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FY 07-08 BAWA Adopted BudgetBaytown Area Water Authority (BAWA) ANNUAL PROGRAM OF SERVICES 2007 -08 ADOPTED BUDGET Submitted To Baytown Area Water Authority Board August 30, 2007 Robert D. Leiper Interim General Manager Fred Pack Plant Manager Rhonda L. Young Director of Finance BAYTOWN AREA WATER AUTHORITY BOARD OF DIRECTORS ROBERT L. GILLETTE, President DAN MUNDINGER, Vice President PETER R. BUENZ, Secretary KNOX BEAVERS DAN CONEJO BAYTOWN AREA WATER AUTHORITY 7425 Thompson Pond, aaymwn, Texas 77521 -1056 (281) 4263517 FAX (281) 126 -3519 August 30, 2007 President and Members of the Baytown Area Water Authority Board Baytown Area Water Authority Baytown, Texas It is my pleasure to present the Adopted 2007 -08 Budget for the Baytown Area Water Authority (BAWA) Board. The Budget sets forth the revenues and appropriations for the fiscal year October 1, 2007 through September 30, 2008. The financial guidance provided by the Board has resulted in SAWA's strong financial position exhibited by a stable working capital balance. The use of non - recurring revenues to fund a portion of the capital improvement program will reduce the amount of future debt issues. The construction of a second water supply line serving the City of Baytown is funded partially from non - recurring revenues to reduce the amount of debt that is issued. This project will provide reliability to SAWA's largest customer, the City of Baytown, which currently constitutes approximately 86% of SAWA's water sales. BAWA was approved for and has closed on a loan with the Texas Water Development Board (TWBD) for funding of the second water supply line and Phase II improvements. The loan received from the TWDB Drinking Water State Revolving fund has interest rates ranging from 2.25% to 3.15% as compared to a range of 4.00% to 6.00% interest rate for insured bonds sold on the market. The City of Houston notified BAWA of a rate increase effective April 1, 2007 for untreated water purchased from the City of Houston. The rate increased 2.8% from $0.4123 to $0.4238 per 1,000 gallons. The previous rate increase was in 2006. Also, a 3.6% increase in the cost of raw water from the City of Houston is anticipated effective April 1, 2008 and is included in the adopted budget. Revenue estimates for water sales in the adopted budget are based upon sales in a typical year. A rate increase was projected in the 2001 BAWA Rate Study for fiscal year 2005 for implementation of the capital improvement program (CIP), which anticipated construction of the Phase II regulatory/disinfection improvements. The second water supply line was not included in the CIP at that time. Since TWDB's loan program reimburses BAWA as funds are expended, the full debt payments will not occur until the project is complete. As of June 30, 2007, $6,990,000 of the total $13,290,000 has been funded. Funding requests are submitted to TWDB as invoices are received from the contractor. The adopted budget includes a $0.07 per 1,000 gallon rate increase (approximately 5 %) for BAWA's customers to adjust for the two untreated water rate increases and debt associated with the construction of the new water supply line. Rates will be adjusted in future budgets to reflect funding needs based on actual debt issued during the previous year. This will allow the rate increase to coincide closely with the actual construction. It will also provide for time contingencies that may be required due to the complexity of the project that may extend the construction time of the project. Rate increases will be based on actual construction progress. The City of Baytown Water and Sewer Fund pays for the cost of the City to tie -in to the new BAWA line to pay for their portion of the project. The City's portion of the project costs are estimated to total $1,000,000. A continuing transfer from the City's water and sewer fund is included for that portion of the debt payment. In January of 2006, the EPA approved the Long Term 2 Enhanced Surface Water Treatment (LT2) Rule and the Stage 2 Disinfection Byproducts (DBP) Rules. With respect to the LT2 rule, systems that serve a population of less than 100,000 must begin the monitoring schedule in January 2007. The schedule is as follows: Submit Sampling Plan January 1, 2007 Begin source water monitoring April 1, 2007 Report bin classification October 1, 2009 Comply with additional treatment requirements (Ozone) October 1, 2012 The data collected during the 2 year monitoring period will determine if Ozone should be implemented at the SAWA surface water treatment plant. The Stage 2 DBP rule pertains to the City of Baytown distribution system only. BAWA has received the Small System waiver and does not have to monitor the by- products listed in the rule. We have completed the first two steps in this process. The current and planned major improvements at BAWA were designed to provide the foundation for growth in sales and continued reliable service of the highest quality water for our customers. I look forward to reviewing this document with you. SincSinc eIL /%� Robert D. Leiper Interim General Manager MAJOR BUDGET ISSUES Fiscal Year 2007 -08 BAYTOWN AREA WATER AUTHORITY This fund accounts for the activities of the Baytown Area Water Authority (BAWA). BAWA is a water authority created by the Texas Legislature to supply water for the City of Baytown (City) and surrounding communities. BAWA services a total of eight customers with the City as the largest customer, generating approximately 89% of BAWA's annual sales. BAWA is a separate legal entity; however, it is considered a component unit of the City. Since it began operating, BAWA has not experienced shortages of raw water supply to the plant nor interruptions to service to its customers. REVENUES The 2007 -08 adopted budget estimates sales of $6,697,893 for 12.5 million gallons per day (MGD) based upon an average rainfall year. Fluctuations to average rainfall can significantly impact actual sales. A $0.07 rate increase is in the adopted 2007 -08 budget. The current rate structure of $1.39 per 1,000 gallons for the City of Baytown and $1.42 per 1,000 gallons for customers outside the city are to increase to $1.46 and $1.49; respectively, to cover the increased cost of operations, including the purchase of raw water. This increase in rates is expected to generate additional revenue in the amount of $320,251. Since the inception of the BAWA plant in April 1981, there have been rate increases in 1988, 1993, 1999 and 2007. EXPENDITURES Total operating expenditures for the adopted 2007 -08 budget are $4,798,850, an increase of $226,301 from the 2006 -07 budget. The depreciation expense increased to recognize one full year of depreciation on new improvements. The adopted 2007 -08 budget includes a transfer to General Fund for an indirect cost allocation, which is to reimburse the City for administrative services such as Human Resources, Fiscal Operations, Legal and Information Technology Services. Highlights of major operating changes were as follows: • Increase in personnel services $ 55,525 • Increase in supplies (Primarily raw water rate increase) 52,099 • Increase in maintenance 80,200 • Increase in services 38,477 Raw Water Supply Cost — BAWA purchases raw water from the City of Houston. The raw water supply contract with the City of Houston is in effect through the year 2040 and sets the maximum amount of raw water to be delivered to the BAWA plant at 15.8 MGD without penalties. BAWA received notice of a 2.8% rate increase from $0.4123 to $0.4238 effective April 1, 2007. An additional increase of 3.6% is anticipated in April 2008. The surcharge for water purchased over the 15.8 MGD is nominal at this time. Debt Service — The debt service requirement for existing debt for the adopted 2007 -08 budget is $2,167,486. MAJOR BUDGET ISSUES Fiscal Year 2007 -08 CAPITAL IMPROVEMENT PROGRAM The Capital Improvement Program for BAWA is funded primarily from bonds. The adopted 2007 -08 budget includes funding from retained earnings designated for capital improvements for the second water supply line project. Utilizing non - operating funds in the CIP program will reduce the amount of debt issued in the future. Phase II of BAWA's plant improvement is on hold pending the Texas Commission on Environmental Quality (TCEQ) study to develop new recommendations pertaining to disinfection programs (Ozone). Phase II was originally estimated at $6,000,000. Final costs will be developed after TCEQ issues final regulations. Implementation will be planned in the fiscal year following the issuance of final regulations that will enable the BAWA Board to review implementation plans during the annual budget process. There is currently one line supplying water to BAWA's major customer, the City of Baytown. The BAWA board approved a contract for the design for the second line in 2004. The design is complete and has been approved by TWDB and the BAWA Board and the City Council awarded the contract in the Spring of 2006. The project is partially funded from non - recurring revenues and CIP funds to reduce the amount of debt that is issued. TWDB debt has been issued for construction. The total estimated cost is $10.5 million for the BAWA line with $1,000,000 funded by the City of Baytown for extending their lines to connect with the new supply line. WORKING CAPITAL In order to maintain fiscal stability, governmental entities maintain a working capital balance to meet daily liquidity needs. Appropriate levels of working capital vary from entity to entity based on the relative impact of particular circumstances or financial conditions. The goal for working capital is 60 to 90 days. Working capital is defined as current assets (e.g., cash, investments and accounts receivable) less current liabilities (e.g., accounts payable). The working capital in the adopted budget is estimated to be 65 days as of September 2008. Working capital in excess of the targeted goal provides contingency funding for current projects and unforeseen expenses. 5 BAYTOWN AREA WATER AUTHORITY FUND 510 BUDGET SUMMARY BY FUND Actual Budget Estimated Adopted 2005 -06 2006 -07 2006 -07 2007 -08 Revenues 917,842 924,960 924,960 980,485 Sale of Water - Baytown $ 4,906,092 $ 5,468,200 $ 4,668,905 $ 5,784,448 Sale of Water - Other 541,130 701,200 606,941 913,445 Interest Revenue 80,801 72,000 67,825 68,000 Mineral Royalties 156,201 144,000 15,000 15,000 Miscellaneous 8,330 5,000 2,400 2,400 Transfer From Water & Sewer Fund 68,000 68,000 68,000 68,000 Total Revenues 5,760,554 6,458,400 5,429,071 6,851,293 Expenditures Personnel Services 917,842 924,960 924,960 980,485 Supplies 2,353,237 2,660,862 2,211,400 2,712,961 Maintenance 279,129 177,500 198,500 257,700 Services 706,473 809,227 748,768 847,704 Total Operating 4,256,681 4,572,549 4,083,628 4,798,850 Capital Outlay 14,642 - - 13,000 Transfers Out - Debt Service 1,308,791 2,211,281 1,873,720 2,172,486 Transfers Out - General Fund 6,000 50,000 50,000 50,000 Transfers Out - Capital Improvement 316,201 - - - Contingency - 40,000 - 40,000 Total Expenditures 5,902,315 6,873,830 6,007,348 7,074,336 Excess (Deficit) Revenues Over Expenditures Working Capital - Beginning Working Capital - Ending No. of Working Capital Days (141,761) (415,430) (578,277) (223,043) 2,204,019 1,550,008 2,062,258 1,483,981 $ 2,062,258 $1,134,578 $ 1,483,981 $1,260,938 6 128 60 90 65 BAYTOWN AREA WATER AUTHORITY FUND 510 OPERATING RESULTS Actual Budget Estimated Adopted 2005 -06 2006 -07 2006 -07 2007 -08 Operating Revenues Sale of Water - Baytown $ 4,906,092 $ 5,468,200 $ 4,668,905 $ 5,784,448 Sale of Water - Other 541,130 701,200 606,941 913,445 Sale of Property 8,330 51000 2,400 2,400 Transfer From Water & Sewer Fund 68,000 68,000 68,000 68,000 Total Revenues 5,523,552 6,242,400 5,346,246 6,768,293 Operating Expenses Personnel Services 917,842 924,960 924,960 980,485 Raw Water Purchases 1,852,610 1,991,572 1,620,000 2,046,571 Supplies 500,627 669,290 591,400 666,390 Maintenance 279,129 177,500 198,500 257,700 Services 706,473 849,227 748,768 887,704 Depreciation 578,381 635,000 571,180 575,000 Transfers Out - General Fund 6,000 50,000 50,000 50,000 Total Expenditures 4,841,062 5,297,549 4,704,808 5,463,850 Operating Income 682,490 944,851 641,438 1,304,443 Non - Operating Interest Revenue and Other 237,002 216,000 82,825 83,000 Interest Expenses and Other (675,956) (936,281) (608,770) (897,486) Transfers Out - Capital Improvement (316,201) - - Total Non- Operating Expenses (755,155) (720,281) (525,945) (814,486) Net Income $ (72,665) $ 224,570 $ 115,493 $ 489,957 to Revenues Income $ (72,665) Principal Debt Retirement (632,835) Capital Outlay (14,642) Depreciation 578,381 fenues Over (Under) Expenditures $ (141,761) $ 224,570 $ 115,493 $ 489,957 (1,275,000) (1,264,950) (1,275,000 (13,000 571,180 575,000 BAWA - CAPITAL IMPROVEMENT PROGRAM FUND 518 BUDGET SUMMARY BY FUND Actual Carried - forward Budget Funds Total Estimated Carried - forward Base Adopted 2005 -06 2005 -06 2006 -07 Transfer 2006 -07 2006 -07 2006 -07 2007 -08 2007 -08 o.. Transfer From BAWA $ 316,201 $ - $ - $ _ $ _ $ - $ - $ - $ _ Interest Revenue 88,789 75,000 - 75,000 100,000 - 75,000 75,000 Total Revenues 404,990 - 75,000 - 75,000 100,000 - 75,000 75,000 Expenditures Debt Issuance Costs 62,959 - - - - _ - - - BAWA Admin Bldg - A/C Repairs 160,000 - - 160,000 160,000 - - - BAWA Second Supply Line 115,439 517,130 - - 517,130 517,130 - - - Highlands Tie -In Meter - - - 11,750 11,750 11,750 - - - BAWA Raw Waterline - - - 76,500 76,500 76,500 - - New Capital Project Initiatives 1,114,784 235,086 (88,250) 1,261,620 - 1.261,620 120,476 120,476 Total Expenditures 178,398 1,791,914 235,086 - 2,027,000 765,380 1,261,620 120,476 120,476 Excess (Deficit) Revenues Over Expenditures 226,592 (1,791,914) (160,086) - (1,952,000) (665,380) (1,261,620) (45,476) (45,476) 00 Retained Earnings - Beginning 1,745,884 1,972,476 235,512 - 1,972,476 1,972,476 1,307,096 45,476 45,476 Retained Earnings - Ending $1,972,476 $ 180,562 $ 75,426 $ - $ 20,476 $ 1,307,096 $ 45,476 $ - $ - CITY OF BAYTOWN PROGRAM SUMMARY 3070 BAYTOWN AREA WATER AUTHORITY BAWA Program Description Operate and maintain a 26 MGD design capacity surface water treatment facility with a projected flow of 12.50 MGD in fiscal year 2007 -2008 and a certified bacteriological laboratory, which currently serves 8 customers with the City of Baytown using 88% of production. Following and complying with the Texas Commission on Environmental Quality (TCEQ) Rules and Regulations for Public Water Supplies adopted 1992, National Primary Drinking Water Regulations, Safe Drinking Water Act, Surface Water Treatment Rule, and the Criteria for Certified Bacteriological Laboratories. Providing BAWA's customers with high quality, safe drinking water and consistent water pressure for fire protection. Major Goals • Maintain water quality necessary to be classified as "Meeting Optimum Corrosion Control" by TCEQ. Workload Measures 1. Customer Connections 2. Average MGD of water produced 3. Customer Service calls • Maintain "Superior Public Water System" status. • Maintain Optimization Standards as classified by TCEQ's Texas Optimization Program. • Operate the bacteriological laboratory in a manner that exceeds the requirements as set fourth by Texas Department of Health. • Develop and maintain a staff of highly trained water professionals to better serve customers. Major Objectives • Produce 12.50 MGD of water. • Maintain finished water turbidity consistently less than 0.1 NTU. • Provide QA/QC and mathematical training for personnel. Actual Budget Estimated Projected 2005 -06 2006 -07 2006 -07 2007 -08 8 8 8 8 11.81 12.50 12.50 12.50 6 10 10 10 Performance Measures 1. Days without interruption of service 365 365 365 366 2. Days finished water <0.1 NTU 365 365 365 366 3. Customer Service Calls Investigated 6 10 10 10 4. Days above 12.50 MGD 177 220 200 200 9 CITY OF BAYTOWN SERVICE LEVEL BUDGET 3070 BAYTOWN AREA WATER AUTHORITY Actual Budget Estimated Adopted Acct# Acct Description 2005 -06 2006 -07 2006 -07 2007 -08 7100 Personnel Services 71031 Contract Personnel Services $ 917,842 $ 924,960 $ 924,960 $ 980,485 Total Personnel Services 917,842 924,960 924,960 980,485 7200 Supplies 72001 Office 2,712 4,000 4,000 4,000 72002 Postage 341 400 400 2,940 72007 Wearing Apparel 3,224 4,700 4,700 5,000 72016 Motor Vehicle 15,222 19,000 10,000 12,000 72021 Minor Tools 871 1,800 1,800 1,800 72026 Cleaning & Janitorial 1,289 2,000 2,000 2,000 72031 Chemical 453,162 601,740 545,000 603,000 72032 Medical 391 600 500 600 72041 Educational 1,227 1,300 1,000 1,300 72051 Untreated Water 1,852,610 1,991,572 1,620,000 2,046,571 72055 Laboratory Supplies 22,188 33,750 22,000 33,750 Total Supplies 2,353,237 2,660,862 2,211,400 2,712,961 7300 Maintenance 73011 Buildings 3,252 3,000 2,500 2,500 73021 Filtration Plants 10,730 20,000 20,000 55,000 73025 Streets Sidewalks & Curbs 573 500 - 500 73027 Heating & Cooling System 9,308 8,000 9,000 6,500 73028 Electrical Maintenance 53,645 58,000 68,000 79,000 73041 Furniture & Fixtures 215 1,000 1,000 1,000 73042 Machinery & Equipment 200,503 80,000 95,000 106,200 73043 Motor Vehicles 903 6,500 3,000 6,500 73045 Radio & Testing Equipment - 500 - 500 Total Maintenance 279,129 177,500 198,500 257,700 7400 Services 74001 Communication 275 3,540 3,540 3,900 74002 Electric Service 623,028 709,500 642,890 709,500 74011 Equipment Rental 5,530 12,400 7,000 12,400 74021 Special Services 25,499 45,370 45,370 63,820 74022 Audits 4,657 4,843 4,843 10,221 74036 Advertising 628 700 500 700 74041 Travel & Reimbursables 3,105 4,000 4,000 4,000 74042 Education & Training 8,479 12,325 12,325 14,220 74051 Rents 6,262 - - - 74071 Association Dues 839 800 800 800 74210 General Liability Insurance 5,215 2,573 4,947 4,724 74220 Errors & Omissions 7,292 3,597 6,695 6,730 74240 Auto Liability 663 525 698 767 74242 Auto Catastrophic 27 22 27 27 74271 Mobile Equipment 332 224 352 370 74272 Real & Personal Property 14,642 8,727 14,695 15,430 74280 Bonds - 81 86 95 Total Services 706,473 809,227 748,768 847,704 10 CITY OF BAYTOWN SERVICE LEVEL BUDGET 3070 BAYTOWN AREA WATER AUTHORITY Actual Budget Estimated Adopted Acct# Acct Description 2005 -06 2006 -07 2006 -07 2007 -08 Total Operating 4,256,681 4,572,549 4,083,628 4,798,850 8000 Capital Outlay 84042 Machinery & Equipment - - - 13,000 84043 Motor Vehicles 14,642 - - - Total Capital Outlay 14,642 - - 13,000 9000 Other Financing Uses 92101 To General Fund 6,000 50,000 50,000 50,000 91511 To BAWA Debt Service 1,308,791 2,211,281 1,873,720 2,172,486 91518 To BAWA Capital Improv 316,201 - - Total Other Financing Uses 1,630,992 2,261,281 1,923,720 2,222,486 9900 Contingencies 99001 Contingencies - 40,000 - 40,000 Total Contingencies - 40,000 - 40,000 TOTAL DEPARTMENT $ 5,902,315 $ 6,873,830 $ 6,007,348 $ 7,074,336 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS LONG TERM DEBT AMORTIZATION SCHEDULES Principal Revenue Amount of Outstanding Bonds Issue Oct. 1, 2007 Requirements Fiscal Year 2007 -08 Principal Outstanding Sept. 30, 2008 Principal Interest Total Series, 1997 $1,350,000 $ 255,000 $ 255,000 $ 11,985 $ 266,985 $ - Series, 1999 9,095,000 2,010,000 265,000 110,260 375,260 1,745,000 Series, 2002 3,800,000 3,160,000 180,000 161,349 341,349 2,980,000 Series, 2006 13,290,000 12,695,000 530,000 349,280 879,280 12,165,000 Series, 2007 6,505,000 6,505,000 40,000 264,613 304,613 6,465,000 1,590,000 Total $ 24,625,000 $ 1,270,000 $ 897,486 $ 2,167,486 $ 23,355,000 Combined BAWA Debt, All Series Total $ 24,625,000 $ 7,769,150 $ 32,394,150 Combined BAWA Debt, All Series pinterest Debt Requirement to Maturity 2.500 ■Principal .ST 2.000 C 1.500 o 1.000 E 0.500 0.000 - cP° d�' o °° o'`, o'`�" o'`� o °°` o'``' o`_ o', o'`o o;`l 4. Z Z Z �l. Z 4• 4. 4. 9. 2 R. °L 'L Z 'L '1. R. �L Fiscal Year 12 Debt Requirements to Maturity Fiscal Principal Total Total Year 5101 Interest Requirement 2008 $ 1,270,000 $ 897,486 $ 2,167,486 2009 1,320,000 843,526 2,163,526 2010 1,375,000 787,706 2,162,706 2011 1,425,000 733,281 2,158,281 2012 1,490,000 676,126 2,166,126 2013 1,535,000 624,301 2,159,301 2014 1,590,000 569,911 2,159,911 2015 1,645,000 512,621 2,157,621 2016 1,710,000 452,691 2,1 62,691 2017 1,765,000 389,961 2,1 54,961 2018 1,830,000 324,799 2,154,799 2019 11900,000 254,346 2,154,346 2020 1,030,000 180,658 1,210,658 2021 735,000 143,588 878,588 2022 755,000 122,273 877,273 2023 775,000 100,000 875,000 2024 800,000 76,750 876,750 2025 825,000 52,350 877,350 2026 850,000 26,775 876,775 Total $ 24,625,000 $ 7,769,150 $ 32,394,150 Combined BAWA Debt, All Series pinterest Debt Requirement to Maturity 2.500 ■Principal .ST 2.000 C 1.500 o 1.000 E 0.500 0.000 - cP° d�' o °° o'`, o'`�" o'`� o °°` o'``' o`_ o', o'`o o;`l 4. Z Z Z �l. Z 4• 4. 4. 9. 2 R. °L 'L Z 'L '1. R. �L Fiscal Year 12 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Fiscal Interest Principal Interest Interest Annual Principal Total Year Rate Due 5101 Due 5101 Due 11101 Requirement Outstanding Outstanding Revenue Bond, Series 1997 Date of Issue - December 4 1997 1999 Date of Issue - November 1, 1999 Term -10 Years 2000 $ - $ 33,503 $ 33,503 $ 67,006 $ 1,350,000 $ 1,715,523 2001 $ 2,612,145 - 33,503 33,503 67,006 1,350,000 1,648,516 2002 $ 2,010,000 - 33,503 33,503 67,006 1,350,000 1,581,510 2003 7.375% 200,000 33,503 33,503 267,006 1,150,000 1,314,504 2004 4.375% 205,000 26,128 26,128 257,256 945,000 1,057,248 2005 4.450% 215,000 21,644 21,644 258,288 730,000 798,960 2006 4.550% 230,000 16,860 16,860 263,720 500,000 535,240 2007 4.600% 245,000 11,628 11,628 268,255 255,000 266,985 2008 4.700% 255,000 5,993 5,993 266,985 - - $ 1,350,000 $ 216,264 $ 216,264 $ 1,782,529 Revenue Bond, Series 1999 Date of Issue - November 1, 1999 Term - 20 Years $ 2,612,145 2007 7.000% $ 245,000 $ 63,705 $ - $ 308,705 $ 2,010,000 2,303,440 2008 7.000% 265,000 55,130 55,130 375,260 1,745,000 1,928,180 2009 5.700% 550,000 45,855 45,855 641,710 1,195,000 1,286,470 2010 5.000% 585,000 30,180 30,180 645,360 610,000 641,110 2011 5.100% 610,000 15,555 15,555 641,110 - - $ 2,255,000 $ 210,425 $ 146,720 $ 2,612,145 Revenue Bond, Series 2002 Date of Issue - January 10, 2002 Term -19 Years $ 6,040,949 2002 $ - $ 81,895 $ - $ 81,895 $ 3,800,000 5,959,054 2003 - 98,274 98,274 196,549 3,800,000 5,762,505 2004 5.500% 150,000 98,274 98,274 346,549 3,650,000 5,415,956 2005 5.500% 155,000 94,149 94,149 343,299 3,495,000 5,072,658 2006 5.500% 165,000 89,887 89,887 344,774 3,330,000 4,727,884 2007 5.500% 170,000 85,349 85,349 340,699 3,160,000 4,387,185 2008 5.500% 180,000 80,674 80,674 341,349 2,980,000 4,045,836 2009 5.500% 190,000 75,724 75,724 341,449 2,790,000 3,704,388 2010 5.500% 195,000 70,499 70,499 335,999 2,595,000 3,368,389 2011 5.350% 205,000 65,137 65,137 335,274 2,390,000 3,033,115 2012 4.700% 215,000 59,653 59,653 334,306 2,175,000 2,698,809 2013 4.800% 230,000 54,601 54,601 339,201 1,945,000 2,359,608 2014 4.900% 240,000 49,081 49,081 338,161 1,705,000 2,021,446 2015 5.000% 250,000 43,201 43,201 336,401 1,455,000 1,685,045 2016 5.000% 265,000 36,951 36,951 338,901 11190,000 1,346,144 2017 5.000% 275,000 30,326 30,326 335,651 915,000 1,010,493 2018 5.100% 290,000 23,451 23,451 336,901 625,000 673,591 2019 5.125% 305,000 16,056 16,056 337,111 320,000 336,480 2020 5.150% 320,000 8,240 8,240 336,480 - - $ 3,800,000 $ 1,161,422 $ 1,079,527 $ 6,040,949 13 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Fiscal Interest Principal Interest Interest Annual Principal Total Year Rate Due 5101 Due 5101 Due 11101 Requirement Outstanding Outstanding Revenue Bond, Series 2006 Date of Issue - June 14 2006 Term - 20 Years $17,537,835 2007 2.250% $ 595,000 $ 283,082 $ - $ 878,082 $12,695,000 16,659,753 2008 2.250% 530,000 174,640 174,640 879,280 12,165,000 15,780,473 2009 2.300% 540,000 168,678 168,678 877,355 11,625,000 14,903,118 2010 2.300% 550,000 162,468 162,468 874,935 11,075,000 14,028,183 2011 2.350% 565,000 156,143 156,143 877,285 10,510,000 13,150,898 2012 2.400% 580,000 149,504 149,504 879,008 9,930,000 12,271,890 2013 2.500% 590,000 142,544 142,544 875,088 9,340,000 11,396,803 2014 2.600% 605,000 135,169 135,169 875,338 8,735,000 10,521,465 2015 2.650% 620,000 127,304 127,304 874,608 8,115,000 9,646,858 2016 2.700% 640,000 119,089 119,089 878,178 7,475,000 8,768,680 2017 2.750% 655,000 110,449 110,449 875,898 6,820,000 7,892,783 2018 2.800% 675,000 101,443 101,443 877,885 6,145,000 7,014,898 2019 2.850% 695,000 91,993 91,993 878,985 5,450,000 6,135,913 2020 2.900% 710,000 82,089 82,089 874,178 4,740,000 5,261,735 2021 2.900% 735,000 71,794 71,794 878,588 4,005,000 4,383,148 2022 2.950% 755,000 61,136 61,136 877,273 3,250,000 3,505,875 2023 3.000% 775,000 50,000 50,000 875,000 2,475,000 2,630,875 2024 3.050% 800,000 38,375 38,375 876,750 1,675,000 1,754,125 2025 3.100% 825,000 26,175 26,175 877,350 850,000 876,775 2026 3.150% 850,000 13,388 13,388 876,775 - - $ 13,290,000 $ 2,265,458 $ 1,982,376 $ 17,537,835 Revenue Bond, Series 2007 Date of Issue - February 1 2007 Term - 20 Years $ 6,505,000 $ 8,842,941 2007 $ - $ 66,153 $ - $ 66,153 6,505,000 8,776,788 2008 4.000% 40,000 132,306 132,306 304,613 6,465,000 8,472,175 2009 4.000% 40,000 131,506 131,506 303,013 6,425,000 8,169,163 2010 4.000% 45,000 130,706 130,706 306,413 6,380,000 7,862,750 2011 4.000% 45,000 129,806 129,806 304,613 6,335,000 7,558,138 2012 4.000% 695,000 128,906 128,906 952,813 5,640,000 6,605,325 2013 4.000% 715,000 115,006 115,006 945,013 4,925,000 5,660,313 2014 4.000% 745,000 100,706 100,706 946,413 4,180,000 4,713,900 2015 4.000% 775,000 85,806 85,806 946,613 3,405,000 3,767,288 2016 4.000% 805,000 70,306 70,306 945,613 2,600,000 2,821,675 2017 4.000% 835,000 54,206 54,206 943,413 1,765,000 1,878,263 2018 4.250% 865,000 37,506 37,506 940,013 900,000 938,250 2019 4.250% 900,000 19,125 19,125 938,250 - - $ 6,505,000 $ 1,202,047 $ 1,135,894 8,842,940.63 14 City of Houston Untreated Water Rates Year Rate 04/81 .22142 Rate 02/83 .24157 10/86 .25123 10/87 .28022 01/88 .26591 FIRST 150 MGD /PER 1,000, .26113 NEXT 150 MGD 08/88 .28426 FIRST 300 MGD /PER 1,000, .27915 NEXT 300 MGD 07/89 .29344 FIRST 300 MGD /PER 1,000, .28817 NEXT 300 MGD 08/90 .31178 FIRST 300 MGD /PER 1,000, .30618 NEXT 300 MGD 02/92 .31820 FIRST 300 MGD /PER 1,000, .31249 NEXT 300 MGD 10/93 .32907 FIRST 300 MGD /PER 1,000, .32316 NEXT 300 MGD 10/94 .37192 (GRACE UP TO 13.1 MGD. ANYTHING OVER 11.9 IF WE GO OVER, THEN 5% ADDED TO 06/04 .385 (GRACE UP TO 13.1 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 11.9) 04/05 .398 (GRACE UP TO 17.38 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 15.8) 04/06 .4123 (GRACE UP TO 17.38 MGD. ANYTHING OVER 15.8 IF WE GO OVER, THEN 5% ADDED TO Baytown Area Water Authority Treated Water Rates 15 Increase Year 11981 Rate Amount Comments $0.97 COB 1985-1987 $0.97 COB, $1.00 Other Result of rising operating cost. 1988-1992 $1.07 COB, $1.10 Other $0.10 Raw water rates up 25% Result of increase in raw water 1993-1998 $1.18 COB, $1.21 Other $0.11 rates. 1999-2006 $1.26 COB, $1.29 Other $0.08 Funding for plant expansion debt Funding for new water line debt and City of Houston rate 2007 $1.39 COB, $1.42 Other $0.13 increase. Funding for new water ine debt and City of Houston rate 2008 1$1.46 COB, $1.49 Other 1 $0.07 lincrease. 15 CITY OF HOUSTON Bill white Public Works and Engineering Department IMPORTANT NOTICE Mayor Michael S. Marcotte. P.E., DEE Director P.O. Box 4863 Houston. Texas 772104883 www.houstontr -9ov NOTIFICATION OF WATER RATE ADJUSTMENT On April 1, 2007, rates will be adjusted upward by 2.8 %. By law, water rates ate now adjusted each year based upon the actual increase in costs in the region. These new rates will be reflected on your April 2007 billing which you will receive in May. NEW RATES AND CHARGES Classification Rate Contract Treated Water P x $1.476 plus (P -M) x $.572 • Untreated Water Rates where there is no contract First 10,000 000 gallons $1.060 per 1,000 nallons Next 10,000,000 gallons $0.953 per 1,000 gallons Next 30,000,000 gallons $0.899 per 1,000 gallons Next 100,000,000 gallons $0.845 per 1,000 gallons Excess of 150,000,000 gallons 1 $0.818 per 1,000 nallons Untreated Water Rates under written contracts 1 $0.4238 per 1,000 gallons P = Total water delivery during the month in thousand gallons, except if the minimum monthly specified in the customer's contract is greater than P. P shall equal M. M = Minimum monthly amount of water specified in the customer's contract expressed in units of one thousand gallons. For further information, please: Refer to the Rates and Prices or the Billing and Payment section of your contract Visit: htto: //www.houstontx.goy /codes/ (Sections 47-61 and 47 -84 et seq.) Please contact Maria Carrillo at Utility Customer Service at (713) 371 -1072 with specific questions about your bill 16