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IGA Accept Bids & Negotiate Power Supply Agreement Terms 09-13-2011 INTERGOVERNMENTAL AGREEMENT BY, BETWEEN, AND AMONG THE VILLAGE OF GRAYSLAKE, THE VILLAGE OF LINCOLNWOOD, AND THE VILLAGE OF OAK BROOK CONCERNING ELECTRIC AGGREGATION THIS INTERGOVERNMENTAL AGREEMENT ("Agreement') is made and entered into as of the Lth day of 2011, by, between, and among the VILLAGE OF GRAYSLAKE, an Illinois municipal corporation ("Grayslake"), THE VILLAGE OF LINCOLNWOOD, an Illinois home rule municipal corporation ("Lincolnwood'), and THE VILLAGE OF OAK BROOK, an Illinois municipal corporation ("Oak Brook") (collectively, the "Parties"). WITNESSETH: WHEREAS, Section 1-92 of the Illinois Power Agency Act, 20 ILCS 3855/1-92 ("Act'), authorizes the corporate authorities of a municipality to establish a program to aggregate electrical loads of residential and small commercial retail customers and to solicit bids and enter into service agreements to facilitate the sale and purchase of electricity and related services and equipment for those electrical loads ("Electric Aggregation Program"); and WHEREAS, pursuant to the Act, municipalities may, if authorized by referendum, operate an Electric Aggregation Program as an "opt-out" program that applies to all residential and small commercial retail electrical customers who do not affirmatively choose not to participate; and WHEREAS, the Act authorizes municipalities to jointly operate an Electric Aggregation Program and does not prohibit municipalities from entering into an intergovernmental agreement to aggregate electric loads for those programs; and WHEREAS, in April 2011, Grayslake, Lincolnwood, and Oak Brook were authorized by referendum to establish "opt-out" Electric Aggregation Programs pursuant to the Act; and WHEREAS, although each Party will operate a separate Electric Aggregation Program for its residents, the Parties have individually and collectively determined that combining the bidding and contracting process to obtain the supply of electric power for their Electric Aggregation Programs could provide potential savings through a joint project bid ("Joint Power Supply Bid'); and WHEREAS, the Parties desire to establish an Intergovernmental Agreement by, between, and among Grayslake, Lincolnwood, and Oak Brook to facilitate joint action and intergovernmental cooperation for the Joint Power Supply Bid; and WHEREAS, to achieve these and other related objectives, the Parties desire to continue to utilize the powers and authority granted to them, individually and collectively, pursuant to Article VII, Section 10 of the Illinois Constitution of 1970; the Intergovernmental Cooperation Action, 5 ILCS 220/1 et seq., and Section 1-92 of the Act, 20 ILCS 3855/1-92; and WHEREAS, after full consideration of all planning, fiscal, and other intergovernmental issues affecting this matter, each of the Parties has determined that it is in the best interests of its citizens and of the general public welfare that this Agreement be executed and implemented by the Parties; and WHEREAS, prior to their consideration of this Agreement, the Parties each considered and approved a joint representation agreement with Holland & Knight LLP for the provision of legal services relating to the Joint Power Supply Bid and this Agreement; and WHEREAS, the Parties have each approved this Agreement by an ordinance or resolution duly adopted by the Party's corporate authorities; and NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein made and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, and pursuant to all applicable statutes and local ordinances, specifically including, but without limitation, Article VII, Section 10 of the Illinois Constitution of 1970; the Intergovernmental Cooperation Act, 5 ILCS 220/1 et seq., and Section 1-92 of the Act, 20 ILCS 3855/1-92, the Parties do hereby agree as follows: SECTION 1. RECITALS. The foregoing recitals are, by this reference, incorporated into and made a part of this Agreement. SECTION 2. PURPOSE. This Agreement is made for the purpose of establishing all of the authority, powers, and resources necessary and convenient to allow the Parties to jointly and efficiently address common bidding and contracting for the Joint Power Supply Bid. This Agreement is further intended to allow the Parties to jointly seek available local, state, and federal funds and other resources, if available, to assist in addressing the Joint Power Supply Bid identified by the Parties as necessary, and being appropriate for, the joint action of the Parties. SECTION 3. TERM; OTHER PARTIES. A. - Effective Date. This Agreement shall take effect as of the date stated in the first paragraph of this Agreement. . B. Term. The term of this Agreement shall be one (1) year from the effective date of this Agreement (the "Initial Term'j. Unless either Party gives written notification of intent to terminate this Agreement not less than ninety (90) days prior to the expiration of the Initial Term, or unless the Agreement is otherwise terminated as set forth in Section 6 herein, the Agreement shall automatically renew for another one (1) year period (the "Subsequent Term'. At the end of any Subsequent Term, the Agreement shall continue to automatically renew for an additional one year period, unless terminated by any Party in the same manner as is provided for the termination of the Initial Term. C. Governance. The Agreement shall be managed, and the duties under this Agreement performed, by the respective chief administrative officers of each Party, or their respective duly authorized representatives or designees ("Party Representative"). Each Party Representative shall operate and act with respect to Agreement affairs and actions only pursuant to action duly authorized by the 2 Party Representative's corporate authorities. Unless otherwise unanimously agreed to by the Party Representatives with respect to a specific action or policy, all actions pursuant to the Agreement shall be taken or established only by the unanimous consent of the Party Representatives. D. Additional Parties. Additional local government entities may be added as Parties to this Agreement (a) if approved by all existing Parties, and (b) upon the new Party's execution and approval of this Agreement, as may be amended, by an ordinance or resolution duly adopted by the Party's corporate authorities, and delivery of a certified copy of that ordinance or resolution. SECTION 4. GENERAL COOPERATION. A. Cooperation. The Parties acknowledge and agree to cooperate with each other in furtherance of the purposes, goals, and objectives of the Agreement. Cooperation required by this Agreement specifically includes, but is not limited to, the sharing and joint utilization by and among the Parties of information and other materials possessed or developed by the Parties, either individually or collectively, and necessary to investigate, identify, and otherwise document the Joint Power Supply Bid. B. Independent Operation. Notwithstanding the provisions of Section 4.A of this Agreement, the Parties acknowledge and agree that the Parties are operating separate Electric Aggregation Programs for each community pursuant to their own plans of governance, and that the Joint Power Supply Bid does not create any responsibility or obligation for any Party to administer or operate any aspect of the Electric Aggregation Program of any other Party. SECTION 5. CONTRACTING PROCESS; PAYMENTS AND EXPENSES. A. Official Coordinator. For the Initial Term of this Agreement Lincolnwood and Oak Brook shall prepare and submit contract documents and bid specifications for their portions of the Joint Power Supply Bid to Grayslake, who will serve as the Official Coordinator to bid the Joint Power Supply Bid. B. Procedure for Developina Request for Proposals. At such time as the Parties desire to solicit competitive sealed bids ("Sealed Bids'l from contractors for the Joint Power Supply Bid, the Parties shall agree to follow the following process: i. The Parties shall meet and confer and agree upon a set of technical specifications and requirements ("Technical Requirements'l and bidding and contract documents ("Contract Package's for the Joint Power Supply Bid. The contract documents shall include a contract to be executed by and between the contractor and each Party for the provision of electrical power to that Party pursuant to the Joint Power Supply Bid ("Power Supply Agreement'j. The Contract Package shall, without limitation, require bidders to submit pricing to supply electric power to all Parties jointly, provided that the bidder's pricing structure must allow a Party or Parties to proceed with the Joint Power Supply Bid at the joint price, or a substantially similar price, if 3 the corporate authorities of no more than two Parties fail to approve the Joint Power Supply Bid. ii. The Contract Package shall provide pricing options for one-year, two- year, and three-year terms. The Contract Package shall further require the contractor to obtain and maintain, for the duration of the Power Supply Agreement, such proof of insurance and performance security as the Parties deem necessary. . iv. The Contract Package shall further require the contractor to whom the Power Supply Agreement is awarded to indemnify each of the Parties pursuant to the terms of the Power Supply Agreement. V. All Parties shall have an adequate opportunity to review and comment on the Technical Requirements and Contract Package, and shall provide such comments to the Official Coordinator. Revised drafts of the Technical Requirements and Contract Package shall be prepared and reviewed by the Parties until such time as the Parties have approved these documents. vi. When all Parties are satisfied with the Technical Requirements and Contract Package, the Official Coordinator may issue these documents to prospective contractors or suppliers to solicit Sealed Bids, and shall establish a deadline for the submission of Sealed Bids. vii. During the time following the issuance of the Technical Requirements and Contract Package, and prior to the deadline for submission of Sealed Bids, the Official Coordinator shall issue such addenda to the prospective contractors as may be necessary to respond to the inquiries of such prospective contractors or to clarify the Technical Requirements and Contract Package. The Official Coordinator shall consult with the other Parties prior to issuing any such addenda. The Parties shall refer any inquiries or issues received or identified regarding the Technical Requirements and Contract Package to the Official Coordinator for possible inclusion in such an addendum. viii. Following receipt of the Sealed Bids, the Official Coordinator shall provide copies of the Sealed Bids to each of the Parties. The Party Representatives shall examine and review the Sealed Bids and shall confer to discuss the Sealed Bids and to recommend to the Parties which contractor shall be selected and whether a one-year, two-year, or three year pricing structure should be selected ix. The corporate authorities of each Party shall approve the award of the Power Supply Agreement for that Party by resolution. C. Administration by the Parties. After the completion of the Joint Power Supply Bid and the award by each Party of its own Power Supply Agreement with the contractor, each Party shall be responsible to manage its own Power Supply Agreement and Electric Aggregation Program. 4 D. Expenses. The Parties acknowledge and agree to use their respective staffs and resources, at no cost to the other Parties, for actions undertaken by or on behalf of one of the Parties. Each Party shall be responsible for, and each Party agrees to pay, its own expenses incurred for professional services, including legal fees, engineering inspection, quality control, and any and all other expenses incurred by that Party during the implementation of the Joint Supply Bid. Any expenses to be shared between the Parties shall be approved in advance, and in writing, by each Party. E. Costs of this Agreement. Pursuant to this Agreement, each Party shall be responsible to pay its respective share of the cost of the Joint Power Supply Bid using local funds. Each Party shall budget and appropriate sufficient funds to pay its respective share of the cost of the Joint Power Supply Bid within its respective jurisdiction by an ordinance or resolution approved by the Party's corporate authorities. F. Approval by Corporate Authorities. The Parties acknowledge and agree that, although they intend to proceed under a joint bid, the corporate authorities of any Party may fail to approve the Joint Power Supply Bid or the related Power Supply Agreement. In either event, the remaining Party or Parties may either proceed with the Joint Power Supply Bid or proceed individually. SECTION 6. WITHDRAWAL; TERMINATION. A. Right to Withdraw. Any Party may withdraw from this Agreement prior to going out to bid on the Joint Power Supply Bid in the Initial Term or any Subsequent Term, provided that the withdrawing Party must provide notice to the other Parties of its withdrawal no later than 48 hours before issuance of the bid. B. Dissolution and Termination. In addition to the termination provisions set forth in Section 3.13 of this Agreement, the Agreement shall be dissolved and terminated (i) upon the written agreement of all the Parties hereto; or (ii) upon the event of only one Party remaining as a party to this Agreement. SECTION 7. GENERAL PROVISIONS. A. Notices. All notices and other materials shall be delivered to the Official Coordinator. All notices required to be delivered to any Parties pursuant to this Agreement shall be in writing and shall be deemed delivered to the Party when delivered in person or by express mail or messenger, via facsimile, or three (3) days after deposit thereof in any main or branch United States Post Office, properly addressed to the Party's principal office and to the attention of the Party's chief administrative official. All notices related to the Technical Requirements of the Joint Power Supply Bid may be coordinated by the Official Coordinator and the Party Representatives by electronic mail or other means of communication, as appropriate. I I 5 Notices and communications to each Party shall be addressed to, and delivered at, the following addresses: Grayslake: Village of Grayslake With a copy to: Victor P. Filippini, Jr. 10 South Seymour Ave. Holland & Knight LLP Grayslake, IL 60030 131 S. Dearborn Street Attn: Village Manager 30th Floor Chicago, IL 60603 Lincolnwood: Village of Lincolnwood With a copy to: Steven M. Elrod 6900 N. Lincoln Avenue Holland & Knight LLP Lincolnwood, IL 60712 131 S. Dearborn Street Attn: Village Administrator 301h Floor Chicago, IL 60603 Oak Brook: Village of Oak Brook With a copy to: Peter M. Friedman 1200 Oak Brook Road Holland & Knight LLP Oak Brook, IL 60523 131 S. Dearborn Street Attn: Village Manager 30th Floor Chicago, IL 60603 B. Entire Agreement. There are no representations, covenants, promises, or obligations not contained in this Agreement that form any part of this Agreement or upon which any of the Parties is relying in entering into this Agreement. This Agreement, and all covenants and provisions herein contained shall bind and inure to the benefit of each respective local governmental entity which is a party hereto and their respective successors and assigns. C. Severability. If any provision of this Agreement is construed or held to be void, invalid, or unenforceable in any respect, the remaining provisions of this Agreement shall not be affected thereby but shall remain in full force and effect. D. Interpretation. It is the express intent of the Parties that this Agreement shall be construed and interpreted so as to preserve its validity and enforceability as a whole. In case of any conflict among the provisions of this Agreement, the provision that best promotes and reflects the intent of the Parties shall control. The Parties hereto have been represented by counsel and have had full opportunity to discuss this Agreement prior to execution. This Agreement shall be construed without regard to the identity of the Party who drafted the various provisions of this Agreement. Moreover, each and every provision of this Agreement shall be construed as though all Parties to this Agreement participated equally in the drafting thereof. As a result of the foregoing, any rule or construction that a document is to be construed against the drafting party shall not be applicable to this Agreement. E. Amendments and Modifications. This Agreement shall not be modified, changed, altered, or amended without the duly authorized and written consent of corporate authorities and pursuant to Parties b their respective p p each of the P y p ordinances or resolutions duly adopted and approved by the Party's corporate 6 authorities. No amendment or modification to this Agreement shall be effective until it is reduced to writing and approved by the corporate authorities of each Party and properly executed in accordance with all applicable law. F. Authority to Execute. Each Party hereby warrants and represents to each other Party that the person executing this Agreement on its behalf has been properly authorized to do so by the corporate authorities of the Party. G. No Third Party Beneficiaries. Nothing in this Agreement shall create, or shall be construed or interpreted to create, any third party beneficiary rights. H. Indemnification. Each Party hereby agrees to indemnify, hold harmless and defend the other Party from and against any and all losses, claims, expenses and damages (including reasonable attorneys' fees) made against or incurred by the other Party for any actions taken or failures to act by the Party in connection with the Joint Power Supply Bid that arise out of the Joint Power Supply Bid, each Party's Power Supply Agreement, each Party's Electric Aggregation Program, Power Supply Agreement, or this Agreement, to the extent that such claims were not caused by actions, or failures to act, of another Party. I. Execution. This Agreement shall be executed by all of the Parties in identical original duplicates and each of the duplicates shall, individually and taken together, constitute one and the same Agreement. IN WITNESS WHEREOF, the Parties have by their duty authorized officers and representatives set their hands and affixed their seals to be effective as of the date specified in Subsection 3A of this Agreement. [SIGNATURES FOLLOW ON SUBSEQUENT PAGE] 7 ATTEST: VILLAGE OF GRAYSLAKE By: By: Village Clerk Village Manager ATTEST: VILLAGE OF LINCOLNWOOD By: By: Village Clerk Village Administrator ATTEST: VILLAGE OF OAK BROOK By: 6Y: 04A4, Village Clerk Village Manager �•�Yy�..'F t r �v I V,i I 8 L 8.31.2011 Draft ATTEST: VILLAGE OF GRAYSLAKE y BY• Y• Village Clerk V' age Manager ATTEST: VILLAGE OF LINCOLNWOOD By: By. Village Clerk Village Administrator ATTEST: VILLAGE OF OAK BROOK By: 24:� ✓ B A4. �,�jm Y• Village Clerk Village Manager #10561099 vl C01INT� + II 8 I I fqmd ZtXA ATTEST: VILLAGE OF GRAYSLAKE By: By: Village Clerk Village Manager ATTEST: VILLAGE OF LINCOLNWOOD By:/ i By: V" age C erk Village Administra r ATTEST: VILLAGE OF OAK BROOK By By: Village Cleric Village Manager. #10561099 vl I i I s vG0 0 Oq��9 O O mile[= COUNTli AGENDA ITEM Regular Board of Trustees Meeting of September 13, 2011 SUBJECT: Resolution Approval—Intergovernmental Agreement and Authorizing the Village Manager to Accept Bids and Execute an Electricity Supply Agreement FROM: Rania Serences, Purchasing Clerk BUDGET SOURCE/BUDGET IMPACT: N/A RECOMMENDED MOTION: Village Board approve Resolution 2011-IGA-AG-ELEC- EX1-R-1122, a Resolution Approving an Intergovernmental Agreement with the Villages of Grayslake and Lincolnwood Concerning Electric Aggregation and Authorizing the Village Manager to Accept Bids and to Negotiate Power Supply Agreement Terms Background/History: During staff's preparation of the Electric Aggregation Program, we were made aware that the Village of Grayslake and the Village of Lincolnwood are developing the program as well and are conducting a joint bid process without the use of a consultant. Approval of the attached Resolution will allow cooperation with the other two municipalities to utilize the economies of scale and to create an even greater electrical aggregation. Like Oak Brook, both municipalities have received referendum approval for electrical aggregation and have held the required public hearings. Both municipalities are also clients of Holland and Knight,the Village's legal firm who prepared the proposed Intergovernmental Agreement. When combined, the municipalities will seek bids for electrical supply on behalf of over 41,430 residential and small retail customers. Staff has already held planning meetings on what the next steps will be for electrical aggregation and finds that the municipalities work well together. Electricity rates may change from day to day and even from hour to hour due to electricity volume demand. Therefore, the bidding process for electricity only secures the electrical supplier rate for a 24 hour period. The Village Manager will need to have the authority to sign an agreement, subject to final board approval, with the lowest cost electricity supplier within hours of receipt of the bids. This is the same process that is performed when the Village conducts the- bid process for electricity for street lighting, water pumpage, and Village buildings that are not qualified to receive franchised electricity from ComEd. The attached Resolution provides the Village Manager with the authority to accept bids and negotiate power supply agreement terms with the lowest successful energy supplier for a term not to exceed three years. In the event that the Village Manager determines that the bids submitted are not favorable to the Village or to the residential and small commercial retail customers within the Village, all bids will be rejected. II RESOLUTION 201 1-IGA-AG-ELEC-EX1-R-1 122 A RESOLUTION APPROVING AN INTERGOVERNMENTAL AGREEMENT WITH THE VILLAGES OF GRAYSLAKE AND LINCOLNWOOD CONCERNING ELECTRIC AGGREGATION AND AUTHORIZING THE VILLAGE MANAGER TO ACCEPT BIDS FOR ELECTRICITY SUPPLY WHEREAS, Section 1-92 of the Illinois Power Agency Act, 20 ILCS 3855/1-92 ("Act'), authorizes the corporate authorities of a municipality to establish a program to aggregate electrical loads of residential and small commercial retail customers, and to solicit bids and enter into service agreements to facilitate the sale and purchase of electricity and related services and equipment for those electrical loads ("Electricity Aggregation Program"); and WHEREAS, pursuant to the Act, municipalities may, if authorized by referendum, operate an Electricity Aggregation Program as an "opt-out" program that applies to all residential and small commercial retail electrical customers unless they affirmatively choose not to participate; and WHEREAS, the Act authorizes municipalities to jointly operate an Electricity Aggregation Program and does not prohibit municipalities from entering into an intergovernmental agreement to aggregate electric loads for those programs; and WHEREAS, on April 5, 2011, the voters of the Village approved a referendum to authorize the operation of a Program as an"opt-out" program; and WHEREAS, the Village President and Board of Trustees adopted Ordinance No. 2011-GL-ELEC- S-1314, authorizing the establishment of an Electricity Aggregation Program as an "opt-out" program; and WHEREAS, the Village President and Board of Trustees have determined that combining the bidding and contracting process to obtain the supply of electric power for its Electricity Aggregation Program with the Village of Grayslake ("Grayslake') and the Village of Lincolnwood ("Lincolnwood'I could provide potential savings through a joint project bid ("Joint Power Supply Bid"); and WHEREAS, the Village desires to approve an Intergovernmental Agreement by, between, and among the Village, Grayslake, and Lincolnwood to facilitate joint action and intergovernmental cooperation for the Joint Power Supply Bid ("Intergovernmental Agreement"); and WHEREAS, the Village anticipates that upon the opening of bids received in connection with the Joint Power Supply Bid process, the Village will be required to decide whether to enter into a contract for the provision of electricity with the winning bidder prior to the next regularly scheduled meeting of the Village Board of Trustees; and WHEREAS, if the most favorable bid received in connection with the Joint Power Supply Bid process reflects a pricing schedule lower than that submitted by ComEd, residential and small commercial retail customers within the Village will realize cost savings upon execution by the Village of a contract for the provision of electricity with the entity that submits the most favorable bid; and WHEREAS, in order to preserve the ability of the Village to enter into a contract with the entity that submits the most favorable bid in connection with the Joint Power Supply Bid process, the Village President and Board of Trustees have determined that it will serve and be in the best interests of the Village and its residents to authorize the Village Manager to (i) execute, on behalf of the Village the Intergovernmental Agreement with Grayslake and Lincolnwood; (ii) accept the Joint Power Supply Bid on Resolution 2011-IGA-AG-ELEC-EX1-R-1 122 IGA w/Lincolnwood,Grayslake Re: Electricity Page 2 of 3 behalf of the Village; and (iii) negotiate the terms of a power supply agreement for the consideration of the President and the Board of Trustees based on the terms of the Joint Power Supply Bid; NOW THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows: Section 1: Recitals. The facts and statements contained in the preamble to this Resolution are found to be true and correct and are hereby adopted as part of this Resolution. Section 2: Approval of Agreement. The Intergovernmental Agreement between and among the Village, Grayslake, and Lincolnwood shall be, and is hereby, approved in substantially the form attached to this Resolution as Exhibit A. Section 3: Execution of Agreement. The Village Manager and Village Clerk shall be, and they are hereby, authorized and directed to execute and attest, on behalf of the Village, the Intergovernmental Agreement and all documentation related thereto. Section 4: Authorization to Accept Joint Power Supply Bid and Negotiate the Terms of a Power Supply Agreement. A. Authorization to Accept Bids and Negotiate Power Supply Agreement Terms. The President and Board of Trustees shall, and do hereby, authorize the Village Manager to accept, on behalf of the Village, the Joint Power Supply Bid, and to negotiate the terms of a power supply agreement for a term not to exceed three years for the provision of electricity to residential and small commercial retail customers within the Village with the selected bidder("Power Supply Agreement'). B. Power Supply Agreement Subiect to Board Approval. This Resolution shall not be deemed or interpreted as authorizing the Village Manager to execute the Power Supply Agreement on behalf of the Village. The President and Board of Trustees retain the authority, in their sole discretion, to accept or reject the Power Supply Agreement. C. No Obligation to Accept Bids. This Resolution shall not be deemed or interpreted as obligating the Village Manager to accept any bid in connection with the Joint Power Supply Bid process. In the event that the Village Manager determines, in his discretion, that the bids submitted in connection with the Joint Power Supply Bid process are not favorable to the Village or to the residential and small commercial retail customers within the Village, then the Village Manager shall be, and is hereby, authorized to reject all of the bids on behalf of the Village. Section 5: Effective Date. This Resolution shall be in full force and effect from and after its passage and approval as provided by law. APPROVED THIS 131h day of September, 201 Gopal G. Lalmalani, Village President PASSED THIS 13th day of September, 2011 Ayes: Trustees Manzo, Moy, Wolin, Yusuf and Zannis Nays: None Absent: Trustee Aktipis Resolution 2011-IGA-AG-ELEC-EXI-R-1122 IGA w/Lincolnwood,Grayslake Re: Electricity Page 3 of 3 * av 's ATTEST/7 Cn ,o Charlotte K. Pruss,Village Clerk COUNTY ��� Resolution 2011-IGA-AG-ELEC-EX1-R-1122 IGA w/Lincolnwood,Grayslake Re: Electricity Page 4 of 3 Exhibit A Intergovernmental Agreement