Tamaroa Village Board Holds Special Hearing On Water Project

</element><element id="paragraph-1" type="body"><![CDATA[Mike Smith of Southern Engineering summed up the project to hook onto the

Rend Lake water system, provide service to about 37 additional customers and

absorb the Consolidated Public Water District in few words.

"We're waiting for the government to tell us what to do," Smith said. "We

expect work to begin in May."

As of Monday evening, Tamaroa had awarded the contract to the lowest bidder,

J.K. Trotter of Mt. Vernon, and agreed to borrow interim financing for the

project from Farmers and Merchants Bank at 3.25 percent interest.

Smith fielded questions about fire hydrants and crop damage. He said that

the flush hydrants that will be installed along with the new water line are

not intended for fire protection. However, some insurance companies

recognize them as a form of fire protection.

As for crop damage, based on a recent project in Hamilton County, Smith said

there will be a lot less crop damage than is anticipated by farmers. The

degree of crop loss depends upon what exactly must be done.

The contractor will keep track of any crop loss and a contingency fund will

compensate farmers for any lost crops.

Financing on the project will come in the form of two loans. The first for

$580,000 at four percent interest. When the project was conceived, the

interest rate on that loan was expected to be 4.5 percent.

The second loan for the remainder of the project will have a 3.25 percent

interest rate.

The village was originally told they would receive a grant for one third of

the project cost of the second phase.

Since the inception of the project, the criteria for grants has changed. A

Federal rule requires that the average water bill in the village cost 1.5

percent of the median household income.

Tamaroa no longer qualifies.

The annual debt service on both loans will be $102,000, paid in two

installments of $51,000 per year for 39 years. The first year's installments

will pay only interest.

Because interest rates have dropped so far, the debt service (total amount

the village will pay back over 40 year period) on the $2 million project at

today's interest rates will cost the same in the long run as borrowing $1.5

million at the interest rates prior to the recession, Marsha Gajewski said

of USDA Rural Development said.

Tamaroa Village Clerk Cheryl Pelker said that Gajewski was working to lower

interest rates even further and hoped to save about $7,000 a year.

Once the project begins, the contractor has 365 days to complete the bulk of

the work. There is an additional 85 days for clean-up.

Work on the tap-on to Rend Lake will begin as soon as the project gets

underway. Smith said he expected the actual tap-on to be complete in the

fall. The change in suppliers from the City of Du Quoin to Rend Lake should

occur at that time.

He reminded new customers that before water service will be provided, they

must pay for the meter connection. Most of the new customers have made a

deposit on the meter connection.