Candlewood Knolls Water Authority

Date: January 9, 2004

To: Candlewood Knolls Water System Users

CONSUMER CONFIDENCE REPORT FOR 2003 (CCR)

(Modified to include latest results)

This is the fifth annual Consumer Confidence Report (CCR). These reports are required by the Connecticut State and U.S. Federal Governments to inform consumers for all public and private water systems about the quality of their drinking water.

Our water system is 21 years old. We provide both seasonal and year round water to subscribers in accordance with their needs. All of our mains are laid below the frost line and capable of year round water service. Our wells are deep artesian wells which predate the existing system. Our water source is basically ground water and comes from the water shed west of Candlewood Lake in the Town of New Fairfield and extends to the New York State Line.

We continue to operate a high quality water system, providing potable water meeting or exceeding all applicable state and federal requirements. During the past year (calendar year 2003) we had several minor incidents relating to our water system, none of which indicate any serious problems with our water quality but each of which required efforts on our part to deal with. These consisted of 2 positive indications of the presence of coliform bacteria, one State citation for failure to test and several incidents of subcriber abuses of the water system. Details are as follows:

1. January through March. Several subscribers experienced frozen pipes which later thawed and leaked severely impacting our water storage capabilities. Fortunately we were able to isolate those areas and maintain water delivery, but not before nearly draining our storage tanks.After investigation it was determined that the subscribers in question did not take proper steps to protect their pipes from freezing and some were engaging in an unsound practice of allowing water to trickle through their pipes in the mistaken belief that this would prevent pipe freezes. Notice was sent to all subscribers that such practices are potentially detrimental to their own pipes and the water system in general and therefore are not permitted.

2. February, 2004: Tested positive for coliform at CK sample port. Follow up tests were all negative indicating that this was a false positive. In accordance with CT state regulations, increased testing was performed for the next few months with negative results.

3. July, 2004: Monthly testing was not performed as required by the State. We received a violation and a $160 fine from the CT DEP for this violation. It was determined that the testing agency we employ had failed to perform the test as contracted for and therefore they were at fault. The testing agency reimbursed the CK Water Authority for the fine. The Water Authority was also required by the State to issue a letter within 1 year of the violation to all subscibers in a format dictated by the State to inform the subcribers of the violation. This letter is attached to this report, in compliance with the State requirements.

4. September, 2004: Tested positive for coliform at CK maintenance sink. After investigation, it was determined that the sink was not properly sanitized for testing. Follow up tests were negative for coliform throughout the system, indicating that the problem was local to the maintenance sink. After proper sanitizing this was corrected. The State DEP accepted these findings indicating a false positive for the system and did not require additional testing.

Additional information about new water rates and future plans for water system upgrades are included in the annual CK mailing, which will also include your 2004 water bills.

The water system is tested by independent, state approved contractors, monthly for physical condition and coliform. In addition to those tests, we test annually for nitrates and nitrites (fertilizer byproducts) and last year we also performed our 9 year asbestos tests. We have not yet received our testing requirements from the State for calendar year 2004, but we expect to be required to perform tests for pesticides, herbicides and other synthetic organic chemicals (SOC's) and for lead and copper as well as the usual monthly physical and coliform and yearly nitrates and nitrites. See the attached report for a summary of the most recent test results for all of the required tests. Copies of all 2003 test reports are available on request at the CK office. Copies of 2003 test reports are also available in electronic ".pdf" format on request.

Our system is maintained and operated by The Candlewood Knolls Maintenance Manager, Dan Hamilton. Mr. Hamilton has undergone extensive training in small water systems and is certified as a small water systems operator by the State of Connecticut . The operation and maintenance of the water system is overseen and coordinated by the Candlewood Knolls Water Authority which consists of Jim Hopkins, Bill Knox, Bernie Neill, Winston Wohr and Don Lynch (chairman), all of whom are CK stockholders, residents and volunteers who lend their specific areas of expertise to the cause of providing excellent quality water to CKC, Inc. stockholders at minimal rates. Operating and Maintenance procedures are defined by a comprehensive manual which was created and is continuously updated by the CK Water Authority. The manual is available for examination by any CKC, Inc. stockholder upon request.

The state requires that all Consumer Confidence Reports (CCR) contain the following statement:

"The source of drinking water (both tap and bottled) includes rivers, lakes, streams, ponds, reservoirs, springs and wells. As water travels over the surface of the land or through the ground, it dissolves naturally occurring minerals and in some cases radioactive material, and can pick up substances resulting from the presence of animal and human activity."

The tests required by State and Federal regulations assure that such contaminants in water are well below levels at which there may be any known or expected health risk.
CANDLEWOOD KNOLLS WATER AUTHORITY

TEST DATA

DEFINITIONS:

MCL - Maximum Contaminant Level - The highest level of contaminant that is allowed in drinking water.

MCLG - Maximum Contaminant Level Goal - The level of contaminant in drinking water below which there is no known or expected risk to health.

TT - Treatment Technique - A required process intended to reduce the level of contaminant in drinking water.

ND - None Detected

Tests Required Monthly

Coliform and Physicals

Coliform PH Color Turbidity Odor

MCL/MGCL 0 6.4-10* 15 5 2

Avg. of 12

monthly tests for 0 6.35 4.44 0.83 0

2003

Latest results (7/04) 0 6.45 50** 8.2** 0

(* Suggested range US Public Health Service)

(** These items are beyond the MCL, but do not affect the potability of the water. These elevated levels are a direct result of the water outage in early July. The tests were taken the day after the water outage occurred. The water outage stirred up sediments in the tanks and lines resulting in higher turbidity and water color. We expect these results to be back to normal and within the State MCL by next month's tests.)

Tests Required Annually

Nitrite and Nitrate

Nitrite Nitrate

MCL 1 10

1/27/03 <.005 1.65

Tests Required Every 3 Years:

Inorganic Chemicals

8/6/2002 21 chemicals All tests under the MCL

Organic Chemicals (VOC's)

6/7/2004 51 compounds All tests under the MCL

Pesticides and Herbicides (SOC's)

6/7/2004 43 compounds All tests under the MCL