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BAWA Resolution No. 2019-18RESOLUTION NO. 2019-18 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY ADOPTING A BUDGET FOR THE ENSUING FISCAL YEAR, BEGINNING OCTOBER 1, 2019, AND ENDING SEPTEMBER 30, 2020; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************************************** WHEREAS, the General Manager of the Baytown Area Water Authority (`BAWA") has submitted to BAWA's Board of Directors a budget estimate of the revenues of BAWA and the expense of conducting the affairs thereof for the ensuing fiscal year, beginning October 1, 2019, and ending September 30, 2020; and WHEREAS, the Board of Directors of BAWA (the "Board") received the General Manager's estimate and held a public hearing thereon; and WHEREAS, after full and final consideration of the information contained in the proposed budget and the input received at the public hearing, it is the opinion of the Board that the budget attached hereto should be approved and adopted; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE BAYTOWN AREA WATER AUTHORITY: Section 1: That the Board of Directors of the Baytown Area Water Authority hereby adopts the budget, which is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes for BAWA's 2019-2020 fiscal year. Section 2: This resolution shall take effect immediately from and after its passage by the Board of Directors of the Baytown Area Water Authority. INTRODUCED, READ and PASSED, by the affirmative vote of the Board of Directors of the Baytown Area Water Authority this the 2 1 " day of August, 2019. I/ ENDA BRADLEY SMITH, President ATT LETICIA BRYSCH, Assista ecretary APPROVED AS TO FORM: 4 ACIO RAMIREZ, SR., General Counsel VKarenTiles BAWA Resolution\20 9 gust BAWA Resolution - Adopt BAWA Budget.doc Exhibit "A" BAYTOWN AREA WATER AUTHORITY (BAWA) ANNUAL PROGRAM OF SERVICES 2019-20 PROPOSED BUDGET BAYTOWN AREA WATER AUTHORITY BOARD OF DIRECTORS BRENDA BRADLEY SMITH, President MIKE WILSON, Vice President FRANK McKAY III, Secretary CITY CLERK, Assistant Secretary BRANDON BENOIT, Director HARLAND FORREST JR, Director BAYTOWN AREA WATER AUTHORITY (BAWA) ORGANIZATION CHART Baytown Area Water Authority E Board of Directors L Y General Manager Plant Manager/Director of Public Works & Utilities 1 { Superintendent This fund accounts for the operations 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 88% 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 its raw water supply to the plant or interruptions of service to its customers. REVENUES The 2019-20 proposed budget estimates sales of $14,093,234 for an average of 13.8 million gallons per day (MGD). Fluctuations in rainfall amounts can significantly impact actual sales. The existing rate structure for BAWA is $2.82 per 1,000 gallons for the City of Baytown and $2.86 per 1,000 gallons for customers outside the city. The rates will remain consistent for the 2019-20 budget. EXPENDITURES Total operating expenditures for the proposed 2019-20 budget are $9,136,462 which is an increase of $2,344,941 from the 2018-19 budget. An increase of $1,870,089 over current year estimate in the untreated water supplies is included in the budget due to the City of Houston's raw water supply contract. This budget includes a transfer of $350,000 to the General Fund for an indirect cost allocation to reimburse the City for administrative services such as Iluman Resources, Fiscal Operations, Legal and Information Technology Services. Highlights of major operating changes are as follows: • Increase in personnel services $ 349,887 • Increase in supplies 1,820,054 • Increase in maintenance 60,000 • Increase in services 115,000 • Increase in capital outlay 205,124 • Increase in transfers out -debt service 1,311,242 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 20 MGD without penalties. The surcharge for water purchased over the 20 MGD is nominal at this time. BAWA received a rate increase (2.8%) from $0.7012 to $0.7208 on April 1, 2019. The annual rate adjustment was intended to help cover the City of Houston's cost increases that impact the provision of safe, clean drinking water and the collection and treatment of wastewater. This includes operational costs as well as the costs involved in repairing portions of the City of Houston system's aging infrastructure. Debt Service The transfer to cover the debt service requirement for the proposed 2019-20 budget is $3,740,760. The Authority awarded a construction contract to build the BAWA East Water Treatment Plant and due to the length of time for construction, 27-36 months, the Authority chose to issue bonds in two parts. The combination of bonds and operating funds totaling $28 million was issued for the first year. The second issue, $18 million in bonds, was issued in the fiscal year 2018-19. CAPITAL IMPROVEMENT PROGRAM The Capital Improvement Program for BAWA is funded through the issuance of revenue bonds, grants, and revenue from operations. BAWA East Water Treatment Plant $6,357,142 Development of a six (6) million gallons per day (MGD) surface water treatment plant south of Interstate Highway (IH) 10 and west of SH 99 along the Coastal Water Authority (CWA) Barbers Hill Canal. The design will provide for the ability to expand the plant based on future water demands and allow the plant to convert to salt water treatment (desalinization) ensuring long term viability. Annual Operating Impact: BA WA East will become operational in FY2020 with ongoing operating costs of $3, 439, 096. Filter Scour $2,222,988 This project will provide more efficient backwash with 40-50% less backwash water and will extend the life of the filter media. (Cost savings less energy and water use) Annual Operating Impact: No anticipated operating cost for FY2020. East Transmission Line $1,450,000 This is for the design of the transmission line that will go from the new Water Treatment Plant to provide water to the City Annual Operating Impact: No anticipated operating cost for FY2020. Chemical Systems Replace Bulk Tank $1,059,556 This is for the design of the transmission line that will go from the new Water Treatment Plant to provide water to the City Annual Operating Impact: No anticipated operating cost for FY2020. 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. Working capital is defined as current assets (e.g., cash, investments and accounts receivable) less current liabilities (e.g., accounts payable). In the 2019-20 proposed budget, BAWA's working capital level at year end is projected to represent 126 days of operating expenditures; a contingency line item of $75,000 is provided; plus we are able to transfer out $2,788,023 to BAWA's Capital Improvement Project Fund (CIPF). The $2,788,023 will be available for funding future capital projects. 3070 BAYTOWN AREA WATER AUTHORITY — PROGRAM SUMMARY Program Description BAWA operates and maintains a 26 Million Gallon per Day (MGD) surface water treatment facility. It has a projected raw water flow of 13.25 MGD and projected finished water flow of 13.5 MGD for fiscal year 2019-20. BAWA currently serves 8 surrounding area customers, including the City of Baytown, which uses 88% of BAWA's production. Operations personnel ensure the facility's compliance with the Texas Commission on Environmental Quality's (TCEQ) Rules and Regulations for Public Water Supplies. BAWA provides its 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. • Maintain "Superior Public Water System" status. • Maintain standards for the Texas Optimization Program - a voluntary program through TCEQ that promotes the optimization of surface water treatment plants, by identifying and addressing the various factors that limit performance in order to lower the risk of waterborne disease. • Develop and maintain a staff of highly trained water professionals through continuing education classes and hands on training. Major Objectives • Produce 13.5 MGD of finished water. • Maintain finished water turbidity (haze measurement) consistently < 0.1 NTU. • Maintain compliance with all TCEQ and EPA regulations. BAYTOWN AREA WATER AUTHORITY FUND 510 BUDGET SUMMARY BY FUND Actual Budget Estimated Proposed 2017-18 2018-19 2018-19 2019-20 Revenues Sale of Water - Baytown $ 12,119,269 $ 12,205,257 $ 12,205,257 $ 12,449,362 Sale of Water - Other 1,623,012 1,611,639 1,611,639 1,643,872 Interest Revenue 89,454 48,991 115,619 45,000 Miscellaneous 3,358 - - - Transfers In From WWIS Fund 12,817,898 112,970 112,970 111,036 Total Revenues 26,652,991 13,978,857 14,045,485 14,249,270 Expenditures Personnel Services 1,417,603 1,477,296 1,418,956 1,827,183 Supplies 4,263,273 4,288,773 3,791,137 6,108,827 Maintenance 216,491 239,500 239,500 299,500 Services 643,990 785,952 785,952 900,952 Total Operating 6,541,357 6,791,521 6,235,545 9,136,462 Capital Outlay - 85,000 35,000 290,124 Transfers Out - Debt Service 2,421,180 2,429,518 2,429,518 3,740,760 Transfers Out - Capital Improvement 2,000,000 5,790,159 5,790,159 2,788,023 Transfers Out - General Fund 350,000 350,000 350,000 350,000 Contingency - 75,000 75,000 75,000 Total Expenditures 11,312,538 15,521,198 14,915,222 16,380,369 Excess (Deficit) Revenues Over Expenditures 15,340,453 (1,542,341) (869,737) (2,131,099) GAAP to budget basis adjustment (12,722,633) - - - Working Capital - Beginning 3,546,554 6,164,374 6,164,374 5,294,637 Working Capital - Ending $ 6,164,374 $ 4,622,033 $ 5,294,637 $ 3,163,538 Days of Operating Expenditures 344 248 310 126 3070 BAYTOWN AREA WATER AUTHORITY- SERVICE LEVEL BUDGET Actual Budget Estimated Proposed Acct# Acct Description 2017-18 2018-19 2018-19 2019-20 7100 Personnel Services 71011 Extra Help/Temporary $ 17,832 $ - $ 10,000 $ - 71031 Contract Personnel BAWA 1,399,771 1,477,296 1,408,956 1,827,183 Total Personnel Services 1,417,603 1,477,296 1,418,956 1,827,183 7200 Supplies 72001 Office Supplies 3,841 3,250 3,250 5,700 72002 Postage Supplies 455 430 430 710 72007 Wearing Apparel 6,453 6,300 6,300 8,050 72016 Motor Vehicle Supplies 4,389 5,000 5,000 10,000 72021 Minor Tools 2,353 2,400 2,400 4,000 72022 Fuel For Generators 12,735 10,000 6,000 10,000 72026 Cleaning & Janitorial Sup 2,142 2,000 2,000 4,200 72031 Chemical Supplies 648,210 700,900 832,186 1,210,508 72032 Medical Supplies 796 900 900 1,600 72041 Educational Supplies 2,135 2,000 2,000 2,000 72051 Untreated Water Supplies 3,557,811 3,533,593 2,908,671 4,778,760 72055 Laboratory Supplies 21,953 22,000 22,000 73,300 Total Supplies 4,263,273 4,288,773 3,791,137 6,108,827 7300 Maintenance 73011 Buildings Maintenance 6,639 7,000 7,000 7,000 73025 Streets Sidewalks & Curbs 33 73026 Storm Drains Maint 5 73027 Heat & Cool Sys Maint 3,932 5,500 5,500 5,500 73028 Electrical Maintenance 37,819 40,000 40,000 48,000 73041 Furniture/Fixtures Maint 1,000 2,000 2,000 2,000 73042 Machinery & Equip Maint 161,805 175,000 175,000 229,000 73043 Motor Vehicles Maint 5,258 10,000 10,000 8,000 Total Maintenance 216,491 239,500 239,500 299,500 7400 Services 74001 Communication - - - - 74002 Electric Service 484,331 474,000 474,000 574,000 74011 Equipment Rental 10,284 15,000 15,000 20,000 74021 Special Services 120,919 267,000 267,000 277,000 74022 Audits 16,352 16,352 16,352 16,352 74036 Advertising 393 600 600 600 74042 Education & Training 11,710 12,800 12,800 12,800 74280 Bonds - 200 200 200 Total Services 643,990 785,952 785,952 900,952 Total Operating 6,541,357 6,791,521 6,235,545 9,136,462 9 3070 BAYTOWN AREA WATER AUTHORITY- SERVICE LEVEL BUDGET Actual Budget Estimated Proposed 4cct# Acct Description 2017-18 2018-19 2018-19 2019-20 8000 Capital Outlay 80001 Furniture & Equip <$5000 83023 Water Distribution System 84042 Machinery & Equipment 84043 Motor Vehicles Total Capital Outlay 9000 Other Financing Uses 91511 To BAWA Debt Service 91512 To BAWA Capital Project 91518 To BAWA CIPF Fund 92101 Expense - General Fund Total Other Financing Uses 9900 Contingencies 99001 Contingencies Total Contingencies TOTAL DEPARTMENT 50,000 - - - - - 255,124 35,000 35,000 35,000 85,000 35,000 290,124 2,421,180 2,429,518 2,429,518 3,740,760 - - - 2,788,023 2,000,000 5,790,159 5,790,159 - 350,000 350,000 350,000 350,000 4,771,180 8,569,677 8,569,677 6,878,783 75,000 75,000 75,000 75,000 75,000 75,000 $ 11,312,538 $ 15,521,198 $ 14,915,222 $ 16,380,369 10 BAWA - CAPITAL IMPROVEMENT PROGRAM FUND 518 BUDGET SUMMARY BY FUND Total Actual Total Allocation Estimated Allocation 2017-18 2018-19 2018-19 2019-20 Revenues Transfer In from Operating Fund $ 2,000,000 $ 5,790,159 $ 5,790,159 2,788,023 Interest Revenue 185,202 80,000 189,645 55,190 Total Revenues 2,185,202 5,870,159 5,979,804 2,843,213 Expenditures BAWA East Plant 1,015,340 4,529,056 421,914 6,357,142 BAWA East Plant Engineering 146,497 1,023,097 575,280 447,817 Mitigation Credits 1,231,200 - - Completed and closed projects 124,550 - - High Service Pumps 4,284,158 1,098,950 1,098,950 - Chemical Systems - Replace Bulk Tank 126,128 1,059,684 128 1,059,556 LAS System Addition 130,765 349,235 73,139 276,096 Lime System Addition - 390,000 390,000 Post Filtration Chemicals - 144,000 144,000 Sludge Room Improvements - 400,000 400,000 Chain & Flight for Basin Four 106,500 40,950 40,950 - Surveillance System 5,000 - - Filter Gallery Improvements 34,016 - - Administration Building 100,319 90,215 90,215 - Ground Storage Tanks Rehabilitation 30,000 1,470,000 26,368 - BAWA East Transmission Line - 1,650,000 200,000 1,450,000 Filter Scour - 1,114,000 291,012 2,222,988 New Capital Project Initiatives - 418,345 1,000,000 Total Expenditures 7,334,473 13,777,532 2,817,956 13,747,599 Excess (Deficit) Revenues Over Expenditures (5,149,271) (7,907,373) 3,161,848 (10,904,386) Working Capital - Beginning 12,995,111 $ 7,845,840 $ 7,845,840 $ 11,007,688 Working Capital - Ending $ 7,845,840 $ (61,533) $ 11,007,688 $ 103,302 11 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS LONG TERM DEBT AMORTIZATION SCHEDULES Revenue Amount of Bonds Issue Principal Outstanding Oct. 1, 2019 Principal & Interest Requirements for 2019-20 Principal Outstanding Sept. 30, 2020 Principal Interest Total Series 2006 $ 9,975,000 $ 2,135,000 $ 710,000 $ 62,260 $ 772,260 $ 1,425,000 Series 2012 8,315,000 4,605,000 580,000 132,800 712,800 4,025,000 Series 2018 22,040,000 22,040,000 - 1,024,250 1,024,250 22,040,000 Series 2019 17,315,000 17,315,000 640,000 591,450 1,231,450 16,675,000 $ 46,095,000 $ 1,930,000 $ 1,810,760 $ 3,740,760 $ 44,165,000 Combined BAWA Debt, All Series Debt Requirements to Maturity Fiscal Principal Total Total Year 5/01 Interest Requirement 2020 1,930,000 1,810,760 3,740,760 2021 1,780,000 1,752,970 3,532,970 2022 1,835,000 1,694,306 3,529,306 2023 1,970,000 1,630,894 3,600,894 2024 2,005,000 1,546,594 3,551,594 2025 2,040,000 1,460,268 3,500,268 2026 2,080,000 1,371,818 3,451,818 2027 2,120,000 1,281,868 3,401,868 2028 2,160,000 1,190,000 3,350,000 2029 2,250,000 1,096,188 3,346,188 2030 2,345,000 998,488 3,343,488 2031 2,440,000 904,850 3,344,850 2032 2,540,000 806,826 3,346,826 2033 2,640,000 704,450 3,344,450 2034 2,755,000 591,750 3,346,750 2035 2,855,000 473,900 3,328,900 2036 2,960,000 369,950 3,329,950 2037 3,065,000 262,100 3,327,100 2038 3,175,000 150,350 3,325,350 2039 1,150,000 34,500 1,184,500 Total $46,095,000 $ 20,132,830 $ 66,227,830 12 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Revenue Bonds Funding: BAWA-WWIS $ 9,975,000 Series 2006 Date of Issue - June 14, 2006 Term - 16 Years Fiscal Interest Principal Interest Interest Total Annual Principal Year Rate Due 5/01 Duel l/01 Due 5/01 Interest Requirement Outstanding 2007 2.25% $ 595,000 $ 2,115 $ 51,400 $ 53,515 $ 648,515 $ 9,380,000 2008 2.25% 530,000 77,040 107,112 184,152 714,152 8,850,000 2009 2.30% 540,000 103,045 107,542 210,587 750,587 8,310,000 2010 2.30% 550,000 104,650 111,509 216,159 766,159 7,760,000 2011 2.35% 565,000 105,184 105,184 210,368 775,368 7,195,000 2012 2.40% 580,000 98,545 98,545 197,090 777,090 6,615,000 2013 2.50% 590,000 91,585 91,585 183,170 773,170 6,025,000 2014 2.60% 605,000 84,210 84,210 168,420 773,420 5,420,000 2015 2.65% 620,000 76,345 76,345 152,690 772,690 4,800,000 2016 2.70% 640,000 68,130 68,130 136,260 776,260 4,160,000 2017 2.75% 655,000 59,490 59,490 118,980 773,980 3,505,000 2018 2.80% 675,000 50,484 50,484 100,968 775,968 2,830,000 2019 2.85% 695,000 41,034 41,034 82,068 777,068 2,135,000 2020 2.90% 710,000 31,130 31,130 62,260 772,260 1,425,000 2021 2.90% 735,000 20,835 20,835 41,670 776,670 690,000 2022 2.95% 690,000 10,178 10,178 20,356 710,356 - $ 9,975,000 $ 1,024,000 $ 1,114,713 $ 2,138,713 $ 12,113,713 Call Option: Bonds maturing on 05/01/2017 to 05/01/2022 callable in whole or in part inversely on any date beginning 05/01/2016 @ par. Revenue Bonds Funding: BAWA $ 8,315,000 Series 2012 Issue Date - March 29, 2012 Term - 20 Years Fiscal Interest Principal Interest Interest Total Annual Principal Year Rate Due 5/01 Duell/01 Due 5/01 Interest Requirement Outstanding 2013 2014 2015 2016 2017 2018 2019 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% $ 485,000 510,000 520,000 535,000 540,000 550,000 570,000 $ 123,050 98,650 93,550 88,350 83,000 77,600 72,100 $ 103,500 $ 98,650 93,550 88,350 83,000 77,600 72,100 226,550 197,300 187,100 176,700 166,000 155,200 144,200 $ 711,550 $ 707,300 707,100 711,700 706,000 705,200 714,200 7,830,000 7,320,000 6,800,000 6,265,000 5,725,000 5,175,000 4,605,000 2020 2.00% 580,000 66,400 66,400 132,800 712,800 4,025,000 2021 2.00% 290,000 60,600 60,600 121,200 411,200 3,735,000 2022 2.38% 295,000 57,700 57,700 115,400 410,400 3,440,000 2023 2.50% 300,000 54,197 54,197 108,394 408,394 3,140,000 2024 2.75% 310,000 50,447 50,447 100,894 410,894 2,830,000 2025 3.00% 315,000 46,184 46,184 92,368 407,368 2,515,000 2026 3.00% 325,000 41,459 41,459 82,918 407,918 2,190,000 2027 3.13% 335,000 36,584 36,584 73,168 408,168 1,855,000 2028 3.25% 345,000 31,350 31,350 62,700 407,700 1,510,000 2029 3.25% 360,000 25,744 25,744 51,488 411,488 1,150,000 2030 3.38% 370,000 19,894 19,894 39,788 409,788 780,000 2031 3.50% 385,000 13,650 13,650 27,300 412,300 395,000 2032 3.50% 395,000 6,913 6,913 13,826 408,826 - $ 8,315,000 $ 1,147,422 $ 1,127,872 $ 2,275,294 $ 10,590,294 Call Option: Bonds maturing on 05/01/2023 to 05 01 2032 callable in whole or in part on any date beginning 05/01/2022 r@ par. 13 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Revenue Bonds Funding: BAWA $ 22,040,000 Series 2018 Issue Date - June 21, 2018 Term-20 Yrs Fiscal Interest Principal Interest Interest Total Annual Principal Year Rate Due 5/01 Duell/01 Due 5/01 Interest Requirement Outstanding 2019 $ - $ 426,771 $ 512,125 $ 938,896 $ 938,896 $ 22,040,000 2020 0.00% - 512,125 512,125 1,024,250 1,024,250 22,040,000 2021 5.00% 135,000 512,125 512,125 1,024,250 1,159,250 21,905,000 2022 5.00% 205,000 508,750 508,750 1,017,500 1,222,500 21,700,000 2023 5.00% 1,000,000 503,625 503,625 1,007,250 2,007,250 20,700,000 2024 5.00% 1,000,000 478,625 478,625 957,250 1,957,250 19,700,000 2025 5.00% 1,000,000 453,625 453,625 907,250 1,907,250 18,700,000 2026 5.00% 1,000,000 428,625 428,625 857,250 1,857,250 17,700,000 2027 5.00% 1,000,000 403,625 403,625 807,250 1,807,250 16,700,000 2028 5.00% 1,000,000 378,625 378,625 757,250 1,757,250 15,700,000 2029 5.00% 1,040,000 353,625 353,625 707,250 1,747,250 14,660,000 2030 5.00% 1,095,000 327,625 327,625 655,250 1,750,250 13,565,000 2031 5.00% 1,145,000 300,250 300,250 600,500 1,745,500 12,420,000 2032 5.00% 1,210,000 271,625 271,625 543,250 1,753,250 11,210,000 2033 5.00% 1,675,000 241,375 241,375 482,750 2,157,750 9,535,000 2034 4.00% 1,760,000 199,500 199,500 399,000 2,159,000 7,775,000 2035 4.00% 1,830,000 155,500 155,500 311,000 2,141,000 5,945,000 2036 4.00% 1,905,000 118,900 118,900 237,800 2,142,800 4,040,000 2037 4.00% 1,980,000 80,800 80,800 161,600 2,141,600 2,060,000 2038 4.00% 2,060,000 41,200 41,200 82,400 2,142,400 - $ 22,040,000 $ 6,696,921 $ 6,782,275 $ 13,479,196 $ 35,519,196 Call Option: Bonds maturing on 05/01/2029 to 05/01/2038 callable in whole or in part on any date beginning 05/01/2029 @ par. Revenue Bonds Funding: BAWA $ 17,315,000 Series 2019 Issue Date - May 30, 2019 Term-20 Yrs Fiscal Interest Principal Interest Interest Total Annual Principal Year Rate Due 5/01 Duel l/01 Due 5/01 Interest Requirement Outstanding 2020 4.00% 640,000 295,725 $ 295,725 $ 591,450 1,231,450 16,675,000 2021 4.00% 620,000 282,925 282,925 565,850 1,185,850 16,055,000 2022 4.00% 645,000 270,525 270,525 541,050 1,186,050 15,410,000 2023 4.00% 670,000 257,625 257,625 515,250 1,185,250 14,740,000 2024 4.00% 695,000 244,225 244,225 488,450 1,183,450 14,045,000 2025 4.00% 725,000 230,325 230,325 460,650 1,185,650 13,320,000 2026 4.00% 755,000 215,825 215,825 431,650 1,186,650 12,565,000 2027 4.00% 785,000 200,725 200,725 401,450 1,186,450 11,780,000 2028 4.00% 815,000 185,025 185,025 370,050 1,185,050 10,965,000 2029 4.00% 850,000 168,725 168,725 337,450 1,187,450 10,115,000 2030 3.00% 880,000 151,725 151,725 303,450 1,183,450 9,235,000 2031 3.00% 910,000 138,525 138,525 277,050 1,187,050 8,325,000 2032 3.00% 935,000 124,875 124,875 249,750 1,184,750 7,390,000 2033 3.00% 965,000 110,850 110,850 221,700 1,186,700 6,425,000 2034 3.00% 995,000 96,375 96,375 192,750 1,187,750 5,430,000 2035 3.00% 1,025,000 81,450 81,450 162,900 1,187,900 4,405,000 2036 3.00% 1,055,000 66,075 66,075 132,150 1,187,150 3,350,000 2037 3.00% 1,085,000 50,250 50,250 100,500 1,185,500 2,265,000 2038 3.00% 1,115,000 33,975 33,975 67,950 1,182,950 1,150,000 2039 3.00% 1,150,000 17,250 17,250 34,500 1,184,500 - Call Option: Bonds maturing on 05/01/2029 to 05 0112033 callable in whole or in part on any date beginning 05 0112028 @ par. 14 CITY OF HOUSTON UNTREATED WATER RATES Effective Month/Year Rate 04/81 .22142 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 UP TO 13.1 MGD. IF WE GO OVER, THEN 50o ADDED TO ANYTHING OVER 11.9 06/04 .385 UP TO 13.1 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 11.9 04/05 .398 UP TO 17.38 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 15.8 04/06 .4123 UP TO 17.38 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 15.8 04/07 .4238 UP TO 17.38 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 15.8 04/08 .4314 UP TO 17.38 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 15.8 04/09 .4533 UP TO 17.38 MGD. IF WE GO OVER, THEN 505 ADDED TO ANYTHING OVER 15.8 04/10 .4546 UP TO 20.00 MGD. IF WE GO OVER, THEN 50o ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 06/10 .5647 UP TO 20.0 MGD. IF WE GO OVER, THEN 50o ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM 04/11 .5754 UP TO 20.0 MGD. IF WE GO OVER, THEN 50o ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/12 .59439 UP TO 20.0 MGD. IF WE GO OVER, THEN 50o ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/13 .61580 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/14 .6232 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/15 .6506 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/16 .6597 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/17 .6821 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM 04/I8 .7012 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 04/19 .7208 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. Is TREATED WATER RATES City Other Rate/1,000 Rate/1,000 Increase- Increase - Year gallons Gallons city Other Comments 1981 $0.97 $0.97 1985 - 1987 1 $0.97 $1.00 $0.00 $0.03 Result of rising operating cost. (Raw water rates 1988 - 1992 $1.07 $1.10 $0.10 $0.10 up 25% 1993 - 1998 $1.18 $1.21 $0.11 $0.11 Result of increase in raw water rates. 1999 - 2006 $1.26 $1.29 $0.08 $0.08 Funding for plant expansion debt Funding for new water line debt and City o 2006-2007 $1.39 $1.42 $0.13 $0.13 Houston rate increase. Funding for new water line debt and City o 2007-2008 $1.46 $1.49 $0.07 $0.07 Houston rate increase. Funding for new water line debt, other operating 2008-2009 $1.55 $1.58 $0.09 $0.09 increases and City of Houston rate increase. Funding for new water line debt, other operating 2009-2010 $1.71 $1.74 $0.16 $0.16 increases and City of Houston rate increase. Funding for new water line debt, other operating 2010-2011 $1.96 $1.99 $0.25 $0.25 increases and City of Houston rate increase. Funding for new water line debt, other operating 2011-2012 $2.15 $2.18 $0.19 $0.19 increases and City of Houston rate increase. Funding for new water line debt, other operating 2012-2013 $2.35 $2.39 $0.20 $0.21 increases and City of Houston rate increase. Funding for new water line debt, other operating 2013-2014 $2.53 $2.57 $0.18 $0.18 increases and City of Houston rate increase. Funding for new water line debt, other operating 2014-2015 $2.61 $2.65 $0.08 $0.08 increases and City of Houston rate increase. Funding for new water line debt, other operating 2015-2016 $2.74 $2.78 $0.13 $0.13 increases and City of Houston rate increase. Excess revenues are sufficient to cover 2016-2017 $2.74 $2.78 $0.00 $0.00 incremental operating cost. Excess revenues are sufficient to cover 2017-2018 $2.74 $2.78 $0.00 $0.00 incremental operating cost. Funding for the BAWA East Treatment Plant, other operating increases and City of Houston 2018-2019 $2.82 $2.86 $0.08 $0.08 rate increase. Excess revenues are sufficient to cover 2019-2020 $2.82 $2.86 $0.00 $0.00 incremental operating cost.