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1. $200,000 from Water Fund Reser\ es. These reserves are available due to water rate increases <br />in recent years that have enabled the City to set aside funds for major water system <br />infrastructure rehabilitation. <br />2. $ 277,000 internal loan from the Building Outlay Fund to be repaid from water operating <br />revenues (reflected in water rates) <br />3. $263,000 from assessments on all properties in the Navarre water system service area ($350 per <br />unit X 752 units) This assessment will be payable over a maximum five year period with <br />interest. The estimated yearly payment for this assessment at 8% interest is $90. <br />In the past, water rates w'ere not providing adequate funding for the City's water operating fund. <br />Over the past several years, water rates have been increased on an annual basis to provide adequate <br />funding for system depreciation and effective operation ai.d maintenance of the water system. These <br />new water rates have improved the status of the water fund and have provided cash reserv'es that can <br />be i:*2;d to finance part of the water plant rehabilitation project. <br />Based on current trends, the City is planning on maintaining an annual water rate increase of 2.95% <br />to provide for continued adequate funding for the water system. This will result in a yearly increase <br />of ^proximately $2.50 per quarter an average quarterly bill. <br />Project Schedule <br />The proposed schedule for this project is described below <br />September 23, 1997 Public Hearing <br />October to December 1997 Complete Project Plans <br />January 1998 Open Bids and Hold Assessment Hearing <br />February 1998 Award Construction Contract and Order Equipment <br />September to December 1998 Complete Project Construction <br />A project overview will be presented and public comments solicited at this meeting. Written <br />comments may also be submitted to the City before this public hearing. A copy of the feasibility <br />study for this project is available for review in the City offices during normal business hours. <br />Sincerely; <br />Grego^^. Gappa <br />Director of Public Services <br />1