Committee approves debt authorization to pursue IEPA funding for lead service line replacements

The Infrastructure Committee on Feb. 5 approved a debt-authorization ordinance and a construction-engineering contract to allow the city to apply for Illinois EPA funding to replace lead service lines across the community.

A staff member told the committee the city’s lead-service-line inventory identifies approximately 797 lead service lines and laid out a multi-phase approach: one project to replace about 375 lines, another to cover roughly 321 lines, and roughly 100 additional replacements to be completed through other capital projects such as water-main work and downtown improvements. "We have approximately 797 lead service lines in this community," the staff member said.

Staff explained two prior IEPA applications: one scored about 200 out of 400 points and the other scored about 145. Because IEPA scoring weighs factors such as median household income and other demographic metrics, the lower-scoring application is unlikely to make the intended-funding list. Staff recommended applying for the IEPA bypass funds for the lower-scoring application — a first-come, first-served option for projects that are ready to proceed. The bypass funds, staff said, provide 0% 30-year loans but do not make a project eligible for principal forgiveness; projects on the intended-funding list can be eligible for principal forgiveness.

Staff estimated the lower-score project at about $6.7 million (with a $7.37 million figure including a 10% contingency) and said construction-engineering costs must be in place to roll those costs into the loan. The presentation emphasized a tight IEPA timeline: the bidding process is a minimum of 45 days and IEPA must execute any loan prior to the end of the state fiscal year on June 30.

Committee members pressed staff on financing and repayment. Staff said the city intends to repay any IEPA loan from water-fund revenues generated by recently approved water-rate increases and that IEPA will evaluate the city’s financial documents as part of the loan-review process. The chair cautioned that taking on debt is significant and urged careful consideration even though the loan would carry 0% interest over 30 years.

The committee voted to approve the debt-authorization ordinance and to award the construction-engineering contract; a roll-call vote recorded the motion as passed.

The next procedural steps are to finalize the loan application materials, put the project out to bid (45-day minimum), and submit documents to the Illinois EPA for loan execution before June 30.