Dear Customers,

The purpose of this informational letter is intended to bring you up to date regarding the status of Lake Wauwanoka Sewer Company (LWSC) progress over the last 18 months. There have been necessary upgrades completed to the plant and collection systems during Phase One out of a total of Five Phases. All this information is to help you understand what’s behind the rate increase coming in February.

LWSC started 18 months ago with an engineering survey that confirmed and detailed the condition of our sewage plant and system as inadequate and deteriorating. Our system was built in 1971 to take care of up to 89 homes. Currently we have 201 homes using that same sewage system. Besides being outdated and at 225% of its original capacity, the system and the equipment is just worn out after 38 years of use. It is important to note that the sheer volume of effluent exceeds what the State DNR authority recommends.

LWSC faces many future requirements. Our Operating Permit is up for renewal in 2012. An estimated schedule of compliance includes:

Feb 2011 - Anti-degradation study (biological impact of plant)

Feb 2012 - Clarifier improvements

Feb 2012 - Disinfections improvements (UV system planned)

Feb 2012 - Lift station improvements (replacement)

Feb 2013 - I & I study

Feb 2013 - Extended aeration improvements

Feb 2013 - WAS & Aerobic digester improvements

Feb 2014 - Gravity collection system improvements (pvc lines)

The above items will likely be required by the MoDNR in order to continue to operate these facilities to the ever-changing standards of the MoDNR and EPA

The basic improvements required just to keep up with the current volume has been estimated to cost $1.2 million dollars. LWSC has gotten three different bids for all five phases. Phase One involved creating a new digester overflow pond. That phase is complete and the overflow pond is now in operation. It can handle up to 335,000 gallons of wastewater but, given the combination of the sad shape of our crumbling old clay and concrete pipes and a record October rainfall of 14 plus inches, the pond alone is still inadequate. In addition, many manholes are collapsing, our three lift stations that move the waste water from our homes to the sewage plant need to be rebuilt and we need a fourth one --our current three not being sufficient. Add to this, the pumps that move the effluent are 38 years old.

When bids for Phase One were projected there was several key items that, at the time were unknown but necessary such as:

Gravel road (Required by AmerenUE to connect service)

Electric pole (Relocating)

Additional engineering/survey (for above items)

Fencing (not included in original phase)

Even with those additional costs, we were able to cut almost $50,000 from the lowest bid, thanks to the knowledge and efforts of Chuck Nitsch.

Recently we had to replace an electrical panel for just one of the lift stations and the cost for that was $1,821. Equipment such as blower motors and pumps can cost thousands of dollars.

LWSC currently has debt service of $192,000. Southern Commercial Bank, financier of the retention pond, is owed $160,000, including interest. Lake Wauwanoka, Inc is owed 38,000 for the loan to de-regulate from the PSC authority and become the not-for-profit company we are today.

Current operating costs of the plant run at $31.25 per month, per resident. This includes the cost of utilities, chemicals, salaries and equipment costs. The current monthly billing of $39.00 produces an extra $8.75 that has been going towards debt reduction. However, it barely pays the interest off and doesn’t leave enough to pay off the loans let alone pay for additional repairs and improvements needed to continue to be able to flush our toilets. If the necessary work isn’t done by 2012, the state DNR shuts us down.

We aren’t trying to paint a bleak picture, we are just communicating the facts. Even if it’s your own home, the roof or furnace or 40-year old clay plumbing pipes, nothing lasts forever.

All our accounting records/books are in order and are audited annually, last year by two of the lake’s sewer customers and Stichling & Associates, CPA’s in Festus.

In the bid we have from Trumpet Engineering Corp, only the necessary items are being considered. Such as equipment like pumps, valves, thousands of feet of main sewage pipes (that even run through our main dam), blower motors and a new clarifier. The collection system by itself costs $700,000--all this is just to continue to be able to receive our permit from DNR to operate. It’s gotten to this shape not because no one wanted to spend the money in years past but rather because nothing lasts forever.

We have a five-phase plan. Phase One, the new retention pond, is completed already. Phase two, a new necessary clarifier, is next. Phase 3, 4, 5 will take place over the next 5 years as we can afford to pay for them. We could consider ourselves lucky compared to the residents at Lake Tishomingo who are paying over $2 million plus for an entirely new system.

All of this information is not new for most of us; we have known for years it was bad news. The good news is in February there will be a rate increase of only an additional $21.00 per month, totaling $60.00 per user. Legally we are a Not for Profit company - we can never make a profit so; you can count on LWSC to first pay down our outstanding loan amounts. LWSC will negotiate the most favorable terms to finance the needed and upcoming required improvements. The Board of Directors of LWSC have and will continue to be responsible members of the community and of the sewer facilities to be able to continue to give you, the residents of LWSC, service that incorporates the cleanest, most ecologically sound waste management practices.

We also have a cost-free LWSewer company web site for your use. To read monthly minutes as posted, see our current finance information and contact us.

Don’t forget to check your gutter downspouts to make sure they empty out on the ground and not into the sewer. Every drop less, helps!



Thank you for your support,
The Board of Directors LWSC