SAGLE VALLEY WATER AND SEWER DISTRICT

| November 19, 2005 8:00 PM

Bonner County, Idaho

LOCAL IMPROVEMENT

DISTRICT NO. 1

NOTICE IS HEREBY GIVEN that Wednesday, November 30, 2005 at the hour of 7:00 o'd5clock P.M., at Sagle Senior Center, 650 Manarch Road, in Sagle, Idaho, has been fixed, pursuant to Resolution No. 0501, adopted on November 9, 2005, (the 'd2Resolution'd3 of Intention'd3) as the time and place for a public hearing at which time the owners of property to be assessed within proposed Local Improvement District No. 1 ('d3LID No. 1'd3) may appear before the Board of Directors (the 'd2Board'd3) of the Sagle Valley Water and Sewer District, of Bonner County, Idaho (the 'd2District), and be heard as to the propriety and advisability of creating LID No. 1 and acquiring and constructing the Project, as hereinafter described, and hear all complaints, protests, and objections which may be made in writing and filed with the Secretary of the Board on or before the said time by any owner of any parcel of land to be assessed.

The boundaries of the proposed LID No. 1 are described in the Resolution of Intention and are incorporated herein by this reference.

A general description of the improvements to be constructed (the 'd2Project'd3), involves:

(a) The consolidation of existing public and private water systems;

(b) The installation of a 250,000 gallon water storage tank;

(e) Installation of approximately ten (10) fire hydrants and related improvements; and

(f) Engineering, legal, accounting, costs of bond issuance, costs of interim financing, costs of financial advice, and other costs incidental thereto. All work will be performed and all materials supplied after the advertisement for bids therefore by giving notice calling for sealed bids for the construction work.

The total Project cost is approximately $1,811,275, all of which shall be borne by and assessed against the properties specially benefited by such improvements. If grant funds are received, they shall be applied to pay a portion of the costs of the Project, serving to reduce assessments. Actual assessments may vary from estimated assessments as long as they do not exceed a figure equal to the increased true and fair value the improvement adds to the property.

The costs and expenses of the Project to be paid from special assessments shall be assessed against the lots and parcels within the proposed LID No. 1 according to the benefits derived method of assessment for said improvements.

Written protests and objections to the creation of LID No. 1 or to the manner of assessment or inclusion of property therein may be filed by any owner of any parcel of land to be assessed with Secretary of the Board of Directors at or before 7:00 o'd5clock P.M. on November 30, 2005, by mailing or delivering a written protest to the Secretary of the Board, Sagle Valley Water and Sewer District, P.O. Box 901, Sagle, Idaho, 83860. In order to be considered by the Board, the written protest must be received on or before November 30, 2005.

DATED this 9th day of November, 2005.

SAGLE VALLEY WATER

AND SEWER DISTRICT,

Bonner County, Idaho

Chairman, Board of Directors

ATTEST:

Beverly Eilerman

District Secretary

Legal SNP#7429

November 19, 26, 2005