03 Prelim. Official Statement - Laserfiche WebLink

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Use of Certain Terms in Other Sections of this Official Statement In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Direct or Indirect Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Bond Ordinance wilt be given only to DTC. THE SYSTEM The City's waterworks and sewer systems (the "System") are described below. Water Supply The City's water supply consists entirely of surface water supplied from two lakes (Lake Crook and Pat Mayse Lake) near the City. The City also owns a third lake, Lake Gibbons, which is used only for recreation. Lake Crook, which is owned by the City, is located on Pine Ceek approximately 3.5 miles northwest of the City. This lake was built in 1922-23 and is still used for water supply. Pat Mayse was built in 1964 and is 9.5 miles northwest of the City. Lake Crook is adjacent to the water treatment plant and has a surface area of 890 acres at over-flow with an estimated storage capacity of 6,800 acre-feet. Under an agreement entered into with the Army Corps of Engineers on January 14, 1965 and amended on June 15, 1978, the City acquired the conservation storage right to utilize 100 percent of the storage space in the project known as Lake Pat Mayse on Sanders Creek. This total storage space is estimated to contain 109,600 acre-feet or 43,800 acre-feet of present water supply and 65,800 acre-feet designated as future water supply. The interest rate set forth for the payments by the City on both the present supply contracts and the future supply is 3.137% per annum. Payments by the City at the present for the 43,800 acre-feet of present water supply are $49,826 annually. These payments began April 1, 1978 and continue until April 1, 2019; and from April 1, 2020 to April 1, 2027, the payments are reduced to $25,211 per year. Payments of interest on the future water supply began to accrue against the City at the end of the 10 year interest free period on September 30, 1977. The City has allowed the interest to accrue and compound as added costs to the project. The initial allocation of costs of the project for this future supply was $1,925,722. A total of $1,686,321 in interest is estimated to have been accumulated at May 31, 1998 (See Notes to the Financial Statements - IV.A. in Appendix D). It is estimated that by the year 2000, the annual interest on the accumulated amount will average an effective interest rate of 6.38% on the original cost allocation, Present City officials estimate that when the compounded interest reaches a point where funds can be obtained in the open market at a rate less than the compounded rate on this project that the City will begin making its interest payments on an annual basis. In addition to the payments for the City's water supply under this agreement, the City is obligated to pay 9.46% of the operations and maintenance costs and 4.22% of the major replacement costs of the project. The City's portion of these costs presently range from $30,000 to $35,000 per year. The City has established a reserve fund (the "Pat Mayse Reserve Fund") into which it I making payments to accrue against the interest accrual for the future supply an to make the payments for the maintenance and operations payments the City is required to pay. At May 31, 1998, this Pat Mayse Reserve Fund contained the sum of $1,726,917. Payments made hereunder constitute operating expenses of the System. Water Treatment Water filtration capacity is provided by one water treatment plant with a present capacity of 36 million gallons per day nominal capacity. Present average daily use is 12.8 million gallons. Water Storage and Distribution Storage facilities are composed of two elevated storage tanks (a 0.5 million gallon tank and a 1.0 million gallon tank); three ground storage tanks (two 2.0 million gallon tanks and one 4.0 million gallon tank) and two booster pump stations; and two clear wells (a 2.0 million gallon well and a 0.5 million gallon well at the Water Treatment Plant). Total storage is 11.5 million gallons, of which approximately 8.5 million gallons is usable. At the present average daily flow of 12.8 million gallons daily (MDG), this would give the City about 16 hours of supply until dry. This time frame is reduced if fire protection reserves are maintained. Water is distributed from the 8.0 million gallon ground storage facility using two booster pump stations with a total of six pumps through approximately 190 miles of waterlines of various types and sizes, all with attendant valves, hydrants, and meters to approximately 10,000 connections. 11