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City moves to authorize up to $7.37 million IEPA loan and related contracts for lead service-line replacements
Summary
City staff told the council the IEPA loan process is time-sensitive and recommends using bypass funding to secure financing for roughly 321 replacements now (with a second packaged application later); council approved the ordinance and related contracts to pursue IEPA funding and construction engineering services.
City staff outlined a plan to finance lead service-line replacement work and asked the council to authorize steps necessary to secure Illinois Environmental Protection Agency (IEPA) loan funding. The council approved an ordinance and related resolutions that staff said are required to submit IEPA loan applications and to include construction engineering in the loan package.
A city staff member told the council the city has roughly 800 service lines citywide, about 100 of which will be addressed through routine capital projects, leaving approximately 700 needing separate replacement. Staff said the city previously filed two IEPA loan applications—one for 375 replacements and one for 321—scoring 200 and 145 out of 400 points (the IEPA cutoff was 240). Because those scores fell short, staff recommended applying for IEPA "bypass" funding, a first-come, first-served loan path that does not include principal forgiveness.
"So what we're doing today is, we're taking our lower score application ... and we're gonna apply for the bypass fund, which is not a competitive loan application program," the city staff member said, explaining that bypass loans are not eligible for principal forgiveness and that the city would only borrow what it needs and include a 10% contingency. The staff member described the IEPA process: obtain a letter of commitment, then follow a 45-day bidding requirement before returning to committee with contract numbers; reimbursement requests would be submitted to IEPA after contractor invoices are verified.
Council members pressed staff on timing and sequencing. One alderman asked what happens if the ordinance does not pass that night; staff said bypass applications are already being submitted by other municipalities and that the city's ability to "get in line" depends on filing, making the effort time-sensitive. Staff said loan execution could happen as soon as the end of the state fiscal year and that most construction work may occur in 2027 because contractors' schedules already are filling for 2026.
The ordinance authorizing the mayor to enter into a public water supply loan agreement with the IEPA (item 7d, ordinance 26-00003) and an associated contract for construction engineering (item 7f, resolution 26R0004) were called out for separate consideration and subsequently approved by roll call.
