Bloomfield Water and Wastewater Improvement General Notes

Bloomfield Water and Wastewater Improvement General Notes:

What is the purpose of this public meeting?

The primary purpose of this meeting is to alert the residents of the City of Bloomfield about the upcoming bond election that will be on the August ballot. This issue will address the City's current water and wastewater deficiencies and allow the City to seek the lowest possible interest rates.

Why do we need a $10,000,000 bond election?

The bond election will allow the City of Bloomfield to seek the lowest possible rates. The City has the authority to pursue the project without a bond election and use open market rates. However, by doing so, this would lead to higher interest rates and lead to higher user rates for each customer.

The $10,000,000 bond will consist of work associated with both water and wastewater improvements. It is currently estimated that it will take approximately $5,000,000 to perform the necessary work to replace the City's current water distribution system (i.e. pipes, valves, meters, hydrants, etc.). The wastewater treatment plant upgrades has been estimated at $3,500,000 to allow the facility to come into compliance with future effluent limitations that must be met. These two projects total $8,500,000 with minimal contingency. The remaining $1,500,000 is being sought as contingency in the event unforeseen circumstances are discovered during design or construction.

Why are these projects necessary?

Water - The majority of the City's current water distribution system (piping, valves, hydrants, etc.) were installed in the 1950's or before. The old lines in most cases have exceeded their design life and the City experiences constant line breaks. The line breaks lead to the disturbance of decades-old buildup of material on the inside of the pipe. This issue leads to the discolored water and boiled water orders.

Wastewater - The EPA and MDNR have recently begun the implementation of more stringent effluent limitations for wastewater treatment facilities. In the past the City of Bloomfield has not had to address ammonia. The City of Bloomfield has received a draft copy of their new operating permit, which will soon become effective. This permit requires that the City upgrade their current facility and will require the City to meet ammonia limits to be met within the next five years. Unfortunately the City's existing system does not have the technology capabilities to meet the more stringent effluent limitations.

What work is planned?

Water - The proposed plan at this time consists of replacing all water lines throughout the City limits. This will consist of replacing approximately 80,000 linear feet of water line. Along with the line work, new hydrants, gate valves, and meters will also be replaced. There will be no work done between the meter and the house. The work will also consist of rehabilitation and painting of the existing water towers.

Wastewater - Currently the work being planned is primarily associated with upgrades to the City's existing lagoon facility, which will allow the facility to meet the more stringent effluent limitations that are being imposed on the City by MDNR and EPA.

All of the options that have been discussed pertain to a loan. Is there a possibility that the City could receive grant funds?

Many of the agencies that deal with grant funding look at the low to moderate household income (LMI) of a community to determine the relevance of grant funding. In order to qualify for grant funding the LMI must be greater than 51%. The City of Bloomfield's LMI does not allow them to qualify for typical block grants. However, if the bond issue passes the City may be able to obtain a portion of the project funding in terms of a grant. Typical grants will be obtained to keep user rates at 2% of the MHI ($23,500) based on 5,000 gallons of usage.

What are my rates going to be?

We have prepared some preliminary calculations based on a three different interest rates for a $5,000,000 water project and a $3,500,000 wastewater project. Rates also have been estimated based on a 20 year and 35 year loan. The interest rates we used were 5%, 3.5% and 2%. These values are only estimates at this time and could change depending on the final project cost as well as the interest rate at the time of bond closing. To see the full list of rates see attached summary.

The rates structure shown is based off the annual debt repayment being divided amongst 800 water users and 775 wastewater users to establish the base payment. The existing and planned operational and maintenance cost was divided by the same number of users and then divided by 5 to determine the cost per 1,000 gallon. This assumes that the average customer uses 5,000 gallons per month.

What impacts will construction have on residents?

Water - The proposed plan at this time will minimize the impact on residents to the greatest extent as possible. There will be periodic times in which the residents will be without water. This will primarily occur after the new line has been installed, tested, and sampled and will occur when the changeover occurs from the current pipe to the new water pipe.

During construction the area in which the proposed pipe will be installed will be disturbed. The contractor will be responsible to repair any disturbed areas to original conditions. This is also the case for roadway and driveway crossings. Roadway and Driveway crossings will be completely filled with rock, but may remain rock for a few weeks until the contractor has substantial areas to complete at one time. Driveway crossings will be coordinated with property owners.

Wastewater - The planned wastewater work will be isolated to the existing facility and should not have any effect on the City's current operational or the residents.

City of Bloomfield, Missouri

Payment Estimates

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EXHIBIT A (THIS IS NOT A REAL BALLOT)

NOTICE OF BOND ELECTION

CITY OF BLOOMFIELD, MISSOURI

Notice is hereby given to the qualified voters of the City of Bloomfield, Missouri (the "City"), that the Board of Aldermen of the City has called an election to be held in the City on Tuesday, August 5,2014, commencing at 6:00 a.m. and closing at 7:00 p.m., on the question contained in the following sample ballot:

OFFICIAL BALLOT

BOND ELECTION

CITY OF BLOOMFIELD, MISSOURI

AUGUST 5, 2014

QUESTION

Shall the City of Bloomfield, Missouri, issue its Combined

Waterworks and Sewerage System Revenue Bonds in the amount of

______($______) for the purpose of acquiring,

constructing, extending and improving the combined waterworks

and sewerage system of the City and acquiring any land and

easements necessary therefore, the cost of operation and maintenance

of the system and the principal of and interest on said bonds to be

payable solely from the revenues derived by the City from the

operation of its combined waterworks and sewerage system,

including all future extensions and improvements thereto?

YES _____

NO _____

INSTRUCTIONS TO VOTERS: If you are in favor of the question, place an X in opposite "YES."

If you are opposed to the question, place an X in the opposite "NO."

The election will be held at the following polling places in the City:

PRECINCTPOLLING PLACE

______

______

DATED: ______, 2014.

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Clerk of the CountyCommission

Stoddard County, Missouri