2012 TOWN HALLNOVEMBER 7, 2012

The Authority makes no representations or warranties regarding the amount of its future fees or water rates, conditions of service, terms of its Groundwater Reduction Plan, terms of its future orders or rules, or any other

matters set forth in this presentation.

• Status of Facilities• Status of Conversion• Ongoing Issues• 2020 System• Finances• Q&A

• 53 miles of pipelines in operation• Pump Station #1

• 15 MG storage

• Upgraded Control/SCADA System

• 5 active contracts• 8.4 miles of pipelines• Connections to 3 Water Plants• Upgrade to supply metering station

STATUS OF CONVERSION

§ Surface Water to 50 Water Plants§ 39 Districts converted§ 2 more Districts with 2 Water

Plants by end of 2012§ 30.1 percent converted in 2011

(extreme drought)§ 35.3 percent converted to date

SW PURCHASED FROM CITY OF HOUSTON

ITEM 2007 2008 2009 2010 2011 2012 2013

Treated Water Costs

0.3584 0.3799 0.6187 0.4341 0.3754 0.5489 0.4882

Untreated WaterCosts

0.1054 0.1260 0.1224 0.1170 0.1109 0.1444 0.1343

Major Rehab -- -- 0.2140 0.1468 0.0158 0.1667

Total Water Cost per 1000 Gallons

0.4638 0.5059 0.9551 0.6979 0.5021 0.6932 0.7891

CITY OF HOUSTON FY

Figures for FY2007 through FY 2011 are based on true-up costs. FY 2012 and FY 2013 are based on City of Houston estimated O&M cost prior to true-up.

• Contracts 39 & 40§ Design 90 percent complete

• Acquiring easements for Contracts 33, 34 & 49

• Start with Census Bureau 2010 Census• 2010 Census equal to projections for 2020• Compared with projections for HGSC• Approximately 2 percent per year until 2020

• Water level dropped 85 feet• Recovered only 40 feet

• For use of untreated surface water or wastewater effluent• Credit equal to 50 percent of then current pumpage fee • Credit for up to 10 years• For recovery of construction cost of project• Currently have one project:

• Pine Forest Country Club

§ Drought of 2011§ City of Houston draft revised plan§ Authority to re-evaluate plan§ Districts need to consider modifying plans

§ HGSD, FBSD, LSGWCD joint study§ Improved groundwater model§ Updated population projections§ Study completed by end of 2012§ Potential regulatory plan changes

• $41,965,000 WIF Loan• Interest rate approximately 1.1667 %• For Second Source Transmission Lines

• Preliminary Engineering• Surveying• ROW Acquisition• Environmental• Permitting

• Luce Bayou• COH Treatment Plant Capacity• North-South Second Source Project• East-West Second Source Project• Repump Station• Central Pump Station• CIP Distribution Lines• Connections to MUDs

§ Expansion of NEWPP§ 8-10 years to plan, design, construct§ Participants include COH, WHCRWA,

NHCRWA, NFBWA, CHCRWA§ Initial evaluations in progress

• North-South and East-West routes• Joint WHCRWA/NFBWA• Projected 39 miles of 96” pipe• Environmental Studies in progress• Permitting ongoing• Acquiring additional easements

• Sites acquired• Sites platted and recorded• Permit for Repump issued• Joint WHCRWA/NFBWA

• Approximately 75 miles

• Evaluating alternate routes

• Acquiring easements

• Designing and constructing sections• Close loops• Deliver contract

supply in winter

75 MILES

EVAL

ROUTES

ACQUIRE

EASEMENTS

DESIGN&

CONSTRUCT

DELIVER

IN WINTER

YTD BUDGET YTD ACTUALRevenues $32,796,271 $27,634,071

Expenditures

Operating Fund $ 9,228,972 $ 6,663,239

Bond Debt Service Fund Transfer

$16,572,409 $18,094,493

Construction Fund(from Bond Proceeds)

$11,735,797 $14,497,497

Second Source Project(from Bond Proceeds)

$2,932,500 $1,597,755

Revenues $36,557,286

Expenditures

Operating Fund $10,392,150

Bond Debt ServiceFund Transfer

$25,811,530

Construction Fund(from Bond Proceeds)

$16,563,500

Second Source(from Bond Proceeds)

$11,100,000

SURFACE WATER GROUNDWATER

WHCRWA $2.15 $1.75

NHCRWA $2.20 $1.75

NFBWA $1.85 $1.50

SURFACE WATER GROUNDWATER

CURRENT $2.15 $1.75

2013 ? ?

HGSD Disincentive Fee$5.00 per 1,000 gallons

www.whcrwa.com