with any of the provisions of this Resolution shall be, and the same hereby repealed to the extent of the conflict. Section 4. This Resolution and every provision thereof shall be considered severable. If any section, paragraph, clause or provision of this Resolution is declared by a court of law to be invalid or unconstitutional, the invalidity or unconstitutionality thereof shall not affect the validity of any other provisions of this Resolution. Section 5. This Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. Resolution No. 2024-____ Page 5 Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ CITY CLERK KEN KOCH _________ DAN TRANSIER _________ ARDEN JOE PLOCHER _________ CRAIG SOLING _________ CHRIS FUNKHOUSER _________ MATT MAREK _________ SEAVER TARULIS _________ RUSTY CORNEILS _________ APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ MAYOR Attest: ______________________________ CITY CLERK INTERGOVERNMENTAL AGREEMENT CONCERNING DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE This Intergovernmental Agreement, (the “Agreement”) is dated the 17th day of October, 2024 (the “Effective Date”), by and 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 “WaterLink Communities”) 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”). W I T N E S S E T H: WHEREAS, the Commission has been organized under the Acts to supply water within its territorial limits; and WHEREAS, the WaterLink Communities currently own and operate municipal drinking water systems served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the WaterLink Communities are within the territorial limits of the Commission; and WHEREAS, the WaterLink Communities intend to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through a water purchase agreement with the Commission, and have applied for and been awarded a Lake Michigan Water Allocation Permit (“Permit”) from the State of Illinois Department of Natural Resources, Office of Water Resources) for each discrete and non-contiguous service area served by each WaterLink Community’s Unit System; and EXHIBIT A IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 2 of 14 WHEREAS, the WaterLink Communities have conducted extensive study and concluded that the most sustainable alternative water source to serve the WaterLink Communities through the municipal waterworks systems currently serving the WaterLink Communities, as well as any extensions or improvements of those 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, the WaterLink Communities seek to connect to their individual Unit Systems to Lake Michigan through the Commission; and WHEREAS, beginning in 2028 the WaterLink Communities seek to have completed the improvements to certain of their WaterLink Communities’ individual Unit Systems necessary to connect to the Commission’s Waterworks System (the “Connection Facilities”); 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 (“Water Supply Contract”); and WHEREAS, the Commission’s Water Supply Contract with the City of Chicago is set to expire in 2041 and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Chicago for a new Water Supply Contract; and IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 3 of 14 WHEREAS, the construction of certain improvements to the Commission’s Waterworks System will enable the WaterLink Communities to provide water to the Individual Unit Systems (the “Improvements”); and WHEREAS, to carry out their duties and responsibilities, and desiring to create a method of providing an adequate supply of Lake Michigan water to the Individual Unit Systems, the Commission and the WaterLink Communities, contemporaneously with this Agreement, are entering into a Water Purchase and Sale Contract dated October 17, 2024 (the “Water Purchase Agreement”); and WHEREAS, it is in the best interests of the Commission and the WaterLink Communities to coordinate and implement the supply of Lake Michigan water to the Individual Unit Systems in accordance with the Water Purchase Agreement; and WHEREAS, the Commission and the WaterLink Communities desire to set forth their understanding regarding such coordination and implementation in this Agreement; and WHEREAS, the matters set forth in this Agreement will serve the public interest and assure that the residents of the Individual Unit Systems are provided safe water to the greatest extent possible; and WHEREAS, pursuant to Section 10 of Article VII of the Illinois Constitution of 1970, the provisions of the Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., and other applicable authority, the Commission and the WaterLink Communities are authorized to enter into this Agreement; and WHEREAS, contemporaneously with this Agreement, the WaterLink Communities and the Commission are entering into other agreements including but not limited to a WaterLink IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 4 of 14 Project Escrow Intergovernmental Agreement to fund the construction of the Connection Facilities (the “WaterLink Escrow Agreement”); and WHEREAS, the WaterLink Communities have previously agreed to each Municipality’s percentage share of the Connection Facilities Cost pursuant to an Intergovernmental Cost Share Agreement (the “Cost Share Agreement”). The WaterLink Communities agree that the costs paid for the Connection Facilities will mirror the Division of Financial Responsibilities/Allocation of Costs set forth in the Cost Share Agreement. Specifically, Montgomery commits and agrees to pay 24.42%, Yorkville commits and agrees to pay 40.22% and Oswego commits and agrees to pay 35.36%. The Commission is not a party to the Cost Share Agreement and has no responsibility or liability as to any true-up or adjusted accounting between the WaterLink Communities. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the Commission and the WaterLink Communities hereby agree as follows: SECTION 1. INCORPORATION OF PREAMBLES AND DEFINITIONS FROM WATER PURCHASE AGREEMENT The foregoing recitals are by this reference incorporated herein and made a part hereof as if fully set forth herein. Further, to the extent any capitalized terms in this Agreement are set forth as a defined term in the Water Purchase Agreement, the capitalized terms in this Agreement will have the same meaning in this Agreement as the definition in the Water Purchase Agreement. SECTION 2. CONSTRUCTION OF IMPROVEMENTS; EXTENSION OF SERVICE A. Description of the Connection Facilities. For purposes of this Agreement, the Connection Facilities will include the water mains, metering station(s), and appurtenances necessary to be built by the Commission to provide water to the WaterLink Communities, IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 5 of 14 including portions of the Waterworks System constructed by the Commission to initially connect the WaterLink Communities’ individual Unit Systems to the Commission’s existing Waterworks System as depicted in preliminary plans attached to the Water Purchase Agreement as Exhibits B- 1 and B-2. B. Design of the Connection Facilities. As outlined in the Water Purchase Agreement, the Commission will be the contracting party with the design engineer and will administer the design contract for the benefit of both the Commission and the WaterLink Communities for the Connection Facilities. The Commission will keep the WaterLink Communities advised as to the progress of the design work. The Commission and the WaterLink Communities will confer upon issues regarding the details of such design work. The final design of the Connection Facilities will be subject to the review of both the Commission and the WaterLink Communities. C. Land Acquisition. The Commission will be responsible for the acquisition and divestment of lands, easements, and rights of way over lands and waters necessary for the construction, installation, removal, relocation, replacement, extension, and/or improvement of the Connection Facilities outside the corporate limits of the WaterLink Communities and all administrative, title, surveying, and legal fees, costs and expenses associated therewith, including, if necessary, exercising the power of eminent domain to procure any necessary easements, which expenses will be added to the Connection Facilities Cost amount that the WaterLink Communities will pay the Commission. The Commission will keep the WaterLink Communities advised of all land acquisition costs and any necessary condemnation proceedings. All land acquired and costs associated therewith within the WaterLink Communities will be the sole responsibility of the WaterLink Communities. IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 6 of 14 D. Construction and Acceptance of the Connection Facilities. The Commission will solicit bids for the construction of the Connection Facilities. The Commission’s standard form of bidding and construction contract documents will be used. The Commission will solicit, award, and administer all contracts for the project in the best interest of both the Commission and the WaterLink Communities and will consult with, and keep advised, the WaterLink Communities’ officials regarding the progress of the work and any problems encountered or changes recommended. Once the winning contractor(s) and the construction costs have been determined, the Commission will enter into a construction contract(s) with the selected contractor(s) and will administer such construction contract(s) in conformance with this Agreement. Any change orders, as well as final acceptance and approval of the completed Connection Facilities, will be subject to the final approval of the Commission. E. Connection Facilities Cost. In accordance with the WaterLink Project Escrow Intergovernmental Agreement, the Commission, will make available in the form of a Line of Credit to the WaterLink Communities funds needed for the Connection Facilities Cost, up to the amount of the Commitment Amount as that term is defined therein, and the WaterLink Communities agree to reimburse the Commission for those costs. SECTION 3. DEFAULTS AND REMEDIES A. Commission Defaults. The occurrence of the following will constitute a default by the Commission under this Agreement: The failure by the Commission to observe and/or perform any covenant, condition, and/or agreement on its part to be observed and/or performed under this Agreement, and the continuation of said failure for thirty (30) days after the Commission’s receipt of written notice thereof from the WaterLink Communities. However, if said failure cannot be remedied by the Commission within said thirty (30) day period, and the Commission has diligently IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 7 of 14 pursued the resolution of the failure during said thirty (30) days, the period will be extended by such additional time as may be reasonably required by the Commission to cure or correct said failure. In no event will the period be extended by more than ninety (90) days. In the event of a default by the Commission under this Agreement, the WaterLink Communities will have the same remedies as are provided for, and only the remedies provided for, in the Water Purchase Agreement for a default by the Commission. B. WaterLink Communities Defaults. The occurrence of the following will constitute a default by the WaterLink Communities under this Agreement: 1. The failure by the WaterLink Communities to observe and/or perform any covenant, condition, and/or agreement on its part to be observed and/or performed under this Agreement, and the continuation of said failure for thirty (30) days after the WaterLink Communities’ receipt of written notice thereof from the Commission. However, if said failure cannot be remedied by the WaterLink Communities within said thirty (30) day period, and the WaterLink Communities will have diligently pursued the resolution of the failure during said thirty (30) days, the period will be extended by such additional time as may be reasonably required by the WaterLink Communities to cure or correct said failure. In no event will the period be extended by more than ninety (90) days; or 2. A default by the WaterLink Communities under the WaterLink Project Escrow Intergovernmental Agreement; or 3. A default by any of the WaterLink Communities under the Intergovernmental Agreements with each individual WaterLink Community Concerning Capital Cost Recovery Charge. IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 8 of 14 In the event of one of the above defaults, the Commission will: (i) be paid its reasonable attorneys’ fees and costs incurred in connection with that default, in addition to any attorneys’ fees and costs incurred in enforcing the terms of this Agreement; (2) be entitled to the right to enforce a lien against all income derived from the WaterLink Communities individual Unit Systems, other than that income necessary to pay any loans to the Government of the United States, of the State of Illinois or their agencies for the construction of the WaterLink Communities individual Unit Systems, until the line of credit referenced in the WaterLink Project Escrow Intergovernmental Agreement is paid back in full; and (3) will have the same remedies as are provided for in the Water Purchase Agreements for a default by the individual WaterLink Communities. C. Force Majeure. In case by reason of a force majeure event, a party to this Agreement will be rendered unable wholly or in part to carry out its obligation under this Agreement, then if such party will give notice and full particulars of such force majeure event in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such force majeure event, will be suspended during the continuance of the inability then claimed, but for no longer period, and any such party will endeavor to remove or overcome such inability with all reasonable dispatch. The term “force majeure event” as employed in this Agreement will mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States, of the State of Illinois, or of any civil or military authority, insurrections, riots, epidemics, pandemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines, canals, or tunnels, partial or entire failure of water supply, and inability on the part of the Commission or of the WaterLink IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 9 of 14 Communities to deliver Lake Michigan water, or of the WaterLink Communities to receive Lake Michigan water, on account of any other causes not reasonably within the control of the party claiming such inability. The settlement of strikes and lockouts will be entirely within the discretion of the party having the difficulty and the above requirement that any “force majeure event” will be remedied with all reasonable dispatch will not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable to it in the judgment of the party having the difficulty. SECTION 4. LEGAL RELATIONSHIPS AND REQUIREMENTS A. Supplemental Agreement. This Agreement will be deemed to supplement the Water Purchase Agreement in connection with the supply of Lake Michigan water to Oswego’s Unit System. If there is any other conflict or inconsistency between the terms of this Agreement and the terms of the Water Purchase Agreement, then the terms of this Agreement will control. The WaterLink Communities will at all times comply with all terms and conditions of the Water Purchase Agreement except as otherwise provided in this Agreement. B. Term of Agreement. This Agreement will continue in full force and effect from the Effective Date until the Line of Credit is paid in full by the WaterLink Communities. C. Cooperation and Further Agreements. The Commission and Oswego agree to meet and cooperate in good faith throughout the term of this Agreement to implement the letter and spirit of the provisions set forth in this Agreement. D. Assignment. This Agreement may not be assigned by any party, in whole or in part, without the prior written consent of the other party. E. Notices. Any notices under this 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 IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 10 of 14 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: may@dpwc.org With a copy to: Phillip A. Luetkehans Luetkehans, Brady, Garner & Armstrong 2700 International Drive, Suite 305 West Chicago, IL 60185 Email: pal@lbgalaw.com If to the WaterLink Communities: Village Administrator Village of Oswego 100 Parkers Mill Oswego, IL 60543 Email: info@oswegoil.org With a copy to: David J. Silverman Village Attorney Mahoney, Silverman, & Cross, LLC 126 South Main Street Oswego, Illinois 60543 Village Administrator Village of Montgomery 200 N River Street Montgomery, IL 60538 Email: zoephel@montgomeyil.org IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 11 of 14 With a copy to: Laura M. Julien Village Attorney Mickey Wilson, Weiler, Renzi, Lenert, & Julien, PC 140 Municipal Drive Sugar Grove, IL 60554 City Administrator United City of Yorkville 800 Game Farm Road Yorkville, IL 60560 Email: bolson@yorkville.il.us With a copy to: Kathleen Field Orr & Associates Kathleen Field Orr 2024 Hickory Road, Suite 205 Homewood, IL 60430 With a copy to: Irene Schild Caminer Caminer Law, LLC 2612 W. Sunnyside Ave. Chicago, IL 60625 Email: Irene@caminerlaw.com By notice complying with the requirements of this Section 4.E, the Commission and the WaterLink Communities each will have the right to change the address or addressee or both for all future notices to it, but no notice of a change of address will be effective until actually received. F. No Oral Agreements. No oral agreements exist by or between the Commission and the WaterLink Communities with respect to this Agreement, nor was the making and execution of this Agreement induced by any representation, statement, warranty, agreement, or action other than those expressed or explicitly referenced in this Agreement. IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 12 of 14 G. No Waiver. No course of dealing or failure of the Commission or the WaterLink Communities to enforce strictly any term, right, or condition of this Agreement will be construed as a waiver of such term, right, or condition. No express waiver of any term, right, or condition of this Agreement will operate as a waiver of any other term, right, or condition. H. No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of the contracting parties, and nothing in this Agreement is intended, either expressly or impliedly, to provide any right or benefit of any kind whatsoever to any person or entity who is not a party to this Agreement, or to acknowledge, establish, or impose any legal duty to any third party. I. Governing Law and Venue. This Agreement will be governed by and construed exclusively under the applicable laws, but not the conflict of laws rules, of the State of Illinois. Venue for any litigation arising out of this Agreement will only be proper in the Eighteenth Judicial Circuit Court, DuPage County, Illinois. J. Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed to be an original, and all of which will constitute but one and the same instrument. Any such counterpart may be signed by one or more of the parties hereto so long as each of the parties hereto has signed one or more of such counterparts. K. Authority. The person(s) executing this Agreement on behalf of the Parties hereto warrant that: (i) such The WaterLink Communities and the Commission are duly organized and existing; (ii) the individual signing is duly authorized to execute and deliver this Agreement on behalf of said WaterLink Communities or the Commission; (iii) by so executing this Agreement, such WaterLink Communities and the Commission are formally bound to the provisions and conditions contained in this Agreement; and (iv) the entering into this Agreement by the WaterLink Communities and the Commission does not violate any provision of any other IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 13 of 14 agreement to which said WaterLink Communities and the Commission is bound. L. Mutual Cooperation. The WaterLink Communities 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 Agreement. the WaterLink Communities 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 the WaterLink Communities and the Commission as evidenced by this Agreement. M. Amendment. This Agreement is the entire agreement between the WaterLink Communities 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. IGA DEVELOPMENT OF CONNECTION FACILITIES TO IMPLEMENT WATER SERVICE Page 14 of 14 IN WITNESS WHEREOF, The WaterLink Communities 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. ATTEST: DuPage Water Commission _________________________ BY: ________________________ ATTEST: Village of Montgomery _________________________ BY: ________________________ ATTEST: Village of Oswego _________________________ BY: ________________________ ATTEST; United City of Yorkville _________________________ BY: ________________________ Resolution No. 2024-____ Page 1 Resolution No. 2024-_____ A RESOLUTION AUTHORIZING THE EXECUTION OF AN INTERGOVERNMENTAL AGREEMENT CONCERNING CAPITAL COST RECOVERY CHARGE BETWEEN THE UNITED CITY OF YORKVILLE AND THE DUPAGE WATER COMMISSION WHEREAS, the United City of Yorkville, Kendall County, Illinois (the “City”) is a duly organized and validly existing non-home-rule municipality created in accordance with the Constitution of the State of Illinois of 1970 and the laws of the State; 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 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”); and WHEREAS, the Commission has been organized under the Acts to supply water within its territorial limits; and WHEREAS, the City currently owns and operates a municipal drinking water system (“Yorkville Unit System”) served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the City is within the territorial limits of the Commission; and WHEREAS, the City intends to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through a Water Purchase and Sale Contract with the DuPage Resolution No. 2024-____ Page 2 Water Commission, and has applied for and received a Lake Michigan Water Allocation Permit (“Permit”) from the State of Illinois Department of Natural Resources, Office of Water Resources; and WHEREAS, the City has conducted extensive study and has concluded that the most sustainable alternative water source to serve the City through the municipal waterworks system currently serving the City, as well as any extensions or improvements of that system, 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, the City is seeking to obtain water for its residents beginning in 2028 from the Commission in the incorporated areas within the City (the “Service Area”); and WHEREAS, the City seeks to connect to Lake Michigan through the Commission; 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 2041 and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Chicago for a new water supply agreement; and WHEREAS, to carry out their duties and responsibilities, and desire to create a method of providing an adequate supply of Lake Michigan water to the Yorkville Unit System, the Commission, and the City, concurrent with the Intergovernmental Agreement Concerning Capital Resolution No. 2024-____ Page 3 Cost Recovery Charge, substantially in the form (the “Agreement”), attached hereto as Exhibit A, are entering into the Water Purchase and Sale Contract dated October 17, 2024, WaterLink Project Escrow Intergovernmental Agreement, and an Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service; and WHEREAS, to become a member of the Commission and comply with the Water Purchase and Sale Contract, the City must pay its proportional share of the costs for the property owned by the Commission (the “Capital Cost Recovery Charge”); and WHEREAS, the Commission previously enacted Resolution R-79-04 allowing the Commission the ability to finance the Capital Cost Recovery Charge for potential Subsequent Customers (customers other than its original customers) requesting such accommodation on a case-by case basis; and WHEREAS, the matters set forth in the Agreement will serve the public interest, and the Commission and the City deem it to be in each of their best interests for the Commission to provide financing to the City for the money necessary to pay the Capital Cost Recovery Charge and enter into the 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. That the recitals set forth above are incorporated here by reference. Section 2. The Mayor and City Council hereby approve the Intergovernmental Agreement Concerning Capital Cost Recovery Charge, and the Mayor and City Clerk are authorized and directed to execute on behalf of the United City of Yorkville the Intergovernmental Agreement Concerning Capital Cost Recovery Charge, substantially in the form attached as “Exhibit A.” Section 3. All Resolutions or parts of Resolutions in conflict with any of the provisions of this Resolution shall be, and the same hereby repealed to the extent of the conflict. Resolution No. 2024-____ Page 4 Section 4. This Resolution and every provision thereof shall be considered severable. If any section, paragraph, clause or provision of this Resolution is declared by a court of law to be invalid or unconstitutional, the invalidity or unconstitutionality thereof shall not affect the validity of any other provisions of this Resolution. Section 5. This Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. [Remainder Intentionally Left Blank. Roll Call Vote to Follow] Resolution No. 2024-____ Page 5 Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ CITY CLERK KEN KOCH _________ DAN TRANSIER _________ ARDEN JOE PLOCHER _________ CRAIG SOLING _________ CHRIS FUNKHOUSER _________ MATT MAREK _________ SEAVER TARULIS _________ RUSTY CORNEILS _________ APPROVED by me, as Mayor of the United City of Yorkville, Kendall County, Illinois this ____ day of __________________, A.D. 2024. ______________________________ MAYOR Attest: ______________________________ CITY CLERK Yorkville -IGA Capital Cost Recovery Charge Page 1 of 11 INTERGOVERNMENTAL AGREEMENT WITH THE UNITED CITY OF YORKVILLE CONCERNING CAPITAL COST RECOVERY CHARGE This Intergovernmental Agreement, (the “Agreement”) is dated the 17th day of October 2024 (the “Effective Date”), by and between the United City of Yorkville (“City”) 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”). W I T N E S S E T H: WHEREAS, the Commission has been organized under the Acts to supply water within its territorial limits; and WHEREAS, the City currently owns and operates a municipal drinking water system (“Yorkville Unit System”) served by wells that extract source water from the Ironton-Galesville aquifer; and WHEREAS, the City is within the territorial limits of the Commission; and WHEREAS, the City intends to change from the Ironton-Galesville groundwater source to Lake Michigan source water, through a Water Purchase and Sale Contract with the DuPage Water Commission, and has applied for and received a Lake Michigan Water Allocation Permit (“Permit”) from the State of Illinois Department of Natural Resources, Office of Water Resources; and WHEREAS, the City has conducted extensive study and has concluded that the most sustainable alternative water source to serve the City through the municipal waterworks system currently serving the City, as well as any extensions or improvements of that system, is Lake Michigan water from the Commission; and WHEREAS, the Commission owns and maintains a waterworks system as a supplier of Yorkville -IGA Capital Cost Recovery Charge Page 2 of 11 Lake Michigan water to member customers that contract for such service (“Commission’s Waterworks System”); and WHEREAS, the City is seeking to obtain water for its residents beginning in 2028 from the Commission in the incorporated areas within the City (the “Service Area”); and WHEREAS, the City seeks to connect to Lake Michigan through the Commission; 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 2041 and the Commission is currently: (1) exploring an alternative solution to obtaining Lake Michigan water; and (2) in discussions and negotiations with the City of Chicago for a new water supply agreement; and WHEREAS, to carry out their duties and responsibilities, and desire to create a method of providing an adequate supply of Lake Michigan water to the Yorkville Unit System, the Commission, and the City, concurrent with this Agreement, are entering into the Water Purchase and Sale Contract dated October 17, 2024, WaterLink Project Escrow Intergovernmental Agreement, and an Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service; and WHEREAS, to become a member of the Commission and comply with the Water Purchase and Sale Contract, the City must pay its proportional share of the costs for the property owned by the Commission (the “Capital Cost Recovery Charge”); and WHEREAS, the Commission previously enacted Resolution R-79-04 allowing the Commission the ability to finance the Capital Cost Recovery Charge for potential Subsequent Yorkville -IGA Capital Cost Recovery Charge Page 3 of 11 Customers (customers other than its original customers) requesting such accommodation on a case-by case basis; and WHEREAS, the matters set forth in this Agreement will serve the public interest, and the Commission and the City deem it to be in each of their best interests for the Commission to provide financing to the City for the money necessary to pay the Capital Cost Recovery Charge and enter into this Agreement; and WHEREAS, pursuant to Section 10 of Article VII of the Illinois Constitution of 1970, the provisions of the Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., and other applicable authority, the Commission and the City are authorized to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the Commission and the City hereby agree as follows: SECTION 1. PREAMBLES The foregoing recitals are by this reference incorporated herein and made a part hereof as if fully set forth herein. SECTION 2. COMMISSION FINANCING A. Capital Cost Recovery Financing. The Commission will, after the execution and delivery of this Agreement, provide financing to the City in the amount of $8,013,886.00 (the “Capital Cost Recovery Amount”). B. Payment Terms. 1. The City will pay the Commission the principal balance of the Capital Cost Recovery Amount in 360 monthly installments, commencing at the time the first payment is due under Subsection 7M in the Water Purchase and Sale Contract (the “Monthly Payment Date”), and continuing in successive monthly installments on each Monthly Payment Date, with the final Yorkville -IGA Capital Cost Recovery Charge Page 4 of 11 payment of any principal, if not sooner paid, on the 360th Monthly Payment Date. Each of the 360 monthly installments of principal for the Capital Cost Recovery Amount will be in the amount of $22,260.79, except that the final payment will be in the amount of $22,262.39. 2. Interest on the unpaid principal balance of the Capital Cost Recovery Amount, will accrue at the rate of zero percent (0%) per annum. C. Tender of Capital Cost Recovery Amount Payments. Payments of the principal of and interest will be made in lawful money of the United States of America in federal or other immediately available funds. D. Asset-in-Kind Contribution. To the extent the City agrees to pay for a portion of the increase in size of the primary 48” western pipeline (commencing at Book Road and 75th Street and extending west of the Fox River to a termination point at Orchard Road, also known as “TW 6/25” in the DWC naming convention), from the baseline pipe size to 54”, the value of that contribution by the City will be mutually agreed upon and set forth in a separate agreement between the Commission and the City before the closing of the WIFIA Loan. E. Covenants. The covenants set forth in Subsections 9A, 9B, 9C, and 9D of the Water Purchase and Sale Contract are incorporated into this Agreement by reference. SECTION 3. DEFAULTS AND REMEDIES A. Commission Defaults. The occurrence of the following will constitute a default by the Commission under this Agreement: The failure by the Commission to observe and/or perform any covenant, condition, and/or agreement on its part to be observed and/or performed under this Agreement, and the continuation of said failure for thirty (30) days after the Commission’s receipt of written notice thereof from the City. However, if said failure cannot be remedied by the Commission within said thirty (30) day period and the Commission has diligently pursued the Yorkville -IGA Capital Cost Recovery Charge Page 5 of 11 resolution of the failure during said thirty (30) days, the period will be extended by such additional time as may be reasonably required by the Commission to cure or correct said failure. In no event will the period be extended by more than ninety (90) days. In the event of a default by the Commission under this Agreement, the City will have the same remedies as are provided for, and only the remedies provided for, in the Water Purchase and Sale Contract for a default by the Commission. B. City Defaults. The occurrence of the following will constitute a default by the City under this Agreement: 1. The failure by the City to observe and/or perform any covenant, condition, and/or agreement on its part to be observed and/or performed under this Agreement, and the continuation of said failure for thirty (30) days after the City’s receipt of written notice thereof from the Commission. However, if said failure cannot be remedied by the City within said thirty (30) day period and the City has diligently pursued the resolution of the failure during said thirty (30) days, the period will be extended by such additional time as may be reasonably required by the City to cure or correct said failure. In no event will the period be extended by more than ninety (90) days. In the event of a default by the City under this Agreement, the Commission will have the same remedies as are provided for, and only the remedies provided for, in the Water Purchase and Sale Contract for a default by the City; 2. A default under the October 17, 2024 Intergovernmental Agreement Concerning Development of Connection Facilities to Implement Water Service; or Yorkville -IGA Capital Cost Recovery Charge Page 6 of 11 3. A default under the October 17, 2024 WaterLink Project Escrow Intergovernmental Agreement. In the event of a default by the City, the Commission will: (i) be paid its reasonable attorneys’ fees and costs incurred in connection with that default, in addition to any attorneys’ fees and costs incurred in enforcing the terms of this Agreement; (2) be entitled to the right to enforce a lien against all income derived from the Yorkville Unit System, other than that income necessary to pay any loans to the State of Illinois or its agencies for the construction of the Yorkville Unit System, until the City’s Capital Cost Recovery Amount and any amounts due from the City under the WaterLink Project Escrow Intergovernmental Agreement are paid back in full; and (3) will have the same remedies as are provided for in the Water Purchase and Sale Contract for a default by the City. C. Force Majeure. In case by reason of a force majeure event, either party to this Agreement will be rendered unable wholly or in part to carry out its obligation under this Agreement, then if such party will give notice and full particulars of such force majeure event in writing to the other party within a reasonable time after occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such force majeure event, will be suspended during the continuance of the inability then claimed, but for no longer period, and any such party will endeavor to remove or overcome such inability with all reasonable dispatch. The term “force majeure event” as employed in this Agreement will mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States, of the State of Illinois, or of any civil or military authority, insurrections, riots, epidemics, pandemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraints of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines, canals, or tunnels, partial or entire Yorkville -IGA Capital Cost Recovery Charge Page 7 of 11 failure of water supply, and inability on the part of the Commission or of the City to deliver Lake Michigan water, or of the City to receive Lake Michigan water, on account of any other causes not reasonably within the control of the party claiming such inability. The settlement of strikes and lockouts will be entirely within the discretion of the party having the difficulty, and the above requirement that any “force majeure event” will be remedied with all reasonable dispatch will not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable to it in the judgment of the party having the difficulty. SECTION 4. LEGAL RELATIONSHIPS AND REQUIREMENTS A. Supplemental Agreement. This Agreement will be deemed to supplement the Water Purchase and Sale Contract in connection with the supply of Lake Michigan water to the Yorkville Unit System. If there is any other conflict or inconsistency between the terms of this Agreement and the terms of the Water Purchase and Sale Contract, then the terms of this Agreement will control. The City will at all times comply with all terms and conditions of the Water Purchase and Sale Contract, except as otherwise provided in this Agreement. B. Term of Agreement. This Agreement will continue in full force and effect from the Effective Date until the Capital Cost Recovery Amount is paid in full by the City. C. Cooperation and Further Agreements. The Commission and the City agree to cooperate in good faith throughout the term of this Agreement to implement the letter and spirit of the provisions set forth in this Agreement. D. Assignment. This Agreement may not be assigned by any party, in whole or in part, without the prior written consent of the other party. E. Notices. Any notices under this 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 Yorkville -IGA Capital Cost Recovery Charge Page 8 of 11 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: may@dpwc.org With a copy to: Phillip A. Luetkehans Luetkehans, Brady, Garner & Armstrong 2700 International Drive, Suite 305 West Chicago, IL 60185 Email: pal@lbgalaw.com If to the City: City Administrator United City of Yorkville 800 Game Farm Road Yorkville, IL 60560 Email: bolson@yorkville.il.us With a copy to: City Attorney Kathleen Field Orr Kathleen Field Orr & Associates 2024 Hickory Road, Suite 205 Homewood, IL 60430 Yorkville -IGA Capital Cost Recovery Charge Page 9 of 11 With a copy to: Irene Schild Caminer Caminer Law, LLC 2612 W. Sunnyside Ave. Chicago, IL 60625 Email: Irene@caminerlaw.com By notice complying with the requirements of this Section 4.E, the Commission and the City each will have the right to change the address or addressee or both for all future notices to it, but no notice of a change of address will be effective until actually received. F. No Oral Agreements. No oral agreements exist by or between the Commission and the City with respect to this Agreement, nor was the making and execution of this Agreement induced by any representation, statement, warranty, agreement, or action other than those expressed or explicitly referenced in this Agreement. G. No Waiver. No course of dealing or failure of the Commission or the City to enforce strictly any term, right, or condition of this Agreement will be construed as a waiver of such term, right, or condition. No express waiver of any term, right, or condition of this Agreement will operate as a waiver of any other term, right, or condition. H. No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of the contracting parties, and nothing in this Agreement is intended, either expressly or impliedly, to provide any right or benefit of any kind whatsoever to any person or entity who is not a party to this Agreement, or to acknowledge, establish, or impose any legal duty to any third party. I. Governing Law and Venue. This Agreement will be governed by and construed exclusively under the applicable laws, but not the conflict of laws rules, of the State of Illinois. Venue for any litigation arising out of this Agreement will only be proper in the Eighteenth Judicial Circuit Court, DuPage County, Illinois. Yorkville -IGA Capital Cost Recovery Charge Page 10 of 11 J. Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed to be an original, and all of which will constitute but one and the same instrument. Any such counterpart may be signed by one or more of the parties hereto so long as each of the parties hereto has signed one or more of such counterparts. K. Authority. The person(s) executing this Agreement on behalf of the Parties hereto warrant that: (i) such the City and the Commission are duly organized and existing; (ii) the individual signing is duly authorized to execute and deliver this Agreement on behalf of said City or the Commission; (iii) by so executing this Agreement, such City and the Commission are formally bound to the provisions and conditions contained in this Agreement; and (iv) the entering into this Agreement by the City and the Commission does not violate any provision of any other agreement to which said City and the Commission is bound. L. Mutual Cooperation. The City 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 Agreement. The City 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 the City and the Commission as evidenced by this Agreement. M. Amendment. This Agreement is the entire agreement between the City and the Commission regarding its subject matter and may not be changed or amended except pursuant to a written instrument signed by the City and the Commission. Yorkville -IGA Capital Cost Recovery Charge Page 11 of 11 IN WITNESS WHEREOF, the City 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. ATTEST: DuPAGE WATER COMMISSION By: __________________________ By: __________________________ Its: __________________________ Its: __________________________ ATTEST: UNITED CITY OF YORKVILLE By: __________________________ By: __________________________ Its: __________________________ Its: __________________________