The Oswego Village Board recently authorized the issuance of up to $27.2 million in general obligation bonds to finance water and sewer system infrastructure improvements as part of the switch to Lake Michigan water.
Oswego, Yorkville and Montgomery decided in mid-December 2021 to change from relying on well water to Lake Michigan water via a connection through the DuPage Water Commission.
The Illinois State Water Survey has used projections showing the region could run out of ground water from the aquifer it currently uses in the next 20 to 40 years.
The planning process between the three municipalities began in 2014. The three communities have been on notice from the Illinois State Water Survey that the region’s aquifer is at “severe risk” of depletion, village officials have said, driving the push to find a new water supply.
“General obligation bonds are a piece of the overall funding strategy for the village’s connection to Lake Michigan as a water source. Debt service payments will come from water and sewer fund revenues,” Oswego Finance Director Andrea Lamberg said in a report to Oswego Village Board members.
The transition to Lake Michigan water will involve two bond issues and a federal loan through the U.S. Environmental Protection Agency. One of the bond issues occurred last summer, and the next one is scheduled for July, Lamberg said in the report.
The upcoming bond issue is for an amount not to exceed $27.2 million to help fund some of the expenses related to the DuPage Water Commission expected through the end of the year, officials said.
The village in October 2024 approved a contract for the purchase and sale of water with the DuPage Water Commission. The village also approved an agreement which states the DuPage Water Commission will construct, own and maintain the transmission mains necessary to deliver water to Oswego, Yorkville and Montgomery. Oswego will pay 35.36% of the costs of the project’s main.
Village staff members have been identified as “designated representatives” that will have the authority to sell bonds, Lamberg said.
“A delegated negotiated sale allows the village the flexibility to enter the market,” Lamberg said in the report. “There has been volatility in the market which could change assumptions. The final debt schedule will not be known until final pricing occurs. It is the village’s intent to abate the debt service levy on these bonds each year and use water and sewer fund revenue as the source of repayment.”
Linda Girardi is a freelance reporter for The Beacon-News.