AN UPDATE ON THE DRINKING WATER SUPPLY FOR CEDAR KEY

On May 28, 2012, the Cedar Key Water & Sewer District (CKWSD) started noting a rise In one of the parameters that are monitored daily at the water plant. The meter was recalibrated and the District staff continued to monitor the water quality for the next several weeks. After evaluating the data at hand, it was determined additional lab work needed to be done to verify what we were afraid might be happening - specifically, salt water Intrusion In our wells.

Lab results confirmed this to be the case, and at a special meeting on June 19, a " Do Not Consume" advisory was issued for customers of the CKWSD water supply system, effective immediately. Since that time, the District has been pursuing with diligence a solution to this problem. The salt water intrusion comes in the form of total dissolved solids, chlorides, sodium, and other elements. The only known treatment process effective in the removal of these elements is membrane technology. The District evaluated the possibility of immediately renting mobile treatment units, but further analysis showed that a unit could be purchased outright for the same or less cost associated with renting for a one year period, the minimum it will take to develop a more permanent solution to the problem.

On June 26, 2012 another special meeting was held at the Community Center, with approximately 100 citizens in attendance, to discuss authorizing the emergency purchase of a membrane system, specifically a reverse osmosis (RO) skid and other required components. Since then, requests for quotations were developed and distributed for the purchase of two 125 gpm RO skids. Proposals were received and reviewed, with an award made on Monday, July 2nd. On the following day, members of the District staff met with representatives of the RO manufacturer in Cedar Key and a purchase order was executed. Expected delivery date for the skids is during the week of July 16th.

During the next two weeks, while we await delivery and installation of the RO skids, the district will issue requests for quotes for pumps, control panels, electrical work, and chemical feed systems, and expect to make awards for those items for immediate delivery. Our engineers are obtaining an emergency Department of Environmental Protection permit for the treatment units (verbal permission already obtained), and the District will be obtaining a Levy County building permit and new power supply. Once all of this is in place, satisfactory bacteriological clearances obtained, and with permission from the regulatory agencies, we expect to start using this system to treat the drinking water supply. We expect this to be a matter of weeks - not months.

Also occurring on June 261h was a meeting with key officials of the USDA Rural Development State Office to discuss possible permanent financing of the needed Improvements. All solicitations for proposals and subsequent awards have been in strict accordance with USDA guidelines. While we expect USDA approval, we have also reached out to other government funding agencies to discuss the problem. In the meantime, Interim financing has been obtained from Drummond Bank, after a solicitation of both banks in Cedar Key.

The District is moving forward as quickly as possible on this crisis, while observing all proper protocol forsolicitations and awards of government work. It Is our good fortune that we already had on hand aknowledgeable and experienced team of professionals, so a learning curve on the problem was not afactor. The District`s General Manager, Jack Hotaling, the Board Chairman, David Beach, the consultingengineers, Joe Mittauer and Harry Kaufmann, are all state licensed professional civil engineers. Mittauer & Associates has extensive expertise In the design and implementation of RO systems, including most recently, the new water plants in Yankeetown and Fowler`s Bluff. Additionally, Treavor H. Boyer, Ph.D. Assistant Professor of Environmental Engineering Sciences at the University of Florida has offered input and assistance along with his team of researchers, which we have gratefully accepted.

It would be irresponsible to suggest that this additional layer of treatment will not come at a cost, but we are committed throughout the process of making it as nominal as possible. This equipment does consume more power than our current process. You, the District`s customers, have the ability to directly impact those costs by choosing to conserve at every available opportunity. The less water we must treat, the less power we consume.

In the meantime, you can continue to obtain drinking water from the water buffaloes and at the fire station. Please remember to reuse and recycle your plastic containers. Please check our website www.ckwater.org for continued updates and developments.