Oswego village trustees approve issuing $24.3 million in bonds to help pay for Lake Michigan water project

Oswego village leaders continue to look at ways to pay for the cost of bringing Lake Michigan water to Oswego, a project estimated to cost $99 million.

At the May 6 Oswego Village Board meeting, village trustees unanimously approved an ordinance providing for the issuance of general obligation bonds not to exceed $24.3 million to generate the necessary $20 million in project costs expected this year. The village board is set to issue a second and final bond issue in the summer of 2026.

“By this time actual costs for the project should be known and the second bond issuance will cover any remaining costs,” Oswego Finance Director Andrea Lamberg told village trustees.

Oswego is looking to pay for the project through general obligation bonds and a federal loan from the Water Infrastructure Finance and Innovation Act program. The maximum portion of eligible project costs funded through the program is 49%.

The DuPage Water Commission would supply the water. The total project cost to bring Lake Michigan water to Oswego, Yorkville and Montgomery is estimated at $249.2 million.

Oswego will be picking up 35.36% of the costs related to bringing Lake Michigan water to the area. Yorkville’s share will be 40.22% and Montgomery’s share will be 24.42%.

At this time, Oswego’s proportionate costs to extend the transmission mains and install the metering stations for the project are estimated at $88.1 million. In addition, Oswego will have to pay the DuPage Water Commission a $11 million buy-in cost.

At the same meeting, village trustees approved amending an agreement with Baxter & Woodman, Inc. for additional professional services related to a water and sewer rate study update. In doing so, they increased the contract amount from $24,500 to $29,500.

“The updated rate study will serve as the basis for water and sewer revenue planning beginning Jan. 1 and will guide the village in achieving rate stability, fund balance sustainability and Lake Michigan transition readiness,” village staff told trustees.

Lake Michigan water is needed because the village’s aquifers are depleting.

“Since 2014, the village has really been on notice from the Illinois State Water Survey that our aquifers are depleting and not replenishing,” Oswego Village Administrator Dan Di Santo said. “And by 2033, our wells will be in significant decline and we could have inoperability of our well system. So we’ve known since then that we need to find an alternate water source.”