HomeMy WebLinkAboutWholesale Water Supply w SkokieEXECUTION COPY
AN AGREEMENT BY AND BETWEEN
THE CITY OF EVANSTON
u
THE VILLAGE OF SKOKIE
RELATING TO WATER SUPPLY AND SERVICE
EFFECTIVE MARCH 1, 1997
EXECUTION COPY
AN AGREEMENT BY AND BETWEEN
THE CITY OF EVANSTON
AND
THE VILLAGE OF SKOKIE
RELATING TO WATER SUPPLY AND SERVICE
TABLE OF CONTENTS
SECTION 1. WATER SUPPLY AND SERVICE .................................... 2
A. Full Water Requirements .......................................... 2
B. Service Defined.................................................3
C. Operation and Maintenance of the Evanston/Skokie System ............... 3
D. Reliability; Curtailments ........................................... 4
E. Quality........................................................4
F. Limitation on New Customers ......... . ............................. 4
G. Emergency Connections...........................................5
H. Supply and Service Agreement Only ................................. 5
SECTION 2. METERS AND MEASUREMENTS ................................... 5
A. Unit of Measurement ............................................. 5
B. Delivery Meters.................................................5
C. Check Meters . .................................................. 6
D. Meter Error and Correction ........... . . . . . . . R
E. Notification Concerning Meter Tests .................................. 7
SECTION 3. BILLING AND RATES ............................................ 8
A. Billing.........................................................8
B. Rates.........................................................8
C. Base Rate.....................................................9
1. Initial Base Rate ........................................... 9
2. Adjustment of Base Rate in Subsequent Service Years ............. 9
D. Regulatory Adjustment Rate ....................................... 10
1: Definitions...............................................10
2. Calculation of Regulatory Adjustment Rate ..................... 12
E. Procedure for Certification of Qualified Capital Equipment and Facilities
and Net Operating Costs ......................................... 13
F. Termination of Regulatory Adjustment Rate ........................... 13
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G. Agreements Concerning New Reservoir .............................. 14
1. Adequacy of Present Treated Lake Michigan Water Storage
Capacity................................................14
2. Cooperation Concerning Potential Requirement for New Reservoir .... 14
SECTION 4. EFFECTIVE DATE AND TERM OF AGREEMENT ...................... 15
SECTION 5. GENERAL PROVISIONS .......................................... 15
A. Entire Agreement ............................................... 15
B. Amendments and Modifications .................................... 15
C. Interpretation.................................................. 15
D. Non -Waiver .............................................. ...1.6
E. No Third Party Beneficiaries ....................................... 16
F. Regulatory Bodies..............................................16
G. Assignment...................................................16
H. Notices.......................................................16
I. Enforcement; Arbitration .......................................... 17
1. Remedies...............................................17
2. Arbitration ............................................... 17
J. Authority to Execute ............................................. 18
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AN AGREEMENT BY AND BETWEEN
THE CITY OF EVANSTON
AND
THE VILLAGE OF SKOKIE
RELATING TO WATER SUPPLY AND SERVICE
THIS AGREEMENT, made and entered into as of the 1st day of March, 1997, by and
between the CITY OF EVANSTON, Cook County, Illinois, a home rule municipal corporation
("Evanston") and the VILLAGE OF SKOKIE, Cook County, Illinois, a home rule municipal
corporation ("Skokie"),
WITNESSETH:
WHEREAS, Skokie owns and operates a water distribution system that provides potable
Lake Michigan Water to the retail water customers of such system (the "Skokie System"); and
WHEREAS, Evanston is the owner and operator of a water intake, filtration, treatment, and
pumping plant on the shore of Lake Michigan (the "Evanston Plant") taking water from Lake
Michigan; and
WHEREAS, Evanston owns and operates a water distribution system within the corporate
limits of Evanston that provides potable Lake Michigan Water to the retail water customers of such
system and also transports water to the Skokie System at points of delivery located at or near the
common boundary between Evanston and Skokie (the "Evanston System"); and
WHEREAS, Evanston also supplies water to the Northwest Water Commission, an Illinois
Water Commission, pursuant to an existing written agreement that defines the rights and
obligations of Evanston with respect to such service; and
WHEREAS, Skokie has been purchasing from Evanston all of the potable Lake Michigan
Water required by the customers of the Skokie System since June 5, 1944; and
WHEREAS, Skokie desires to continue to purchase and receive Lake Michigan Water from
Evanston for distribution and sale by Skokie to the customers of the Skokie System; and
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WHEREAS, Evanston desires to continue to sell and deliver Lake Michigan Water to Skokie
and currently has, and will continue to have, available facilities sufficient to pump, treat and deliver
Lake Michigan Water to Skokie in quantities sufficient to meet the maximum daily demands of the
Skokie System;
NOW, THEREFORE, in consideration of the aforesaid premises, which are hereby
made a part of this Agreement, and of the mutual covenants and agreements herein contained, and
of other good and valuable consideration, Evanston and Skokie do hereby agree as follows:
SECTION 1. WATER SUPPLY AND SERVICE.
A. Full Water Reauirements. Subject to the terms and conditions of this Agreement,
Evanston shall sell and deliver to Skokie, and Skokie shall purchase and receive from Evanston,
all the Lake Michigan Water required for the use of the retail customers of the Skokie System, as
it exists on the effective date of this Agreement and as it may be expanded in the future, with the
following exceptions: (1) customers of the Skokie System being supplied from a source other than
Evanston as of the effective date of this Agreement may continue to be so supplied; (2) customers
of the Skokie System may be supplied from a source other than Evanston at any time in the future
if both Evanston and Skokie consent; (3) no new customer, either public or private, having an
estimated ultimate average daily use in excess of 100,000 gallons and located outside the
corporate limits of Skokie may be supplied by Skokie without the prior written consent of Evanston;
and (4) Evanston shall supply on a direct basis its current, and any new, customers located east
of the Metropolitan Water Reclamation District Canal, including any such current or new customers
located within the corporate limits of Skokie; provided, however, that this Clause 1.A(4) shall not
be construed to prevent Evanston from recovering, as a condition to providing such service to any
new customer located within such area of Skokie, Evanston's reasonable, actual costs of
connecting such new customer to the Evanston System.
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B. Service Defined. Evanston shall supply at points of delivery located within Skokie
at or near (1) the intersection of McCormick Boulevard and Emerson Street, (2) the intersection of
Oakton Street and the Metropolitan Water Reclamation District Canal and (3) the intersection of
Old Orchard Road and Gross Point Road (the "Points of Delivery") sufficient Lake Michigan Water
to satisfy the maximum 24-hour demand for Lake Michigan Water of the Skokie System. Evanston
shall supply Lake Michigan Water to both the Evanston System and the Skokie System by direct
pressure from the Evanston Plant without intermediate pumping from reservoirs. The Evanston
System and the Skokie System shall be operated as one single, fully integrated water distribution
system (the "Evanston/Skokie System"). Evanston shall be responsible for controlling operating
pressures within the Evanston/Skokie System and for adjusting such pressures according to the
water demands within such System. Operating pressures within the Evanston/Skokie System shall
depend. on the facilities, such as pumps, feeder mains, tanks and reservoirs, within such System
and the. ability of the mains within such System to withstand higher pressures. At no time shall the
operating pressure or quality of service in the Skokie System be reduced in order to give better
service_ to the Evanston System.
C. Ooeration and Maintenance of the Evanston/Skokie System. In carrying out its
obligations pursuant to Subsection 1.B above, Evanston shall be responsible for operating,
controlling, maintaining, restoring and improving the Evanston System and for operating and
controlling, but not maintaining, all tanks, reservoirs, booster stations and similar facilities within
the Skokie System. Such operation and control of the Skokie System shall be effected remotely
from the Evanston Plant over telephone lines leased for that purpose by Skokie and so as to give
at all times the best possible service within the Skokie System, with due concern for Skokie's costs.
Evanston shall maintain complete and accurate records of Skokie booster station operating periods
and of Skokie tank and reservoir water levels and pressures and shall deliver a copy of such
records to Skokie at least once during each calendar month. Except as provided in this Subsection
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1.0 or in a separate agreement between Evanston and Skokie, Skokie shall be responsible for
maintaining, restoring and improving the Skokie System.
D. Reliability: Curtailments. Evanston shall at all times use maximum feasible efforts
to avoid interruptions to the service required pursuant to this Agreement or reductions in the
amount of Lake Michigan Water required to be delivered by it to Skokie pursuant to this Agreement.
In the event that, by reason of any emergency, system failure or malfunction, Evanston is unable,
despite the use of such maximum feasible efforts, to supply the full Lake Michigan Water needs
of the Evanston System, the Skokie System, the Northwest Water Commission and all other
Evanston customers, the total amount of Lake Michigan Water that Evanston is able to supply to
such parties shall be equitably apportioned among such parties; provided, however, that any Lake
Michigan Water available from the New Reservoir described in Paragraph 3.D.1(d) of this
Agreement shall not be supplied to Skokie unless, and then only to the extent, that Skokie has
made a .contribution in accordance with Subsection 3.G of this Agreement to cover a portion of
Evanston's investment in the New Reservoir.
E. Quality. The quality of Lake Michigan Water supplied and delivered to the Skokie
System pursuant to this Agreement shall at all times be equal to the quality of Lake Michigan Water
supplied to the Evanston System and shall, at a minimum, be of such quality as to meet or exceed
any water quality standards heretofore or hereafter enacted or promulgated by the United States
Public Health Service, the Department of Public Health of the State of Illinois, the United States or
Illinois Environmental Protection Agencies, or such other Federal or State agency or agencies as
shall have jurisdiction from time to time to enact or promulgate such standards.
F. Limitation on New Customers. Evanston shall not enter into any new, modified or
amended agreement to supply Lake Michigan Water to any customer located outside the corporate
limits of Evanston unless it can do so without impairing the service to which Skokie is entitled
pursuant to this Agreement. Evanston shall give Skokie at least 90 days notice of its intention to
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enter into any such new, modified or amended agreement to supply Lake Michigan Water to any
customer located outside the corporate limits of Evanston and shall supply Skokie with the
evidence available that such service will not impair the service to which Skokie is entitled pursuant
to this Agreement.
G. Emeroencv Connections. Nothing in this Agreement shall be construed to prohibit
Skokie from entering into any emergency water service agreement with any other municipality or
water agency.
H. Supply and Service Agreement Only. Nothing in this Agreement shall be construed
as granting any proprietary or other interest in the Evanston Plant or System to Skokie. Nothing
in this Agreement shall be construed as granting any proprietary or other interest in the Skokie
System to Evanston. It is the intent of Evanston and Skokie that this Agreement shall constitute
only an agreement for the sale and purchase of a water supply and related services.
._,SECTION 2. METERS AND MEASUREMENTS.
_.A. Unit of Measurement. The unit of measurement for Lake Michigan Water delivered
pursuant to this Agreement shall be gallons of water, U.S. Standard Liquid Measure, and all meters
installed pursuant to this Agreement shall, unless Evanston and Skokie otherwise agree, be so
calibrated. In the event that it should become necessary or desirable to use other units of
measurement, the basis of conversion shall be that 7.48 gallons is equivalent to one cubic foot.
B. Delivery Meters. Lake Michigan Water sold and delivered to Skokie pursuant to this
Agreement shall be measured through a meter or meters furnished, installed, and read by
Evanston (the "Delivery Meters"). Except as hereinafter provided, all billing for Lake Michigan
Water sold and delivered pursuant to this Agreement shall be based upon Evanston's readings of
the Delivery Meters. All Delivery Meters shall meet the standards of the American Water Works
Association and shall be available for inspection and checking by Skokie at all times.
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Evanston, at its own expense, shall maintain and, at intervals not to exceed six months,
inspect, test, calibrate and adjust all Delivery Meters. Representatives from Skokie shall have the
right to witness all such inspections, tests, calibrations and adjustments. Copies of the results of
all such inspections, tests, calibrations and adjustments shall be furnished to Skokie upon request.
Any Delivery Meter that tests not over two percent slow or fast shall be considered correct for billing
purposes.
C. Check Meters. Skokie may, at its option and its own expense, install and operate
a check meter (a "Check Meter") to check each Delivery Meter, but the measurement of Lake
Michigan Water for billing pursuant to this Agreement shall, except as hereinafter provided, be
solely by the Delivery Meters. All Check Meters shall meet the standards of the American Water
Works Association and shall be available for inspection and checking by Evanston at all times.
The maintenance, reading, calibration and adjustment of all Check Meters shall be
performed by Skokie; provided, however, that if at any time any such Check Meter is, due to the
malfunction of a Delivery Meter,or other reason, being used as the primary meter for measuring
the amount of Lake Michigan Water delivered to Skokie pursuant to this Agreement, the
maintenance, reading, calibration and adjustment of such Check Meter shall be performed by
Evanston during such time.
D. Meter Error and Correction. If either Evanston or Skokie at any time observes a
variation between a Delivery Meter and a Check Meter or any other evidence of meter malfunction,
such party shall promptly notify the other party, and Evanston and Skokie shall then cooperate to
procure an immediate inspection and test of the accuracy of such meters.
If, upon any inspection or test, any meter is found to be out of service or the percentage
inaccuracy of any meter is found to be in excess of two percent slow or fast, the registration
thereof, as well as charges for Lake Michigan Water based thereon, shall be corrected by
agreement of Evanston and Skokie, based on the best data available, for a period extending back
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to the time when such inaccuracy began, if such time is ascertainable and, if such time is not
ascertainable, then for a period extending back one-half of the time elapsed since the last date of
calibration, but in no event farther back than a period of six months. For such purposes, the best
data available shall be deemed to be the registration of a Check Meter if one has been installed
and is accurately registering not more than two percent slow or fast. Otherwise, the amount of
Lake Michigan Water delivered during such period may be estimated (i) by correcting the error if
the percentage of the error is ascertainable by calibration tests or mathematical calculation; or (ii)
if the error is not ascertainable by calibration tests or mathematical calculation, by estimating the
quantity of Lake Michigan Water delivered by reference to deliveries during the preceding periods
under similar conditions when the meter or meters were registering accurately.
E. Notification Concemina Meter Tests. Evanston and Skokie shall each deliver to the
other .written notice at least 48 hours in advance of the time of any planned inspection, test,
calibration, adjustment, or other work affecting any meter so that the other party may arrange to
have a, representative present. If said representative is not present at the time set in such notice,
the inspection, test, calibration, adjustment or other work may, notwithstanding any other provision
of this Section 2, proceed in the absence of said representative. The notice herein required may
be waived in writing by either party. Notices required pursuant to this Subsection 2.E shall be given
in the manner provided in Subsection 5.H of this Agreement but, notwithstanding said Subsection
5.H, shall be delivered to only the following persons at the following addresses:
If for Evantson:
Director of Public Works
2100 Ridge Avenue
Evanston, Illinois 60201
If for Skokie:
Public Works Director
5015 Davis Street
Skokie, Illinois 60077
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SECTION 3. BILLING AND RATES.
A. Billing. Evanston shall render bills to Skokie pursuant to this Section 3 on a monthly
basis for all Lake Michigan Water delivered by Evanston to the Points of Delivery pursuant to this
Agreement, which water shall be measured as provided in Section 2 of this Agreement. Each such
bill shall be due and payable on or before the 30th day following the date of its delivery to Skokie.
Any bill not paid within 45 days following the date of its delivery to Skokie shall thereupon bear
interest until paid at the lesser of the prime rate from time to time announced by the largest bank
having its principal office in the State of Illinois or 10 percent per annum; provided, however, that
in the event Skokie disputes any bill, or portion thereof, in writing within said 45 day period, and
prevails in its dispute as to all or any portion of such bill, no interest shall be due or payable with
regard to such successfully disputed portion of such bill.
B. Rates. For purposes of this Section 3, a "Service Year" shall be the one year period
beginning on March 1 of any year and ending on the last day of February of the following year.
During each Service Year, - Evanston shall bill Skokie and Skokie shall pay Evanston, as full
compensation to Evanston for all Lake Michigan Water sold and delivered and all services rendered
pursuant to this Agreement, the following water rates:
• Base Rate. A Base Rate per 1000 gallons of Lake Michigan Water
delivered by Evanston to the Points of Delivery, calculated as set forth in
Subsection 3.0 below, plus
Reaulatory Adiustment Rate. For Service Years beginning on and after
March 1, 2007, a Regulatory Adjustment Rate, if any is due, in accordance
with, and calculated as set forth in, Subsection 3.D below.
Charges due to the Base Rate shall be stated separately from charges due to the Regulatory
Adjustment Rate, if any, on the monthly billings required pursuant to Subsection 3.A of this
Agreement.
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Evanston shall, no later than January 31 of each year, deliver to Skokie written notice of
the Base Rate and the Regulatory Adjustment Rate, if any, for the following Service Year, together
with a detailed explanation of the calculation of such Rates.
C. Base Rate.
1. Initial Base Rate. For all Lake Michigan Water delivered during the Service
Year beginning March 1, 1997, the Base Rate shall be 72.5 cents per 1000 gallons.
2. Adiustment of Base Rate in Subseauent Service Years,. For each Service
Year beginning on or after March 1, 1998, the Base Rate shall be calculated by multiplying the
factor "1.WXYZ" times the Base Rate applicable in the immediately preceding Service Year, where
".WXYZ" shall be calculated as follows:
(a) Calculate "Annual Inflation" equal to:
(1) The percentage change, expressed as a decimal, in the
Consumer Price Index -- All Urban Consumers -- Chicago,
IL/Northwest IN, as published by the U.S. Department of
Labor, Bureau of Labor Statistics, 1982-1984=100, or any
successor index ( the "CPI"), from the value of the CPI at the
second December preceding the Service Year to the value
of the CPI at the first December preceding the Service Year;
plus
(2) The percentage change, expressed as a decimal, in the
national Producer Price Index -- Total Durable Goods, as
published by the U.S. Department of Labor, Bureau of Labor
Statistics, 1982=100, or any successor index (the "PPI"),
from the value of the PPI at the second December preceding
the Service Year to the value of the PPI at the first
December preceding the Service Year; divided by
(3) Two to produce the average of the percentage change of the
CPI and the PPI ({1+2)/2); but subject to the limitations that
(4) (i) If the resulting dividend ({1+2)/2) is greater than the ceiling
of 0.0900, Annual Inflation shall be deemed to be 0.0900,
and (ii) If the resulting dividend is less than the floor of
0.0375, Annual Inflation shall be deemed to be 0.0375.
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(b) Subtract 0.0175 from Annual Inflation as calculated pursuant to the
preceding Subparagraph 3.C.2(a).
D. Reaulatory Adiustment Rate.
1. Definitions.
(a) "Qualified Capital Equipment and Facilities" means any capital
equipment or facility that:
(1) Is required to serve Skokie pursuant to this Agreement; and
(2) Has an initial acquisition cost, calculated in the Service Year
in which installation of such equipment or facility is
commenced, equal to or greater than the "Threshold Value,"
where the Threshold Value for the Service Year beginning
March 1, 1997 is $1,135,000 and the Threshold Value for
each Service Year beginning on or after March 1, 1998, is
equal to the factor "1.ABCD" multiplied times the Threshold
Value for the immediately preceding Service Year, where
".ABCD" is the Annual Inflation as defined in Subparagraph
3.C.2(a) of this Agreement; BUT
(3) ONLY WHEN the need for such equipment or facilities is
certified pursuant to, and by an independent engineering firm
(the "Independent Engineer") retained pursuant to, the
procedures set forth in Subsection 3.E of this Agreement to
be entirely and directly due to one or more specific,
identifiable additions to, or changes in, Federal or State
statutes or regulations applicable to operation of the
Evanston Plant or the delivery of Lake Michigan Water to
Skokie therefrom, including without limiting the foregoing,
additions to or changes in the regulations of the United
States Public Health Service, the United States
Environmental Protection Agency, the Department of Public
Health of the State of Illinois, the Illinois Pollution Control
Board, or the Illinois Environmental Protection Agency, or
any successor departments or agencies, which additions or
changes become effective on or after March 1, 2007 (a "New
Regulation"). Such certification shall be conclusive and
binding on Evanston and Skokie.
Any such equipment or facility that is entirely and directly due
to a New Regulation shall be deemed Qualified Capital
Equipment and Facilities notwithstanding the fact that the
equipment or facility also produces other benefits to
Evanston such as reducing operating expenses, increasing
operating efficiencies, or permitting the retirement of other
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Evanston water works properties. Notwithstanding the
foregoing, however, the New Reservoir defined in
Subparagraph 3.D.1(d) below shall not be Qualified Capital
Equipment and Facilities.
In determining whether to certify equipment or facilities, or
what portion of the cost of equipment and facilities to certify,
as Qualified Capital Equipment and Facilities, the
Independent Engineer shall include only the minimum cost
of equipment and facilities necessary to comply with the New
Regulation, and shall not include any costs for the equipment
or facilities incurred by Evanston for purposes other than
compliance with the New Regulation, such as costs to
improve or upgrade the operation, or to expand the capacity,
of the Evanston Plant or System, that are not entirely and
directly due to the New Regulation. Evanston may, in its
discretion, incur costs in connection with the acquisition and
installation of Qualified Capital Equipment and Facilities for
equipment, facilities or purposes not required for compliance
with a New Regulation, but none of such additional costs
shall be included in the calculation of the Regulatory
Adjustment Rate.
(b) "Principal and Interest Charges" means:
(1) The actual principal and interest payments due during the
Service Year in question attributable to any bonds (or that
portion of any bonds) issued to finance the acquisition and
installation of Qualified Capital Equipment and Facilities less
the annual depreciation charge that would have been
recorded for any assets required in serving Skokie that are
retired in connection therewith, computed on a straight-line
basis of depreciation over the remaining useful life of such
assets as shown in the audited financial records of the
Evanston Water Fund; or
(2) If no bonds are issued, the amount of "Imputed Payments"
for such Qualified Capital Equipment and Facilities less the
amount of the annual depreciation charge that would have
been recorded for any assets required in serving Skokie that
are retired in connection therewith, computed on a straight-
line basis of depreciation over the remaining useful life of
such assets as shown in the audited financial records of the
Evanston Water Fund, where "Imputed Payments" means
the principal and interest charges that would have been
incurred in the Service Year in question if the Qualified
Capital Equipment and Facilities had been financed by an
issue of 20-year bonds to be retired by 40 equal, semi-
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annual payments at an annual interest rate equal to the
average interest rate, in the month in which the principal
contract for the Qualified Capital Equipment and Facilities is
signed by Evanston, for newly -issued municipal bonds
carrying the same rating as Evanston's bonds as reported in
the Municinal Bond Buver or similar publication. Principal
and Interest Charges shall not be less than zero.
(c) "Net Operating Cost" means:
(1) The sum of (i) the increase in annual operating expense
properly recorded by Evanston in the Evanston Water Fund
plus (ii) the increase in the portion of annual operating
expense properly recorded by Evanston in the Evanston
General Fund for insurance costs that are properly allocated
to the Evanston Water Fund, but only to the extent that such
increases are entirely and directly attributable to the
operation and maintenance of the Qualified Capital
Equipment and Facilities; minus
(2) Any reduction in any such operating expenses that is entirely
and directly attributable to (i) the operation and maintenance
of the Qualified Capital Equipment and Facilities or (ii) the
retirement due to the installation of the Qualified Capital
Equipment and Facilities of any assets of the Evanston Plant
and System that had been required in serving Skokie.
The amount of Net Operating Costs for the Service Year in which
any such Net Operating Costs are first incurred shall be certified to
both Evanston and Skokie by the Independent Engineer.
(d) "New Reservoir" means any addition to the treated Lake Michigan
Water storage capacity existing at the Evanston Plant that is
installed after March 1, 1997.
2. Calculation of Reoulatory Adjustment Rate. The Regulatory Adjustment
Rate, if any, for the Service Years beginning on and after March 1, 2007, shall be calculated as
follows:
(a) Determine "Skokie's Share" by taking the ratio of the total quantity
of Lake Michigan Water delivered by Evanston to the Points of
Delivery during the immediately preceding Service Year to the
product of 365 times the rated maximum daily capacity of the
Evanston Plant during such preceding Service Year (for purposes of
this provision, Evanston and Skokie agree that the rated maximum
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daily capacity of the Evanston Plant as of the effective date of this
Agreement is 108 million gallons per day); and
(b) Multiply Skokie's Share times the sum of the total annual Principal
and Interest Charges plus Net Operating Cost for the current Service
Year attributable to the Qualified Capital Equipment and Facilities;
and
(c) Divide the resulting product by 12 to produce a monthly Regulatory
Adjustment Rate.
E. Procedure for Certification of Qualified Capital Equipment and Facilities and Net,
Operating Costs. The Independent Engineer shall not have been previously employed by either
Evanston or Skokie for at least 4 years prior to the date of its appointment pursuant to this
Agreement and shall not be utilized by Evanston in connection with designing or installing the
Qualified Capital Equipment and Facilities in question. The contract with the Independent Engineer
shall be executed jointly by, and the fees of the Independent Engineer shall be shared equally by,
Evanston and Skokie. The Independent Engineer shall be informed that its determination of what
expenditure is "entirely and directly" due to the New Regulation is to be based on the minimum cost
of acquiring and installing, or operating and maintaining, as the case may be, capital equipment
and facilities strictly necessary to comply with the New Regulation and shall not include any
expenditures that serve to improve or upgrade operation of, or expand the capacity of, the
Evanston Plant but that are not entirely and directly required by the New Regulation.
F. Termination of Reaulatory Adiustment Rate. At such time as Evanston ceases to
incur any Principal and Interest Charges that are incorporated in the Regulatory Adjustment Rate,
either by retirement of bonds actually issued or by reaching the end of the 20-year amortization
period for Imputed Payments specified in Subparagraph 3.D.2(b) of this Agreement, the Regulatory
Adjustment Rate shall be reduced by that amount. Skokie shall continue to pay the balance, if any,
of the Regulatory Adjustment Rate.
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G. Agreements Concerning New Reservoir.
1. Adeauacv of Present Treated Lake Michigan Water Storage Capacity.
Should Evanston construct additional treated Lake Michigan Water storage capacity after March
1, 1997 ('New Reservoir'), Skokie shall not, under any circumstances, be entitled to, or make any
demand for, any allocation of Lake Michigan Water from such New Reservoir capacity pursuant
to Subsection 1.D hereof in the event of emergency, system malfunction or failure, unless, and then
only to the extent, that Skokie has made a contribution, in an amount agreed to by Evanston and
Skokie and in addition to the Rates for Lake Michigan Water service provided for in this Agreement,
to cover a portion of Evanston's investment in such additional treated Lake Michigan Water storage
capacity, but nothing in this contract shall require Skokie to make any such contribution.
2. Cooperation Concerning Potential Requirement for New Reservoir. In
consideration for the exclusion of the costs of a New Reservoir from the calculation of the
Regulatory Adjustment Rate pursuant to. Subparagraph 3.D.1(a) of this Agreement, Skokie agrees
to cooperate with and assist Evanston, in both informal activities and formal proceedings, in
demonstrating to the Illinois Environmental Protection Agency and the Illinois Pollution Control
Board that Evanston should not be required to construct any additional treated Lake Michigan
Water storage capacity. In carrying out this obligation, Skokie agrees to, among other things,
advocate to the Illinois Environmental Protection Agency and the Illinois Pollution Control Board
that, insofar as the demands of Skokie's customers are taken into account in determining the need
for additional treated Lake Michigan Water storage capacity, the capacity of the tanks and
reservoirs of the Skokie System should be included as part of the treated Lake Michigan Water
storage capacity at the Evanston Plant in determining whether the treated Lake Michigan Water
storage capacity at the Evanston Plant is sufficient in relation to the demands of the customers
served by the Evanston Plant.
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SECTION 4. EFFECTIVE DATE AND TERM OF AGREEMENT.
This Agreement shall take effect as of March 1, 1997, and shall continue in force and effect
for a term of twenty years, from March 1, 1997 to February 28, 2017, and shall be renewed
automatically at ten year intervals thereafter unless either party hereto delivers notice of its
intention to terminate this Agreement, in writing, not less than five years prior to the end of the initial
term of this Agreement or any such ten-year term thereafter. However, both Evanston and Skokie
agree to negotiate in good faith with reference to the continuation, extension, or renewal of this
Agreement in the event that one of them delivers notice of its intention to terminate the Agreement
and the other requests such negotiations.
SECTION 5. GENERAL PROVISIONS.
A. Entire Aareement. This Agreement shall constitute the entire agreement of
Evanston and Skokie concerning the sale and purchase of Lake Michigan Water; all prior
agreements between Evanston and Skokie, whether written or oral, are superseded by this
Agreement. There are no representations, covenants, promises, or obligations not contained in
this Agreement that form any part of this Agreement or upon which either Evanston and Skokie is
relying in entering into this Agreement.
B. Amendments and Modifications. No modification, addition, deletion, revision,
alteration, or other change to this Agreement shall be effective unless and until such change is
reduced to writing and executed by Evanston and Skokie pursuant to all applicable statutory
procedures.
C. Interpretation. It is the intent of Evanston and Skokie that this Agreement shall be
construed and interpreted so as to preserve its validity and enforceability as a whole. No rule of
construction that a document is to be construed against the drafting party shall be applicable to this
Agreement.
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D. Non -Waiver. No term or condition of this Agreement shall be deemed waived by
either Evanston or Skokie unless the term or condition to be waived and the circumstances giving
rise to such waiver are set forth specifically in a duly authorized and written waiver of the party
charged with such waiver. No waiver by either Evanston or Skokie of any term or condition of this
Agreement shall be deemed or construed as a waiver of any other term or condition of this
Agreement, nor shall waiver of any breach be deemed to constitute a waiver of any subsequent
breach whether of the same or a different term or condition of this Agreement.
E. No Third Partv Beneficiaries. No claim as a third party beneficiary under this
Agreement by any person, firm or corporation shall be made, or be valid, against either Evanston
or Skokie.
F. Reoulatory Bodies. This Agreement shall be subject to all valid rules, regulations,
and laws applicable hereto passed or promulgated by the United States of America, the State of
Illinois, or any governmental body or agency having lawful jurisdiction, or any authorized
representative or agency of any of them; provided, however, that this Subsection 5.F shall not be
construed as waiving the right of either Evanston or Skokie to challenge the validity of any such
rule, regulation, or law on any basis, including impairment of this Agreement.
G. Assignment. Neither this Agreement nor the obligations or rights of either Evanston
or Skokie pursuant to this Agreement shall be assigned or transferred except with the mutual
consent of both Evanston and Skokie.
H. Notices. Except as provided in Subsection 2.E of this Agreement, all notices and
other communications in connection with this Agreement shall be in writing and shall be deemed
delivered to the addressee thereof when delivered in person at the address set forth below or five
business days after deposit thereof in any main or branch United States post office, certified or
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registered mail, return receipt requested, postage prepaid, properly addressed to Evanston and
Skokie, respectively, as follows:
If for Evanston:
City Manager
Evanston Civic Center
2100 Ridge Avenue
Evanston, Illinois 60201
If for Skokie:
Village Clerk
Skokie Village Hall
5127 Oakton Street
Skokie, Illinois 60077
with duplicates to:
Village Manager
Skokie Village Hall
5127 Oakton Street
Skokie, Illinois 60077
Corporation Counsel
Skokie Village Hall
5127 Oakton Street
Skokie, Illinois 60077
By notice complying with the foregoing requirements of this Subsection 5.1-1, Evanston and Skokie
shall each have the right to change the addressees or addresses or both for all future notices and
communications to itself, but no notice of such a change shall be effective until actually received.
Enforcement: Arbitration.
1. Remedies. Subject to Paragraph 5.1.2 below, Evanston and Skokie may in
law or in equity enforce or compel the performance of this Agreement and shall otherwise have all
remedies provided by applicable law.
2. Arbitration. In case of any dispute arising between Evanston and Skokie
concerning this Agreement, such dispute shall, at the written request of either party, be referred
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to arbitration before a three person arbitration board for determination or settlement under the
Illinois Uniform Arbitration Act, 70 ILCS 5/1 et seq., and the Commercial Arbitration Rules of the
American Arbitration Association.
The arbitration board shall consist of three experienced specialists in the matter to be
arbitrated. One member of the arbitration board shall be chosen by Evanston, one shall be chosen
by Skokie, and the two thus chosen shall appoint a third member, who shall serve as chairman.
If the two thus named cannot agree upon a third within thirty days, a third shall be appointed by the
American Arbitration Association from its National Panel of Arbitrators and in accordance with its
rules for such appointments.
It shall be the responsibility of the arbitrators to demand a clear and concise definition of
the matter or matters at issue and to determine and demand all records, information, testimony,
and other evidence that may be useful in their deliberations. It shall be the responsibility of
Evanston and Skokie to meet such demands promptly and without reservation.
Any award pursuant to arbitration as herein provided for shall be accompanied by a written
opinion of the arbitrators giving reasons for the award.
The arbitrators shall be entitled to reasonable compensation and to incur reasonable
expenses, and such compensation and all other expenses of the arbitrators shall be shared equally
by Evanston and Skokie unless the arbitrators shall specify some other allocation based on the
equities of the situation.
J. Authority to Execute. This Agreement, and its execution by the City Manager of
Evanston, was approved by the City Council of Evanston on the third day of February, 1997. This
Agreement, and its execution by the Village Manager of Skokie, was approved by the Mayor and
Board of Trustees of Skokie on the third day of February, 1997. Evanston and Skokie each
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warrants to the other that no other approvals are required to make this Agreement binding upon
it and enforceable against it.
IN WITNESS WHEREOF, Evanston and Skokie, acting under authority of their respective
governing bodies, have caused this Agreement to be executed in several duplicate original
counterparts effective as of the date first above written.
ATTEST: CITY OF EVANSTON
City Clerk City Manager
ATTEST: VILLAGE OF SKOKIE
Village Clerk Village Manager
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