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YORKVILLE – The city of Yorkville is in the process of applying for a federal loan in excess of $100 million to pay for the Lake Michigan water project.
The precise amount of the loan is still yet to be determined, but could be as much as $120 million at the outside.
“It’s changing every day as we learn more,” City Engineer Brad Sanderson said.
The loan would be from the federal Water Infrastructure Finance and Innovation Act program (WIFIA) and would come with a low-interest rate of about 3.5%.
Sanderson said the city will submit its loan application in about 60 days, with a decision from WIFIA expected after another two months.
Yorkville, Montgomery and Oswego have banded together to connect with the DuPage Water Commission’s pipeline to bring Lake Michigan water to the three communities.
The project will involve construction of a new multi-legged water transmission pipeline connecting with the DuPage system at Naperville, along with additional water reservoirs and other facilities.
Yorkville’s share of the project is now estimated to be at least $120 million but could run as high as $150 million, especially when factoring in construction inflation, City Administrator Bart Olson said.
Cities with a population under 25,000 may apply for a loan representing 80% of the cost for a water infrastructure project, Olson said.
While Yorkville’s growing population is believed to be at about 25,000 now or to have already crossed that line, the city’s 2020 Census count of 21,533 remains the official total.
The city also may apply for a smaller, revolving loan from the Illinois Environmental Protection Agency with a rate as low as 2%, if needed, Olson said
The Yorkville City Council approved an $11 million bond sale earlier this year to help fund projects that need to be done immediately.
These include replacement of leaky water mains and construction of a new well on the Yorkville High School property.
The city must reduce its water loss from leaking water mains to less than 10% of the treated supply. Initially, the loss rate stood at 14%. It has been reduced to 12.7%.
“We’ve been aggressive with our water main replacement program,” Sanderson said. “We need a clean water audit.”
The city will have to get the loss rate to less than 10% by 2026.
Construction of the well on the YHS property is needed to comply with requirements by the DuPage Water Commission, city of Chicago and Illinois Department of Natural Resources to have a reserve supply on hand in case of pipeline disruptions.
Work on the pipeline could start in 2026, with residents drawing Lake Michigan water from the tap as early as 2028, Sanderson said.
The multi-legged pipeline will enter Yorkville at both the north and south ends of the city near existing water towers.
Yorkville, Montgomery and Oswego currently draw their water from wells that are served by the same aquifer, which is rapidly becoming depleted even as the communities continue to grow.
The three municipalities each decided to join the DuPage Water Commission in order to connect with Lake Michigan for their water supplies, rather than the Fox River.
Each of the three is paying equal shares into an escrow account to cover the cost of a $4.2 million engineering study for determining the pipeline route and location for related infrastructure such as water reservoirs.
The pipeline would extend from a location in Naperville to Oswego, then Montgomery and finally Yorkville.
The engineering study, which already is underway, is expected to be complete by the end of the year.
Yorkville officials have been working to boost the city’s revenue stream in order to finance the water infrastructure work.
Last year, aldermen increased water rates and more hikes are expected in the future. This year, the council approved a new 1% restaurant meals and drinks tax which will take effect in January and is expected to produce $700,000 a year in revenue.