CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Adopt the resolution authorizing the third amendment to the intergovernmental agreement between Naperville and Warrenville for wastewater utility services
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DEPARTMENT: Water Utilities
SUBMITTED BY: Darrell Blenniss, Director of Water Utilities
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The Water Utilities Department has maintained an intergovernmental agreement (“IGA”) with Warrenville for wastewater utility services since 1982. Services provided under this agreement include system collection, conveyance, pumping, and treatment. Warrenville flows currently account for approximately 8% of the total wastewater treated at the Springbrook Water Reclamation Facility.
The IGA establishes the billing methodology for Warrenville’s proportional costs and has been amended previously in 1984 and 1994 to address operational changes.
DISCUSSION:
The existing agreement is no longer sufficient to support the City's preferred debt service financing approach, specifically regarding significant upcoming investments in capacity and nutrient removal improvements at the Springbrook Water Reclamation Facility.
To ensure equitable cost-sharing for these large-scale improvements, this third amendment updates the billing structure as follows:
1. Modified Capital Charge: The amendment restructures the fixed capital charge mechanism.
2. Annual Capital Payment: Warrenville will provide an annual payment of $1,250,000 dedicated to eligible projects within the Water Utilities’ long-range capital plan.
3. Full Cost Recovery: This payment amount is calculated to accommodate all anticipated project expenditures, including necessary financing costs.
4. Annual Review: Project lists and associated costs will be reviewed and updated annually to ensure payments align with actual expenses.
FISCAL IMPACT:
The Water Utilities budget accounts for revenue from Warrenville for these services. The new annual payment of $1,250,000 ensures that capital improvements are funded proportionally on a full cost recovery basis and will be recorded in the appropriate existing revenue line items.