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Ordinance No. 14,449ORDINANCE NO. 14,449 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING THE BUDGET FOR THE BAYTOWN AREA WATER AUTHORITY (BAWA) FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2020, AND ENDING SEPTEMBER 30, 2021; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ********************************************************************************* WHEREAS, the Board of Directors of the Baytown Area Water Authority (`BAWA") has adopted a budget for BAWA for the fiscal year beginning October 1, 2020, and ending September 30, 2021; and WHEREAS, the General Manager of BAWA has submitted said budget to the City Council of the City of Baytown for approval; and WHEREAS, after full and final consideration, it is the opinion of the City Council of the City of Baytown that the budget should be approved; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby approves the budget of the Baytown Area Water Authority for the fiscal year beginning October 1, 2020, and ending September 30, 2021. A copy of the above -referenced budget for BAWA is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 23rd day of July, 2020. 6 BRANDON CAPETILL , Mayor ATTE : C LE ILIA BRYSCH, Ci Clerk y,�y5 dry p� as APPROVED AS TO FORM: of • 0 71S s KAREN L. HORNER, Interim City Attorney R: KarenTiles City CounciEordinances\2020Vuly 23\AprovingBAWABudgetFY2020-2 Ldoc r i .t r5 `� ti � � � � ,� h . ��� ��� �: fir. - BAYTOWN AREA WATER AUTHORITY (BAWA) ANNUAL PROGRAM OF SERVICES 2020-21 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 Waterj + Authority --F Board of Directors . General Manager Plant Manager/Director of Public Works & Imo Utilities ., Superintendent BAYTOWN AREA WATER AUTHORITY MAJOR BUDGET ISSUES FISCAL YEAR 2020-21 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 2020-21 proposed budget estimates sales of $14,379,596 for an average of 13.5 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 consist of a 3% bump to $2.90 per 1,000 gallons for the City of Baytown and $2.95 per 1,000 gallons for customers outside the city for the 2020-21 budget. EXPENDITURES Total operating expenditures for the proposed 2020-21 budget are $9,152,115 which is an increase of $15,653 from the 2019-20 budget. An increase of $502,316 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 Human Resources, Fiscal Operations, Legal and Information Technology Services. Highlights of major operating changes are as follows: • Increase in personnel services $ 103,941 • Decrease in supplies (132,831) • Decrease in maintenance (32,000) • Increase in services 76,543 • Decrease in capital outlay (92,124) • Decrease in transfers out -debt service (225,390) 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 (3.5%) from $0.7208 to $0.7460 on April 1, 2020. 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. 4 BAYTOWN AREA WATER AUTHORITY MAJOR BUDGET ISSUES FISCAL YEAR 2020-21 Debt Service — The transfer to cover the debt service requirement for the proposed 2020-21 budget is $3,515,370. 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 Chemical Feed $2,813,811 The Baytown Area Water Authority (BAWA) Fritz Lanham, Surface Water Treatment Plant (SWTP) plant main chemical disinfection system which is based on an anhydrous ammonia system is at the end of its service life. This project includes replacing the disinfection system with a safer system of liquid ammonia sulfate. The project will also replace the bulk storage tanks for fluoride, caustic, zinc, ferric chloride, and polymer, as well as the associated chemical pumps, feed lines and sludge system. The costs represent the project design and construction costs. BAWA East Plant Sanitary Sewer $160,000 This project entails the installation of a sanitary sewer line (gravity or force main) from BAWA East Surface Water Plant to CCID #1 to treat the plant's sanitary sewer. This line will connect into the CCID No. 1 sanitary sewer system located in the vicinity of the undeveloped property to the south of the plant. These costs represent the project design and construction costs. BAWA Raw Water Rehabilitation $200,000 The existing forebay liner is HDPE and has several tears and holes, which cause water loss of metered and paid raw water. The existing raw water pumps and motors are deteriorated and are at the end of useful life. Multiple pumps raw water pumps have been rebuilt over the years, and contain no original equipment manufacturer parts. The addition of VFD pumps will allow staff to better control raw water production over the year, especially at peak flow requirement times. These costs represent the project design costs. 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 2020-21 proposed budget, BAWA's working capital level at year end is projected to represent 107 days of operating expenditures plus we are able to transfer out $2,258,192 to BAWA's Capital Improvement Project Fund (CIPF). The $2,258,192 will be available for funding future capital projects. 5 3070 BAYTOWN AREA WATER AUTHORITY — PROGRAM SUMMARY Program Description BAWA operates and maintains a 31.898 Million Gallon per Day (MGD) surface water treatment facility. 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 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 2018-19 2019-20 2019-20 2020-21 Revenues Sale of Water - Baytown $ 11,923,502 $ 12,449,362 $ 12,307,902 $ 12,653,923 Sale of Water - Other 1,639,432 1,643,872 1,386,859 1,725,673 Interest Revenue 125,214 45,000 45,000 65,000 Miscellaneous 779 - 78 - Transfers In From WWIS Fund 112,970 111,036 111,036 117,227 Transfers in From Capital Projects 28,258,526 - - - Total Revenues 42,060,424 14,249,270 13,850,876 14,561,823 Expenditures Personnel Services 1,381,421 1,827,183 1,645,253 1,931,124 Supplies 4,172,187 6,108,827 5,165,348 5,975,996 Maintenance 270,524 299,500 246,101 267,500 Services 627,198 900,952 933,652 977,495 Total Operating 6,451,330 9,136,462 7,990,354 9,152,115 Capital Outlay - 290,124 290,124 198,000 Transfers Out - Debt Service 2,429,518 3,740,760 3,740,760 3,515,370 Transfers Out - Capital Improvement 5,790,159 2,788,023 2,788,023 2,258,192 Transfers Out - General Fund 350,000 350,000 350,000 350,000 Contingency - 75,000 75,000 - Total Expenditures 15,021,007 16,380,369 15,234,261 15,473,677 Excess (Deficit) Revenues Over Expenditures 27,039,416 (2,131,099) (1,383,385) (911,853) GAAP to budget basis adjustment (28,233,043) - - - Working Capital - Beginning 6,164,374 4,970,747 4,970,747 3,587,362 Working Capital - Ending $ 4,970,747 $ 2,839,648 $ 3,587,362 $ 2,675,509 Days of Operating Expenditures 281 113 164 107 3070 BAYTOWN AREA WATER AUTHORITY- SERVICE LEVEL BUDGET Actual Budget Estimated Proposed IAcct# Acct Description 2018-19 2019-20 2019-20 2020-21 7100 Personnel Services 71011 Extra Help/Temporary $ 4,739 $ - $ - $ 71031 Contract Personnel BAWA 1,376,683 1,827,183 1,645,253 1,931,124 Total Personnel Services 1,381,421 1,827,183 1,645,253 1,931,124 7200 Supplies 72001 Office Supplies 3,329 5,700 5,700 6,500 72002 Postage Supplies 285 710 710 400 72007 Wearing Apparel 5,633 8,050 9,166 13,400 72016 Motor Vehicle Supplies 4,594 10,000 6,500 10,000 72021 Minor Tools 198 4,000 4,000 4,000 72022 Fuel For Generators 5,603 10,000 7,000 10,000 72026 Cleaning & Janitorial Sup 2,065 4,200 2,500 4,400 72031 Chemical Supplies 826,150 1,210,508 875,000 1,210,508 72032 Medical Supplies 632 1,600 1,600 1,600 72041 Educational Supplies 1,461 2,000 2,000 2,000 72051 Untreated Water Supplies 3,297,885 4,778,760 4,177,872 4,680,188 72055 Laboratory Supplies 24,352 73,300 73,300 33,000 Total Supplies 4,172,187 6,108,827 5,165,348 5,975,996 7300 Maintenance 73011 Buildings Maintenance 94,340 7,000 12,601 10,500 73023 Water Distrib Sys Maint 19,480 - - - 73025 Streets Sidewalks & Curbs - 73026 Storm Drains Maint - - - - 73027 Heat & Cool Sys Maint 3,146 5,500 5,500 13,000 73028 Electrical Maintenance 35,767 48,000 48,000 52,000 73041 Furniture/Fixtures Maint 1,820 2,000 2,000 2,000 73042 Machinery & Equip Maint 128,283 229,000 170,000 182,000 73043 Motor Vehicles Maint 7,168 8,000 8,000 8,000 Total Maintenance 290,004 299,500 246,101 267,500 7400 Services 74001 Communication - - - - 74002 Electric Service 432,252 574,000 515,000 650,000 74011 Equipment Rental 9,685 20,000 15,000 20,000 74021 Special Services 135,888 277,000 377,000 271,543 74022 Audits 16,352 16,352 16,352 16,352 74026 Janitorial Services - - - 6,000 74036 Advertising 730 600 600 600 74042 Education & Training 12,811 12,800 9,500 12,800 74280 Bonds - 200 200 200 Total Services 607,718 900,952 933,652 977,495 Total Operating 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 6,451,330 9,136,462 7,990,354 9,152,115 - 255,124 255,124 93,000 - 35,000 35,000 105,000 290,124 290,124 198,000 2,429,518 3,740,760 3,740,760 3,515,370 5,790,159 2,788,023 2,788,023 2,258,192 350,000 350,000 350,000 350,000 8,569,677 6,878,783 6,878,783 6,123,562 - 75,000 75,000 75,000 75,000 TOTAL DEPARTMENT $ 15,021,007 $ 16,380,369 $ 15,234,261 $ 15,473,677 BAWA - CAPITAL IMPROVEMENT PROGRAM FUND 518 BUDGET SUMMARY BY FUND Total Actual Total Allocation Estimated Allocation 2018-19 2019-20 2019-20 2020-21 Revenues Transfer In from Operating Fund $ 5,790,159 $ 2,788,023 $ 2,788,023 $ 2,258,192 Interest Revenue 227,664 55,190 112,381 50,000 Total Revenues 6,017,823 2,843,213 2,900,404 2,308,192 Expenditures BAWA East Plant 1,762,950 6,804,959 8,707,359 - Completed and closed projects 345,555 - - - High Service Pumps 976,186 - 117,794 - BAWA Chemical Feed 5,440 2,269,652 744,000 2,813,811 Ground Storage Tanks Rehabilitation 26,368 - 42,380 - BAWA East Transmission Line 347 1,450,000 1,344,481 - Filter Scour 77,469 2,222,988 291,013 - BAWA East Plant Sanitary Sewer - - - 160,000 BAWA Raw Water Rehabilitation - - - 200,000 New Capital Project Initiatives - 1,000,000 - 1,457,106 Total Expenditures 3,194,316 13,747,599 11,247,027 4,630,917 Excess (Deficit) Revenues Over Expenditures 2,823,508 (10,904,386) (8,346,623) (2,322,725) Working Capital - Beginning 7,845,840 $ 10,669,348 $ 10,669,348 $ 2,322,725 Working Capital - Ending $ 10,669,348 $ (235,039) $ 2,322,725 - 9 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS LONG TERM DEBT AMORTIZATION SCHEDULES Revenue Amount of Bonds Issue Principal Outstanding Oct. 1, 2020 Principal & Interest Requirements for 2020-21 Principal Outstanding Sept. 30, 2021 Principal Interest Total Series 2006 $ 9,975,000 $ 1,425,000 $ 735,000 $ 41,670 $ 776,670 $ 690,000 Series 2012 8,315,000 4,025,000 290,000 121,200 411,200 3,735,000 Series 2018 22,040,000 22,040,000 135,000 1,006,650 1,141,650 21,905,000 Series 2019 17,315,000 16,675,000 620,000 565,850 1,185,850 16,055,000 $ 44,165,000 $ 1,780,000 $ 1,735,370 $ 3,515,370 $ 42,385,000 Combined BAWA Debt, All Series Debt Requirements to Maturity Fiscal Principal Total Total Year 5/01 Interest Requirement 2021 1,780,000 1,735,370 3,515,370 2022 1,835,000 1,676,706 3,511,706 2023 1,970,000 1,613,294 3,583,294 2024 2,005,000 1,528,994 3,533,994 2025 2,040,000 1,442,668 3,482,668 2026 2,080,000 1,354,218 3,434,218 2027 2,120,000 1,264,268 3,384,268 2028 2,160,000 1,172,400 3,332,400 2029 2,250,000 1,078,588 3,328,588 2030 2,345,000 980,888 3,325,888 2031 2,440,000 887,250 3,327,250 2032 2,540,000 789,226 3,329,226 2033 2,640,000 686,850 3,326,850 2034 2,755,000 574,150 3,329,150 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 $44,165,000 $ 18,075,670 $ 62,240,670 ID 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 Duel1/01 Due 5101 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 2.00% $ 485,000 $ 123,050 $ 103,500 $ 226,550 $ 711,550 $ 7,830,000 2014 2.00% 510,000 98,650 98,650 197,300 707,300 7,320,000 2015 2.00% 520,000 93,550 93,550 187,100 707,100 6,800,000 2016 2.00% 535,000 88,350 88,350 176,700 711,700 6,265,000 2017 2.00% 540,000 83,000 83,000 166,000 706,000 5,725,000 2018 2.00% 550,000 77,600 77,600 155,200 705,200 5,175,000 2019 2.00% 570,000 72,100 72,100 144,200 714,200 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 0510IJ2032 callable in whole or in part on any date beginning 05/01/2022 (ay par 11 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 5101 Duell/01 Due 5/01 Interest Requirement Outstanding 2019 $ - $ 426,771 $ 512,125 $ 938,896 $ 938,896 $ 22,040,000 2020 0.00% - 503,325 503,325 1,006,650 1,006,650 22,040,000 2021 5.00% 135,000 503,325 503,325 1,006,650 1,141,650 21,905,000 2022 5.00% 205,000 499,950 499,950 999,900 1,204,900 21,700,000 2023 5.00% 1,000,000 494,825 494,825 989,650 1,989,650 20,700,000 2024 5.00% 1,000,000 469,825 469,825 939,650 1,939,650 19,700,000 2025 5.00% 1,000,000 444,825 444,825 889,650 1,889,650 18,700,000 2026 5.00% 1,000,000 419,825 419,825 839,650 1,839,650 17,700,000 2027 5.00% 1,000,000 394,825 394,825 789,650 1,789,650 16,700,000 2028 5.00% 1,000,000 369,825 369,825 739,650 1,739,650 15,700,000 2029 5.00% 1,040,000 344,825 344,825 689,650 1,729,650 14,660,000 2030 5.00% 1,095,000 318,825 318,825 637,650 1,732,650 13,565,000 2031 5.00% 1,145,000 291,450 291,450 582,900 1,727,900 12,420,000 2032 5.00% 1,210,000 262,825 262,825 525,650 1,735,650 11,210,000 2033 5.00% 1,675,000 232,575 232,575 465,150 2,140,150 9,535,000 2034 4.00% 1,760,000 190,700 190,700 381,400 2,141,400 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 $ 6,564,921 $ 6,650,275 $ 13,215,196 $ 35,255,196 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 Duell/01 Due 5/01 Interest Requirement Outstanding 2020 4.00% $ 640,000 $ 248,080 $ 295,725 $ 543,805 $ 1,183,805 $ 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 - $ 17,315,000 $ 3,175,355 $ 3,223,000 $ 6,398,355 $ 23,713,355 Call Option: Bonds maturing on 05/01/2029 to 0510IJ2033 callable in whole or in part on any date beginning 05 01 2028 (t. par. IN 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 5% 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 5% ADDED TO ANYTHING OVER 15.8 04/10 .4546 UP TO 20.00 MGD. IF WE GO OVER, THEN 5% 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 5% 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 5% 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 5% 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 50' 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. 04/18 .7012 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 4/19 .7208 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 4/20 .7460 UP TO 20.0 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER. BAWA EAST (2nd TAKE POINT) 6 MGD MINIMUM. 13 TREATED WATER RATES City Other Rate/1,000 Rate/1,000 Increase- Increase - Year gaHons 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 12020-2021 $2.82 $2.86 $0.00 $0.00 incremental operating cost. $2.90 $2.95 $0.08 $0.09 Funding for City of Houston rate increase. 14