Trial begins to settle dispute between Shodeen, Mill Creek water district
A long-running dispute between prominent Geneva developer Kent Shodeen and the Mill Creek Water Reclamation District over wastewater used to irrigate two of Shodeen's golf courses soon could be resolved.
A bench trial began Monday before Kane County Judge Mark Pheanis to settle a disagreement in which Shodeen is seeking payment for roughly 160 million gallons of non-potable wastewater used in part to maintain the Mill Creek and Tanna Farms golf courses.
The water reclamation district, which was formed in the 1990s as part of the massive Mill Creek development west of Randall Road, sued Shodeen in late 2014, asking a judge to void a 1995 lease agreement because two of Shodeen's relatives and an employee were on the reclamation district board when the pact was signed.
The water reclamation district is a special taxing body with a three-person board and no employees; the board has new members now not related to Shodeen.
Phillip Bus, a retired development director for Kane County, testified that the county's 2020 development plan wanted to preserve the water and ecosystem quality of numerous creeks - such as Mill, Tyler and Ferson.
"One of the goals was to preserve that quality as new development occurred and progressed west from Randall Road," he said.
Bus said the county wanted to encourage public, not private utilities, for new developments and rezoned part of the Mill Creek area to allow the water reclamation system to be built.
It cost Shodeen about $8 million to create the district, which relied on large swaths of land, prairie plants and other natural means to filter waste instead of a traditional plant, which has more bricks-and-mortar infrastructure on a smaller area.
Shodeen sold the system to the newly formed water reclamation district in 1995 for about $6.5 million.
Yorkville-based attorney Daniel J. Kramer testified as an expert for the reclamation district, but did not offer a "legal opinion." Kramer said developers who build a water reclamation system may recover some costs, along with a reasonable amount of interest.
Attorneys from the water reclamation district have argued Shodeen has reaped some $2.3 million since the sale of the system through connection fees, rate increases and annexations, which is in excess of the $1.5 million allowed.
Kramer said for Shodeen to have control over the district after its formation and sale was out of the ordinary.
"Once it's the district's property, it's a governmental entity," Kramer said. "I've never seen it cede control to a developer."
Shodeen's attorneys argue the agreement was proper and Pheanis made a previous ruling that the two golf courses could not use non-potable, reclaimed water for irrigation for free.
"In 2012, the district decided not to renew the lease and stopped making payments. Two years after ending the lease, and 19 years after executing the agreements, the district filed this lawsuit alleging the agreements were 'void from inception,'" Shodeen's attorney's argued in an August motion to dismiss the case.
The trial is expected to run until at least Thursday.