1. Stanlick Sewer Treatment Plant Upgrade Implementation Date: September 1, 2008

2. History July 2001 –Discharge Permit Renewal Application March 2002 – Referendum for Addition March 2003 – Start construction for Addition August 2003 – NJDEP issues new permit –Permitted Flow reduced, new limits for Copper, Zinc and Phosphorus September 2003 – District Adjudicates Permit conditions 2004 – District conducts process evaluations on STP 2005 – District evaluates options to meet new limits

3. Timing @ 6 months required to prepare design & contract documents NJ DEP will require 3 – 6 months for permit review & approvals, which are complicated by the NJ Highlands Legislation Minimum 1 year to construct facilities

4. Design Options Alternative 1 – Modify 50-year old STP –Install new chemical addition & filtration at existing activated sludge plant Alternative 2 – Construct New STP –Install Membrane Bioreactor (MBR) activated sludge plant with chemical addition Alternative 3 – Discharge to Groundwater –Install new MBR plant & groundwater disposal field Hauling, Septic Disposal & Connection to regional treatment facility were also considered

5. Construction Cost Estimates Alternative 1 – Modify STP –$1.6 Million Alternative 2 – New STP –$1.6 Million Alternative 3 – Groundwater Discharge/New STP –$3.0 Million + Soft Costs @30%

6. Project Schedule Spring 2006 – Initiate design September 2006 – Submit Contract Documents & Permit Applications to NJ DEP January 2007 – Advertise for Bids April 2007 – Start Construction April 2008 – Complete Construction May – July 2008 – Start-up & Testing September 1, 2008 – Meet Final Permit Limits

7. Funding Options Build into 2006-2007 district budget within Cap –Displaces $350K existing programs Separate ballot referendum question –Eligible for Debt Service

8. Funding Sources NJ Environmental Infrastructure Trust - low interest (~2%) loan with up to a 20 year term. Morris County Improvement Authority can provide a market rate loan (~4%). Traditional Issuance of Bonds – Eligible for State Aid Debt Service

9. Consequences If Referendum Fails Existing STP will not consistently meet new permit limits Discharge violations will result in mandatory civil administrative penalties Name of Violator will be published in Newspaper Mandatory Penalties range from $1,000 - $50,000 per violation

10. Grant Funds Available Township has a US EPA $1.1 Million Grant, of which 55% funded through EPA and 45% will need to be financed locally through the Trust or County or Traditional Bond Issuance program.

11. Range & Scope of Potential Cost to Taxpayers Minimum Exposure = $1,495,000 Maximum Exposure= $2,100,000