· 6/25/2020 · north texas municipal water district . 501 e. brown street • wylie, texas...

NORTH TEXAS MUNICIPAL WATER DISTRICT 501 E. Brown Street • Wylie, Texas 75098

(972) 442-5405 – Phone • (972) 295-6440 – Fax

TO: BOARD OF DIRECTORS FROM: RODNEY RHOADES, INTERIM EXECUTIVE DIRECTOR DATE: JUNE 18, 2020 SUBJECT: REGULAR MEETING – THURSDAY, JUNE 25, 2020 I. JUNE 2020 BOARD/COMMITTEE MEETINGS (via teleconference)

The following Committee meetings were held earlier this month:

• Wednesday, June 10, 2020 o Executive Committee o Personnel Committee o Finance/Audit Committee

• Wednesday, June 17, 2020 o Policy Committee o Special Purpose Committee – PUC Issues

The following Committee meetings will be held as follows:

• Wednesday, June 24, 2020 o 1:00 p.m. – Wastewater Committee Meeting o 2:45 p.m. – Water Committee Meeting

A special Board meeting has been scheduled on Thursday, June 25, 2020, at 3:00 p.m. for legal counsel, Lauren Kalisek, to present a review of Open Government Training. The regular Board meeting will be held on Thursday, June 25, 2020, at 4:00 p.m. All meetings are being held via teleconference and audio recordings will be available on NTMWD’s website.

II. 2020-2021 COMMITTEE ASSIGNMENTS

The Board Policy Manual states, “When a new President takes office on June 1, it shall be the President's duty to appoint or reappoint the members of the Standing Committees so that composition of the Committees is compatible with the plans and goals of NTMWD. In making such appointments, the President should take into consideration the continuity of the committee and the expertise of the member, but should consider

MEMORANDUM TO BOARD OF DIRECTORS JUNE 18, 2020 PAGE 2

rotating members after three years of service to achieve each member’s exposure to other committees.” President Parks has reviewed the existing Committees and has made changes in accordance with NTMWD Policy and his judgment concerning the exposure of each Director to all phases of District activity. A list of the appointments for the Committees for the 2020 – 2021 year is attached. The new Committee assignments were announced at the Executive Committee meeting and are effective June 11, 2020.

III. BOARD ROOM SEATING CHART A copy of the 2020-2021 Board room seating chart is also attached to this memorandum.

IV. MONTHLY REPORTS/APPENDIX

Please note the following reports/documents are enclosed in the Board packet for your reference as appendices: • Glossary of Terms • Board Policies Manual, Section IX. Board of Directors Meeting Agenda Policy • Water Consumption Report • Water Quality Reports

o Bonham Water Treatment Plant o Tawakoni Water Treatment Plant o Wylie Water Treatment Plant

• Wastewater Flow Report • Wastewater Treatment Plant Capacity Report • Wastewater Quality Report • Solid Waste Tonnage Report • NTMWD Financial Statements

o Monthly Financial Statements for the month ended May 31, 2020 • Engineering Activity Report • Construction Progress Report • Bois d’Arc Lake Report • NTMWD Board Policies Manual with proposed amendments in redline Preliminary

Official Statement – NTMWD Regional Wastewater System Revenue Bonds, Series 2020A

• Slide presentations for discussion items: o Power agreement for the Tawakoni Water Treatment Plant with Farmers

Electric Cooperative o Bois d’Arc Lake Construction Update

• 2020 Executive Summary on Compensation and Benefits Study

MEMORANDUM TO BOARD OF DIRECTORS JUNE 18, 2020 PAGE 3 V. WATER CONTRACT AMENDMENT PROCESS

Following is a summary of the costs related to the Water Contract Amendment activities as of June 10, 2020:

FY16 FY17 FY18 FY19 FY20 TOTAL Contract Amendment Activities (a)

$156,882.85 $143,184.38 $54,670.67 $28,301.03

$383,038.93

PUC Activities (b) $383,180.88 $1,949,386.65 $1,708,756.74 $327,306.68 $4,368,630.95

Litigation Activities (c) $816,152.29 $86,303.72 $100,854.61 $83,431.18

$1,086,741.80

TOTAL $156,882.85 $1,342,517.55 $2,090,361.04 $1,837,912.38 $410,737.86

$5,838,411.68

(a) Includes payments to NewGen Strategies, Raftelis, Strategic Government

Resources and Lloyd Gosselink for rate modeling services, facilitation services and legal support

(b) Includes payments to Lloyd Gosselink for legal support to respond to PUC petition (c) Includes payments to Lloyd Gosselink for legal support for bond validation and PUC

jurisdictional activities

The hourly rate charges for Lloyd Gosselink are as follows:

VI. STRATEGIC HIGHLIGHT, Goal 2 – Stewardship (2.4 Rigorous financial

management)

Financial Transparency Key to Stewardship The North Texas Municipal Water District (NTMWD) is building on its commitment to strong stewardship for our region by providing greater transparency through easy online access to more detailed financial data. NTMWD is organizing this important information in a way that makes it easier for our communities to understand and analyze – further underscoring our dedication to rigorous financial management. In addition, sharing more of our traditional financial data on the NTMWD website means the organization is eligible to apply for recognition under the Texas Comptroller of Public Accounts' Transparency Stars program which recognizes local governments for going above and beyond in their transparency efforts. The new NTMWD.com Financial Transparency webpage combines numerous financial documents (many of which were already available online) with new visualizations,

LEGAL COST TO NTMWD HOURLY RATE RANGE Paralegal $115 - $200 Associate $150 - $280 Principal $225 - $485

https://www.ntmwd.com/

MEMORANDUM TO BOARD OF DIRECTORS JUNE 18, 2020 PAGE 4

summaries, downloadable data and other helpful information into a single online location. This concentration of data includes budgets, expenditures and revenue charts, comprehensive annual financial reports, check registers, strategic financial plans and links to archived data. While the Texas Transparency Stars program encourages greater access to information, it also emphasizes that information be straightforward and allow for users to easily perform basic analysis on the data. For example, users can now download a spreadsheet of our annual budget or check registers which provides the ability to search and examine specific data. NTMWD also provides a comparison chart showing the last five years of expense budgets by system. These are just a few ways the District has “opened its books” to share its financial resources with the communities we serve. The new webpage qualifies NTMWD to apply for the first transparency star, Traditional Finances, which encompasses all the activities most governments undertake. It is the foundational step, and all entities have to meet the requirements for this first star before applying for the other four which include contracts and procurement, economic development, public pensions and debt obligations. NTMWD will build upon this initial effort to include greater online access to the resources required in these other areas. Through providing the additional online data to pursue this first Transparency Star recognition, the District adds to its financial transparency by further demonstrating a commitment to responsibly manage public resources today and into the future. https://www.ntmwd.com/finances/traditional-finances/

https://www.ntmwd.com/finances/traditional-finances/

Effective June 11, 2020

NORTH TEXAS MUNICIPAL WATER DISTRICT

BOARD OF DIRECTORS COMMITTEES

2020-2021

STANDING COMMITTEES

EXECUTIVE COMMITTEE 1. Larry Parks President 2. Darrell Grooms Vice-President 3. Phil Dyer Secretary 4. Don Gordon Past President WATER COMMITTEE 1. Jack May, Chairman 2. Terry Sam Anderson 3. Joe Farmer 4. Marvin Fuller 5. Chip Imrie 6. Joe Joplin 7. Keith Stephens WASTEWATER COMMITTEE 1. Richard Peasley, Chairman 2. John Carr 3. David Hollifield 4. James Kerr 5. George Crump 6. John Murphy 7. Princeton - Vacant SOLID WASTE COMMITTEE 1. Blair Johnson, Chairman 2. Brenda Jean Patrick 3. Ron Kelley 4. Charles McKissick 5. Lynn Shuyler 6. John Sweeden 7. Princeton - Vacant

Board of Directors Committees 2020-2021 Page 2 FINANCE/AUDIT COMMITTEE* 1. Phil Dyer, Chairman 2. John Carr 3. George Crump 4. Marvin Fuller 5. David Hollifield 6. Chip Imrie 7. James Kerr 8. John Sweeden 9. Princeton – Vacant *Subject to Board approval, Insurance/Risk Management may be added to this Committee’s responsibility

PERSONNEL COMMITTEE 1. Chip Imrie, Chairman 2. Terry Sam Anderson 3. Joe Farmer 4. Joe Joplin 5. Brenda Jean Patrick 6. Ron Kelley 7. Jack May 8. Princeton – Vacant

REAL ESTATE** 1. Charles McKissick, Chairman 2. Terry Sam Anderson 3. George Crump 4. Marvin Fuller 5. Don Gordon 6. Darrell Grooms 7. David Hollifield 8. Blair Johnson ** Proposed standing Real Estate Committee is subject to Board approval LEGISLATIVE 1. Marvin Fuller, Chairman 2. George Crump 3. Joe Farmer 4. Charles McKissick 5. John Murphy 6. Richard Peasley 7. Lynn Shuyler 8. Keith Stephens POLICY 1. Larry Parks, Chairman President 2. Jack May Water 3. Richard Peasley Wastewater 4. Blair Johnson Solid Waste 5. Phil Dyer Finance/Audit/Ins. 6. Chip Imrie Personnel 7. Charles McKissick Real Estate*** 8. Marvin Fuller Legislative ***Subject to Board approval of standing Real Estate Committee

Board of Directors Committees 2020-2021 Page 3 WILSON CREEK OVERSIGHT COMMITTEE 1. Jack May, Chairman JOHN BUNKER SANDS WETLAND CENTER BOARD OF DIRECTORS 1. Terry Sam Anderson 2. Don Gordon 3. Executive Director/Executive Director Alternate 4. Joe Farmer, Board Member Emeritus

Interim Executive Director

RODNEY RHOADES

TERRY

SAM

ANDERSON

(Mesquite)

JOHN

SWEEDEN

(Richardson)

DON GORDON

(Garland)

DAVID HOLLIFIELD

(Royse City)

VACANT

(Princeton)

RICHARD PEASLEY

(Frisco)

CHIP IMRIE

(Rockwall)

MARVIN FULLER

(Wylie)

GEORGE CRUMP

(Farmersville)

CHARLES

MCKISSICK

(McKinney)

JOE

FARMER

(Allen)

Secretary

PHIL DYER

(Plano)

BRENDA JEAN

PATRICK

(Mesquite)

Vice-President

DARRELL GROOMS

(Forney)

LYNN

SHUYLER

(Frisco)

JOHN

MURPHY

(Richardson)

BLAIR JOHNSON

(Royse City)

JOE JOPLIN

(McKinney)

JIM KERR

(Allen)

JACK MAY

(Garland)

VACANT

(Princeton)

RON KELLEY

(Plano)

JOHN CARR

(Forney)

2020 - 2021

BOARD OF DIRECTORS

SEATING CHART

KEITH STEPHENS

(Wylie)

President

LARRY PARKS

(Rockwall)

________________

1Persons with disabilities who plan to attend the NTMWD Board of Directors meeting and who may need auxiliary aids or services are requested to contact Shannon Sauceman in the NTMWD Administrative Offices at (972) 442-5405 as soon as possible. All reasonable efforts will be taken to make the appropriate arrangements.


(972) 442-5405 – Phone • (972) 295-6440 – Fax

BOARD OF DIRECTORS REGULAR MEETING (BY TELECONFERENCE)

THURSDAY, JUNE 25, 2020 4:00 P.M.

Notice is hereby given pursuant to V.T.C.A., Government Code, Chapter 551, that the Board of Directors of North Texas Municipal Water District (NTMWD) will hold a regular meeting by teleconference, accessible to the public, on Thursday, June 25, 2020, at 4:00 p.m. In accordance with the COVID-19 public health threat and the related March 16, 2020, action by the Office of the Governor, temporarily suspending certain provisions of the Texas Open Meetings Act, NTMWD will hold its meeting by telephonic conference call. In lieu of physical attendance of the meeting, the public may teleconference in to the Board meeting by calling 1 (844) 621-3956 and entering the following access code: 928 587 040. Members of the public wishing to make public comment during the meeting should follow the instructions for on-line registration listed under Item V. below no later than the start time of the meeting. The meeting will be recorded and the audio recording will be available on the NTMWD website after the meeting. The Board of Directors is authorized by the Texas Open Meetings Act to convene in closed or executive session for certain purposes. These purposes include receiving legal advice from its attorney (Section 551.071); discussing real property matters (Section 551.072); discussing gifts and donations (Section 551.073); discussing personnel matters (Section 551.074); or discussing security personnel or devices (Section 551.076). If the Board of Directors determines to go into executive session on any item on this agenda, the Presiding Officer will announce that an executive session will be held and will identify the item to be discussed and provision of the Open Meetings Act that authorizes the closed or executive session.

AGENDA1

I. CALL TO ORDER

II. INVOCATION

III. ROLL CALL/ANNOUNCEMENT OF QUORUM NTMWD staff will call the roll and confirm attendance of Board members by voice confirmation. The Board Secretary shall announce a quorum.

AGENDA – JUNE 25, 2020 PAGE 2 IV. INSTRUCTIONS FROM MODERATOR

A member of NTMWD staff will serve as moderator for the teleconference and provide instructions to Board members, staff and the public for conducting the meeting by teleconference.

V. OATH OF OFFICE

VI. PUBLIC COMMENTS

INSTRUCTIONS FOR PUBLIC COMMENT ON-LINE REGISTRATION: Prior to the start of the Board meeting, members of the public wishing to provide public comment must submit via email to [email protected] their first and last name, organization, comment topic, mailing address and email address. During the public comment portion of the meeting, speakers will be recognized by name and asked to provide their comments. The time limit is five (5) minutes per speaker, not to exceed a total of thirty (30) minutes for all speakers. The Board may not discuss these items, but may respond with factual or policy information.

VII. OPENING REMARKS

A. President’s Remarks concerning current events, conduct of meeting, posted agenda items, committee assignments, and related matters

B. Interim Executive Director’s Status Report concerning legislation and regulatory

matters, budgets, current projects and ongoing programs of the District including the Regional Water System, Regional Wastewater System, Regional Solid Waste System, Watershed Protection, and Water Conservation

VIII. CONSENT AGENDA ITEMS

The Consent Agenda allows the Board of Directors to approve all routine, noncontroversial items with a single motion, without the need for discussion by the entire Board. Any item may be removed from consent and considered individually upon request of a Board member or NTMWD staff member. A. Regular Board Meeting Minutes – Consent Agenda Item No. 20-06-01

• Consider approval of May 28, 2020, Board of Directors Regular meeting minutes

B. Monthly Construction Report – Consent Agenda Item No. 20-06-02

• Consider approval of May 2020 Monthly Construction Report

C. Authorize engineering services agreement on Bypass Connection and Phase II Valve Improvements project – Consent Agenda Item No. 20-06-03 • Consider authorizing the Interim Executive Director to execute an engineering

services agreement with Pacheco Koch Consulting Engineers, Inc., in the amount of $197,100 for final engineering design on Project No. 501-0565-20, Bypass Connection and Phase II Valve Improvements

mailto:[email protected]

AGENDA – JUNE 25, 2020 PAGE 3

IX. AGENDA ITEMS FOR INDIVIDUAL CONSIDERATION

GENERAL/ADMINISTRATIVE SERVICES ITEMS

A. Amendment to Board Policies Manual, Section VII. Board of Directors Committee Policy – Administrative Memorandum No. 5575• Consider authorizing amendment to NTMWD Board Policies Manual, Section

VII. Board of Directors Committee Policy

B. Adoption of Resolution No. 20-27 authorizing issuance, sale, and delivery of NTMWD Regional Wastewater System Revenue Bonds, Series 2020A –Administrative Memorandum No. 5576• Consider adoption of Resolution No. 20-27 authorizing the issuance, sale, and

delivery of approximately $35.13 million of NTMWD Regional Wastewater System Revenue Bonds, Series 2020A, and approving and authorizing instruments and procedures relating thereto

C. Acceptance of FY20 Comprehensive Compensation and Benefits Study –Administrative Memorandum No. 5577• Consider authorizing acceptance of the FY20 Comprehensive Compensation

and Benefits Study

D. Adoption of Resolution No. 20-29 recognizing and supporting Member City contract and settlement negotiations – Administrative Memorandum No. 5578• Consider adoption of Resolution No. 20-29 recognizing and supporting

Member City contract and settlement negotiations

E. Authorize execution of architectural services agreement on Maintenance Facilities Central Region, Phase II – Administrative Memorandum No. 5579• Consider authorizing the Interim Executive Director to execute an architectural

services agreement with Stantec Architecture, Inc., in the amount of$1,070,826 for final architecture and engineering design on Project No.101-0445-16, Maintenance Facilities Central Region, Phase II

WATER SYSTEM AGENDA ITEMS

F. Authorize Change Order No. 5 on Wylie Water Treatment Plant Water SystemOperations Center – Administrative Memorandum No. 5580• Consider authorizing Change Order No. 5 with MYCON General Contractors,

Inc., with a reduction in the amount of $486,044.73 to Project No. 101-0352-14, Wylie Water Treatment Plant Water System Operations Center

G. Authorize execution of engineering services agreement on Plano West SidePipeline, Plano Delivery Point No. 3 to Richardson Delivery Point No. 2 –Administrative Memorandum No. 5581• Consider authorizing the Interim Executive Director to execute an engineering

services agreement with Lockwood, Andrews and Newnam, Inc., in the amountof $1,249,977 for final engineering design on Project No. 101-0566-20, PlanoWest Side Pipeline, Plano Delivery Point No. 3 to Richardson Delivery PointNo. 2


H. Award of construction contract on Meter Vault Standardization, Set Point Control Implementation, Phase III – Administrative Memorandum No. 5582 • Consider authorizing award of construction contract to Felix Construction

Company in the amount of $13,470,395 for Project No. 101-0338-13, Meter Vault Standardization, Set Point Control Implementation, Phase III

I. Designation of emergency action and authorize execution of construction

contract on Texoma to Wylie Raw Water Pipeline Crossing at State Highway 121 – Administrative Memorandum No. 5583 • Consider authorizing designation of emergency action and authorizing

execution of construction contract with Garney Companies, Inc., in the amount of $818,739.87 on Project No. 101-0557-20, Texoma to Wylie Raw Water Pipeline Crossing at State Highway 121, Tunnel Casing Extension

J. Authorize partial release of retainage on Trinity River Main Stem Pump

Station and Raw Water Pipeline Project – Administrative Memorandum No. 5584 • Consider authorizing partial release of retainage to Garney Companies, Inc.,

in the amount of $1,219,957.28 on Project No. 101-0269-11, Trinity River Main Stem Pump Station and Raw Water Pipeline

WASTEWATER SYSTEM AGENDA ITEMS

K. Authorize transfer of funds and ratification of action by previous Executive

Director in response to emergency conditions at Upper Rowlett Creek Lift Station and Upper Cottonwood Creek Lift Station – Administrative Memorandum No. 5585 • Consider authorizing transfer of funds up to $550,000 and authorizing

ratification of the emergency procurement of goods and services in the amount of $719,461.98 authorized by the previous Executive Director in response to emergency conditions resulting from check valve failures at Upper Rowlett Creek Lift Station and influent pipe leak at the Upper Cottonwood Creek Lift Station

L. Award of construction contract on Wilson Creek Lift Station Improvements

project – Administrative Memorandum No. 5586 • Consider authorizing award of construction contract to Crescent Constructors,

Inc., in the amount of $4,747,000 on Project No. 501-0448-16, Wilson Creek Lift Station Improvements

M. Additional inspection services for Wilson Creek Regional Wastewater

Treatment Plant Advanced Treatment and Headworks Improvements project – Administrative Memorandum No. 5587 • Consider authorizing additional inspection services with Mbroh Engineering,

Inc., in the amount of $138,600 for electrical inspection services on Project No. 301-0346-13, Wilson Creek Regional Wastewater Treatment Plant Advanced Treatment and Headworks Improvements


N. Authorize execution of engineering services agreement on Wilson Creek Regional Wastewater Treatment Plant Aeration Basin Improvements project – Administrative Memorandum No. 5588 • Consider authorizing the Interim Executive Director to execute an engineering

services agreement with Lockwood, Andrews, and Newnam, Inc., in the amount of $977,384 for final engineering design on Wilson Creek Regional Wastewater Treatment Plant Aeration Basin Improvements

LAND ACQUISITION/RIGHT-OF-WAY AGENDA ITEMS

O. Authorize additional funding for pipeline relocations and adoption of

Resolution No. 20-30 authorizing additional funding of right-of-way for Project No. 101-0506-18, Pipeline Relocations at FM 2478 (Custer Road) – Administrative Memorandum No. 5589 • Consider authorizing additional funding for right-of-way acquisition program in

the amount of $320,000 resulting in a total authorization of $1,000,000 and adoption of Resolution No. 20-30 authorizing additional funding of right-of-way for the pipeline relocations at FM 2478 (Custer Road), Project No. 101-0506-18

P. Authorize right-of-way acquisition program and adopt Resolution No. 20-29 authorizing the use of eminent domain to acquire right-of-way for the Upper East Fork Interceptor Rehabilitation and Improvements 2020 project – Administrative Memorandum No. 5590 • Consider authorizing Interim Executive Director to execute a right-of-way

acquisition program with a budget of $30,000 and adoption of Resolution No. 20-29 authorizing the use of eminent domain to acquire right-of-way for the Upper East Fork Interceptor Rehabilitation and Improvements 2020, Project No. 501-0540-169 and delegating authority to initiate condemnation proceedings to the NTMWD Interim Executive Director

X. DISCUSSION ITEMS

A. Bois d’Arc Lake Update

1. Construction update 2. Property acquisition update

B. Update on power agreement with Farmers Electric Cooperative for Tawakoni

Water Treatment Plant C. Discuss status of Member City contract matters including:

1. Petitions of the Cities of Garland, Mesquite, Plano and Richardson Appealing Wholesale Water Rates Implemented by North Texas Municipal Water District, Docket Nos. 46662, 47863, 49043, 50382 before the Public Utility Commission of Texas

2. Facilitation with Member Cities regarding alternate cost methodologies to the Amendatory Water Supply Contract


D. Update on litigation involving North Texas Municipal Water District/advice from legal counsel, including: 1. North Texas Municipal Water District v. S.J. Louis Construction of Texas,

Ltd., ACT Pipe and Supply, Inc., North American Pipe Corporation, J-M Manufacturing, Inc., d/b/a JM Eagle, Inc., Cause No. 429-06607-2019, 429th Judicial District, Collin County, Texas (121 Force Main)

2. Mediation results for Upper East Fork Interceptor System Indian Creek Force Main No. 2, Project No. 501-0454-17

3. Justin A. Jinright, et al., v. NTMWD, Cause No. 429-02373-2016 pending in Collin County, Texas 3. Loyd D. Johnson Family Ltd. Partnership No. 1, LLC, et al, v. NTMWD

E. Update on accident at Seis Lagos Wastewater Treatment Plant on June 2, 2020 F. Discuss Executive Director search process

G. Review of items for follow up raised during meeting

H. Opportunity for Board members to request potential future agenda items (No substantive discussion of items will take place at this time)

XI. ADJOURNMENT

NORTH TEXAS MUNICIPAL WATER DISTRICT JUNE 2020 CONSENT AGENDA ITEM NO. 20-06-01

MAY 2020 REGULAR BOARD MEETING MINUTES

RECOMMENDATION The Interim Executive Director and NTMWD staff recommend the Board of Directors approve the minutes of the regular Board meeting held on Thursday, May 28, 2020 as presented. (See attached.)


(972) 442-5405 – Phone • (972) 295-6440 – Fax

MINUTES REGULAR MEETING (BY TELECONFERENCE) OF THE BOARD OF DIRECTORS

THURSDAY, MAY 28, 2020 The North Texas Municipal Water District (NTMWD) Board of Directors met in regular meeting by teleconference on Thursday, May 28, 2020, at 4:00 p.m. Notice of the meeting was legally posted in accordance with Government Code, Title 551, Open Meetings. I. CALL TO ORDER

President Don Gordon called the meeting to order at approximately 4:00 p.m. President Gordon advised the following regarding today’s meeting.

In accordance with the COVID-19 public health threat and the related March 16, 2020, action by the Office of the Governor, temporarily suspending certain provisions of the Texas Open Meetings Act, NTMWD will hold its meeting by telephonic conference call.

In lieu of physical attendance of the meeting, the public may teleconference in to the Board meeting by calling 1-844-621-3956 and entering the following access code: 928 587 040. Members of the public wishing to make public comment during the meeting should follow the instructions for on-line registration listed under Item V. below no later than the start time of the meeting. The meeting will be recorded and the audio recording will be available on the NTMWD website after the meeting.

II. INVOCATION

Board Secretary Darrell Grooms offered the invocation.

President Gordon announced that the Board would forego the Pledge of Allegiance and the Pledge of Allegiance to the Texas Flag due to meeting through teleconference.

III. ROLL CALL/ANNOUNCEMENT OF QUORUM Secretary Darrell Grooms called the roll and confirmed attendance by teleconference as follows:

1 Anderson, Terry Sam 2 Carr, John 3 Crump, George

MINUTES – MAY 28, 2020 PAGE 2

4 Dyer, Phil 5 Farmer, Joe 6 Fuller, Marvin 7 Gordon, Don 8 Grooms, Darrell 9 Hogan, Rod 10 Hollifield, David 11 Imrie, Chip 12 Johnson, Blair 13 Joplin, Joe 14 Kerr, James (Jim) 15 May, Jack 16 McKissick, Charles 17 Murphy, John 18 Parks, Larry 19 Patrick, Brenda Jean 20 Peasley, Richard 21 Shuyler, Lynn 22 Stephens, Keith 23 Sweeden, John

The following NTMWD legal and financial consultants attended the meeting:

Lauren Kalisek and James Aldredge – Lloyd Gosselink Rochelle & Townsend Kate Norman – Coffin Renner Lewis Isaacks and Mark Walsh – Saunders Walsh & Beard Alan Raynor – McCall Parkhurst & Horton Nick Bulaich and David Medanich- Hilltop Securities

IV. INSTRUCTIONS FROM MODERATOR

Interim Executive Director Rodney Rhoades served as moderator for the teleconference and provided instructions to Board members, staff and the public for conducting the meeting by teleconference. Instructions included: • Remember to unmute your phone when you acknowledge your presence, provide

comments, make a motion/second, and vote. Please then return to mute to minimize any background noise.

• Please announce your name when speaking. • If for some reason you drop off the call, simply follow the instructions to redial into

teleconference. • Audio for this meeting will be recorded and made available on our website in

accordance with the current modified requirements. • Secretary Darrell Grooms will oversee the voting process and confirm the votes of

each Director. • The public line will be muted except during public comment to avoid noise disruptions

so that we can do our best to make sure all participants can clearly hear the proceedings.


V. PUBLIC COMMENTS

INSTRUCTIONS FOR PUBLIC COMMENT ON-LINE REGISTRATION: Prior to the start of the Board meeting, members of the public wishing to provide public comment must submit via email to [email protected] their first and last name, organization, comment topic, mailing address and email address. During the public comment portion of the meeting, speakers will be recognized by name and asked to provide their comments. The time limit is five (5) minutes per speaker, not to exceed a total of thirty (30) minutes for all speakers. The Board may not discuss these items, but may respond with factual or policy information. There were no requests for public comments from members of the public.

VI. OPENING REMARKS

A. President’s Remarks concerning current events, conduct of meeting, posted agenda items, committee assignments, and related matters

President Don Gordon stated that these are some unusual times due to COVID-19. He stated that the agenda today is large and that each item was reviewed and is vital and essential to keep our business moving forward.

Per the Governor’s Order, this meeting is being recorded and will be made available on the website in the future. President Gordon advised that if there are questions on the agenda items, please keep questions germane to the vote. If there are any other questions, please save those for the staff tomorrow. President Gordon advised that those who would like to make a motion or second to please identify themselves first. Discussion will be held after the motion and second, per Roberts Rules of Order. The June 2020 Board and Committee meeting schedule is still tentative; however, the following meetings are planned:

o Wednesday, June 10, 2020: 11:30 a.m. – Executive Committee 1:30 p.m. – Personnel Committee 2:30 p.m. – Finance/Audit Committee

o Tuesday, June 23, 2020* 2:00 p.m. – Water Committee

o Wednesday, June 24, 2020* 2:00 p.m. – Wastewater Committee

*Note: These dates/times were tentative and a change occurred to the schedule following the Board of Directors meeting.

mailto:[email protected]


o Thursday, June 25, 2020 3:00 p.m. – Local Government Officers Training – Lauren Kalisek 4:00 p.m. – Regular Board meeting

President Gordon advised that Director Larry Parks will abstain from voting on all the Consent Agenda items and on Agenda Item No. VIII. I.

B. Executive Director’s Status Report concerning legislation and regulatory matters, budgets, current projects and ongoing programs of the District including the Regional Water System, Regional Wastewater System, Regional Solid Waste System, Watershed Protection, and Water Conservation Interim Executive Director Rodney Rhoades reported: • COVID-19 Update - Mr. Rhoades advised that there are no confirmed cases

of COVID-19 of District employees. He added that he will continue to email situation reports weekly.

• Sister Grove Facility Bond pricing - Mr. Rhoades stated that in conjunction with the Texas Water Development Board, the Sister Grove facility bonds of over $450 million were priced last week. The bonds received an interest rate of .1555%, which equates to $4 million in interest payments over the life of the 30-year bonds. He expressed his appreciation to the Texas Water Development Board for their assistance.

VII. CONSENT AGENDA ITEMS

The Consent Agenda allows the Board of Directors to approve all routine, noncontroversial items with a single motion, without the need for discussion by the entire Board. Any item may be removed from consent and considered individually upon request of a Board member or NTMWD staff member.

President Gordon advised that the language in the agenda for Consent Agenda Item 20-05-07 contains an error by including the word “additional”. The proposed action is for approval of initial services as reflected in the consent memo. Director Joe Joplin requested that following the vote, staff provide a cost/benefit analysis for outsourcing Items F. through M. Upon a motion by Director John Sweeden and a second by Director Brenda Jean Patrick to approve the Consent Agenda items, the Board of Directors voted to approve. Director Larry Parks abstained from voting on the Consent Agenda. A. Regular Board Meeting Minutes – Consent Agenda Item No. 20-05-01

• Consider approval of April 23, 2020, Board of Directors Regular meeting minutes

B. Special Board Meeting Minutes – Consent Agenda Item No. 20-05-02

• Consider approval of April 16, 2020, Board of Directors Special meeting minutes

C. Monthly Construction Report – Consent Agenda Item No. 20-05-03 • Consider approval of May 2020 Monthly Construction Report


D. Conveyance of Property to Fannin County Electric Cooperative – Consent

Agenda Item No. 20-05-04 • Consider adoption of Resolution No. 20-19 authorizing conveyance of property

in the form of a 1.093 acre permanent easement to Fannin County Electric Cooperative, Project No. 101-0120-07

E. Mitigation Credit Sales Agreement on Wylie Rockwall Farmersville 48-Inch Pipeline, Phase II, Improvements Project – Consent Agenda Item No. 20-05-05 • Consider authorizing execution of mitigation credit sales agreement with Red

Oak Umbrella Mitigation, Ltd., in the amount of $52,888 on Project No. 101-0490-18, Wylie Rockwall Farmersville 48-Inch Pipeline, Phase II, Improvements

F. Additional Inspection Services on Wylie Water Treatment Plant I Rapid Mix

and Sedimentation Improvements Project – Consent Agenda Item No. 20-05-06 • Consider authorizing additional inspection services with Mbroh Engineering,

Inc., in the amount of $29,700 on Project No. 101-0375-14, Wylie Water Treatment Plant I Rapid Mix and Sedimentation Improvements

G. Additional Construction Inspection Services on Transmission System Water

Quality Analyzers – Consent Agenda Item No. 20-05-07 • Consider authorizing additional construction inspection services with Dietz

Engineering in the amount of $249,392 on Project No. 101-0510-18, Transmission System Water Quality Analyzers

H. Authorize Inspection Services Agreement on Wylie Water Treatment Plant III

Power Redundancy and Electrical Building Improvements – Consent Agenda Item No. 20-05-08 • Consider authorizing execution of inspection services agreement with Mbroh

Engineering, Inc., in the amount of $254,600 on Project No. 101-0518-18, Wylie Water Treatment Plant III Power Redundancy and Electrical Building Improvements

I. Authorize Additional Inspection Services – Consent Agenda Item No. 20-05-

09 • Consider authorizing additional funding for inspection services in the amount

of $278,250 with Freese and Nichols, Inc., on Project No. 301-0328-13, Rowlett Creek Regional Wastewater Treatment Plant Peak Flow Management Improvements, Phase I

J. Authorize Additional Supervisory Control and Data Acquisition Inspection Services – Consent Agenda Item No. 20-05-10 • Consider authorizing additional Supervisory Control and Data Acquisition

(SCADA) inspection services in the amount of $138,600 with Mbroh Engineering, Inc., Project No. 301-0328-13, Rowlett Creek Regional Wastewater Treatment Plant Peak Flow Management Improvements, Phase I


K. Authorize Additional Electrical Inspection Services – Consent Agenda Item No. 20-05-11 • Consider authorizing additional electrical inspection services in the amount of

$108,900 with Mbroh Engineering, Inc., on Project No. 301-0328-13, Rowlett Creek Regional Wastewater Treatment Plant, Peak Flow Management Improvements, Phase I

L. Inspection Services Agreement on Plano Spring Creek Lift Station No. 2

Improvements Project – Consent Agenda Item No. 20-05-12 • Consider authorizing execution of inspection services agreement with Freese

and Nichols, Inc., in the amount of $280,665 on Project No. 501-0473-17, Plano Spring Creek Lift Station No. 2 Improvements

M. Inspection Services Agreement on Beck Branch Parallel Interceptor, Phase

II, and Plano Spring Creek Force Main Parallel – Consent Agenda Item No. 20-05-13 • Consider authorizing execution of inspection services agreement with Freese

and Nichols, Inc., in the amount of $352,485 on Project No. 501-0439-16, Beck Branch Parallel Interceptor Improvements, Beck Branch Parallel Interceptor, Phase II, and Plano Spring Creek Force Main Parallel

N. Engineering Services Agreement on 121 Regional Disposal Facility Heavy

Equipment Shop Addition – Consent Agenda Item No. 20-05-14 • Consider authorizing execution of engineering services agreement with Huitt-

Zollars, Inc., in the amount of $431,100 for final design and construction phase services on Project No. 401-0529-19, 121 Regional Disposal Facility Heavy Equipment Shop Addition

In response to Director Joplin’s request for a cost/benefit analysis for Items F. through M., Deputy Director Cesar Baptista advised that the District currently has more projects in process than the current inspection staff can handle. He said that some of the projects are multi-year and, some are newer and for shorter terms (12 – 13 months). Mr. Baptista advised that it costs a little more to outsource for the inspections, however to do the inspections in-house would result in hiring an additional 20 or so employees. Since the District’s capital projects will peak in two to three years, that number of employees would not be needed afterward. In response to a question from Director Dyer, Mr. Baptista advised that the dollar limit for items on the Consent Agenda is $500,000.

VIII. AGENDA ITEMS FOR INDIVIDUAL CONSIDERATION

GENERAL/ADMINISTRATIVE SERVICES ITEMS A. Adoption of Resolution No. 20-20 commending Director Don Gordon’s

service as President in 2019 – 2020 • Consider adoption of Resolution No. 20-20 commending Director Don Gordon

for his service as President of the Board of Directors

Vice-President Larry Parks advised that the Board of Directors would like to take the opportunity to commend President Don Gordon for his service as President of the Board of Directors in 2019 – 2020. He expressed that everyone is disappointed that the Board


members could not attend in person to congratulate Director Gordon for his service. He read written remarks from some of the Board Members. He read the Resolution and presented it to President Gordon. Upon a motion by Director Joe Joplin and a second by Director Brenda Jean Patrick, the Board of Directors unanimously voted to adopt the Resolution.

President Gordon accepted the Resolution and tokens of appreciation for his dedicated service to the NTMWD. President Gordon advised this would be his last meeting and expressed his appreciation to executive staff, the District’s legal team, the Executive Committee, the Technical staff, and the Board of Directors. B. Adoption of Resolution No. 20-26 commending Director Rod Hogan’s service

on the NTMWD Board of Directors • Consider adoption of Resolution No. 20-26 commending Director Rod Hogan’s

service on the NTMWD Board of Directors

President Don Gordon advised that the Board of Directors would like to take the opportunity to commend Director Rod Hogan for his service on the Board of Directors from 2016 - 2020. He expressed that everyone is disappointed that the Board members could not attend in person to congratulate Director Hogan for his service and read the Resolution.

Upon a motion by Director Darrell Grooms and a second by Director Larry Parks, the Board of Directors unanimously voted to adopt the Resolution.

Director Hogan expressed his appreciation to the Board of Directors and staff. C. Election of Officers for Board of Directors for 2020 – 2021

• Consider election of Board of Directors Officers for 2020-2021

President Gordon advised that the Special Purpose – Nominating Committee met on May 13, 2020, and Director John Sweeden, Chairman of the Committee, will provide the recommended slate of officers. Director Sweeden made the following remarks: • The Nominating Committee met on May 13, 2020, to develop a slate of officers for

the 2020-2021 term of the Board of Directors. • The Committee consisted of Directors Terry Sam Anderson, Joe Joplin, and myself

(the past three serving Presidents). • The Committee reviewed historical information related to previous service as

Board Presidents including when each Member City has had a Director serve as President as well as individual Board members tenure on the Board of Directors.

• After review of information, the Committee voted unanimously to recommend the following slate of officers for 2020-2021: o President – Larry Parks (Rockwall) o Vice President – Darrell Grooms (Forney) o Secretary – Phil Dyer (Plano)


Director John Sweeden made a motion on behalf of the Nominating Committee to recommend the following slate of officers: Larry Parks – President; Darrell Grooms – Vice President, and Phil Dyer - Secretary. The motion was seconded by Director Terry Sam Anderson. President Gordon asked if there are there any other nominations from the floor. There were no nominations from the floor. The Board of Directors voted unanimously to approve the slate of officers as presented. D. Authorize issuance, sale, and delivery of NTMWD Upper East Fork

Wastewater Interceptor System Contract Revenue Bonds, Series 2020 – Administrative Memorandum No. 5558 • Consider adoption of Resolution No. 20-21 authorizing the issuance, sale, and

delivery of approximately $58,490,000 of NTMWD Upper East Fork Wastewater Interceptor System Contract Revenue Bonds, Series 2020, and approving and authorizing instruments and procedures relating thereto

Director Phil Dyer stated that this item was reviewed and approved on May 13, 2020 by the Finance/Audit Committee. Director Phil Dyer made a motion to adopt Resolution 20-21 authorizing the issuance, sale, and delivery of approximately $58,490,000 of NTMWD Upper East Fork Wastewater Interceptor System Contract Revenue Bonds, Series 2020. Director George Crump seconded the motion.

Nick Bulaich with Hilltop Securities provided an update on the bond sale. He advised that the bids were received today at 10:30 a.m. for the amount of $57,800,000. There were nine bidders with Citigroup Global Markets offering the lowest rate at 2.335%. Mr. Bulaich reviewed the debt service schedule and advised that a cash premium will be paid in the amount of $4,660,116, resulting in a final rate of 2.32%. He added that this is a very favorable result. The Board of Directors voted unanimously to approve as presented.

E. Amendment to Board Policies Manual – Administrative Memorandum

No. 5559 • Consider authorizing amendment to NTMWD Board Policies Manual, Section

IV. Board of Directors Rules of Procedures, 4.2 Organization, B. Officers clarifying the procedures and process for nominating and electing officers to the Board of Directors

President Gordon advised that the Policy Committee reviewed this item on May 19, 2020, and voted to recommend to the Board of Directors approval of the amendment to the Board Polices Manual. Upon a motion by Director Terry Sam Anderson and a second by Director Joe Farmer, the Board of Directors voted unanimously to approve as presented.


F. Amendment to Personnel Policies Manual – Administrative Memorandum No. 5560 • Consider authorizing amendment to NTMWD Personnel Policies Manual by

adopting a Sick Leave Pool program, updating Family and Medical Leave of Absence (FMLA) requirements and adding clarifying language within the Policy

President Gordon advised that the Policy Committee reviewed this item on May 11, 2020, and voted to recommend to the Board of Directors approval of the amendment to the Board Polices Manual. Motion to approve was made by Director Darrell Grooms and seconded by Director Chip Imrie. In response to a Director’s question, Assistant Deputy John Montgomery reviewed the proposed changes to the Personnel Policy Manual. He advised that the Family and Medical Leave Act (FMLA) is being amended to ensure that NTMWD practices are compliant with Federal guidelines, and to incorporate a Sick Leave Pool to provide sick leave (donated by employees) to employees facing catastrophic illnesses and/or injuries themselves or if they need to care for family members facing catastrophic illnesses and/or injuries. The Board of Directors voted unanimously to approve as presented.

BOIS D’ARC LAKE AGENDA ITEMS

G. Authorize Amendment No. 12 to Construction Manager At-Risk Agreement –

Administrative Memorandum No. 5561 • Consider authorizing execution of Amendment No. 12 to the Construction

Manager At-Risk (CMAR) agreement for final Guaranteed Maximum Price on Project No. 101-0424-16, Bois d’Arc Lake Raw Water Pipeline, and Project No. 101-0425-16, Treated Water Pipeline from Leonard Water Treatment Plant to McKinney No. 4, as follows: • Decrease the Bois d’Arc Lake Raw Water Pipeline pre-construction

services fee by $103,358.70 for unused preconstruction services; and, • Decrease the Treated Water Pipeline from Leonard Water Treatment Plant

to McKinney No. 4 pre-construction services fee by $60,000 for unused pre-construction services; and,

• Provide funding of $5,124,475.54 for Partial Guaranteed Maximum Price No. 9 for installation of a fiber optic cable and allowances for Collin County road maintenance and repair for the construction of the Treated Water Pipeline from Leonard Water Treatment Plant to McKinney No. 4; and,

• Establish the total contract price for the entirety of CMAR 5 scope in the amount of $298,936,078.19; and,

• Set the CMAR’s substantial completion deadline to March 3, 2022, and set the final completion deadline to May 24, 2022; and,

• Set liquidated damages to $2,500 per day from the substantial completion and $4,000 per day from final completion.

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize execution of Amendment No. 12 to the CMAR agreement with Garney Companies, Inc. to credit NTMWD for unused pre-construction


services, authorize additional construction services for installation of a fiber optic cable parallel to the treated water pipeline and for maintenance and repair of Collin County roads. This amendment also sets the final Guaranteed Maximum Price for CMAR 5, which includes both the raw water and treated water pipelines. Upon a motion by Director Jack May and a second by Director Blair Johnson, the Board of Directors voted unanimously to approve as presented.

H. Adoption of Resolution No. 20-22 authorizing additional funding for Leonard

Water Treatment Plant Land Acquisition Program – Administrative Memorandum No. 5562 • Consider adoption of Resolution No. 20-22 authorizing additional funding to

acquire remaining property required for the Leonard Water Treatment Plant and payment of legal fees, Project No. 101-0154-09; and approve additional funding in the amount of $150,000, resulting in a total authorization of $2,070,000 for the land acquisition program

President Gordon advised that Item H. needs to be discussed in Executive Session prior to consideration and it was moved to the end of the agenda.

I. Additional Engineering Services for Bois d’Arc Lake Mitigation Property

Monitoring – Administrative Memorandum No. 5563 • Consider authorizing additional engineering services with Freese and Nichols,

Inc., in the amount of $1,047,194 for mitigation monitoring on Project No. 101-0366-14, Bois d’Arc Lake Mitigation Property

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize additional engineering services for Freese and Nichols, Inc., to monitor and report on mitigation performance as required in the special conditions of the Clean Water Act Section 404 permit, the water right, and the Texas Water Development Board. This authorization will provide funding for mitigation monitoring through 2023.

Upon a motion by Director Jack May and a second by Director George Crump, the Board of Directors voted to approve as presented. Director Larry Parks abstained from voting on this item.

J. Additional Engineering Services for Bois d’Arc Lake Boat Ramps and Lake Facilities Project – Administrative Memorandum No. 5564 • Consider additional engineering services with Pacheco Koch Consulting

Engineers, Inc., in the amount of $329,710 on Project No. 101-0436-16, Bois d’Arc Lake Boat Ramps and Lake Facilities

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize additional engineering services for design efforts related to the business system network and fiber optic internet connectivity, permanent utility power, fire sprinkler and irrigation sprinkler system revisions, and Lake Operations Center finish-out.

Upon a motion by Director Jack May and a second by Director Blair Johnson, the Board of Directors voted unanimously to approve as presented.


WATER SYSTEM AGENDA ITEMS

K. Award of Construction Contract on High Service Pump Station 2-1 2016 Electrical Improvements, Phase IIB, Project – Administrative Memorandum No. 5565 • Consider authorizing award of construction contract with Facility Solutions

Group, Inc., in the amount of $3,265,100 on Project No. 101-0414-16, High Service Pump Station 2-1 2016 Electrical Improvements, Phase IIB

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize execution of a construction contract with Facility Solutions Group Inc. for replacing two pump motors at High Service Pump Station 2-1 and adding variable speed capability. The project also includes new discharge valves, replacement/addition of associated electrical gear and installation of a second medium-voltage power feed to the Wylie Water Treatment Plant II blower building. Upon a motion by Director Jack May and a second by Director Phil Dyer, the Board of Directors voted unanimously to approve as presented.

L. Award of Construction Contract on Wylie Water Treatment Plant III Power

Redundancy and Electrical Building Improvements Project – Administrative Memorandum No. 5566 • Consider authorizing award of construction contract with Facility Solutions

Group, Inc., in the amount of $6,400,000 on Project No. 101-0518-18, Wylie Water Treatment Plant III Power Redundancy and Electrical Building Improvements

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize execution of a construction contract with Facility Solutions Group, Inc. to install a redundant electrical feed to each motor control center at Wylie Water Treatment Plant III and other related improvements to improve safe operation and increase reliability. Upon a motion by Director Jack May and a second by Director Blair Johnson, the Board of Directors voted unanimously to approve as presented. M. Award of Construction Contract on Transmission System Water Quality

Analyzers – Administrative Memorandum No. 5567 • Consider authorizing award of construction contract to RLC Controls, Inc., in

the amount of $4,367,542 on Project No. 101-0510-18, Transmission System Water Quality Analyzers

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize execution of a construction contract with RLC Controls, Inc., to install online water quality analyzers at strategic points in the transmission system to better manage the quality of treated water as it travels through the NTMWD water transmission system.

Upon a motion by Director Jack May and a second by Director Brenda Jean Patrick, the Board of Directors voted unanimously to approve as presented.


N. Engineering Services Agreement for Wylie Water Treatment Plant Backup Power Improvements Project – Administrative Memorandum No. 5568 • Consider authorizing execution of engineering services agreement with Gupta

& Associates, Inc., in the amount of $795,244.45 for preliminary engineering design on Project No. 101-0564-20, Wylie Water Treatment Plant Backup Power Improvements

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend authorizing a preliminary engineering services agreement with Gupta & Associates, Inc. to evaluate and recommend emergency backup power system alternatives for emergency backup power at the Wylie Water Treatment Plant. Upon a motion by Director Jack May and a second by Director John Carr, the Board of Directors voted unanimously to approve as presented.

O. Engineering Services Agreement for Wylie Water Treatment Plant

Biologically Active Filtration Preliminary Design, Phase II – Administrative Memorandum No. 5569 • Consider authorizing execution of engineering services agreement with Carollo

Engineers, Inc., in the amount of $1,456,000 for preliminary engineering design on Project No. 101-0390-15, Wylie Water Treatment Plant Biologically Active Filtration Design, Phase II

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend authorizing an engineering services agreement with Carollo Engineers, Inc. to proceed with next phase of preliminary design to develop a Basis of Design Memorandum for the Wylie Water Treatment Plant Biologically Active Filtration Design, Phase II project and bring the design to approximately 30% completion.

Upon a motion by Director Jack May and a second by Director Blair Johnson, the Board of Directors voted unanimously to approve as presented. P. Award of Construction Contract for Wylie Water Treatment Plant Pavement

Improvements Project – Administrative Memorandum No. 5570 • Consider authorizing award of construction contract to Ratliff Hardscape, Ltd.,

in the amount of $1,050,424.92 on Project No. 101-0562-20, Wylie Water Treatment Plant Pavement Improvements

Director Jack May advised the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize execution of a construction contract with Ratliff Hardscape, Ltd. to demolish and reconstruct existing failed paving sections on the Wylie Campus. He added that this is a much needed project and that the expense will be less than what was anticipated. Upon a motion by Director Jack May and a second by Director Joe Farmer, the Board of Directors voted unanimously to approve as presented. Q. Adoption of Resolution No. 20-23 authorizing execution of Development

Agreement with City of Wylie Economic Development Corporation – Administrative Memorandum No. 5571


• Consider adoption of Resolution No. 20-23 authorizing execution of Development Agreement with the City of Wylie Economic Development Corporation, Project No. 101-0563-20, Relocation of Wylie-to-Garland 42-Inch Waterline

Director Jack May said that the Water Committee reviewed this item on May 26th and voted to recommend the Board adopt Resolution 20-23 authorizing execution of a Development Agreement with the City of Wylie Economic Development Corporation (WEDC) to allow the for the WEDC to fund the design and relocation of an existing NTMWD 42-inch waterline adjacent to State Highway 78 between Brown and Marble Streets to make room for additional development along the State Highway 78 corridor. He added that funding will be provided completely by Wylie. Upon a motion by Director Jack May and a second by Director James Kerr, the Board of Directors voted unanimously to approve as presented. WASTEWATER SYSTEM AGENDA ITEMS

R. Ratification of actions by Executive Director in authorizing emergency

procurement in response to South Mesquite Regional Wastewater Treatment Plant Pipeline Leak – Administrative Memorandum No. 5572 • Consider authorizing ratification of the emergency procurement of goods and

services authorized by the Executive Director in response to the emergency conditions resulting from the 48-inch South Mesquite Regional Wastewater Treatment Plant pipeline leak on January 21, 2020, in the amount of $312,896.47

Upon a motion by Director Joe Farmer and a second by Director Phil Dyer, the Board of Directors voted unanimously to approve as presented. LAND ACQUISITION/RIGHT-OF-WAY AGENDA ITEMS

S. Execution of Right-of-Way Acquisition Program and Adoption of Resolution

No. 20-24 authorizing use of eminent domain to acquire right-of-way for the McKinney Prosper Transfer Sewer – Administrative Memorandum No. 5573 • Consider authorizing execution of right-of-way acquisition program with a

budget of $3,410,000 and adoption of Resolution No. 20-24 authorizing the use of eminent domain to acquire right-of-way for the McKinney Prosper Transfer Sewer, Project No. 501-0470-17, and delegating authority to initiate condemnation proceedings to the NTMWD Executive Director

Director George Crump made a motion to approve. Director John Sweeden seconded the motion.

Assistant Deputy Cesar Baptista presented this item. He advised that this item was not presented to the Wastewater Committee because that committee did not meet this month.

Mr. Baptista advised that the design for this project was approved in September 2018. He noted that a lot of coordination has occurred between the City of McKinney and the District due to the pipeline being very long, approximately 6.4 miles. The pipeline starts at the


Wilson Creek Lift Station and goes to U.S. Hwy. 80. He advised that the project is planned in three construction phases that will last over 2.5 years. In response to a Director’s question, Mr. Baptista advised that 29 properties are involved however he does not anticipate there will be many imminent domain issues.

The Board of Directors voted unanimously to approve as presented.

ADDITIONAL GENERAL/ADMINISTRATIVE SERVICES ITEMS

T. Adoption of Resolution No. 20-25 authorizing Regional Wastewater System

Revenue Bonds, Series 2020 – Administrative Memorandum No. 5574 • Consider adoption of Resolution No. 20-25 authorizing the issuance, sale, and

delivery of NTMWD Regional Wastewater System Revenue Bonds, Series 2020, in the amount of approximately $458,920,000 and approving and authorizing instruments and procedures relating thereto

Director Phil Dyer advised that this bond issue is to fund the Sister Grove Regional Water Resource Recovery Facility. It was reviewed and approved on April 8, 2020 by the Finance/Audit Committee. The Texas Water Development Board’s Clean Water State Revolving Fund’s 165 basis point reduction, resulted in an interest rate of .1555%. Estimated savings are $147 million over the 30 year life of the bonds.

Director Phil Dyer made a motion to adopt Resolution 20-25 authorizing the issuance, sale, and delivery of approximately $458,920,000 of NTMWD Regional Wastewater System Revenue Bonds, Series 2020. Director Richard Peasley seconded the motion. The Board of Directors voted unanimously to approve as presented.

U. Salary of Interim Executive Director

• Consider salary level of Interim Executive Director

President Gordon advised that Item U. needs to be discussed in Executive Session prior to consideration and will be moved to the end of the agenda.

At 5:06 p.m. President Gordon announced that an Executive Session of the Board of Directors was being called in order to discuss:

• Agenda Item No. VIII. H. on the agenda pursuant to Texas Government Code, Section 551.072, Real Property; and,

• Agenda Item No. VIII. U. on the agenda pursuant to Texas Government Code, Section 551.074, Personnel; and,

• Agenda Item No. IX. A. (1-2) on the agenda pursuant to Texas Government Code, Section 551.071, Consultation with Attorney.

President Gordon confirmed with staff that the public access line was disconnected and that the audio recording of this meeting was disabled during Executive Session discussions. Open Session reconvened at 6:40 p.m. No action was taken in Executive Session. The public access teleconference line was reconnected.

MINUTES – MAY 28, 2020 PAGE 15 The following action was taken upon reconvening Open Session.

VIII. AGENDA ITEMS FOR INDIVIDUAL CONSIDERATION

H. Adoption of Resolution No. 20-22 authorizing additional funding for Leonard Water Treatment Plant Land Acquisition Program – Administrative Memorandum No. 5562 • Consider adoption of Resolution No. 20-22 authorizing additional funding to

acquire remaining property required for the Leonard Water Treatment Plant and payment of legal fees, Project No. 101-0154-09; and approve additional funding in the amount of $150,000, resulting in a total authorization of $2,070,000 for the land acquisition program

Director Jack May advised that the Water Committee reviewed this item on May 26th and voted to recommend the Board authorize additional funding for Leonard Water Treatment Plant property acquisition to include attorney fees and related expenses.

Upon a motion by Director Jack May and a second by Director Joe Farmer, the Board of Directors voted unanimously to approve as presented.

U. Salary of Interim Executive Director

• Consider salary level of Interim Executive Director

Director Larry Parks expressed that he would like to make a motion and asked Attorney Sheila Gladstone to summarize the motion as discussed in Executive Session. She advised the motion should be: “to authorize the President to offer to Rodney Rhoades supplemental compensation for serving in the role of Executive Director with an increase of 10%, and that the President will discuss with Mr. Rhoades how that increase will be provided, either monthly or in a lump sum at the end of his term as Interim and when the Board of Directors makes a permanent appointment to the Executive Director position. This increase to be effective as of June 1, 2020.” Director Larry Parks made the motion. Director Chip Imrie seconded the motion. The Board of Directors voted to approve the motion with the exception of Director James Kerr who voted no. Directors Hogan, McKissick, and Sweeden left the meeting and were not present for the vote.

IX. DISCUSSION ITEMS (Continued)

A. Review of items for follow up raised during meeting

There were no follow up items.

B. Opportunity for Board members to request potential future agenda items (No substantive discussion of items will take place at this time)

Director John Carr requested a discussion regarding possible future water exchange.

MINUTES – MAY 28, 2020 PAGE 16 IX. ADJOURNMENT

There being no further business, the meeting adjourned at approximately 7:12 p.m. The next regular meeting of the NTMWD Board of Directors will be held Thursday, June 25, at 4:00 p.m. at the North Texas Municipal Water District offices at 501 E. Brown Street, Wylie, Texas, unless otherwise posted. APPROVED: ___________________________________ DON GORDON, President ATTEST: ________________________________ DARRELL GROOMS, Secretary


MONTHLY CONSTRUCTION REPORT

RECOMMENDATION The Interim Executive Director and NTMWD staff recommend the Board of Directors authorize the Monthly Construction Report in accordance with NTMWD’s Board Policies Manual for project changes greater than $100,000 and less than $500,000.

I. CONSTRUCTION CHANGE ORDERS ONLY

WATER SYSTEM a. Project No. 101-0519-18, North Garland Pipelines Condition Assessment: Pipeline

Repairs, Change Order No. 2.

Description Amount Days Original Contract Amount $1,972,725.00 116 Prior Change Order(s) Total $54,964.30 0 Proposed Change Order No. 2

Expose pipe and backfill at North Interconnect, South Interconnect, and 30-inch access manway $125,023.35 0 Time extension for shutdown postponement $0.00 214

Proposed Change Order No. 2 Increase $125,023.35 214 Revised Contract Amounts $2,152,712.65 330

Original Completion Dates: Substantial – May 1, 2020; Final – May 31, 2020 Revised Completion Dates: Substantial – December 1, 2020; Final – December 31, 2020 Funding in the amount of $125,023.35 for Change Order No. 2 to Garney Companies, Inc., is available in the Regional Water System Capital Improvement Fund

WASTEWATER SYSTEM a. None.

SOLID WASTE SYSTEM a. None.

CONSENT AGENDA ITEM NO. 20-06-02 PAGE 2 II. AUTHORIZATION TO ISSUE CONSTRUCTION FINAL PAYMENT ONLY

Work on the following projects is substantially complete with only minor deficiencies remaining. Final payment in the total amounts shown will be made on these projects when completion of all deficiency items is verified.

WATER SYSTEM a. Project No. 101-0340-13, Plano No. 2 Delivery Point Meter Station Upgrade

Description Amount Days Original Contract Amount $1,882,700.00 310 Prior Change Order(s) Total $76,295.79 657 Previous Payments $1,861,046.00 Proposed Final Payment to Archer Western Construction, LLC $97,949.79 Final Contract Amounts $1,958,995.79 967

Original Completion Dates: Substantial – June 19, 2018; Final – July 19, 2018 Revised Completion Dates: Substantial -- April 6, 2020; Final – May 6, 2020.



III. CONSTRUCTION CHANGE ORDER AND AUTHORIZATION TO ISSUE FINAL

PAYMENT ONLY

Work on the following projects is substantially complete with only minor deficiencies remaining. Final payment in the total amounts shown will be made on these projects when all work associated with the change order shown on the tabulation shall have been completed and accepted, and completion of all deficiency items is verified.

WATER SYSTEM a. None.


SOLID WASTE SYSTEM a. Project No. 401-0537-19, McKinney Landfill 2019 Landfill Gas System Upgrades

Description Amount Days Original Contract Amount $173,905.00 120 Proposed Change Order No. 1

CONSENT AGENDA ITEM NO. 20-06-02 PAGE 3

Oncor voltage delay $0.00 126 Proposed Change Order No. 1 Increase $0.00 126 Final Contract Amounts $173,905.00 246

Original Completion Dates: Substantial – December 15, 2019; Final – January 14, 2020 Revised Completion Dates: Substantial – April 19, 2020; Final – May 19, 2020 No additional funding is requested for Change Order No. 1 for the 126 additional days to be added to the contract with Tri-Con Works, LLC. IV. AMENDMENTS TO ENGINEERING, INSPECTION AND/OR LEGAL SERVICES ONLY:

WATER SYSTEM a. None.




UPPER EAST FORK INTERCEPTOR SYSTEM BYPASS CONNECTION AND PHASE II VALVE IMPROVEMENTS

PROJECT NO. 501-0565-20

ENGINEERING SERVICES AGREEMENT FINAL DESIGN

ACTION (What)

Authorize an engineering services agreement to design lift station bypass connections and valve replacements in the Upper East Fork Interceptor System (UEFIS).

PURPOSE (Why)

Bypass connections allow lift station flows to be diverted for maintenance or construction purposes. The valve replacements are needed for valves that have reached the end of their remaining useful life.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommend the Board of Directors authorize the Interim Executive Director to execute an engineering services agreement (ESA) as follows: Consultant: Pacheco Koch Consulting Engineers, Inc. Scope: Final Engineering Design Project: No. 501-0565-20, Bypass Connection and Phase II Valve Improvements Amount: $197,100

DRIVER(S) FOR THIS PROJECT

☐ Regulatory Compliance ☐ Capacity ☐ Relocation or External Requests ☐ Safety ☐ Policy

☒ Asset Condition ☐ Redundancy/Resiliency ☒ Operational Efficiency ☐ Administrative ☐ Other ______________

CONSENT AGENDA ITEM NO. 20-06-03 PAGE 2

BACKGROUND The UEFIS Valve Improvements, Phase 1 Project No. 501-0416-16 was completed in February 2018 and included the replacement of isolation gate valves at five UEFIS lift stations. Additional valves and bypass connections have been identified to ensure reliable operations and maintenance of the lift stations and force mains in this system.

PROJECT PURPOSE • Improve operability and reliability of valves in the Upper East Fork Interceptor System • Provide bypass connections to simplify bypass pumping that is needed during maintenance

activities or construction. • The planning level estimated cost of construction is $2,706,000. PROJECT COMPONENTS • Replace twenty-one (21) isolation valves, three (3) check valves, and two (2) surge valves at

seven lift stations and four force mains in the UEFIS • Bypass connection at four (4) UEFIS lift stations

BASIC SERVICES • Final design plans and specifications • Bid phase services • Construction phase services

SPECIAL SERVICES • Surveying • Subsurface Utility Engineering • Valve vault measurements

ENGINEERING SERVICES FEE

Description Amount

Basic Services $160,200 Special Services $36,900 Requested Amount $197,100

FUNDING FUND(S): Upper East Fork Interceptor System 2019 Construction Fund

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JUNE 2020 ADMINISTRATIVE MEMORANDUM NO. 5575

AMENDMENT TO BOARD POLICIES MANUAL SECTION VII. BOARD OF DIRECTORS COMMITTEE POLICY

ACTION (What)

Authorize amendment to the Board Policies Manual, Section VII, Board of Directors Committee Policy as follows:

• Revise Section 7.1 Standing Committees

PURPOSE (Why)

The purpose of amending the Board Policies Manual, Section VII, Board of Directors Committee Poilcy is to:

• Create a “Real Estate” Committee• Incorporate the “Insurance” Committee responsibilities into the Finance Committee and

eliminate the Insurance Committee• Truncate the Finance/Audit/Insurance/Risk Management Committee title to

Finance Committee

RECOMMENDATION

It is recommended that the Board of Directors amend Section VII, 7.1 of the Board Policies Manual.

This was an item on the June 17, 2020, Policy Committee meeting agenda.


☐ Regulatory Compliance☐ Capacity☐ Relocation or External Requests☐ Safety☒ Policy

☐ Asset Condition☐ Redundancy/Resiliency☐ Operational Efficiency☐ Administrative☐ Other

BACKGROUND

• The Policy Committee met on June 17, 2020 to review and take possible action onamending Section VII, Board of Directors Committee Policy, of the Board Policies Manual.

• The Policy Committee met on May 19, 2020, and recommended amending the BoardPolicies Manual in order to formally set a procedure for nomination of the slate of BoardOfficers annually.

• A copy of the proposed redlined version of Section VII. Board of Directors Committee Policyattached as Exhibit A.

• A copy of the complete Board Policies Manual is included as Appendix M.

Exhibit A

SECTION VII. BOARD OF DIRECTORS COMMITTEE

POLICY

All committees of the Board of Directors of NTMWD shall be governed by this Policy. The

committees may develop their own procedures, but the Committee Policy shall prevail in case of

conflict. All committees shall serve in an advisory capacity to the Board unless special

authorization is obtained formally from the Board and is included in a written policy or in the

minutes of NTMWD.

7.1 Standing Committees

The following Standing Committees are created as perpetual committees of the Board of Directors:

A. EXECUTIVE COMMITTEE

The Executive Committee shall be composed of the current President, Vice President,

Secretary, and immediate past President of the Board. The Executive Committee shall have

authority as delegated in NTMWD Policies and as from time to time authorized by the Board

on individual matters. The Executive Committee shall be available for consultation with the

ED/GM on any matters affecting NTMWD. The current President shall serve as Chairman, and

the Chairman will schedule meetings as needed.

B. WATER COMMITTEE

Matters pertaining to water supply, water treatment, and water transmission that require

additional consideration prior to submittal to the full Board shall be reviewed by the Water

Committee. The Committee shall be composed of seven Directors including the Chairman. The

Water Committee generally meets quarterly or as needed.

C. WASTEWATER COMMITTEE

Matters which need additional consideration before submittal to the Board of Directors

concerning wastewater treatment facilities, collection facilities, or regional interceptor

programs shall be reviewed by the Wastewater Committee. This Committee shall be composed

of seven Directors including the Chairman. The Wastewater Committee generally meets

quarterly or as needed.

D. SOLID WASTE COMMITTEE

Matters which need additional consideration concerning solid waste transfer or disposal

prior to submittal to the Board shall be reviewed by the Solid Waste Committee. This

Committee shall be composed of seven Directors including the Chairman, with at least four

of the Solid Waste Member Cities (Allen, Frisco, McKinney, Plano and Richardson)

represented. The Solid Waste Committee generally meets every six months or as needed.

E. FINANCE/AUDIT/INSURANCE/RISK MANAGEMENT COMMITTEE

The Finance/Audit/Insurance/Risk Management Committee shall review financial, insurance

and risk management matters that need additional consideration prior to submission to the

Board, and shall coordinate and review the annual budget and the annual audit as submitted

by the appointed outside auditors. The Committee shall be composed of seven Directors

including the Chairman. The Finance/Audit/Insurance/Risk Management Committee shall

meet in June and July to review the upcoming annual operating budget, and in January to

review the annual audit. In addition, the Committee should generally meet every six months

or as needed.

F. PERSONNEL COMMITTEE

This Committee shall review personnel matters and appeals from District personnel on

grievances in accordance with NTMWD's Personnel Policies Manual, as amended. The

Committee shall be composed of seven Directors including the Chairman. The Personnel

Committee generally meets annually or as needed.

G. INSURANCE COMMITTEE

The Insurance Committee shall review NTMWD Insurance Program periodically with the

minutes of the meeting to serve as a report to the Board. The Committee may advise NTMWD

staff on insurance matters with any major changes presented to the Board for final

consideration. The Committee shall be composed of seven Directors including the Chairman.

The Insurance Committee generally meets every six months or as needed.

G. REAL ESTATE COMMITTEE

The Real Estate Committee shall review NTMWD real estate matters and make

recommendations to the Board as needed. The Committee shall be composed of seven Directors

including the Chairman. The Real Estate Committee generally meets every six months or as

needed.

H. POLICY COMMITTEE

Matters pertaining to general policy of NTMWD or matters that affect all of the Committees

will be referred to the Policy Committee. The Policy Committee will be composed of the

Chairman of each of the Standing Committees with the President serving as Chairman. The

Policy Committee will meet annually to review NTMWD Policies and as needed.

I. LEGISLATIVE COMMITTEE

Matters pertaining to state and federal legislative issues of NTMWD will be referred to the

Legislative Committee. The Legislative Committee will be composed of seven Directors

including the Chairman. The Legislative Committee generally meets every six months or as

needed.

7.2 Special Purpose Committees

Special purpose committees may from time to time be appointed by the President. If a special purpose

committee is authorized by the Board, its existence may extend beyond the term of the current President

to a specific time or termination of the project or program involved. However, a committee appointed

by the President without the confirmation and approval of the Board will exist only for the term of the

current President. Each Special Purpose Committee shall be given a specific name related to its

purpose.

7.3 Appointment

Appointments of Directors to Standing Committees shall be the primary responsibility of the President;

however, all appointments must be reported to the Board of Directors at the next regular meeting and

included in the formal minutes of that meeting. Committee members must be members of NTMWD

Board.

A. NEW COMMITTEES

The President may propose new Standing Committees which would be created with a

majority vote of the Board at the next regular meeting confirming the need for the Standing

Committee.

B. COMMITTEE VACANCIES

Should a vacancy occur on any committee, it shall be the responsibility of the President to

promptly designate a replacement.

C. NEW PRESIDENT

When a new President takes office on June 1, it shall be the President's duty to appoint or

reappoint the members of the Standing Committees so that composition of the committees is

compatible with the plans and goals of NTMWD. In making such appointments, the President

should take into consideration the continuity of the committee and the expertise of the member,

but should consider rotating members after three years of service to achieve each member's

exposure to other committees. All changes and recommendations should be forwarded to the

Board at the regular Board meeting in June.

7.4 General Rules

A. NOTICE OF MEETING

All meetings of committees shall be called by the Chairman of the committee. Notice of the

committee meeting, including the date, time, location, and subject, must be presented to each

member by mail, electronic mail, facsimile or telephone at least 72 hours prior to the committee

meeting. An emergency condition can be declared and a committee meeting held on shorter

notice, provided a quorum is present in accordance with the Open Meetings Act. NTMWD

shall post public notice of its committee meetings in a form and manner similar to postings for

its Board meetings in accordance with the Open Meetings Act, and such meetings shall be open

to the public.

B. QUORUM

A simple majority of the Committee's designated seats shall be considered a quorum at any

meeting that has met proper notice requirements. The President, Vice President and ED/GM

shall be ex-officio nonvoting members of all Standing Committees (except the Executive

Committee) and shall receive notice of meetings. A simple majority vote of the members

present shall rule on all votes.

C. CHAIRMAN

The President shall name the Chairman of the committee. The Chairman may select a Vice-

Chairman; however, in the event that no Vice-Chairman has been selected and an absence of

the Chairman occurs, the majority present at a meeting with a quorum selects an Acting

Chairman.

D. MINUTES OF MEETINGS

The ED/GM or designee shall be responsible for preparing minutes of each committee meeting

which will be submitted to the committee members for approval. The draft minutes shall be

prepared and sent to committee members prior to the next committee meeting. Copies of the

minutes shall be forwarded to all the Directors after approval.

E. COMMITTEE ASSISTANCE

The ED/GM shall designate staff personnel to assist the committee in its work as needed.

The committee shall have the full cooperation of NTMWD staff, right to all information

available, use of consultants within budgetary restraints, and any other facilities or

materials available to NTMWD.

F. ROBERT'S RULES OF ORDER

Where NTMWD policy is silent on meeting procedure, the committee may use Robert's Rules

of Order as guidance; however, the Board does not formally adopt Robert's Rules of Order.

7.5 Procedures

The purpose of the committee system is to provide adequate time and information for a smaller group

of Directors to be knowledgeable and informed on appropriate matters with a full intent to have

committee recommendations forwarded to the Board prior to Board action. The following procedures

are provided as guidelines:

A. REFERRAL ITEMS

It is not the intent to restrict the actions of the ED/GM on routine items by requiring committee

review, but the following shall establish a procedure for referrals to committees.

1. The President, Vice President, Secretary, or ED/GM, committee members may refer items

to the appropriate committee. In addition, a Board member may present matters for

consideration to the Board or the President or ED/GM for referral to the appropriate

committee in accordance with Board procedure.

2. All new programs or projects must be submitted to the appropriate committee unless

previously approved by the Board at a special or regular meeting.

3. All contracts or agreements with new customers in any system for NTMWD service or

any new request for service outside the service area as defined in Enabling Act must be

referred to the appropriate committee. This does not include vendor contracts or

agreements for services provided to NTMWD by others for routine operations.

B. BOARD RECOMMENDATIONS

Items referred to committees for recommendation to the Board:

1. Shall require the Committee Chairman to call a meeting as soon as possible. If a quorum

cannot be obtained, the item will be placed on the next regular meeting of the Board of

Directors for consideration; and,

2. Shall be made at the next Regular Board Meeting unless a majority of the committee

requests additional information or establishes reasons in writing for delay.

NORTH TEXAS MUNICIPAL WATER DISTRICT JUNE 2020 ADMINISTRATIVE MEMORANDUM NO. 5576

REGIONAL WASTEWATER SYSTEM REVENUE BONDS, SERIES 2020A

RESOLUTION NO. 20-27

ACTION (What) Request authorization to issue Revenue Bonds for the Regional Wastewater System.

PURPOSE (Why) Fund improvements for the Regional Wastewater System at South Mesquite and Rowlett Creek Wastewater Plants.

RECOMMENDATION The Interim Executive Director and NTMWD staff recommend the Board of Directors adopt Resolution No. 20-27, “Resolution Authorizing the Issuance, Sale, and Delivery of North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2020A; and Approving and Authorizing Instruments and Procedures Relating Thereto.” Contracting Party: N/A Scope: Fund Improvements to the Regional Wastewater System Project: Regional Wastewater System Projects Amount: Approximately $35.13 million of 2020A contract revenue bonds will be

issued. Actual amount to be determined at date of pricing Staff reviewed with the Finance/Audit Committee on June 10, 2020.



☐ Asset Condition ☐ Redundancy/Resiliency ☐ Operational Efficiency ☒ Administrative ☐ Other

ADMINISTRATIVE MEMORANDUM NO. 5576 PAGE 2

BACKGROUND

• The Finance/Audit Committee met on June 10, 2020, to review the proposed bond sale including:o South Mesquite Peak Flow Management and Expansion Phase 1 (Design)o Rowlett Creek Operations Building (Construction and Inspection)o South Mesquite Solids Handling Improvements (Construction and Inspection)

• Staff and members of Hilltop Securities, Inc., also presented the Finance/Audit Committee with timelines for the sale and a summary of the financing plan.

• At this time, it is expected that approximately $35.13 million of 2020A contract revenue bonds will be issued. The actual amount of the bond sale will be determined on the date of pricing.

• The transaction will be sold via competitive bid on June 23, 2020, and the estimated interest rate is 2.57%

• NTMWD bond counsel, McCall, Parkhurst and Horton, LLP, has prepared the attached Bond Resolution and NTMWD financial advisor, Hilltop Securities, Inc. has prepared the attached Preliminary Official Statement. The POS is included as Appendix N.

• Representatives from McCall, Parkhurst & Horton, LLP, as well as Hilltop Securities, Inc., will be available at the Board meeting to review the documents and financing procedures.

FUNDING

FUND(S): N/A


RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OFNORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL WASTEWATERSYSTEM REVENUE BONDS, SERIES 2020A; AND APPROVING ANDAUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO

WHEREAS, North Texas Municipal Water District (the "Issuer") is a political subdivisionof the State of Texas, being a conservation and reclamation district created and functioning underArticle 16, Section 59 of the Texas Constitution, pursuant to Chapter 62, Acts of 1951, 52ndLegislature of Texas, Regular Session, as amended (the "Act");

WHEREAS, the Board of Directors of the Issuer is authorized to issue the bonds hereinafterauthorized pursuant to Chapter 30, Texas Water Code, as amended, Chapter 1371, TexasGovernment Code, as amended ("Chapter 1371"), and other applicable laws.

THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF NORTHTEXAS MUNICIPAL WATER DISTRICT THAT:

Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of NorthTexas Municipal Water District (the "Issuer") are hereby authorized to be issued and delivered inthe aggregate principal amount not to exceed $40,000,000, FOR THE PURPOSE OF PROVIDINGFUNDS FOR (i) DESIGN AND CONSTRUCTION OF THE SOUTH MESQUITE REGIONALWASTEWATER TREATMENT PLANT (WWTP) SYSTEM PEAK FLOW MANAGEMENTAND EXPANSION PHASE I; CONSTRUCTION AND INSPECTION OF THE ROWLETTCREEK REGIONAL WWTP OPERATIONS BUILDING; CONSTRUCTION AND INSPECTIONOF SOUTH MESQUITE REGIONAL WWTP SOLIDS HANDLING IMPROVEMENTS;CONSTRUCTION OF THE ROWLETT CREEK REGIONAL WWTP ELECTRICALIMPROVEMENT; DESIGN OF FLOYD BRANCH REGIONAL WWTP PEAK FLOWMANAGEMENT AND OTHER SYSTEM IMPROVEMENTS; (II) MAKING A DEPOSIT TO ADEBT SERVICE RESERVE FUND; AND (III) PAYING THE COSTS INCIDENT TO THEISSUANCE AND DELIVERY OF THE BONDS.

Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Resolutionshall be designated: "NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONALWASTEWATER SYSTEM REVENUE BOND, SERIES 2020A", and initially there shall be issued,sold, and delivered hereunder a single fully registered bond, without interest coupons, payable ininstallments of principal (the "Initial Bond"), but the Initial Bond may be assigned and transferredand/or converted into and exchanged for a like aggregate principal amount of fully registered bonds,without interest coupons, having serial maturities, and in the denomination or denominations of$5,000 or any integral multiple of $5,000, all in the manner hereinafter provided. The term "Bonds"as used in this Resolution shall mean and include collectively the Initial Bond and all substitutebonds exchanged therefor, as well as all other substitute bonds and replacement bonds issuedpursuant hereto, and the term "Bond" shall mean any of the Bonds.

Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIALREGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND.

(a) As authorized by Chapter 1371, the Interim Executive Director, the Assistant Deputy- Finance, and the Deputy Director - Administrative Services of the Issuer are each herebyauthorized, appointed, and designated as the officer or employee of the Issuer (each, an "AuthorizedOfficer") authorized to act on behalf of the Issuer, which actions shall be evidenced by a certificateexecuted by such Authorized Officer (the "Approval Certificate") for a period not to extend beyondJune 15, 2021, in the selling and delivering of the Bonds, which may be issued in one or more seriesor two or more subseries as determined by the Authorized Officer, and carrying out the otherprocedures specified in this Resolution, including the use of a book-entry only system with respectto the Bonds and the execution of an appropriate letter of representations if deemed appropriate, anyadditional or different designation or title by which the Bonds shall be known, the price at whichthe Bonds will be sold (but in no event less than 97% of the principal amount of the Bonds), theprincipal amount (not exceeding $40,000,000) of the Bonds, the amount of each installment ofprincipal thereof, the final maturity date (not exceeding forty years from the date of the Bonds), therate of interest to be borne by each such maturity (but in no event resulting in a net effective interestrate on the Bonds exceeding 6.00% per annum), the initial interest payment date, the date or datesof any optional redemption thereof, any mandatory sinking fund redemption provisions, theprocuring of municipal bond insurance, if any, and approving modifications to this Resolution andexecuting such instruments, documents and agreements as may be necessary with respect thereto,and all other matters relating to the issuance, sale and delivery of the Bonds.

(b) The Initial Bond is hereby authorized to be issued, sold, and delivered hereunder as

a single fully registered Bond, without interest coupons, in the denomination and aggregate principalamount set forth in the Approval Certificate (not exceeding exceed $40,000,000), numbered TR-1,payable in annual installments of principal to the initial registered owner thereof or to the registeredassignee or assignees of said Bond or any portion or portions thereof (in each case, the "registeredowner"), with the annual installments of principal of the Initial Bond to be payable on the dates,respectively, and in the principal amounts, respectively, and shall be prepaid or redeemed prior tothe respective scheduled due dates of installments of principal thereof, all as set forth in theApproval Certificate.

(c) The Initial Bond (i) may and, if so provided in the Approval Certificate, shall beprepaid or paid on the respective scheduled due dates of installments of principal thereof, (ii) maybe assigned and transferred, (iii) may be converted and exchanged for other bonds, (iv) shall havethe characteristics, and (v) shall be signed and sealed, and the principal of and interest on the InitialBond shall be payable, all as provided, and in the manner required or indicated, in the FORM OFINITIAL BOND set forth in this Resolution.

Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall bear interestfrom the date of the Initial Bond to the respective scheduled due dates, or to the respective dates ofprepayment or redemption, of the installments of principal of the Initial Bond, and said interest shallbe payable, all in the manner provided and at the rates and on the dates stated in the ApprovalCertificate and the FORM OF INITIAL BOND set forth in this Resolution.

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Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the formof Registration Certificate of the Comptroller of Public Accounts of the State of Texas to beendorsed on, or attached to, the Initial Bond, shall be substantially as follows:

FORM OF INITIAL BOND

NO. TR-1 $__________*UNITED STATES OF AMERICA

STATE OF TEXASNORTH TEXAS MUNICIPAL WATER DISTRICT

REGIONAL WASTEWATER SYSTEM REVENUE BOND,SERIES 2020A

NORTH TEXAS MUNICIPAL WATER DISTRICT (the "Issuer"), being a politicalsubdivision of the State of Texas, hereby promises to pay to _____________________________,or to the registered assignee or assignees of this Bond or any portion or portions hereof (in eachcase, the "registered owner") the aggregate principal amount of ___________________________________________________* DOLLARS in annual installments of principal due and payableon June 1 in each of the years, and in the respective principal amounts, as set forth in the followingschedule:

Year*Principal Amount* Year*

PrincipalAmount*

and to pay interest, calculated on the basis of a 360-day year composed of twelve 30-day months,from the date of initial delivery to the Purchaser (as defined in the Bond Resolution (hereinafterdefined)), on the balance of each such installment of principal, respectively, from time to timeremaining unpaid, at the rates as follows:

Year* Rate* Year* Rate*

with said interest being payable semiannually on each June 1 and December 1, commencing ______,____*, while this Bond or any portion hereof is outstanding and unpaid.

3* From Approval Certificate.

THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond arepayable in lawful money of the United States of America, without exchange or collection charges. The installments of principal and the interest on this Bond are payable to the registered owner hereofthrough the services of The Bank of New York Mellon Trust Company, National Association, inDallas, Texas, which is the "Paying Agent/Registrar" for this Bond. Payment of all principal of andinterest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereofon each principal and/or interest payment date by check dated as of such date, drawn by the PayingAgent/Registrar on, and payable solely from, funds of the Issuer required by the resolutionauthorizing the issuance of this Bond (the "Bond Resolution") to be on deposit with the PayingAgent/Registrar for such purpose as hereinafter provided; and such check shall be sent by the PayingAgent/Registrar by United States mail, first-class postage prepaid, on each such principal and/orinterest payment date, to the registered owner hereof, at the address of the registered owner, as itappeared on the 15th day of the month next preceding each such date (the "Record Date") on theRegistration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuercovenants with the registered owner of this Bond that on or before each principal and/or interestpayment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interestand Redemption Fund" created by the Bond Resolution, the amounts required to provide for thepayment, in immediately available funds, of all principal of and interest on this Bond, when due.

IF THE DATE for the payment of the principal of or interest on this Bond shall be aSaturday, Sunday, a legal holiday, or a day on which banking institutions in the City where thePaying Agent/Registrar is located are authorized by law or executive order to close, then the datefor such payment shall be the next succeeding day which is not such a Saturday, Sunday, legalholiday, or day on which banking institutions are authorized to close; and payment on such dateshall have the same force and effect as if made on the original date payment was due.

THIS BOND has been authorized in accordance with the Constitution and laws of the Stateof Texas FOR THE PURPOSE OF PROVIDING FUNDS FOR (i) THE ENLARGEMENT,IMPROVEMENT AND EXTENSION OF THE ISSUER'S REGIONAL WASTEWATERSYSTEM, (ii) FUNDING THE DEBT SERVICE RESERVE FUND; AND (iii) PAYING THECOSTS OF ISSUANCE OF THIS BOND.

ON ____________*, or any date thereafter, the unpaid installments of principal of this Bondmay be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with fundsderived from any available source, as a whole, or in part, and, if in part, the Issuer shall select anddesignate the installment or installments of principal, and the amount that is to be redeemed, and ifless than a whole principal installment is to be called, the Issuer shall direct the PayingAgent/Registrar to call by lot or other customary method of random selection the portion of theprincipal installment to be redeemed (only in an integral multiple of $5,000), at the redemption priceof the principal amount to be prepaid or redeemed, plus accrued interest to the date fixed forprepayment or redemption.

**[THE PRINCIPAL INSTALLMENTS OF THIS BOND maturing on June 1, ____ andJune 1, ____ are subject to mandatory prepayment or redemption prior to maturity in part, at a priceequal to the principal amount of this Bond or portions hereof to be prepaid or redeemed plus accrued

* From Approval Certificate.** From Approval Certificate, if applicable.** From Approval Certificate, if applicable. 4

interest to the date of prepayment or redemption, on June 1 in each of the years and in the amountsas follows:

Principal Installment due on June 1, ____

Years Amounts

Principal Installment due on June 1, _____

Years Amounts

The amount of any principal installment of this Bond required to be prepaid or redeemedpursuant to the operation of such mandatory prepayment or redemption provisions shall be reduced,at the option and direction of the Issuer, by the principal amount of such principal installment of thisBond which, at least 50 days prior to the mandatory prepayment or redemption date (1) shall havebeen acquired by the Issuer at a price not exceeding such principal amount plus accrued interest tothe date of purchase thereof, (2) shall have been purchased by the Paying Agent/Registrar at therequest of the Issuer at a price not exceeding such principal amount plus accrued interest to the dateof purchase, or (3) shall have been prepaid or redeemed pursuant to the optional prepayment orredemption provisions and not theretofore credited against a mandatory prepayment or redemptionrequirement.]

AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a writtennotice of such prepayment or redemption shall be mailed by United States mail, postage prepaid,by the Paying Agent/Registrar to the registered owner hereof at the address of such registered ownerappearing on the registration books of the Issuer kept by the Paying Agent/Registrar at the close ofbusiness on the business day next preceding the date of mailing of such notice. Any notice somailed shall be conclusively presumed to have been duly given, whether or not the registered ownerreceives such notice. By the date fixed for any such prepayment or redemption due provision shallbe made by the Issuer with the Paying Agent/Registrar for the payment of the required prepaymentor redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed, plusaccrued interest thereon to the date fixed for prepayment or redemption. If such written notice ofprepayment or redemption is given, and if due provision for such payment is made, all as providedabove, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automaticallyshall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interestafter the date fixed for its prepayment or redemption, and shall not be regarded as being outstandingexcept for the right of the registered owner to receive the prepayment or redemption price plusaccrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar outof the funds provided for such payment. The Paying Agent/Registrar shall record in the RegistrationBooks all such prepayments or redemptions of principal of this Bond or any portion hereof.

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THIS BOND, to the extent of the unpaid principal balance hereof, or any unpaid portionhereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof andshall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registraracting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the BondResolution. Among other requirements for such transfer, this Bond must be presented andsurrendered to the Paying Agent/Registrar for cancellation, together with proper instruments ofassignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,evidencing assignment by the initial registered owner of this Bond, or any portion or portions hereofin any integral multiple of $5,000, to the assignee or assignees in whose name or names this Bondor any such portion or portions hereof is or are to be transferred and registered. Any instrument orinstruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence theassignment of this Bond or any such portion or portions hereof by the initial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which then will be the new registeredowner or owners of such new Bond or Bonds) or to the initial registered owner as to any portion ofthis Bond which is not being assigned and transferred by the initial registered owner, shall bedelivered by the Paying Agent/Registrar in conversion of and exchange for this Bond or any portionor portions hereof, but solely in the form and manner as provided in the next paragraph hereof forthe conversion and exchange of this Bond or any portion hereof. The registered owner of this Bondshall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute ownerhereof for all purposes, including payment and discharge of liability upon this Bond to the extentof such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any noticeto the contrary.

AS PROVIDED above and in the Bond Resolution, this Bond, to the extent of the unpaidprincipal balance hereof, may be converted into and exchanged for a like aggregate principal amountof fully registered bonds, without interest coupons, payable to the assignee or assignees dulydesignated in writing by the initial registered owner hereof, or to the initial registered owner as toany portion of this Bond which is not being assigned and transferred by the initial registered owner,in any denomination or denominations in any integral multiple of $5,000 (subject to the requirementhereinafter stated that each substitute bond issued in exchange for any portion of this Bond shallhave a single stated principal maturity date), upon surrender of this Bond to the PayingAgent/Registrar for cancellation, all in accordance with the form and procedures set forth in theBond Resolution. If this Bond or any portion hereof is assigned and transferred or converted eachbond issued in exchange for any portion hereof shall have a single stated principal maturity datecorresponding to the due date of the installment of principal of this Bond or portion hereof for whichthe substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne bysuch installment of principal or portion thereof. Such bonds, respectively, shall be subject toredemption prior to maturity on the same dates and for the same prices as the correspondinginstallment of principal of this Bond or portion hereof for which they are being exchanged. No suchbond shall be payable in installments, but shall have only one stated principal maturity date. ASPROVIDED IN THE BOND RESOLUTION, THIS BOND IN ITS PRESENT FORM MAY BEASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or moreassignees, but the bonds issued and delivered in exchange for this Bond or any portion hereof maybe assigned and transferred, and converted, subsequently, as provided in the Bond Resolution. TheIssuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for

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transferring, converting, and exchanging this Bond or any portion thereof, but the one requestingsuch transfer, conversion, and exchange shall pay any taxes or governmental charges required to bepaid with respect thereto. The Paying Agent/Registrar shall not be required to make any suchtransfer, conversion, or exchange (i) during the period commencing with the close of business onany Record Date and ending with the opening of business on the next following principal or interestpayment date, or, (ii) with respect to any Bond or portion thereof called for prepayment orredemption prior to maturity, within 45 days prior to its prepayment or redemption date.

IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns,or otherwise ceases to act as such, the Issuer has covenanted in the Bond Resolution that it promptlywill appoint a competent and legally qualified substitute therefor, and promptly will cause writtennotice thereof to be mailed to the registered owner of this Bond.

IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validlyauthorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to beperformed, exist, and be done precedent to or in the authorization, issuance, and delivery of thisBond have been performed, existed, and been done in accordance with law; that this Bond is aspecial obligation of the Issuer which, together with other bonds, are secured by and payable froma first lien on and pledge of the "Pledged Revenues" as defined in the Bond Resolution, includingthe Gross Revenues of the Issuer's Trinity East Fork Regional Wastewater System, and includingspecifically certain payments to be received by the Issuer from the Cities of Mesquite, Plano,Richardson, Allen, McKinney, Forney, Frisco, Princeton, Rockwall, Heath, Seagoville, Melissa, andthe Town of Prosper, Texas, and any future Additional Member Cities, under the "Trinity East ForkRegional Wastewater System Contract", dated October 1, 1975, among the Cities of Mesquite andPlano and the Issuer, the "City of Richardson-Trinity East Fork Regional Wastewater SystemContract", dated January 9, 1978, and amended as of December 1, 1985, between the City ofRichardson and the Issuer, the "City of Allen-Trinity East Fork Regional Wastewater SystemContract", dated August 24, 1978, between the City of Allen and the Issuer, the "City of McKinney-Trinity East Fork Regional Wastewater System Contract", dated August 23, 1979, between the Cityof McKinney and the Issuer, the "City of Forney - Trinity East Fork Regional Wastewater SystemContract", dated February 22, 1990, between the City of Forney and the Issuer, the City of Frisco -Trinity East Fork Regional Wastewater System Contract, dated as of November 19, 1996, betweenthe City of Frisco and the Issuer, the City of Princeton - Trinity East Fork Regional WastewaterSystem Contract, dated as of November 26, 1996, between the City of Princeton and the Issuer, the"City of Rockwall - Trinity East Fork Regional Wastewater System Contract," dated March 29,2001, between the City of Rockwall and the Issuer, "City of Heath - Trinity East Fork RegionalWastewater System Contract," dated March 29, 2001, between the City of Heath and the Issuer, theTown of Prosper - Trinity East Fork Regional Wastewater System Contract, dated as of February24, 2004, between the Town of Prosper and the Issuer, and the City of Seagoville - Trinity EastFork Regional Wastewater System Contract, dated as of February 24, 2005, between the City ofSeagoville and the Issuer, and "City of Melissa - Trinity East Fork Regional Wastewater SystemContract," dated as of April 1, 2019, between the City of Melissa and the Issuer, and the and allsimilar contracts with any Additional Member Cities as permitted in said contracts.

THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Resolution,to issue Additional Bonds payable from and secured by a first lien on and pledge of the "PledgedRevenues" on a parity with this Bond.

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THE ISSUER also has reserved the right to amend the Bond Resolution with the approvalof the registered owners of 51% in principal amount of all outstanding bonds secured by and payablefrom a first lien on and pledge of the "Pledged Revenues".

THE REGISTERED OWNER hereof shall never have the right to demand payment of thisBond or the interest hereon out of any funds raised or to be raised by taxation or from any sourcewhatsoever other than specified in the Bond Resolution.

BY BECOMING the registered owner of this Bond, the registered owner therebyacknowledges all of the terms and provisions of the Bond Resolution, agrees to be bound by suchterms and provisions, acknowledges that the Bond Resolution is duly recorded and available forinspection in the official minutes and records of the governing body of the Issuer, and agrees thatthe terms and provisions of this Bond and the Bond Resolution constitute a contract between theregistered owner hereof and the Issuer.

IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual orfacsimile signature of the President of the Board of Directors of the Issuer and countersigned withthe manual or facsimile signature of the Secretary of the Board of Directors of the Issuer, has causedthe official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond, and hascaused this Bond to be dated as of ________________*.

xxxxxxxxxxxx xxxxxxxxxx Secretary, Board of Directors, President, Board of Directors,North Texas Municipal Water District North Texas Municipal Water District

(DISTRICT SEAL)

FORM OF REGISTRATION CERTIFICATE OF THECOMPTROLLER OF PUBLIC ACCOUNTS:

COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.

I hereby certify that this Bond has been examined, certified as to validity, and approved bythe Attorney General of the State of Texas, and that this Bond has been registered by theComptroller of Public Accounts of the State of Texas.

Witness my signature and seal this

_______________________________Comptroller of Public Accounts

of the State of Texas(COMPTROLLER'S SEAL)

8* From Approval Certificate.

Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. Registration andTransfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of TheBank of New York Mellon Trust Company, National Association, in Dallas, Texas (the "PayingAgent/Registrar") books or records of the registration and transfer of the Bonds (the "RegistrationBooks"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agentto keep such books or records and make such transfers and registrations under such reasonableregulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrarshall make such transfers and registrations as herein provided. The Paying Agent/Registrar shallobtain and record in the Registration Books the address of the registered owner of each Bond towhich payments with respect to the Bonds shall be mailed, as herein provided; but it shall be theduty of each registered owner to notify the Paying Agent/Registrar in writing of the address to whichpayments shall be mailed, and such interest payments shall not be mailed unless such notice hasbeen given. The Issuer shall have the right to inspect the Registration Books during regular businesshours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep theRegistration Books confidential and, unless otherwise required by law, shall not permit theirinspection by any other entity. Registration of each Bond may be transferred in the RegistrationBooks only upon presentation and surrender of such Bond to the Paying Agent/Registrar for transferof registration and cancellation, together with proper written instruments of assignment, in form andwith guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing (i) theassignment of the Bond, or any portion thereof in any integral multiple of $5,000, to the assigneeor assignees thereof, and (ii) the right of such assignee or assignees to have the Bond or any suchportion thereof registered in the name of such assignee or assignees. Upon the assignment andtransfer of any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued inconversion and exchange therefor in the manner herein provided. The Initial Bond, to the extent ofthe unpaid or unredeemed principal balance thereof, may be assigned and transferred by the initialregistered owner thereof once only, and to one or more assignees designated in writing by the initialregistered owner thereof. All Bonds issued and delivered in conversion of and exchange for theInitial Bond shall be in any denomination or denominations of any integral multiple of $5,000(subject to the requirement hereinafter stated that each substitute Bond shall have a single statedprincipal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE BOND setforth in this Resolution, and shall have the characteristics, and may be assigned, transferred, andconverted as hereinafter provided. If the Initial Bond or any portion thereof is assigned andtransferred or converted the Initial Bond must be surrendered to the Paying Agent/Registrar forcancellation, and each Bond issued in exchange for any portion of the Initial Bond shall have asingle stated principal maturity date, and shall not be payable in installments; and each such Bondshall have a principal maturity date corresponding to the due date of the installment of principal orportion thereof for which the substitute Bond is being exchanged; and each such Bond shall bearinterest at the single rate applicable to and borne by such installment of principal or portion thereoffor which it is being exchanged. If only a portion of the Initial Bond is assigned and transferred,there shall be delivered to and registered in the name of the initial registered owner substitute Bondsin exchange for the unassigned balance of the Initial Bond in the same manner as if the initialregistered owner were the assignee thereof. If any Bond or portion thereof other than the InitialBond is assigned and transferred or converted each Bond issued in exchange therefor shall have thesame principal maturity date and bear interest at the same rate as the Bond for which it is exchanged. A form of assignment shall be printed or endorsed on each Bond, excepting the Initial Bond, whichshall be executed by the registered owner or its duly authorized attorney or representative toevidence an assignment thereof. Upon surrender of any Bonds or any portion or portions thereof

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for transfer of registration, an authorized representative of the Paying Agent/Registrar shall makesuch transfer in the Registration Books, and shall deliver a new fully registered substitute Bond orBonds, having the characteristics herein described, payable to such assignee or assignees (whichthen will be the registered owner or owners of such new Bond or Bonds), or to the previousregistered owner in case only a portion of a Bond is being assigned and transferred, all in conversionof and exchange for said assigned Bond or Bonds or any portion or portions thereof, in the sameform and manner, and with the same effect, as provided in Section 6(d), below, for the conversionand exchange of Bonds by any registered owner of a Bond. The Issuer shall pay the PayingAgent/Registrar's standard or customary fees and charges for making such transfer and delivery ofa substitute Bond or Bonds, but the one requesting such transfer shall pay any taxes or othergovernmental charges required to be paid with respect thereto. The Paying Agent/Registrar shallnot be required to make transfers of registration of any Bond or any portion thereof (i) during theperiod commencing with the close of business on any Record Date and ending with the opening ofbusiness on the next following principal or interest payment date, or, (ii) with respect to any Bondor any portion thereof called for redemption prior to maturity, within 45 days prior to its redemptiondate].

(b) Ownership of Bonds. The entity in whose name any Bond shall be registered in theRegistration Books at any time shall be deemed and treated as the absolute owner thereof for allpurposes of this Resolution, whether or not such Bond shall be overdue, and the Issuer and thePaying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or onaccount of, the principal of, premium, if any, and interest on any such Bond shall be made only tosuch registered owner. All such payments shall be valid and effectual to satisfy and discharge theliability upon such Bond to the extent of the sum or sums so paid.

(c) Payment of Bonds and Interest. The Issuer hereby further appoints the PayingAgent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, andto act as its agent to convert and exchange or replace Bonds, all as provided in this Resolution. ThePaying Agent/Registrar shall keep proper records of all payments made by the Issuer and the PayingAgent/Registrar with respect to the Bonds, and of all conversions and exchanges of Bonds, and allreplacements of Bonds, as provided in this Resolution.

(d) Conversion and Exchange or Replacement; Authentication. Each Bond issued anddelivered pursuant to this Resolution, to the extent of the unpaid principal balance or principalamount thereof, may, upon surrender of such Bond at the principal corporate trust office of thePaying Agent/Registrar, together with a written request therefor duly executed by the registeredowner or the assignee or assignees thereof, or its or their duly authorized attorneys orrepresentatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at theoption of the registered owner or such assignee or assignees, as appropriate, be converted into andexchanged for fully registered bonds, without interest coupons, in the form prescribed in the FORMOF SUBSTITUTE BOND set forth in this Resolution, in the denomination of $5,000, or any integralmultiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall havea single stated maturity date), as requested in writing by such registered owner or such assignee orassignees, in an aggregate principal amount equal to the unpaid principal balance or principalamount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner,assignee, or assignees, as the case may be. If the Initial Bond is assigned and transferred orconverted each substitute Bond issued in exchange for any portion of the Initial Bond shall have a

10

single stated principal maturity date, and shall not be payable in installments; and each such Bondshall have a principal maturity date corresponding to the due date of the installment of principal orportion thereof for which the substitute Bond is being exchanged; and each such Bond shall bearinterest at the single rate applicable to and borne by such installment of principal or portion thereoffor which it is being exchanged. If any Bond or portion thereof (other than the Initial Bond) isassigned and transferred or converted, each Bond issued in exchange therefor shall have the sameprincipal maturity date and bear interest at the same rate as the Bond for which it is beingexchanged. Each substitute Bond shall bear a letter and/or number to distinguish it from each otherBond. The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided herein,and each fully registered bond delivered in conversion of and exchange for or replacement of anyBond or portion thereof as permitted or required by any provision of this Resolution shall constituteone of the Bonds for all purposes of this Resolution, and may again be converted and exchanged orreplaced. It is specifically provided that any Bond authenticated in conversion of and exchange foror replacement of another Bond on or prior to the first scheduled Record Date for the Initial Bondshall bear interest from the date of the Initial Bond, but each substitute Bond so authenticated aftersuch first scheduled Record Date shall bear interest from the interest payment date next precedingthe date on which such substitute Bond was so authenticated, unless such Bond is authenticated afterany Record Date but on or before the next following interest payment date, in which case it shallbear interest from such next following interest payment date; provided, however, that if at the timeof delivery of any substitute Bond the interest on the Bond for which it is being exchanged is duebut has not been paid, then such Bond shall bear interest from the date to which such interest hasbeen paid in full. THE INITIAL BOND issued and delivered pursuant to this Resolution is notrequired to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substituteBond issued in conversion of and exchange for or replacement of any Bond or Bonds issued underthis Resolution there shall be printed a certificate, in the form substantially as follows:

"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE

It is hereby certified that this Bond has been issued under the provisions of the BondResolution described in this Bond; and that this Bond has been issued in conversion of and exchangefor or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally wasapproved by the Attorney General of the State of Texas and registered by the Comptroller of PublicAccounts of the State of Texas.

THE BANK OF NEW YORK TRUST MELLONCOMPANY, NATIONAL ASSOCIATION

Paying Agent/Registrar

Dated: __________ _____________________________Authorized Representative"

An authorized representative of the Paying Agent/Registrar shall, before the delivery of any suchBond, date and manually sign the above Certificate, and no such Bond shall be deemed to be issuedor outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shallcancel all Bonds surrendered for conversion and exchange or replacement. No additional

11

ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer orany other body or person so as to accomplish the foregoing conversion and exchange or replacementof any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing,execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bondsshall be of type composition printed on paper with lithographed or steel engraved borders ofcustomary weight and strength. Pursuant to Chapter 1201, Texas Government Code, the duty ofconversion and exchange or replacement of Bonds as aforesaid is hereby imposed upon the PayingAgent/Registrar, and, upon the execution of the above Paying Agent/Registrar's AuthenticationCertificate, the converted and exchanged or replaced Bond shall be valid, incontestable, andenforceable in the same manner and with the same effect as the Initial Bond which originally wasissued pursuant to this Resolution, approved by the Attorney General, and registered by theComptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard orcustomary fees and charges for transferring, converting, and exchanging any Bond or any portionthereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes orgovernmental charges required to be paid with respect thereto as a condition precedent to theexercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not berequired to make any such conversion and exchange or replacement of Bonds or any portion thereof(i) during the period commencing with the close of business on any Record Date and ending withthe opening of business on the next following principal or interest payment date, or, (ii) with respectto any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to itsredemption date.

(e) In General. All Bonds issued in conversion and exchange or replacement of anyother Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons,with the principal of and interest on such Bonds to be payable only to the registered owners thereof,(ii) may and/or shall be redeemed prior to their scheduled maturities, (iii) may be transferred andassigned, (iv) may be converted and exchanged for other Bonds, (v) shall have the characteristics,(vi) shall be signed and sealed, and (vii) the principal of and interest on the Bonds shall be payable,all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE BONDset forth in this Resolution.

(f) Payment of Fees and Charges. The Issuer hereby covenants with the registeredowners of the Bonds that it will (i) pay the standard or customary fees and charges of the PayingAgent/Registrar for its services with respect to the payment of the principal of and interest on theBonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services withrespect to the transfer of registration of Bonds, and with respect to the conversion and exchange ofBonds solely to the extent above provided in this Resolution.

(g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered ownersof the Bonds that at all times while the Bonds are outstanding the Issuer will provide a competentand legally qualified bank, trust company, financial institution, or other agency to act as and performthe services of Paying Agent/Registrar for the Bonds under this Resolution, and that the PayingAgent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, changethe Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar,to be effective not later than 60 days prior to the next principal or interest payment date after suchnotice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by

12

merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuercovenants that promptly it will appoint a competent and legally qualified bank, trust company,financial institution, or other agency to act as Paying Agent/Registrar under this Resolution. Uponany change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shalltransfer and deliver the Registration Books (or a copy thereof), along with all other pertinent booksand records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed bythe Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a writtennotice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds,by United States mail, first-class postage prepaid, which notice also shall give the address of the newPaying Agent/Registrar. By accepting the position and performing as such, each PayingAgent/Registrar shall be deemed to have agreed to the provisions of this Resolution, and a certifiedcopy of this Resolution shall be delivered to each Paying Agent/Registrar.

Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversionand exchange or replacement of any other Bond or portion thereof, including the form of PayingAgent/Registrar's Certificate to be printed on each of such Bonds, and the Form of Assignment tobe printed on each of the Bonds, shall be, respectively, substantially as follows, with suchappropriate variations, omissions, or insertions as are permitted or required by this Resolution.

FORM OF SUBSTITUTE BOND

Unless this Bond is presented by an authorized representative of The Depository TrustCompany, a New York corporation ("DTC") to the Issuer or its agent for registration of transfer,exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such othername as is requested by an authorized representative of DTC (and any payment is made to Cede &Co. or to such other entity as is requested by an authorized representative of DTC), ANYTRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TOANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has aninterest herein.

As provided in the Bond Resolution referred to herein, until the termination of the systemof book-entry-only transfers through DTC, and notwithstanding any other provision of the BondResolution to the contrary, this Bond may be transferred, in whole but not in part, only to a nomineeof DTC, or by a nominee of DTC to DTC or a nominee of DTC, or by DTC or a nominee of DTCto any successor securities depository or any nominee thereof.

PRINCIPALAMOUNT

NO. R-__ $___________UNITED STATES OF AMERICA

STATE OF TEXASNORTH TEXAS MUNICIPAL WATER DISTRICT

REGIONAL WASTEWATER SYSTEM BOND,SERIES 2020A

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MATURITYINTEREST RATE DATE ISSUE DATE CUSIP NO.

_____% JUNE 1, ____ ______________* ________

ON THE MATURITY DATE specified above NORTH TEXAS MUNICIPAL WATERDISTRICT (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to payto CEDE & CO., or to the registered assignee hereof (either being hereinafter called the "registeredowner") the principal amount of ________________ ____________________________ and to payinterest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, fromthe Issue Date specified above, to the Maturity Date specified above, or the date of redemption priorto maturity, at the interest rate per annum specified above; with interest being payable semiannuallyon each June 1 and December 1, commencing _______, _____**, except that if the date ofauthentication of this Bond is later than the first Record Date (hereinafter defined), such principalamount shall bear interest from the interest payment date next preceding the date of authentication,unless such date of authentication is after any Record Date (hereinafter defined) but on or before thenext following interest payment date, in which case such principal amount shall bear interest fromsuch next following interest payment date.

THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of theUnited States of America, without exchange or collection charges. The principal of this Bond shallbe paid to the registered owner hereof upon presentation and surrender of this Bond at maturity orupon the date fixed for its redemption prior to maturity, at the principal corporate trust office of theBank of New York Mellon Trust Company, National Association, in Dallas, Texas, which is the"Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by thePaying Agent/Registrar to the registered owner hereof on each interest payment date by check datedas of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from,funds of the Issuer required by the resolution authorizing the issuance of the Bonds (the "BondResolution") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafterprovided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at theaddress of the registered owner, as it appeared on the 15th day of the month next preceding eachsuch date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, ashereinafter described. However, notwithstanding the foregoing provisions, the payment of suchinterest may be made by any other method acceptable to the Paying Agent/Registrar and requestedby, and at the risk and expense of, the registered owner hereof. Any accrued interest due upon theredemption of this Bond prior to maturity as provided herein shall be paid to the registered ownerat the principal corporate trust office of the Paying Agent/Registrar upon presentation and surrenderof this Bond for redemption and payment at the principal corporate trust office of the PayingAgent/Registrar. The Issuer covenants with the registered owner of this Bond that on or before eachprincipal payment date, interest payment date, and accrued interest payment date for this Bond itwill make available to the Paying Agent/Registrar, from the "Interest and Redemption Fund" createdby the Bond Resolution, the amounts required to provide for the payment, in immediately availablefunds, of all principal of and interest on the Bonds, when due.

* Date of initial delivery to the Purchaser (as defined in Section 33 of this Resolution).** From the Approval Certificate.

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IF THE DATE for the payment of the principal of or interest on this Bond shall be aSaturday, Sunday, a legal holiday, or a day on which banking institutions in the City where thePaying Agent/Registrar is located are authorized by law or executive order to close, then the datefor such payment shall be the next succeeding day which is not such a Saturday, Sunday, legalholiday, or day on which banking institutions are authorized to close; and payment on such dateshall have the same force and effect as if made on the original date payment was due.

THIS BOND is one of a series of Bonds (the "Bonds") dated as of _________*, authorizedin accordance with the Constitution and laws of the State of Texas in the principal amount of$__________*, FOR THE PURPOSE OF PROVIDING FUNDS FOR (i) THE ENLARGEMENT,IMPROVEMENT AND EXTENSION OF THE ISSUER'S REGIONAL WASTEWATERSYSTEM, (ii) MAKING A DEPOSIT TO THE DEBT SERVICE RESERVE FUND; AND (iii)PAYING THE COSTS OF ISSUANCE OF THE BONDS.

ON ________ 1, ____*, or any date thereafter, the unpaid installments of principal of thisBond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, withfunds derived from any available source, as a whole, or in part, and, if in part, the Issuer shall selectand designate the installment or installments of principal, and the amount that is to be redeemed, andif less than a whole principal installment is to be called, the Issuer shall direct the PayingAgent/Registrar to call by lot or other customary method of random selection the portion of theprincipal installment to be redeemed (only in an integral multiple of $5,000), at the redemption priceof the principal amount to be prepaid or redeemed, plus accrued interest to the date fixed forprepayment or redemption.

**[THE BONDS maturing on June 1, ____ and June 1, ____ (the "Term Bonds") are subjectto mandatory redemption prior to maturity in part, by lot or other customary random methodselected by the Paying Agent/Registrar, at a redemption price equal to the principal amount of theTerm Bonds or portions thereof to be redeemed plus accrued interest to the redemption date, on June1 in each of the years and in the principal amounts as follows:

Term Bonds maturing on June 1, ____

Years Amounts

Term Bonds maturing on June 1, _____

Years Amounts

* From Approval Certificate.** If applicable, from the Approval Certificate.

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The principal amount of the Term Bonds of a maturity required to be redeemed pursuant tothe operation of such mandatory redemption provisions shall be reduced, at the option of the Issuer,by the principal amount of the Term Bonds of such maturity which, at least 50 days prior to themandatory redemption date (1) shall have been acquired by the Issuer at a price not exceeding theprincipal amount of such Term Bonds plus accrued interest to the date of purchase thereof, anddelivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceledby the Paying Agent/Registrar at the request of the Issuer at a price not exceeding the principalamount of such Term Bonds plus accrued interest to the date of purchase, or (3) shall have beenprepaid or redeemed pursuant to the optional prepayment or redemption provisions and nottheretofore credited again a mandatory prepayment or redemption requirement.]

DURING ANY PERIOD in which ownership of the Bonds is determined by a book entryat a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity andbearing the same interest rate are to be redeemed, the particular Bonds of such maturity and bearingsuch interest rate shall be selected in accordance with the arrangements between the Issuer and thesecurities depository.

AT LEAST 30 days prior to the date fixed for any such redemption a written notice of suchredemption shall be mailed by United States mail, postage prepaid, by the Paying Agent/Registrarto the registered owner hereof at the address of such registered owner appearing on the registrationbooks of the Issuer kept by the Paying Agent/Registrar at the close of business on the business daynext preceding the date of mailing of such notice. Any notice so mailed shall be conclusivelypresumed to have been duly given, whether or not the registered owner receives such notice. By thedate fixed for any such redemption due provision shall be made by the Issuer with the PayingAgent/Registrar for the payment of the required redemption price for this Bond or the portion hereofwhich is to be so redeemed, plus accrued interest thereon to the date fixed for prepayment orredemption. If such written notice of redemption is given, and if due provision for such paymentis made, all as provided above, this Bond, or the portion thereof which is to be so redeemed, therebyautomatically shall be treated as redeemed prior to its scheduled maturity, and shall not bear interestafter the date fixed for its redemption, and shall not be regarded as being outstanding except for theright of the registered owner to receive the redemption price plus accrued interest to the date fixedfor redemption from the Paying Agent/Registrar out of the funds provided for such payment. If aportion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date,bearing interest at the same rate, in any denomination or denominations in any integral multiple of$5,000, at the written request of the registered owner, and in aggregate principal amount equal tothe unredeemed portion thereof, will be issued to the registered owner upon the surrender thereoffor cancellation, at the expense of the Issuer, all as provided in the Bond Resolution.

THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRALMULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books ofthe Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, uponthe terms and conditions set forth in the Bond Resolution. Among other requirements for suchassignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,together with proper instruments of assignment, in form and with guarantee of signaturessatisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion orportions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or

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names this Bond or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Bond shall be executed by the registered owneror its duly authorized attorney or representative, to evidence the assignment hereof. A new Bondor Bonds payable to such assignee or assignees (which then will be the new registered owner orowners of such new Bond or Bonds), or to the previous registered owner in the case of theassignment and transfer of only a portion of this Bond, may be delivered by the PayingAgent/Registrar in conversion of and exchange for this Bond, all in the form and manner as providedin the next paragraph hereof for the conversion and exchange of other Bonds. The Issuer shall paythe Paying Agent/Registrar's standard or customary fees and charges for making such transfer, butthe one requesting such transfer shall pay any taxes or other governmental charges required to bepaid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers ofregistration of this Bond or any portion hereof (i) during the period commencing with the close ofbusiness on any Record Date and ending with the opening of business on the next followingprincipal or interest payment date, or (ii) with respect to any Bond or portion thereof called forredemption prior to maturity within 45 days prior to its redemption date. The registered owner ofthis Bond shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absoluteowner hereof for all purposes, including payment and discharge of liability upon this Bond to theextent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by anynotice to the contrary.

ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, withoutinterest coupons, in the denomination of any integral multiple of $5,000. As provided in the BondResolution, this Bond, or any unredeemed portion hereof, may, at the request of the registered owneror the assignee or assignees hereof, be converted into and exchanged for a like aggregate principalamount of fully registered bonds, without interest coupons, payable to the appropriate registeredowner, assignee, or assignees, as the case may be, having the same maturity date, and bearinginterest at the same rate, in any denomination or denominations in any integral multiple of $5,000as requested in writing by the appropriate registered owner, assignee, or assignees, as the case maybe, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordancewith the form and procedures set forth in the Bond Resolution. The Issuer shall pay the PayingAgent/Registrar's standard or customary fees and charges for transferring, converting, andexchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, andexchange shall pay any taxes or governmental charges required to be paid with respect thereto asa condition precedent to the exercise of such privilege of conversion and exchange. The PayingAgent/Registrar shall not be required to make any such conversion and exchange [(i)]* during theperiod commencing with the close of business on any Record Date and ending with the opening ofbusiness on the next following principal or interest payment date [or (ii) with respect to any Bondor portion thereof called for redemption prior to maturity, within 45 days prior to its redemptiondate]*.

IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,

or otherwise ceases to act as such, the Issuer has covenanted in the Bond Resolution that it promptlywill appoint a competent and legally qualified substitute therefor, and promptly will cause writtennotice thereof to be mailed to the registered owners of the Bonds.

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IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validlyauthorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to beperformed, exist, and be done precedent to or in the authorization, issuance, and delivery of thisBond have been performed, existed, and been done in accordance with law; that this Bond is aspecial obligation of the Issuer which, together with other bonds, are secured by and payable froma first lien on and pledge of the "Pledged Revenues" as defined in the Bond Resolution, includingthe Gross Revenues of the Issuer's Trinity East Fork Regional Wastewater System, and includingspecifically certain payments to be received by the Issuer from the Cities of Mesquite, Plano,Richardson, Allen, McKinney, Forney, Frisco, Princeton, Rockwall, Heath, Seagoville, Melissa,and the Town of Prosper, Texas, and any future Additional Member Cities, under the "Trinity EastFork Regional Wastewater System Contract", dated October 1, 1975, among the Cities of Mesquiteand Plano and the Issuer, the "City of Richardson-Trinity East Fork Regional Wastewater SystemContract", dated January 9, 1978, and amended as of December 1, 1985, between the City ofRichardson and the Issuer, the "City of Allen-Trinity East Fork Regional Wastewater SystemContract", dated August 24, 1978, between the City of Allen and the Issuer, the "City of McKinney-Trinity East Fork Regional Wastewater System Contract", dated August 23, 1979, between the Cityof McKinney and the Issuer, the "City of Forney - Trinity East Fork Regional Wastewater SystemContract", dated February 22, 1990, between the City of Forney and the Issuer, the City of Frisco -Trinity East Fork Regional Wastewater System Contract, dated as of November 19, 1996, betweenthe City of Frisco and the Issuer, the City of Princeton - Trinity East Fork Regional WastewaterSystem Contract, dated as of November 26, 1996, between the City of Princeton and the Issuer, the"City of Rockwall - Trinity East Fork Regional Wastewater System Contract," dated March 29,2001, between the City of Rockwall and the Issuer, "City of Heath - Trinity East Fork RegionalWastewater System Contract," dated March 29, 2001, between the City of Heath and the Issuer, theTown of Prosper - Trinity East Fork Regional Wastewater System Contract, dated as of February24, 2004, between the Town of Prosper and the Issuer, and the City of Seagoville - Trinity EastFork Regional Wastewater System Contract, dated as of February 24, 2005, between the City ofSeagoville and the Issuer, and "City of Melissa - Trinity East Fork Regional Wastewater SystemContract," dated as of April 1, 2019, between the City of Melissa and the Issuer, and the and allsimilar contracts with any Additional Member Cities as permitted in said contracts.

THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Resolution,to issue Additional Bonds payable from and secured by a first lien on and pledge of the "PledgedRevenues" on a parity with this Bond and series of which it is a part.

THE ISSUER also has reserved the right to amend the Bond Resolution with the approvalof the registered owners of 51% in principal amount of all outstanding bonds secured by and payablefrom a first lien on and pledge of the "Pledged Revenues".

THE REGISTERED OWNER hereof shall never have the right to demand payment of thisBond or the interest hereon out of any funds raised or to be raised by taxation or from any sourcewhatsoever other than specified in the Bond Resolution.

BY BECOMING the registered owner of this Bond, the registered owner therebyacknowledges all of the terms and provisions of the Bond Resolution, agrees to be bound by suchterms and provisions, acknowledges that the Bond Resolution is duly recorded and available forinspection in the official minutes and records of the governing body of the Issuer, and agrees that

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the terms and provisions of this Bond and the Bond Resolution constitute a contract between eachregistered owner hereof and the Issuer.

IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual orfacsimile signature of the President of the Board of Directors of the Issuer and attested andcountersigned with the manual or facsimile signature of the Secretary of the Board of Directors ofthe Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile,on this Bond.

xxxxxxxxxxxx xxxxxxxxxx Secretary, Board of Directors, President, Board of DirectorsNorth Texas Municipal Water District North Texas Municipal Water District

(DISTRICT SEAL)

FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE

PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE

It is hereby certified that this Bond has been issued under the provisions of the BondResolution described in this Bond; and that this Bond has been issued in conversion of and exchangefor or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally wasapproved by the Attorney General of the State of Texas and registered by the Comptroller of PublicAccounts of the State of Texas.

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION

Paying Agent/Registrar

Dated: ___________ _____________________________Authorized Representative

FORM OF ASSIGNMENT

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto

Please Insert Social Security orOther Identifying Number of Assignee/___________________________________/

____________________________________________________________(Name and Address of Assignee)

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the within Bond and does hereby irrevocably constitute and appoint _________________________to transfer said Bond on the books kept for registration thereof with full power of substitution in thepremises.

Date: _____________________

___________________________________

Signature Guaranteed: ____________________________________

NOTICE: The signature to this assignment must correspond with the name as it appears uponthe face of the within Bond in every particular, without alteration or enlargement orany change whatever; and

NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating ina Securities Transfer Association recognized signature guarantee program.

Section 8. ADDITIONAL DEFINITIONS. As used in this Resolution the following termsshall have the meanings set forth below, unless the text hereof specifically indicates otherwise:

The term "Additional Bonds" shall mean the additional parity revenue bonds permitted tobe authorized in the future in this Resolution.

The term "Board" shall mean the Board of Directors of the Issuer, being the governing bodyof the Issuer, and it is further resolved that the declarations and covenants of the Issuer containedin this Resolution are made by, and for and on behalf of the Board and the Issuer, and are bindingupon the Board and the Issuer for all purposes.

The terms "Bond Resolution" and "Resolution" mean this resolution authorizing the Bonds.

The term "Bonds" means collectively the Initial Bond as described and defined in Section1 of this Resolution, and all substitute bonds exchanged therefor as well as all other substitute andreplacement bonds issued pursuant to this Resolution.

The term "Contract" shall mean collectively the Trinity East Fork Regional WastewaterContract dated as of October 1, 1975, among the Issuer and the City of Mesquite, in Dallas County,Texas, and the City of Plano, in Collin County, Texas, the City of Richardson-Trinity East ForkRegional Wastewater System Contract, dated as of January 9, 1978, and amended as of December1, 1985, between the Issuer and the City of Richardson, in Dallas and Collin Counties, Texas, theCity of Allen-Trinity East Fork Regional Wastewater System Contract, dated as of August 24, 1978,between the Issuer and the City of Allen, in Collin County, Texas, the City of McKinney - TrinityEast Fork Regional Wastewater System Contract, dated as of August 29, 1979, between the Issuerand the City of McKinney, in Collin County, Texas, the City of Forney - Trinity East Fork RegionalWastewater System Contract, dated as of February 22, 1990, between the Issuer and the City ofForney, in Kaufman County, Texas, the City of Frisco - Trinity East Fork Regional WastewaterSystem Contract, dated as of November 19, 1996, between the Issuer and the City of Frisco, in

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Collin and Denton Counties, Texas, the City of Princeton - Trinity East Fork Regional WastewaterSystem Contract, dated as of November 26, 1996, between the Issuer and the City of Princeton, inCollin County, Texas, the City of Rockwall - Trinity East Fork Regional Wastewater SystemContract, dated as of March 29, 2001, between the Issuer and the City of Rockwall, in RockwallCounty, Texas, the City of Heath - Trinity East Fork Regional Wastewater System Contract, datedas of March 29, 2001, between the Issuer and the City of Heath, in Rockwall County, Texas, theTown of Prosper - Trinity East Fork Regional Wastewater System Contract, dated as of February24, 2004, between the Issuer and the Town of Prosper, in Collin and Denton Counties, Texas, and the City of Seagoville - Trinity East Fork Regional Wastewater System Contract, dated as ofFebruary 24, 2005, between the Issuer and the City of Seagoville, Dallas and Kaufman Counties,Texas, and "City of Melissa - Trinity East Fork Regional Wastewater System Contract," dated asof April 1, 2019, between the Issuer and the City of Melissa, in Collin County, Texas, together withall similar contracts which may be executed in the future between the Issuer and Additional MemberCities, as defined and permitted in the aforesaid contracts.

The terms "District" and "Issuer" shall mean North Texas Municipal Water District.

The terms "District's System", "Issuer's System", and "System" shall mean all of the Issuer'sfacilities acquired, constructed, used, or operated by the Issuer for receiving, transporting, treating,and disposing of Wastewater of and for Member Cities, pursuant to the Contract, including thecontracts with Additional Member Cities (but excluding any facilities acquired or constructed with"Special Facilities Bonds" as hereinafter described, and excluding any facilities required to transportWastewater to any Point of Entry of the System), together with any improvements, enlargements,or additions to said System facilities and any extensions, repairs, or replacements of said Systemfacilities acquired, constructed, used, operated, or otherwise incorporated into or made a part of saidSystem facilities in the future by the Issuer. Said terms shall include only those facilities which areacquired, constructed, used, or operated by the Issuer to provide service to Member Cities pursuantto the Contract, including the contracts with Additional Member Cities, and which, as determinedby the Issuer, can economically and efficiently provide service to Member Cities. Said terms do notinclude any Issuer facilities which provide Wastewater services of any kind to cities, politicalsubdivisions, or persons which are not Member Cities, nor do they in any way include or affect theIssuer's water supply system. Said terms do not include any facilities acquired or constructed by theIssuer with the proceeds from the issuance of "Special Facilities Bonds", which are hereby definedas being revenue obligations of the Issuer which are not secured by or payable from AnnualPayments under the Contract, including the contracts with Additional Member Cities, but which arepayable solely from other sources; but Special Facilities Bonds may be made payable from payments from any person, including any Member City, under a separate contract whereunder the facilitiesto be acquired or constructed are declared not to be part of the System and are not made payablefrom the Annual Payments as defined in the Contract, including the contracts with AdditionalMember Cities.

The term "Gross Revenues of the System" shall mean all of the revenues, income, rentals,rates, fees, and charges of every nature derived by the Board or the Issuer from the operation and/orownership of the System, including specifically all payments constituting the "Annual Requirement"(consisting of the "Operation and Maintenance Component" and the "Bond Service Component"),and all other payments and amounts received by the Board or the Issuer from the Member Citiespursuant to the Contract, including any contracts with Additional Member Cities.

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The term "Member Cities" shall mean collectively the City of Mesquite, in Dallas County,Texas, the City of Plano, in Collin County, Texas, the City of Richardson, in Dallas and CollinCounties, Texas, the City of Allen, in Collin County, Texas, the City of McKinney, in CollinCounty, Texas, the City of Forney, in Kaufman County, Texas, the City of Frisco, in Collin andDenton Counties, Texas, the City of Princeton, in Collin County, Texas, the City of Rockwall, inRockwall County, Texas, the City of Heath, in Rockwall County, Texas, the Town of Prosper, inCollin and Denton Counties, Texas, the City of Seagoville, in Dallas and Kaufman Counties, Texas,and the City of Melissa, in Collin County, Texas, together with all Additional Member Cities, asdefined in the Contract.

The term "Net Revenues of the System" shall mean the Gross Revenues of the System lessthe Operation and Maintenance Expense of the System.

The term A1976 Bond Resolution@ shall mean the resolution adopted by the Board on May27, 1976, authorizing the issuance of the ANorth Texas Municipal Water District RegionalWastewater System Revenue Bonds, Series 1976,@ the initial issuance of bonds by the Issuer toprovide the System.

The term "Operation and Maintenance Expense of the System" shall mean all costs ofoperation and maintenance of the Issuer's System including, but not limited to, repairs andreplacements, the cost of utilities, supervision, engineering, accounting, auditing, legal services,insurance premiums, and any other supplies, services, administrative costs, and equipment necessaryfor proper operation and maintenance of the Issuer's System, payments made for the use or operationof any property, payments of fines, and payments made by Issuer in satisfaction of judgments orother liabilities resulting from claims not covered by Issuer's insurance or not paid by one particularMember City arising in connection with the operation and maintenance of the Issuer's System. Depreciation shall not be considered an item of Operation and Maintenance Expense.

The term "Parity Bonds" shall mean collectively the Bonds and the unpaid and unrefundedbonds out of the following described Series which will be outstanding after the issuance and deliveryof the Initial Bond: North Texas Municipal Water District Regional Wastewater System RevenueBonds, Series 2009, authorized by resolution of the Board on June 25, 2009, North Texas MunicipalWater District Regional Wastewater System Revenue Bonds, Series 2012, authorized by resolutionof the Board on March 22, 2012, North Texas Municipal Water District Regional WastewaterSystem Revenue Bonds, Series 2013, authorized by resolution of the Board on March 28, 2013,North Texas Municipal Water District Regional Wastewater System Revenue Refunding andImprovement Bonds, Series 2015, authorized by resolution of the Board on August 27, 2015, NorthTexas Municipal Water District Regional Wastewater System Revenue Refunding and ImprovementBonds, Series 2016, authorized by resolution of the Board on August 25, 2016, North TexasMunicipal Water District Regional Wastewater System Revenue Bonds, Series 2017, authorized byresolution of the Board on March 23, 2017, North Texas Municipal Water District RegionalWastewater System Revenue Refunding Bonds, Series 2017, authorized by resolution of the Boardon November 29, 2017, North Texas Municipal Water District Regional Wastewater SystemRevenue Bonds, Series 2018, authorized by resolution of the Board on February 22, 2018, NorthTexas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2019,authorized by resolution of the Board on April 25, 2019, and North Texas Municipal Water District

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Regional Wastewater System Revenue Bonds, Series 2020, authorized by resolution of the Boardon May 28, 2020.

The term "Pledged Revenues" shall mean: (a) the Gross Revenues of the System and (b)any additional revenues, income, receipts, or other resources, including, without limitation, anygrants, donations, or income received or to be received from the United States Government, or anyother public or private source, whether pursuant to an agreement or otherwise, which in the futuremay, at the option of the Issuer, be pledged to the payment of the Parity Bonds or the AdditionalBonds.

The term "year" shall mean the 12 month period beginning each October 1, or such other 12month period hereafter established by the Issuer as a fiscal year for the purposes of this Resolution.

Section 9. PLEDGE. (a) The Bonds authorized by this Resolution are hereby designatedas, and shall be, "Additional Bonds" as permitted by Sections 21 and 22, respectively, of the 1976Bond Resolution and by Sections 22 and 23, respectively, of the resolutions authorizing the ParityBonds, and it is hereby determined, declared, and resolved that all of the Parity Bonds, includingthe Bonds authorized by this Resolution, are and shall be secured and payable equally and ratablyon a parity, and that Sections 8 through 25 of this Resolution substantially restate and aresupplemental to and cumulative of the applicable and pertinent provisions of the resolutionsauthorizing the issuance of the previously issued Parity Bonds, respectively, with Sections 8 through25 of this Resolution being equally applicable to all of the Parity Bonds, including the Bonds.

(b) The Parity Bonds and any Additional Bonds, and the interest thereon, are and shallbe secured by and payable from a first lien on and pledge of the Pledged Revenues, and the PledgedRevenues are further pledged to the establishment and maintenance of the Interest and RedemptionFund and the Reserve Fund as provided in this Resolution.

Section 10. REVENUE FUND. There has been created and established pursuant to the 1976Bond Resolution, and there shall be maintained at an official depository of the Issuer (which mustbe a member of the Federal Deposit Insurance Corporation) a separate fund to be entitled the "NorthTexas Municipal Water District Regional Wastewater System Revenue Bonds Revenue Fund"(hereafter called the "Revenue Fund"). All Gross Revenues of the System shall be credited to theRevenue Fund immediately upon receipt.

Section 11. INTEREST AND REDEMPTION FUND. For the sole purpose of paying theprincipal of and interest on all outstanding Parity Bonds and any Additional Bonds, as the samecome due, there has been created and established pursuant to the 1976 Bond Resolution and shallbe maintained at The Bank of New York Mellon Trust Company, National Association, a separatefund to be entitled the "North Texas Municipal Water District Regional Wastewater SystemRevenue Bonds Interest and Redemption Fund" (hereinafter called the "Interest and RedemptionFund").

Section 12. RESERVE FUND. There has been created and established pursuant to theSeries 1976 Bond Resolution, and there shall be maintained at the The Bank of New York MellonTrust Company, National Association, a separate fund to be entitled the "North Texas MunicipalWater District Regional Wastewater System Revenue Bonds Reserve Fund" (hereinafter called the

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"Reserve Fund"). The Reserve Fund shall be used solely for the purpose of finally retiring the lastof the outstanding Parity Bonds and Additional Bonds, or for paying principal of and interest on anyoutstanding Parity Bonds and Additional Bonds, when and to the extent the amount in the Interestand Redemption Fund is insufficient for such purpose.

Section 13. DEPOSITS OF PLEDGED REVENUES. The Pledged Revenues shall bedeposited into the Interest and Redemption Fund and the Reserve Fund when and as required by thisResolution.

Section 14. INVESTMENTS. Money in the Revenue Fund, the Interest and RedemptionFund, and the Reserve Fund established pursuant to the 1976 Bond Resolution may, at the optionof the Issuer, be placed in secured time deposits or secured certificates of deposit, or be invested indirect obligations of the United States of America, obligations guaranteed or insured by the UnitedStates of America, which, in the opinion of the Attorney General of the United States, are backedby its full faith and credit or represent its general obligations, including, but not limited to, evidencesof indebtedness issued, insured, or guaranteed by such governmental agencies as the Federal LandBank, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks,Government National Mortgage Association, United States Postal Service, Farmers HomeAdministration, Federal Home Loan Mortgage Association, Small Business Administration, FederalHousing Association, or Participation Certificates in the Federal Assets Financing Trust; providedthat all such deposits and investments shall be made in such manner that the money required to beexpended from any Fund will be available at the proper time or times. Such investments shall bevalued in terms of current market value as of the 15th day of January of each year. Interest andincome derived from such deposits and investments shall be credited to the Fund from which thedeposit or investment was made. Such investments shall be sold promptly when necessary toprevent any default in connection with the Parity Bonds or Additional Bonds. No investment of anyFund shall be made in any way which would violate any provision of this Resolution, particularlywith respect to any surplus in the Reserve Fund or "arbitrage bonds".

Section 15. FUNDS SECURED. Money in all Funds described in this Resolution, to theextent not invested, shall be secured in the manner prescribed by law for securing funds of theIssuer, in principal amounts at all times not less than the amounts of money credited to such Funds,respectively.

Section 16. DEBT SERVICE REQUIREMENTS. (a) Immediately after the delivery of theInitial Bond the Issuer shall deposit to the credit of the Interest and Redemption Fund, from theproceeds received from the sale and delivery of the Initial Bond, all accrued interest, if any, to beused to pay part of the interest coming due on the Bonds.

(b) The Issuer shall transfer from the Pledged Revenues and deposit to the credit of theInterest and Redemption Fund the amounts, at the times, as follows:

(1) such amounts, deposited in approximately equal monthly installments on orbefore the 25th day of each month hereafter as will be sufficient, together with otheramounts, if any, then on hand in the Interest and Redemption Fund and available for suchpurpose, to pay the interest scheduled to accrue and come due on the Parity Bonds and anyAdditional Bonds on the next succeeding interest payment date; and

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(2) such amounts, deposited in approximately equal monthly installments on orbefore the 25th day of each month hereafter as will be sufficient, together with otheramounts, if any, then on hand in the Interest and Redemption Fund and available for suchpurpose, to pay the principal scheduled to mature and come due, and/or mandatorily requiredto be redeemed prior to maturity, on the Parity Bonds and any Additional Bonds on the nextsucceeding principal payment date or mandatory redemption date.

Section 17. RESERVE REQUIREMENTS. Out of proceeds of the Bonds, there shall bedeposited to the credit of the Reserve Fund an amount of money, if any, sufficient to cause theReserve Fund to contain money and/or investments in market value equal to the average annualprincipal and interest requirements on all Parity Bonds which will be outstanding immediately afterissuance of the Bonds (the "Required Amount"). So long as the money and investments in theReserve Fund are at least equal to the Required Amount, no deposits shall be made to the credit ofthe Reserve Fund; but when and if the Reserve Fund at any time contains less than said RequiredAmount in market value, then, subject and subordinate to making the required deposits to the creditof the Interest and Redemption Fund, the Issuer shall transfer from Pledged Revenues and depositto the credit of the Reserve Fund, on or before the 25th day of each month, a sum equal to 1/60thof the average annual principal and interest requirements of all then outstanding Parity Bonds, untilthe Reserve Fund is restored to said Required Amount. So long as the Reserve Fund contains saidRequired Amount, all amounts in excess of such Required Amount shall, on or before the 10th dayprior to each interest payment date, be deposited to the credit of the Interest and Redemption Fund;and otherwise any earnings from the deposit and investment of the Reserve Fund shall be retainedin the Reserve Fund.

Section 18. DEFICIENCIES. If on any occasion there shall not be sufficient PledgedRevenues to make the required deposits into the Interest and Redemption Fund and the ReserveFund, then such deficiency shall be made up as soon as possible from the next available PledgedRevenues, or from any other sources available for such purpose.

Section 19. EXCESS PLEDGED REVENUES. Subject to making the required deposits tothe credit of the Interest and Redemption Fund and the Reserve Fund, when and as required by thisResolution, or any Resolution authorizing the issuance of Additional Bonds, the excess PledgedRevenues first shall be used to pay the Operation and Maintenance Expenses of the System, andthen, subject to paying such Operation and Maintenance Expenses of the System, may be used forany other lawful purpose.

Section 20. PAYMENT OF BONDS. On or before the last day of each May and of eachNovember hereafter while any of the Parity Bonds or Additional Bonds are outstanding and unpaid,the Issuer shall make available to the paying agents therefor, out of the Interest and RedemptionFund or the Reserve Fund, if necessary, money sufficient to pay such interest on and such principalof the Parity Bonds and Additional Bonds as will accrue or mature on the June 1 or December 1immediately following.

Section 21. FINAL DEPOSITS. At such times as the aggregate amount of money andinvestments in the Interest and Redemption Fund and the Reserve Fund are at least equal in marketvalue to (1) the aggregate principal amount of all unpaid (unmatured and matured) outstanding

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Parity Bonds and Additional Bonds, plus (2) the aggregate amount of all unpaid interest, includingall unpaid (unmatured and matured) outstanding interest coupons, appertaining to such Parity Bondsand Additional Bonds, no further deposits need be made into the Interest and Redemption Fund orthe Reserve Fund. In determining the amount of such Parity Bonds and Additional Bonds, andunpaid interest appertaining thereto, outstanding at any time, there shall be subtracted and excludedthe amount of any such Parity Bonds and Additional Bonds, and unpaid interest appertaining thereto,which shall have been duly called for redemption and for which funds shall have been depositedwith the paying agents therefor sufficient for such redemption.

Section 22. ADDITIONAL BONDS. (a) The Issuer shall have the right and power at anytime and from time to time, and in one or more Series or issues, to authorize, issue, and deliveradditional parity revenue bonds (herein called "Additional Bonds"), in any amounts, for any lawfulpurpose of relating to the System, including the refunding of any Parity Bonds or Additional Bonds. Such Additional Bonds, if and when authorized, issued, and delivered in accordance with thisResolution, shall be secured by and made payable equally and ratably on a parity with the ParityBonds, and all other outstanding Additional Bonds, from a first lien on and pledge of the PledgedRevenues.

(b) The Interest and Redemption Fund and the Reserve Fund, established by thisResolution shall secure and be used to pay all Additional Bonds as well as the Parity Bonds. However, each Resolution under which Additional Bonds are issued shall provide and require that,in addition to the amounts required by the provisions of this Resolution and the provisions of anyother Resolution or Resolutions authorizing Additional Bonds to be deposited to the credit of theInterest and Redemption Fund, the Issuer shall deposit to the credit of the Interest and RedemptionFund at least such amounts as are required for the payment of all principal of and interest on saidAdditional Bonds then being issued, as the same come due; and that the aggregate amount to beaccumulated and maintained in the Reserve Fund shall be increased (if and to the extent necessary)to an amount not less than the average annual principal and interest requirements of all Parity Bondsand Additional Bonds which will be outstanding after the issuance and delivery of the then proposedAdditional Bonds; and that the required additional amount shall be so accumulated by the depositin the Reserve Fund of all or any part of said required additional amount in cash immediately afterthe delivery of the then proposed Additional Bonds, or, at the option of the Issuer, by the deposit ofsaid required additional amount (or any balance of said required additional amount not depositedin cash as permitted above) in monthly installments, made on or before the 25th day of each monthfollowing the adoption of the Resolution authorizing the issuance of the then proposed AdditionalBonds, of not less than 1/60th of said required additional amount (or 1/60th of the balance of saidrequired additional amount not deposited in cash as permitted above).

(c) All calculations of average annual principal and interest requirements made pursuantto this Section shall be made as of and from the date of the Additional Bonds then proposed to beissued.

(d) The principal of all Additional Bonds must be scheduled to be paid or mature on June1 of the years in which such principal is scheduled to be paid or mature; and all interest thereon mustbe payable on June 1 and December 1.

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Section 23. FURTHER REQUIREMENTS FOR ADDITIONAL BONDS. AdditionalBonds shall be issued only in accordance with this Resolution, but notwithstanding any provisionsof this Resolution to the contrary, no installment, Series, or issue of Additional Bonds shall be issuedor delivered unless the President and the Secretary of the Board sign a written certificate to the effectthat the Issuer is not in default as to any covenant, condition, or obligation in connection with alloutstanding Parity Bonds and Additional Bonds, and the Resolutions authorizing same, and that theInterest and Redemption Fund and the Reserve Fund each contains the amount then required to betherein.

Section 24. GENERAL COVENANTS. The Issuer further covenants and agrees that:

(a) PERFORMANCE. It will faithfully perform at all times any and all covenants,undertakings, stipulations, and provisions contained in this Resolution and each resolutionauthorizing the issuance of Additional Bonds, and in each and every Parity Bond and AdditionalBond; that it will promptly pay or cause to be paid the principal of and interest on every Bond andAdditional Bond, on the dates and in the places and manner prescribed in such resolutions and ParityBonds or Additional Bonds; and that it will, at the times and in the manner prescribed, deposit orcause to be deposited the amounts required to be deposited into the Interest and Redemption Fundand the Reserve Fund; and any holder of the Parity Bonds or Additional Bonds may require theIssuer, its Board, and its officials and employees, to carry out, respect, or enforce the covenants andobligations of this Resolution or any resolution authorizing the issuance of Additional Bonds, by alllegal and equitable means, including specifically, but without limitation, the use and filing ofmandamus proceedings, in any court of competent jurisdiction, against the Issuer, its Board, and itsofficials and employees.

(b) ISSUER'S LEGAL AUTHORITY. The Issuer is a duly created and existingconservation and reclamation district of the State of Texas pursuant to Article 16, Section 59 of theTexas Constitution, and Chapter 62, Acts of the 52nd Legislature of Texas, Regular Session, 1951,as amended (originally compiled as Vernon's Ann. Tex. Civ. St. Article 8280-141), and is dulyauthorized under the laws of the State of Texas to create and issue the Parity Bonds; that all actionon its part for the creation and issuance of the Parity Bonds has been duly and effectively taken, andthat the Parity Bonds in the hands of the holders and owners thereof are and will be valid andenforceable special obligations of the Issuer in accordance with their terms.

(c) TITLE. It has or will obtain lawful title to, or the lawful right to use and operate, thelands, buildings, and facilities constituting the System, that it warrants that it will defend, the titleto or lawful right to use and operate, all the aforesaid lands, buildings, and facilities, and every partthereof, for the benefit of the holders and owners of the Parity Bonds and Additional Bonds againstthe claims and demands of all persons whomsoever, that it is lawfully qualified to pledge thePledged Revenues to the payment of the Parity Bonds and Additional Bonds in the mannerprescribed herein, and has lawfully exercised such rights.

(d) LIENS. It will from time to time and before the same become delinquent pay anddischarge all taxes, assessments, and governmental charges, if any, which shall be lawfully imposedupon it, or the System, that it will pay all lawful claims for rents, royalties, labor, materials, andsupplies which if unpaid might by law become a lien or charge thereon, the lien of which would beprior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be

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fully preserved in the manner provided herein, and that it will not create or suffer to be created anymechanic's, laborer's, materialman's, or other lien or charge which might or could be prior to theliens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired;provided, however, that no such tax, assessment, or charge, and that no such claims which might beused as the basis of a mechanic's, laborer's, materialman's, or other lien or charge, shall be requiredto be paid so long as the validity of the same shall be contested in good faith by the Board.

(e) OPERATION OF SYSTEM. While the Parity Bonds or any Additional Bonds areoutstanding and unpaid it will cause the System to be continuously and efficiently operated andmaintained in good condition, repair, and working order, and at a reasonable cost.

(f) FURTHER ENCUMBRANCE. While the Parity Bonds or any Additional Bonds areoutstanding and unpaid, the Issuer shall not additionally encumber the Pledged Revenues in anymanner, except as permitted in this Resolution in connection with Additional Bonds, unless saidencumbrance is made junior and subordinate in all respects to the liens, pledges, covenants, andagreements of this Resolution and any resolution authorizing the issuance of Additional Bonds; butthe right of the Issuer and the Board to issue revenue bonds payable from a subordinate lien on thePledged Revenues is specifically recognized and retained.

(g) SALE OF PROPERTY. While the Parity Bonds or any Additional Bonds areoutstanding and unpaid, the Issuer will maintain its current legal corporate status as a conservationand reclamation district, and the Issuer shall not sell, convey, mortgage, or in any manner transfertitle to, or lease, or otherwise dispose of the entire System, or any significant or substantial partthereof; provided that whenever the Issuer deems it necessary to dispose of any machinery, fixtures,and equipment, it may sell or otherwise dispose of such machinery, fixtures, and equipment whenit has made arrangements to replace the same or provide substitutes therefor, unless it is determinedby the Issuer that no such replacement or substitute is necessary.

(h) INSURANCE. (1) It will cause to be insured such parts of the System as wouldusually be insured by corporations operating like properties, with a responsible insurance companyor companies, against risks, accidents, or casualties against which and to the extent insurance isusually carried by corporations operating like properties, including fire and extended coverageinsurance. Public liability and property damage insurance shall also be carried unless the generalcounsel for Issuer, or the Attorney General of Texas, gives a written opinion to the effect that theIssuer, the Board, and its officers and employees, are not liable for claims which would be protectedby such insurance. At any time while any contractor engaged in construction work shall be fullyresponsible therefor, the Issuer shall not be required to carry insurance on the works beingconstructed, but the contractor shall be required to carry appropriate insurance. All such policiesshall be open to the inspection of the Bondholders and their representatives at all reasonable times.

(2) Upon the happening of any loss or damage covered by insurance from one or moreof said causes, the Issuer shall make due proof of loss and shall do all things necessary or desirableto cause the insuring companies to make payment in full directly to the Issuer. The proceeds ofinsurance covering such property, together with any other funds necessary and available for suchpurpose, shall be used forthwith by the Issuer for repairing the property damaged or replacing theproperty destroyed; provided, however, that if said insurance proceeds and other funds are

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insufficient for such purpose, then said insurance proceeds pertaining to the System shall be usedpromptly as follows:

(a) for the redemption prior to maturity of the Parity Bonds and AdditionalBonds, if any, ratably in the proportion that the outstanding principal of each Series or issueof Parity Bonds or Additional Bonds bears to the total outstanding principal of all ParityBonds and Additional Bonds; provided that if on any such occasion the principal of any suchSeries or issue is not subject to redemption, it shall not be regarded as outstanding in makingthe foregoing computation; or

(b) if none of the outstanding Parity Bonds or Additional Bonds is subject toredemption, then for the purchase on the open market and retirement of said Parity Bondsand Additional Bonds, in the same proportion as prescribed in the foregoing clause (a), tothe extent practicable; provided that the purchase price for any such Parity Bond orAdditional Bonds shall not exceed the redemption price of such Parity Bond or AdditionalBond on the first date upon which it becomes subject to redemption; or

(c) to the extent that the foregoing clauses (a) and (b) cannot be complied withat the time, the insurance proceeds, or the remainder thereof, shall be deposited in a specialand separate trust fund, at an official depository of the Issuer, to be designated the InsuranceAccount. The Insurance Account shall be held until such time as the foregoing clauses (a)and/or (b) can be complied with, or until other funds become available which, together withthe Insurance Account, will be sufficient to make the repairs or replacements originallyrequired, whichever of said events occurs first.

(3) The annual audit hereinafter required shall contain a list of all such insurance policiescarried, together with a statement as to whether or not all insurance premiums upon such policieshave been paid.

(i) RATE COVENANT. It will fix, establish, maintain, and collect such rentals, rates,charges, and fees for the use and availability of the System as are necessary to produce GrossRevenues of the System sufficient, together with any other Pledged Revenues, (a) to make allpayments and deposits required to be made into the Interest and Redemption Fund, and to maintainthe Reserve Fund, as required by the resolutions authorizing all Parity Bonds and Additional Bonds,and (b) to pay all Operation and Maintenance Expenses of the System.

(j) RECORDS. Proper books of record and account will be kept in which full, true, andcorrect entries will be made of all dealings, activities, and transactions relating to the System, thePledged Revenues, and all Funds described in this Resolution; and all books, documents, andvouchers relating thereto shall at all reasonable times be made available for inspection upon requestof any bondholder.

(k) AUDITS. Each year while any of the Parity Bonds or Additional Bonds areoutstanding, an audit will be made of its books and accounts relating to the System and the PledgedRevenues by an independent certified public accountant or an independent firm of certified publicaccountants. As soon as practicable after the close of each year, and when said audit has beencompleted and made available to the Issuer, a copy of such audit for the preceding year shall be

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mailed to the Municipal Advisory Council of Texas and to any bondholders who shall so request inwriting. Such annual audit reports shall be open to the inspection of the bondholders and theiragents and representatives at all reasonable times.

(l) GOVERNMENTAL AGENCIES. It will comply with all of the terms and conditionsof any and all agreements applicable to the System and the Parity Bonds or Additional Bondsentered into between the Issuer and any governmental agency, and the Issuer will take all actionnecessary to enforce said terms and conditions; and the Issuer will obtain and keep in full force andeffect all franchises, permits, and other requirements necessary with respect to the acquisition,construction, operation, and maintenance of the System.

(m) CONTRACTS WITH MEMBER CITIES. It will comply with the terms andconditions of the Contract, including any contracts with Additional Member Cities, and will causethe Member Cities to comply with all of their obligations thereunder by all lawful means; and theIssuer agrees to prepare an annual budget as required by the Contract.

Section 25. AMENDMENT OF RESOLUTION. (a) The holders or owners of Parity Bondsand Additional Bonds aggregating 51% in principal amount of the aggregate principal amount ofthen outstanding Parity Bonds and Additional Bonds shall have the right from time to time toapprove any amendment to this Resolution or any resolution authorizing the issuance of AdditionalBonds, which may be deemed necessary or desirable by the Issuer, provided, however, that nothingherein contained shall permit or be construed to permit the amendment of the terms and conditionsin said resolutions or in the Parity Bonds or Additional Bonds so as to:

(1) Make any change in the maturity of the outstanding Parity Bonds or AdditionalBonds;

(2) Reduce the rate of interest borne by any of the outstanding Parity Bonds orAdditional Bonds;

(3) Reduce the amount of the principal payable on the outstanding Parity Bonds orAdditional Bonds;

(4) Modify the terms of payment of principal of or interest on the outstanding ParityBonds or Additional Bonds, or impose any conditions with respect to such payment;

(5) Affect the rights of the holders of less than all of the Parity Bonds and AdditionalBonds then outstanding;

(6) Change the minimum percentage of the principal amount of Parity Bonds andAdditional Bonds necessary for consent to such amendment.

(b) If at any time the Issuer shall desire to amend a resolution under this Section, theIssuer shall cause notice of the proposed amendment to be published in a financial newspaper orjournal published in the City of New York, New York, or in the City of Austin, Texas, once duringeach calendar week for at least two successive calendar weeks. Such notice shall briefly set forththe nature of the proposed amendment and shall state that a copy thereof is on file at the principal

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office of each Paying Agent for each Series of Parity Bonds and Additional Bonds for inspectionby all holders of Parity Bonds and Additional Bonds. Such publication is not required, however,if notice in writing is given to each holder of Parity Bonds and Additional Bonds.

(c) Whenever at any time not less than thirty days, and within one year, from the dateof the first publication of notice or other service of written notice the Issuer shall receive aninstrument or instruments executed by the holders or owners of at least 51% in aggregate principalamount of all Parity Bonds and Additional Bonds then outstanding, which instrument or instrumentsshall refer to the proposed amendment described in said notice and which specifically consent to andapprove such amendment in substantially the form of the copy thereof on file as aforesaid, the Issuermay adopt the amendatory resolution in substantially the same form.

(d) Upon the adoption of any amendatory resolution pursuant to the provisions of thisSection, the resolution being amended shall be deemed to be amended in accordance with theamendatory resolution, and the respective rights, duties, and obligations of the Issuer and all theholders or owners of then outstanding Parity Bonds and Additional Bonds and all future AdditionalBonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects tosuch amendment.

(e) Any consent given by the holder or owner of a Parity Bond or Additional Bondpursuant to the provisions of this Section shall be irrevocable for a period of six months from thedate of the first publication of the notice provided for in this Section, and shall be conclusive andbinding upon all future holders or owners of the same Parity Bond or Additional Bond during suchperiod. Such consent may be revoked at any time after six months from the date of the firstpublication of such notice by the holder or owner who gave such consent, or by a successor in title,by filing notice thereof with each Paying Agent for each Series of Parity Bonds and AdditionalBonds, Texas, and the Issuer, but such revocation shall not be effective if the holders of 51% inaggregate principal amount of the then outstanding Parity Bonds and Additional Bonds as in thisSection defined have, prior to the attempted revocation, consented to and approved the amendment.

(f) For the purpose of this Section, the fact of the holding of Parity Bonds or AdditionalBonds in bearer, coupon form by any holder thereof and the amount and numbers of such ParityBonds and Additional Bonds, and the date of their holding same, may be provided by the affidavitof the person claiming to be such holder, or by a certificate executed by any trust company, bank,banker, or any other depository wherever situated showing that at the date therein mentioned suchperson had on deposit with such trust company, bank, banker, or other depository, the Parity Bondsor Additional Bonds described in such certificate. The ownership of all registered Parity Bonds andAdditional Bonds shall be ascertained by the registration books pertaining thereto kept by theregistrar. The Issuer may conclusively assume that such holding or ownership continues untilwritten notice to the contrary is served upon the Issuer.

Section 26. DEFEASANCE OF BONDS. (a) Each of the Bonds, including the Initial Bondand each of the other Bonds (as hereinbefore defined), and the interest thereon shall be deemed tobe paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of thisResolution, except to the extent provided in subsection (d) of this Section, when payment of theprincipal of such Bond, plus interest thereon to the due date (whether such due date be by reason ofmaturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in

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accordance with the terms thereof (including the giving of any required notice of redemption), or(ii) shall have been provided for on or before such due date by irrevocably depositing with ormaking available to the Paying Agent/Registrar for such payment (1) lawful money of the UnitedStates of America sufficient to make such payment or (2) Government Obligations which matureas to principal and interest in such amounts and at such times as will insure the availability, withoutreinvestment, of sufficient money to provide for such payment, and when proper arrangements havebeen made by the Issuer with the Paying Agent/Registrar for the payment of its services until allDefeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to bea Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer besecured by, payable from, or entitled to the benefits of, the Pledged Revenues as provided in thisResolution, and such principal and interest shall be payable solely from such money or GovernmentObligations.

(b) Any moneys so deposited with the Paying Agent/Registrar may at the writtendirection of the Issuer also be invested in Government Obligations, maturing in the amounts andtimes as hereinbefore set forth, and all income from such Government Obligations received by thePaying Agent/Registrar which is not required for the payment of the Bonds and interest thereon,with respect to which such money has been so deposited, shall be turned over to the Issuer, ordeposited as directed in writing by the Issuer.

(c) The term "Government Obligations" as used in this Section shall mean (i) direct,noncallable obligations of the United States of America, including obligations that areunconditionally guaranteed by the United States of America, and (ii) noncallable obligations of anagency or instrumentality of the United States of America, including obligations that areunconditionally guaranteed or insured by the agency or instrumentality and that, on the date theBoard of Directors adopts or approves proceedings authorizing the issuance of refunding bonds orotherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated asto investment quality by a nationally recognized investment rating firm not less than "AAA" or itsequivalent.

(d) Until all Defeased Bonds shall have become due and payable, the PayingAgent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds thesame as if they had not been defeased, and the Issuer shall make proper arrangements to provide andpay for such services as required by this Resolution.

Section 27. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. In the event any outstanding Bonds or Bond authorized by this Resolutionis damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to beprinted, executed, and delivered, a new bond of the same principal amount, maturity, and interestrate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in themanner hereinafter provided.

(b) Application for Replacement Bonds. Application for replacement of damaged,mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to thePaying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered ownerapplying for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such

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security or indemnity as may be required by them to save each of them harmless from any loss ordamage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, theregistered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to theirsatisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case ofdamage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrarfor cancellation the Bond so damaged or mutilated.

(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, inthe event any such Bond shall have matured, and no default has occurred which is then continuingin the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuermay authorize the payment of the same (without surrender thereof except in the case of a damagedor mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity isfurnished as above provided in this Section.

(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacementbond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,printing, and other expenses in connection therewith. Every replacement bond issued pursuant tothe provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shallconstitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bondshall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits ofthis Resolution equally and proportionately with any and all other Bonds duly issued under thisResolution.

(e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1201, TexasGovernment Code, this Section of this Resolution shall constitute authority for the issuance of anysuch replacement bond without necessity of further action by the governing body of the Issuer orany other body or person, and the duty of the replacement of such bonds is hereby authorized andimposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate anddeliver such Bonds in the form and manner and with the effect, as provided in Section 6(d) of thisResolution for Bonds issued in conversion and exchange for other Bonds.

Section 28. COVENANTS REGARDING TAX-EXEMPTION. (a) Covenants. The Issuercovenants to refrain from any action which would adversely affect, or to take such action to assure,the treatment of the Bonds as obligations described in section 103 of the Code, the interest on whichis not includable in the "gross income" of the holder for purposes of federal income taxation. Infurtherance thereof, the Issuer covenants as follows:

(1) to take any action to assure that no more than 10 percent of the proceeds ofthe Bonds or the projects financed therewith (less amounts deposited into a reserve fund, ifany) are used for any "private business use," as defined in section 141(b)(6) of the Code, orif more than 10 percent of the proceeds or the projects financed therewith are so used, suchamounts, whether or not received by the Issuer, with respect to such private business use, donot, under the terms of this Resolution or any underlying arrangement, directly or indirectly,secure or provide for the payment of more than 10 percent of the debt service on the Bonds,in contravention of section 141(b)(2) of the Code;

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(2) to take any action to assure that in the event that the "private business use"described in subsection (a) hereof exceeds five percent of the proceeds of the Bonds or theprojects financed therewith (less amounts deposited into a reserve fund, if any) then theamount in excess of five percent is used for a "private business use" which is "related" andnot "disproportionate," within the meaning of section 141(b)(3) of the Code, to thegovernmental use;

(3) to take any action to assure that no amount which is greater than the lesserof $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into areserve fund, if any) is, directly or indirectly, used to finance loans to persons, other thanstate or local governmental units, in contravention of section 141(c) of the Code;

(4) to refrain from taking any action that would otherwise result in the Bondsbeing treated as "private activity bonds" within the meaning of section 141(b) of the Code;

(5) to refrain from taking any action that would result in the Bonds being"federally guaranteed" within the meaning of section 149(b) of the Code;

(6) to refrain from using any portion of the proceeds of the Bonds, directly orindirectly, to acquire or to replace funds which were used, directly or indirectly, to acquireinvestment property (as defined in section 148(b)(2) of the Code) which produces amaterially higher yield over the term of the Bonds, other than investment property acquiredwith --

(A) proceeds of the Bonds invested for a reasonable temporary period of3 years or less or, in the case of a current refunding bond and an advance refundingbond, for a period of 90 days or less and 30 days or less, respectively, until suchproceeds are needed for the purpose for which the Bonds are issued,

(B) amounts invested in a bona fide debt service fund, within the meaningof section 1.148-1(b) of the Treasury Regulations, and

(C) amounts deposited in any reasonably required reserve or replacementfund to the extent such amounts do not exceed 10 percent of the stated principalamount (or, in the case of a discount, the issue price) of the Bonds;

(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treatedas proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwisecontravene the requirements of section 148 of the Code (relating to arbitrage);

(8) to refrain from using the proceeds of the Bonds or proceeds of any priorbonds to pay debt service on another issue more than 90 days after the date of issue of theBonds in contravention of the requirements of section 149(d) of the Code (relating toadvance refundings); and

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(9) to pay to the United States of America at least once during each five-yearperiod (beginning on the date of delivery of the Bonds) an amount that is at least equal to90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code andto pay to the United States of America, not later than 60 days after the Bonds have been paidin full, 100 percent of the amount then required to be paid as a result of Excess Earningsunder section 148(f) of the Code.

For purposes of the foregoing (a)(1) and (a)(2), the Issuer understands that the term"proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the caseof refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended priorto the date of issuance of the Bonds.

(b) Compliance with Code. It is the understanding of the Issuer that the covenantscontained herein are intended to assure compliance with the Code and any regulations or rulingspromulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulationsor rulings are hereafter promulgated which modify or expand provisions of the Code, as applicableto the Bonds, the Issuer will not be required to comply with any covenant contained herein to theextent that such failure to comply, in the opinion of nationally-recognized bond counsel, will notadversely affect the exemption from federal income taxation of interest on the Bonds under section103 of the Code. In the event that regulations or rulings are hereafter promulgated which imposeadditional requirements which are applicable to the Bonds, the Issuer agrees to comply with theadditional requirements to the extent necessary, in the opinion of nationally-recognized bondcounsel, to preserve the exemption from federal income taxation of interest on the Bonds undersection 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directsits President or any Authorized Officer to execute any documents, certificates or reports requiredby the Code and to make such elections, on behalf of the Issuer, which may be permitted by theCode as are consistent with the purpose for the issuance of the Bonds. The Issuer covenants tocomply with the covenants contained in this section after defeasance of the Bonds.

(c) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a"Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States ofAmerica, and such fund shall not be subject to the claim of any other person, including withoutlimitation, the bondholders. The Rebate Fund is established for the additional purpose ofcompliance with section 148 of the Code.

(d) Written Procedures. Unless superseded by another action of the Issuer to ensurecompliance with the covenants contained herein regarding private business use, remedial actions,arbitrage and rebate, the Issuer hereby adopts and establishes the instructions attached hereto asExhibit A as their written procedures applicable to Bonds issued pursuant to the Contract.

Section 29 ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THEPROJECT; DISPOSITION OF THE PROJECT. (a) The Issuer covenants to account for theexpenditure of Bond proceeds and investment earnings to be used for the construction or acquisitionof the property constituting the projects financed or refinanced with proceeds of the Bonds (theProject") on its books and records by allocating proceeds to expenditures within 18 months of thelater of the date that (1) the expenditure is made or (2) such construction or acquisition is completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the Bonds or investment

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earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of theBonds or (2) the date the Bonds are retired, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such expenditure will not adversely affect the tax-exempt status of theBonds. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if itobtains an opinion that such failure to comply will not adversely affect the excludability for federalincome tax purposes from gross income of the interest on the Bonds.

(b) The Issuer covenants that the property constituting the Project will not be sold orotherwise disposed in a transaction resulting in the receipt by the Issuer of cash or othercompensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that suchsale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposesof the foregoing, the portion of the property comprising personal property and disposed in theordinary course shall not be treated as a transaction resulting in the receipt of cash or othercompensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenantif it obtains an opinion that such failure to comply will not adversely affect the excludability forfederal income tax purposes from gross income of the interest on the Bonds.

Section 30. CUSTODY, APPROVAL, AND REGISTRATION OF INITIAL BOND;BOND COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE, AND INSURANCE. ThePresident of the Board of Directors of the Issuer and any Authorized Officer is hereby authorizedto have control of the Initial Bond issued hereunder and all necessary records and proceedingspertaining to the Initial Bond pending its delivery and its investigation, examination, and approvalby the Attorney General of the State of Texas, and its registration by the Comptroller of PublicAccounts of the State of Texas. Upon registration of the Initial Bond said Comptroller of PublicAccounts (or a deputy designated in writing to act for said Comptroller) shall manually sign theComptroller's Registration Certificate on or attached to the Initial Bond, and the seal of saidComptroller shall be impressed, or placed in facsimile, on the Initial Bond. The approving legalopinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of theIssuer, be printed on the Initial Bond or on any Parity Bonds issued and delivered in conversion ofand exchange or replacement of any Bond, but neither shall have any legal effect, and shall be solelyfor the convenience and information of the registered owners of the Bonds. The preamble to thisResolution is hereby adopted and made a part hereof for all purposes. If insurance is obtained onany of the Bonds, the Initial Bond and all insured Bonds shall bear an appropriate legend concerninginsurance as provided by the insurer.

Section 31. SALE OF BONDS; PURCHASE AGREEMENT. Pursuant to theauthorizations in Section 3 hereof, as approved by an Authorized Officer, the Bonds may be soldeither pursuant to the taking of bids therefor as provided in an Official Notice of Sale or pursuantto a purchase agreement (the "Purchase Agreement") with a purchaser or purchasers (collectively,the "Purchaser") to be approved by an Authorized Officer, and any supplements thereto which maybe necessary to accomplish the issuance of Bonds. Such Purchase Agreement is hereby authorizedto be dated, executed and delivered on behalf of the Issuer by an Authorized Officer, with suchchanges therein as shall be approved by an Authorized Officer, the execution thereof by anAuthorized Officer to constitute evidence of such approval. The delegation of authority to anAuthorized Officer to approve the final terms of the Bonds as set forth in this Resolution is, and thedecisions made by an Authorized Officer pursuant to such delegated authority will be, in the best

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interests of the Issuer, and an Authorized Officer is authorized to make a finding to such effect inthe Approval Certificate.

Section 32. OFFICIAL STATEMENT. A Preliminary Official Statement relating to theBonds, in substantially the form as submitted to the Board of Directors at this meeting, is herebyapproved and authorized to be distributed to prospective investors and other interested parties inconnection with the underwriting and sale of the Bonds, with such changes therein as shall beapproved by an Authorized Officer, including such changes as are necessary for distribution as afinal Official Statement. It is further officially found, determined, and declared that the statementsand representations contained in said Preliminary Official Statement are true and correct in allmaterial respects. The use and distribution by the Purchaser of the Official Statement relating to theBonds, is hereby approved. For the purpose of review by the Purchaser prior to purchasing theBonds, the Issuer deems said Preliminary Official Statement to have been "final as of its date"within the meaning of Securities and Exchange Commission Rule 15c2-12.

Section 33. FURTHER PROCEDURES. The President and Secretary, respectively, of theBoard of Directors of the Issuer, the Interim Executive Director of the Issuer, and all other officers,employees, and agents of the Issuer, and each of them, shall be and they are hereby expresslyauthorized, empowered, and directed from time to time and at any time to do and perform all suchacts and things and to execute, acknowledge, and deliver in the name and under the corporate sealand on behalf of the Issuer all such instruments, whether or not herein mentioned, as may benecessary or desirable in order to carry out the terms and provisions of this Bond Resolution, theBonds, the sale of the Bonds, and the Notice of Sale and Official Statement. In case any officerwhose signature shall appear on any Bond shall cease to be such officer before the delivery of suchBond, such signature shall nevertheless be valid and sufficient for all purposes the same as if suchofficer had remained in office until such delivery.

Section 34. DTC REGISTRATION. The Bonds initially shall be issued and delivered insuch manner that no physical distribution of the Bonds will be made to the public, and theDepository Trust Company ("DTC"), New York, New York, initially will act as depository for theBonds. DTC has represented that it is a limited purpose trust company incorporated under the lawsof the State of New York, a member of the Federal Reserve System, a "clearing corporation" withinthe meaning of the New York Uniform Commercial Code, and a "clearing agency" registered underSection 17A of the federal Securities Exchange Act of 1934, as amended, and the Issuer accepts, butin no way verifies, such representations. The Initial Bond authorized by this Resolution shall bedelivered to and registered in the name of the Purchaser. However, it is a condition of delivery andsale that the Purchaser, immediately after such delivery, shall cause the Paying Agent/Registrar, asprovided for in this Resolution, to cancel said Initial Bond and deliver in exchange therefor asubstitute Bond for each maturity of such Initial Bond, with each such substitute Bond to beregistered in the name of CEDE & CO., the nominee of DTC, and it shall be the duty of the PayingAgent/Registrar to take such action. It is expected that DTC will hold the Bonds on behalf of thePurchaser and/or the DTC Participants, as defined and described in the Official Statement referredto and approved in Section 33 hereof (the "DTC Participants"). So long as each Bond is registeredin the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC in allrespects the same as if it were the actual and beneficial owner thereof. It is expected that DTC willmaintain a book entry system which will identify beneficial ownership of the Bonds by DTCParticipants in integral amounts of $5,000, with transfers of ownership being effected on the records

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of DTC and the DTC Participants pursuant to rules and regulations established by them, and that thesubstitute Bonds initially deposited with DTC shall be immobilized and not be further exchangedfor substitute Bonds except as hereinafter provided. The Issuer is not responsible or liable for anyfunctions of DTC, will not be responsible for paying any fees or charges with respect to its services,will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC orthe DTC Participants, or protecting any interests or rights of the beneficial owners of the Bonds. It shall be the duty of the Purchaser and the DTC Participants to make all arrangements with DTCto establish this book-entry system, the beneficial ownership of the Bonds, and the method of payingthe fees and charges of DTC. The Issuer does not represent, nor does it in any way covenant thatthe initial book-entry system established with DTC will be maintained in the future. The Issuerreserves the right and option at any time in the future, in its sole discretion, to terminate the DTC(CEDE & CO.) book-entry only registration requirement described above, and to permit the Bondsto be registered in the name of any owner. If the Issuer exercises its right and option to terminatesuch requirement, it shall give written notice of such termination to the Paying Agent/ Registrar andto DTC, and thereafter the Paying Agent/Registrar shall, upon presentation and proper request,register any Bond in any name as provided for in this Resolution. Notwithstanding the initialestablishment of the foregoing book-entry system with DTC, if for any reason any of the originallydelivered substitute Bonds is duly filed with the Paying Agent/Registrar with proper request fortransfer and substitution, as provided for in this Resolution, substitute Bonds will be duly deliveredas provided in this Resolution, and there will be no assurance or representation that any book-entrysystem will be maintained for such Bonds.

Section 35. CONTINUING DISCLOSURE UNDERTAKING.

(a) Annual Reports.

The Issuer shall provide or cause to be provided annually to the MSRB, (1) within sixmonths after the end of each fiscal year ending in or after 2020, financial information and operatingdata of the general type included in the final Official Statement authorized by Section 32 of thisResolution, (i) with respect to the Issuer, in tables numbered 1 through 4, and (ii) with respect toeach Significant Obligated Persons, in Appendix C, and (2) when and if available, audited financialstatements of the Issuer and each Significant Obligated Person. Any financial statements so to beprovided shall be prepared in accordance with generally accepted accounting principles or suchother accounting principles as the Issuer or any such Significant Obligated Person may be requiredto employ from time to time pursuant to state law or regulation. If the audit of such financialstatements of the Issuer or a Significant Obligated Person is not complete within 12 months afterthe respective fiscal year end, then the Issuer shall provide or cause to be provided by eachSignificant Obligated Person unaudited financial statements within such 12-month period andaudited financial statements when and if the audit report on such statements become available.

If the Issuer or any such Significant Obligated Person changes its fiscal year, the Issuer willnotify or cause the Significant Obligated Person to notify the MSRB of the change (and of the dateof the new fiscal year end) prior to the next date by which the Issuer or any such SignificantObligated Person otherwise would be required to provide financial information and operating datapursuant to this Section.

38

The financial information and operating date to be provided pursuant to this Section may beset forth in full in one or more documents or may be included by specific reference to any document(including an official statement or other offering document, if it is available from the MSRB) thattheretofore has been provided to the MSRB or filed with the SEC.

(b) Material Event Notices.

The Issuer shall notify, or cause a Significant Obligated Person to notify, the MSRB, in atimely manner, of any of the following events with respect to the Bonds, if such event is materialwithin the meaning of the federal securities laws:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final determinations of taxability, Notices of Proposed Issue (IRS Form5701-TEB) or other material notices or determinations with respect to the tax status of thesecurity, or other material events affecting the tax status of the security;

7. Modifications to the rights of security holders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasances;

10. Release, substitution or sale of property securing repayment of the securities,if material;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the Issuer or aSignificant Obligated Person;

13. The consummation of a merger, consolidation, or acquisition involving theIssuer or a Significant Obligated Person or the sale of all or substantially all of the assets ofthe Issuer or a Significant Obligated Person, other than in the ordinary course of business,the entry into a definitive agreement to undertake such an action or the termination of adefinitive agreement relating to any such actions, other than pursuant to its terms, if material;and

39

14. Appointment of a successor or additional trustee or the change of name of atrustee, if material.

(15) Incurrence of a Financial Obligation of a Significant Obligated Person, ifmaterial, or agreement to covenants, events of default, remedies, priority rights, or othersimilar terms of a Financial Obligation of a Significant Obligated Person, any of whichaffect security holders, if material; and

(16) Default, event of acceleration, termination event, modification of terms, orother similar events under the terms of a Financial Obligation of a Significant ObligatedPerson, any of which reflect financial difficulties.

For these purposes, any event described in the immediately preceding paragraph (12)is considered to occur when any of the following occur: the appointment of a receiver, fiscalagent, or similar officer for the Issuer or a Significant Obligated Person in a proceedingunder the United States Bankruptcy Code or in any other proceeding under state or federallaw in which a court or governmental authority has assumed jurisdiction over substantiallyall of the assets or business of the Issuer or a Significant Obligated Person, or if suchjurisdiction has been assumed by leaving the existing governing body and officials orofficers of the Issuer in possession but subject to the supervision and orders of a court orgovernmental authority, or the entry of an order confirming a plan of reorganization,arrangement, or liquidation by a court or governmental authority having supervision orjurisdiction over substantially all of the assets or business of the Issuer.

The Issuer shall notify or cause the appropriate Significant Obligated Person to notifythe MSRB, in a timely manner, of any failure by the Issuer or any such Significant ObligatedPerson to provide financial information or operating data in accordance with Section 36(a)of this Resolution by the time required by such Section.

(c) Limitations, Disclaimers, and Amendments.

The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to providefinancial information or operating data in accordance with Section 35(a) of this Resolution by thetime required by such Section. As used in clause 12 above, the phrase "bankruptcy, insolvency,receivership or similar event" means the appointment of a receiver, fiscal agent, or similar officerfor the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under stateor federal law in which a court or governmental authority has assumed jurisdiction over substantiallyall of the assets or business of the Issuer, or if jurisdiction has been assumed by leaving the Boardof Directors and official or officers of the Issuer in possession but subject to the supervision andorders of a court or governmental authority, or the entry of an order confirming a plan ofreorganization, arrangement or liquidation by a court or governmental authority having supervisionor jurisdiction over substantially all of the assets or business of the Issuer.

40

The provisions of this Section are for the sole benefit of the Holders and beneficial ownersof the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal orequitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provideor cause to be provided only the financial information, operating data, financial statements, andnotices which it has expressly agreed to provide pursuant to this Section and does not herebyundertake to provide or cause to be provided any other information that may be relevant or materialto a complete presentation of the Issuer's or any Significant Obligated Person's financial results,condition or prospects or hereby undertake to update any information provided in accordance withthis Section or otherwise, except as expressly provided herein. The Issuer does not make anyrepresentation or warranty concerning such information or its usefulness to a decision to invest inor sell Bonds at any future date.

UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDEROR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT ORTORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BYTHE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANYCOVENANT SPECIFIED IN THIS SECTION, BUT VERY RIGHT AND REMEDY OF ANYSUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACHSHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIED PERFORMANCE.

No default by the Issuer in observing or performing its obligations under this Section shallcomprise a breach of or default under this Resolution for purposes of any other provision of thisResolution.

Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit theduties of the Issuer under federal and state securities laws.

Should the Rule be amended to obligate the Issuer to make filings with or provide noticesto entities other than the MSRB, the Issuer hereby agrees to undertake such obligation with respectto the Bonds in accordance with the Rule as amended. The provisions of this Section may bechanged prior to delivery of the Bonds in order to conform to the requirements of any amendmentsto the Rule which become applicable to the Bonds prior to the delivery thereof to the purchaser. Any such changes shall be approved by the Authorized Officer as evidenced by the ApprovalCertificate.

The provisions of this Section may be amended by the Issuer from time to time after issuanceof the Bonds to adapt to changed circumstances that arise from a change in legal requirements, achange in law, or a change in the identify, nature, status, or type of operations of the Issuer or anySignificant Obligated Person, but only if (1) the provisions of this Section, as so amended, wouldhave permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds incompliance with the Rule, taking into account any amendments or interpretations of the Rule sincesuch offering as well as such changed circumstances and (2) either (a) the Holders of a majority inaggregate principal amount (or any greater amount required by any other provision of thisResolution that authorizes such an amendment) of the outstanding Bonds consent to suchamendment or (b) a Person that is unaffiliated with the Issuer (such as nationally recognized bondcounsel) determined that such amendment will not materially impair the interest of the Holders and

41

beneficial owners of the Bonds. If the Issuer so amends the provisions of this Section, it shallinclude with any amended financial information or operating data next provided in accordance withSubsection (a) hereof an explanation, in narrative form, of the reason for the amendment and of theimpact of any change in the type of financial information or operating data so provided. The Issuermay also amend or repeal the provisions of this continuing disclosure agreement if the SEC amendsor repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment thatsuch provisions of the Rule are invalid, but only if and to the extent that the provisions of thissentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primaryoffering of the Bonds.

(d) Definitions.

As used in this Section, the following terms have the meanings ascribed to such terms below:

"Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered intoin connection with, or pledged as security or a source of payment for, an existing or planned debtobligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that"financial obligation" shall not include municipal securities as to which a final official statement (asdefined in the Rule) has been provided to the MSRB consistent with the Rule.

"MSRB" means the Municipal Securities Rulemaking Board.

"Rule" means SEC Rule 15c2-12, as amended from time to time.

"SEC" means the United States Securities and Exchange Commission and any successor toits duties.

"Significant Obligated Person" means, at any point in time, any Member City, AdditionalMember City, or other party contracting with the Issuer, in any case whose payments to the Issuerfor the use of or service from the System in the calendar year preceding any such determination,exceeded 10% of the Gross Revenues of the System.

Section 36. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derivedfrom the investment of proceeds from the sale of the Initial Bond, shall be used along with otheravailable proceeds for improving the District’s Water System; provided that after such use, if anyof such interest earnings remain on hand, such interest earnings on bond proceeds which are requiredto be rebated to the United States of America pursuant to Section 28 hereof in order to prevent theBonds from being arbitrage bonds shall be so rebated and not considered as interest earnings for thepurposes of this Section.

Section 37. ATTORNEY GENERAL FEES. The Issuer hereby authorizes and directspayment, from legally available funds of the Issuer, of the nonrefundable examination fee of theAttorney General of the State of Texas required by Section 1202.004, Texas Government Code, asamended.

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Section 38. REPEAL OF CONFLICTING RESOLUTIONS. All resolutions and all partsof any resolutions which are in conflict or inconsistent with this Resolution are hereby repealed andshall be of no further force or effect to the extent of such conflict or inconsistency.

Section 39. SECURITY INTEREST. Chapter 1208, Government Code, applies to theissuance of the Bonds and the pledge of the Pledged Revenues granted by the Issuer under Section9 of this Resolution, and is therefore valid, effective, and perfected. If Texas law is amended at anytime while the Bonds are outstanding and unpaid such that the pledge of the Pledged Revenuesgranted by the Issuer under Section 9 of this Resolution is to be subject to the filing requirementsof Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of theBonds the perfection of the security interest in said pledge, the Issuer agrees to take such measuresas it determines are reasonable and necessary under Texas law to comply with the applicableprovisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the securityinterest in said pledge to occur.

Section 40. EFFECTIVENESS. This Resolution shall be effective from and after the dateof adoption thereof by the Issuer; provided, however, if the Bonds authorized by this Resolution arenot issued prior to July 31, 2020, this Resolution shall be void ab initio and shall be of no force andeffect.

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EXHIBIT "A"

WRITTEN PROCEDURES RELATING TO CONTINUINGCOMPLIANCE WITH FEDERAL TAX COVENANTS

A. Arbitrage. With respect to the investment and expenditure of the proceeds of theBonds and any Additional Bonds (the "Obligations") the Issuer's Executive Director and Directorof Finance (the "Responsible Persons") will :

For Obligations issued for newly acquired property or constructed property:

· instruct the appropriate person or persons that the construction, renovation oracquisition of the facilities must proceed with due diligence and that bindingcontracts for the expenditure of at least 5%of the proceeds of the Obligations will beentered into within 6 months of the date of delivery of the Obligations ("IssueDate");

· monitor that at least 85% of the proceeds of the Obligations to be used for theconstruction, renovation or acquisition of any facilities are expended within 3 yearsof the Issue Date;

· restrict the yield of the investments (other than those in the Reserve Fund) to theyield on the Obligations after 3 years of the Issue Date;

· monitor all amounts deposited into a sinking fund or funds, e.g., the Interest andRedemption Fund and the Reserve Fund, to assure that the maximum amountinvested at a yield higher than the yield on the Obligations does not exceed anamount equal to the debt service on the Obligations in the succeeding 12 monthperiod plus a carryover amount equal to one-twelfth of the principal and interestpayable on the Obligations for the immediately preceding 12-month period;

· assure that no more than 50% of the proceeds of the Obligations are invested in aninvestment with a guaranteed yield for 4 years or more;

· assure that the maximum amount of the Reserve Fund invested at a yield higher thanthe yield on the Obligations will not exceed the lesser of (1) 10% of the originalprincipal amount of the Obligations, (2) 125% of the average annual debt service onthe Obligations measured as of the Issue Date, or (3) 100% of the maximum annualdebt service on the Obligations as of the Issue Date;

For Obligations issued for refunding purposes:

· monitor the actions of the escrow agent (to the extent an escrow is funded withproceeds) to assure compliance with the applicable provisions of the escrowagreement, including with respect to reinvestment of cash balances;

A-1

For all Obligations:

· maintain any official action of the Issuer (such as a reimbursement resolution) statingits intent to reimburse itself with the proceeds of the Obligations any amountexpended prior to the Issue Date for the acquisition, renovation or construction of thefacilities;

· assure that the applicable information return (e.g., IRS Form 8038-G, 8038-GC, orany successor forms) is timely filed with the IRS;

· assure that, unless excepted from rebate and yield restriction under section 148(f) ofthe Code, excess investment earnings are computed and paid to the U.S. governmentat such time and in such manner as directed by the IRS (i) at least every 5 years afterthe Issue Date and (ii) within 30 days after the date the Obligations are retired.

B. Private Business Use. With respect to the use of the facilities financed or refinancedwith the proceeds of the Obligations the Responsible Persons will:

· monitor the date on which the facilities are substantially complete and available tobe used for the purpose intended;

· monitor whether, at any time the Obligations are outstanding, any person, other thanthe Issuer, the employees of the Issuer, the agents of the Issuer or members of thegeneral public has any contractual right (such as a lease, purchase, management orother service agreement) with respect to any portion of the facilities;

· monitor whether, at any time the Obligations are outstanding, any person, other thanthe Issuer, the employees of the Issuer, the agents of the Issuer or members of thegeneral public has a right to use the output of the facilities (e.g., water, gas,electricity);

· monitor whether, at any time the Obligations are outstanding, any person, other thanthe Issuer, the employees of the Issuer, the agents of the Issuer or members of thegeneral public has a right to use the facilities to conduct or to direct the conduct ofresearch;

· determine whether, at any time the Obligations are outstanding, any person, otherthan the Issuer, has a naming right for the facilities or any other contractual rightgranting an intangible benefit;

· determine whether, at any time the Obligations are outstanding, the facilities are soldor otherwise disposed of; and

· take such action as is necessary to remediate any failure to maintain compliance withthe covenants contained in the resolution authorizing the Obligations.

A-2

C. Record Retention. The Responsible Persons will maintain or cause to be maintainedall records relating to the investment and expenditure of the proceeds of the Obligations and the useof the facilities financed or refinanced thereby for a period ending three (3) years after the completeextinguishment of the Obligations. If any portion of the Obligations is refunded with the proceedsof another series of tax-exempt obligations, such records shall be maintained until the three (3) yearsafter the refunding obligations are completely extinguished. Such records can be maintained inpaper or electronic format.

D. Responsible Persons. Each Responsible Person shall receive appropriate trainingregarding the Issuer's accounting system, contract intake system, facilities management and othersystems necessary to track the investment and expenditure of the proceeds and the use of thefacilities financed with the proceeds of the Obligations. The foregoing notwithstanding, theResponsible Persons are authorized and instructed to retain such experienced advisors and agentsas may be necessary to carry out the purposes of these instructions.

B-1


JUNE 2020 ADMINISTRATIVE MEMORANDUM NO. 5577

FY20 COMPREHENSIVE COMPENSATION AND BENEFITS STUDY

ACTION (What)

Authorize accepting the FY20 Comprehensive Compensation and Benefits Study as conducted by Paradox Advisors.

PURPOSE (Why)

Paradox Advisors performed a comprehensive Compensation and Benefits Study, analyzing and comparing over 115 NTMWD positions with similar positions from Member Cities and like organizations. The purpose for accepting this study is to acknowledge that the process and results are representative and consistent with the intent of the Study. It is also acknowledged that due to the impact of COVID-19, no implemented actions will occur as a result of this study.

RECOMMENDATION

It is recommended that the Board of Directors accept the FY20 Comprehensive Compensation and Benefits Study.

This was an item on the June 10, 2020 and May 11, 2020 Personnel Committee meeting agenda and the June 10, 2020 and May 13, 2020 Finance/Audit Committee meeting agenda.


☐ Regulatory Compliance☐ Capacity☐ Relocation or External Requests☐ Safety☐ Policy

☐ Asset Condition☐ Redundancy/Resiliency☐ Operational Efficiency☐ Administrative☒ Other

BACKGROUND

• The Personnel Committee met on June 10, 2020, to further discuss the findings of the Compensation and Benefits study and voted to recommend accepting the study.

• The Personnel Committee met on May 11, 2020, to discuss the findings of the Compensation and Benefits Study conducted by Paradox Advisors. The Committee voted to table action until the next Committee meeting.

• The Finance/Audit Committee met on May 13, 2020, to discuss the findings of the Compensation and Benefits Study and voted to accept the study as presented.

• NTMWD last utilized Paradox Advisors in FY17 to conduct the same study.• A copy of the Executive Summary is included in the Board packet as Appendix P.


RESOLUTION RECOGNIZING AND SUPPORTING MEMBER CITY CONTRACT AND SETTLEMENT NEGOTIATIONS


ACTION (What)

Adopt Resolution No. 20-29 recognizing, encouraging, and supporting the Member Cities’ efforts to cooperatively reach a regional solution regarding Member City Contract amendment that will preserve the District’s financial integrity and operational capabilities.

PURPOSE (Why)

The District supports all Member City efforts to resolve and settle all issues that are the subject of Public Utility Commission of Texas Docket Nos. 46662, 47863, 49043, and 50382 so that those matters may be dismissed without further proceedings.

RECOMMENDATION

The Special Purpose – PUC Issues Committee met on June 17, 2020, and voted to recommend the Board of Directors adopt Resolution No. 20-29 Recognizing and Supporting Member City Contract and Settlement Negotiations.



☐ Asset Condition ☐ Redundancy/Resiliency ☐ Operational Efficiency ☐ Administrative ☒ Other

BACKGROUND

• The Member Cities and District have expended considerable resources to participate in the

ongoing rate proceedings before the Public Utility Commission of Texas (“PUCT”) in PUCT Docket Nos. 46662, 47863, 49043, and 50382.

• The Member Cities’ respective governing bodies have recently expressed support for negotiating a definitive agreement, including a settlement and amendment(s) to the Member City Contract.

ADMINISTRATIVE MEMORANDUM NO. 5578 PAGE TWO

• The District as the fourteenth signatory to the Member City Contract has also been considering issues related to settlement and amendments to the Member City Contract.

• The Board of Directors is encouraged by the Member Cities’ recent efforts to resolve their differences and negotiate an amendment(s) to the Member City Contract and settlement of the PUCT rate disputes.

• Any amendment to the Member City Contract must preserve the District’s financial integrity and operational capabilities, including fully funding the District’s annual budgets as adopted by the Board of Directors and the District’s debt service obligations.



A RESOLUTION RECOGNIZING AND SUPPORTING MEMBER CITY CONTRACT AND SETTLEMENT NEGOTIATIONS

WHEREAS, the North Texas Municipal Water District (the “District”) provides treated water supply service to the Cities of Allen, Farmersville, Forney, Frisco, Garland, McKinney, Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City, and Wylie (the “Member Cities”); and,

WHEREAS, the District provides water supply service to the Member Cities pursuant to the terms of the North Texas Municipal Water District Regional Water Supply Facilities Amendatory Contract, made and entered into by and between the Member Cities and the District on August 1, 1988 (the “Member City Contract”); and,

WHEREAS, the Member Cities and District have expended considerable resources to participate in the ongoing rate proceedings before the Public Utility Commission of Texas (“PUCT”) in PUCT Docket Nos. 46662, 47863, 49043, and 50382; and,

WHEREAS, the Member Cities’ respective governing bodies have recently expressed support for negotiating a definitive agreement, including a settlement and amendment(s) to the Member City Contract; and,

WHEREAS, the District as the fourteenth signatory to the Member City Contract has also been considering issues related to settlement and amendments to the Member City Contract

WHEREAS, the Board of Directors is encouraged by the Member Cities’ recent efforts to resolve their differences and negotiate an amendment(s) to the Member City Contract and settlement of the PUCT rate disputes; and,

WHEREAS, any amendment to the Member City Contract must preserve the District’s financial integrity and operational capabilities, including fully funding the District’s annual budgets as adopted by the Board of Directors and the District’s debt service obligations. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE NORTH TEXAS MUNICIPAL WATER DISTRICT, THAT:

1. The District continues to recognize, encourage, and support the Member Cities’ efforts to cooperatively reach a regional solution regarding Member City Contract amendment that will preserve the District’s financial integrity and operational capabilities; and

RESOLUTION NO. 20-29 PAGE 2

2. The District supports all Member City efforts to resolve and settle all issues that are the subject of Public Utility Commission of Texas Docket Nos. 46662, 47863, 49043, and 50382 so that those matters may be dismissed without further proceedings.

THIS RESOLUTION ADOPTED BY THE NORTH TEXAS MUNICIPAL WATER DISTRICT BOARD OF DIRECTORS IN A REGULAR MEETING ON June 25, 2020 IN THE ADMINISTRATIVE OFFICES OF THE DISTRICT, WYLIE, TEXAS. ______________________________ ______________________________ PHIL DYER, Secretary LARRY PARKS, President


MULTIPLE SYSTEMS MAINTENANCE FACILITIES CENTRAL REGION

PROJECT NO. 101-0445-16

PHASE II ARCHITECTURAL SERVICES AGREEMENT

ACTION (What)

Authorize an architectural service agreement for the final design of the Regional Water System Maintenance Facilities Central Region to provide the needed facilities to support NTMWD staff and infrastructure.

PURPOSE (Why)

The Facility Services Department has outgrown their current centralized facility at the Wylie Water Treatment Plant. Expansion of this facility was evaluated but is not possible due to surrounding infrastructure.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommend the Board of Directors authorize the Interim Executive Director to execute an architectural services agreement (ASA) as follows: Consultant: Stantec Architecture, Inc. Scope: Final architecture and engineering design Project: No. 101-0445-16, Maintenance Facilities Central Region, Phase II Amount: $1,070,826 This will be an item on the June 24, 2020, Water Committee meeting agenda.


☐ Regulatory Compliance ☒ Capacity ☐ Relocation or External Requests ☐ Safety ☐ Policy

☐ Asset Condition ☐ Redundancy/Resiliency ☒ Operational Efficiency ☐ Administrative ☐ Other ______________


BACKGROUND

PROJECT PURPOSE • The NTMWD Facility Services and Technical Services Departments are responsible for

repairing and maintaining facilities throughout the water and wastewater systems. • The Facility Services Department has outgrown their current centralized facility at the Wylie

Water Treatment Plant I. Expansion of this facility is not possible due to surrounding infrastructure. The Facility Services Department had a total of 25 employees when the department moved into their current building in 2007, but since then has grown to a total of 70 employees.

• In October 2016, the Board awarded a design contract to Merriman Anderson Architects, Inc. (Merriman) to masterplan and design a new larger facility located west of the Technical Services Building. The design scope included a 20,000 square foot (sf) maintenance facility, concrete equipment yard, enclosed heavy equipment storage bays, light equipment canopy, oil storage facility and boat storage facility.

• In early 2017, the project was split into two phases and the scope of Phase I was reduced to assist in alleviating the growing cost of service in the water and wastewater capital improvement plans. The revised Phase I scope included the original master planning effort, a 6,000 sf warehouse, sand and gravel storage and a 3,200 sf boat storage facility.

• Construction of the Phase 1 facilities has been completed. • In May 2020, NTMWD Technical Services, Facility Services, Environmental Services,

Planning and Engineering departments updated the original 2016 plan for the maintenance facility to include current employee levels with an addition second floor office area for future growth.

• The first floor of the maintenance facility was expanded from 20,000 to 24,000 sf. NTMWD staff recommend the construction of a 16,000 sf second floor office area to meet future staffing levels, take advantage of the lower construction cost benefits of vertical construction, reduce building footprint on the water plant site and provide more space for future treatment facilities.

• Recommendation to construct the second floor office area as the project moves forward and cost estimates are refined.

• The planning level estimated cost for Phase II is $14,000,000. PROJECT COMPONENTS • Development of 6-acre site including water, sewer, overhead and underground electrical

and communication utilities, service roads, parking, equipment yard and site landscaping • Construction of a 40,000 sf Maintenance Building to include offices, cubicles, conference

rooms, dual purpose break/training room, restrooms with shower and locker facilities and attached maintenance shop with two work bays, overhead cranes and tool crib.

• Seven enclosed Heavy Equipment Storage Bays. • Six Light Equipment Canopies BASIC SERVICES • Development of efficient building floor plan based on department workflow; • Preparation of design plans, specifications and construction estimate for 30%, 60% and

90% plan review; • Assistance with City of Wylie plan review and permitting process; • Preparation of bid phase plans and specifications; • Bid phase and construction administration services including evaluation of bids and

submittals; and


• Preparation of record drawings and specifications at completion of project.

SPECIAL SERVICES • Geotechnical survey • Topographical survey • Tree survey • Subsurface Utility Engineering • Platting • Accessibility services • Landscape and irrigation services

ARCHITECTURAL SERVICES FEE

DESCRIPTION AMOUNT

Basic Services $953,415

Special Services $117,411

Requested Amount $1,070,826

FUNDING FUND(S): The proposed facility will support both Water and Wastewater facilities and equipment. Therefore, it is proposed to split funding 80% from the Regional Water System, 15% from the Regional Wastewater System and 5% from the Upper East Fork Interceptor System. Funding in the amount of $856,660 is to be made available from the Regional Water System Capital Improvement Fund, $160,625 from the Regional Wastewater System 2017 Construction Fund and $53,541 from the Upper East Fork Interceptor System 2017 Construction Fund.

Warehouse

Boat House

Phase I

Phase II

ÜRegional Water System

Maintenance Facilities Central Region, Phase II Project No.101-0445-16

Administrative Memorandum No. 5579

LegendPhase I - Completed

Phase II - Proposed

_̂


REGIONAL WATER SYSTEM WYLIE WATER TREATMENT PLANT

WATER SYSTEM OPERATIONS CENTER PROJECT NO. 101-0352-14

CHANGE ORDER NO. 5

ACTION (What)

Authorize a change order to the Construction Contract with MYCON General Contractors, Inc.

PURPOSE (Why)

This action takes a credit for decreased scope of work for fiber and communications duct banks. Existing duct banks have been located and are available for use. This credit will offset costs for other necessary additions to the project.

RECOMMENDATION

The Interim Executive Director, NTMWD staff, and Halff Associates, Inc., recommend the Board of Directors authorize the construction change order as follows:

Contractor: MYCON General Contractors, Inc.

Scope: Construction

Project: No. 101-0352-14, Wylie Water Treatment Plant Water System Operations Center

Amount: ($486,044.73)

This will be an item on the June 24, 2020, Water Committee meeting agenda.



☒ Asset Condition ☐ Redundancy/Resiliency ☐ Operational Efficiency ☐ Administrative ☐ Other ______________


PROJECT PURPOSE • Construction of a centralized water system management and operations center that will

house approximately 16,000 square-feet of employee offices and workspaces. The facility will meet the projected needs of the Water Division at the Wylie Water Treatment Plant for water system treatment, transmission, supervisory control and data acquisition (SCADA) and training personnel.

PROJECT COMPONENTS • A portion of the building envelope housing critical operations will be hardened to withstand

wind speeds equivalent to an “F5” tornado categorized by the Fujita Tornado Damage Scale. Generally, the hardened space will include exterior walls, a building mid-sectional wall and roof for the control and administrative areas of the building. The “hardening” will allow the facility to function as an Emergency Operations Center (EOC) during a natural disaster event by protecting employees and improving the survivability of those critical portions of the structure. Rooms inside the hardened space include control room, main conference room, EOC room, manager’s offices, restrooms, break room, main lobby and entrance. Hardening will also allow critical operations staff to remain at the water treatment/transmission controls at all times during threats of severe weather or other emergencies.

PROPOSED CHANGE ORDER • Concrete Encasement of EOC Electrical Services: All electrical and communications

duct banks serving the EOC are concrete encased except for two ducts banks located at: o Utility electrical service from the main transformer to the operations center and o Emergency electrical service from generator to the operations center.

NTMWD staff recommends these critical services encased in concrete duct banks to reduce risk of damage

• Credit to Utilize Existing Communication Duct banks: The design included provision for new duct banks for power and control signals connection the building. In coordination with other ongoing construction at Plant IV it was determined that sufficient existing spare conduits are available for use by the Operations Center project. The contractor has submitted a proposal to delete approximately 6,600 linear feet of proposed duct bank, resulting in a total credit amount of $528,904.01.

• Mandrel Testing: Mandrel testing of existing conduit is recommended to verify usability,

and to facilitate installation of pull strings for future cable installation.

• Additional Shunt Trip: A shunt trip is an electrical switch mounted near the entrance to the building that energizes a larger disconnect switch on the main electrical service to the building. The shunt trip allows Fire Department personnel to easily shutdown power to the building in the event of an emergency. The City of Wylie Fire Marshal requested an additional shunt trip installed at the west entrance.

• Ice Machine Drain Pumps: The project includes two independent ice machines to ensure plant operations personnel are furnished with sufficient quantities. A condensate pump is needed for each machine to lift melted ice water to a nearby gravity drain line.


CHANGE ORDER NO. 5

Description Amount Days Original Contract $11,963,090.00 455 Prior Change Order(s) Total $143,909.15 0 Proposed Change Order No. 5

Concrete Encasement of EOC Electrical Services $7,636.37 0 Credit to Utilize Existing Communications Duct Banks ($528,904.01) 0 Mandrel Testing $29,749.58 0 Additional Shunt Trip $2,656.95 0 Ice Machine Drain Pumps $2,816.38 0

Proposed Change Order No 5. Amounts ($486,044.73) 0 Revised Contract Amount $11,620,954.42 455

FUNDING FUND(S): Regional Water System Capital Improvement Fund

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Project No. 101-0352-14Administrative Memorandum No. 5580

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REGIONAL WATER SYSTEM PLANO WEST SIDE PIPELINE

PLANO DELIVERY POINT NO. 3 TO RICHARDSON DELIVERY POINT NO. 2 PROJECT NO. 101-0566-20

ENGINEERING SERVICES AGREEMENT

ACTION (What)

Authorize an engineering services agreement for the final design of the 36-inch Plano West Side Pipeline between Plano Delivery Point No. 3 and Richardson Delivery Point No. 2.

PURPOSE (Why)

The existing 30-inch water transmission pipeline to the Plano No. 3 and Richardson No. 2 delivery points have experienced leaks and an increased frequency of maintenance attention. A new parallel transmission pipeline is recommended to add redundancy and replace aging infrastructure at the two delivery point locations.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommends the Board of Directors authorize the Interim Executive Director to execute an engineering services agreement (ESA) as follows: Consultant: Lockwood, Andrews and Newnam, Inc. Scope: Final Engineering Design Project: No. 101-0566-20, Plano West Side Pipeline, Plano Delivery Point No. 3 to

Richardson Delivery Point No. 2 Amount: $1,249,977 This will be an item on the June 24, 2020, Water Committee meeting agenda.


☐ Regulatory Compliance ☐ Capacity ☐ Relocation or External Requests ☐ Safety ☒ Policy

☒ Asset Condition ☒ Redundancy/Resiliency ☐ Operational Efficiency ☐ Administrative ☐ Other ______________


BACKGROUND

The existing 30-inch pipeline has two pipe segments that deliver water from the Shiloh Pump Station in the NTMWD’s south water transmission system. The first pipe segment, built in 1974, is the existing 30-inch pipeline along Renner Road and Point North Parkway between Custer Road and Richardson Delivery Point No. 2. (Richardson No. 2) This segment is frequently referred to as City of Richardson Custer to North pipeline. The second pipe segment is the existing 30-inch Plano Westside pipeline built in 1975 along Custer Road between Renner Road and Plano Delivery Point No. 3 (Plano No. 3) at 15th Street. Both pipe segments connect to the existing 48-inch Replacement of Plano/Richardson West Side Pipeline, built in 2012, at the intersection of Custer Road and Renner Road.

PROJECT PURPOSE • The pipeline segment along Custer Road to Plano No. 3 has required an increasing level of

leak repairs in recent years. • The pipeline segment along Renner Road and Point North Parkway is currently the only

transmission water source to the Richardson No. 2. This presents risks of service interruptions or not meeting demands due to failure of the pipeline.

• This project includes elements to make needed upgrades to aging equipment and appurtenances at Plano No. 3, and to add parallel pipelines along both segments to improve reliability and maintenance accommodation.

PROJECT COMPONENTS • 14,500 linear feet of 36-inch water pipeline and appurtenances • Connection at Plano No. 3 on 15th Street east of Custer Road • Connection at Richardson No. 2 at Point North Parkway • Engineer’s planning level opinion of probable construction cost is $15,000,000.

BASIC SERVICES • Route study • 30%, 60%, 90% design drawings • 100% Design/Bid Documents • Permitting • Bid phase services • Construction phase services SPECIAL SERVICES • Environmental services • Right-of-Way (ROW) and easement support • Topographic survey • Geotechnical engineering • Subsurface Utility Engineering • Cathodic protection



DESCRIPTION AMOUNT

Basic Services $ 879,809

Special Services $ 370,168

Requested Amount $1,249,977

FUNDING FUND(S): Regional Water System Capital Improvement Fund

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REGIONAL WATER SYSTEM METER VAULT STANDARDIZATION

SETPOINT CONTROL IMPLEMENTATION PHASE III PROJECT NO. 101-0338-13

TABULATION OF BIDS AND AWARD OF CONTRACT

ACTION (What)

Execute a construction contract with Felix Construction Company, to install improvements at specified water transmission system delivery point meter vaults.

PURPOSE (Why)

These improvements will help regulate a more constant rate of delivery throughout the water transmission system and at the water treatment plants.

RECOMMENDATION

The Interim Executive Director, NTMWD staff and Freese and Nichols, Inc., recommend the Board of Directors authorize the award of a contract as follows: Contractor: Felix Construction Company Scope: Construction Project: No. 101-0338-13, Meter Vault Standardization, Set Point Control Implementation

Phase III Amount: $13,470,395 This will be an item on the June 24, 2020, Water Committee meeting agenda.





BACKGROUND

PROJECT PURPOSE • September 2013 – NTMWD Board of Directors authorized development and implementation

of a multi-phase plan of improving all water transmission system delivery point meter vaults. This will equip the delivery points with the ability to implement set-point control.

• Provides the installation necessary to deliver a predetermined rate of delivery at each delivery point.

• These improvements will help in maintaining a more constant rate of delivery throughout the transmission system and at the water treatment plants, thereby, decreasing the number of daily flow changes and increasing the operating efficiency at the water treatment plants.

• This refined operational control will allow for daily delivery volumes to be set for each delivery site in the event maximum delivery rates are required due to stricter conservation levels.

• Of the more than 70 wholesale water delivery points currently in the NTMWD system, 39 remain to be upgraded.

PROJECT COMPONENTS • Upgrade six existing metering stations to the current NTMWD meter vault standard and

implement set-point control each: o Allen Delivery Point No. 2 o Allen Delivery Point No. 3 o Richardson Delivery Point No. 3 o Mesquite Delivery Point No. 1 o McKinney Delivery Point No. 3 o Wylie Delivery Point No. 2

TABULATION OF BIDS

Sealed bids for Setpoint Control Implementation Phase III were received at 2:00 p.m. on Friday, May 29, 2020 as tabulated below:

Bidder Total Bid Recommendation

Felix Construction Company $13,470,395 Lowest responsible bid Recommended for Award

Crescent Constructors, Inc. $13,917,000

Red River Construction Company $14,337,700

Archer Western Construction, LLC $14,480,020

Bar Constructors, Inc. $16,153,270

Thalle Construction Company $18,816,955

ENGINEER’S OPINION OF PROBABLE CONSTRUCTION COST $13,589,416


LOWEST RESPONSIBLE BIDDER HISTORY Felix Construction Company has successfully completed or is currently in construction on several projects for the NTMWD as well as other entities: • Project No. 101-0422-16, Wylie Water Treatment Plant IV Filter Complex – Wall Repairs,

Construction Manager At-Risk (CMAR - awarded in March 2020) • Project No. 361, Preston Road, Beck Branch, and Prairie Creek Lift Stations Emergency

Generators (completed in August 2016) • Project No. 371B, McKinney and Wilson Creek Lift Stations Emergency Generator

Installation (completed in December 2015) • Projects completed for NTMWD wastewater operations include: Sabine Creek Sub-Regional

Wastewater Treatment Plant (WWTP) Filter Foundation, South Mesquite Creek Regional WWTP and Muddy Creek WWTP Storage Building Foundations, and Wilson Creek Regional WWTP Chemical Feed Improvements

• City of Keller – Alta Vista Pump Station (completed March 2020) • City of Midlothian – Auger Water Treatment Plant Expansion to 12 MGD (currently under

construction) • City of Frisco – Frisco Lakes Lift Station No. 1 Rehabilitation (completed October 2019)

Based on their standing as lowest responsible bidder, the information provided, reports by the supplied references, and history of successful project completions, the NTMWD staff and Freese and Nichols, Inc. recommend award of the contract to Felix Construction Company.

FUNDING FUND(S): Funding in the amount of $13,470,395 is to be made available in the Regional Water System 2019A Construction Fund.

Meter Vault StandardizationProject No. 101-0338-13


Richardson #3

Wylie #2

Allen #3

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REGIONAL WATER SYSTEM TEXOMA TO WYLIE RAW WATER PIPELINE

CROSSING AT STATE HIGHWAY 121 TUNNEL CASING EXTENSION

PROJECT NO. 101-0557-20

DESIGNATION AS EMERGENCY ACTION AND AUTHORIZATION TO EXECUTE CONSTRUCTION CONTRACT

ACTION (What)

This action designates construction for Project No. 101-0557-20, Texoma to Wylie Water Pipeline Crossing at State Highway (SH) 121 Tunnel Casing Extension, as an emergency action, and authorizes the execution of a construction contract with Garney Companies, Inc. (Garney) in the amount of $818,739.87.

PURPOSE (Why)

The project requires the District increase the length of pipeline encasement to include the newly extended width of Texas Department of Transportation (TxDOT) right-of-way at the location of NTMWD pipeline crossing. This is in response to TxDOT construction standards, and to expedite completion of the pipeline encasement prior to the beginning of TxDOT’s roadway widening, which is scheduled for September 2020.

RECOMMENDATION

The Interim Executive Director, NTMWD staff and Freese and Nichols, Inc., (FNI) recommend the Board of Directors designate this as an emergency action and authorize the execution of a construction contract as follows: Contractor: Garney Companies, Inc. Scope: Construction of pipeline casing extension Project: No. 101-0557-20, Texoma to Wylie Raw Water Pipeline Crossing at State

Highway 121, Tunnel Casing Extension Amount: $818,739.87 This will be an item on the June 24, 2020, Water Committee meeting agenda.



☐ Regulatory Compliance☐ Capacity☒ Relocation or External Requests☐ Safety☐ Policy

☐ Asset Condition☐ Redundancy/Resiliency☐ Operational Efficiency☐ Administrative☐ Other ______________

BACKGROUND

• TxDOT has announced plans to widen SH 121 from SH 5 to the Collin County Line, adistance of approximately 15 miles. Plans include widening the ROW from the current 120feet to 200 feet.

• NTMWD’s Texoma pipeline section B is a 96-inch diameter steel pipeline constructed in2012. The pipeline is in a 50 foot wide permanent easment that crosses perpedicular to theSH 121 ROW. The 96-inch pipeline is inside a 114-inch casing tunneled from ROW to ROWwhere it crosses SH 121.

• In order to widen SH 121 the existing Texoma pipeline 114-inch casing will need to belengthened approximately 87 LF so that it will extend the full width of the new expandedROW. This extension will also require that one pipeline corrosion monitoring test station berelocated, and that the NTMWD fiber optic line running parallel to the pipeline be relocatedto share the extended casing.

• TxDOT’s planned biddding for the widening of SH 121 is June 2020. The Texoma pipelinecasing will need to be extended prior to TxDOT beginning construction.

• Most of this utility relocation should qualify for reimbursment by TxDOT.• In March 2020 the Board of Directors approved Administrative Memorandum No. 5534,

authorizing Designation as an Emergency Action and Engineering Services Agreement forthe design of the tunnel casing extension as NTMWD Project Number 101-0557-20.

• The length of encasement extension is relatively small, but still requires the mobilization oflarge excavation equipment, trench protection and encasement materials, as well as themore specialized crews accustomed to working with pipes of this size. These combinedfactors create unattractive project conditions that often produce limited interest andinordinately high pricing.

PROJECT PURPOSE • Facilitate the TxDOT widening of SH 121 in the area of the NTMWD Texoma Raw Water

Pipeline crossing by extending the pipeline encasement to the full modified width of theROW.

• Complete the extension and relocation of appurtenances as timely as possible toaccommodate TxDOT’s schedule for the widening of SH 121.

• Garney is currently encaged with the Bois d’Arc Treated Water Pipeline project that is inconstruction nearby. The work is very similar and they already have the specializedequipment and crews at hand and can respond to this small project quickly and efficiently.

• Designation of Emergency Action recognizes the critical needs of the project, and therelative negative impact that the standard procurement process would impose on theresponse and efficiency of the work in this case. The designation provides the DistrictManagement and staff the flexibility to react in a timely manner and in the best interest ofthe project.


PROJECT SCOPE • Cut and remove 87 LF of 96-inch C200 steel pipe• Install 87 LF of 114-inch tunnel liner plate• Reinstall 87 LF of 96-inch steel pipe inside tunnel liner plate• Construction testing• Material testing• Certified Welding Inspection• Dewatering of nuisance water in excavation• Trench shoring• Tunnel grouting• Flowable backfill up to 12-inches above the pipe• Property restoration• Traffic control• Fiber optic termination and install• Cathodic protection test station install

Garney has reviewed the encasement extension design and has provided a cost proposal to complete the work. The Engineering staff has reviewed the proposal and recommends it as representative of the effort required. Garney is available to complete this work as soon as a standard construction agreement can be executed.

CONTRACT AMOUNT

Description Amount Days Proposed Change Order Amounts $818,739.87 67 Revised Contract Amount $818,739.87 67

FUNDING

FUND(S): Regional Water System Capital Improvement Fund

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REGIONAL WATER SYSTEM TRINITY RIVER MAIN STEM PUMP STATION AND RAW WATER PIPELINE

PROJECT NO. 101-0269-11

AUTHORIZATION FOR PARTIAL RELEASE OF RETAINAGE

ACTION (What) Authorize a partial release of retainage for Construction Manager At-Risk (CMAR) bid packages that have been completed and accepted.

PURPOSE (Why)

Enables CMAR to close out contracts with subcontractors and/or vendors for bid packages that have been completed, accepted and are functional.

RECOMMENDATION

The Interim Executive Director, NTMWD staff and Freese and Nichols, Inc., (FNI) recommend the Board of Directors authorize a partial release of retainage as follows: Contractor: Garney Companies, Inc. (Garney) Scope: Construction, Partial Release of Retainage Project: No. No. 101-0269-11, Trinity River Main Stem Pump Station and Raw Water

Pipeline (Main Stem Project) Reduction In Retainage: $1,219,957.28 This will be an item on the June 24, 2020, Water Committee meeting agenda.



☐ Asset Condition ☒ Redundancy/Resiliency ☐ Operational Efficiency ☐ Administrative ☐ Other ______________

ADMINISTRATIVE MEMORANDUM NO. 5584 PAGE 2 PROJECT PURPOSE • Supplements NTMWD’s raw water supply up to 90 million gallons per day (MGD) by

withdrawing permitted flows from the main stem of the Trinity River and pumping them to the East Fork Wetlands.

• Increases the pumping capacity of the East Fork Conveyance Pump Station from 85 MGD to 130 MGD to allow the water supply from the Main Stem Project to be conveyed to Lake Lavon.

• In October 2016, the Board authorized the Guaranteed Maximum Price (GMP) for the project of $102,796,737.00.

• In January 2018, the Board authorized a partial release of retainage for completed bid packages totaling $42,000.00

• In October 2019, the Board authorized a partial release of retainage for completed bid packages totaling $2,340,710.25

• In March 2020, the Board authorized a change order reducing the Guaranteed Maximum Price for the project to $100,796,737.00.

PROJECT COMPONENTS • 90 MGD capacity intake structure, fore bay and raw water pump station • Sediment handling facilities • 87,350 linear feet of 72-inch raw water pipeline • Weir box and main stem pipeline connection to the Diversion Pump Station discharge pipe • Additional conveyance pump station pumping capacity PROPOSED RELEASE OF RETAINAGE • The total Guaranteed Maximum Price approved by the Board is $100,796,737. • The Cost of Work, which is the basis for retainage, consists of bid packages that are partially

complete and bid packages that are totally complete. As of April 2020 the total Cost of Work complete was $87,118,052.90, and the associated total retainage was $4,324,979.34.

• The Board has authorized a total of $2,382,710.25 of retainage released to date. • The CMAR’s latest request for a partial release of the current retainage is based upon the

sum of all bid packages that are verified to be totally complete and functional. The recommended partial release retainage amount is $1,219,957.28.

• The retainage of $722,311.81, which is the amount that would remain after the partial release, is approximately five percent of the remaining Cost of Work, and is sufficient to account for the active parts of work that have been delayed by sustained high water levels in the Trinity River.

FUNDING FUND(S): Funding was previously authorized in the Regional Water System 2016 Construction Fund. No additional funding is requested at this time.


UPPER EAST FORK INTERCEPTOR SYSTEM

TRANSFER OF FUNDS FROM RESERVE FOR MAINTENANCE AND RATIFICATION OF ACTIONS BY THE PREVIOUS EXECUTIVE DIRECTOR AUTHORIZING EMERGENCY

PROCUREMENT TO FUND VALVE REPLACEMENT AT UPPER ROWLETT LIFT STATION AND INFLUENT PIPE REPAIR AT UPPER COTTONWOOD LIFT STATION

ACTION (What) (1) Authorize transfer of funds from Upper East Fork Interceptor System Reserve for Maintenance Account of up to $550,000 into the FY 2019-20 Annual Operating Budget and (2) ratify emergency procurement for valve replacements at Upper Rowlett Creek Lift Station (LS) and influent pipe repair at Upper Cottonwood Creek LS.

PURPOSE (Why)

Unbudgeted emergency repairs were required to facilitate a prompt response, minimize risk of environmental impact, and restore reliable operation. Substantial unbudgeted costs were incurred; therefore, authorization to utilize Reserve for Maintenance funding as needed to cover repair costs is requested.

RECOMMENDATION The Interim Executive Director and NTMWD staff recommend the Board of Directors authorize (1) transfer of funds of up to $550,000 and (2) ratification of the emergency procurement of goods and services authorized by the Interim Executive Director. These actions are in response to the emergency conditions resulting from the check valve failures at the Upper Rowlett Creek LS and the influent pipe leak at the Upper Cottonwood Creek LS. Scope: Replace check valves at Upper Rowlett Creek LS and repair influent pipe at

Upper Cottonwood Creek LS System: Upper East Fork Interceptor System (UEFIS) Amount: $550,000 transfer from Reserve for Maintenance to Operating Budget Amount: $719,461.98 ratification of emergency procurement This will be an item on the June 24, 2020, Wastewater Committee agenda.



☒ Regulatory Compliance☒ Capacity☐ Relocation or External Requests☒ Safety

☒ Asset Condition☐ Redundancy/Resiliency☐ Operational Efficiency☐ Other

BACKGROUND

Upper Rowlett Creek LS • Check valves on three of the five pumps at the LS began experiencing operational issues

over several months. Several mechanical adjustments and seal replacements werecompleted; however, none of the repairs provided long term success. Ultimately, the threecheck valves were inoperable without a reliable repair option.

• During wet weather conditions an operator was required to man the station 24 hours a dayto make use of the pumps.

• In consultation with Maintenance Services after several unsuccessful repair attempts it wasdecided that the three check valves should be replaced.

• Previous Executive Director authorized emergency procurement on March 18, 2020 tofacilitate the repair.

• The repairs have been completed. The total cost of goods and services procured under theemergency authorization for the repairs was $166,950.00.

Upper Cottonwood Creek LS • A sinkhole developed adjacent to the wet well in the vicinity of the lift station influent

pipeline. Our investigation revealed that the concrete pipe had collapsed just outside of the wall of the wet well.

• Previous Executive Director authorized emergency procurement on March 20, 2020 to facilitate the repair.

• Shortly after repairs were initiated on the influent pipe, significant corrosion of the concrete wet well walls was discovered.

• Since the lift station was under full bypass pumping conditions for the pipeline repair the wet well walls were repaired and coated utilizing an existing coating contract.

• The repairs have been completed. The total cost of goods and services for the repairs was$780,072.36 of which $552,511.98 was procured under the emergency authorization.

Total Funding • Funding in the amount of $166,950.00 for the Upper Rowlett Creek LS and in the amount of

$780,072.36 for the Upper Cottonwood Creek LS, totals $947,022.36.• Funding procured under emergency authorization in the amount of $166,950.00 for the

Upper Rowlett Creek LS and $552,511.98 for the Upper Cottonwood Creek LS, totals$719,461.98.


FUNDING

FUND(S): Total funding in the amount of $947,022.36 is to be made available. Funding in the amount of $550,000 can been made available from the Upper East Fork Interceptor System Reserve for Maintenance Account. The remaining $397,022.36 will be funded by the Upper East Fork Interceptor System FY2019-20 Annual Operating Budget. The Upper East Fork Interceptor System Reserve for Maintenance Account will only be used if funds are not otherwise made available in the Upper East Fork Interceptor System FY2019-20 Annual Operating Budget.


UPPER EAST FORK INTERCEPTOR SYSTEM WILSON CREEK LIFT STATION IMPROVEMENTS

PROJECT NO. 501-0448-16

TABULATION OF BIDS AND AWARD OF CONTRACT

ACTION (What) Authorize award of a construction contract for the Wilson Creek Lift Station Improvements project.

PURPOSE (Why)

Add pumps to increase the capacity of the Wilson Creek Lift Station due to growth and maximize the capacity of the existing force main to Wilson Creek Regional Wastewater Treatment Plant. The project includes discharge header improvements to allow connection to the future Wilson Creek Transfer Force Main to facilitate conveyance of flow to the new Sister Grove Regional Water Resource Recovery Facility.

RECOMMENDATION

The Interim Executive Director, NTMWD staff and Kimley-Horn and Associates, Inc. recommend the Board of Directors authorize the award of a contract as follows: Contractor: Crescent Constructors, Inc. Scope: Construction Project: No. 501-0448-16, Wilson Creek Lift Station Improvements Amount: $4,747,000 This will be an item on the June 24, 2020, Wastewater Committee meeting agenda.


☐ Regulatory Compliance ☒ Capacity ☐ Relocation or External Requests ☒ Safety ☐ Policy


ADMINISTRATIVE MEMORANDUM NO. 5586 PAGE 2 PROJECT PURPOSE • Provide additional pumping for a total firm pumping capacity of 46.5 MGD at the Wilson

Creek Lift Station to utilize the remaining available capacity in the existing Wilson Creek Force Main.

• Construct discharge header improvements and yard piping to connect to the future Wilson Creek Transfer Force Main to convey flow to the North McKinney Lift Station. NTMWD Project No. 501-0495-18 (Wilson Creek Transfer Force Main) will complete the transition of this lift station to transfer the flow to the North McKinney lift station, which will then transfer the flow to the new Sister Grove Regional Water Resource Recovery Facility.

PROJECT COMPONENTS • Two additional pumps and motors with variable frequency drives. • Discharge header improvements, valves, meters, and force main yard piping (to connect to

the future Wilson Creek Transfer Force Main which is performed by others). • Safety improvements including platforms and handrails to access equipment for

maintenance. • Bypass connection on new force main. • Electrical and instrumentation improvements for the proposed two pumps, wet well level

instrumentation, flow metering, and HVAC improvements.

TABULATION OF BIDS

Sealed bids were received at 2:00 p.m. on Thursday, June 4, 2020, as tabulated below:

Bidder Total Bid Recommendation

Crescent Constructors, Inc. $4,747,000 Lowest responsible bid Recommended for Award

McKee Utility Contractors, Inc. $4,772,500

Archer Western Construction, LLC $4,849,500

Red River Construction Company $5,093,500

Crossland Heavy Contractors, Inc. $5,267,433

Urban Infraconstruction, LLC $5,303,600

Rey-Mar Construction $5,777,500

Associated Construction Partners, Ltd. $5,947,500 ENGINEER’S OPINION OF PROBABLE COST $5,400,000


LOWEST RESPONSIBLE BIDDER HISTORY Crescent Constructors, Inc. has successfully completed or is currently in construction on several similar projects for the NTMWD: • Project No. 101-0326-13, Casa View Control Structure Improvements and Ground Storage

Tank Improvements (completed) • Project No. 101-0419-16, Casa View Pump Station Electrical and Site Improvements

(completed) • Project No. 101-0338-13, Meter Vault Standardization, Phase II, Set-Point Control (currently

under construction) • Project No. 301-0443-16, South Mesquite Regional Wastewater Treatment Plant Influent

Flow Handling and Secondary Clarifier Improvements (currently under construction) • Project No. 501-0401-15, Princeton Lift Station Improvements (substantially complete) • Project No. 509-0455-17, Forney Mustang Creek Lift Station Phase I (currently under

construction) Based on their standing as lowest responsible bidder, the information provided, reports by the supplied references, and history of successful project completion, the NTMWD staff and Kimley-Horn and Associates, Inc. recommend award of the contract to Crescent Constructors, Inc.

FUNDING FUND(S): Upper East Fork 2020 Construction Fund

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REGIONAL WASTEWATER SYSTEM WILSON CREEK REGIONAL WASTEWATER TREATMENT PLANT ADVANCED TREATMENT AND HEADWORKS IMPROVEMENTS

PROJECT NO. 301-0346-13

INSPECTION SERVICES AGREEMENT ADDITIONAL SERVICES

ACTION (What)

Authorize additional funding for outsourced electrical inspection services

PURPOSE (Why) Allow continuation of outsourced electrical inspection services to assist NTMWD staff in performing quality assurance inspections for the Wilson Creek Regional Wastewater Treatment Plant (RWWTP) Advanced Treatment and Headworks Improvements construction project.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommends the Board of Directors authorize additional services as follows: Consultant: Mbroh Engineering, Inc. (Mbroh) Scope: Electrical Inspection Services Project: No. 301-0346-13, Wilson Creek Regional Wastewater Treatment Plant

Advanced Treatment and Headworks Improvements Amount: $138,600 This will be an item on the June 24, 2020, Water Committee meeting agenda.


☒ Regulatory Compliance ☒ Capacity ☐ Relocation or External Requests ☐ Safety ☐ Policy

☒ Asset Condition ☐ Redundancy/Resiliency ☒ Operational Efficiency ☐ Administrative ☐ Other ______________

ADMINISTRATIVE MEMORANDUM NO. 5587 PAGE 2 PROJECT PURPOSE • Provide treatment for an increase in the peak two-hour flow rate up to 204 million gallons

per day (MGD). • The Wilson Creek RWWTP serves the cities of Allen, Anna, Fairview, Frisco, Lucas,

McKinney, Melissa, Parker, Plano, Princeton, Prosper and Richardson. • Continued growth in these cities necessitates the addition of peak flow capacity to meet

Texas Commission on Environmental Quality (TCEQ) requirements. • Modifications include:

o addition of a BioActiflo process for advanced treatment and peak flow capacity increase o expansion of the existing headworks and associated facilities

ADDITIONAL SERVICES • Mbroh is under contract to provide part-time electrical inspection services for this multi-year

project. Project needs are evaluated on an annual basis as construction progresses and recommendations for additional services are brought to the Board in separate actions as required for the successful delivery of the project. This stepped approach to inspection services is recommended in order to better manage use of available funds and scoping of project needs.

• NTMWD retained Mbroh to provide part-time electrical inspection services for this project due to the current project workload. NTMWD currently has four electrical inspectors on staff and 21 active projects requiring electrical inspection. Mbroh is currently providing inspection services for NTMWD on several construction projects.

• Mbroh has proposed to provide up to 1,540 hours of additional inspection services at a rate of $90 per hour, resulting in a current requested authorization of $138,600 and a revised contract amount of $397,240. These services are based on an additional eight-month inspection period.

• The NTMWD staff has reviewed the hourly rate and maximum hour projection proposed by Mbroh and recommends them as representative of the anticipated effort required for this project.


DESCRIPTION AMOUNT

Original inspection services agreement (ISA) $64,800

Prior Additional Services $193,840

Proposed Additional Services $138,600

Revised ISA Amount $397,240

FUNDING FUND(S): Regional Wastewater System 2017 Construction Fund

Headworks Building

Bio-actiflo Contact Basin,BCB2, PL1

UV 612, PL1

Outfall Structure,Plant Effluent, PL2

High Rate Clarifier,HRC2, PL1

ÜWilson Creek RWWTP Advanced Treament and Headwork Improvements

Additional Electrical Inspection ServicesProject No. 301-0346-13


LegendNew Treatment Structures

Existing Structures

LegendNew Treatment Structures

Existing Structures


REGIONAL WASTEWATER SYSTEM WILSON CREEK REGIONAL WASTEWATER TREATMENT PLANT

AERATION BASIN IMPROVEMENTS PROJECT NO. 301-0567-20

ENGINEERING SERVICES AGREEMENT

ACTION (What)

Authorize an engineering services agreement for design of the Wilson Creek Regional Wastewater Treatment Plant (RWWTP) Aeration Basin Improvements project.

PURPOSE (Why)

Replace the existing buried main air header and fine bubble aeration systems for Aeration Basin Nos. 1 through 8.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommend the Board of Directors authorize the Interim Executive Director to execute an engineering services agreement (ESA) as follows: Consultant: Lockwood, Andrews & Newnam, Inc. Scope: Final engineering design Project: No. 301-0567-20, Wilson Creek Regional Wastewater Treatment Plant

Aeration Basin Improvements Amount: $977,384 This will be an item on the June 24, 2020, Wastewater Committee meeting agenda.





BACKGROUND

• The Wilson Creek Regional Wastewater Treatment was initially placed into service in 1987 and serves the cities of Allen, Anna, Fairview, Frisco, Lucas, McKinney, Melissa, Parker, Plano, Princeton, Prosper and Richardson.

• The Wilson Creek RWWTP is comprised of two trains; Plant I with an average day capacity of 32 MGD, and Plant II with an average day capacity of 32 MGD.

• Plant I has eight aeration basins and two blower buildings. The existing diffused aeration systems and buried header for these basins are past their useful life and need to be replaced as soon as possible.

PROJECT PURPOSE • Improve condition of Plant I by providing new fine bubble diffused aeration systems and an

above grade air header from the two blower buildings • Project will be split into two summers to allow for future phased replacements and minimize

disruption to operations. • The total planning level estimated cost is $9,000,000 PROJECT COMPONENTS • New air distribution piping (including droplegs, manifolds, valves, and laterals) • New air diffuser assemblies (including membrane diffuser elements, baseplate, diffuser

holder, retainer ring, and airflow control orifice) • New above grade air header from the blower buildings to the air distribution piping • Abandon in place existing buried air header

BASIC SERVICES • Final engineering services • Bid phase services • Construction phase services • SPECIAL SERVICES • Topographic survey • Geotechnical investigation


DESCRIPTION AMOUNT

Basic Services $939,851

Special Services $37,533

Requested Amount $977,384

FUNDING FUND(S): Funding in the amount of $450,775.00 is to be made available in the Regional Wastewater System 2017 Construction Fund and $526,609.00 is to be made available in the Regional Wastewater System 2019 Construction Fund.

Aeration Basin Structure 1 - 4

Blower Building 1 - 2

Aeration Basin Structure 5 - 8

ÜWilson Creek Regional Wastewater Treatment Plant Aeration Basin

Improvements Project No. 301-0567-20Administrative Memorandum No. 5588

LegendBuildings of Interest

W

LegendWWTP Structures

Structures of Interest


REGIONAL WATER SYSTEM PIPELINE RELOCATIONS AT FM 2478 (CUSTER ROAD)

PROJECT NO. 101-0506-18


RIGHT-OF-WAY ACQUISITION PROGRAM

ACTION (What)

Authorize additional funding for previously approved right-of-way acquisition program.

PURPOSE (Why)

Provide additional funding to acquire two remaining easements for the project.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommend the Board of Directors:

1) Authorize additional funding in the amount of $320,000, resulting in the totalauthorization of $1,000,000, for the Pipeline Relocations at FM 2478 (Custer Road),Project No. 101-0506-18; and,

2) Adopt Resolution No. 20-30, “A Resolution Authorizing Additional Funding of Right-of-Way for the Pipeline Relocations at FM 2478 (Custer Road), Project No. 101-0506-18.”

Consultant: N/A

Scope: Right-of-way acquisition and the necessary support services to facilitate the purchase of easements for the project

Project: Project No. 101-0506-18, Pipeline Relocations at FM 2478 (Custer Road)

Amount: $320,000

This will be an item on the June 24, 2020, Water Committee meeting agenda.




☐ Asset Condition ☐ Redundancy/Resiliency ☐ Operational Efficiency ☐ Administrative ☐ Other ______________

PROJECT PURPOSE • The Texas Department of Transportation (TxDOT) is in the process of widening Custer

Road (FM 2478) through the City of Frisco and Town of Prosper. • A portion of NTMWD’s existing Frisco-McKinney 48-inch Pipeline is located within an

NTMWD easement parallel to and along the western side of the existing Custer Road right-of-way, north of US 380 to County Road (CR) 853, and parallel to and along the northern side of CR 853 right-of-way, east of Custer Road.

• TxDOT’s proposed right-of-way expansion will encroach over the existing easement, pipeline and delivery meter vault.

• This portion of the relocation cannot take place without the acquisition of the remaining two easements.

• The Board of Directors Authorized to execute a right-of-way acquisition program for the Pipeline Relocations at FM 2478 (Custer Road) in December 2018 with a budget of $680,000.

• Additional funding of $320,000 is being requested due to the increase in market value of land in Prosper from initial budgeting in 2018 through acquisition in 2019/2020 as well as higher than anticipated market values of a retail pad site and a parcel of land used primarily for water detention.

SUPPORT SERVICES • Employ the firm of Saunders, Walsh & Beard, Attorneys & Counselors, to act as counsel on

the acquisition of the properties. • Employ an appraiser to provide appropriate reports. • Employ a title company to provide professional services related to certain property

ownership issues. • Employ survey services to perform title survey for purchase and acquisition, and verify

property lines and potential easement locations when necessary.

FUNDING FUND(S): Additional funding in the amount of $320,000 for the right-of-way acquisition program is to be made available in the Regional Water System Capital Improvement Fund.



A RESOLUTION AUTHORIZING ADDITIONAL FUNDING OF RIGHT-OF-WAY FOR THE PIPELINE RELOCATIONS AT FM 2478 (CUSTER ROAD),

PROJECT NO. 101-0506-18

WHEREAS, the NTMWD Board of Directors previously authorized a right-of-way acquisition program with funding in the amount of $680,000 for the Pipeline Relocations at FM 2478 (Custer Road), Project No. 101-0506-18 (Project); and,

WHEREAS, the Board previously authorized the use of Eminent Domain to acquire right-

of-way for the Project; and, WHEREAS, NTMWD has begun acquiring permanent and temporary easements required

for the construction, operation, and maintenance of the pipeline relocations on the Project; and, WHEREAS, $320,000 is required to complete right-of-way acquisitions necessary for the

project. The funding is to be made available in the Regional Water System Capital Improvement Fund.

NOW, THEREFORE, THE BOARD OF DIRECTORS IN A REGULAR MEETING RESOLVES THAT:

1. There is a public need for and the public welfare and convenience are to be served by the improvements associated with the Pipeline Relocations at FM 2478 (Custer Road), Project No. 101-0506-18.

2. A budget increase of $320,000 is authorized for right-of-way acquisition, resulting in a total of authorized funding of $1,000,000 on this Project.

3. The Resolution shall take effect and be in full force and effective from and after the

date of its adoption, and it so resolved; and all resolutions of the Board of Directors of the District in conflict herewith are hereby amended or modified to the extent of such a conflict.

THIS RESOLUTION ADOPTED BY THE NTMWD BOARD OF DIRECTORS IN A REGULAR MEETING ON JUNE 25, 2020 IN THE ADMINISTRATIVE OFFICES OF THE NTMWD, WYLIE, TEXAS.

______________________________ ________________________________ PHIL DYER, Secretary LARRY PARKS, President (SEAL)



UEFIS REHABILITATION AND IMPROVEMENTS 2020 PROJECT NO. 501-0540-19


RIGHT-OF-WAY ACQUISITION PROGRAM

ACTION (What)

Adopt resolution to fund acquisition of permanent and temporary access easements needed for the rehabilitation and improvements of portions of the Allen Sewer Associated Partners (ASAP) West Interceptor and the Richardson Spring Creek Trunk Sewer.

PURPOSE (Why)

Development in the area prevents access to existing pipeline easements from public roadways, which necessitates the need to acquire permanent and temporary access easements.

RECOMMENDATION

The Interim Executive Director and NTMWD staff recommends the Board of Directors:

1. Authorize the Interim Executive Director to execute a right-of-way acquisition program for the UEFIS Rehabilitation and Improvements 2020, Project No. 501-0540-19, with a budget of $30,000; and,

2. Adopt Resolution No. 20-28, “A Resolution Authorizing the Use of Eminent Domain to

Acquire Right-of-Way for the UEFIS Rehabilitation and Improvements 2020, Project No. 501-0540-19, and Delegating Authority to Initiate Condemnation Proceedings to the NTMWD Interim Executive Director.”

Consultant: N/A Scope: Right-of-way acquisition and the necessary support services to facilitate the

purchasing of easements for the project Project: No. 501-0540-19, UEFIS Rehabilitation and Improvements 2020 Amount: $30,000 This will be an item on the June 24, 2020, Wastewater Committee agenda.





PROJECT PURPOSE • The purpose of this agenda item is to authorize acquisition of permanent and temporary access

easements connecting public roadways to NTMWD pipeline easements. • The survey plat is available for review upon request.

FUNDING FUND(S): Upper East Fork Interceptor System 2015 Construction Fund



A RESOLUTION AUTHORIZING THE USE OF EMINENT DOMAIN TO ACQUIRE RIGHT-OF-WAY FOR THE UEFIS REHABILITATION AND IMPROVEMENTS 2020,

PROJECT NO. 501-0540-19, AND DELEGATING AUTHORITY TO INITIATE CONDEMNATION PROCEEDINGS TO THE NTMWD INTERIM EXECUTIVE DIRECTOR

WHEREAS, the NTMWD Board of Directors has authorized the engineering design of the

UEFIS Rehabilitation and Improvements 2020, Project No. 501-0540-19 (Project); and, WHEREAS, it is necessary to proceed with the acquisition of permanent and temporary

access easements as a means of connecting existing NTMWD pipeline easements with public roadways; and, WHEREAS, it may be necessary to acquire the easements required for the Project through the use of eminent domain in the event negotiations are unsuccessful; and,

WHEREAS, adequate funds in the amount of $30,000 for project 501-0540-19 is available in the Upper East Fork Interceptor System 2015 Construction Fund for the acquisition of properties needed for the Project. NOW, THEREFORE, THE BOARD OF DIRECTORS IN A REGULAR MEETING DETERMINES AND RESOLVES THAT:

1. There is a public need for and that the public welfare and convenience are to be served by the improvements associated with the UEFIS Rehabilitation and Improvements 2020, Project No. 501-0540-19.

2. It is in the best interest and is necessary to acquire approximately 1.9047 acres of

permanent and approximately 1.0475 acres of temporary easements for the Project and across the properties described in Exhibit “A” attached hereto, and incorporated by reference herein, to provide the required working area for prosecution of the work, and operation and maintenance of the facilities.

3. The Interim Executive Director is authorized to employ surveyors to assist in the

acquisition process, as required.

4. The power to initiate eminent domain proceedings is hereby delegated to the Interim Executive Director and he is hereby authorized to take all steps necessary to acquire the easements for the Project; including the hiring of negotiators, transaction managers, appraisers, surveyors, Title Company, and attorneys.

5. The Interim Executive Director is authorized to employ the firm of Saunders, Walsh &

Beard, Attorneys and Counselors, to represent the NTMWD in these land transactions, including filing of Petitions for Condemnation on properties when the Interim Executive Director determines the property cannot be secured through negotiations and after issuance of a final offer letter in accordance therewith.

6. A budget of $30,000 is authorized for this right-of-way acquisition program.

RESOLUTION NO. 20-28 PAGE 2 THIS RESOLUTION ADOPTED BY THE NTMWD BOARD OF DIRECTORS IN A REGULAR MEETING ON JUNE 25, 2020, IN THE ADMINISTRATIVE OFFICES OF THE NTMWD, WYLIE, TEXAS. _______________________________ ________________________________ PHIL DYER, Secretary LARRY PARKS, President (SEAL)

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UEFIS Rehabilitation and Improvements Project No. 501-0540-19

Administrative Memorandum No. 5590 Ü

Legend!!2 Wastewater Manholes

Existing Pipelines

Repair Locations

US-75

Renner Rd

N Pla

no R

d

Spring Creek Trunk Sewers ASAP West

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!!2 !!2

W McDermott Dr

Custe

r Rd

Repair Location

RepairLocation

Repair Location

Repair Location

EXHIBIT "A"

UPPER EAST FORK INTERCEPTOR SYSTEMASAP REHABILITATION AND IMPROVEMENTS 2020

PROJECT NO. 501-0540-19

CURRENT LINE LIST

PROPERTY OWNERTwin Creeks Community Association Inc.Romspen Twin Creeks LLC (dba Twin Creeks Golf Course)


JUNE 2020 APPENDIX

BOARD OF DIRECTORS MEETING LIST OF APPENDICES

MONTHLY REPORTS A. Glossary of NTMWD Terms B. Board Policies Manual Section IX Board of Directors Meeting Agenda Policy C. Water Consumption Report D. Water Quality Reports

1. Bonham Water Treatment Plant 2. Tawakoni Water Treatment Plant 3. Wylie Water Treatment Plant

E. Wastewater Flow Report F. Wastewater Treatment Plant Capacity Report G. Wastewater Quality Report H. Solid Waste Tonnage Report I. NTMWD Financial Reports

1. Monthly Financial Statements for the Month ended April 30, 2020 J. Engineering Activity Report K. Construction Progress Report L. Bois D’Arc Lake Report

OTHER DOCUMENTS

M. Amendment to NTMWD’s Board Policies Manual

(Please refer to Administrative Memorandum No. 5575)

N. Preliminary Official Statement - $35,130,000 +/- Regional Wastewater System Revenue Bonds, Series 2020A (Please refer to Administrative Memorandum No. 5576)

O. Slide Presentations for discussion items:

1 Power agreement for the Tawakoni Water Treat Plant with Farmers Electric Cooperative

2 Bois d’Arc Lake Construction Update

P. 2020 Executive Summary on Compensation and Benefits Study

AWWA American Water Works AssociationBDL Bois d'Arc LakeBOD Board of DirectorsC/O Change OrderCAFR Comprehensive Annual Financial ReportCCN Certificate of Convenience and NecessityCMAR Construction Manager At-RiskCMOM Capacity, Management, Operation, and MaintenanceCSP Competitive Sealed ProposalDART Dallas Area Rapid TransitEIS Environmental Impact StatementEPA Environmental Protection AgencyESA Engineering Services AgreementFCEC Fannin County Electric CooperativeFEC Farmers Electric CooperativeFRP Fiberglass reinforced pipeGIS Geographic Information SystemGMP Guaranteed maximum priceGPCD Gallons Per Capita Per DayHSPS High Service Pump Station

ILAInterlocal Agreement - a written contract between two governmental entities.

K ThousandM Million MGD Million Gallons Per DayMOU Memorandum of UnderstandingMSPS Main Stem Pump StationNTMWD North Texas Municipal Water DistrictNWC National Waterways ConferenceNWRA National Water Resources AssociationO&M Operations and MaintenanceOPCC Opinion of Probable Construction CostPFIA Public Funds Investment ActPUC Public Utility CommissionRCEC Rayburn Country Electric CooperativeRDF Regional Disposal FacilityROW Right-of-WayRWPS Raw Water Pump StationRWRRF Regional Water Resource Recovery FacilityRWS Regional Water SystemRWWS Regional Wastewater SystemRWWTP Regional Wastewater Treatment PlantSCADA Supervisory Control and Data AcquisitonSEP Supplemental Environmental ProjectSUD Special Utility District

Glossary of NTMWD Terms

TCEQ Texas Commission on Environmental QualityTCOS Transmission Cost of ServiceTS Transfer StationTWCA Texas Water Conservation AssociationTWDB Texas Water Development BoardUEFIS Upper East Fork Interceptor SystemUSACE US Army Corps of EngineersWEF Water Environment FederationWTP Water Treatment PlantWWTP Wastewater Treatment Plant

NTMWD WASTEWATER FLOW SUMMARY BY SYSTEM

FISCAL YEAR 2020(Flows are Reported in 1000 Gallons)

OCT SEPJULAPR MAY JUNMARFEBJANDECNOV AUG FYTD FYTD % Contribution

Regional Wastewater System Member CitiesMember Cities

237,859 244,273 285,152 288,803 230,333 246,878241,616 362,294 2,137,207 9.16%Allen74,840 114,688 165,048 157,282 158,853 162,217136,756 181,411 1,151,095 4.93%Forney

121,392 126,430 140,598 133,705 132,477 145,984130,842 161,732 1,093,160 4.68%Frisco50,203 52,828 58,973 63,717 46,212 50,20953,783 74,531 450,455 1.93%Heath

452,969 461,928 539,612 530,522 489,577 516,213461,635 683,793 4,136,250 17.73%Mckinney24,758 27,375 30,083 29,936 29,724 32,41026,007 48,046 248,339 1.06%Melissa*

381,211 322,001 329,395 342,318 348,533 390,201302,244 466,757 2,882,660 12.35%Mesquite825,225 793,730 879,067 900,328 775,569 839,339782,830 1,160,547 6,956,635 29.81%Plano28,663 29,786 35,837 37,085 30,633 33,64027,226 49,723 272,594 1.17%Princeton29,461 31,948 37,839 36,410 27,546 35,25428,108 50,421 276,987 1.19%Prosper

309,701 299,348 361,367 375,703 317,869 327,246304,817 481,507 2,777,559 11.90%Richardson71,033 67,333 94,061 89,346 83,959 90,81777,685 127,908 702,143 3.01%Rockwall29,095 27,735 31,449 33,248 30,987 33,45728,600 35,249 249,820 1.07%Seagoville*

Totals 2,636,411 2,599,402 2,602,150 23,334,9042,988,483 3,018,402 3,883,919 2,702,274 2,903,864 100.00%

Upper East Fork Interceptor System (UEFIS) System Member Cities(UEFIS) System Member Cities

237,859 244,273 285,152 288,803 230,333 246,878241,616 362,294 2,137,207 12.38%Allen121,392 126,430 140,598 133,705 132,477 145,984130,842 161,732 1,093,160 6.33%Frisco452,969 461,928 539,612 530,522 489,577 516,213461,635 683,793 4,136,250 23.96%Mckinney24,758 27,375 30,083 29,936 29,724 32,41026,007 48,046 248,339 1.44%Melissa*

825,225 793,730 879,067 900,328 775,569 839,339782,830 1,160,547 6,956,635 40.30%Plano28,663 29,786 35,837 37,085 30,633 33,64027,226 49,723 272,594 1.58%Princeton29,461 31,948 37,839 36,410 27,546 35,25428,108 50,421 276,987 1.60%Prosper*

250,314 238,478 278,946 283,068 242,244 253,271244,553 348,415 2,139,290 12.39%RichardsonTotals 1,970,641 1,953,948 1,942,817 17,260,4612,227,135 2,239,857 2,864,971 1,958,105 2,102,988 100.00%

Regional Wastewater System and (UEFIS) Customer Cities(UEFIS) Customer Cities

17,719 35,384 38,442 42,264 30,843 21,05028,675 49,390 263,768Anna14,488 16,329 17,085 17,533 15,123 15,45014,886 19,651 130,545Fairview

667 645 484 470 426 452403 767 4,315Lucas4,969 7,014 8,229 8,387 5,938 4,9926,822 8,332 54,685Parker

Totals 37,844 59,373 50,786 453,31364,240 68,654 78,140 52,331 41,944

6/8/2020Page 1 of 3

Numbers shown are rounded to the nearest thousand gallons*Annual Requirement not exceeded, actual flow reported**Annual Requirement not exceeded, metering currently not in place




Sewer System InterceptorsBuffalo Creek Interceptor

4,916 50,223 88,527 74,778 84,072 76,76876,362 82,098 537,744 31.81%Forney50,203 52,828 58,973 63,717 46,212 50,20953,783 74,531 450,455 26.65%Heath71,033 67,333 94,061 89,346 83,959 90,81777,685 127,908 702,143 41.54%Rockwall

Totals 126,152 170,383 207,831 1,690,342241,562 227,841 284,536 214,243 217,794 100.00%Forney Interceptor

42,823 42,012 45,914 54,996 53,809 56,26136,418 51,337 383,570Forney

Forney-Mustang Creek Interceptor

27,101 22,454 30,607 27,508 20,972 29,18723,976 47,976 229,782Forney

Lower East Fork Interceptor

20,076 20,273 24,378 26,286 23,089 26,62120,955 28,818 190,495 43.26%Mesquite*29,095 27,735 31,449 33,248 30,987 33,45728,600 35,249 249,820 56.74%Seagoville*49,171 48,008 55,827 59,534 54,076 60,07849,555 64,067 440,315 100.00%Totals

McKinney Interceptor

27,186 27,202 29,226 28,127 27,980 30,04127,534 31,543 228,840 23.71%Frisco82,387 83,615 95,945 93,523 84,582 96,57282,308 117,507 736,438 76.29%Mckinney

109,573 110,817 125,171 121,650 112,562 126,613109,842 149,050 965,278 100.00%Totals

Muddy Creek Interceptor

57,480 58,767 69,701 73,282 61,695 59,99858,799 93,865 533,587 27.62%Murphy*137,694 144,047 178,100 184,480 177,811 180,390146,534 249,020 1,398,076 72.38%Wylie**195,174 202,814 247,801 257,762 239,506 240,388205,332 342,886 1,931,664 100.00%Totals

Parker Creek Interceptor

15,617 16,880 16,640 17,494 13,061 15,75816,972 20,479 132,902 100.00%Fate*Royse City**

15,617 16,880 16,640 17,494 13,061 15,75816,972 20,479 132,902 100.00%Totals

Parker Creek Parallel Interceptor

10,122 8,842 10,595 9,232 13,081 11,8679,780 11,076 84,595Fate

Sabine Creek Interceptor

24,033 20,909 31,745 36,885 25,896 31,67321,151 48,920 241,213Royse City*

6/8/2020Page 2 of 3





Sewer System Treatment PlantsFarmersville WWTP

9,045 9,475 15,613 20,173 14,298 12,5719,682 31,773 122,630Farmersville ‐ A.S.Farmersville ‐ T.F.

Totals 9,045 9,475 9,682 122,63015,613 20,173 31,773 14,298 12,571Frisco (Cottonwood Creek) WWTP

Frisco

Lavon (Bear Creek) WWTP

5,246 5,728 6,374 6,639 6,243 5,9815,769 7,610 49,590Lavon

Muddy Creek WWTP

57,480 58,767 69,701 73,282 61,695 59,99858,799 93,865 533,587 27.62%Murphy137,694 144,047 178,100 184,480 177,811 180,390146,534 249,020 1,398,076 72.38%Wylie195,174 202,814 247,801 257,762 239,506 240,388205,332 342,886 1,931,664 100.00%Totals

North Rockwall (Squabble Creek) WWTP

17,176 22,271 12,968 13,247 17,005 11,32122,031 11,369 127,389Rockwall

Panther Creek WWTP

167,582 170,786 183,560 181,873 167,652 179,764166,584 197,186 1,414,987Frisco

Royse City WWTP

Royse City

Sabine Creek WWTP

25,739 25,722 27,235 26,726 26,142 27,62526,752 31,555 217,497 47.41%Fate*24,033 20,909 31,745 36,885 25,896 31,67321,151 48,920 241,213 52.59%Royse City*49,773 46,632 58,980 63,611 52,038 59,29847,903 80,475 458,710 100.00%Totals

Seis Lagos WWTP

3,918 4,537 5,403 5,327 4,381 4,8284,649 6,999 40,042Seis Lagos

South Rockwall (Buffalo Creek) WWTP

41,261 37,031 33,184 44,569 28,602 42,47427,921 46,956 301,999Rockwall

Stewart Creek West WWTP

129,801 126,428 141,900 140,600 111,858 136,670122,856 179,144 1,089,257Frisco

Wylie WWTP

Wylie

6/8/2020Page 3 of 3


WASTEWATER TREATMENT PLANT CAPACITY REPORTMay FY 2020

NTMWD

Wastewater Treatment Plant Permitted Peak 2 Hour MGD

Actual Monthly Peak 2 Hour MGD

Actual AADF MGD

Permitted AADF MGD

(Current Design Capacity)

Monthly Total FlowMG

% Capacity (AADF/Permitted AADF)

Monthly Average Daily Flow

MGD

FYTD Peak2 hour MGD

Regional Wastewater SystemFloyd Branch 73.975 4.750 2.533 9.999 5.574 53.3%2.386 11.429Rowlett Creek 554.063 24.000 19.396 60.048 31.177 80.8%17.873 68.680South Mesquite 726.901 33.000 21.764 82.501 85.775 66.0%23.448 87.685Wilson Creek 1,688.891 64.000 51.670 224.002 106.335 80.7%54.480 152.634

Sewer System > 1 MGDBuffalo Creek 42.474 2.250 1.268 8.227 1.901 56.4%1.370 4.030Muddy Creek 240.388 10.000 7.466 30.000 16.167 74.7%7.755 29.687Panther Creek 179.764 10.000 5.780 30.000 9.256 57.8%5.799 15.599Sabine Creek 59.298 3.000 1.811 9.000 4.860 60.4%1.913 6.402Squabble Creek 11.321 1.200 0.560 3.000 1.864 46.6%0.365 2.229Stewart Creek 136.670 5.000 4.288 12.501 10.571 85.8%4.409 12.959Wylie 0.000 2.000 5.0000.000

Wastewater Treatment Plant Monthly Total FlowMG

Permitted AADF MGD

(Current Design Capacity)

Permitted Peak 2 Hour MGD

ActualAADF MGD

Actual Monthly Peak 2 Hour MGD

% Capacity (AADF/Permitted AADF)

Monthly Average Daily Flow

MGD

FYTD Peak2 hour MGD

Sewer System < 1 MGDBear Creek 5.981 0.250 0.193 0.667 0.555 77.1%0.193 0.695Cottonwood Creek 0.000 0.300 0.000 0.590 0.000 0.0%0.000 0.000Farmersville ‐ A.S. 12.571 0.530 0.453 1.590 2.299 85.5%0.406 3.487Farmersville ‐ T.F. 0.000 0.225 0.6750.000Royse City 0.000 0.500 2.0000.000Seis Lagos 4.828 0.250 0.146 0.720 0.546 58.3%0.156 1.250

6/8/2020Page 1 of 1Numbers shown are rounded to the nearest thousand gallons *Annual Requirement not exceeded, actual flow reported**Annual Requirement not exceeded, metering currently not in place


WASTEWATER QUALITY REPORT

May 2020

CARB. BIOCHEMICAL OXYGEN DEMAND TOTAL SUSPENDED SOLIDS

RAWINFLUENT

(mg/L)

FINALEFFLUENT

(mg/L)

TCEQLIMIT(mg/L)

%REMOVAL

RAWINFLUENT

(mg/L)

FINALEFFLUENT

(mg/L)

TCEQLIMIT(mg/L)

%REMOVAL

REGIONAL SYSTEM

FLOYD BRANCH 227.2 2.9 10.0 98.7 124.4 1.7 15.0 98.6

ROWLETT CREEK 156.6 2.2 5.0 98.6 151.4 2.6 5.0 98.3

SOUTH MESQUITE 244.9 2.3 7.0 99.0 197.2 1.6 15.0 99.2

WILSON CREEK 201.6 2.2 5.0 98.9 224.3 1.2 5.0 99.5

SEWER SYSTEM

BEAR CREEK 215.5 4.6 5.0 97.9 195.8 1.9 5.0 99.0

BUFFALO CREEK 196.7 2.2 10.0 98.9 160.9 1.2 15.0 99.3

COTTONWOOD CREEK * 10.0 15.0

FARMERSVILLE NO. 1 0.0 0.0 10.0 0.0 0.0 0.0 15.0 0.0

FARMERSVILLE NO. 2 102.0 2.2 10.0 97.8 93.8 1.7 15.0 98.2

MUDDY CREEK 183.4 2.2 7.0 98.8 164.5 1.2 15.0 99.3

PANTHER CREEK 201.7 2.2 5.0 98.9 203.3 1.1 12.0 99.5

ROYSE CITY 0.0 0.0 10.0 0.0 0.0 0.0 15.0 0.0

SABINE CREEK 222.9 2.2 10.0 99.0 196.0 1.3 15.0 99.3

SEIS LAGOS 222.8 3.3 7.0 98.5 202.0 10.7 15.0 94.7

SQUABBLE CREEK 193.7 2.2 5.0 98.9 205.5 1.5 12.0 99.3

STEWART CREEK WEST 194.3 2.2 7.0 98.8 201.8 2.0 15.0 99.0

WYLIE 0.0 0.0 10.0 0.0 0.0 0.0 15.0 0.0

* Final Effluent Reported as BOD5

AMMONIA-NITROGEN TOTAL PHOSPHORUS

RAWINFLUENT

(mg/L)

FINALEFFLUENT

(mg/L)

TCEQLIMIT(mg/L)

%REMOVAL

RAWINFLUENT

(mg/L)

FINALEFFLUENT

(mg/L)

TCEQLIMIT(mg/L)

%REMOVAL

BEAR CREEK 44.2 0.38 2.0 99.2

BUFFALO CREEK 25.9 0.14 2.0 99.5

FARMERSVILLE NO. 1 0.0 0.00 3.0 0.0

FARMERSVILLE NO. 2 22.9 0.05 3.0 99.8

FLOYD BRANCH 24.8 0.05 2.0 99.8

MUDDY CREEK 27.4 0.47 2.0 98.3 4.99 1.47 2.4 70.6

PANTHER CREEK 30.2 0.48 2.0 98.4 5.11 0.25 1.0 95.2

ROWLETT CREEK 34.0 0.81 1.2 97.6 3.96 0.54 1.0 86.4

ROYSE CITY 0.0 0.00 3.0 0.0

SABINE CREEK 28.7 0.75 2.0 97.4

SEIS LAGOS 42.5 0.16 2.0 99.6

SOUTH MESQUITE 29.7 2.05 3.0 93.1

SQUABBLE CREEK 42.4 0.36 2.0 99.2

STEWART CREEK WEST 28.3 0.68 2.0 97.6 4.69 0.56 1.5 88.1

WILSON CREEK 31.6 0.48 2.0 98.5 4.64 0.28 0.5 94.0

WYLIE 0.0 0.00 2.0 0.0

NORTH TEXAS MUNICIPAL WATER DISTRICTREGIONAL SOLID WASTE SYSTEM

TONNAGE REPORT

May 2020

May FY/YEAR-TO-DATE May FY/YEAR-TO-DATE2020 2019-2020 2019 2018-2019

CUSTER 26,253.83 209,926.11 30,042.86 208,089.25

PARKWAY 8,640.16 74,520.34 9,784.23 83,461.57

LOOKOUT 14,795.67 119,474.44 18,241.34 117,180.37

121 RDF 28,198.74 230,510.93 37,381.48 263,188.61

TOTAL 77,888.40 634,431.82 95,449.91 671,919.80

SOURCE

ALLEN 6,160.71 47,918.66 6,794.81 48,076.08

FRISCO 12,121.91 82,478.02 10,990.33 82,548.27

MCKINNEY 13,472.87 104,430.12 14,300.17 106,965.50

PLANO 17,748.39 149,035.78 22,021.86 156,842.12

RICHARDSON 7,896.42 72,267.08 10,002.62 74,083.83

OTHERS 20,488.10 178,302.16 31,340.12 203,404.00

TOTAL 77,888.40 634,431.82 95,449.91 671,919.80

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NORTH

TEXAS

MUNICIPAL

WATERI•

10,;, DISTRICT

FINANCIAL STATEMENTSti-__ ir; ,i l For the Month Ended-,;,,„:>,,„-

e„,, Ma 31 2020

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THIS PAGE INTENTIONALLY LEFT BLANK

NORTH

TEXAS

MUNICIPAL Regio ia/. Re/'a.b/e. Ever q(ay.WATER

r DISTRICT

June 17, 2020

Mr. Rodney RhoadesInterim Executive Director/ General Manager

P. O. Box 2408

Wylie, Texas 75098

Re: 2019- 20 ALL SYSTEMS FINANCIAL STATEMENTS AS OF MAY 31, 2020

Dear Mr. Rhoades:

Submitted herewith are the financial statements for the North Texas Municipal Water District for

the month ended May 31, 2020. All systems currently have revenues equal to or exceedingexpenses with the exception of the following: Rockwall- Heath Water Storage Facility, RockwallWater Pump Station Facility, Terrell Water Transmission Facility, Seis Lagos and FarmersvilleWastewater Treatment Plants and McKinney Interceptor System, which have variances betweenrevenues and expenses due to timing. The North Rockwall WWTP is currently expected to exceedthe original budget at fiscal year-end due to increased odor control as requested by the city.

During the period, the District' s total operating revenues for all systems were $ 368, 690, 577 or

66. 8% of the original budget. Total expenditures for all systems were $ 343, 425, 861 or 62. 2% of

the original budget. As of May 31, 2020 the District' s cash and investment balance was

1, 795, 146, 470. Interest earnings during the month were $ 1, 703, 133 and the yield on theinvestments was 1. 13%.

Overall, the attached financial statements reflect favorable results as the District continues to

provide cost effective services to its member and customer cities.

Sincerely,

ERIK FELTHOUS

Assistant Deputy - Finance

EF/ DF

Regional Service Through Unity... Meeting Our Region' s Needs Today and Tomorrow

501 E. Brown Street, P. O. Box 2408, Wylie, Texas 75098- 2408 I Phone: 972- 442- 5405 I Fax: 972- 295- 6440 I www. ntmwd. com

TABLEOF CONTENTS NORTH TEXAS MUNICIPAL WATER DISTRICT

BUDGET SUMMARY

All Systems- Revenues and Expenditures 6

Support Fund 7

Regional Water System 8

Regional Wastewater System 9

Regional Solid Waste System 10

Upper East Fork Interceptor System 11

Sewer System 12

All Systems- By System 13

SUPPORT FUND

Comparative Statement of Net Assets 18

Statement of Revenues, Expenses, and Changes in Net Assets 19

Statement of Cash Flows 20

REGIONAL WATER SYSTEM FUND




REGIONAL WASTEWATER SYSTEM FUND




REGIONAL SOLID WASTE SYSTEM FUND








SEWER SYSTEM




SCHEDULES OF CASH AND INVESTMENTS 4 1

BUDGET SUMMARYSECTION

BUDGET SUMMARY NORTH TEXAS MUNICIPAL WATER DISTRICT

ALL SYSTEMS

BUDGET SUMMARY- REVENUES AND EXPENDITURES

MAY 31, 2020

Original YTD Of RemainingBudget Actual Budget Budget

Revenues:

Sales:

Water 354, 655, 576 $ 236, 438, 364 66. 7% $ 118, 217, 212

Wastewater 76, 059, 575 50, 256, 936 66. 1% 25, 802, 639

Interceptor 38, 373, 090 25, 261, 822 65. 8% 13, 111, 268

Solid Waste 32, 435, 175 21, 583, 711 66. 5% 10, 851, 464

Sewer 40, 039, 455 26, 693, 082 66. 7% 13, 346, 373

Total 541, 562, 871 360, 233, 914 66. 5% 181, 328, 957

Other Charges 8, 930, 674 8, 052, 529 90. 2% 878, 145

Interest Income 1, 233,385 404, 134 32. 8% 829, 251

Total 551, 726, 930 $ 368, 690, 577 66. 8% $ 183, 036, 353

Expenditures:

Personnel 91, 125, 735 $ 59, 574, 802 65. 4% $ 31, 550, 933

Supplies:

Fuel 3, 303, 620 1, 683, 941 51. 0% 1, 619, 679

Chemicals 41, 587, 180 21, 232, 499 51. 1% 20, 354, 681

Other 15, 869, 010 10, 446, 791 65. 8% 5, 422, 219

Total 60, 759, 810 33, 363, 231 54.9% 27, 396, 579

Services:

Consulting 8, 796, 095 2, 629, 942 29. 9% 6, 166, 153

Insurance 1, 720, 150 1, 538, 393 89. 4% 181, 757

Landfill Service Fees 5, 590, 055 2, 985, 342 53. 4% 2, 604, 713

Maintenance 18, 886,465 6, 517, 785 34. 5% 12, 368, 680

Power 25, 005, 740 12, 464, 988 49. 8% 12, 540, 752

Support 57, 808, 485 40, 095, 161 69. 4% 17, 713, 324

Water Purchases 7, 577, 685 3, 637, 001 48. 0% 3, 940, 684

Other 16, 332, 420 7, 760, 516 47. 5% 8, 571, 904

Support Allocation 60, 926, 985) ( 39, 478, 483) 64. 8% 21, 448, 502)

Total 80, 790, 110 38, 150, 644 47. 2% 42, 639, 466

Capital Outlay 12, 357, 175 7, 092, 033 57. 4% 5, 265, 142

Escrow 4, 281, 045 2, 854, 003 66. 7% 1, 427, 042

Capital Improvement Fund 36, 904, 000 24, 933, 661 67. 6% 11, 970, 339

Debt Service 266, 103, 925 177, 443, 489 66. 7% 88, 660, 436

Special Projects 140, 000 14, 000 10. 0% 126, 000

Total 552, 461, 800 $ 343, 425, 861 62. 2% $ 209, 035, 939

Revenues Over/( Under) Expenditures 734, 870) 25, 264, 715

FINANCIAL STATEMENTS FOR THE MONTH ENDED: MAY 31, 2020 UNAUDITED

6

NORTH TEXAS MUNICIPAL WATER DISTRICT BUDGET SUMMARY

SUPPORT FUND


MAY 31, 2020


Revenues:

Indirect Cost Allocation 55, 536, 250 $ 36, 909, 276 66. 5% $ 18, 626, 974

Facilities Maintenance Services 775, 310 1, 265, 523 163. 2% 490,213)

Inspectors 3, 118, 500 2, 192, 046 70. 3% 926, 454

IT Services 238, 455 65, 786 27. 6% 172, 669

Technical Services 1, 258, 470 1, 852, 044 147. 2% 593, 574)

Total 60, 926, 985 42, 284, 675 69. 4% 18, 642, 310

Other Charges:

Other 97, 641 97, 641)

Total 97, 641 97, 641)

Interest Income 7, 698 7, 698)

Total 60, 926, 985 $ 42, 390, 014 69. 6% $ 18, 536, 971

Expenditures:

Personnel 44, 009, 095 $ 29, 611, 736 67. 3% $ 14, 397, 359

Supplies:

Fuel 491, 065 242, 204 49. 3% 248, 861

Chemicals 26, 995 735 2. 7% 26, 260

Other 4, 761, 810 3, 767, 757 79. 1% 994, 053

Total 5, 279, 870 4, 010, 696 76. 0% 1, 269, 174

Services:

Consulting 2, 724, 485 850, 821 31. 2% 1, 873, 664

Insurance 618, 175 347, 854 56. 3% 270, 321

Maintenance 2, 105, 365 1, 438, 880 68. 3% 666, 485

Power 115, 800 69, 217 59. 8% 46, 583

Support 8, 000 710 8. 9% 7, 290

Other 4, 113, 195 1, 628, 195 39. 6% 2, 485, 000

Total 9, 685, 020 4, 335, 676 44. 8% 5, 349, 344

Capital Outlay 1, 878, 000 1, 506, 375 80. 2% 371, 625

Escrow

Capital Improvement Fund

Debt Service

Special Projects 75, 000 14, 000 18. 7% 61, 000

Total 60, 926, 985 $ 39, 478, 483 64. 8% $ 21, 448, 502

Revenues Over/( Under) Expenditures 2, 911, 531


7


REGIONAL WATER SYSTEM


MAY 31, 2020


Revenues:

Water Sales:

Members 292, 468, 946 $ 194, 979, 270 66. 7% $ 97, 489, 676

Customers 62, 166, 175 41, 444, 039 66. 7% 20, 722, 136

Retail Customers 20, 000 14, 688 73. 4% 5, 312

Raw Water Sales 455 367 80. 6% 88

Total 354, 655, 576 236, 438, 364 66. 7% 118, 217, 212

Other Charges

Other 459, 244 2, 635, 585 573. 9% 2, 176, 341)

Total 459, 244 2, 635, 585 573. 9% 2, 176, 341)

Interest Income 763, 030 215, 959 28. 3% 547, 071

Total 355, 877, 850 $ 239, 289, 907 67. 2% $ 116, 587, 943

Expenditures:

Personnel 12, 885, 735 $ 7, 606, 319 59. 0% $ 5, 279, 416

Supplies:

Fuel 73, 730 29, 854 40. 5% 43, 876

Chemicals 31, 318, 175 16, 418, 357 52. 4% 14, 899, 818

Other 2, 763, 075 1, 666, 772 60. 3% 1, 096, 303

Total 34, 154, 980 18, 114, 982 53. 0% 16, 039, 998

Services:

Consulting 3, 838, 250 1, 061, 033 27. 6% 2, 777, 217

Insurance 520, 555 662, 309 127. 2% 141, 754)

Maintenance 9, 748, 095 1, 836, 313 18. 8% 7, 911, 782

Power 17, 905, 825 8, 679, 699 48. 5% 9, 226, 126

Support 41, 689, 415 29, 470, 020 70. 7% 12, 219, 395

Water Purchases 7, 577, 685 3, 637, 001 48. 0% 3, 940, 684

Other 4, 157, 445 1, 496, 170 36. 0% 2, 661, 275

Total 85, 437, 270 46, 842, 544 54. 8% 38, 594, 726

Capital Outlay 1, 367, 500 408, 715 29. 9% 958, 785

Escrow 50, 000 33, 338 66. 7% 16, 662

Capital Improvement Fund 35, 170, 000 23, 777, 665 67. 6% 11, 392, 335

Debt Service 187, 547, 235 125, 046, 810 66. 7% 62, 500, 425

Special Projects

Total 356, 612, 720 $ 221, 830, 373 62. 2% $ 134, 782, 347

Revenue Over/( Under) Expenditures 734, 870) 17, 459, 533


8


REGIONAL WASTEWATER SYSTEM


MAY 31, 2020


Revenues:

Wastewater Sales:

Members 73, 686, 695 $ 49, 192, 005 66. 8% $ 24, 494, 690

Customer 2, 372, 880 1, 064, 931 44. 9% 1, 307, 949

Total 76, 059, 575 50, 256, 936 66. 1% 25, 802, 639

Other Charges:

Other 543, 960 378, 374 69. 6% 165, 586

Total 543, 960 378, 374 69. 6% 165, 586

Interest Income 138, 730 66, 581 48. 0% 72, 149

Total 76, 742, 265 $ 50, 701, 890 66. 1% $ 26, 040, 375

Expenditures:

Personnel 13, 253, 725 $ 8, 873, 247 66. 9% $ 4, 380, 478

Supplies:

Fuel 535, 645 274, 837 51. 3% 260, 809

Chemicals 5, 172, 055 2, 370, 832 45. 8% 2, 801, 223

Other 3, 478, 110 2, 311, 980 66. 5% 1, 166, 130

Total 9, 185, 810 4, 957, 648 54. 0% 4, 228, 162

Services:

Consulting 464,930 146, 656 31. 5% 318, 274

Insurance 229, 105 184, 533 80. 5% 44, 572

Landfill Service Fees 4, 483, 015 2, 464, 760 55. 0% 2, 018, 255

Maintenance 1, 695, 510 578, 234 34. 1% 1, 117, 276

Power 3, 284, 100 1, 824, 001 55. 5% 1, 460, 099

Support 7, 750, 650 4, 996, 750 64. 5% 2, 753, 900

Other 2, 154, 240 1, 311, 171 60. 9% 843, 069

Total 20, 061, 550 11, 506, 105 57. 4% 8, 555, 445

Capital Outlay 1, 721, 300 1, 012, 863 58. 8% 708, 438

Escrow 550, 000 366, 664 66. 7% 183, 336

Capital Improvement Fund 300, 000 200, 000 66. 7% 100, 000

Debt Service 31, 669, 880 21, 117, 330 66. 7% 10, 552, 550

Special Projects

Total 76, 742, 265 $ 48, 033, 856 62. 6% $ 28, 708, 409

Revenue Over/( Under) Expenditures 2, 668, 034


9


REGIONAL SOLID WASTE SYSTEM


MAY 31, 2020


Revenues:

Solid Waste Sales:

Members 26, 676, 750 $ 17, 784, 520 66. 7% $ 8, 892, 230

Customers 5, 758, 425 3, 799, 191 66. 0% 1, 959, 234

Total 32, 435, 175 21, 583, 711 66. 5% 10, 851, 464

Other Charges:

Sludge Disposal 3, 350, 880 2, 206, 177 65. 8% 1, 144, 703

Composting 565, 840 393, 117 69. 5% 172, 723

Gas Royalties 1, 200, 000 799, 288 66. 6% 400, 712

Other 640, 070 285, 884 44. 7% 354, 186

Total 5, 756, 790 3, 684, 466 64. 0% 2, 072, 324

Interest Income 97, 660 38, 679 39. 6% 58, 981

Total 38, 289, 625 $ 25, 306, 856 66. 1% $ 12, 982, 769

Expenditures:

Personnel 11, 775, 580 $ 7, 534, 812 64. 0% $ 4, 240, 768

Supplies:

Fuel 2, 073, 250 1, 076, 333 51. 9% 996, 917

Chemicals 189, 400 56, 466 29. 8% 132, 934

Other 2, 418, 095 1, 460, 572 60. 4% 957, 523

Total 4, 680, 745 2, 593, 371 55. 4% 2, 087, 374

Services:

Consulting 787, 080 297, 498 37. 8% 489, 582

Insurance 223, 875 220, 055 98. 3% 3, 820

Maintenance 1, 250, 345 856, 325 68. 5% 394, 020

Power 167, 100 90, 492 54. 2% 76, 608

Support 1, 969, 475 1, 376, 187 69. 9% 593, 288

Other 3, 083, 575 1, 977, 118 64. 1% 1, 106, 457

Total 7, 481, 450 4, 817, 674 64. 4% 2, 663, 776

Capital Outlay 6, 293, 900 3, 781, 305 60. 1% 2, 512, 595

Escrow 2, 445, 000 1, 629, 996 66. 7% 815, 004

Capital Improvement Fund 1, 084, 000 722, 664 66. 7% 361, 336

Debt Service 4, 488, 950 2, 992, 917 66. 7% 1, 496, 033

Special Projects 40, 000 0. 0% 40, 000

Total 38, 289, 625 $ 24, 072, 738 62. 9% $ 14, 216, 887



10




MAY 31, 2020


Revenues:

Wastewater Sales:

Members 36, 722, 070 $ 24, 528, 274 66. 8% $ 12, 193, 796

Customer 1, 651, 020 733, 548 44. 4% 917, 472

Total 38, 373, 090 25, 261, 822 65. 8% 13, 111, 268

Transfer from PM Escrow

Other Charges: 415, 565 265, 343 63. 9% 150, 222

Total 415, 565 265, 343 63. 9% 150, 222

Interest Income 70, 475 37, 271 52. 9% 33, 204

Total 38, 859, 130 $ 25, 564, 435 65. 8% $ 13, 294, 695

Expenditures:

Personnel 2, 331, 625 $ 1, 471, 098 63. 1% $ 860, 527

Supplies:

Fuel 76, 210 31, 338 41. 1% 44, 872

Chemicals 2, 581, 045 1, 239, 630 48. 0% 1, 341, 415

Other 716, 700 398, 673 55. 6% 318, 027

Total 3, 373, 955 1, 669, 641 49. 5% 1, 704, 314

Services:

Consulting 471, 500 158, 111 33. 5% 313, 389

Insurance 65, 345 68, 865 105. 4% 3, 520)

Landfill Service Fees 5, 000 1, 031 20. 6% 3, 969

Maintenance 2, 843, 070 1, 551, 461 54. 6% 1, 291, 609

Power 1, 480, 000 731, 867 49. 5% 748, 133

Support 2, 775, 760 1, 745, 121 62. 9% 1, 030, 639

Other 343, 405 308, 158 89. 7% 35, 247

Total 7, 984, 080 4, 564, 614 57. 2% 3, 419, 466

Capital Outlay 240, 950 49, 012 20. 3% 191, 938

Escrow 58, 030 38, 686 66. 7% 19, 344

Capital Improvement Fund 350, 000 233, 332 66. 7% 116, 668

Debt Service 24, 520, 490 16, 347, 982 66. 7% 8, 172, 508

Special Projects

Total 38, 859, 130 $ 24, 374, 365 62. 7% $ 14, 484, 765



11


SEWER SYSTEM


MAY 31, 2020


Revenues:

Wastewater Sales:

Sewer/ Interceptor Facilities 38, 457, 680 $ 25, 638, 552 66. 7% $ 12, 819, 128

Water Facilities 1, 581, 775 1, 054, 530 66. 7% 527, 245

Total 40, 039, 455 26, 693, 082 66. 7% 13, 346, 373

Other Charges:

Pretreatment 1, 189, 445 793, 000 66. 7% 396, 445

Debt Acquistion 344, 830 229, 886 66. 7% 114,944

Other Charges: 220, 840 65, 876 29. 8% 154, 964

Total 1, 755, 115 1, 088, 762 62. 0% 666, 353

Interest Income 163, 490 45, 645 27. 9% 117, 845

Total 41, 958,060 $ 27, 827, 489 66. 3% $ 14, 130, 571

Expenditures:

Personnel 6, 869, 975 $ 4, 477, 590 65. 2% $ 2, 392, 385

Supplies:

Fuel 53, 720 29, 376 54. 7% 24, 344

Chemicals 2, 299, 510 1, 146, 478 49. 9% 1, 153, 032

Other 1, 731, 220 841, 037 48. 6% 890, 183

Total 4, 084, 450 2, 016, 892 49. 4% 2, 067, 558

Services:

Consulting 509, 850 115, 823 22. 7% 394, 027

Insurance 63, 095 54, 778 86. 8% 8, 317

Landfill Service Fees 1, 102, 040 519, 550 47. 1% 582, 490

Maintenance 1, 244, 080 256, 574 20. 6% 987, 506

Power 2, 052, 915 1, 069, 712 52. 1% 983, 203

Support 3, 615, 185 2, 506, 373 69. 3% 1, 108, 812

Other 2, 480, 560 1, 039, 705 41. 9% 1, 440, 855

Total 11, 067, 725 5, 562, 514 50. 3% 5, 505, 211

Capital Outlay 855, 525 333, 764 39. 0% 521, 761

Escrow 1, 178, 015 785, 319 66. 7% 392, 696

Capital Improvement Fund

Debt Service 17, 877, 370 11, 938, 450 66. 8% 5, 938, 920

Special Projects 25, 000 0. 0% 25, 000

Total 41, 958, 060 $ 25, 114, 528 59. 9% $ 16, 843, 532



12


ALL SYSTEMS

BUDGET SUMMARY- BY SYSTEM

MAY 31, 2020


Regional Water System

Revenues 355, 877, 850 $ 239, 289, 907 67. 2% $ 116, 587, 943

Expenditures 356, 612, 720 221, 830, 373 62. 2% 134, 782, 347


Regional Wastewater System

Revenues 76, 742, 265 50, 701, 890 66. 1% 26, 040, 375

Expenditures 76, 742, 265 48, 033, 856 62. 6% 28, 708, 409


Regional Solid Waste System

Revenues 38, 289, 625 25, 306, 856 66. 1% 12, 982, 769

Expenditures 38, 289, 625 24, 072, 738 62. 9% 14, 216, 887


Upper East Fork Interceptor System

Revenues 38, 859, 130 25, 564, 435 65. 8% 13, 294, 695

Expenditures 38, 859, 130 24,374, 365 62. 7% 14, 484, 765


Sewer System- Total

Revenues 41, 958, 060 27, 827, 489 66. 3% 14, 130, 571

Expenditures 41, 958, 060 25, 114, 528 59. 9% 16, 843, 532


Support System

Revenues 60, 926, 985 42, 390, 014 69. 6% 18, 536, 971

Expenditures 60, 926, 985 39, 478, 483 64. 8% 21, 448, 502


Little Elm Water Transmission Facilities

Revenues 397, 005 264, 366 66. 6% 132, 639

Expenditures 397, 005 264,086 66. 5% 132, 919

Revenue Over/( Under) Expenditures 280

Plano Water Transmission Facilities

Revenues 4, 160 2, 645 63. 6% 1, 515

Expenditures 4, 160 108 2. 6% 4, 052

Revenue Over/( Under) Expenditures 2, 537

Kaufman 4- 1 Water Distribution Facilities

Revenues 69, 755 46,396 66. 5% 23, 359

Expenditures 69, 755 38, 490 55. 2% 31, 265


Rockwall- Heath Water Storage Facilities

Revenues 226, 565 150, 845 66. 6% 75, 720

Expenditures 226, 565 $ 151, 791 67. 0% $ 74, 774

Revenue Over/( Under) Expenditures 945)


13


ALL SYSTEMS


MAY 31, 2020


Terrell Water Transmission Facilities

Revenues 719, 545 $ 479, 242 66. 6% $ 240, 304

Expenditures 719, 545 481, 318 66. 9% 238, 227

Revenue Over/( Under) Expenditures 2, 076)

Rockwall Water Pump Station FacilitiesRevenues 168, 555 112, 236 66. 6% 56, 319

Expenditures 168, 555 113, 870 67. 6% 54, 685


Wylie WWTP

Revenues 34, 975 23, 303 66. 6% 11, 672

Expenditures 34, 975 20, 010 57. 2% 14, 965


South Rockwall WWTP

Revenues 1, 809, 325 1, 187, 139 65. 6% 622, 186

Expenditures 1, 809, 325 884, 833 48. 9% 924, 492


North Rockwall WWTP

Revenues 606, 765 405, 198 66. 8% 201, 567

Expenditures 606, 765 449, 042 74. 0% 157, 723


Panther Creek Regional WWTP

Revenues 7, 945, 045 5, 299, 258 66. 7% 2, 645, 787

Expenditures 7, 945, 045 4, 960, 764 62. 4% 2, 984, 281


Sabine Creek Regional WWTP

Revenues 2, 674, 905 1, 781, 383 66. 6% 893, 522

Expenditures 2, 674, 905 1, 699,091 63. 5% 975, 814


Stewart Creek Regional WWTP

Revenues 9, 341, 650 6, 231, 215 66. 7% 3, 110, 435

Expenditures 9, 341, 650 5, 152, 616 55. 2% 4, 189, 034


Muddy Creek Regional WWTPRevenues 7, 430, 605 4,954,086 66. 7% 2, 476, 519

Expenditures 7, 430, 605 4, 523, 181 60. 9% 2, 907, 424


Seis Lagos WWTP

Revenues 216, 140 143, 612 66. 4% 72, 528

Expenditures 216, 140 145, 534 67. 3% 70,606


Royse City WWTPRevenues 26, 675 17, 792 66. 7% 8, 883

Expenditures 26, 675 $ 6, 979 26. 2% $ 19, 696



14


ALL SYSTEMS


MAY 31, 2020


Farmersville WWTP

Revenues 480, 815 $ 320, 512 66. 7% $ 160, 303

Expenditures 480, 815 322, 382 67. 0% 158, 433


Frisco Cottonwood Creek WWTP

Revenues 14, 839 14, 839)

Expenditures


Lavon WWTP

Revenues 363, 105 241, 722 66. 6% 121, 383

Expenditures 363, 105 236, 136 65. 0% 126, 969


Forney Interceptor SystemRevenues 519, 430 346, 794 66. 8% 172, 636

Expenditures 519, 430 262, 297 50. 5% 257, 133


Lower East Fork Interceptor System

Revenues 1, 860, 195 1, 238, 087 66. 6% 622, 108

Expenditures 1, 860, 195 1, 120, 093 60. 2% 740, 102


Muddy Creek Interceptor SystemRevenues 476, 780 318, 363 66. 8% 158, 417

Expenditures 476, 780 278, 945 58. 5% 197, 835


Parker Creek Interceptor System

Revenues 469, 585 312, 701 66. 6% 156, 884

Expenditures 469, 585 290,672 61. 9% 178, 913


Sabine Creek Interceptor System

Revenues 306, 425 203, 896 66. 5% 102, 529

Expenditures 306, 425 187, 613 61. 2% 118, 812


Buffalo Creek Interceptor System

Revenues 2, 586, 110 1, 720,699 66. 5% 865,411

Expenditures 2, 586, 110 1, 597, 056 61. 8% 989, 054


McKinney Interceptor SystemRevenues 400, 675 134, 146 33. 5% 266, 529

Expenditures 400, 675 $ 147, 991 36. 9% $ 252, 684



15


ALL SYSTEMS


MAY 31, 2020


Mustang Creek Interceptor SystemRevenues 1, 516, 375 $ 1, 007, 069 66. 4% $ 509, 306

Expenditures 1, 516, 375 989, 076 65. 2% 527, 299


Parker Creek Parallel Interceptor System

Revenues 112, 300 74, 764 66. 6% 37, 536

Expenditures 112, 300 70, 900 63. 1% 41, 400


Small Sewer Plants

Revenues

Expenditures

Revenue Over/( Under) Expenditures

Wastewater Pretreatment Program

Revenues 1, 194, 595 795, 181 66. 6% 399, 414

Expenditures 1, 194, 595 719, 654 60. 2% 474, 941


Total- All Systems

Revenues 551, 726, 930 368, 690, 577 66. 8% 183, 036, 353

Expenditures 552, 461, 800 $ 343, 425, 861 62. 2% $ 209, 035, 939



16

SUPPORT FUNDSECTION

SUPPORT FUND NORTH TEXAS MUNICIPAL WATER DISTRICT

SUPPORT

COMPARATIVE STATEMENT OF NET POSITION

MAY 31, 2020

May 31, September 30, Increase

2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:

Unrestricted Assets:

Cash and cash equivalents 4, 953, 079 4, 953, 079

Investments

Interest receivable

Accounts receivable 67 67

Contracts receivable

Due from other funds 2, 118, 256 2, 118, 256

Prepaid expenses 25, 741 25, 741

Unbilled receivables

Total unrestricted assets 7, 097, 143 7, 097, 143

Restricted Assets:

Cash and cash equivalents

Investments


Interest receivable

Accounts receivable

Due from other funds 106, 588 106, 588

Total restricted assets 106, 588 106, 588

LONG- TERM ASSETS:

Net capital assets 28,447, 845 28,447, 845

TOTAL ASSETS 35, 651, 576 35, 651, 576

DEFERRED OUTFLOWS OF RESOURCES

Deferred pension outflow 12,066, 578 12,066, 578

Deferred loss on refundingDeferred OPEB outflow 638,249 638,249

TOTAL DEFERRED OUTFLOWS OF RESOURCES 12, 704,827 12, 704, 827

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 48, 356, 403 48, 356, 403

LIABILITIES:

CURRENT LIABILITIES:

Payable from Unrestricted Assets:

Accounts payable and other liabilities 5, 663, 854 5, 663, 854

Due to other funds 4, 202 4, 202

Customer advance paymentsDue to cities

Accrued interest- notes

Current portion of notesTotal payable from unrestricted assets 5, 668, 056 5, 668, 056

Payable from Restricted Assets:

Accounts payableDue to other funds

Accrued interest- revenue bonds

Current portion of revenue bondsTotal payable from restricted assets

LONG- TERM LIABILITIES

Accrued vacation and sick- less current portion 2, 569, 744 2, 569, 744

Net pension liability 16, 663, 796 16, 663, 796

Net OPEB liability 1, 865, 039 1, 865, 039

Deferred compensation 235, 000 235, 000

Long- term debt- less current portionTotal long- term liabilities 21, 333, 579 21, 333, 579

TOTAL LIABILITIES 27, 001, 635 27, 001, 635

DEFERRED INFLOWS OF RESOURCES

Deferred pension inflow 4, 501, 571 4, 501, 571

Deferred OPEB inflow 1, 506, 829 1, 506, 829

Deferred insurance proceeds

TOTAL DEFERRED INFLOWS OF RESOURCES 6, 008, 400 6, 008, 400

TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 33,010,035 33,010,035

NET POSITION:

Net investment in capital assets 28, 554, 433 28, 554, 433

Restricted for debt service

Unrestricted 13, 208, 065) 13, 208, 065)

TOTAL NET POSITION 15, 346, 368 $ 15, 346, 368


18

NORTH TEXAS MUNICIPAL WATER DISTRICT SUPPORT FUND

SUPPORT

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

FOR THE EIGHT MONTHS ENDED MAY 31, 2020

Current Year to

Month Date

OPERATING REVENUES:

Water sales

Deferred charges for services

Other operating revenues 93 97, 642

Total operating revenues 93 97, 642

OPERATING EXPENSES:

Personnel 3, 086, 362 29, 611, 736

Electric power 8, 452 69, 217

Chemicals 735

Other operating supplies and services 5, 858, 838) 18, 022, 415)

Total operating expenses excludingdepreciation 2, 764, 024) 11, 659, 273

EXCESS OF REVENUES OVER EXPENSES

BEFORE DEPRECIATION 2, 764, 117 11, 561, 631)

Depreciation expense 229, 986 1, 800, 902

Total depreciation 229, 986 1, 800, 902

OPERATING INCOME( LOSS) 2, 534, 131 13, 362, 533)

NONOPERATING REVENUES( EXPENSES):

Investment income 436 7, 699

Miscellaneous revenue/ expense 212, 879 3, 500)

Federal programs revenuesGain( loss) on sale of capital assets 28, 742,372

Interest expenses- long term debtTotal nonoperating revenues( expenses) 213, 315 28, 746, 571

CHANGE IN NET POSITION 2, 747, 446 15, 384,038

NET POSITION, BEGINNING BALANCE 12, 598, 922 37, 670)

NET POSITION, ENDING BALANCE 15, 346, 368 $ 15, 346,368


19

SUPPORT FUND NORTH TEXAS MUNICIPAL WATER DISTRICT

SUPPORT

STATEMENT OF CASH FLOWS


Current Year to

Month Date

CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers

Cash received from other funds 4, 807, 726 38, 163, 271

Cash received from( paid to) others 274, 330 2, 140, 744

Cash paid to suppliers for goods and services 563, 150) 12, 590, 278)

Cash paid for employees for services 3, 527, 983) 18, 661, 090)

Cash paid to other funds 6, 958) 2, 600, 891)

Net cash provided by operating activities 983, 965 6, 451, 756

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Proceeds from( for) the issuance of bonds

Cash paid for capital assets 298, 697) 1, 506, 376)

Interest paid on long- term debtInterest paid on U. S. government contractsPrincipal payments on long- term debtPayments on U. S. government contractsPayments from( for) bond issue costs

Federal program revenuesNet cash used for capital and related financing activities 298, 697) 1, 506, 376)

CASH FLOWS FROM INVESTING ACTIVITIES:

Sale and maturity of investmentsPurchase of investments

Interest received 436 7, 699

Net cash provided by( used for) investing activities 436 7, 699

NET INCREASE( DECREASE) IN CASH AND CASH EQUIVALENTS 685, 704 4, 953, 079

CASH AND CASH EQUIVALENTS- Beginning of year 4,267, 375

CASH AND CASH EQUIVALENTS- End of year 4,953, 079 $ 4,953, 079

RECONCILIATION OF TOTAL CASH TO THE STATEMENT OF NET POSITION

Unrestricted cash and cash equivalents 4, 953, 079 $ 4, 953, 079

Restricted cash and cash equivalents

RECONCILIATION OF OPERATING INCOME TO NET CASH

PROVIDED BY OPERATING ACTIVITIES:

Operating income 2, 534, 131 13, 362, 533)

Adjustments to reconcile net income to net cash

provided by operating activities:Depreciation 229, 986 1, 800,902

Change in current assets and liabilities:

Accounts receivable and deferred billings 57) 67)

Prepaid expenses 5, 079) 25, 741)

Net pension liability 9, 098, 789

Net OPEB liability 2, 733, 619

Due to/ from other funds 1, 759, 179) 2, 220, 642)

Accounts payable, accrued liabilities and developers' deposit 15, 837) 5, 857, 685

Accrued vacation and Accrued sick 2, 569, 744

Accrued OPEB

Customer advance paymentsTotal adjustments 1, 550, 166) 19, 814, 289

NET CASH PROVIDED BY OPERATING ACTIVITIES 983, 965 $ 6, 451, 756

NONCASH TRANSACTION DISCLOSURES

Gain on disposal of capital assets

Interest capitalized on construction

Amortization of bond- related items

Change in fair value of investments

Change in actuarial value of net pension assetsRefunding bonds issuedRefunding proceeds deposited in escrow


20

REGIONAL WATERSYSTEM FUND

REGIONAL WATER SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT

WATER SYSTEM


MAY 31, 2020


2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:


Cash and cash equivalents 81, 698, 633 $ 42, 685, 455 $ 39, 013, 178

Investments 119, 410, 910 152, 996, 119 33, 585, 209)

Interest receivable

Accounts receivable 24, 839, 782 27, 206, 443 2, 366, 661)

Contracts receivable 26, 400 26, 400

Due from other funds 421, 622 421, 622)

Prepaid expenses 2, 293, 975 3, 134, 504 840, 529)

Unbilled receivables 164, 574 164, 574

Total unrestricted assets 228, 434, 274 226, 635, 117 1, 799, 157

Restricted Assets:

Cash and cash equivalents 786, 911, 881 691, 366, 115 95, 545, 766

Investments 423, 161, 299 518, 171, 460 95,010, 161)


Interest receivable 2, 182, 239 2, 118,026 64,213

Accounts receivable


Total restricted assets 1, 212, 255, 419 1, 211, 794, 434 460, 985

LONG- TERM ASSETS:

Net capital assets 2, 855, 034,819 2, 603, 603, 567 251, 431, 252

TOTAL ASSETS 4, 295, 724, 512 4, 042, 033, 118 253, 691, 394


Deferred pension outflow 3, 281, 629 15, 348, 207 12, 066, 578)

Deferred loss on refunding 17, 510, 158 18, 506,212 996,054)

Deferred OPEB outflow 120,425 758,674 638,249)

TOTAL DEFERRED OUTFLOWS OF RESOURCES 20,912,212 34,613, 093 13, 700, 881)

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 4, 316, 636, 724 4, 076, 646, 211 239, 990, 513

LIABILITIES:



Accounts payable and other liabilities 3, 198,282 23, 011, 378 19, 813, 096)

Due to other funds 1, 692,278 100,359 1, 591, 919

Customer advance paymentsAccrued interest- notes 475, 434 701, 635 226,201)

Accrued interest capital lease

Current portion of notes 1, 647, 494 1, 597, 613 49, 881

Total payable from unrestricted assets 7, 013, 488 25,410, 985 18, 397, 497)


Accounts payable 36, 834, 205 88, 649, 589 51, 815, 384)

Due to other funds 50,292 50,292)

Accrued interest- revenue bonds 25, 185, 871 7, 869,432 17, 316,439

Current portion of revenue bonds 92, 545, 000 85, 955, 000 6, 590,000

Total payable from restricted assets 154, 565, 076 182, 524, 313 27, 959,237)

LONG- TERM LIABILITIES

Accrued vacation and sick- less current portion 913, 252 3, 482, 996 2, 569, 744)

Net pension liability 5, 112, 591 21, 776, 387 16, 663, 796)

Net OPEB liability 459, 014 2, 324, 053 1, 865, 039)

Deferred compensation 255, 000 255, 000)

Long- term debt- less current portion 2, 863, 422, 993 2, 633, 106, 361 230, 316, 632

Total long- term liabilities 2, 869, 907, 850 2, 660, 944, 797 208, 963, 053

TOTAL LIABILITIES 3, 031, 486,414 2, 868, 880,095 162, 606,319


Deferred pension inflow 1, 294, 040 5, 795, 611 4, 501, 571)

Deferred OPEB inflow 339, 122 1, 845, 951 1, 506, 829)

Deferred insurance proceeds 426, 426 426, 426)

TOTAL DEFERRED INFLOWS OF RESOURCES 1, 633, 162 8, 067, 988 6, 434, 826)

TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 3, 033, 119, 576 2, 876, 948,083 156, 171, 493

NET POSITION:

Net investment in capital assets 850, 250, 873 868, 154, 047 17, 903, 174)

Restricted for debt service 216, 149, 697 150, 564, 821 65, 584, 876

Unrestricted 217, 116, 578 180, 979, 260 36, 137, 318

TOTAL NET POSITION 1, 283, 517, 148 $ 1, 199, 698, 128 $ 83, 819, 020


22

NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL WATER SYSTEM FUND

WATER SYSTEM



Current Year to

Month Date

OPERATING REVENUES:

Water sales 29, 554, 830 $ 236, 438, 364

Deferred charges for services

Other operating revenues 895, 362 1, 460, 978

Total operating revenues 30, 450, 192 237, 899, 342

OPERATING EXPENSES:

Personnel 787, 972 7, 606, 319

Electric power 820, 075 8, 679, 699

Chemicals 1, 676, 032 16, 418, 357

Other operating supplies and services 6, 461, 400 25, 253, 961

Total operating expenses excludingdepreciation 9, 745, 479 57, 958, 336


BEFORE DEPRECIATION 20, 704, 713 179, 941, 006

Depreciation expense 3, 822, 311 30, 115, 805

Total depreciation 3, 822, 311 30, 115, 805

OPERATING INCOME( LOSS) 16, 882, 402 149, 825, 201


Investment income 591, 297 21, 532, 613

Miscellaneous revenue/ expense 41, 247 329,974

Grant Income 21, 146

Federal programs revenues 1, 008,997

Gain( loss) on sale of capital assets 28, 742,372)

Interest expenses- long term debt 7, 597, 957) 60, 194, 209)

Total nonoperating revenues( expenses) 6,965, 413) 66,043, 851)

CHANGE IN NET POSITION 9,916, 989 83, 781, 350

NET POSITION, BEGINNING BALANCE 1, 273, 600, 159 1, 199, 735, 798

NET POSITION, ENDING BALANCE 1, 283, 517, 148* $ 1, 283,517, 148

Beginning Balance does not include Fund 102 and 103Balance is now in Support Fund


23

REGIONAL WATER SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT

WATER SYSTEM



Current Year to

Month Date


Cash received from customers 32, 830, 702 $ 238,995, 767

Cash received from other funds 315, 735

Cash received from( paid to) others 22, 083 117, 475

Cash paid to suppliers for goods and services 3, 273, 964) 52, 513, 637)

Cash paid for employees for services 878, 612) 5, 366, 032)

Cash paid to other funds 3, 460, 543) 27, 641, 883)

Net cash provided by operating activities 25, 239, 666 153, 907, 425


Proceeds from( for) the issuance of bonds 248, 098, 404

Cash paid for capital assets 35, 471, 640) 365, 688, 178)

Interest paid on long- term debt 49, 207, 572)

Interest paid on U. S. government contracts 775, 209)

Principal payments on long- term debtPayments on U. S. government contracts 1, 544, 421)

Payments from( for) bond issue costs 1, 392, 632)

Grant Income 21, 146

Federal program revenues 1, 008, 997

Net cash used for capital and related financing activities 35, 471, 640) 1, 008, 997


Sale and maturity of investments 16, 109, 131 649, 682, 759

Purchase of investments 5, 099, 835) 519, 721, 964)

Interest received 1, 400, 291 20, 170, 189

Net cash provided by( used for) investing activities 12,409, 587 150, 130,984

NET INCREASE( DECREASE) IN CASH AND CASH EQUIVALENTS 2, 177, 613 134, 558, 944

CASH AND CASH EQUIVALENTS- Beginning of year 866,432, 901 734, 051, 570

CASH AND CASH EQUIVALENTS- End of year 868,610, 514 $ 868,610, 514


Unrestricted cash and cash equivalents 81, 698, 633 $ 81, 698,633

Restricted cash and cash equivalents 786,911, 881 786, 911, 881



Operating income 16, 882, 402 $ 149, 825, 201


provided by operating activities:Depreciation 3, 822, 311 30, 115, 805


Accounts receivable and deferred billings 3, 032, 606 2, 302, 448

Prepaid expenses 1, 803) 840, 529

Net pension liability 9, 098, 789)

Net OPEB liability 2, 733, 619)

Due to/ from other funds 1, 661, 996 2, 243, 813

Accounts payable, accrued liabilities and developers' deposit 157, 846) 17, 018, 219)

Accrued vacation and Accrued sick 2, 569, 744)

Accrued OPEB

Customer advance paymentsTotal adjustments 8, 357, 264 4, 082, 224

NET CASH PROVIDED BY OPERATING ACTIVITIES 25, 239, 666 $ 153, 907, 425


Gain on disposal of capital assets


Amortization of bond- related items 906, 173) 7, 208, 784)

Change in fair value of investments 746, 807 4, 696, 463)



24

REGIONAL WASTEWATERSYSTEM FUND

REGIONAL WASTEWATER SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT



MAY 31, 2020


2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:



Accounts receivable 83, 429 1, 510, 724 1, 427, 295)


Prepaid expenses 294, 327 512, 931 218, 604)

Unbilled receivables 1, 225, 286 1, 225, 286


Restricted Assets:


Investments 48, 044, 677 95, 155, 149 47, 110, 472)

Interest receivable 198, 660 303, 147 104, 487)

Total restricted assets 116, 878, 346 146, 945, 030 30, 066, 684)

LONG- TERM ASSETS:

Net capital assets 425, 549, 599 389, 083, 918 36, 465, 681

TOTAL ASSETS 557, 149, 930 548, 163, 322 8, 986, 608


Deferred pension outflow 4, 124, 149 4, 124, 149

Deferred loss on refunding 2, 433, 118 2,693, 793 260, 675)

Deferred OPEB outflow 171, 580 171, 580

TOTAL DEFERRED OUTFLOWS OF RESOURCES 6,728, 847 6,989, 522 260,675)

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 563,878, 777 555, 152, 844 8, 725, 933

LIABILITIES:



Accounts payable and accrued liabilities 2, 128, 971 3, 595, 508 1, 466, 537)

Due to other funds 201, 270 417, 019 215, 749)

Customer advance payments 6, 143, 089 3, 642, 839 2, 500, 250

Due to cities 2, 668, 034 2, 668,034

Total payable from unrestricted assets 11, 141, 364 7, 655, 366 3,485, 998



Due to other funds 33, 238 33, 238)

Accrued interest- revenue bonds 7, 382, 513 4, 924, 686 2, 457, 827

Current portion of revenue bonds 14, 690, 000 14, 690, 000

Total payable from restricted assets 31, 398, 474 34, 498, 292 3, 099, 818)

LONG- TERM LIABILITIES:

Accrued vacation and sick- less current portion 980, 153 980, 153


Net OPEB liability 553, 412 553, 412

Long- term debt- less current portion 365, 817, 922 367, 403, 506 1, 585, 584)

Total long- term liabilities 373, 484, 785 375, 070, 369 1, 585, 584)

TOTAL LIABILITIES 416, 024, 623 417, 224, 027 1, 199, 404)



Deferred OPEB inflow 422, 184 422, 184


TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 418, 000, 953 419, 200, 357 1, 199, 404)

NET POSITION:

Net investment in capital assets 110,902, 758 111, 999, 738 1, 096,980)

Restricted for debt service 36,741, 909 24, 821, 251 11, 920,658

Unrestricted 1, 766, 843) 868, 502) 898,341)

TOTAL NET POSITION 145, 877, 824 $ 135, 952, 487 $ 9, 925, 337


26

NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL WASTEWATER SYSTEM FUND


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION


Current Year to

Month Date

OPERATING REVENUES:

Charges for services 6, 284, 920 $ 50, 256, 934

Deferred charges for services 540, 294) 2, 668, 034)

Other Operating revenues 162 107, 970

Total operating revenue 5, 744, 788 47, 696, 870

OPERATING EXPENSES:

Personnel 895, 178 8, 873, 246

Electric power 209, 654 1, 824, 001

Chemicals 280, 487 2, 370, 832







OPERATING INCOME( LOSS) 1, 979, 424 16,464,030


Investment income 41, 887 1, 974,687

Miscellaneous revenue/ expense

Federal programs revenuesGain( loss) on sale of capital assets 6, 569

Interest expense- long term debt 1, 064, 805) 8, 519, 949)

Total nonoperating revenue( expenses) 1, 022, 918) 6, 538,693)

CHANGE IN NET POSITION 956, 506 9, 925, 337

NET POSITION, BEGINNING BALANCE 144, 921, 318 135, 952, 487

NET POSITION, ENDING BALANCE 145, 877, 824 $ 145, 877, 824


27

REGIONAL WASTEWATER SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT




Current Year to

Month Date


Cash received from customers 6, 201, 735 $ 54, 184, 211

Cash received from other funds 42, 137 310, 710

Cash received from( paid to) others 14, 989


Cash paid for employee services 1, 004, 741) 6, 077, 878)




Proceeds from the issuance of bonds



Principal payments on long- term debtPayments for bond issue costs

Federal program RevenuesNet cash used for capital and related financing activities 4, 759, 213) 55, 195, 464)



Purchase of investments 451, 935) 36, 081, 556)

Interest received 83, 702 1, 967, 793

Net cash provided by( used for) investing activities 3, 112, 523 49, 110, 854

NET INCREASE( DECREASE) IN CASH 1, 647, 007 21, 429, 082

CASH AND CASH EQUIVALENTS- Beginning of year 80, 106, 945 60, 324, 870

CASH AND CASH EQUIVALENTS- End of year 81, 753, 952 $ 81, 753, 952



Restricted cash and cash equivalents 68, 635, 009 68, 635, 009



Operating income 1, 979, 424 $ 16,464,030


provided by operating activities:Depreciation 723, 807 5, 768, 883


Accounts receivable and deferred billings 94, 964) 1, 531, 782

Prepaid expense 560) 218, 604

Net pension liabilityNet OPEB liabilityDue to/ from other funds 113, 032 168, 452)

and developers' deposits 32, 664 1, 469, 439)

Accrued vacation and Accrued sick

Accrued OPEB

Customers advance payments 2, 500, 250

Due to/ from Cities 540, 294 2, 668, 034

Total adjustments 1, 314, 273 11, 049, 662

Net cash provided by operating activities 3, 293, 697 $ 27, 513, 692


Gain( loss) on disposal of capital assets



Change in fair value of investments 73, 125 310, 519)



28

REGIONAL SOLID WASTESYSTEM FUND

REGIONAL SOLID WASTE SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT



MAY 31, 2020


2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:



Investments 6, 044, 680 5, 997, 662 47, 018

Accounts receivable 142, 184 248, 743 106, 559)

Due from other funds 37, 325 347, 598 310, 273)


Unbilled receivables 1, 084, 956 838, 268 246, 688


Restricted Assets:

Cash and cash equivalents 16, 008, 258 17, 690, 966 1, 682, 708)

Investments 5, 274, 256 4, 307, 657 966, 599

Interest receivable 28, 267 14, 000 14, 267

Unbilled receivables 6, 194, 441 6, 194, 441

Total restricted assets 27, 505, 222 28, 207, 064 701, 842)

LONG- TERM ASSETS:

Net capital assets 121, 179, 628 117, 047, 996 4, 131, 632

TOTAL ASSETS 164,679, 520 159, 833,242 4, 846,278


Deferred pension outflow 3, 928, 343 3, 928, 343

Deferred loss on refundings 1, 595, 798 1, 778, 192 182,394)


TOTAL DEFERRED OUTFLOWS OF RESOURCES 5, 664,055 5, 846,449 182,394)

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 170,343, 575 165, 679, 691 4, 663, 884

LIABILITIES:



Accounts payable and other liabilities 1, 422, 544 2, 539,286 1, 116,742)


Customer advance payments 2, 223, 035 1, 887, 351 335, 684

Due to Cities 1, 234, 118 1, 234, 118

Total payable from unrestricted assets 4, 887, 573 4, 442, 419 445, 154


Accounts payable 12, 332, 144 11, 391, 600 940, 544


Accrued landfill closure and postclosure care cost 5, 113, 521 5, 113, 521

Accrued interest payable on revenue bonds 540, 921 180, 307 360,614

Current portion of revenue bonds 3, 010,000 3, 010,000

Total payable from restricted assets 20, 996, 586 19, 699, 637 1, 296, 949


Accrued landfill closure costs 1, 080,920 1, 080,920

Accured vacation and sick- less current portion 959, 230 959,230

Net Pension liability 5, 360, 004 5, 360, 004


Long- term debt- less current portion 52, 830, 074 53, 161, 534 331, 460)

Total long- term liabilities 60, 681, 259 61, 012, 719 331, 460)

TOTAL LIABILITIES 86,565, 418 85, 154, 775 1, 410,643





TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 88, 307, 331 86, 896,688 1, 410,643

NET POSITION:

Net investment in capital assets 69,078, 596 68, 448,580 630,016

Restricted for debt service 6,294,472 4, 642,583 1, 651, 889

Unrestricted 6,663, 176 5, 691, 840 971, 336

TOTAL NET POSITION 82,036, 244 $ 78, 783,003 $ 3, 253, 241


30

NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL SOLID WASTE SYSTEM FUND




Current Year to

Month Date

OPERATING REVENUES:

Charges for services 3, 014, 556 $ 24,036, 578


Other operating revenues 177, 665 1, 300, 799


OPERATING EXPENSES:

Personnel 782, 359 7, 534, 812

Electric power 15, 001 90,492

Chemicals 2, 000 56, 466







OPERATING INCOME( LOSS) 658, 149 4, 195, 055

NONOPERATING REVENUES( EXPENSES)

Investment income 6, 539 351, 574


Federal program revenuesGain( loss) on sale of capital assets

Interest expense- long term debt 161, 674) 1, 293, 388)

Total nonoperating revenue( expenses) 155, 135) 941, 814)





31

REGIONAL SOLID WASTE SYSTEM FUND NORTH TEXAS MUNICIPAL WATER DISTRICT




Current Year to

Month Date



Cash received from other funds 291, 260 2, 677, 288

Cash received from( paid to) others 94, 094 817, 285


Cash paid for employee services 835, 578) 5, 177, 088)


Net cash provided by operating activities 546, 763 8, 524, 086


Proceeds from( for) the issuance of bonds

Cash paid for capital assets 464, 772) 6, 808,912)


Principal payments on long- term debtPayments from( for) bond issue costs

Federal program RevenuesNet cash used for capital and related financing activities 464, 772) 7, 890,753)


Sale and maturity of investments 449, 511 8, 686, 934

Purchases of investments 451, 935) 9, 702,953)

Interest received 33, 580 467, 339

Net cash provided by( used for) investing activities 31, 156 548,680)

NET INCREASE( DECREASE) IN CASH AND CASH EQUIVALENTS 113, 147 84,653








Operating income 658, 149 $ 4, 195, 055




Accounts receivable and deferred billings 1, 690) 154, 396)

Prepaid expense 34, 475) 227, 747

Net pension liabilityNet OPEB liabilityDue to/ from other funds 4, 854) 302, 367

Accounts payable, accrued liabilities and developers' deposits 563, 018) 1, 116, 742)


Accrued OPEB

Landfill liabilityCustomers advance payments 335, 684

Due to Cities 40, 969 1, 234, 118

Total adjustments 111, 386) 4, 329, 031

Net cash provided by operating activities 546. 763 $ 8, 524, 086


Change in landfill liabilityGain( loss) on disposal of capital assets


Amortization of bond- related items 18, 633) 149, 067)




32

UPPER EAST FORKINTERCEPTOR SYSTEM

UPPER EAST FORK INTERCEPTOR SYSTEM NORTH TEXAS MUNICIPAL WATER DISTRICT



MAY 31, 2020


2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:

Current Assets:

Cash and cash equivalents 9, 685, 640 $ 8, 894, 745 $ 790, 895

Investments

Accounts receivable 57, 966 267, 679 209, 713)

Due from other funds 5, 445 73 5, 372



Total unrestricted assets 9, 899, 884 9, 349, 043 550, 841

Restricted Assets:


Investments 81, 094, 709 97, 531, 433 16, 436, 724)

Interest receivable 540,988 267,332 273, 656

Due from other funds

Total restricted assets 129, 729, 095 141, 332, 745 11, 603, 650)

LONG- TERM ASSETS:

Net capital assets 302, 290,210 285, 064, 127 17, 226,083

TOTAL ASSETS 441, 919, 189 435, 745, 915 6, 173, 274


Deferred pension inflow 473, 736 473, 736

Deferred loss on refundings 2, 110, 396 2, 306, 061 195, 665)


TOTAL DEFERRED OUTFLOWS OF RESOURCES 2, 614, 150 2, 809, 815 195, 665)

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 444, 533, 339 438, 555, 730 5, 977, 609

LIABILITIES:



Accounts payable and other liabilities 1, 337, 639 2, 674, 607 1, 336, 968)

Due to other funds 28,499 67, 263 38,764)

Customer advance payments 3, 061, 936 2, 440,907 621, 029

Due to cities 1, 190,070 1, 190,070

Total payable from unrestricted assets 5, 618, 144 5, 182, 777 435, 367


Accounts payable 4, 254,460 7, 679,794 3, 425,334)


Accrued interest- revenue bonds 5, 649,556 3, 488,494 2, 161, 062

Current portion of revenue bonds 13, 835,000 13, 835, 001 1)

Total payable from restricted assets 23, 739, 016 25, 036, 386 1, 297, 370)


Accured vacation and sick- less current portion 132, 695 132, 695

Net pension liability 756, 102 756, 102

Net OPEB Liability 89, 027 89, 027

Long- term debt- less current portion 281, 453, 957 283, 230, 865 1, 776, 908)

Total long- term liabilities 282, 431, 781 284, 208, 689 1, 776, 908)

TOTAL LIABILITIES 311, 788, 941 314, 427, 852 2, 638, 911)


Deferred pension inflow 140,039 140,039


TOTAL DEFERRED INFLOWS OF RESOURCES 209, 220 209, 220

TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 311, 998, 161 314, 637, 072 2, 638, 911)

NET POSITION:

Net investment in capital assets 100, 362, 164 101, 615, 836 1, 253, 672)


Unrestricted 3, 598, 450 3, 482, 975 115, 475

TOTAL NET POSITION 132, 535, 178 $ 123, 918, 658 $ 8, 616, 520


34

NORTH TEXAS MUNICIPAL WATER DISTRICT UPPER EAST FORK INTERCEPTOR SYSTEM




Current Year to

Month Date

OPERATING REVENUES:

Charges for services 3, 159, 543 $ 25, 261, 821

Deferred charges for services 724, 701 1, 190, 070)

Other operating revenues 10 37, 794


OPERATING EXPENSES:

Personnel 164, 342 1, 471, 098

Electric power 78, 324 731, 867

Chemicals 187, 268 1, 239, 630







OPERATING INCOME( LOSS) 1, 492, 574 12,075, 333


Investment income 32, 153 2, 353, 747




Total nonoperating revenue( expenses) 711, 784) 3, 458, 813)





35

UPPER EAST FORK INTERCEPTOR SYSTEM NORTH TEXAS MUNICIPAL WATER DISTRICT




Current Year to

Month Date


Cash received from customers 3, 101, 577 $ 26,092, 565

Cash received from other funds 5, 331 41, 236







Proceeds from issuance of bonds 18, 714)



Principal payments on long- term debtPayments for bond issue costs 18, 714

Federal program revenuesNet cash used for capital and related financing activities 2, 541, 894) 30, 467, 634)



Purchases of investments 421, 806) 77, 395, 931)

Interest received 170, 119 2, 053, 401

Net cash provided by( used for) investing activities 1, 178, 271 18, 817, 327

NET INCREASE( DECREASE) IN CASH AND CASH EQUIVALENTS 113, 971) 5, 350, 313





Restricted cash and cash equivalents 48,093, 398 48,093, 398



Operating income 1, 492, 574 $ 12,075, 333




Accounts receivable and deferred billings 117, 578) 63, 943)

Prepaid expense 72) 35, 713

Net pension liabilityNet OPEB liabilityDue to/ from other funds 555) 44, 135)

developers' deposits 23, 215 1, 335, 237)


Accrued OPEB

Customers advance payments 621, 029

Due to Cities 724, 701) 1, 190, 070

Total adjustments 242, 922) 4, 925, 287









36

SEWER SYSTEMSECTION

SEWER SYSTEM NORTH TEXAS MUNICIPAL WATER DISTRICT

SEWER SYSTEM


MAY 31, 2020


2020 2019 Decrease)

ASSETS:

CURRENT ASSETS:



Investments

Accounts receivable 10, 833 779,807 768,974)

Due from other funds 12, 362 55, 835 43, 473)

Prepaid expenses 237, 413 328,947 91, 534)



Restricted Assets:


Investments 27, 779, 313 30, 425, 518 2, 646, 205)

Interest receivable 107, 350 79, 126 28, 224

Due from other funds

Total restricted assets 69, 090, 392 55, 125, 816 13, 964, 576

LONG- TERM ASSETS:

Net capital assets 218, 148, 398 215, 559,405 2, 588,993

TOTAL ASSETS 299, 822, 884 279, 460, 828 20, 362, 056


Deferred pension outflow 1, 609, 753 1, 609,753

Deferred loss on refunding 1, 683, 476 1, 851, 442 167, 966)


TOTAL DEFERRED OUTFLOWS OF RESOURCES 3, 378, 835 3, 546, 801 167, 966)

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 303, 201, 719 283, 007, 629 20, 194, 090

LIABILITIES:



Accounts payable and other liabilities 3, 637, 852 3, 980, 012 342, 160)


Customer advance payments 3, 453, 362 1, 396, 893 2, 056, 469

Due to cities 2, 712, 960 2, 712, 960

Total payable from unrestricted assets 9, 854, 538 5, 617, 207 4, 237, 331



Due to other funds 49, 697 49,697)

Accrued interest- revenue bonds 3, 583, 331 2, 294,617 1, 288, 714

Current portion of revenue bonds 12, 990, 000 12, 720,000 270,000

Total payable from restricted assets 21, 056, 313 22, 328,874 1, 272, 561)


Monthly Complilation 315, 657 315, 657


Net OPEB liability 264, 899 264,899

Monthly Complilation 183, 149, 505 170, 469, 297 12, 680,208

Total long- term liabilities 186, 139, 534 173, 459, 326 12, 680, 208

TOTAL LIABILITIES 217, 050, 385 201, 405, 407 15, 644, 978


Deferred pension inflow 561, 459 561, 459

Deferred OPEB inflow 210, 338 210,338

TOTAL DEFERRED INFLOWS OF RESOURCES 771, 797 771, 797

TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 217, 822, 182 202, 177, 204 15, 644, 978

NET POSITION:

Net investments in capital assets 54, 150, 280 56, 648, 258 2, 497, 978)


Unrestricted 663, 089 1, 133, 571 470, 482)

TOTAL NET POSITION 85, 379. 537 $ 80, 830, 425 $ 4, 549, 112


38

NORTH TEXAS MUNICIPAL WATER DISTRICT SEWER SYSTEM

SEWER SYSTEM



Current Year to

Month Date

OPERATING REVENUES:

Charges for services 3, 435, 763 $ 27, 486,082


Other operating revenues 28, 746 281, 018


OPERATING EXPENSES:

Personnel 466, 301 4, 477, 591

Electric power 140, 726 1, 069, 712

Chemicals 167, 716 1, 146, 478







OPERATING INCOME( LOSS) 829, 622 7, 509, 141


Investment income 29, 183 964, 120

Contributions in aid of construction




Total nonoperating revenue( expenses) 471, 837) 2, 960,029)


NET POSITION, BEGINNING BALANCE 85, 021, 752 80,830,425



39

SEWER SYSTEM NORTH TEXAS MUNICIPAL WATER DISTRICT

SEWER



Current Year to

Month Date



Cash received from other funds


Cash paid to suppliers for goods and services 788, 974) 8, 802, 299)




CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES:

Proceeds from( for) the issuance of bonds 5, 817, 175 14, 369,320



Principal payments on long- term debtPayments from( for) bond issue costs 221, 956) 481, 259)

Federal program revenuesNet cash used for capital and related financing activities 3, 800, 072 3, 595, 062


Sale and maturity of investments 2,382, 410 29,460, 748

Purchase of investments 2,316, 922) 26, 794,258)

Interest received 79, 480 975, 170

Net cash provided by( used for) investing activities 144, 968 3, 641, 660

NET INCREASE( DECREASE) IN CASH AND CASH EQUIVALENTS 5, 630, 537 21, 295, 025



RECONCILIATION OF TOTAL CASH TO

THE STATEMENT OF NET POSITION





Operating income 829, 622 7, 509, 141




Accounts receivable and deferred billings 10, 758) 297, 681

Prepaid expense 1, 343) 91, 534

Net pension liabilityNet OPEB liabilityDue to/ from other funds 31, 602) 178, 170)

Accts payable, accrued liabilities and developers deposits 223, 582 2, 060, 439)


Accrued OPEB

Customers advance payments 1, 943) 1, 742, 386

Due to Cities 185, 333 2, 712, 960

Total adjustments 855, 875 6, 549, 162





Amortization of bond- related items 96, 202) 769, 888)




40

SCHEDULES OF CASHAND INVESTMENTS

SCHEDULES OF CASH AND INVESTMENTS NORTH TEXAS MUNICIPAL WATER DISTRICT

SCHEDULE OF CASH AND INVESTMENTS

MAY 31, 2020

INVESTMENTS

FUND CASH AT COST TOTAL

CONSTRUCTION FUNDS:

Regional Water System- Capital Improvement Fund 162, 621, 991. 66 $ 162, 621, 991. 66

Regional Water System- 2015 2, 398, 404. 97 2, 398, 404. 97


Regional Water System- 2017 SWIFT- LBCR 4, 182, 338. 77 4, 182, 338. 77

Regional Water System- 2017 SWIFT- TRT& DIST 4, 955, 529. 63 4, 955, 529. 63

Regional Water System- 2018 SWIFT- LBCR 45, 401, 657. 16 45, 401, 657. 16

Regional Water System- 2018 SWIFT- TRT& DIST 0. 50 2, 982, 909. 10 2, 982, 909. 60

Regional Water System- 2018A SWIFT- LBCR 53, 420, 442. 60 53, 420, 442. 60

Regional Water System- 2018A SWIFT- TRT& DIST 99, 062, 638. 99 99, 062, 638. 99

Regional Water System- 2018 SWIFT- CNST/ ESC 184, 171, 821. 30 184, 171, 821. 30

Regional Water System- 2018A SWIFT- CNST/ ESC 217, 287, 468. 04 217, 287, 468. 04

Regional Water System- 2019 SWIFT- CNST/ ESC 101, 825, 519. 07 101, 825, 519. 07


Regional Water System- 2018 SWIFT- WORKING CAPITAL 34, 004, 326. 77 34, 004, 326. 77

Regional Water System- 2018A SWIFT- WORKING CAPITAL 15, 351, 941. 40 15, 351, 941. 40

Regional Wastewater System- Capital Improvement Fund 2, 770, 728. 33 2, 770, 728. 33

Regional Wastewater System- 2015 0. 66 3, 139, 907. 44 3, 139, 908. 10

Regional Wastewater System- 2016 13, 445, 509. 96 13, 445, 509. 96




Regional Solid Waste System- Capital Improvement Fund 9, 831, 663. 58 9, 831, 663. 58

Regional Solid Waste System- 2015 233, 759. 83 233, 759. 83

Regional Solid Waste System- 2016 315, 949. 39 315, 949. 39

Regional Solid Waste System- 2017 2, 305, 266. 84 2, 305, 266. 84

Upper East Fork Interceptor System- Capital Improvement Fund 4, 149, 046. 13 4, 149, 046. 13

Upper East Fork Interceptor System- 2015 1, 565, 346. 42 1, 565, 346. 42

Upper East Fork Interceptor System- 2016 1, 508,693. 77 1, 508,693. 77


Upper East Fork Interceptor System- 2018 334, 300. 96 31, 622, 668. 75 31, 956, 969. 71


Buffalo Creek Interceptor- Capital Improvement Fund 748, 719. 57 748, 719. 57

Buffalo Creek Interceptor- 2019 5, 866, 176. 88 5, 866, 176. 88

Muddy Creek WWTP- Capital Improvement Fund 8, 375. 17 8, 375. 17

Muddy Creek WWTP- 2019 2, 969, 508. 17 2, 969, 508. 17

Mustang Creek Interceptor- Capital Improvement Fund 3, 248, 715. 85 3, 248, 715. 85

Mustang Creek Interceptor- 2019 11, 178, 900. 53 11, 178, 900. 53

Panther Creek Wastewater Treatment Plant- Capital Improvement Fund 539, 501. 03 539, 501. 03

Panther Creek Wastewater Treatment Plant- 2020 5, 373, 820. 98 5, 373, 820. 98

Parker Creek WW Interceptor System- Capital Improvement Fund 689, 130. 67 689, 130. 67

Parker Creek Parallel WW Interceptor- Capital Improvement Fund 16, 156. 88 16, 156. 88

Parker Creek Parallel WW Interceptor System- 2016 95, 816. 56 95, 816. 56

Sabine Creek Wastewater Treatment Plant- Capital Improvement Fund 165, 567. 77 165, 567. 77

Sabine Creek Wastewater Treatment Plant- 2016 138, 977. 42 138, 977. 42

Sabine Creek WW Interceptor System- Capital Improvement Fund 344, 233. 65 344, 233. 65

Stewart Creek West WWTP- Capital Improvement Fund 2, 625, 208. 40 2, 625, 208. 40

Stewart Creek West Wastewater Treatment Plant- 2015 2, 043, 995. 01 2, 043, 995. 01

TOTAL 334, 302. 12 $ 1, 324, 601, 831. 92 $ 1, 324, 936, 134. 04


42

NORTH TEXAS MUNICIPAL WATER DISTRICT SCHEDULES OF CASH AND INVESTMENTS


MAY 31, 2020

INVESTMENTS


INTEREST AND SINKING FUNDS:

Regional Water System 94, 177, 789. 23 $ 94, 177, 789. 23

Regional Water System- U S Government Notes 1, 235, 736. 65 1, 235, 736. 65

Regional Wastewater System 24, 123, 780. 10 24, 123, 780. 10

Regional Solid Waste System 2, 373, 038. 80 2, 373, 038. 80

Upper East Fork Interceptor System 20, 548, 769. 73 20, 548, 769. 73

Buffalo Creek Interceptor 2, 514, 589. 14 2, 514, 589. 14

Little Elm Water Transmission Facilities 383, 844. 77 383, 844. 77

Lower East Fork Interceptor 1, 147, 951. 58 1, 147, 951. 58

Muddy Creek Interceptor 234, 786. 85 234, 786. 85

Muddy Creek Wastewater Treatment Plant 2, 151, 860. 70 2, 151, 860. 70

Mustang Creek Interceptor System 1, 245, 805. 01 1, 245, 805. 01

Panther Creek Wastewater Treatment Plant 3, 476, 542. 06 3, 476, 542. 06

Parker Creek Interceptor 201, 185. 94 201, 185. 94

Parker Creek Parallel Interceptor 189, 116. 62 189, 116. 62

Rockwall- Heath Water Storage Facilities 206, 133. 54 206, 133. 54

Rockwall South( Buffalo) Wastewater Treatment Plant- 2008 199, 777. 33 199, 777. 33

Rockwall Water Pump Station Facilities 148, 855. 64 148, 855. 64

Sabine Creek Interceptor 162, 304. 59 162, 304. 59

Sabine Creek Wastewater Treatment Plant 1, 261, 138. 02 1, 261, 138. 02


Terrell Water Transmission Facilities 576, 037. 63 576, 037. 63

TOTAL 160, 133, 308. 97 $ 160, 133, 308. 97

DEBT SERVICE RESERVE FUNDS:

Regional Water System 144, 012, 731. 41 $ 144, 012, 731. 41




Buffalo Creek Interceptor 1, 140, 230. 72 1, 140, 230. 72


Lower East Fork Interceptor 1, 333, 416. 22 1, 333, 416. 22


Muddy Creek Wastewater Treatment Plant 1, 194, 450. 38 1, 194, 450. 38

Mustang Creek Interceptor System 1, 546, 737. 59 1, 546, 737. 59

Panther Creek Wastewater Treatment Plant 2, 406, 385. 44 2, 406, 385. 44



Rockwall- Heath Water Storage Facilities 236, 301. 24 236, 301. 24

Rockwall South( Buffalo) Wastewater Treatment Plant- 2008 257, 542. 81 257, 542. 81

Rocwall Water Pump Station Facilities 173, 968. 00 173, 968. 00


Sabine Creek Wastewater Treatment Plant 946, 865. 03 946, 865. 03


Terrell Water Transmission Facilities 767, 748. 60 767, 748. 60

TOTAL 197, 276, 170. 34 $ 197, 276, 170. 34


43



MAY 31, 2020

INVESTMENTS


RESERVE FOR MAINTENANCE ESCROW FUNDS:

Regional Water System- Chapman 317, 102. 57 $ 317, 102. 57

Regional Water System- Contingency 24, 160, 140. 72 24, 160, 140. 72



Upper East Fork Interceptor System 1, 486,873. 57 1, 486,873. 57

Buffalo Creek Interceptor 162, 059. 08 162, 059. 08

Farmersville Wastewater Treatment Plant 6, 152. 63 6, 152. 63

Forney Interceptor 18, 352. 57 18, 352. 57

Kaufman Four- One Water Distribution Facilities 48, 067. 75 48, 067. 75

Lavon Wastewater Treatment Plant 11, 565. 70 11, 565. 70


Lower East Fork Interceptor 25, 461. 73 25, 461. 73

McKinney Interceptor 15, 589. 12 15, 589. 12


Muddy Creek Wastewater Treatment Plant 14, 411. 46 14, 411. 46

Mustang Creek Interceptor 10, 655. 76 10, 655. 76

Panther Creek Wastewater Treatment Plant 27, 759. 78 27, 759. 78



Plano Water Transmission Facilities 74, 048. 11 74, 048. 11

Rockwall North( Squabble) Wastewater Treatment Plant 4, 445. 12 4, 445. 12

Rockwall South( Buffalo) Wastewater Treatment Plant 42, 634. 09 42, 634. 09

Royse City Wastewater Treatment Plant 10, 562. 82 10, 562. 82



Seis Lagos Wastewater Treatment Plant 16, 183. 33 16, 183. 33

Stewart Creek West Wastewater Treatment Plant 98, 954. 46 98, 954. 46

TOTAL 30, 244, 285. 66 $ 30, 244, 285. 66

EQUIPMENT REPLACEMENT ESCROW FUNDS:

Regional Solid Waste System 10, 334, 033. 51 $ 10, 334, 033. 51

Wylie Wastewater Treatment Plant 25, 029. 86 25, 029. 86

TOTAL 10,359,063. 37 $ 10,359,063. 37

PREVENTATIVE MAINTENANCE ESCROW FUNDS:

Regional Wastewater System 371, 939. 57 $ 371, 939. 57


Buffalo Creek Interceptor 396, 111. 28 396, 111. 28

Forney Interceptor 192, 950. 97 192, 950. 97

Lavon Wastewater Treatment Plant 4, 205. 87 4, 205. 87

Lower East Fork Interceptor 357, 689. 68 357, 689. 68



Muddy Creek Wastewater Treatment Plant 8, 462. 89 8, 462. 89

Mustang Creek Interceptor 229, 671. 47 229, 671. 47

Panther Creek Wastewater Treatment Plant 32, 473. 96 32, 473. 96



Rockwall South( Buffalo) Wastewater Treatment Plant 278, 813. 96 278, 813. 96



Stewart Creek West Wastewater Treatment Plant 23, 017. 17 23, 017. 17

TOTAL 4, 061, 491. 71 $ 4, 061, 491. 71

TOTAL ESCROW FUNDS: 44, 664, 840. 74 $ 44, 664, 840. 74


44

NORTH TEXAS MUNICIPAL WATER DISTRICT SCHEDULES OF CASH AND INVESTMENTS


MAY 31, 2020

INVESTMENTS


OPERATING FUNDS:

Support Services 1, 117, 419. 68 $ 2, 120, 389. 87 $ 3, 237, 809. 55

Regional Water System 1, 119, 581. 26 35, 357, 512. 85 36, 477, 094. 11

Regional Wastewater System 1, 117, 879. 77 9, 029, 039. 01 10, 146, 918. 78

Regional Solid Waste System 1, 148, 645. 70 3, 685, 774. 30 4, 834, 420. 00

Upper East Fork Interceptor System 1, 117, 771. 93 3, 364, 738. 39 4,482,510. 32

Buffalo Creek Interceptor 28. 36 351, 368. 49 351, 396. 85

Farmersville Wastewater Treatment Plant 19. 95 57, 287. 96 57, 307. 91

Forney Interceptor 1. 61 140, 702. 68 140, 704. 29

Kaufman Four- One Water Distribution Facilities 0. 28 2, 235. 00 2, 235. 28

Lavon Wastewater Treatment Plant 19. 68 46, 323. 97 46, 343. 65

Little Elm Water Transmission Facilities 0. 73 33, 286. 53 33, 287. 26

Lower East Fork Interceptor 22. 29 274, 899. 72 274, 922. 01


Muddy Creek Interceptor 3. 83 80, 272. 32 80, 276. 15

Muddy Creek Wastewater Treatment Plant 23. 55 1, 121, 534. 43 1, 121, 557. 98

Mustang Creek Interceptor System 10. 00 145, 028. 37 145, 038. 37

Panther Creek Wastewater Treatment Plant 74. 47 1, 214, 780. 48 1, 214, 854. 95

Parker Creek Interceptor 0. 69 66,031. 00 66, 031. 69


Plano Water Transmission Facilities 21, 436. 85 21, 436. 85

Rockwall- Heath Water Storage Facilities 7. 82 17, 761. 98 17, 769. 80

Rockwall North( Squabble) Wastewater Treatment Plant 22. 30 44, 887. 34 44, 909. 64

Rockwall South( Buffalo) Wastewater Treatment Plant 37. 92 490, 583. 86 490, 621. 78

Rockwall Water Pump Station Facilities 2. 16 12, 497. 34 12, 499. 50

Royse City Wastewater Treatment Plant 13, 728. 02 13, 728. 02

Sabine Creek Interceptor 0. 33 43, 423. 48 43, 423. 81

Sabine Creek Wastewater Treatment Plant 19. 68 363, 849. 30 363, 868. 98

Seis Lagos Wastewater Treatment Plant 20. 65 24, 609. 26 24, 629. 91

Stewart Creek West Wastewater Treatment Plant 109. 03 1, 962, 863. 35 1, 962, 972. 38

Terrell Water Transmission Facilities 3. 71 57, 754. 16 57, 757. 87

Wylie Wastewater Treatment Plant 0. 03 6, 736. 27 6, 736. 30

Small Wastewater Treatment Plants 407, 581. 64 407, 581. 64

Wastewater Pretreatment Program 1. 20 224, 128. 29 224, 129. 49

Insurance 448, 671. 39 1, 266, 597. 94 1, 715, 269. 33

TOTAL 6, 477, 981. 64 $ 61, 658, 033. 90 $ 68, 136, 015. 54

GRAND TOTAL 6, 812, 283. 76 $ 1, 788, 334, 185. 87 $ 1, 795, 146, 469. 63


45


SCHEDULE OF CASH AND INVESTMENTS- CONSTRUCTION FUNDS

MAY 31, 2020

TOTAL FUTURE FY20 FUTURE FY20 ESTIMATED FY20

CASH AND ENCUMBERED UNENCUMBERED TRANSFERS CONTRACT UNENCUMBERED

INVESTMENTS BALANCE BALANCE INi' n AWARDS BALANCE

A) B) C)_( A B) D) F) F)=( C)+( D)-( E)

Regional Water System- CIF 162, 621, 992 96, 502, 530 ( 1) 66, 119, 462 12, 432, 484 ( 6) 16, 747, 721 ( 3) 61, 804, 225

Regional Water System- 2015 2, 398, 405 2, 111, 957 ( 1) 286, 448 286, 448

Regional Water System- 2016 36, 165, 959 36, 122, 353 ( 1) 43, 606 43, 606

Regional Water System- 2017 SWIFT 9, 137, 868 8, 116, 336 ( 1) 1, 021, 533 1, 021, 533

Regional Water System- 2018 SWIFT 82, 388,894 260,040, 100 ( 1) 177, 651, 207) 169, 278,620 ( 4) 18, 665, 137) ( 7) 10,292,550

Regional Water System- 2018 SWIFT- TWDB Escrow 184, 171, 821 1) 184, 171, 821 169, 278,620) ( 4) 14,893, 201

Regional Water System- 2018A SWIFT 167, 835, 023 387, 154, 551 ( 1) 219,319, 528) 196, 355, 355 ( 5) 30, 939, 253) ( 7) 7, 975, 080

Regional Water System- 2018A SWIFT- TWDB Escrow 217, 287, 468 1) 217, 287, 468 196, 355, 355) ( 5) 9, 000, 000 ( 3) 11, 932, 113

Regional Water System- 2019 SWIFT- TWDB Escrow 101, 825, 519 1) 101, 825, 519 99, 271, 838 ( 3) 2, 553, 681

Regional Water System- 2019 141, 919,760 10,401, 475 ( 1) 131, 518,285 130, 523, 000 ( 3) 995,285

Regional Wastewater System- CIF 2, 770,728 2, 036, 778 ( 1) 733, 951 100,000 833, 951

Regional Wastewater System- 2015 3, 139, 908 3, 131, 902 ( 1) 8, 006 8, 006

Regional Wastewater System- 2016 13, 445, 510 13, 316, 679 ( 1) 128, 831 128, 831

Regional Wastewater System- 2017 2, 820,059 2, 049, 673 ( 1) 770,386 750,000 ( 3) 20,386

Regional Wastewater System- 2018 12, 267, 244 12, 086, 470 ( 1) 180,775 180,775

Regional Wastewater System- 2019 38, 379,410 29, 020, 794 ( 1) 9, 358,616 9, 192,000 ( 3) 166, 616

Regional Solid Waste System- CIF 9, 831, 664 3, 323, 694 ( 1) 6, 507, 970 361, 336 153, 000 ( 3) 6, 716,306

Regional Solid Waste System- 2015 233, 760 113, 465 ( 1) 120, 295 120, 295

Regional Solid Waste System- 2016 315,949 288, 325 ( 1) 27, 625 27, 625

Regional Solid Waste System- 2017 2, 305, 267 2, 235, 938 ( 1) 69, 329 69, 329

Upper East Fork Interceptor System- CIF 4, 149, 046 866, 972 ( 1) 3, 282,074 9, 149, 668 ( 9) 9, 033, 000 ( 3) 3, 398,742

Upper East Fork Interceptor System- 2015 1, 565,346 924, 766 ( 1) 640,580 640,580

Upper East Fork Interceptor System- 2016 1, 508, 694 1, 379, 165 ( 1) 129, 529 129, 529

Upper East Fork Interceptor System- 2017 7, 023, 243 5, 895, 450 ( 1) 1, 127, 793 1, 127, 793

Upper East Fork Interceptor System- 2018 31, 956, 970 31, 395, 512 ( 1) 561, 458 561, 458

Upper East Fork Interceptor System- 2019 51, 417, 823 46, 924, 788 ( 1) 4, 493, 034 3, 977, 000 ( 3) 516, 034

Upper East Fork Interceptor System- 2020 1) 59, 919, 297 ( 11) 59, 915, 000 ( 3) 4, 297

Muddy Creek Wastewater Treatment Plant- CIF 8, 375 6, 800 ( 1) 1, 575 1, 575

Muddy Creek Wastewater Treatment Plant- 2019 2, 969, 508 2, 018, 369 ( 1) 951, 139 951, 139

Mustang Creek Interceptor System- CIF 3, 248, 716 3, 023, 100 ( 1) 225, 616 225, 616

Mustang Creek Interceptor System- 2019 11, 178, 901 9, 888, 339 ( 1) 1, 290, 561 800, 000 ( 3) 490, 561

Mustang Crk Inter Sys- 2020( Bonds to be delivered Jun 2020) 456, 000 ( 1) 456, 000) 4, 032, 447 ( 11) 3, 417, 000 ( 10) 159, 447

Panther Creek Wastewater Treatment Plant- CIF 539, 501 296 ( 1) 539, 205 539, 205

Panther Creek Wastewater Treatment Plant- 2020 5, 373, 821 5, 364, 255 ( 1) 9, 566 9, 566

Parker Creek WW Interceptor System- CIF 689, 131 685, 606 ( 1) 3, 525 3, 525

Parker Creek WW Parallel Interceptor System- CIF 16, 157 1) 16, 157 16, 157

Parker Creek WW Parallel Interceptor System- 2016 95, 817 1) 95, 817 95, 817

Sabine Creek Interceptor - CIF 344, 234 343, 164 ( 1) 1, 069 1, 069

Sabine Creek Wastewater Treatment Plant- CIF 165, 568 161, 207 ( 1) 4, 361 4, 361

Sabine Creek Wastewater Treatment Plant- 2016 138, 977 136, 391 ( 1) 2, 586 2, 586

Buffalo Creek Interceptor System- CIF 748, 720 685, 936 ( 1) 62, 783 62, 783

Buffalo Creek Interceptor System- 2019 5, 866, 177 2, 723, 287 ( 1) 3, 142, 890 2, 942,000 ( 3) 200,890

Stewart Creek Wastewater Treatment Plant- CIF 2, 625, 208 2, 089, 556 ( 1) 535, 653 535, 653

Stewart Creek Wastewater Treatment Plant- 2015 2, 043,995 2, 013, 880 ( 1) 30, 115 30, 115

TOTAL 1, 324, 936, 134 985, 035, 856 339, 900, 278 85, 995, 233 296, 117, 169 129, 778, 342

1) Reflects Remaining Payments to be Made on Board Awarded Contracts and Agreements. 6) Reflects Tfrs from Oper and Funds from GTUA($ 709, 147. 90; Dec17; AM# 5057).

2) Current Fiscal Year Transfers from Operating Unless Otherwise Noted. 7) SWIFT Funded Contracts Pending Reclass due to TWDB Funding Requirements.

8) FY20 Budget Est. Ending Balance was$ 13, 903, 003; Unencumb Bal due to CIP Proj Rescheduled to

3) Contracts to be Funded by Bonds or FY20 Capital Improvement. FY21.

4) Contracts to be funded by Bonds and Funds to be Released to RWS 2018 SWIFT Contingent upon TWDB Approval. ( 9) Reflects Tfrs from Oper and Funds to be Provided by Allen and Fairview($ 9, 033, 000 Project# 521).

10) Contracts to be Funded by Bonds and$ 2, 616, 746 to Reimb Forney for Prior Contrib for Design and

5) Contracts to be funded by Bonds and Funds to be Released to RWS 2018A SWIFT Contingent upon TWDB Approval. Const.


46

NORTH TEXAS MUNICIPAL WATER DISTRICT MAY 2020

ENGINEERING ACTIVITY REPORT

I. CHANGE ORDERS TO CONSTRUCTION ONLY: The following changes are in accordance with Board Policies Manual Section 9.3.A, which authorizes the Executive Director to approve changes up to $100,000.

WATER SYSTEM a. Project No. 101-0481-17, Wylie Water Treatment Plant III Supervisory Control and

Data Acquisition (SCADA) Improvements, Change Order No. 1

Description Amount Days Original Contract Amount $1,791,315.00 458 Prior Change Order(s) Total $0.00 0 Change Order No. 1

Chlorine dioxide tags $6,048.63 5 Delays for Wylie Water Treatment Plant III shutdown $0.00 95

Change Order No. 1 Increase $6,048.63 100 Revised Contract Amounts $1,797,363.63 558

Original Completion Dates: Substantial – January 28, 2020; Final – February 27, 2020 Revised Completion Dates: Substantial – May 7, 2020; Final – June 6, 2020 Funding in the amount of $6,048.63 for Change Order No. 1 to Prime Controls, L.P. is available in the Regional Water System Capital Improvement Fund

b. Project No. 101-0519-18, North Garland Pipelines Condition Assessment: Pipeline Repairs, Change Order No. 1

Description Amount Days

Original Contract Amount $1,972,725.00 116 Prior Change Order(s) Total $0.00 0 Change Order No. 1

Remove two (2) 8-inch blow off valves (BOV’s) and install two (2) 12-inch BOV’s $54,964.30 0


Original Completion Dates: Substantial – May 1, 2020; Final – May 31, 2020

ENGINEERING ACTIVITY REPORT PAGE 2 Revised Completion Dates: Substantial – May 1, 2020; Final – May 31, 2020 Funding in the amount of $54,964.30 for Change Order No. 1 to Garney Companies, Inc. is available in the Regional Water System Capital Improvement Fund

c. Project No. 101-0534-19, Wylie Water Treatment Plant (WTP) III IV Filter Performance

Improvements, Change Order No. 5

Description Amount Days Original Contract Amount $3,575,305.00 485 Prior Change Order(s) Total $99,796.17 0 Change Order No. 5

Caulk fiberglass reinforced polymer weir plates on steel troughs $41,634.60 0 Repair steel troughs pitting corrosion $8,606.85 0 Delete turbidimeter splashguards (credit) ($2,500.00) 0


Original Completion Dates: Substantial – October 26, 2020; Final – November 25, 2020 Revised Completion Dates: No change. Funding in the amount of $47,741.45 for Change Order No. 5 to Prime Controls, LP, is available in the Regional Water System Capital Improvement Fund

WASTEWATER SYSTEM a. Project No. 301-0328-13, Rowlett Creek Regional Wastewater Treatment Plant Peak

Flow Management Improvements, Phase I, Change Order No. 24 (5/5/2020)

Description Amount Days Original Contract Amount $46,487,500.00 1,095 Prior Change Order(s) Total $1,642,431.39 233 Change Order No. 24

Provide a 48-inch pipe stick to install at effluent of Train A Primary Clarifier $8,809.00 0 Provide modifications to rebar at membrane bioreactor (MBR) structure deck $19,309.85 19

Change Order No. 24 Increase $28,118.85 19 Revised Contract Amounts $48,158,050.24 1,347

Original Completion Dates: Substantial – January 26, 2020; Final – March 26, 2020 Revised Completion Dates: Substantial – October 4, 2020; Final –December 3, 2020 Funding in the amount of $28,118.85 for Change Order No. 24 to Pepper Lawson Waterworks, LLC, is available in the Regional Wastewater System 2016 Construction Fund.

ENGINEERING ACTIVITY REPORT PAGE 3

b. Project No. 301-0369-14, South Mesquite Creek Regional Wastewater Treatment Plant Filter and Ultraviolet Disinfection Improvements, Change Order No. 9.


Original Contract Amount $9,955,608.00 586 Prior Change Order(s) Total $315,363.77 34 Change Order No. 9

Filter distribution structure modifications $45,192.20 0 Change Order No. 9 Increase $45,192.20 0 Revised Contract Amounts $10,316,163.97 620

Original Completion Dates: Substantial – November 27, 2018; Final – January 26, 2019 Revised Completion Dates: Substantial – December 31, 2018; Final – March 1, 2019 Funding in the amount of $45,192.20 for Change Order No. 9 to Archer Western Construction, LLC, is available in the Regional Wastewater System 2018 Construction Fund

c. Project No. 301-0468-17, Wilson Creek Regional Wastewater Treatment Plant (RWWTP) Electrical Improvements, Phase II, Change Order No. 7.


Original Contract Amount $14,456,000.00 762 Prior Change Order(s) Total $714,454.00 30 Change Order No. 7

Modify Pole Number 31 anchors $780.00 0 Analyze Pole Number 33 anchors for possible modification $2,809.00 0 Remove and replace roadway to install duct bank to Load Control Station numbers 5 and 5A $6,220.00 0


Original Completion Dates: Substantial – September 28, 2020; Final – October 28, 2020 Revised Completion Dates: Substantial – October 28, 2020; Final – November 27, 2020 Funding in the amount of $9,809.00 for Change Order No. 7 to Facility Solutions Group, Inc., is available in the Regional Wastewater System 2018 Construction Fund

d. Project No.310-0450-17, Muddy Creek Wastewater Treatment Plant Aeration Basin, Odor Control and Backup Power Improvements, Change Order No. 4.

Description Amount Days Original Contract Amount $6,134,000.00 426 Prior Change Order(s) Total $107,182.76 50


Change Order No. 4 Addition of two 20-pound fire extinguishers $1,290.87 1 Raise existing fire hydrant to grade $1,780.58 1


Original Completion Dates: Substantial – May 31, 2020; Final – June 30, 2020 Revised Completion Dates: Substantial – July 22, 2020; Final – August 21, 2020 Funding in the amount of $3,071.45 for Change Order No. 4 to Eagle Contracting, L.P., is available in the Muddy Creek Wastewater Treatment Plant 2019 Construction Fund.

e. Project No. 501-0319-13, Lower Rowlett Creek and Lower Cottonwood Creek Lift Station Improvements, Change Order No. 6 (5/20/2020)


Original Contract Amount $3,012,500.00 1,095 Prior Change Order(s) Total ($4,649.00) 3 Change Order No. 6

Extension of contract time to match substantial and final completion dates for Project 301-0328-13- Rowlett Creek Regional Wastewater Treatment Plant Peak Flow Management Improvements, Phase I, as projects were bid and awarded under a single contract. $0.00 249

Change Order No. 6 Increase $0.00 249 Revised Contract Amounts $3,007,851.00 1,347

Original Completion Dates: Substantial – January 26, 2020; Final – March 26, 2020 Revised Completion Dates: Substantial – October 4, 2020; Final –December 3, 2020 No additional funding is requested for Change Order No. 6 for the 249 additional days to be added to the contract with Pepper Lawson Waterworks, LLC.

SOLID WASTE SYSTEM a. Project No. 401-0527-19, 121 Regional Disposal Facility (121 RDF) Bypass Lane

Improvements, Change Order No. 5 and 6

Description Amount Days Original Contract Amount $1,794,142.20 180 Prior Change Order(s) Total ($56,316.57) 112 Change Order No. 5

Adjustment to contract quantity for sod $6,328.20 20 Change Order No. 6


Adjustment to contract quantity for lowering a manhole $3,397.00 10 Change Order No. 5 & 6 Increase $9,725.20 30 Revised Contract Amounts $1,744,153.83 322

Original Completion Dates: Substantial – October 17, 2019; Final – November 16, 2019 Revised Completion Dates: Substantial – March 7, 2020; Final – April 6, 2020 Funding in the amount of $9,725.20 for Change Order No. 5 and 6 to New World Contracting, LLC, is available in the _Regional Solid Waste System Capital Improvement Fund.

II. AMMENDMENTS TO ENGINEERING, INSPECTION AND/OR LEGAL SERVICES

ONLY:

The following projects are being amended in accordance with NTMWD’s Board Policies Manual Section 9.3.B – up to $100,000.

WATER SYSTEM a. Project No. 101-0431-16, North McKinney Pipeline, Phase III

DESCRIPTION AMOUNT

Original ESA $1,880,500.00

Prior Additional Services $390,653.11

Additional Services $4,750.00

Conductivity analyzer addition $4,750.00

Revised ESA Amount $2,275,903.11 Funding in the amount of $4,750.00 to HDR, Inc., is available in the Regional Water System Capital Improvement Fund

b. Project No. 101-0490-18, Wylie Rockwall Farmersville 36”/48” Pipeline Improvements, Phase II

DESCRIPTION AMOUNT

Original ESA $1,223,175


Additional Services $15,000

Develop request for exception from TCEQ $15,000

Revised ESA Amount $1,474,406

ENGINEERING ACTIVITY REPORT PAGE 6 Funding in the amount of $15,000 to Kimley-Horn and Associates, Inc. is available in the Regional Water System Capital Improvement Fund

c. Additional funding related to the Water Contract Amendment activities.

Apply FY20 budgeted funds to increase the funding to Lloyd, Gosselink, Rochelle & Townsend P.C. for the pursuit of legal action relating to establishing the legality and validity of public securities and public securities authorization (Purchase Order No. 18-40367) by $66,000.

Previously Approved Funding

Additional Funding

Revised Funding

Contract Amendment Activities (a)

NewGen Strategies Raftelis Lloyd Gosselink Strategic Government

Resources Total

$140,242

$99,000 $127,000

$30,804

$397,046

$ - $ - $ - $ -

$-

$140,242

$99,000 $127,000

$30,804

$397,046

PUC Activities (b) $4,443,000 $- $4,443,000

Litigation Activities (c) $1,031,954 $66,000 $1,097,954

TOTAL $5,872,000 $66,000 $5,938,000

(a) Includes payments to NewGen Strategies, Raftelis, Strategic Government Resources and Lloyd Gosselink for rate modeling services, facilitation services and legal support

(b) Includes payments to Lloyd Gosselink for legal support to respond to PUC petition (c) Includes payments to Lloyd Gosselink for legal support for bond validation and PUC

jurisdictional activities

Funding in the amount of $66,000.00 to Lloyd, Gosselink, Rochelle & Townsend P.C. is available in the Support Fund 2019-2020 Annual Operating Budget (Account: 100-5701-531410 Legal Service, P.A.)

WASTEWATER SYSTEM a. Project No. 301-0525-18, South Mesquite Creek Regional Wastewater Treatment

Plant Peak Flow Management

DESCRIPTION AMOUNT

Original ESA $271,150.00

Prior Additional Services $0

Additional Services $9,131 Cost estimate support for the Buffalo Creek evaluation


Revised ESA Amount $280,281 Funding in the amount of $9,131 to Hazen and Sawyer, Inc., is available in the Regional Wastewater System 2018 Construction Fund

b. Project No. 301-0471-17, Rowlett Creek Regional Wastewater Treatment Plant Peak Flow Management Improvements, Phase II

DESCRIPTION AMOUNT

Original ESA $5,182,700


08

Additional Services Design of electrical improvements at Train A to address equipment condition $72,000

Revised ESA Amount $5,261,108 Funding in the amount of $72,000 to Hazen and Sawyer, Inc., is available in the Regional Wastewater System 2016 Construction Fund

SOLID WASTE SYSTEM

None.

III. REASSIGNMENT OF FUNDING

The following projects are being amended in accordance with NTMWD’s Board Policies Manual Section 9.3.B – up to $100,000.

SOLID WASTE SYSTEM

a. Project No. 401-0440-16, 121 Regional Disposal Facility Concrete Pavement Improvements

Description Amount Original ESA $350,000 Prior Additional Services $10,000 Revised ESA Amount $360,000

Administrative Memorandum No. 4679 (June 2016) and the May 2018 EAR assigned funding in the amount of $360,000.00 in the Regional Solid Waste System 2015 Construction Fund. $37,367.91 is currently remaining of the award amount, and is to be reassigned to the Regional Solid Waste System Capital Improvement Fund. There is no change in the total dollar amount awarded.


b. Project No. 401-0447-16, Parkway Transfer Station Conversion To Top Load, Permitting Phase

Description Amount Original ESA $221,500 Prior Additional Services $110,000 Revised ESA Amount $331,500

Administrative Memorandum Nos. 4777 (November 2016) and 5401 (April 2019) and Consent Agenda Item 18-06-04 (June 2018) assigned funding in the amount of $266,500.00 in the Regional Solid Waste System 2015 Construction Fund and $65,000.00 in the Regional Solid Waste System 2017 Construction Fund. $64,512.80 is currently remaining of the Regional Solid Waste System 2015 Construction Fund award amount, and is to be reassigned to the Regional Solid Waste System Capital Improvement Fund. There is no change in the total dollar amount awarded.

c. Project No. 401-0465-17, Custer Road Transfer Station Compost Office


Original Contract Amount $502,000.00 189 Prior Change Order(s) Total $49,230.64 121 Change Order No. 4 Increase $10,608.75 45 Revised Contract Amounts $561,839.39 355

The December 2019 EAR assigned funding in the amount of $10,608.75 for Construction Change Order No. 4 in the Regional Solid Waste System 2015 Construction Fund. $10,608.75 is currently remaining of the award amount, and is to be reassigned to the Regional Solid Waste System Capital Improvement Fund. There is no change in the total dollar amount awarded.

d. Project No. 401-0465-17, Custer Road Transfer Station Compost Office

Description Amount

Original ESA $78,170 Prior Additional Services $91,950 Revised ESA Amount $170,120

Administrative Memorandum Nos. 4903 (May 2017), 4980 (August 2017), and 5110 (February 2018) assigned funding in the amount of $170,120.00 in the Regional Solid Waste System 2015 Construction Fund. $975.07 is currently remaining of the award amount, and is to be reassigned

ENGINEERING ACTIVITY REPORT PAGE 9 to the Regional Solid Waste System Capital Improvement Fund. There is no change in the total dollar amount awarded.

e. Project No. 401-0552-19, 121 Regional Disposal Facility Property Purchase

Funding Source Approved Funding

Reassignment of Funding

Revised Funding

Regional Solid Waste 2015 Construction Fund

$ - $225,000 $225,000


$328,465 $ - $328,465


$1,353,415 <$225,000> $1,128,415

Regional Solid Waste Capital Improvement Fund

$1,418,120 $ - $1,418,120

TOTAL $3,100,000 $ - $3,100,000

Administrative Memorandum No. 5508 (December 2019) approved funding in the amount of $1,353,415 for Land Acquisition in the Regional Solid Waste System 2017 Construction Fund and all funding is currently expensed. Funding and actual expenditures of $225,000 originally assigned to the Regional Solid Waste 2017 Construction Fund, is to be reassigned to the Regional Solid Waste 2015 Construction Fund. There is no change in the total dollar amount awarded.

Construction Progress Report

May 2020

Water

Project Name: 0269 - Trinity River Main Stem Pump Station and RWP (CMAR) Contractor: Garney Companies, Inc. Consultant: Freese & Nichols, Inc.

Contract Date: 1/26/2012

Original Contract: $102,796,737.00 Notice to Proceed: 5/29/2015 Change Order: $-2,000,000.00

Original Completion: 6/3/2019 % of Increase: -1.9% Revised Completion: TBD Current Contract: $100,796,737.00

Days Extended: Earned to Date: $95,976,460.19 Remarks: Main Stem Pump Station: 1) Tunnel repair complete. 2) River work and intake structure construction ongoing. 3) Installing security system components. 4) Finalizing elevator installation. 4) Contractors satisfying punch list items. Raw Water Pipeline: Punch list items complete. Conveyance Pump Station: Contractors satisfying punch list items. Project Name: 0332 - Rockwall to Royse City PL No.2 & East System GST Contractor: Thalle Construction Company, Inc. Consultant: Alan Plummer Associates, Inc.


Original Contract: $6,030,262.00 Notice to Proceed: 1/10/2018 Change Order: $ 0.00

Original Completion: 2/24/2019 % of Increase: 0.0% Revised Completion: Current Contract: $6,030,262.00

Days Extended: Earned to Date: $5,726,649.82 Remarks: Contractor began draining tank for mixer installation. Items remaining are the fence, drainage and entryway completion. Currently considering additional contract time relating to electric utility feed redesign and protracted mixer design coordination and corrections. Project Name: 0338A - Meter Vault Standardization, Phase II, Set Point Control Contractor: Crescent Constructors, Inc. Consultant: Freese & Nichols, Inc.


Original Contract: $5,541,000.00 Notice to Proceed: 11/1/2017 Change Order: $206,468.00

Original Completion: 4/25/2019 % of Increase: 3.7% Revised Completion: 7/12/2019 Current Contract: $5,747,468.00

Days Extended: 78 Earned to Date: $5,503,453.89 Remarks: Mesquite 3: Contractor installed piping/valves and performed 24" tie-in for interconnect between 24" PL and 36" PL. SCADA contractor performed start up on the new 36" PL meter vault. Contractor installed manholes for 24" valves and backfilled/compacted area around piping/valves. Electrical subcontractor removed old electrical panels from ex. 24" meter vault, laid conduits and poured duct bank, installed conductors to feed the new panels and transformer in ex. vault. Contractor installed driveway culvert and headwalls and preparing flexbase for new driveway. Project Name: 0338B - Meter Vault Standardization, Set Point Control Implementation, Phase II Contractor: MELA Contracting, Inc. Consultant: Huitt-Zollars, Inc.

Contract Date: 10/25/2018 Original Contract: $8,985,000.00 Notice to Proceed: 11/26/2018 Change Order: $53,738.39

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Original Completion: 5/9/2020

% of Increase: 0.6% Revised Completion: Current Contract: $9,038,738.39

Days Extended: Earned to Date: $5,829,390.99 Remarks: Frisco: Contractor installed pipe supports and concrete pad for equipment. Contractor painting the interior of building and installed membrane roof. Electrical sub installing electrical conduits/duct bank. Wylie: Contractor welding butt straps, wiping joints and disinfecting pipe, holiday testing, wrapping bolts/nuts with wax tape, and joints with heat shrink sleeve. Poured equipment pad and bolted fittings inside the vault. Installed MH risers for valves, poured flowable fill under pipes. Backfilling/compacting on site. Installed membrane roof. Plano: Contractor began demolition of ex. building/meter vault. Contactor to restrain ex. pipes with welding and add supports to ex. pipe. McKinney: Laying brick on new vault building, replacing steps to ex. vault, bolting fittings & adding pipe supports inside vault. Installed monopole foundations at McKinney and Frisco sites. Project Name: 0340 - Plano No. 2 Delivery Point Meter Station Upgrade Contractor: Archer Western Construction, LLC Consultant: Birkhoff, Hendricks, & Carter, LLP




Days Extended: 657 Earned to Date: $1,958,995.77 Remarks: Contractor continued to work on completing punchlist. Anticipate requesting Authorization to Final at the June 2020 Board meeting. Project Name: 0352 - Wylie WTP Water System Operations Center Contractor: MYCON General Contractors, Inc. Consultant: Halff Associates, Inc.




Days Extended: Earned to Date: $6,271,897.04 Remarks: Contractor has set domestic and fire water meter boxes and completed installation of the domestic and fire waterlines to the Center. Contractor has completed rough grading between the new Center and the WTP IV site, demolished section of WTP IV fence between the two sites and begun preparations to install subgrade for service roads between the two sites. The concrete roof of the mechanical room has been poured as well as the structural sidewalk west of the Center. Installation of the irrigation system, east and west retaining walls, cleaning and patching of brick, thin stone and thin brick masonry and construction of the water chiller enclosure are underway. Project Name: 0368A - Wylie WTP Power System Improvements, Phase I Contractor: Brandt Industrial Consultant: Freese & Nichols, Inc.




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Days Extended: 204 Earned to Date: $3,096,676.95 Remarks: Project substantially complete with new control house in service and powering the plant South loop under normal configuration. Remaining work includes final walkthrough with FNI and a 25kV air switch for Pole 102. Project Name: 0368B - Wylie WTP Power System Improvements, Phase II Contractor: Brandt Industrial Consultant: Freese & Nichols, Inc.




Days Extended: Earned to Date: $1,156,311.75 Remarks: The Kansas City Southern Railroad has authorized Freese & Nichol’s revised design of electrical ductbank crossing under the WTP III rail spur. Revised design will provide additional separation between ductbank and existing high service pump station no. 3 pipelines. Overall cost of the new design will be a credit change order to the project. Project Name: 0375 - Wylie WTP I Rapid Mix and Sedimentation Improvements Contractor: Eagle Contracting, LP Consultant: Carollo Engineers, Inc.




Days Extended: 19 Earned to Date: $20,868,626.93 Remarks: The contractor is working to clean up and establish grass around the construction site while they remove flex base from their lay-down area. The structural and mechanical walk through of the floc/sed basins and equipment has been conducted. Hydrostatic testing of the sludge collection pipelines is complete, and operator training is ongoing. The instrumentation subcontractor has completed the Operational Readiness Test. The contractor is working on punch list items and has attempted to repair delamination on the 60-inch effluent pipe per the recommendations issued by the pipe manufacturer that reviewed the pipeline defect by photograph. Project Name: 0387 - Wylie WTP IV Expansion (CMAR) Contractor: Archer Western Construction, LLC Consultant: Carollo Engineers, Inc.


Original Contract: $88,557,744.20 Notice to Proceed: 12/8/2016 Change Order: $-1,231,576.21

Original Completion: 4/7/2019 % of Increase: -1.4% Revised Completion: 1/06/2020 Current Contract: $87,326,167.99

Days Extended: 274 Earned to Date: $84,139,005.37 Remarks: The contractor is continually working on final backfill around structures and road construction and cleaning up the site by removing storage containers and flex base in staging areas. They have placed the new ferric sulfate tank in the bulk storage area south of the chemical building and cleaned out anthracite from the south reclaim basin washed in by the filter backwashes. The installation of the ammonia injection point is complete. Insulation on the existing NaOH tanks has been removed and the tanks inspected for repairs prior to relocation to the new bulk storage area. Electrical and

of 16

instrumentation work is ongoing for preparation of the Operational Readiness Test (ORT) and Field Demonstration Tests (FDT). The contractor has filled the floc/sed basins for the ORT and FDTs. Project Name: 0388 - Chapman Raw Water Trans PL Channel Stabilization at S. Sulphur River Crossing

Phase II Contractor: Garney Companies, Inc. Consultant: Halff Associates, Inc.


Original Contract: $889,870.00 Notice to Proceed: 2/5/2020 Change Order: $ 0.00

Original Completion: 8/1/2020 % of Increase: 0.0% Revised Completion: Current Contract: $889,870.00

Days Extended: Earned to Date: $26,500.00 Remarks: Contractor has commenced with sheet pile retaining wall. A change order for flowable fill to stabilize foundation under the pipe is recommeded by NTMWD staff and design engineer Halff Associates, Inc. Project Name: 0414 - HSPS 2-1 Electrical Improvements, Phase I Contractor: Facilities Solutions Group Consultant: Gupta & Associates, Inc.




Days Extended: 180 Earned to Date: $6,745,339.06 Remarks: Contractor continues to transfer 480V equipment loads over to the new electrical gear. Remaining loads that can be completed prior to the next shutdown season include a plant water pump and the Plant II air compressor compound. Project Name: 0414A - HSPS 2-1 Electrical Improvements, Phase IIA Contractor: Clark Electric, Inc. Consultant: Gupta & Associates, Inc.


Original Contract: $620,000.00 Notice to Proceed: 4/23/2019 Change Order: $-14,286.75

Original Completion: 12/9/2019 % of Increase: -2.3% Revised Completion: 3/5/2020 Current Contract: $605,713.25

Days Extended: 87 Earned to Date: $605,713.25 Remarks: Project complete. Authorization to issue final payment will be presented for the Board’s concideration at the May 28, 2020 meeting. Project Name: 0434 - Wylie WTP II Filter Underdrain Improvements and Conversion to Biologically Active

Filters Contractor: Archer Western Construction, LLC Consultant: Carollo Engineers, Inc.




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Days Extended: 40 Earned to Date: $15,729,598.15 Remarks: The settled water flume from filters 32-40 was brought down and a leaking construction joint inside basin 8 was repaired. The flume was returned to service and filters 32-35 are back in operation. Work on air lines inside influent gallery was completed. Filters 36-40 have had underdrains and grout installed. Filter 38 has had gravel, sand, and anthracite installed. Washwater valves and tees were installed at filters 36-40. Air scour valves for filters 36-40 were installed. Contractor is painting the piping inside the influent gallery. Project Name: 0442 - North System Air Valve Improvements, Phase I Contractor: Canary Construction, Inc. Consultant: Freese & Nichols, Inc.




Days Extended: Earned to Date: $1,728,860.00 Remarks: Contractor submitted request for additional calendar days to perform final air valve tie-in installation that could not be accommodated until October 2020 due to system capacity demands. Contractor continues to finalize air valve locations already tied-in or not requiring tie-ins. Project Name: 0445A - Maintenance Facilities Central Region, Phase I Contractor: Drive Construction, LLC Consultant: Merriman Anderson Architects, Inc.




Days Extended: 236 Earned to Date: $2,229,997.93 Remarks: All major construction has been completed and the contractor is working on punchlist items. The City of Wylie has issued Certificates of Occupancy for the boat storage and warehouse facilities. Project Name: 0457 - Replace Ozone Generators at Bonham Water Treatment Plant Contractor: Archer Western Construction, LLC Consultant: CDM Smith, Inc.




Days Extended: Earned to Date: $1,582,176.52 Remarks: Final payment has been approved. This project is complete. Project Name: 0461 - Wylie WTP Emergency Notfication System Contractor: Johnson Controls Security Solutions, LLC Consultant: Chiang, Patel & Yerby (CP&Y)

Contract Date: 8/23/2018 Original Contract: $3,211,013.00

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Notice to Proceed: 9/18/2018

Change Order: $ 0.00 Original Completion: 9/8/2019 % of Increase: 0.0% Revised Completion: Current Contract: $3,211,013.00

Days Extended: Earned to Date: $880,614.20 Remarks: The eight test buildings have been completed with the following exceptions: 1) an electrical tie-in to provide power to the equipment, 2) installation of an antenna on the tower at the Operations building, and 3) installation of a dish at the WTP I chemical building. Once these installations are completed, testing and commissioning of the eight buildings will begin. Project Name: 0462 - Renner Road to Plano Delivery Point 2 Pipeline Contractor: McKee Utility Contractors Consultant: Alan Plummer Associates, Inc.


Original Contract: $6,279,290.00 Notice to Proceed: 7/29/2019 Change Order: $-427,998.97


Days Extended: 3 Earned to Date: $4,917,154.24 Remarks: Contractor restored pavement for parking lots, driveways, sidewalks. Contractor also installed blow off assemblies and splash pads. Contractor continued to clean up site and haul spoils to landfill. Contractor working on field verification of utilities on property south of Plano Pkwy. Project Name: 0467 - South System Air Valve Improvements, Phase I Contractor: Mountain Cascade of TX, LLC Consultant: Chiang, Patel & Yerby (CP&Y)




Days Extended: 250 Earned to Date: $2,252,572.84 Remarks: Contractor installed 8 CAV Assemblies along Line B (South Mesquite 24"PL) from US 80 to Mesquite No. 3 meter vault (B6-B13). Contractor continues to install manholes, lids, vent piping for these CAV locations, and restoring concrete sidewalks and grading. Contractor has also relocated CAV at I-8 in Mesquite. Project Name: 0467A - South System Air Valve Improvements, Phase II Contractor: Canary Construction, Inc. Consultant: CP&Y, Inc.




Days Extended: Earned to Date: $1,307,371.40 Remarks: Contractor installed vent piping for K-21, K-23 in Garland. Installed MH sections, lids, vent piping and backfilled at K-16 and K17 locations on Jupiter Rd. At air valve K-19, contractor finished installing piping from CAV under pavement, installed MH sections in road and parkway and completed lids and vent piping installations. Contractor set MH sections

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and added lid at K-24, and completed work at K-28 and set lid at K-21. Contractor installed metal lids for G-19 and G-20, and pamrex lid for G-18 (in Wylie). Contractor set old lids back on E-9a/9b MHs to secure until the next permissible shutdown opportunity in the fall. Project Name: 0469 - 72" Texoma Pipeline Improvements Contractor: Garney Companies, Inc. Consultant: Freese & Nichols, Inc.




Days Extended: 21 Earned to Date: $5,919,881.25 Remarks: Construction contract has been approved for closeout/final payment on May Monthly Construction Report. Project Name: 0480 - HSPS 3-1 Improvements Contractor: Eagle Contracting, LP Consultant: AECOM Technical Services, Inc.



Original Completion: 6/13/2020 % of Increase: -1.1% Revised Completion: Current Contract: $5,946,658.00

Days Extended: Earned to Date: $4,520,737.90 Remarks: Work on the meter vault continues and should be commissioned by mid-June. Mechanical, electrical and PLC work continues. Work on Pump 3 currently through June 5th. Work on Pumps 4 and 5 to follow, which will finalize the pump work. Installation of the 96" butterfly valve has been moved to November 2020 (next shutdown season). Project Name: 0481 - Wylie WTP III SCADA Improvements Contractor: Prime Controls Consultant: Tetra Tech, Inc.




Days Extended: Earned to Date: $1,560,086.01 Remarks: Contractor has completed the server separation and I/O check for Plant III. Project Name: 0485 - Wylie WTP Chlorine System Improvements Contractor: Archer Western Construction, LLC Consultant: HDR Engineering, Inc.




Days Extended: 55 Earned to Date: $9,735,400.10 Remarks:

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The new scrubber and chlorine system work at WTP III has been completed and the system has been turned over to NTMWD. Installation of electrical wiring and conduit for the backup generator has been completed at WTP II. Contractor is finishing up the scrubber containment coatings and painting of piping. The contractor is finishing up electrical work for heat trace and lighting for the new chlorine building at WTP III. Project Name: 0494 - Princeton No. 2A Delivery Point Contractor: City of Princeton Consultant: Kimley-Horn and Associates, Inc.



Original Completion: % of Increase: 0.0% Revised Completion: Current Contract: $1,262,500.00

Days Extended: Earned to Date: $1,262,500.00 Remarks: No work on NTMWD water line elements of this project in the month of May. Contractor performed work on the City of Princeton tank and pump stations site. Project Name: 0519B - North Garland Condition Assessment - Pipelines Repairs Contractor: Garney Companies, Inc. Consultant: Halff Associates, Inc.




Days Extended: Earned to Date: $597,375.00 Remarks: Contractor performed repair at location no. 2, backfilled pipeline and poured concrete parking lot. Contractor mobilized and excavated pipelines at north interconnect, south interconnect, and at belly of pipeline for 30" manway for location nos. 3-6 repair shutdown. NTMWD was unable to isolate the pipeline to where the contractor could not perform the repairs. Contractor had to backfill pipeline locations and demobilized. Work will have to be performed at the next shutdown season. Contractor removed pipe segment at location no. 1 in Breckenridge Park and replaced with new stick of pipe and poured flowable under pipeline. Project Name: 0534 - Wylie WTP III & IV Filter Performance Improvements Contractor: Prime Controls Consultant: Gupta & Associates, Inc.




Days Extended: Earned to Date: $2,581,283.35 Remarks: The Contractor completed testing of the PLC for Backwash Pump No. 3 at WTP IV. The weir plates on Basin 1 have been removed, and the contractor is preparing for sandblasting.

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Wastewater Project Name: 0252 - Stewart Creek WWTP Expansion to 10 MGD Contractor: MWH Constructors, Inc. Consultant: Carollo Engineers, Inc.


Original Contract: $60,429,000.00 Notice to Proceed: 10/20/2015 Change Order: $2,349,025.00


Days Extended: 978 Earned to Date: $62,222,972.08 Remarks: Influent Pump Station: Continued working on structural and coating repairs to West wetwell. East wetwell does not require structural repairs. Work expected to be completed by June 5, 2020. Aeration Basins: Air diffuser system was tested again following completion of aeration basins structural and coating repairs, to confirm no damage to the diffusers. Worked on repairing wall rust spots which came up after filling and draining basins; repaired areas were patched. Paving Repairs: Continued working on site grading around newly installed paving. SCADA: Contractor continued operating new equipment ustilizing the SCADA system for testing purposes. Project Name: 0319 - Lower Rowlett & Lower Cottonwood Creek Lift Station Improvements Contractor: Pepper Lawson Waterworks Consultant: CH2M Hill




Days Extended: 252 Earned to Date: $2,675,887.39 Remarks: Lower Cottonwood: Installed control panels for the wetwell high level float switches. Lower Cottonwood Electrical Building: Installed and tested secondary feeder conductors from Oncor transformers to main switchboards. Installed, tested, and made terminations on interconnecting power feeder cables between main switchboards, switchboards, and automatic transfer switch. Installed lighting protection. Lower Rowlett: Completed installation and testing of feeder cables to both automatic transfer switches from the electrical building. Project Name: 0328 - Rowlett Creek RWWTP Peak Flow Improvements, Phase 1 Contractor: Pepper Lawson Waterworks Consultant: CH2M Hill




Days Extended: 252 Earned to Date: $37,433,637.73 Remarks: Headworks: Tie-in of line from new Headworks to existing Train B primary clarifier was made and new step screens started operation on temporary power. Demolition of existing Train B Headworks in progress. Installed conductors from utility pole to Oncor transformers for Headworks Electrical Bldg. MBR: Installed chemical tanks. Continued installation of membrane permeate piping. Installed lightning protection. Installed turboblowers and associated master control panel and UPS panels. Continued cable terminations on MBR ATS, main switchboards, and switchboards. Started electrical work for upsized RAS motor pumps. Wet Weather PS: Mounted master control panel in Headworks Electrical Bldg. UV equipment: Continued connections from UV reactors to control panels. Site Electrical: Completed duct banks from

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Headworks Electrical Building to biofilter. Instrumentation: FAT testing performed for MBR main control panel and Grit Classifier control panel. Project Name: 0343 - Wilson Creek RWWTP Electrical Improvements, Phase 1 Contractor: Facilities Solutions Group Consultant: Mbroh Engineering, Inc.




Days Extended: 443 Earned to Date: $5,816,935.13 Remarks: Contractor is working on electrical punch list items. Archer Western has a firm schedule to complete the primary clarifier tie-in's in May. This will permit construction of the access road which is the only remaining work item in this project. Project Name: 0346 - Wilson Creek Advanced Treatment and Headworks Improvements Contractor: Archer Western Construction, LLC Consultant: CH2M Hill




Days Extended: 201 Earned to Date: $43,910,188.13 Remarks: Installing grit baffles in existing grit basin nos. 2 and 3. Placed ultraviolet disinfection basin no. 612 in service. Tied-in the 30-inch primary influent lines for primary clarifier nos. 3 and 4. Tied-in the 42-inch screened raw sewage line and 8-inch basin drain pump station discharge line to the grit effluent channel. The electrical subcontractor installed wire and grounding for the plant effluent structure. Project Name: 0369 - SMC RWWTP Filter & Ultraviolet Disinfection Improvements Contractor: Archer Western Construction, LLC Consultant: Black & Veatch




Days Extended: 34 Earned to Date: $9,688,851.66 Remarks: A 40-MGD bypass system of the filter complex was installed to perform the tie-in of the new 48-inch pipe to convey flow from the filter distribution box to filter complex 2. The bypass and tie-in was successfully completed. The chlorine contact basin is permanently removed from service. The demolition of the weir wall in the filter distribution box was completed. Removal of the bypass pumps and piping is in progress. Tie-in of the new 42-inch pipe to also convey flow from the filter distribution box to filter complex 2 was started. Project Name: 0381 - Lower White Rock Lift Station Improvements Contractor: Archer Western Construction, LLC Consultant: Cobb, Fendley & Associates

Contract Date: 9/28/2017 Original Contract: $5,789,000.00

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Notice to Proceed: 10/27/2017

Change Order: $1,361,850.41 Original Completion: 12/29/2018 % of Increase: 23.5% Revised Completion: 3/13/2020 Current Contract: $7,150,850.41

Days Extended: 440 Earned to Date: $6,804,440.56 Remarks: Completed replacement of exhaust duct work in dry well. Planted 3-inch trees and performed odor control unit start-up and training. Project Name: 0391- Preston Road Lift Station Improvements Contractor: Archer Western Construction, LLC Consultant: Cobb, Fendley & Associates



Original Completion: 12/29/2018 % of Increase: 0.0% Revised Completion: 3/13/2020 Current Contract: $675,000.00

Days Extended: 440 Earned to Date: $324,381.36 Remarks: Contractor has demobilized from site until VFD for Pump #4 is repaired by NTMWD. Expected completion of repair is in July. Project Name: 0392 - Beck Branch Interceptor Improvements, Phase II Contractor: IPR South Central, LLC Consultant: Lockwood, Andrews & Newnam, Inc.




Days Extended: 123 Earned to Date: $6,278,826.96 Remarks: Awaiting delivery of fence sections to complete the work at Beck Branch Lift Station. Project Name: 0401 - Princeton Lift Station Improvements Contractor: Crescent Constructors, Inc. Consultant: Parsons Environment & Infrastructure, Inc.




Days Extended: 484 Earned to Date: $8,228,089.00 Remarks: Contractor continued work on punch list items and replaced damaged air filtration motor. Project Name: 0432 - Floyd Branch Regional WWTP Process Optimization Improvements Contractor: Eagle Contracting, LP Consultant: Arcadis Inc.

Contract Date: 6/27/2019 Original Contract: $14,193,000.00 Notice to Proceed: 7/10/2019 Change Order: $80,412.30

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Days Extended: Earned to Date: $2,558,151.69 Remarks: Contractor submittal reviews on-going. Construction of BioMag building and filter bypass structure on-going. Electrical subcontractor installed conduit, power, and controls at the activated sludge pump station, and conduits at the UV facility and sludge pump station. Installed duct bank at solids building. Preparing for scheduled summer construction improvements at north aeration basin, secondary clarifier, and RAS/WAS pumping facilities. Project Name: 0433 - Princeton Parallel Force Main Contractor: Wildstone Construction, LLC Consultant: Parsons Environment & Infrastructure, Inc.




Days Extended: 205 Earned to Date: $4,538,613.42 Remarks: Contractor installed replacement air valves and evaluating its performance. Project complete pending final walk through. Project Name: 0437 - Wilson Creek RWWTP Expansion to 64 MGD (CMAR) Contractor: Sundt Construction, Inc. Consultant: Carollo Engineers, Inc.




Days Extended: 197 Earned to Date: $54,365,733.30 Remarks: Contractor completed all punch list items. Final payment will be sent on June 25, 2020. Project Name: 0439 - Beck Branch Parallel Interceptor FM Contractor: Belt Construction, Inc. Consultant: Lockwood, Andrews & Newnam, Inc.




Days Extended: 127 Earned to Date: $5,199,680.99 Remarks: Manholes: Atmos completed relocation of the gas line in the way of the project manhole at the interconnect of the new Beck Branch Interceptor and the existing Beck Branch line to facilitate manhole construction at this location. Worked on installation of vents on two other manholes. Odor Control Units: Pads have been poured and electrical stubout installed and inspected. General site: Worked on saw cutting damaged concrete panels at the Capital One Bank parking lot and at an intermediate pit at STA 16+91.

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Project Name: 0443 - SMC RWWTP Influent Flow Handling and Secondary Clarifier Improvements Contractor: Crescent Constructors, Inc. Consultant: CDM Smith, Inc.




Days Extended: 39 Earned to Date: $6,027,375.86 Remarks: At secondary clarifier, the contractor continues to install the walls and launders of the clarifier. The contractor installed grout in the effluent launders. The contractor installed the 4-inch grit suction line, 1 1/2-inch nonpotable water line, and fluidizing ring in the west grit basin. Project Name: 0450 - Muddy Creek WWTP Aeration Basin, Odor Control, and Backup Improvements Contractor: Eagle Contracting, LP Consultant: Gupta & Associates, Inc.




Days Extended: 50 Earned to Date: $4,999,986.44 Remarks: Contractor has relocated a light pole adjacent to Lift Station, completed paving at Lift Station and Blower Building. Bollards are complete at the Lift Station Generator and the Blower Building Generator. Installed Biotrickling duct condensate drains, biotrickling pipe insulation and heat tracing. Completed connection of new foul air duct to existing Clarifiers and splitter box. Currently testing new Biotrickling System. Project Name: 0453 - Indian Creek Lift Station No. 2 Contractor: Red River Construction Consultant: AECOM Technical Services, Inc.




Days Extended: 70 Earned to Date: $5,099,209.47 Remarks: Contractor continued finishing roofs of buildings, installing electrical conduit, installing pipe and appurtenances in dry well, painted interior walls of buildings, set odor control equipment and feed lines. Contractor also poured piers for generator pad, poured slab footing for meter vault, and continued installation of HDPE force main. Project Name: 0454 - Indian Creek Force Main No. 2 Contractor: Excel Trenching, LLC Consultant: HDR Engineering, Inc.




Days Extended: 109 Earned to Date: $9,601,678.39

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Remarks: Contractor has finished the installation of four plug valves in the project. Hydrostatic testing of Phase I and II of the pipeline was conducted during this month and the test passed. Contractor ready to demobilize from the project at the end of the month since Phase I and II of the project will be complete. HDR (Design Consultant) is currently reviewing the alignment along McKamy Trail in light of the SUE data that was provided by their sub consultant which was intended to locate the existing utilities along McKamy Trail, especially the 24-inch and 18-inch FM. Project Name: 0455 - Forney Mustang Creek Lift Station, Phase I Contractor: Crescent Constructors, Inc. Consultant: CP&Y, Inc.




Days Extended: 239 Earned to Date: $6,644,266.72 Remarks: Lift Station: Built scaffold and shoring to support the top deck. Set forms and hatches, placed rebar, and installed electrical conduits. Manhole Installation: Excavated and installed manhole #1. Pipeline Work: Excavated a trench and installed 3 segments of pipe. Project Name: 0468 - Wilson Creek RWWTP Electrical Improvements, Phase II Contractor: Facilities Solutions Group Consultant: Mbroh Engineering, Inc.




Days Extended: 30 Earned to Date: $13,394,641.99 Remarks: New electrical building complete and paralleling switchgear has been set inside building. Overhead tie-in is expected to begin in June. Coordination with Oncor for switchgear settings has been slow and could prove to be critical path item. Project Name: 0499 - Wilson Creek RWWTP Maintenance Facility & Solids Operations Facility Contractor: Mart, Inc. Consultant: Halff Associates, Inc.




Days Extended: Earned to Date: $979,789.83 Remarks: Formed grade beams and tied steel preparing for concrete pour. Project Name: 0502 - McKinney Lift Station Improvements Contractor: Archer Western Construction, LLC Consultant: HDR Engineering, Inc.

Contract Date: 6/27/2019 Original Contract: $24,951,625.00 Notice to Proceed: 7/22/2019 Change Order: $ 0.00

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Days Extended: Earned to Date: $11,233,842.04 Remarks: Poured the third lift of the center wall, south wall, north wall, south east corner, south west corner, north east corner, and north west corner for the lift station. Poured the second lift of the influent box walls and stair well walls for the lift station. Installed part of 72-inch interceptor line and tied-in 84-inch interceptor line to the interceptor diversion structure. Project Name: 0522 - UEFIS Parking and Storage Facilities at Wilson Creek RWWTP Contractor: Mart, Inc. Consultant: Halff Associates, Inc.




Days Extended: Earned to Date: $634,662.81 Remarks: Formed grade beams and tied steel in preparation for concrete pour.

Solid Waste Project Name: 0465 - Custer Road Transfer Station Compost Office Contractor: Advanced Transol Consultants, LLC Consultant: Huitt-Zollars, Inc.


Original Contract: $502,000.00 Notice to Proceed: 5/25/2018 Change Order: $59,839.39

Original Completion: 11/30/2018 % of Increase: 11.9% Revised Completion: 5/15/2019 Current Contract: $561,839.39

Days Extended: 166 Earned to Date: $556,528.11 Remarks: New flooring and doors are on order, and expected to be installed in June. The Contractor is waiting to demolish the old building until Plano moves into new facility. Project Name: 0482B - 121 RDF Cell 5B-B, 5C, and 5D Excavation Contractor: DelHur Industries, Inc. Consultant: Biggs & Mathews Environmental




Days Extended: 141 Earned to Date: $12,210,751.08 Remarks: The Contractor has 2 dozers on site. The Contractor has completed all cell excavation and grading of the southwest corner of the 121 RDF stockpile. The Consultant will assess the grading through aerial survey, and confirm completion of all work. After a final walkthrough all equipment will be demobilized from the 121 RDF.

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Project Name: 0527 - 121 RDF Bypass Lane Improvements Contractor: New World Contracting, LLC Consultant: Biggs & Mathews Environmental




Days Extended: 132 Earned to Date: $1,738,853.83 Remarks: All computer equipment has been installed and configured for use by District scale house personnel. The NTMWD Information Technology Dept. has installed two seperate computers to be able to read both signature pads for the new bypass lane scale. The Contractor is working on completion of punchlist items. Additional work to lower the manhole north of the scale house is being considered by the District. Project Name: 0537 - McKinney Landfill 2019 Landfill Gas System Upgrades Contractor: Tri Con Works, LLC Consultant: Weaver Consultants Group, LLC



Original Completion: 1/14/2020 % of Increase: 0.0% Revised Completion: Current Contract: $173,905.00

Days Extended: Earned to Date: $173,905.00 Remarks: The new air compressor has been placed in service and operational testing of the landfill gas system has been completed. The Contractor is working on closeout documents. An authorization to make final payment will be requested at the June NTMWD board meeting. Project Name: 0560 - 121 RDF Intermediate Cover Improvements (Construction) Contractor: Hammett Excavation, Inc. Consultant: Biggs & Mathews Environmental




Days Extended: Earned to Date: $90,752.58 Remarks: The Contractor has begun work from the east (sector 1 and 4) moving west with intermediate cover and temporary controls work.

Total Value – All Projects: $ 719,228,381.74 Total Earned – All Projects: $ 618,143,263.45

% Difference: 85.95%

BOIS D’ARC LAKE

PROGRAM SUMMARY.

June 2020

B O I S D ’ A R C L A K E P R O G R A M S U M M A R Y

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PROGRAM MAPS AND STATUS SUMMARY

① RIVERBY AND UPPER MITIGATION SITES (FSP – RES)

Design/Construction Budget: Est. - $148M; Authorized Amount – $148M; Spent

Amount - $70.5M

Status: See construction report sheet later in report. Schedule: See construction report sheet later in report.

② DAM AND RESERVOIR (CMAR 1 – Archer Western)

Design/Construction Budget: Est. - $182M; Authorized Amount – $182M; Spent

Amount - $104.1M

Status: See construction report sheet later in report.

Schedule: See construction report sheet later in report.

③ RAW WATER PUMP STATION (CMAR 3 – Garney)

Design/Construction Budget: Est. - $97.1M; Authorized Amount – $97.1M; Spent

Amount - $48.6M



④ FM 897 AND COUNTY ROADS (CMAR 4 – Austin Bridge and Road)

Design/Construction Budget: Est. - $55.6M; Authorized Amount – $55.6M; Spent

Amount - $43.7M



⑤ & ⑥ RECREATION AREAS, BOAT RAMPS, LAKE OFFICE (CMAR 4 –

Austin Bridge and Road) and DAM MAINTENANCE BUILDING (CMAR 3 –

Garney)

Design/Construction Budget: Est. - $29M; Authorized Amount – $26M; Spent Amount -

$7.1M




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PROGRAM MAPS AND STATUS SUMMARY

⑦ 90-INCH RAW WATER PIPELINE (CMAR 5 – Garney)

Design/Construction Budget: Est. - $191.3M; Authorized Amount – $185.4M; Spent Amount - $123.1M



⑧ LEONARD WATER TREATMENT PLANT (CMAR 3 – Garney)




⑨ HIGH SERVICE PUMP STATION (CMAR 3 – Garney)




⑩ TERMINAL STORAGE RESERVOIR (CMAR 1 – Archer Western)




⑪ 84-INCH TREATED WATER PIPELINE (CMAR 5 – Garney) Design/Construction Budget: Est. - $125M; Authorized Amount – $64M; Spent Amount - $24.3M




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CONSTRUCTION PROGRESS PHOTOS


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JUNE 2020 FINANCIAL STATUS (BASELINE ESTIMATE)


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JUNE 2020 FINANCIAL STATUS

*Finance Contingency is Savings from Cost of Issuance


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JUNE 2020 FINANCIAL STATUS (BY COMPONENT)


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JUNE 2020 OVERALL PROGRAM FINANCIAL STATUS (FINANCE TABLE)

JUNE 2020 FINANCIAL STATUS (REMAINING CONTINGENCY AND ALLOWANCES)

Construction QAProgram Admin

& Permitting

Conflicts Around

Reservoir

Property

Acquisition

Dam, Reservoir

& TSR (CMAR 1 -

AW)

Mitigation (FSP -

RES)

WTP, Pump

Stations, Dam

Maint (CMAR 3 -

Garney

Roads, Boat

Ramps and Lake

Ops (CMAR 4 -

ABR)

Pipelines

(CMAR 5 -

Garney)

Program

ContingencyTOTALS

Baseline

Estimate$39,040,000 $51,239,000 $54,647,000 $136,435,000 $211,761,000 $213,482,000 $422,872,000 $83,050,000 $316,097,000 $60,000,000 $1,588,624,000

Current

Estimated

Commitment

$42,350,000 $67,676,000 $68,449,000 $164,156,000 $229,049,000 $148,735,000 $482,512,000 $82,175,000 $314,434,000 -$10,911,000 $1,588,624,000

Expenditures $14,991,000 $39,562,000 $50,171,000 $152,818,000 $135,563,000 $70,547,000 $234,163,000 $50,905,000 $149,334,000 - $898,054,000

CMAR 1 FSP CMAR 3 CMAR 4 CMAR 5 TOTALSBoard

Authorized

Unused CMAR

Contingency $5,426,347.31 $0.00 $3,252,356.93 $2,006,507.99 $2,135,640.33 $12,820,852.56 Yes

Unused CMAR

Allowances$2,446,499.01 $0.00 $6,469,273.12 $6,464,849.29 $4,426,560.71 $19,807,182.13 Yes

Program

Contingency -$10,911,000.00 No

Finance

Contingency $390,000.00 No

$32,628,034.69

$390,000.00

$33,018,034.69

TOTAL CMAR (AUTHORIZED)

TOTAL PRGM (UNAUTHORIZED)

TOTAL


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PROGRAM CONTINGENCY TRACKER

*Projections for future use are based on planned future authorizations to the BDL budget and expected future project closeouts with remaining contingency and allowances that

went unused.

June 2020 - Bois d’Arc Lake Program Construction Status Summary

Overall Program Summary: Work is ongoing on all program components except for the dam maintenance facility. All construction sites continue to react and adjust safety plans accordingly in response to the COVID-19 virus pandemic. Construction crews, managerial staff, NTMWD management, inspection staff, etc. are all subject to the CMAR requirements onsite for screening, social distancing, and personal hygiene. All Bois d’Arc staff are being asked to limit meetings and maintain less of an office presence during this time. The Bois d’Arc team will adjust to any changes pushed by the local, state and federal officials. Teams are making good progress in spite of the concerns with COVID 19 and the occasional weather impacts. Program component schedules for the dam and treatment plant facilities are being monitored. Current schedules show delays, but the teams are working to bring those back to within contract durations and meet key program milestones such as early impoundment before substantial completion.

*Curve data utilizes actual numbers and schedules when available and estimated amounts/dates for projects still pending procurement. Schedule and curve follow the earliest start and latest completion for that particular CMAR/FSP.

Impoundment

Fall 2020

Treatment

Spring 2022

Mitigation

Monitoring/Maintenance

continues through

approximately 2042. Not

shown for clarity.

Auth. Budget

Projected

Actual

Program Authorized Budget vs. Actual/Projected Cost Curve


Archer Western - CMAR 1 Summary for the Dam, Reservoir Clearing and TSR: Dam construction work continued. Work progressed on filling the Bois d’Arc Creek area of the dam with several good weeks of production. Concrete work made good progress at the intake structure and on the spillway slabs and walls. Several very large pours were completed this past month to include the 8-foot-thick slab under the labyrinth weir. Work on the TSR continued. Work focused on installation of the liner and soil cement in the bottom of the reservoir. Progress continues to exceed schedule with completion looking to be ahead of contract timelines.

CMAR 1 Schedule and Cost Summaries:

Dam and Clearing

Time Summary TSR Time Summary

Original Contract Duration to Substantial 922 544

Approved Changes to Contract Duration 58 0

Original Construction Start Date (NTP) 04/27/18 06/20/19

Original Substantial Completion Date 11/04/20 12/15/20

Revised Substantial Completion Date 01/01/21 12/15/20

Days Charged to the Project to Date* 766 347

Days Remaining in Contract to Substantial 156 197

Contracted Final Completion Date 07/03/21 05/30/21

Days Ahead/Behind Schedule 159 Days Behind On Schedule

*Days charged to project from NTP to 6/1/20

**159 days behind for substantial completion. CMAR and Contractor meeting internally to find

out options for sequencing work to still push towards earliest impoundment possible. NTMWD

and FNI will be in next round of meetings to discuss. Recovery schedule will be requested.

Impoundment

Fall 2020

Treatment

Spring 2022

Auth. Budget

Projected

Actual

CMAR 1 Authorized Budget vs. Actual/Projected Cost Curve

Dam and

ReservoirTSR Total Amount

Preconstruction

Procurement $1,711,718.87 $222,083.00 $1,933,801.87

GMP Amounts $170,303,940.46 $44,687,897.67 $214,991,838.13

Approved Change

Orders$1,557,352.74 $0.00 $1,557,352.74

Current Cost $173,573,012.07 $44,909,980.67 $218,482,992.73

Amount Paid to Date $95,689,074.91 30,069,896.56$ $125,758,971.47

Percent Paid to Date 55.13% 66.96% 57.56%*Costs are for construction authorizations only. Totals exclude engineering costs, ROW

costs, etc.


RES - FSP Summary for the Environmental Mitigation Projects: RES continued work at Riverby and the Grasslands. Work at Riverby was mostly in Sections 1, 4 and 5. Crews continued work on stream restoration, cover crop maintenance, fence maintenance and invasive species removal. Stream work is expected to be aggressive this summer pushing to complete all required stream construction by September/October. FSP Schedule and Cost Summaries:

FSP Mitigation

Original Construction Contract Duration 1665

Approved Changes to Contract Duration 0

Original Construction Start Date 08/08/18

Original Construction Substantial Completion Date 02/28/23

Revised Construction Substantial Completion Date 02/28/23

Days Charged to the Project to Date* 663

Days Remaining in Contract** 1002

Days Ahead/Behind Schedule On Schedule

*Days charged from NTP to 6/1/20

**Maintenance/Monitoring will continue for up to 20 years.

Main Construction

Effort Complete

Early 2023

Auth. Budget

Projected

Actual

Mitigation FSP Authorized Budget vs. Actual/Projected Cost Curve


Garney – CMAR 3 Summary for the Leonard Water Treatment Plant, Raw Water Pump Station, High Service Pump Station and Dam Maintenance Facility: Leonard Water Treatment Plant work continued on all structures onsite. Activity onsite is peaking with 8-9 cranes positioned around the site to help with construction. Structural concrete work continued to be the focus on all major components. Walls and structural steel are starting to become more visible onsite at the various structures. Yard piping, electrical work and grading continued around the entire site. The Raw Water Pump Station progress on structural concrete continues at a fast pace. Multiple pours weekly have kept the project on schedule. The roof structure continued with most of the beams being installed and roof decking pours ongoing. The HSPS continued the structural foundation work and started wall construction. The dam maintenance facility has not started construction yet; it is expected to start in September 2020. CMAR 3 Schedule and Cost Summaries:

LWTP HSPS RWPSDam

Maintenance

Original Contract Duration to Substantial 1055 747 811 TBD

Approved Changes to Contract Duration 46 46 56 0

Original Construction Start Date (NTP) 11/05/18 09/09/19 12/10/18 TBD

Original Substantial Completion Date 09/25/21 09/25/21 02/28/21 TBD

Revised Substantial Completion Date 11/10/21 11/10/21 04/25/21 TBD

Days Charged to the Project to Date* 574 266 539 0

Days Remaining in Contract to Substantial527 527 272 0

Anticipated Final Completion Date 04/30/22 04/30/22 07/24/21 TBD

Days Ahead/Behind Schedule 30 Days

Behind**

30 Days

Behind**

11 Days

Ahead TBD

* Days charged to project from NTP to 6/1/20

** CMAR is evaluating impacts of slab work at HSPS that is driving the critical path of the schedule to be

delayed. Recovery is possible and options for work sequencing will be discussed with the NTMWD/FNI

program team. Recovery schedule will be formally requested.

Impoundment

Fall 2020

Treatment

Spring 2022

Auth. Budget

Projected

Actual



Austin Bridge and Road – CMAR 4 Summary for FM 897, Fannin County Roads, Boat Ramps and Lake Operations Center: FM 897 and Fannin County Road construction work continued. Concrete work on the bridge deck is now complete. A FM897 walkthrough is scheduled with TxDOT for later in June. County road work is available at all sites. Sites 2, 12, 27 and 23 are complete. Site 13 was able to get started and made up some ground on schedule in the month of May. Sites 1 and 3 are near completion and will be reviewed by County Officials soon. County road closures continued. Site 4 and 5 are complete. Sites 32, 15 and 16 have been started. Lake Operations Center crews continued on several construction components. Structural steel beams, joists, and decking at the north and south ends has been installed. The lobby’s steel beams have been installed and we are awaiting architectural metal decking. Boat ramps crews continued work when able at the 3 boat ramp locations. CMAR 4 Schedule and Cost Summaries:

*Schedule bars for CMAR 4 indicate a longer final completion due to the floating boat house construction needing impounded water to complete installation.

FM 897County

Roads

Lake

OperationsBoat Ramps Boat House

Original Contract Duration to Substantial 795 794 430 430 722

Approved Changes to Contract Duration 30 30 0 0 0

Original Construction Start Date (NTP) 04/27/18 04/27/18 09/03/19 09/03/19 09/03/19

Original Substantial Completion Date 06/30/20 06/29/20 11/06/20 11/06/20 08/25/21

Revised Substantial Completion Date 07/30/20 07/29/20 11/06/20 11/06/20 08/25/21

Days Charged to the Project to Date* 766 766 272 272 272

Days Remaining in Contract to Substantial29 28 158 158 450

Anticipated Final Completion Date 07/31/20 07/30/20 12/06/20 12/06/20 09/24/21

Days Ahead/Behind Schedule 2 Days

Ahead

2 Days

Ahead

On

Schedule

On

Schedule

On

Schedule


Impoundment

Fall 2020

Treatment

Spring 2022

Auth. Budget

Projected

Actual


FM 897 County RoadsBoat Ramps &

Lake OperationsTotal Amount

Preconstruction

Procurement $446,100.00 $167,525.00 $272,375.00 $886,000.00

GMP Amounts $34,653,982.23 $13,295,505.79 $24,932,935.95 $72,882,423.97

Approved Change

Orders$47,470.38 $20,699.86 $0.00 $68,170.24

Current Cost $35,319,937.19 $13,311,346.07 $25,205,310.95 $73,836,594.21

Amount Paid to Date $28,460,662.87 $9,696,801.96 $5,774,242.47 $43,931,707.30

Percent Paid to Date 80.58% 72.85% 22.91% 59.50%

*Costs are for construction authorizations only. Totals exclude engineering costs, ROW costs, etc.


Garney – CMAR 5 Summary for Raw and Treated Water Pipelines: Installation crews on all segments of the RWPL continued work. A total of 5 installation crews are working on RWPL segments. Work continued on prep ROW, preconstruction video, etc. and then moved to actual tunnel construction on the TWPL segments. It is anticipated that there will be 3 installation crews and one dedicated tunnel crew. Installation work will start in June/July. CMAR 5 Schedule and Cost Summaries:

RWPL TWPL

Original Contract Duration to Substantial 748 678

Approved Changes to Contract Duration 0 0

Original Construction Start Date (NTP) 03/30/19 04/24/20

Original Substantial Completion Date 04/21/21 03/03/22

Revised Substantial Completion Date 04/21/21 03/03/22

Days Charged to the Project to Date* 429 38

Days Remaining in Contract to Substantial 319 640

Contract Final Completion Date 8/21/21 5/24/22

Days Ahead/Behind Schedule On Schedule On Schedule


Impoundment

Fall 2020

Treatment

Spring 2022

Auth. Budget

Projected

Actual


RWPL TWPL Total Amount

Preconstruction

Procurement and Early

Packages

$1,093,800.00 $931,200.00 $2,025,000.00

GMP Amounts $170,847,153.36 $121,102,808.00 $291,949,961.36

Approved Change

Orders$0.00 $0.00 $0.00

Current Cost $171,940,953.36 $122,034,008.00 $293,974,961.36

Amount Paid to Date $118,192,079.21 $20,892,876.89 $139,084,956.10

Percent Paid to Date 68.74% 17.12% 47.31%*Costs are for construction authorizations only. Totals exclude engineering costs, ROW

costs, etc.

North Texas Municipal Water District

Board Policies Manual

Adopted August 2017 Amended December 2018 Amended January 2019 Amended October 2019 Amended March 2020 Amended May 2020

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Table of Contents

SECTION I. DISTRICT POLICY ................................................................................................. 1

1.1 Submission ....................................................................................................................... 1

1.2 Consideration and Approval............................................................................................. 1

1.3 Codification ...................................................................................................................... 1

SECTION II. EXECUTIVE DIRECTOR/GENERAL MANAGER............................................. 2

2.1 Appointment ..................................................................................................................... 2

2.2 Duties and Responsibilities .............................................................................................. 2

2.3 Meetings ........................................................................................................................... 2

2.4 ED/GM Annual Evaluation Process ................................................................................. 2

SECTION III. EXECUTIVE COMPENSATION ......................................................................... 4

SECTION IV. BOARD OF DIRECTORS RULES OF PROCEDURE ....................................... 5

4.1 Authority .......................................................................................................................... 5

4.2 Organization ..................................................................................................................... 5

4.3 Director Compensation .................................................................................................... 6

4.4 Meetings ........................................................................................................................... 6

4.5 Duties of the President ..................................................................................................... 7

4.6 General Provisions ........................................................................................................... 7

SECTION V. DISTRICT OBJECTIVE ........................................................................................ 9

5.1 Objective .......................................................................................................................... 9

5.2 Guidelines......................................................................................................................... 9

SECTION VI. EDUCATION AND DEVELOPMENT EXPENSES ......................................... 10

6.1 Authorized Education and Development Expenses ....................................................... 10

6.2 Reimbursement Procedure ............................................................................................. 11

SECTION VII. BOARD OF DIRECTORS COMMITTEE POLICY........ Error! Bookmark not defined.

7.1 Standing Committees ...................................................... Error! Bookmark not defined. 7.2 Special Purpose Committees ........................................... Error! Bookmark not defined. 7.3 Appointment .................................................................... Error! Bookmark not defined. 7.4 General Rules .................................................................. Error! Bookmark not defined. 7.5 Procedures ....................................................................... Error! Bookmark not defined.

SECTION VIII. STANDARDS OF CONDUCT ........................................................................ 17

8.1 Purpose ........................................................................................................................... 17

8.2 General ........................................................................................................................... 17

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8.3 Relationships with Contractors, Suppliers, and Consultants ......................................... 17

8.4 Ethical Responsibilities of Officers................................................................................ 19

8.5 Use of NTMWD Property .............................................................................................. 19

8.6 Improper Use of NTMWD Funds and Assets ................................................................ 20

8.7 Easement or Property Purchases Involving NTMWD Officers ..................................... 20

SECTION IX. BOARD OF DIRECTORS MEETING AGENDA ............................................ 22

9.1 Purpose ........................................................................................................................... 22

9.2 Agendas .......................................................................................................................... 22

9.3 Construction Change Orders .......................................................................................... 22

9.4 Consent Agenda Items ................................................................................................... 23

SECTION X. INDEMNIFICATION POLICY .......................................................................... 24

10.1 Insurance ..................................................................................................................... 24

10.2 Indemnification and Defense of Directors, Officers, and Employees ........................ 24

10.3 Procedures for Providing Indemnification ................................................................. 24

10.4 No Waiver of Immunity ............................................................................................. 25

SECTION XI. BOARD MEMBER RETIREMENT RECOGNITION PROGRAM ................. 26

SECTION XII. BOARD/STAFF COMMUNICATION POLICY .............................................. 27

SECTION XIII. ADDITION OF MEMBER CITIES TO REGIONAL WASTEWATER SYSTEMS..................................................................................................................................... 28

13.1 Purpose ....................................................................................................................... 28

13.2 Requests for Membership Consideration ................................................................... 28

13.3 Consideration by Board of Directors and Evaluation Factors .................................... 29

SECTION XIV. NEW CUSTOMER REQUESTS FOR WATER SERVICE ............................ 30

14.1 Purpose ....................................................................................................................... 30

14.2 Requests for Water Service ........................................................................................ 30

14.3 Consideration by Board of Directors and Evaluation Factors .................................... 30

14.4 Authorization .............................................................................................................. 31

ADOPTION BY BOARD OF DIRECTORS ............................................................................... 32

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SECTION I. DISTRICT POLICY All authority for the North Texas Municipal Water District (”NTMWD”) is derived from the legislative act creating NTMWD, Art. 8280-141, Vernon's Annotated Texas Civil Statutes, as amended (the "Enabling Act"). The Enabling Act places all powers of NTMWD on the Board of Directors (the "Board"). To enable the sale of NTMWD's original revenue bonds, the Board agreed to the terms of the Bond Indentures, which became the second written group of special regulations. Of necessity, NTMWD must operate under all state law pertaining to corporate entities that are applicable; therefore, the Board of Directors operates within a framework of written law and regulations. The remaining regulations are those policies established by the Board for the operation of NTMWD. In an effort to clarify and provide permanent records on Board policies, the following procedure shall be established and all future policy questions shall be submitted in accordance therewith.

1.1 Submission All proposed policies shall be submitted to the Board in written form and be numbered for future reference. Additional written memoranda, recommendations from consultants, and verbal testimony may also be submitted.

1.2 Consideration and Approval All policy matters shall be considered by the Board, but may be referred to a committee for study and recommendation. A majority of an official quorum at a regular or special meeting shall be necessary to approve any policy. Policy matters may be considered at regular meetings of the Board when placed on the regular agenda or consent agenda and at special meetings when each member has been notified by mail, electronic mail, facsimile, or telephone at least 72 hours prior to the special meeting.

1.3 Codification All policies approved by the Board shall be signed by the President and Secretary. As soon as practical thereafter, all policies shall be codified into the appropriate manual of NTMWD Policies to be utilized by the Board and employees of NTMWD.

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SECTION II. EXECUTIVE DIRECTOR/GENERAL MANAGER The Board of Directors of NTMWD, in accordance with the Enabling Act, has created the position of Executive Director/General Manager (“ED/GM”) with the following provisions.

2.1 Appointment The Board shall appoint and remove an ED/GM who shall be the chief administrative officer and general manager of NTMWD.

2.2 Duties and Responsibilities The ED/GM shall be responsible to the Board for the proper and efficient operation of NTMWD within the laws of the State of Texas, the Bond Indentures of NTMWD, and NTMWD policy. He or she shall appoint and supervise all employees of NTMWD and may at will remove any employees, in accordance with state and federal employment laws. In order to ensure succession and the smooth transition of duties, the ED/GM may adjust the number of employee positions approved by the Board in the Salary Plan set forth in the current Annual Budget by adding any new out-of-budget cycle positions and/or double-slotting key positions, if such adjustments are budget-neutral. If NTMWD resources above those approved in the current Annual Budget are necessary to fund the position change, then Board approval shall be required. Private consultants (engineers, attorneys, financial advisors, and accountants) may be employed by the Board, and it will be the responsibility of the ED/GM to supervise and coordinate the authorized work of the consultants. The ED/GM shall make recommendations to the Board on such matters as he or she may deem necessary or expedient, and shall keep the Board advised as to the financial condition and needs of NTMWD. The ED/GM shall prepare annually a plan for filling interim vacancies on the Executive Team (including the GM/ED and Deputy Directors), in case of the incumbents’ temporary absence from job duties, or if an interim is needed pending the Board’s selection of a permanent replacement. The Directors of each city shall be notified of any significant District activities that could affect that city as soon as practicable.

2.3 Meetings The ED/GM shall attend all special and regular meetings of the Board and committees thereof, with the right to take part in the discussions but having no vote. The Board may request the ED/GM to retire from any meeting during a discussion relating directly to the ED/GM’s actions, compensation, or duties. In the temporary absence of the ED/GM, he or she may designate someone to act in his or her behalf. During any vacancy in the office of ED/GM, a Deputy Director will be appointed to serve as Acting ED/GM until the Board considers the matter.

2.4 ED/GM Annual Evaluation Process To support NTMWD’s growth and improvement as an organization, the Board shall conduct an annual review of the ED/GM as follows:

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Board Members shall individually evaluate the ED/GM through interviews with legal counsel and/or legal counsel’s designees/consultants (“legal team”), based on an evaluation form developed by the legal team. In addition, the ED/GM will complete a self-evaluation, and the legal team shall interview the ED/GM’s direct reports. On or before April 30 of each year, the legal team shall complete and provide its report, including draft findings and compilation of the gathered information to the Board President, Past President, Vice President, Secretary (“Executive Committee”) and the Chair of the Personnel Committee. During the May Board Meeting, the President and the legal team will share the results of the evaluation with the Board in executive session. The Board delegates to the Executive Committee the task of presenting the final evaluation results to the ED/GM after the May Board Meeting. All written communications and documents regarding the ED/GM’s performance evaluation shall be first directed solely to NTMWD’s legal team to gather, review, and analyze such information for the purpose of providing legal counsel and recommendations to the Board on how to proceed with the final performance evaluation in executive session. All documentation shall be created by and remain in the possession of the legal team.

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SECTION III. EXECUTIVE COMPENSATION The Board shall establish the salaries to be received by the ED/GM and each of the Deputy Directors of NTMWD. The Board may, from time to time, authorize additional remuneration to these executives as compensation, reward and/or incentive for work performed on behalf of NTMWD. Additionally, the ED/GM and the Deputy Directors may receive reimbursement for actual expenses reasonably incurred in the course of their duties. Neither the ED/GM nor the Deputy Directors shall accept payment from any source other than NTMWD for work performed in their roles as NTMWD executives, nor may they or any member of their families be employed or paid for work by any individual or organization associated with or benefitting from NTMWD.

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SECTION IV. BOARD OF DIRECTORS RULES OF PROCEDURE

4.1 Authority Under the provisions of the Enabling Act, all powers of NTMWD shall be exercised by the Board of Directors. The following procedures shall be in effect to guide the activities of the Board until amended or unless the procedures are in conflict with state law or any outstanding bond indentures.

4.2 Organization A. DIRECTORS

The Board shall be appointed by majority vote of the governing body of each of the Member Cities in accordance with the Enabling Act. A Director serves as an officer of NTMWD.

B. OFFICERS

The Board shall elect from its membership a President, Vice President, and Secretary of the Board and such other officers as in the judgment of the Board is necessary. Officers shall serve one-year terms commencing June 1 of each year. If the Board fails to elect officers prior to June 1 for the coming year, the current officers shall hold over until such election is held. Nominations for officers shall be made jointly by the most recent past three serving Presidents and presented to the Board for consideration prior to the annual election of officers at a Board meeting. Nominations may also be taken from the floor at the Board meeting prior to the vote. Individual officer vacancies in the midst of a term due to resignation, illness or otherwise may be filled by vote of the Board at the next convenient Board meeting

C. EXECUTIVE DIRECTOR/GENERAL MANAGER (“ED/GM”)

The Board shall have the power to appoint and remove an ED/GM who shall be the chief administrative officer and general manager of NTMWD.

D. CONSULTANTS

The Board shall approve all necessary engineers, attorneys, and other consultants not otherwise provided for in operating budgets, for the efficient and economical operation of NTMWD.

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4.3 Director Compensation

Each Director shall be entitled to receive a dollar amount per day as authorized and limited by the Enabling Act when required to attend to business of NTMWD, and to reimbursement for actual expenses incurred for any travel, lodging, or meals required.

4.4 Meetings The Administrative Offices at 501 E. Brown Street, Wylie, Texas, shall be the main building of NTMWD, and all official records of NTMWD shall be preserved in accordance with applicable state law. Where this policy is silent on meeting rules of procedure, the Board may use Robert’s Rules of Order as guidance; however, the Board does not formally adopt Robert’s Rules of Order. A. PUBLIC MEETINGS

All regular and special meetings of the Board shall be open to the public, and public notices shall be posted in accordance with applicable state law.

B. REGULAR MEETINGS

The Board shall hold at least one regular meeting each month. All regular meetings shall be held in the Administrative Offices at Wylie, Texas, or at a location within the boundaries of the NTMWD service area; the time and dates to be established by the Board at a regular meeting.

C. SPECIAL AND EMERGENCY MEETINGS

Special meetings of the Board shall be those meetings that are scheduled in addition to monthly regular meetings to address non-emergency District business. All special meetings shall be called by the President, Vice President, Secretary, or ED/GM. Notice of the special meeting, including the date, time, location, and subject, must be presented to each member either by mail, electronic mail, facsimile, or telephone at least 72 hours prior to the special meeting. In addition, the President or ED/GM may call an emergency meeting to address an emergency or a matter of urgent public necessity requiring immediate action by the Board due to an imminent threat to public health and safety or a reasonably unforeseeable situation upon two hours’ notice by electronic mail, facsimile, or telephone. Public notice of any special or emergency meeting shall be posted in accordance with applicable state law.

D. COMMITTEE MEETINGS

Committee meetings will be held on the date, time, and location as determined by the Chairman of the Committee. On all Committee proposals or recommendations, the Chairman must inform the Board of the vote on the proposal or recommendation. The ED/GM shall be an ex-officio member of all Committees except those Committees relating directly to the ED/GM's actions, compensation, or duties.

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E. EXECUTIVE SESSIONS

The Board and Committees may meet in executive session closed to the general public on matters exempted by applicable state law from public meeting requirements, provided that requirements for public notice and documentation of such sessions are followed.

4.5 Duties of the President A. CHAIRMAN

The President shall preside as Chairman at all Board meetings. In the absence of the President, the Vice President or Secretary shall preside. In the absence of the President, Vice President or Secretary the Board of Directors shall select a Chairman for the meeting.

B. PRESERVATION OF ORDER

Any Board meeting shall be called to order by the Chairman, and it shall be the responsibility of the Chairman to preserve order and decorum and confine the members in debate to the question under discussion.

C. POINTS OF ORDER

The Chairman shall determine all points of order, subject to the right of any member to appeal to the Board. The appeal shall be decided by a majority of the members of the Board present.

D. QUESTION

The Chairman shall state all questions submitted for a voice vote. A roll call vote shall be taken upon the request of any member.

4.6 General Provisions A. QUORUM

A majority of the Board’s designated seats shall constitute a quorum to do business, and the affirmative vote of the majority present will approve a motion.

B. MINUTES OF MEETINGS

Official written minutes of all Board meetings shall be kept. Copies of the minutes of the preceding meeting shall be furnished to each member, and the minutes shall be approved or corrected by the Board at the next regular or special meeting. These minutes will constitute a formal permanent record of NTMWD.

C. ATTENDANCE

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The President shall notify the Mayor of the applicable Member City when a Board member is absent without reason, acceptable to the Board, from three consecutive regular meetings. The ED/GM or his or her delegate will attend all meetings of the Board. Consultants may be requested to attend meetings, when items pertaining to their specialty are involved, at the request of the President, Vice President, Secretary, or ED/GM.

D. TIE VOTE

In the case of a tie vote on any proposal, the proposal shall fail to carry.

E. AGENDA ITEMS REQUESTED BY BOARD MEMBERS

1. At any Board meeting, a Board member may present an item for future consideration by the Board during the posted agenda item as provided in the “Items of Business” section of this policy. The President or ED/GM will refer such item to the Executive Committee for consideration at its next scheduled meeting. The Executive Committee will schedule the item for a future Board Agenda or refer such item to a Standing or Special Purpose Committee for review and consideration prior to consideration at a Board meeting.

2. Board members may also present an item directly to the President or ED/GM, who

shall refer such item to the Executive Committee for consideration at its next scheduled meeting. The Executive Committee will schedule the item for consideration on the following Board Agenda or refer such item to a Standing or Special Purpose Committee for review and consideration prior to consideration at a Board meeting.

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SECTION V. DISTRICT OBJECTIVE

5.1 Objective The objective of NTMWD is to provide regional services in the most economical and efficient manner within its legal authority.

5.2 Guidelines

Guidelines for effectively performing the objective of NTMWD are: A. The first responsibility of NTMWD is to provide services to the Member Cities in

accordance with the contractual agreements therewith, and to fulfill additional service requirements at the request of the Member Cities when these services will in no way be detrimental to any of the other Member Cities and when said services will be beneficial to the overall operation of NTMWD.

B. NTMWD may provide regional services to other customers within the service area of

NTMWD (as such service area is defined by the Enabling Act) when said services are being offered Member Cities and the additional service will be of benefit to NTMWD as well as the customer.

C. The primary concern of NTMWD is to be of service to the Member Cities by assistance

and development of desired services while leaving the responsibility for local governmental service in the hands of the locally-elected officials of each individual community.

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SECTION VI. EDUCATION AND DEVELOPMENT EXPENSES Essential to NTMWD’s mission is a Board of Directors that is well-educated and current on the industry and business standards, trends, and developments that effect NTMWD. Attending educational and developmental opportunities (“events”) addressing the complex issues facing water districts, including water supply and quality, water, wastewater, and solid waste law, permitting, and enforcement actions, the legislative process, the current practices of other districts, and the general business of running a water district, is the most effective way to ensure that each Director is adequately educated to govern NTMWD and perform his or her crucial duties to the District and its Member Cities. This Policy contains guidelines for authorizing and reimbursing Directors’ expenses for attending such events necessary to their education and development.

6.1 Authorized Education and Development Expenses The needs of NTMWD may change throughout a year, and thus, any guidelines governing education and development opportunities and expenses shall remain flexible and at the discretion of the Executive Committee. At the beginning of each fiscal year, the Executive Committee shall review the water, wastewater, and solid waste industry conventions and major conferences that have been scheduled for the coming year and authorize the appropriate meetings in accordance with the following guidelines: A. A list of the authorized educational and/or developmental opportunities, along with a

general description of the purpose of such events shall be furnished to each member of the Board as soon as practical after October 1. Generally, each Director shall be eligible to attend two educational events that are most applicable to his or her current committee appointment and/or development as a Director.

B. Other needs for education and development of Directors shall be reviewed by Executive Committee as they arise during the year.

C. The President and/or ED/GM shall schedule an annual planning workshop for the Board and staff providing sufficient time for planning and program development of NTMWD activities. The ED/GM is encouraged to invite subject matter experts to such workshops for the purpose of enhancing the education of Directors on topics relevant to their duties to NTMWD. Additional Board planning workshops may be scheduled as necessary with approval of the Executive Committee.

D. NTMWD will reimburse expenses only for each individual Director’s reimbursable expenses, as outlined in the following paragraph. Expenses for the spouse or significant other will be at the personal expense of the Director.

E. Reimbursable items shall include expenses for food, lodging, transportation, and general expense (registration, fees, tips, parking, etc.)

• Lodging – NTMWD will reimburse lodging expenses for the hotel at which the meeting is being held, or other comparable hotel, but will not reimburse personal expenses.

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• Meals – At the individual Director’s option, meals will be reimbursed, either at their

actual cost, with receipts, or at the current federal per diem rate authorized for the location of the event.

Alcohol will not be reimbursed. Meals will not be reimbursed if a meal at that time is provided as part of the

event cost. NTMWD may sponsor one or more group dinners during conferences to

discuss the issues learned from the day’s events; Directors will reimburse NTMWD for any expenditure incurred at group dinners for alcohol or guests.

• Transportation – Round-trip mileage is reimbursed at the current IRS rate, or round-trip airfare at coach rates. For out-of-state events, if a Director chooses to drive when round-trip airfare is the more economical option to NTMWD, then mileage will be reimbursed only up to the cost of airfare at coach rates.

Directors sharing travel expenses may split reimbursable expenses as they deem equitable, but NTMWD will pay no more than 100 percent of the actual cost.

F. Should a disagreement develop over a travel policy matter, the Director shall submit to the President a written statement of the disagreement. The matter shall be referred to the Executive Committee for resolution within 30 days of the written notice to the President. If the Director making the complaint is not satisfied with the Executive Committee’s decision, then the matter will be placed as an item for consideration by the entire Board at the next regularly scheduled meeting.

6.2 Reimbursement Procedure

Within 60 days of the conclusion of the event, each Director shall submit an "expense voucher" provided by NTMWD, with supporting detail receipts, to receive reimbursement for travel and expenses, which will be made in accordance with the payment policies of NTMWD.

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SECTION VII. BOARD OF DIRECTORS COMMITTEE POLICY

All committees of the Board of Directors of NTMWD shall be governed by this Policy. The committees may develop their own procedures, but the Committee Policy shall prevail in case of conflict. All committees shall serve in an advisory capacity to the Board unless special authorization is obtained formally from the Board and is included in a written policy or in the minutes of NTMWD.

7.1 Standing Committees

The following Standing Committees are created as perpetual committees of the Board of Directors:

A. EXECUTIVE COMMITTEE

The Executive Committee shall be composed of the current President, Vice President, Secretary, and immediate past President of the Board. The Executive Committee shall have authority as delegated in NTMWD Policies and as from time to time authorized by the Board on individual matters. The Executive Committee shall be available for consultation with the ED/GM on any matters affecting NTMWD. The current President shall serve as Chairman, and the Chairman will schedule meetings as needed.

B. WATER COMMITTEE

Matters pertaining to water supply, water treatment, and water transmission that require additional consideration prior to submittal to the full Board shall be reviewed by the Water Committee. The Committee shall be composed of seven Directors including the Chairman. The Water Committee generally meets quarterly or as needed.

C. WASTEWATER COMMITTEE

Matters which need additional consideration before submittal to the Board of Directors concerning wastewater treatment facilities, collection facilities, or regional interceptor programs shall be reviewed by the Wastewater Committee. This Committee shall be composed of seven Directors including the Chairman. The Wastewater Committee generally meets quarterly or as needed.

D. SOLID WASTE COMMITTEE

Matters which need additional consideration concerning solid waste transfer or disposal prior to submittal to the Board shall be reviewed by the Solid Waste Committee. This Committee shall be composed of seven Directors including the Chairman, with at least four of the Solid Waste Member Cities (Allen, Frisco, McKinney, Plano and Richardson) represented. The Solid Waste Committee generally meets every six months or as needed.

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E. FINANCE/AUDIT/INSURANCE/RISK MANAGEMENT COMMITTEE

The Finance/Audit/Insurance/Risk Management Committee shall review financial, insurance and risk management matters that need additional consideration prior to submission to the Board, and shall coordinate and review the annual budget and the annual audit as submitted by the appointed outside auditors. The Committee shall be composed of seven Directors including the Chairman. The Finance/Audit/Insurance/Risk Management Committee shall meet in June and July to review the upcoming annual operating budget, and in January to review the annual audit. In addition, the Committee should generally meet every six months or as needed.

F. PERSONNEL COMMITTEE

This Committee shall review personnel matters and appeals from District personnel on grievances in accordance with NTMWD's Personnel Policies Manual, as amended. The Committee shall be composed of seven Directors including the Chairman. The Personnel Committee generally meets annually or as needed.

G. REAL ESTATE COMMITTEE The Real Estate Committee shall review NTMWD real estate matters and make

recommendations to the Board as needed. The Committee shall be composed of seven Directors including the Chairman. The Real Estate Committee generally meets every six months or as needed.

H. POLICY COMMITTEE

Matters pertaining to general policy of NTMWD or matters that affect all of the Committees will be referred to the Policy Committee. The Policy Committee will be composed of the Chairman of each of the Standing Committees with the President serving as Chairman. The Policy Committee will meet annually to review NTMWD Policies and as needed.

I. LEGISLATIVE COMMITTEE

Matters pertaining to state and federal legislative issues of NTMWD will be referred to the Legislative Committee. The Legislative Committee will be composed of seven Directors including the Chairman. The Legislative Committee generally meets every six months or as needed.

7.2 Special Purpose Committees

Special purpose committees may from time to time be appointed by the President. If a special purpose committee is authorized by the Board, its existence may extend beyond the term of the current President to a specific time or termination of the project or program involved. However, a committee appointed by the President without the confirmation and approval of the Board will

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exist only for the term of the current President. Each Special Purpose Committee shall be given a specific name related to its purpose.

7.3 Appointment

Appointments of Directors to Standing Committees shall be the primary responsibility of the President; however, all appointments must be reported to the Board of Directors at the next regular meeting and included in the formal minutes of that meeting. Committee members must be members of NTMWD Board.

A. NEW COMMITTEES

The President may propose new Standing Committees which would be created with a majority vote of the Board at the next regular meeting confirming the need for the Standing Committee.

B. COMMITTEE VACANCIES

Should a vacancy occur on any committee, it shall be the responsibility of the President to promptly designate a replacement.

C. NEW PRESIDENT

When a new President takes office on June 1, it shall be the President's duty to appoint or reappoint the members of the Standing Committees so that composition of the committees is compatible with the plans and goals of NTMWD. In making such appointments, the President should take into consideration the continuity of the committee and the expertise of the member, but should consider rotating members after three years of service to achieve each member's exposure to other committees. All changes and recommendations should be forwarded to the Board at the regular Board meeting in June.

7.4 General Rules

A. NOTICE OF MEETING

All meetings of committees shall be called by the Chairman of the committee. Notice of the committee meeting, including the date, time, location, and subject, must be presented to each member by mail, electronic mail, facsimile or telephone at least 72 hours prior to the committee meeting. An emergency condition can be declared and a committee meeting held on shorter notice, provided a quorum is present in accordance with the Open Meetings Act. NTMWD shall post public notice of its committee meetings in a form and manner similar to postings for its Board meetings in accordance with the Open Meetings Act, and such meetings shall be open to the public.

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B. QUORUM

A simple majority of the Committee's designated seats shall be considered a quorum at any meeting that has met proper notice requirements. The President, Vice President and ED/GM shall be ex-officio nonvoting members of all Standing Committees (except the Executive Committee) and shall receive notice of meetings. A simple majority vote of the members present shall rule on all votes.

C. CHAIRMAN

The President shall name the Chairman of the committee. The Chairman may select a Vice-Chairman; however, in the event that no Vice-Chairman has been selected and an absence of the Chairman occurs, the majority present at a meeting with a quorum selects an Acting Chairman.

D. MINUTES OF MEETINGS

The ED/GM or designee shall be responsible for preparing minutes of each committee meeting which will be submitted to the committee members for approval. The draft minutes shall be prepared and sent to committee members prior to the next committee meeting. Copies of the minutes shall be forwarded to all the Directors after approval.

E. COMMITTEE ASSISTANCE

The ED/GM shall designate staff personnel to assist the committee in its work as needed. The committee shall have the full cooperation of NTMWD staff, right to all information available, use of consultants within budgetary restraints, and any other facilities or materials available to NTMWD.

F. ROBERT'S RULES OF ORDER

Where NTMWD policy is silent on meeting procedure, the committee may use Robert's Rules of Order as guidance; however, the Board does not formally adopt Robert's Rules of Order.

7.5 Procedures

The purpose of the committee system is to provide adequate time and information for a smaller group of Directors to be knowledgeable and informed on appropriate matters with a full intent to have committee recommendations forwarded to the Board prior to Board action. The following procedures are provided as guidelines:

A. REFERRAL ITEMS

It is not the intent to restrict the actions of the ED/GM on routine items by requiring committee review, but the following shall establish a procedure for referrals to committees.

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1. The President, Vice President, Secretary, or ED/GM, committee members may refer items to the appropriate committee. In addition, a Board member may present matters for consideration to the Board or the President or ED/GM for referral to the appropriate committee in accordance with Board procedure.

2. All new programs or projects must be submitted to the appropriate committee unless previously approved by the Board at a special or regular meeting.

3. All contracts or agreements with new customers in any system for NTMWD service or any new request for service outside the service area as defined in Enabling Act must be referred to the appropriate committee. This does not include vendor contracts or agreements for services provided to NTMWD by others for routine operations.

B. BOARD RECOMMENDATIONS

Items referred to committees for recommendation to the Board:

1. Shall require the Committee Chairman to call a meeting as soon as possible. If a quorum cannot be obtained, the item will be placed on the next regular meeting of the Board of Directors for consideration; and,

2. Shall be made at the next Regular Board Meeting unless a majority of the committee requests additional information or establishes reasons in writing for delay.

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SECTION VIII. STANDARDS OF CONDUCT

8.1 Purpose These Standards of Conduct reaffirm and clarify the policy and expectations of NTMWD concerning the standards of behavior and ethical conduct of the members of its Board of Directors and the ED/GM while conducting NTMWD business. The maintenance of the highest standards of honesty, integrity, impartiality and conduct is essential to the proper performance of NTMWD business responsibilities and to the maintenance of confidence in the NTMWD by the citizens and officials of NTMWD Member Cities and Customers. For purposes of this Policy, “officers” means NTMWD’s ED/GM, Deputy Directors, and members of its Board of Directors.

8.2 General A. NTMWD’s reputation for integrity is an invaluable asset to be nurtured by each officer; it

is each officer’s responsibility to demonstrate the highest standards of integrity and personal conduct.

B. It is the personal responsibility for each officer to diligently, and thoroughly observe, the

policies and procedures of ethical business conduct set forth in District Policy. C. Employees of NTMWD are subject to the highest ethical standards, as outlined in

NTMWD’s Personnel Policies Manual (Ethics, Gifts, and Conflicts of Interest). Such standards are similar to those contained in this Policy. It is each officer’s responsibility to ensure that no NTMWD business is conducted outside of the highest standards of honesty, integrity, impartiality and conduct. If any officer becomes aware of an NTMWD employee violating these standards of ethical conduct, the officer has a responsibility to immediately report such concerns to the ED/GM.

8.3 Relationships with Contractors, Suppliers, and Consultants It is the policy of the Board that all activities of NTMWD, its officers and employees will continue to be conducted in accordance with the laws of the United States, the State of Texas, appropriate counties or municipalities, and the Policies and Directives of NTMWD. A. Bribes, kickbacks, or other illegal payments are specifically prohibited, and any officer

proven to have participated in such activities will be reviewed for legal action by NTMWD. B. While good relations with NTMWD contractors and suppliers or consultants (“business

entities”) are important to the timely and cost-effective execution of NTMWD responsibilities, NTMWD will neither authorize nor condone illegal or unethical activities by these business entities. NTMWD officers with direct or indirect knowledge of such activities shall immediately report to the Board or the ED/GM any activities which indicate that these business entities are acting illegally or beyond the authorization of the NTMWD.

C. No officer or a member of the officer’s family shall solicit or accept any gift, favor, or

service that might reasonably tend to influence the officer in the discharge of official duties

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or that the officer knows or should know is being offered with the intent to influence official conduct. A “gift” does not include a reasonable meal accepted as a guest, or a promotional item of nominal value of the sort typically given at vendor booths at conferences. Officers are specifically prohibited from accepting from current or potential business entities:

1. Vacations, pleasure trips, or hunting trips;

2. Discounts not available to the general public;

3. Products or services not available to the general public under similar circumstances; 4. Loans or advances; 5. Entertainment at a discount unavailable to the general public; 6. Other unusual favors not available to the general public at the same cost. Any officer receiving such offers shall immediately report such offers to the ED/GM, or to the Board of Directors.

D. The first responsibility of an NTMWD officer is to the NTMWD and its members and customers. The officer shall avoid situations where other interest conflict or appear to conflict with the officer’s ability to perform reasonably and with independent judgment removed from any influence by a business entity. If any officer has a substantial interest in a business entity being considered for contract with the NTMWD, that officer must notify the ED/GM or the Board of Directors in writing or in a public meeting called and held in compliance with the Open Meetings Law before consideration of the contract. The officer shall remove himself or herself from the project or contract consideration.

An individual has a “substantial interest” if the individual or his or her parent, child, stepchild, spouse or spouse’s parent:

1. Has controlling interest in the business entity; 2. Has ownership in excess of ten percent of the voting interest in the business entity

or in excess of $25,000 of the fair market value of the business entity; 3. Has any participating interest, either direct or indirect, by shares, stock, or

otherwise, whether or not voting rights are included, in the profits, proceeds, or capital gains of the business entity in excess of ten percent;

4. Holds the position of a member of the Board of Directors or other governing board of the business entity;

5. Serves as an elected officer of the business entity; 6. Is an employee of the business entity.

E. NTMWD officers shall not transact any business on behalf of the NTMWD with any

business entity with which they have a substantial interest, and shall refrain from discussing

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the matter at any time with the members of the body of which the officer is a member or any other body which will consider the matter, and will abstain from voting on the matter.

F. Selection of consultants shall be made based on the merits contained in written proposals or letters of proposal and on consideration of the firms’ expertise, references, performance history, financial strength, or other such criteria uniformly applied by the NTMWD as the specific project may require.

8.4 Ethical Responsibilities of Officers A. All officers of NTMWD shall conduct themselves in a manner that maintains the highest

standards of integrity and personal conduct, avoiding even the appearance of any conflict of interest.

B. In addition to the above, all officers shall conduct themselves in such a manner as to avoid

the appearance of:

1. Using public office for private gain; 2. Giving preferential treatment to any person or entity; 3. Impeding NTMWD efficiency or economy; 4. Losing complete independence or impartiality; 5. Making an NTMWD decision outside official channels; 6. Using any information understood to be confidential gained by his or her official

position with NTMWD for the officer’s own personal gain or for the private interest of others.

C. The Board of Directors shall evaluate any violation coming to its attention, and shall take

appropriate corrective action including sanctions and pursuit of any available legal remedies.

D. Any substantiated violations of this Ethics Policy shall be documented by the ED/GM and/or the Board of Directors, and kept by NTMWD’s Records Management Officer. The documentation shall include documentation of any action taken.

8.5 Use of NTMWD Property

NTMWD property, equipment or vehicles, including property leased to the NTMWD, may not be used for other than officially approved activities. No NTMWD property, equipment or vehicles may be used for personal business or personal gain.

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8.6 Improper Use of NTMWD Funds and Assets A. The funds and assets of NTMWD shall not directly or indirectly be used for illegal or

improper payments of any kind. B. The funds and assets of NTMWD shall not be used directly or indirectly for payments,

gifts, or gratuities of any kind which indirectly or directly inure improperly to the personal benefit of any agent or employee of any entity with which the NTMWD does business.

C. The funds and assets of NTMWD shall not be used directly for political contributions.

"Political contributions" include, but are not limited to, local, state, or national fund-raising dinners, banquets, raffles, or any funds or gifts (including the free use or discounted use of property or services) that could be routed directly to a political candidate, party, committee, or organization. This section is not intended to limit or otherwise restrict lawful personal political activity of persons subject to this standard.

D. No officer shall knowingly cause the NTMWD to enter into any agreement with dealers, vendors, distributors, agents, or consultants: (1) which are knowingly not in compliance with the statutes of the State of Texas and applicable local laws that may be involved, or (2) which provide a commission rate or fee that is not reasonable and commensurate with the function or services to be rendered, or (3) with which the officer has a business relationship beyond the NTMWD.

E. The funds and assets of the NTMWD shall be properly and accurately recorded in accordance with generally accepted accounting practices. No officer shall willfully make or cause to make false or inaccurate entries in the books and records or accounts of the NTMWD. No officer shall, on behalf of the NTMWD, make or approve payments with the intention or understanding that any part of the payments may be used for any purpose other than described in documents supporting the payment.

8.7 Easement or Property Purchases Involving NTMWD Officers

A. Any NTMWD officer who has, or whose parent, child, stepchild, spouse or spouse’s parent has, an ownership interest in property which is within proposed boundaries of an NTMWD project being considered for approval by the Board, shall identify such property in writing to the President of the Board and to the ED/GM prior to project consideration by the Board. Such written notification shall be maintained as part of the permanent records in the project file.

B. Any purchase or easement purchase of property within an approved NTMWD project belonging to an officer of the NTMWD may proceed only if: 1. Records of such sale are fully documented in the project file and are accompanied by

documentation of the price including an appraisal of the fair market value of the property by at least two independent professional appraisers; and,

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2. The cost of the property easement or purchase shall be approved by a majority of the Board of Directors at a regular meeting after submission of such records.

3. The officer has removed him or herself from consideration of or involvement in such transaction.

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SECTION IX. BOARD OF DIRECTORS MEETING AGENDA

9.1 Purpose This policy establishes guidelines for the inclusion of items on the consent agenda and as action items on the Board of Directors regular agenda. Items for expenditures and award of contracts for goods and services funded in NTMWD's annual operating budget are not required to be placed on the agenda. For expenditure items and award of contracts for projects, which are not funded in NTMWD's annual operating budget, the dollar thresholds in 9.3 apply.

9.2 Agendas The order of business of each Board meeting shall be contained in a written agenda prepared by the ED/GM and/or the President and posted in accordance with applicable state law. Written agendas for regular Board meetings shall be delivered to each member at least 72 hours prior to the date of said meeting. Written agendas for special or emergency Board meetings shall be delivered to each member as soon as reasonably possible prior to the commencement of the meeting. Additionally, each Board agenda shall include an item that will allow a Board member to request that an item be placed on a future agenda for consideration by the Board; no substantive discussion of that item will take place at that time. The Board may not deliberate or vote on any item not included on its written agenda and public notice.

9.3 Changes to Construction Contracts and Agreements

A. Consideration of changes to contract* components shall be according to the following table:

ED Limits Consent Agenda Items for Individual

Consideration Cumulative changes below $100,000 or changes that do not exceed 15 percent of the original contract or Board authorization will be included in the Monthly Engineering Activity Report. The report shall be included in each Board Packet.

$100,000 - $500,000 or changes that exceed 15 percent of the original contract or Board Authorization and shall be included in the Monthly Construction Report.

All cumulative changes above $500,000 or above 25 percent over original contract or Board authorization, and resolutions to allow the use of eminent domain.

* To include:

• Construction contract change orders • Construction Manager At-Risk Preconstruction and Procurement

Services • Engineering Services Agreements • Right-of-way acquisitions • Inspection Services Agreements • Legal Services

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B. Notwithstanding the above requirements, the ED shall provide a report to the Board regarding all matters involving litigation not less than every 6 months.

9.4 Consent Agenda Items Consent Agenda Items shall include cumulative change orders between $100,000 and $500,000. These items shall be included in the Monthly Construction Report. Board Members and the ED/GM may use their discretion to move items from the Consent Agenda to Items for Individual Consideration. A. Miscellaneous

1. Interlocal Agreements between NTMWD and another governmental entity involving amounts less than $500,000 and with a term of less than one year.

2. Contracts for professional or contractual services, legal services, or the construction

of improvements to real property in amounts less than $500,000. 3. Sale of surplus personal property provided the value of a single item is less than

$500,000. 1. Miscellaneous items not involving an expenditure of funds or that are ministerial

in nature.

2. Contract extensions of 5 years or less with Customers in any System that include no material changes other than the Term.

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SECTION X. INDEMNIFICATION POLICY

It is the policy of NTMWD to protect and indemnify its Directors, Officers, and Employees (“Covered Individuals”) from claims and lawsuits for damages or other relief sought against them for acts or omissions arising out of the performance of their duties for NTMWD to the full extent allowed by law. For NTMWD to fulfill its public purpose and to attract and maintain quality individuals in all required positions it is necessary that Covered Individuals serving NTMWD not incur the expense and liability for acts or omissions arising out of the discharge of their duties in the course and scope of NTMWD's business.

10.1 Insurance

NTMWD may purchase insurance or may self-insure, to protect itself and its Covered Individuals from the cost and expense of defending against claims and litigation brought against NTMWD or its Covered Individuals individually for acts or omissions occurring during, or arising out of, the course and scope of their duties for NTMWD and undertaken in the good faith discharge of their duties for NTMWD.

10.2 Indemnification and Defense of Directors, Officers, and Employees

To the extent that the cost and expense of defending against claims asserted, or lawsuits brought, against the Covered Individuals of NTMWD are not covered by the applicable policies of insurance provided by NTMWD under this Policy, and to the extent permitted by applicable law, NTMWD may defend, hold harmless, and indemnify Covered Individuals from any and all demands, claims, suits, actions, judgments, expenses and reasonable attorneys' fees incurred in any legal proceedings brought against them in their individual or official capacities as a Covered Individual, provided that the allegations which form the basis of such demand, claim, or action arose from an act or omission of the Covered Individual, acting within the course and scope of their duties with NTMWD. NTMWD will not indemnify any demand, claim, suit, action, judgment, expense or reimbursement for attorneys' fees for any claim or cause of action where it is determined that the Covered Individual 1) committed official misconduct, 2) committed a willful or wrongful act or omission constituting gross negligence, or 3) acted in bad faith, with conscious indifference or reckless disregard to the rights of others. Further, NTMWD will not indemnify the Covered Individual if the claim or cause of action arose out of the Covered Individual's self-dealing or involves a defense of his/her private interests, or for a criminal act absent a finding of not guilty or dismissal of the criminal case (except when the dismissal does not indicate innocence, such as dismissal after a guilty plea, nolo contendre or deferred adjudication).

10.3 Procedures for Providing Indemnification

In the event a claim or demand for monetary or other relief is made or a civil lawsuit instituted against a Covered Individual arising out of an act or omission occurring in the course and scope a Covered Individual's employment for, and in discharge of the individuals duties for NTMWD, the ED/GM or Board Executive Committee may present a Request for Indemnification to the Board on behalf of a Covered Individual.

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In the event a criminal complaint, indictment or information is filed against a Covered Individual arising out of an alleged act or omission related to the discharge of a Covered Individual’s duties for NTMWD, upon a finding of not guilty after a trial or appeal or the complaint, information, or indictment is dismissed without a plea of guilty or nolo contendere being entered, the ED/GM or Executive Committee of the Board may submit a Request for Indemnification to the Board on behalf of the Covered Individual.

Upon presentation of a Request For Indemnification to the Board, the disinterested members of the Board shall determine: (1) if the act or omission giving rise to the claim, demand, or legal proceeding occurred within the course and scope of employment of NTMWD, and (2) whether the defense of the claims, demands, or legal proceedings is in furtherance of the public interest of NTMWD. Upon a majority of disinterested Board members making such findings, NTMWD shall indemnify the Covered Individuals for reasonable attorneys’ fees, costs and expenses associated with the defending of those claims, demand, and legal proceedings, as set forth in this District policy. The determination of the Board shall be final and conclusive absent fraud, or arbitrary and capricious action in making this determination.

The selection of the Covered Individual’s legal counsel shall be with the mutual agreement of the Covered Individual and NTMWD if such legal counsel is not also NTMWD's legal counsel. However, if a legal defense is provided through insurance coverage, the Covered Individual’s right to select legal counsel shall depend on the terms of the applicable insurance contract. To the extent this policy of indemnification exceeds the authority provided and limitations imposed by Texas Civil Practice & Remedies Code, Chapter 102, it shall be construed and modified to the extent necessary to not exceed such authority and limitations.

10.4 No Waiver of Immunity

This policy is solely for the protection of the Covered Individuals of NTMWD and does not grant or confer any rights on any third party, nor does it provide any rights or causes of action not expressly provided for under the laws of the State of Texas and the United States, including the Texas Tort Claim Act. Further, nothing in this policy shall be construed to be a waiver of sovereign immunity or governmental indemnity by NTMWD or its Covered Individuals.

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SECTION XI. BOARD MEMBER RETIREMENT RECOGNITION PROGRAM

Retiring Board members shall be recognized during a regularly scheduled Board meeting as follows:

• A Board member who retires with less than 10 years of service shall be presented with an official resolution adopted by the Board of Directors.

• A Board member who retires with 10 years or more, but less than 20 years of service shall also receive a NTMWD plaque of appreciation.

• A Board member who retires with 20 or more years of service shall also receive an engraved NTMWD logo watch, engraved glass “Water Drop,” or other similar memento.

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SECTION XII. BOARD/STAFF COMMUNICATION POLICY Interaction between Board members and NTMWD staff is encouraged in order to promote productive communications and cooperation. The following are guidelines to clarify Board/Staff contact. A. Board members should direct requests for information and contact only to senior NTMWD

leaders and executive level staff: ED/GM, Deputy Directors, Assistant Deputy Directors, Officers, Process Improvement Advisor, or the Executive Assistant to the Executive Director/General Manager.

B. The ED/GM shall be informed (by email or verbally) of requests for information and

meetings between a Board member and staff. The ED/GM should be copied on email requests and notified promptly of verbal requests.

C. For meetings between staff and Board members that do not require the presence of the

ED/GM, staff shall notify the ED/GM of such meetings in advance so that the ED/GM may make a decision whether to attend.

D. Board members may request from senior staff previously presented existing documents

and reports, but should not direct staff work by asking for reports that are not already prepared or otherwise ask staff to perform tasks. Board members should direct requests for new reports and tasks only to the ED/GM.

E. If a Board member receives an employee complaint or personnel grievance, the Board

member should advise the employee to go through the complaint and grievance procedures specified in the Personnel Policy Manual, which also provides information about protecting employees from retaliation protection. The Board member should also promptly inform the ED/GM of any such communications received from employees.

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SECTION XIII. ADDITION OF MEMBER CITIES TO REGIONAL WASTEWATER SYSTEMS

13.1 Purpose The District operates two regional wastewater systems (Regional Wastewater Treatment System and Upper East Fork Regional Interceptor System, collectively the “Regional Wastewater Systems”). The underlying contracts governing the Regional Wastewater Systems allow for the addition of new member cities to the Regional Wastewater Systems. The purpose of this policy is to outline the process for and the factors to be considered by the District for the addition of new member cities to the Regional Wastewater Systems. This policy is applicable to the Regional Wastewater Systems only and does not serve as the basis for consideration for service by or membership in any other District facility, system, or service.

13.2 Requests for Membership Consideration A. MINIMUM CRITERIA In order to be eligible for membership in the Regional Wastewater Systems, a city must meet the following minimum criteria:

1. The city has been a current customer of the Regional Wastewater Treatment System for at least five years with a longstanding cooperative relationship with the District that has been mutually beneficial to both entities;

2. Wholesale wastewater service will be provided to the entire city limits and future city limits by the Regional Wastewater Systems, or by wastewater treatment plants operated by the District;

3. The District operates any city-owned wastewater treatment plants that exist; 4. The city has supported the District’s regionalization initiatives through sharing of

resources such as dedication for rights of way, work with other key stakeholders or other similar matters.

B. REQUEST FORMAT AND REQUIREMENTS

To be considered for membership in the Regional Wastewater Systems, cities should file a written request with the District that includes the following items. District staff shall evaluate all requests for completeness and may return any incomplete requests to the requesting city, in which case the request will not move forward for consideration:

1. Narrative explanation of how it meets the minimum criteria set out in Section 13.2; 2. Engineering report prepared by a Registered Professional Engineer or engineer approved

by the District containing: a. Description of the area to be served b. Description of existing facilities

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c. Yearly projected wastewater flows for the city for the next five years d. Projected flows in five-year increments thereafter for an additional 15 years e. Description of proposed usage of the sewer service such as a residential,

commercial, etc. f. Identification of, sizing and estimated cost of any additional facilities needed for

provision of wholesale service by the District to the city for the time period under review.

3. Copy of the latest annual audit of the city’s waterworks and/or sewer system, if any.

13.3 Consideration by Board of Directors and Evaluation Factors A. CONSIDERATION BY BOARD OF DIRECTORS. District staff shall present the written request for membership to the District Board of Directors at a scheduled District Board Meeting at which time, if the Board decides to proceed with consideration of the request, it shall set a date and time for possible action at a future Board meeting. The District shall provide written notice to current Regional Wastewater System members of the date and time of the District Board meeting at which the Board may take action on the request.

B. EVALUATION FACTORS. In addition to the minimum criteria set out in Section 13.2.A, above, the factors to be considered by the Board of Directors in determining whether to grant the request may include:

1. Financial impacts to other Regional Wastewater System members; 2. Impacts to Regional Wastewater System credit or bond rating; 3. Financial or engineering impacts to the Regional Wastewater System, in general; 4. Whether the city has a plan of promoting resident use of city collection system in future to

reduce reliance on septic systems; 5. Whether the city has a current population of approximately 10,000 and 6. Whether the city’s wastewater contributes to the District’s reuse and reclaimed water

programs. The Board may approve the request if, after considering all relevant factors, including those specified herein, it determines that the addition of the new member would be of benefit to the Regional Wastewater System, other members, and the District. Nothing in this policy shall be interpreted to guarantee approval of a membership request, and the Board of Directors retains the discretion to apply this policy in a manner serving the best interests of the District.

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SECTION XIV. NEW CUSTOMER REQUESTS FOR WATER SERVICE

14.1 Purpose The purpose of this policy is to outline the process and the factors to be considered by the District when a prospective customer wishes to request water service from the District Water System. This policy does not apply to requests of existing customers that are already supplied by the District either directly or indirectly.

14.2 Requests for Water Service A. Only a municipality, municipal utility district, water supply corporation, fresh water supply district, special utility district, water control and improvement district, or other legislatively-created special district having the water and sewer power of a conservation and reclamation district is eligible for new water service from the District Water System. B. Any new request for water service must be in writing and directed to the Executive Director of the District. District staff shall evaluate all requests for completeness and may return any incomplete requests to the requesting entity, in which case the request will not move forward for consideration. C. The written request must be accompanied by an engineering report, prepared by a Registered Professional Engineer in the State of Texas, that includes the following items:

1. Information on the proposed point of delivery meeting current District standards for water service;

2. Projected annual usage for the first six years; 3. Projected future annual usage thereafter in five-year increments, and total future

requirements; 4. Population projections for the area to be served; 5. The reason for the request; and 6. The Texas Commission on Environmental Quality (TCEQ), or its predecessor or successor

agency, certification (if applicable) and all relevant information submitted to the TCEQ or predecessor or successor agency, in support of certification requests.

14.3 Consideration by Board of Directors and Evaluation Factors A. CONSIDERATION BY BOARD OF DIRECTORS. District staff shall present the written request for new water service to the District Board of Directors at a scheduled District Board Meeting at which time, if the Board decides to proceed with consideration of the request, it shall set a date and time for possible action at a future Board meeting.

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C. EVALUATION FACTORS. In evaluating a request for service, the Board of Directors shall consider at least the following factors:

1. Existing contractual commitment to all current District members and customers; 2. TCEQ, or its predecessor or successor agencies, certification and all relevant

information submitted to the TCEQ or predecessor or successor agencies, in support of certification requests, if applicable;

3. Engineering report submitted by the requestor explaining how sanitary sewer service will be provided to the requested area and how the water quality for the watershed(s) within the area will be protected;

4. Geographic description of the land area to be served; 5. Forecasted impact to the District’s raw water sources, treatment plant capacity, and

transmission and pumping system capacity; 6. Whether the District’s approved Water System Development Plan can meet

additional water supply volumes and the additional water supplies being requested; 7. Other potential sources available to provide service to the customer; 8. Impact to all current District members or customers if the requesting entity is within

the city limits, extraterritorial jurisdiction, or service area of such Member Cities or customers;

9. Requestor’s water conservation and drought contingency plans, and whether it includes all of the elements of the District’s plan at the time of request, and will likely remain in compliance with the District’s plans throughout the term of the contract;

10. The requested location of the point of delivery.

14.4 Authorization In order to provide new water service, a customer service agreement must be developed in accordance with District Standards and must be approved by the Board of Directors. Nothing in this policy shall be interpreted to guarantee approval of a membership request, and the Board of Directors retains the discretion to apply this policy in a manner serving the best interests of the District.

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ADOPTION BY BOARD OF DIRECTORS The Board Policies in this Manual have been passed and approved, as amended, by the

Board of Directors of the North Texas Municipal Water District, in a Regular Meeting of the

Board, on this ___ day of ______________, 2020, and attested to by the signature of the President

and Secretary, as indicated below.

_________________________________ __________________________________ DARRELL GROOMS, Secretary DON GORDON, President

PRELIMINARY OFFICIAL STATEMENT Ratings: Moody's: "Aa2" Dated June 9, 2020 S&P: "AAA" (See "OTHER INFORMATION - NEW ISSUE - Book-Entry-Only Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for purposes of federal income taxation under statutes, regulations, published rulings and court decisions existing on the date of such opinion, subject to the matters described under "Tax Matters" herein.

$35,130,000*

NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL WASTEWATER SYSTEM REVENUE BONDS, SERIES 2020A

Dated Date: June 15, 2020 Due: June 1, as shown below Interest Accrues: Delivery Date (defined below) PAYMENT TERMS . . . Interest on the $35,130,000* North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2020A, (the "Bonds") will accrue from the date of initial delivery thereto (the "Delivery Date") to the initial purchaser thereof (the "Initial Purchaser") and will be payable on June 1 and December 1 of each year until maturity or prior redemption, commencing December 1, 2020, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Bonds. See "THE BONDS - Book-Entry-Only System" herein. The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, National Association, currently in Dallas, Texas (see "THE BONDS - Paying Agent/Registrar"). SECURITY AND SOURCE OF PAYMENT . . . The Bonds are special obligations of North Texas Municipal Water District (the "District"), secured by and payable from a lien on and pledge of the "Pledged Revenues" as defined in the Resolution authorizing the Bonds, including the Gross Revenues of the District's Regional Wastewater System (as defined herein), and including specifically certain payments to be received by the District from the Member Cities of the District’s Regional Wastewater System(Plano, Richardson, Mesquite, McKinney, Forney, Allen, Frisco, Heath, Rockwall, Prosper, Seagoville, Princeton and Melissa, Texas) pursuant to the "Trinity East Fork Regional Wastewater System Contract", and supplements thereto with the Member Cities, and all similar contracts with any Additional Member Cities. The Bonds are on parity in all respects with outstanding Regional Wastewater System Revenue Bonds (the "Outstanding Bonds") which are also secured by and payable from the Pledged Revenues. The District has not covenanted or obligated itself to pay the Bonds from monies raised or to be raised from taxation or from any other source of funds other than the "Pledged Revenues". PURPOSE . . . Proceeds from the sale of the Bonds will be used for the purpose of providing funds for (i)design and construction of the South Mesquite Regional Wastewater Treatment Plant (WWTP) System Peak Flow Management and Expansion Phase I; construction and inspection of the Rowlett Creek Regional WWTP Operations Building; construction and inspection of South Mesquite Regional WWTP Solids Handling Improvements; construction of the Rowlett Creek Regional WWTP Electrical Improvement; design of Floyd Branch Regional WWTP Peak Flow Management and other system improvements; (ii) making a deposit to a debt service reserve fund; and (iii) paying the costs incident to the issuance and delivery of the Bonds. MATURITY SCHEDULE* CUSIP Prefix: 662835 (1)

Principal Maturity Initial CUSIP Principal Maturity Initial CUSIPAmount June 1 Rate Yield (2) Suffix (1) Amount June 1 Rate Yield (2) Suffix (1)

850,000$ 2021 1,160,000$ 2036695,000 2022 1,195,000 2037725,000 2023 1,230,000 2038755,000 2024 1,270,000 2039785,000 2025 1,305,000 2040815,000 2026 1,345,000 2041850,000 2027 1,385,000 2042880,000 2028 1,430,000 2043920,000 2029 1,470,000 2044955,000 2030 1,515,000 2045990,000 2031 1,560,000 2046

1,030,000 2032 1,610,000 20471,065,000 2033 1,655,000 20481,095,000 2034 1,705,000 20491,130,000 2035 1,755,000 2050

_______________ (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Global Market Intelligence on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. None of the District, the Financial Advisor (defined herein), or the Initial Purchaser (defined herein) is responsible for the selection or correctness of the CUSIP numbers set forth herein. (2) Initial reoffering yield represents the initial offering yield to the public which has been established by the Initial Purchaser for offers to the public and which may be subsequently changed by the Initial Purchaser and is the sole responsibility of the Initial Purchaser. The initial reoffering yields indicated above represent the lower of the yields resulting when priced to maturity or to the first call date. REDEMPTION OPTION . . . The District reserves the right, at its option, to redeem Bonds having stated maturities on and after June 1, 2030, in whole or in part, in principal amounts of $5,000 or any integral multiple thereof, on June 1, 2029, or any date thereafter, at a price equal to the principal amount thereof plus accrued interest to the date of redemption (see "THE BONDS - Optional Redemption"). LEGALITY . . . The Bonds are offered for delivery when, as and if issued by the District and subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel (see APPENDIX D - "Form of Bond Counsel's Opinion"). DELIVERY . . . It is expected that the Bonds will be available for delivery through The Depository Trust Company on July 29, 2020.

BIDS DUE THURSDAY, JUNE 25, 2020, AT 10:30 AM, CDT __________________ * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale and Bidding Instructions.

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2

This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation, or sale. No dealer, broker, salesperson, or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), this document constitutes an "official statement" of the District with respect to the Bonds that has been "deemed final" by the District as of its date except for the omission of no more than the information permitted by the Rule. The information set forth herein has been obtained from the District and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the representation, promise, or guarantee of the Financial Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be realized. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or other matters described herein since the date hereof. See "Continuing Disclosure of Information" for a description of the District's undertaking to provide certain information on a continuing basis. Neither the District nor its Financial Advisor make any representation as to the accuracy, completeness, or adequacy of the information supplied by The Depository Trust Company for use in this Official Statement. The cover page of this Official Statement contains certain information for general reference only and is not intended as a summary of the offering. Investors should read the entire Official Statement, including all schedules and appendices hereto, to obtain information essential to making an informed investment decision. The agreements of the District and others related to the Bonds are contained solely in the contracts described herein. Neither this Official Statement nor any other statement made in connection with the offer or sale of the Bonds is to be construed as constituting an agreement with the purchaser of the Bonds. INVESTORS SHOULD READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING ALL SCHEDULES AND APPENDICES ATTACHED HERETO, TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION. This Official Statement contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, and achievements to be different from future results, performance, and achievements expressed or implied by such forward-looking statements. Investors are cautioned that the actual results could differ materially from those set forth in the forward-looking statements. The Bonds are exempt from registration with the United States Securities and Exchange Commission and consequently have not been registered therewith. The registration, qualification, or exemption of the Bonds in accordance with applicable securities law provisions of the jurisdiction in which the Bonds have been registered, qualified or exempted should not be regarded as a recommendation thereof.

TABLE OF CONTENTS

PRELIMINARY OFFICIAL STATEMENT SUMMARY ....... 3

DISTRICT OFFICIALS, STAFF AND CONSULTANTS ....... 4 BOARD OF DIRECTORS ......................................................... 4 MANAGEMENT & STAFF ....................................................... 4 CONSULTANTS AND ADVISORS ............................................. 4

INTRODUCTION ........................................................................ 5

THE NORTH TEXAS MUNICIPAL WATER DISTRICT ..... 6

THE TRINITY EAST FORK REGIONAL WASTEWATER SYSTEM ............................................................................ 7

PLAN OF FINANCING .............................................................. 7

THE BONDS ................................................................................ 8

HISTORICAL OPERATING INFORMATION ..................... 12 TABLE 1 - SCHEDULE OF REGIONAL WASTEWATER SYSTEM

OPERATING INFORMATION ....................................... 12 TABLE 2 – SCHEDULE OF REVENUES – EXISTING

WASTEWATER SYSTEM CONTRACTS........................ 12

DEBT INFORMATION ............................................................ 14 TABLE 3 - DEBT SERVICE REQUIREMENTS ......................... 14

SUMMARY OF CERTAIN PROVISIONS OF THE.............. 15

TRINITY EAST FORK REGIONAL WASTEWATER SYSTEM CONTRACT ................................................... 15

SELECTED PROVISIONS OF THE BOND RESOLUTION20

INVESTMENTS ........................................................................ 29 TABLE 4 - CURRENT INVESTMENTS .................................... 30

TAX MATTERS ........................................................................ 31

OTHER INFORMATION ........................................................ 33 RATINGS ............................................................................ 33 LITIGATION ........................................................................ 33 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE 33 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC

FUNDS IN TEXAS ..................................................... 33 LEGAL MATTERS ............................................................... 33 AUTHENTICITY OF FINANCIAL DATA AND OTHER

INFORMATION ......................................................... 34 CONTINUING DISCLOSURE OF INFORMATION ..................... 34 FINANCIAL ADVISOR .......................................................... 35 INITIAL PURCHASER OF THE BONDS ................................... 35 FORWARD-LOOKING STATEMENTS DISCLAIMER ................ 36 MISCELLANEOUS ............................................................... 36 CERTIFICATION OF THE OFFICIAL STATEMENT .................. 36

APPENDICES THE DISTRICT'S ANNUAL FINANCIAL REPORT ................... A MISCELLANEOUS STATISTICAL DATA ................................ B GENERAL INFORMATION ON MAJOR CUSTOMERS OF

THE DISTRICT ............................................................. C FORM OF BOND COUNSEL'S OPINION ................................ D The cover page hereof, this page, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Official Statement.

3

PRELIMINARY OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Official Statement. No person is authorized to detach this summary from this Official Statement or to otherwise use it without the entire Official Statement. THE DISTRICT ................................... North Texas Municipal Water District (the "District") is a conservation and reclamation district and political

subdivision of the State of Texas, created and functioning under Article 16, Section 59, of the Texas Constitution, pursuant to Chapter 62, Acts of the 52nd Legislature of Texas, Regular Session, 1951, as amended (the "District Act").

THE BONDS ........................................ The Bonds are issued as $35,130,000* Regional Wastewater System Revenue Bonds, Series 2020A, (the

"Bonds"). The Bonds mature on June 1 in each of the years and in the amounts shown on the cover page hereof (see "THE BONDS – Description of the Bonds").

PAYMENT OF INTEREST .................... Interest on the Bonds accrues from the date of initial delivery thereof (the "Delivery Date"), at the rates

shown on the cover hereof, and is payable on December 1, 2020, and each June 1 and December 1 thereafter until maturity or prior redemption (see "THE BONDS - Description of the Bonds" and "THE BONDS – Optional Redemption").

RESERVE FUND REQUIREMENT ........ The District is required to accumulate and maintain, in the Reserve Fund (as defined herein) an aggregate

amount of money and/or investments equal in market value to the average annual principal and interest requirements (the "Reserve Required Amount") on all outstanding Parity Bonds (hereinafter defined).

AUTHORITY FOR ISSUANCE .............. The Bonds are issued pursuant to the District Act, Chapter 30, Texas Water Code, as amended, Chapter

1371, Texas Government Code, as amended, and other applicable laws (see "THE BONDS - Authority for Issuance").

SECURITY FOR THE BONDS ............... The Bonds are special obligations of the District, secured by and payable from a first lien on and pledge

of the "Pledged Revenues" as defined in the Resolution (as defined herein), including the Gross Revenues of the District's Regional Wastewater System (as defined herein), and including specifically certain payments to be received by the District from the Cities of Mesquite, Plano, Richardson, Allen, McKinney, Forney, Frisco, Heath, Rockwall, Prosper, Seagoville, Melissa and Princeton, Texas, (the "Member Cities") under the "Trinity East Fork Regional Wastewater System Contract" (the "Contract"), and all similar contracts with any Additional Member Cities (see "The Trinity East Fork Regional Wastewater System", "Summary of Certain Provisions of the Trinity East Fork Regional Wastewater System Contract" and "Summary of Certain Provisions of the Bond Resolution"). The Bonds are on a parity in all respects with $796,610,000 in principal amount of outstanding Regional Wastewater System Revenue Bonds (the "Outstanding Bonds") which are also secured by and payable from the Pledged Revenues. (The Outstanding Bonds and the Bonds, collectively, the "Parity Bonds"). The Member Cities are obligated under The Contract to make payments in amounts sufficient to pay the principal and interest on The Bonds.

OPTIONAL REDEMPTION .................. The District reserves the right, at its option, to redeem Bonds having stated maturities on and after June 1,

2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on June 1, 2029, or any date thereafter, at a price equal to the principal amount thereof plus accrued interest to the date of redemption (see "THE BONDS - Optional Redemption").

TAX EXEMPTION ............................... In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income for

federal income tax purposes under existing law, subject to the matters described under the caption "TAX MATTERS" herein, including the alternative minimum tax on corporations.

USE OF PROCEEDS ............................. Proceeds from the sale of the Bonds will be used for the purpose of providing funds for (i) design and

construction of the South Mesquite Regional Wastewater Treatment Plant (WWTP) System Peak Flow Management and Expansion Phase I; construction and inspection of the Rowlett Creek Regional WWTP Operations Building; construction and inspection of South Mesquite Regional WWTP Solids Handling Improvements; construction of the Rowlett Creek Regional WWTP Electrical Improvement; design of Floyd Branch Regional WWTP Peak Flow Management and other system improvements; (ii) making a deposit to a debt service reserve fund; and (iii) paying the costs incident to the issuance and delivery of the Bonds.

RATINGS ........................................... The Bonds and certain Outstanding Bonds are rated "Aa2", by Moody's Investors Service, Inc. ("Moody's")

and "AAA" by S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC ("S&P") (see "OTHER INFORMATION - Ratings").

BOOK-ENTRY-ONLY SYSTEM ........... The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC

pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the beneficial owners of the Bonds (see "THE BONDS - Book-Entry-Only System").

PAYMENT RECORD ............................ The District has never defaulted in payment of its bonds including the Outstanding Bonds. __________________ * Preliminary, subject to change.

4

NORTH TEXAS MUNICIPAL WATER DISTRICT DISTRICT OFFICIALS, STAFF AND CONSULTANTS

BOARD OF DIRECTORS

Larry Parks, Rockwall, President Darrell Grooms, Forney, Vice President

Phil Dyer, Plano, Secretary

ALLEN FARMERSVILLE FORNEY FRISCOJoe Farmer George Crump John Carr Richard PeasleyJames Kerr Lynn Shuyler

GARLAND McKINNEY MESQUITE PLANOJack May Joe Joplin Terry Sam Anderson Ron KelleyPending Charles McKissick Brenda Jean Patrick Pending

RICHARDSON ROCKWALL ROYSE CITY WYLIEJohn Murphy Chip Imrie David Hollifield Marvin FullerJohn Sweeden Blair Johnson Keith Stephens

PRINCETONPending

MANAGEMENT & STAFF

Interim Executive Director/General Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rodney Rhoades

Deputy Director - Administrative Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rodney Rhoades

Assistant Deputy - Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Erik Felthous

Deputy Director of Engineering & CIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cesar Baptista

Deputy Director of Operations & Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mike Rickman CONSULTANTS AND ADVISORS General Counsel ..................................................................................................................................................... Saunders, Walsh & Beard

McKinney, Texas Bond Counsel .......................................................................................................................................... McCall, Parkhurst & Horton L.L.P

Dallas, Texas

Financial Advisor ................................................................................................................................................ Hilltop Securities Inc. Fort Worth, Texas For additional information regarding the District, please contact:

Mr. Rodney Rhoades Mr. David K. Medanich

Mr. Erik Felthous Mr. Nick Bulaich

North Texas Municipal Water District or Hilltop Securities Inc.

P.O. Box 2408 777 Main Street, Suite 1200

Wylie, Texas 75098 Fort Worth, TX 76102(972) 442-5405 (817) 332-9710

5

PRELIMINARY OFFICIAL STATEMENT

RELATING TO

$35,130,000* NORTH TEXAS MUNICIPAL WATER DISTRICT

REGIONAL WASTEWATER SYSTEM REVENUE BONDS, SERIES 2020A

INTRODUCTION This Official Statement, which includes the Appendices hereto, provides certain information regarding the issuance of $35,130,000* North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2020A (the "Bonds"). Capitalized terms used in this Official Statement have the same meanings assigned to such terms in the Resolution authorizing the Bonds (the "Bond Resolution" or "Resolution") to be adopted on the date of sale of the Bonds which will authorize the issuance of the Bonds, except as otherwise indicated herein. There follows in this Official Statement descriptions of the Bonds and certain information regarding the North Texas Municipal Water District (the "District") and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the District's Financial Advisor, Hilltop Securities Inc. ("Hilltop Securities"), Fort Worth, Texas. INFECTIOUS DISEASE OUTLOOK (COVID-19) . . . The World Health Organization has declared a pandemic following the outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus (the “Pandemic”), which is currently affecting many parts of the world, including the United States and Texas. On January 31, 2020, the Secretary of the United States Health and Human Services Department declared a public health emergency for the United States in connection with COVID-19. On March 13, 2020, the President of the United States (the “President”) declared the Pandemic a national emergency and the Texas Governor (the “Governor”) declared COVID-19 an imminent threat of disaster for all counties in Texas (collectively, the “disaster declarations”). On March 25, 2020, in response to a request from the Governor, the President issued a Major Disaster Declaration for the State of Texas. Pursuant to Chapter 418 of the Texas Government Code, the Governor has broad authority to respond to disasters, including suspending any regulatory statute prescribing the procedures for conducting state business or any order or rule of a state agency that would in any way prevent, hinder, or delay necessary action in coping with this disaster and issuing executive orders that have the force and effect of law. The Governor has issued a number of executive orders relating to COVID-19 preparedness and mitigation. Many of the federal, state and local actions and policies under the aforementioned disaster declarations are focused on limiting instances where the public can congregate or interact with each other, which affects economic growth within Texas. Since the disaster declarations were made, the Pandemic has negatively affected travel, commerce, and financial markets locally and globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide and within Texas. Stock values and crude oil prices, in the U.S. and globally, have seen significant declines attributed to COVID-19 concerns. Texas may be particularly at risk from any global slowdown, given the prevalence of international trade in the state and the risk of contraction in the oil and gas industry and spillover effects into other industries. The Member Cities expect that their revenues and cash flow could be adversely affected during the continuance of the Pandemic as a result of a Governor’s directive that prevents utilities from charging late fees and disconnect fees and from disconnecting customers during such time. The Member Cities may also experience a reduction in water and sewer sales as customers delay payments. While the potential impact of the Pandemic on the Member Cities cannot be quantified at this time, the continued outbreak of COVID-19 could have an adverse effect on the Member Cities’ operations and financial conditions, and therefore impair the ability of the Member Cities to make payment to the District to pay debt service on the Bonds. The District continues to monitor the spread of COVID-19 and is following the directives of local, state, and national agencies to address the potential impact of COVID-19 upon the District and the Cities. The financial and operating data contained herein are the latest available, but are as of dates and for periods prior to the economic impact of the Pandemic and measures instituted to slow it. Accordingly, they are not indicative of the economic impact of the Pandemic on the Member Cities’ financial conditions. _________________ * Preliminary, subject to change.

6

THE NORTH TEXAS MUNICIPAL WATER DISTRICT

The North Texas Municipal Water District (the "District") is a conservation and reclamation district and political subdivision of the State of Texas, created and functioning under Article 16, Section 59, of the Texas Constitution pursuant to Chapter 62, Acts of 1951, 52nd Legislature of Texas, Regular Session, 1951, as amended (the "District Act"). The District was created for the purpose of providing a source of water supply for municipal, domestic and industrial use and for the treatment, processing and transportation of such water to its thirteen District Member Cities (as defined below) and other customers located in North Central Texas. Under the Texas Constitution and laws of the State of Texas, including the District Act, the District has broad powers to effectuate flood control and the conservation and use, for all beneficial purposes, of storm and floodwaters and unappropriated flow waters and, as a necessary aid to these purposes, the specific authority to construct, own and operate water supply, treatment and distribution facilities and sewage gathering, transmission and disposal facilities, and to collect, transport, treat, dispose of, and control all municipal, domestic, industrial, or communal waste, whether in fluid, solid or composite state. The District currently serves a 2,200 square-mile area located in nine counties in the State of Texas and comprises all of the territory of its current Member Cities, viz., Garland, Princeton, Plano, Mesquite, Wylie, Rockwall, Farmersville, McKinney, Richardson, Allen, Forney, Frisco, and Royse City (together with any cities which subsequently become member cities of the District, the "District Member Cities"). The District's Administrative Office is located at 501 East Brown Street, Wylie, Texas. The District is governed by a 25-member Board of Directors. Each District Member City having a population of 5,000 or more is represented by two members on the Board of Directors and each District Member City of less than 5,000 is represented by one member on the Board of Directors. Members of the Board of Directors are appointed by the governing bodies of the respective District Member Cities for two-year terms. In addition to its Regional Wastewater System (herein defined), the District, in cooperation with certain area cities, has established and implemented the Water System, the Upper East Fork Wastewater Interceptor System, the Stewart Creek Regional Wastewater System, Muddy Creek Regional Wastewater System, Sabine Creek Regional Wastewater System, Panther Creek Regional Wastewater System, Lower East Fork Wastewater Interceptor System and the Trinity East Fork Solid Waste Disposal System wherein the District, pursuant to contracts and other agreements, has accepted the responsibility to design, acquire, construct, complete, operate, maintain, and from time to time enlarge, improve and expand the systems to provide facilities to adequately receive, transport, treat and dispose of wastewater and solid waste of such cities and future additional cities. These Regional Systems were created, exist and operate as completely separate and independent Regional Systems, and except for moderate cost-sharing enterprises, the financial transactions and other activities associated with the operation and maintenance of each system are kept separate and apart, and are not in any manner commingled or connected with any of the other systems. While all District Member Cities are contracting partners for the Water System, not all District Member Cities participate in the District's other Regional Systems. Revenues from the Water System, the Upper East Fork Wastewater Interceptor System, the Stewart Creek Regional Wastewater System, Muddy Creek Regional Wastewater System, Sabine Creek Regional Wastewater System, Panther Creek Regional Wastewater System, the Lower East Fork Wastewater Interceptor System, and the Trinity East Fork Solid Waste Disposal System are not pledged to the payment of the Bonds.

7

THE TRINITY EAST FORK REGIONAL WASTEWATER SYSTEM

The District has been designated by the Texas Water Commission (now known as the Texas Commission on Environmental Quality) as the regional agency to provide and develop a regional system for wastewater treatment in the general area of the East Fork of the Trinity River lying in Collin, Dallas, Kaufman and Rockwall Counties, Texas. Pursuant thereto, the District entered into a contract (dated October 1, 1975) with the Cities of Mesquite and Plano, Texas, for the purpose of implementing a Regional Sewerage Plan prepared by its consulting engineers, and for the establishment, operation and maintenance of the Trinity East Fork Regional Wastewater System (the "Regional Wastewater System" or "System") to adequately receive, transport, treat and dispose of wastewater in order to control water pollution, and to protect, improve and enhance water quality of the East Fork of the Trinity River, and the water supplies impounded therein. Subsequently, membership in the Regional Wastewater System was enlarged through execution of contracts with the City of Richardson on January 9, 1978, the City of Allen on August 24, 1978, the City of McKinney on August 23, 1979, the City of Forney on February 22, 1990, the City of Frisco on November 19, 1996, the City of Princeton on November 26, 1996 and the Cities of Rockwall and Heath on March 29, 2001, the Town of Prosper on February 24, 2006, the City of Seagoville on February 24, 2006, and the City of Melissa on April 1, 2019. All of such Cities are hereinafter referred to as "Member Cities." Under the terms of the contracts with Member Cities, the District is committed to design, acquire, construct and complete the System, to operate and maintain the Regional Wastewater System, and from time to time enlarge, improve, replace and/or extend it to provide service to said Member Cities and Additional Member Cities. The Regional Wastewater System, as initially established, consisted of all existing wastewater treatment and disposal facilities of the Cities of Mesquite and Plano. The contract between the District and the Member Cities constitutes an operating agreement with regard to these facilities, whereby the District agrees to manage, administer, operate, maintain and use the facilities as part of the Regional Wastewater System, subject to the provisions and during the terms of the contracts. The District's Regional Wastewater System includes the Mesquite Wastewater Treatment Plant, the Floyd Branch Wastewater Treatment Plant (Richardson), the Rowlett Creek Wastewater Treatment Plant (Plano), the Wilson Creek Wastewater Treatment Plant and the Sister Grove Wastewater Treatment Plant (which is currently under construction). Existing elements of the District's Regional Wastewater System are designed to provide facilities necessary to accommodate and serve the needs of the Member Cities. Total treatment capacity of existing plants is 117.75 MGD. 2018-2019 average flow amounted to 105.71 MGD. The District will, from time to time, determine when and to what extent it is necessary to provide additions, enlargements, improvements, repairs and extensions to receive, transport, treat and dispose of wastewater of Member Cities, including Additional Member Cities, and to issue its bonds to accomplish such purposes. Member Cities and Additional Member Cities shall be obligated to pay to District an "Annual Requirement" equal to an "Operation and Maintenance Component" and a "Bond Service Component". (See "Summary of Certain Provisions of the Trinity East Fork Regional Wastewater System Contract.")

PLAN OF FINANCING PURPOSE . . . Proceeds from the sale of the Bonds will be used for the purpose of providing funds for (i) design and construction of the South Mesquite Regional Wastewater Treatment Plant (WWTP) System Peak Flow Management and Expansion Phase I; construction and inspection of the Rowlett Creek Regional WWTP Operations Building; construction and inspection of South Mesquite Regional WWTP Solids Handling Improvements; construction of the Rowlett Creek Regional WWTP Electrical Improvement; design of Floyd Branch Regional WWTP Peak Flow Management and other system improvements; (ii) making a deposit to a debt service reserve fund; and (iii) paying the costs incident to the issuance and delivery of the Bonds. SOURCES AND USES OF PROCEEDS . . . The proceeds from the sale of the Bonds will be applied approximately as follows:

Sources of FundsPrincipal Amount of Bonds -$ Net Premium - Total Sources of Funds -$

Uses of FundsDeposit to Debt Service Reserve Fund -$ Deposit to Construction Fund - Estimated Costs of Issuance - Total Uses of Funds -$

8

THE BONDS

DESCRIPTION OF THE BONDS . . . The Bonds are dated June 15, 2020, and mature on June 1 in each of the years and in the amounts shown on the cover page hereof. Interest will accrue from the date of initial delivery thereof (the "Delivery Date"), at the rated shown on the cover hereof, to the Initial Purchaser (herein defined), and will be computed on the basis of a 360-day year of twelve 30-day months, and will be payable on June 1 and December 1 of each year, commencing December 1, 2020 until maturity or prior redemption. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC"), New York, New York, pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar (herein after defined) to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "Book-Entry-Only System" herein. AUTHORITY FOR ISSUANCE . . . The Bonds are being issued pursuant to the provisions and authority provided by the District Act, Chapter 30, Texas Water Code, as amended, Chapter 1371, Texas Government Code, as amended, and other applicable laws. Under the Texas Constitution and laws of the State of Texas, including the District Act, the District has broad powers to (1) impound, control, store, preserve, treat, transmit and use storm and floodwater, the water of rivers and streams, and underground water, for irrigation, power, and all other useful purposes, and to supply water for municipal, domestic, power, industrial and commercial uses and purposes, and all other beneficial uses and purposes; (2) collect, transport, process, treat, dispose of, and control, all municipal, domestic, industrial, or commercial waste whether in fluid, solid, or composite state, including specifically the control, abatement, or reduction of all types of pollution, and (3) to refund obligations issued for the foregoing purposes. SECURITY AND SOURCE OF PAYMENT . . . The Bonds are special obligations of the District, secured by and payable from a first lien on and pledge of the "Pledged Revenues" as defined in the Bond Resolution, including the Gross Revenues of the District's Regional Wastewater System, and including specifically certain payments to be received by the District from the Member Cities of the District’s Regional Wastewater System, Mesquite, Plano, Richardson, Allen, McKinney, Forney, Frisco, Rockwall, Heath, Prosper, Seagoville and Princeton, Texas, and any future Additional Member Cities, under the "Trinity East Fork Regional Wastewater System Contract", and all similar contracts with any Additional Member Cities (collectively, the "Contract") (see "The Trinity East Fork Regional Wastewater System", "Summary of Certain Provisions of the Trinity East Fork Regional Wastewater System Contract" and "Summary of Certain Provisions of the Bond Resolution"). The Bonds are on a parity in all respects with the outstanding Regional Wastewater System Revenue Bonds which are also secured by and payable from the Pledged Revenues. The District has outstanding Regional Wastewater System Revenue Bonds (the "Outstanding Bonds"), as follows:

OriginalDated Issue OutstandingDate Amount Debt (1) Issue Description

3/15/2012 14,105,000$ 8,815,000$ Regional Wastewater System Revenue Bonds, Series 2012

3/15/2013 24,330,000 17,875,000 Regional Wastewater System Revenue Bonds, Series 2013

8/15/2015 65,250,000 51,985,000 Regional Wastewater System Revenue Refunding and Improvement Bonds, Series 2015

8/15/2016 95,075,000 76,405,000 Regional Wastewater System Revenue Refunding and Improvement Bonds, Series 2016


12/1/2017 19,515,000 18,005,000 Regional Wastewater System Revenue Refunding Bonds, Series 2017



6/1/2020 458,920,000 458,920,000 Regional Wastewater System Revenue Bonds, Series 2020796,610,000$

The Outstanding Bonds and the Bonds are referred to herein, collectively, as the "Parity Bonds". _____________ (1) As of June 23, 2020. Does not include the Bonds. RESERVE FUND REQUIREMENT . . . The District is required to accumulate and maintain in the Reserve Fund an aggregate amount of money and/or investments equal in market value to the average annual principal and interest requirements on all outstanding Parity Bonds (the "Required Amount"). After the delivery of the Bonds and the deposit of a portion of the proceeds thereof, the Reserve Fund will contain an amount at least equal to Required Amount. So long as the money and investments in the Reserve Fund are at least equal to the Required Amount, no deposits shall be made to the credit of the Reserve Fund; but when and if the Reserve Fund at any time contains less than said Required Amount in market value, then, subject and subordinate to making the required deposits to the credit of the Interest and Redemption Fund, the Issuer shall transfer from Pledged Revenues and deposit to the credit of the Reserve Fund, on or before the 25th day of each month, a sum equal to 1/60th of the average annual principal and interest requirements of all then outstanding Parity Bonds, until the Reserve Fund is restored to said Required Amount. So long as the Reserve Fund contains said Required Amount, all amounts in excess of such Required Amount shall, on or before the 10th day prior to each interest payment date, be deposited to the credit of the Interest and Redemption Fund; and otherwise any earnings from the deposit and investment of the Reserve Fund shall be retained in the Reserve Fund.

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OPTIONAL REDEMPTION . . . The District reserves the right, at its option, to redeem Bonds having stated maturities on and after June 1, 2030, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on June 1, 2029, or any date thereafter, at a price equal to the principal amount thereof plus accrued interest to the date of redemption. If fewer than all of the Bonds are to be redeemed, the District may select the maturities and amounts of Bonds to be redeemed. If fewer than all the Bonds within a maturity are to be redeemed, the Bonds, or portions thereof, to be redeemed shall be selected by lot or other customary method of random selection (or by DTC in accordance with the procedures while the Bonds are in the Book-Entry-Only System). If a Bond (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. MANDATORY SINKING FUND REDEMPTION . . . In addition to being subject to optional redemption as provided above, should the Initial Purchaser select a combination of Serial Bonds and Term Bonds, the Term Bonds will be subject to mandatory sinking fund redemption prior to maturity at a price of par plus accrued interest to the redemption date from amounts required to be deposited in the Interest and Sinking Fund. NOTICE OF REDEMPTION . . . Not less than 30 days prior to a redemption date for the Bonds, the District shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN, WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. NOTICE HAVING BEEN SO GIVEN, THE BONDS CALLED FOR REDEMPTION SHALL BECOME DUE AND PAYABLE ON THE SPECIFIED REDEMPTION DATE, AND NOTWITHSTANDING THAT ANY BOND OR PORTION THEREOF HAS NOT BEEN SURRENDERED FOR PAYMENT, INTEREST ON SUCH BOND OR PORTION THEREOF SHALL CEASE TO ACCRUE. DEFEASANCE . . . The Resolution provides for the defeasance of Bonds when the payment of the principal of such Bonds, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, redemption, or otherwise), is provided by irrevocably depositing with a paying agent or other authorized entity, in trust (1) money sufficient to make such payment and/or (2) Government Obligations which mature as to principal and interest in such amounts and at such times to ensure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of the Paying Agent/Registrar for the Bonds. The Resolution provides that "Government Obligations" means (a) direct obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America and (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the Board of Directors adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent. Upon such deposit as described above, such Bonds shall no longer be regarded to be outstanding or unpaid. Provided, however, the District has the option, to be exercised at the time of the defeasance of the Bonds, to call for redemption, at an earlier date, those Bonds which have been defeased to their maturity date, if the District (i) in the proceedings providing the firm banking and financial arrangements, expressly reserves the right to call the Bonds for redemption: (ii) gives notice of the reservation of that right to the owners of the Bonds immediately following the making of the firm banking and financial arrangements; and (iii) directs that notice of the reservation be included in any redemption notices that it authorizes. AMENDMENTS . . . The District may, with the written consent of the holders of a majority in aggregate principal amount of the Bonds then outstanding, amend the provisions of the Resolution; except that, without consent of the registered owners of all of the Bonds then outstanding, no such amendment, addition or rescission may (1) make any change in the maturity of the outstanding Parity Bonds or Additional Bonds; (2) reduce the rate of interest borne by any of the outstanding Parity Bonds or Additional Bonds; (3) reduce the amount of the principal payable on the outstanding Parity Bonds or Additional Bonds; (4) modify the terms of payment of principal of or interest on the outstanding Parity Bonds or Additional Bonds, or impose any conditions with respect to such payment; (5) affect the rights of the holders of less than all of the Parity Bonds and Additional Bonds then outstanding; (6) change the minimum percentage of the principal amount of Parity Bonds and Additional Bonds necessary for consent to such amendment. BOOK-ENTRY-ONLY SYSTEM . . . This section describes how ownership of the Bonds is to be transferred and how the principal of and interest on the Bonds are to be paid to and credited by the Depository Trust Company ("DTC") while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Entry-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The District and the Underwriters believe the source of such information to be reliable, but take no responsibility for the accuracy or completeness thereof. The District and the Underwriters cannot and do not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the United States Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC.

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The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered security certificate will be issued for the Bonds in the aggregate principal amount thereof and will be deposited with DTC. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of "AA+". The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owners entered into the transaction. Transfers of ownership interest in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participant to whose account such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Bonds will be made to DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the District or the Paying Agent/Registrar on payable dates in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility of the District, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the District and the Paying Agent/Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered.

http://www.dtcc.com/

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Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Resolution will be given only to DTC. Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the District, the Financial Advisor or the Underwriters. Effect of Termination of Book-Entry-Only System. In the event the Book-Entry-Only System with respect to the Bonds is discontinued by DTC, or the use of the Book-Entry-Only System with respect to the Bonds is discontinued by the District, printed bond certificates will be issued to the respective holders of the Bonds, as the case may be, and the respective Bonds will be subject to transfer, exchange, and registration provisions as set forth in the Resolution, summarized under "Transfer, Exchange, and Registration" below. PAYING AGENT/REGISTRAR . . . The initial paying agent/registrar is The Bank of New York Mellon Trust Company, National Association, Dallas, Texas (the "Paying Agent/Registar"). In the Resolution, the District retains the right to replace the Paying Agent/Registrar. The District covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the District agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. TRANSFER, EXCHANGE AND REGISTRATION . . . In the event the Book-Entry-Only System should be discontinued, the Bonds may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Bonds may be assigned by the execution of an assignment form on the respective Bonds or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bonds being transferred or exchanged, at the designated office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be canceled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Bonds surrendered for exchange or transfer. See "Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Bonds. Neither the District nor the Paying Agent/Registrar shall be required to transfer or exchange any Bond called for redemption (i) during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date, or by (ii) with respect to any Bond or portion thereof called for redemption within 45 days prior to its redemption date. RECORD DATE FOR INTEREST PAYMENT . . . The record date ("Record Date") for the interest payable on the Bonds on any interest payment date means the close of business on the 15th day of the preceding month. BONDHOLDERS’ REMEDIES . . . The Resolution does not establish specific events of default with respect to the Bonds. Under State law and the Resolution, there is no right to the acceleration of maturity of the Bonds upon the failure of the District to observe any covenant under the Resolution. No assurance can be given that a mandamus or other legal action to enforce a remedy under the Resolution would be successful. The enforcement of any such remedy may be difficult and time consuming. The Resolution does not provide for the appointment of a trustee to represent the interests of the bondholders upon any failure of the District to perform in accordance with the terms of the Resolution, or upon any other condition. Furthermore, the District is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code. Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of contract revenues of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or bondholders of an entity which has sought protection under Chapter 9. Therefore, should the District avail itself of Chapter 9 protection from creditors, the ability to enforce the remedies under the Resolution would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state courts); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The District may not be placed into bankruptcy involuntarily. The opinion of Bond Counsel will note that all opinions relative to the enforceability of the Resolution and the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. In addition, based on recent Texas Court decisions, it is unclear whether statutory language authorizing local governments such as the District to sue and be sued has effectively waived the local governments immunity from suits for money damages. Further, while such decisions also could affect the ability of a registered owner to seek specific performance of a covenant made by Member City under the Contracts or by the District in the Resolution or other bond document, the remedy of mandamus has not been at issue in these cases. The opinion of Bond Counsel would note that all opinions with respect to enforceability of the Resolution of the Bonds are also qualified with respect to principles of sovereign immunity.

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HISTORICAL OPERATING INFORMATION The following table presents condensed financial information for the Regional Wastewater System of the District for each fiscal year ended September 30, 2015 through September 30, 2019. These Statements have been compiled using accounting principles customarily employed in the determination of revenues available for payment of bonded debt service and, in all instances, exclude depreciation, transfers of debt service requirements and expenditures identified as capital. Excerpts of District's combined financial statements for the fiscal year ended September 30, 2019 appear in Appendix A, hereto attached. TABLE 1 - SCHEDULE OF REGIONAL WASTEWATER SYSTEM OPERATING INFORMATION

Fiscal Year Ended September 30,

Revenues 2019 2018 2017 2016 2015Wastewater Service Fees 69,241,179$ 63,211,178$ 57,446,981$ 54,467,985$ 45,161,269$ Interest Income and Other 4,647,452 3,857,771 1,676,094 586,285 245,124

73,888,631$ 67,068,949$ 59,123,075$ 55,054,270$ 45,406,393$

Operating Expenses (1) 40,969,895$ 38,041,545$ 35,719,340$ 35,090,094$ 28,618,479$

Net Available for Debt Service 32,918,736$ 29,027,404$ 23,403,735$ 19,964,176$ 16,787,914$

Regional Wastewater System Revenue Bonds Outstanding (as of 4-30-20) (2) 846,430,000$

Average Annual Principal and Interest Requirements, 2020-2050 (2) 34,422,457$ Coverage of Average Annual Principal and Interest Requirements by 9-30-19 Net Available for Debt Service 1.52x

Maximum Annual Principal and Interest Requirements, 2028 (2) 43,406,298$ Coverage of Maximum Annual Principal and Interest Requirements by 9-30-19 Net Available for Debt Service (3) 0.94x

Interest and Sinking Fund (as of 4-30-20) 21,472,290$ Reserve Fund (as of 4-30-20) (4) 19,528,684$ _____________ (1) Excludes depreciation. (2) Includes the Bonds. Preliminary, subject to change. (3) The Member Cities share the cost for wastewater transportation on the basis of proportional flows. Charges are based on

current budgeted expenditures and are allocated to each Member City at the beginning of the year based on estimated flows (subject to certain minimums). At the end of the year the actual cost of each Member City is determined based on actual flows (subject to certain minimums) and final billing adjustments are applied accordingly. See "Annual Requirement" in "Summary of Certain Provisions of the Regional Wastewater System" herein.

(4) On June 23, 2020, an additional $13,317,031 will be deposited to the Debt Service Reserve Fund from proceeds of the Series 2020 Parity Bonds.

TABLE 2 – SCHEDULE OF REVENUES – EXISTING WASTEWATER SYSTEM CONTRACTS


% of % of % ofMember City Amount Total Amount Total Amount TotalAllen 6,178,199$ 9.33% 5,284,817$ 8.78% 5,054,815$ 8.99%Forney 2,270,044 3.43% 1,802,971 3.00% 1,581,688 2.81%Frisco 2,888,857 4.36% 2,772,080 4.61% 2,503,674 4.45%Heath 1,221,338 1.84% 840,159 1.40% 817,993 1.46%McKinney 11,617,626 17.55% 10,898,433 18.11% 10,055,201 17.89%Melissa 322,162 0.49% - 0.00% - 0.00%Mesquite 9,811,158 14.82% 9,026,957 15.00% 8,342,185 14.84%Plano 19,125,826 28.89% 18,391,894 30.56% 17,994,200 32.02%Princeton 648,156 0.98% 554,404 0.92% 514,418 0.92%Prosper 978,421 1.48% 970,743 1.61% 908,037 1.62%Richardson 8,143,330 12.30% 6,877,921 11.43% 5,929,765 10.55%Rockwall 1,939,088 2.93% 1,616,774 2.69% 1,373,136 2.44%Seagoville 1,053,187 1.59% 1,139,482 1.89% 1,129,131 2.01%Total 66,197,391$ 100.00% 60,176,635$ 100.00% 56,204,243$ 100.00%

20182019 2017

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PENSION PLAN The District provides pension benefits for all of its eligible full-time employees through an Aetna Life Insurance Company group pension defined benefit fund contract (the "Plan"). The District's annual minimum contribution is actuarially calculated based on the amount required to prevent the unfunded accrued liability from increasing. The contribution is determined using the projected unit cost method. The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same as those used to compute the pension benefit obligation. As of December 31, 2018, the unfunded actuarial accrued liability of the District was $36,435,264, with a funded ratio (ratio of assets to accrued liabilities) of 88.82%. The unfunded actuarial accrued liability is amortized over a period of 30 years. Effective January 1, 2018, employees who enter service on or after January 1, 2018 shall make mandatory contributions to the Plan at the rate of 5% of annual earnings and subject to 3.5% plan interest rate credits per year. For the Plan years ended December 31, 2018, 2017, and 2016 the District made contributions of $6,450,000, $6,765,000 and $5,957,000, respectively. See "APPENDIX A – EXCERPTS FROM THE ANNUAL FINANCIAL REPORT – Note 10 – Retirement Plan" for a more detailed discussion of the Plan. OTHER POST-EMPLOYMENT BENEFITS The District provides other post-employment benefits ("OPEB") in the form of health and dental insurance benefits for certain retirees and their spouses up to age 65. These benefits are funded 100 percent by the District for the currently eligible retirees and their spouses. The District has established an irrevocable trust fund to accumulate assets for the payment of future OPEB benefits. For fiscal year 2019, the District contributed $1,275,000 to the program. See "APPENDIX A – EXCERPTS FROM THE ANNUAL FINANCIAL REPORT", Note 14 – Other Postemployment Benefits.

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DEBT INFORMATION

TABLE 3 - DEBT SERVICE REQUIREMENTS

FiscalYear Total Percent ofEnded Outstanding Debt The Bonds (1) Outstanding Prinicpal9/30 Principal Interest Total Principal Interest Total Debt Retired2020 14,690,000$ 14,769,541$ 29,459,541$ -$ -$ -$ 29,459,541$ 2021 17,840,000 14,249,269 32,089,269 850,000 961,451 1,811,451 33,900,7192022 19,900,000 13,538,642 33,438,642 695,000 1,112,100 1,807,100 35,245,7422023 19,825,000 12,798,242 32,623,242 725,000 1,084,300 1,809,300 34,432,5422024 19,955,000 12,187,642 32,142,642 755,000 1,055,300 1,810,300 33,952,942 11.25%2025 21,575,000 11,575,242 33,150,242 785,000 1,025,100 1,810,100 34,960,3422026 26,180,000 10,906,686 37,086,686 815,000 993,700 1,808,700 38,895,3862027 31,355,000 10,237,486 41,592,486 850,000 961,100 1,811,100 43,403,5862028 32,015,000 9,584,198 41,599,198 880,000 927,100 1,807,100 43,406,2982029 29,330,000 8,900,173 38,230,173 920,000 891,900 1,811,900 40,042,073 28.35%2030 27,340,000 8,353,017 35,693,017 955,000 855,100 1,810,100 37,503,1172031 27,795,000 7,894,355 35,689,355 990,000 816,900 1,806,900 37,496,2552032 27,255,000 7,457,567 34,712,567 1,030,000 777,300 1,807,300 36,519,8672033 27,715,000 7,046,830 34,761,830 1,065,000 746,400 1,811,400 36,573,2302034 26,440,000 6,615,861 33,055,861 1,095,000 714,450 1,809,450 34,865,311 45.09%2035 26,900,000 6,218,842 33,118,842 1,130,000 681,600 1,811,600 34,930,4422036 27,395,000 5,804,055 33,199,055 1,160,000 647,700 1,807,700 35,006,7552037 27,915,000 5,377,930 33,292,930 1,195,000 612,900 1,807,900 35,100,8302038 28,455,000 4,950,680 33,405,680 1,230,000 577,050 1,807,050 35,212,7302039 29,035,000 4,504,405 33,539,405 1,270,000 540,150 1,810,150 35,349,555 62.30%2040 29,635,000 4,058,211 33,693,211 1,305,000 502,050 1,807,050 35,500,2612041 30,270,000 3,574,842 33,844,842 1,345,000 462,900 1,807,900 35,652,7422042 30,930,000 3,082,286 34,012,286 1,385,000 422,550 1,807,550 35,819,8362043 31,635,000 2,563,820 34,198,820 1,430,000 381,000 1,811,000 36,009,8202044 32,365,000 2,041,917 34,406,917 1,470,000 338,100 1,808,100 36,215,017 81.41%2045 33,130,000 1,489,033 34,619,033 1,515,000 294,000 1,809,000 36,428,0332046 30,780,000 915,550 31,695,550 1,560,000 248,550 1,808,550 33,504,1002047 23,610,000 441,183 24,051,183 1,610,000 201,750 1,811,750 25,862,9332048 20,605,000 227,913 20,832,913 1,655,000 153,450 1,808,450 22,641,3632049 20,830,000 130,458 20,960,458 1,705,000 103,800 1,808,800 22,769,258 97.60%2050 18,600,000 27,900 18,627,900 1,755,000 52,650 1,807,650 20,435,550 100.00%

811,300,000$ 201,523,771$ 1,012,823,771$ 35,130,000$ 19,142,401$ 54,272,401$ 1,067,096,172$

_____________ (1) Average life of the issue – 17.628 Years. Interest on the Bonds has been calculated at the average rate of 2.58% for purposes of

illustration. Preliminary, subject to change.

ANTICIPATED ISSUANCE OF DEBT . . . The District anticipates issuing additional Regional Wastewater System Revenue debt in the amount of approximately $100,000,000 over the next 12 months.

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SUMMARY OF CERTAIN PROVISIONS OF THE TRINITY EAST FORK REGIONAL WASTEWATER SYSTEM CONTRACT

The District entered into an Initial Contract, dated October 1, 1975 ("Initial Contract"), with the Cities of Mesquite and Plano, Texas and subsequent substantially similar contracts (the Initial Contract and subsequent contracts, collectively, "the Contract") with the Cities of McKinney, Allen, Forney, Frisco, Princeton, Heath, Richardson, Prosper, Seagoville, Rockwall and Melissa (collectively "the Member Cities"), which provide for the establishment, acquisition, construction, operation, maintenance, extension and enlargement of the Trinity East Fork Regional Wastewater System. Pursuant thereto the District agrees to issue Bonds from time to time as required, to provide facilities to adequately receive, transport, treat and dispose of the Member Cities' wastewaters. The following statements summarize certain portions of the Contract and do not purport to be comprehensive or definitive and are qualified in their entirety by reference to the Contract, a copy of which is available from the Districts financial advisor. Facilities. In order to provide services for receiving, transporting, treating, and disposing of Wastewater for Member Cities, the District will design, acquire, construct, and complete the System, and will operate and maintain the System, and from time to time enlarge, improve, repair, replace, and/or extend the System to provide service to the Cities and to Additional Member Cities. The District shall provide, manage, operate, and maintain the System in such manner as it determines is necessary for providing adequate, efficient, and economical service to Member Cities, and shall have the right to provide single plants, multiplants, or combine two or more plants, and to use or discontinue the use of any facilities of the System as District deems necessary. Discharge. Each of the Cities of Plano, Mesquite, Allen, McKinney, Forney, Princeton, Heath, Seagoville, Rockwall and Melissa has the right to discharge all of their Wastewater from their sewer systems into District's System, provided that such Wastewater meets the requirements for quantity and quality as set forth in the Contract. Richardson has the right to discharge all of its Wastewater from the Spring Creek, Rowlett Creek, and Duck Creek drainage areas, within the boundaries of Richardson; but Richardson shall not have the right to discharge any other Wastewater into the District's System. The City of Frisco has the right to discharge only such wastewater as originates within those portions of the Rowlett Creek and White Rock Creek drainage basins located within the municipal boundaries of Frisco existing on the date of its Contract with the District, November 16, 1996. Prosper has the right to discharge up to 4,960,000 gallons per day from its sewer system into the District's System. Financing. District will issue its Bonds, in amounts and at times as determined by the District, to provide the System. Annual Requirement. Payments to be made under the Contract, and similar contracts with Additional Member Cities will be the only source available to District to provide the Annual Requirement. The District has a statutory duty to establish and from time to time revise the charges for services to be rendered and made available to Member Cities so that the Annual Requirement shall at all times be no less than an amount sufficient to pay or provide for the payment of: (a) An "Operation and Maintenance Component" equal to the amount paid or payable for all Operation and Maintenance Expense; and (b) A "Bond Service Component" equal to: (1) the principal of, redemption premium, if any, and interest on, its Bonds, as such principal, redemption premium, if

any, and interest become due, less interest to be paid out of Bond proceeds if permitted by any Bond Resolution; and (2) during each Fiscal Year, the proportionate part of any special or reserve funds required to be established and/or

maintained by the provisions of any Bond Resolution; and (3) an amount in addition thereto sufficient to restore any deficiency in any of such funds required to be accumulated and

maintained by the provisions of any Bond Resolution; and (4) the charge of paying agents or paying agent/registrars for paying principal of, redemption premium, if any, and

interest on, all Bonds. Payments by Member Cities. (a) For services to be rendered to each Member City by District under the Contract each Member City has agreed to pay its proportionate share of the Annual Requirement, which shall be determined as hereafter described and shall constitute a Member City's Annual Payment or Adjusted Annual Payment. For each Fiscal Year each Member City's proportionate share of the Annual Requirement shall be a percentage obtained by dividing such Member City's estimated contributing flow to the System by the total estimated contributing flow to the System by all Member Cities during such Fiscal Year. The terms "contributing flow to the System" and "contributing flow" as used in the contract with respect to any Fiscal Year shall mean (i) the actual metered contributing flow of a Member City or, (ii) as to Richardson, Allen, McKinney, Forney, Frisco, Heath, Mesquite, Rockwall, Plano, Princeton, Prosper and Seagoville and any subsequent Additional Member City, any minimum annual contributing flow for which it has agreed to pay, whichever of the foregoing (i) or (ii) is the greater; provided that the minimum annual contributing flow for which Richardson, Allen, McKinney, Forney, Frisco, Heath, Mesquite, Rockwall, Plano, Princeton, Prosper, Seagoville have agreed to pay shall be calculated as provided in their respective contract. Each Member City's Annual Payment shall be calculated by the District by multiplying such Member City's estimated percentage of

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the estimated total contributing flow times the Annual Requirement. Each Member City's Annual Payment shall be made to District in monthly installments, on or before the twentieth (20th) day of each month, for its required part of the Annual Requirement for each Fiscal Year. Such payments shall be made in accordance with a Schedule of Payments for each Fiscal Year which will be supplied to each Member City. At the close of each Fiscal Year, District shall redetermine each Member City's percentage by dividing each Member City's contributing flow to the System by the total contributing flow of all Member Cities. Each Member City's Adjusted Annual Payment shall be calculated by multiplying each Member City's redetermined percentage times the Annual Requirement. The difference between the Adjusted Annual Payment and the Annual Payment, if any, when determined, shall be applied as a credit or a debit to each Member City's account with District and shall be credited or debited to such Member City's next subsequent monthly payment or payments. For each Fiscal Year the District may fix and collect each Member City's Annual Payment and Adjusted Annual Payment on the basis set forth above, or, at its sole option and within its discretion, may fix and collect each Member City's Annual Payment and Adjusted Annual Payment on the sole basis of contributing flow. In such case each Member City agrees to pay its Annual Payment and Adjusted Annual Payment solely on the basis of contributing flow, without regard to debits or credits for any Direct Cost, except for any Additional Member City entitled to pay on a Direct Cost basis for a temporary period. If the District, at its option changes the method of making Annual Payments and Adjusted Annual Payments to a contributing flow basis, such basis shall then become the permanent method, and it shall not thereafter be changed. It is further provided, however, that if in any contract with a subsequent Additional Member City the District agrees to provide new or additional facilities to serve such Additional Member City, then such contract may provide that during the temporary period until the end of the Fiscal Year during which such new or additional facilities are placed in operations (but in no event later than the end of the third Fiscal Year following the execution of the contract) such subsequent Additional Member City's Adjusted Annual Payment shall be further adjusted by credits or debits according to its Direct Cost, in the same manner as if, with respect to such Additional Member City, the District were operating on a Direct Cost Basis, even though the District actually has changed to a contributing flow basis for the other Member Cities. As used in the contract the term ''Direct Cost" shall mean the following: (1) that part of the annual Operation and Maintenance Component of the Annual Requirement which is attributable to any

local Wastewater Facilities of a Member City which are acquired, operated, or used by the District as a part of the System, and any new and additional facilities of the System provided and designated by the District to serve such Member City, less any amount thereof attributable to the use of any part of said facilities for the benefit of any other Member City or Cities, and

(2) that part, if any, of the Bond Service Component of each Annual Requirement which is attributable to any Bonds

issued to acquire or improve any existing Local Wastewater Facilities of such Member City or to provide all or any part of any new and additional facilities for the System provided and designated by the District to serve such Member City, and

(3) a percentage of that part, if any, of the Bond Service Component of each Annual Requirement attributable to any

other Bonds issued to provide any other facilities for the System equal to the percentage of actual use by such Member City of any such facilities during that Fiscal Year.

(b) Monthly payments by Member Cities, as set forth in each Schedule of Payments, shall be in the following amounts: (i) the amount necessary to provide the Bond Service Component of the Annual Requirement so as to enable the District

to make all payments with respect to the Bonds when due; and

(ii) such amounts as will cause the District to have on hand, on or before the twentieth (20th) day of each month, an amount not less than 1/6th of the then current Annual Budget required for Operation and Maintenance Expenses.

It is specifically covenanted and agreed that each Member City shall pay its Annual Payment and Adjusted Annual Payment calculated as provided in this section, and that the Annual Payment shall be its appropriate percentage based on contributing flow or Direct Cost, whichever is the greater; provided that such Member City is entitled to receive if and when available any credit provided for herein during any Fiscal Year when the provisions relating to Direct Cost are applicable and in effect. If a Member City fails to pay its monthly charge on or before the twentieth (20th) day of any month, it shall incur and pay a penalty of ten percent of the amount due together with any legal or other costs incurred by the District in collecting the amount due. District is authorized to discontinue service to any Member City which fails to make any monthly payment, and which, after written notice, does not make such payment.

(c) If, during any Fiscal Year, District begins providing services to an Additional Member City or Cities, each Member City's Annual Payment for such Fiscal Year shall be redetermined consistent with the provisions of the Contract. (d) Each Member City's Annual Payment also shall be adjusted and redetermined for the balance of any applicable Fiscal Year, consistent with the provisions of the Contract, and initially based on estimated contributing flow, at any time during any Fiscal Year if: (i) Additions, enlargements, repairs, extensions, or improvements to the System are placed in service by District which

require an increase and redetermination of the Annual Requirement; or

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(ii) Unusual or extraordinary expenditures for operation and maintenance of the System are required which are not provided for in the Annual Budget or in a Bond Resolution; or

(iii) A Member City's contributing flow to the System, after the beginning of the Fiscal Year, is estimated to be

substantially different from that on which Annual Payments are based as determined by District, to the extent that such difference in flow will substantially affect such Member City's Budget, and consequently such Member City's Annual Payment to District; or

(iv) The District issues additional Bonds, the payments in connection with which require an increase and redetermination

of the Annual Requirement; or (v) It appears to the District that for any other reason it will not receive the full amount of the Annual Requirement unless

such adjustment and redetermination are made. (e) The District shall give all Member Cities at least 21 days written notice prior to consideration by the Board of Directors of the District of making any Adjusted Annual Payment for any Member City during any Fiscal Year. (f) The Annual Payment set forth in this section shall be considered the Basic Charge for service hereunder, and each Member City shall pay a surcharge for excess BOD and/or SS, and for excessive discharge, as set forth in the Contracts. (g) The Operation and Maintenance Component of the Annual Requirement allocable to such Member City shall be determined finally by the contributing flow and/or the Direct Cost of each Member City, as provided above. However, notwithstanding any other provisions of the contract to the contrary, the Bond Service Component of the Annual Requirement shall be allocated to each Member City, including each Additional Member City, and shall be computed and paid during each Fiscal Year as part of its Annual Payment and Adjusted Annual Payment, either (1) on the basis of the amount of such Member City's contributing flow into the System or (2) its Direct Cost during any such Fiscal Year when the provisions of the contract relating to Direct Cost are applicable and in effect, or (3) on the basis of the amount of such Member City's contributing flow in the System during the Fiscal Year in which such Member City's contributing flow in the System was the greatest, or (4) as to Richardson, Allen, McKinney, Forney, Frisco, Heath, Mesquite, Rockwall, Plano, Princeton, Prosper, Seagoville, Melissa, and any subsequent Additional Member City, on the basis of the amount of any minimum flows for which it has agreed to pay in the contract or any contract similar to the Contract, whichever of the foregoing amount (1), (2), (3), or (4) is the greatest; provided that each Member City is entitled to receive, if and when available, any credit provided for during any Fiscal Year when the provisions of the contract relating to Direct Cost are applicable and in effect. It is the intention hereof that the Bond Service Component allocable to each Member City and to be paid by each Member City shall be computed for each Fiscal Year in such manner that no reduction will be allowed to a Member City because the amount of its actual contributing flow to the System is reduced below a previous high, or because the amount of its actual contributing flow is less than the amount of any minimum flow for which it has agreed to pay, subject to the foregoing provisions relating to Direct Cost. (h) The facilities and services of the System to be provided to each Member City pursuant to the Contracts are and will be essential and necessary to the operation of each City's combined waterworks and sanitary sewer system, and all payments to be made thereunder will constitute reasonable and necessary "operating expenses" of its combined waterworks and sanitary sewer system, within the meaning of Section 150.056(c) Texas Government Code (formerly Vernon's Article 1113), and the provision of all ordinances authorizing the issuance of all waterworks and sanitary sewer system revenue bond issues of each Member City, with the effect that the obligation to make payments from its waterworks and sanitary sewer system revenues under the Contracts shall have priority over its obligations to make payments of the principal of and interest on any and all of its waterworks and sanitary sewer system revenue bonds. Each Member City agrees to fix and collect such rates and charges for waterworks and sanitary sewer system services to be supplied by its waterworks and sanitary sewer system as will make possible the prompt payment of all expenses of operating and maintaining its entire waterworks and sanitary sewer system, including all payments, obligations, and indemnities contracted hereunder, and the prompt payment of the principal of and interest on its bonds payable from the net revenues of its waterworks and sanitary sewer system. The District shall never have the right to demand payment of the amounts due under the Contracts from funds raised or to be raised from taxation. Each Member City's payments thereunder shall be made pursuant to the authority granted by Section 30.030 of the Texas Water Code and the District Act, as well as Section 1502.056(c) Texas Government Code (formerly Vernon's Article 1113). Recognizing the fact that each Member City urgently requires the facilities and services covered by the Contracts, and that such facilities and services are necessary for actual use and for stand-by purposes; and further recognizing that the District will use the payments received hereunder to pay, secure, and finance the issuance of its Bonds, each Member City shall be obligated unconditionally, and without offset or counterclaim, to make the payments designated as the "Bond Service Component" of the Annual Requirement, in the manner provided in the Contracts, regardless of whether or not the District actually provides such facilities and services, or whether or not any Member City actually receives or uses such facilities and services, and regardless of the validity or performance of the other parts of the Contract, and such "Bond Service Component" shall in all events be applied and used for providing debt service and other requirements of the Bonds, and the holders of the Bonds shall be entitled to rely on the foregoing agreement and representation, regardless of any other agreement between the District and any Member City. Each Member City further agrees that it shall be obligated to make the payments designated as the "Operation and Maintenance Component" of the Annual Requirement as described in the Contract, so long as the District is willing and able to provide the facilities and services contemplated thereunder.

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(i) On or before August 1 of each year District will furnish each Member City with a tentative budget and an estimated schedule of monthly payments to be made by such Member City for the ensuing Fiscal Year. On July 1 of each year, the District shall be in a position to furnish any Member City an estimate of the City's annual requirement. On or before October 1 of each year, District shall furnish such Member City with a finalized schedule of the monthly payments to be made by such Member City to the District for the ensuing Fiscal Year. Each Member City agrees that it will make such payments to the District on or before the twentieth (20th) day of each month of such Fiscal Year. If any Member City shall dispute the Annual Budget, and proceed as provided in the Contracts, such Member City nevertheless promptly shall make the payment or payments determined by District, and if it is subsequently determined by agreement that such disputed payments made by such Member City should have been less, District shall promptly revise, reallocate, and readjust the charges among all Member Cities then being served by District in such manner that such Member City will recover its overpayment. In the event any Member City is assessed a surcharge for excess BOD and/or SS, District will bill such Member City for such surcharge on or before the tenth (l0th) day of the month following the determination of the surcharge and such Member City shall pay such surcharge on or before the twentieth (20th) day of the month of receipt of the month of receipt of any such bill. Any such surcharge collected by District shall be applied by District against the total cost of Operation and Maintenance Expense of the System. (j) If any Member City's Annual Payment is redetermined as provided, District will promptly furnish such Member City with an updated schedule of monthly payments reflecting such redetermination. (k) All interest income earned by the investment of any Funds created pursuant to any Bond Resolution shall be credited towards the payment of the Bond Service Component and taken into account in determining the Annual Requirement; except that as to any Acquisition or Construction Fund created from any Bond proceeds all interest income earned by the investment thereof may, at the option of the District, be credited to such Acquisition or Construction Fund and used for the System purposes for which the Bonds are issued, or be credited towards the payment of the Bond Service Component. Use of Other Revenues of System. (a) If the District receives any net income from the sale of treated Wastewater from the System prior to is discharge into a public stream of the State of Texas, the District will apply and credit said net income towards payments of Operation and Maintenance Expenses. (b) Notwithstanding any other provisions of the Contract, the District may provide any excess available capacity or service of the System to any person, as defined by the Texas Water Code, provided that such service does not interfere with or impair the rights of any Member City under the Contract, and any such service shall in all events be subordinate and subject to such rights; and provided further that the District must charge for such service in amount at least sufficient to pay all operation and Maintenance Expense attributable thereto plus an amount which will produce an estimated reasonable allocation as determined by the District, plus an additional amount of not less than 20% of the foregoing to cover prior incurred costs, to be credited to the Bond Service Component of the Annual Requirement. The District is not authorized to issue Bonds, as defined in the Contracts, to provide the services of the System to any persons other than Member Cities. Initial Facilities of the System. (a) Immediately after execution of the Initial Contract, the District established the System initially to consist of facilities at Mesquite and Plano. (b) As permitted and authorized by the Texas Water Code, and other provisions of law, the District, Mesquite and Plano agreed in the Initial Contract that the Initial Contract would constitute an operating agreement with respect to the treatment and disposal facilities which existed on the date of the Initial Contract (the "Initial Facilities") and which on the date of the Initial Contract constituted a part of the Local Wastewater Facilities of Mesquite and Plano, respectively: The District under the Initial Contract agreed to manage, administer, operate, maintain, and use the Initial Facilities as part of the System, subject to the provisions and during the term of the Initial Contract, and in consideration thereof, the District agreed to pay to Mesquite, certain annual amounts through the fiscal year ending September 30, 1995, and to Plano, certain annual amounts through the fiscal year ending September 30, 1998. (c) Such payments constituted a part of the fixed Operation and Maintenance Expenses of the System, and the District included such amount in each Annual Budget, to be paid, along with all other items of Operation and Maintenance Expense, according to the formulae and methods provided in the Initial Contract and the contract for the payment of the Annual Requirement. Annual Audit of System. The District shall, at the close of each Fiscal Year, cause an Annual Audit of the System to be performed. District Contracts with Additional Member Cities. (a) The District reserves the right to contract with Additional Member Cities to provide the services of the System to such Additional Member Cities; provided that the terms and provisions of such contracts with Additional Member Cities shall be, to the extent practicable and applicable, the same as the terms and provisions of the contracts, except that with respect to any Local Wastewater Facilities of such Additional Member City which are to be acquired, operated, or used by the District as a part of the System as a result of such contract, the District and the Additional Member City may agree in such contract for mutually acceptable payments in connection therewith from Bond proceeds or as an Operation and

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Maintenance Expense of the System (provided that in any formula used for determining such payments, the value attributed to such Local Wastewater Facilities shall not exceed a sum equal to the principal amount of all then outstanding bonds or other obligations issued by the Additional Member City to acquire and construct such Local Wastewater Facilities), and except that such contract shall provide for payments calculated on the basis of adequate minimum flows as hereinafter provided. All Member Cities shall be bound by the contracts and the similar contracts with Additional Member Cities. The District shall not enter into contracts for any services by the System except with cities which become Member Cities, or as otherwise provided in the contracts. (b) A city may become an Additional Member City in the following manner and under the following conditions: (i) A formal request must be submitted to the District furnishing information on the area to be served, a description of

existing facilities, and the latest annual audit of such proposed Additional Member City's waterworks and/or sewer systems, if any.

(ii) Such proposed Additional Member City must provide funds for any necessary engineering studies if funds are not

available from the appropriate Federal or State agencies. The preliminary studies must determine or estimate, for the ensuing five year period, the size and type of any proposed facilities, their estimated cost, and estimated flows of Wastewater, so as to enable the District to ascertain or estimate the requirements of the proposed Additional Member City for the ensuing five year period.

(iii) After all preliminary data is developed; the Board of Directors of the District shall call a hearing and notify all

Member Cities to review the request of the proposed Additional Member City. The Board of Directors of the District then shall determine if the proposed Additional Member City shall become a Member City.

(c) Each Additional Member City must agree to make minimum payments under its Contract, on the basis of estimated annual minimum flows, that would provide amounts annually at least sufficient, as determined by the District, to pay: (i) all of the annual Operation and Maintenance Component of the Annual Requirement which is attributable to any

Local Wastewater Facilities of such Additional Member City which are to be acquired, operated, used, or improved by the District as part of the System and any other new and additional facilities of the System provided and designated by the District to serve such Member City, less any amount thereof attributable to the use of any part of said facilities for the benefit of any other Member City or Cities, and

(ii) an amount (to be credited and applied to the Bond Service Component of each Annual Requirement), at least equal

to: (I) all of that part of the Bond Service Component of each Annual Requirement attributable to Bonds issued to

acquire or improve any existing Local Wastewater Facilities of such Additional Member City to be a part of the System, and all Bonds issued within five years from the date of such contract to provide any other new and additional facilities for the System to serve such Additional Member City, plus

(II) a percentage of the Bond Service Component of each future Annual Requirement for all then outstanding

Bonds equal to the then estimated percentage of use by such proposed Additional Member City of any portion of the then existing System, plus

(iii) an annual amount (to be credited to the Bond Service Component of the Annual Requirement and/or to the

Operation and Maintenance Component of the Annual Requirement, at the option of the District) as estimated and determined by the District to equalize the previous capital cost (including the cost of previously constructed excess capacity) of facilities to be used to provide service to the Additional Member City.

Additional Capacity and Facilities. As the responsible agency for the establishment, administration, management, operation, and maintenance of the System, the District will, from time to time, determine when and to what extent it is necessary to provide additions, enlargements, improvements, repairs, and extensions to the System to receive, transport, treat, and dispose of Wastewater of any Member Cities, including all Additional Member Cities, and to issue its Bonds to accomplish such purposes, and all Member Cities, including Additional Member Cities, shall be obligated to pay both the Operation and Maintenance Component and the Bond Service Component included in the Annual Requirement with respect to the entire System, as expanded. Term of Contract. The Contract shall continue in force from the effective date thereof at least until all Bonds, including any Bonds issued to refund same shall have been paid in full; and shall also remain in force thereafter throughout the useful life of the System.

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SELECTED PROVISIONS OF THE BOND RESOLUTION The following statements summarize certain portions of the Bond Resolution to be adopted by the Board of Directors authorizing the issuance, sale and delivery of the Bonds and do not purport to be comprehensive or definitive and are qualified in their entirety by reference to the Resolution. As used in this Summary, the term "Issuer" refers to the District as otherwise defined in the Official Statement. ADDITIONAL DEFINITIONS. As used in this Resolution the following terms shall have the meanings set forth below, unless the text hereof specifically indicates otherwise:

The term "Additional Bonds" shall mean the additional parity revenue bonds permitted to be authorized in the future in this Resolution.

The term "Board" shall mean the Board of Directors of the Issuer, being the governing body of the Issuer, and it is further resolved that the declarations and covenants of the Issuer contained in this Resolution are made by, and for and on behalf of the Board and the Issuer, and are binding upon the Board and the Issuer for all purposes.

The terms "Bond Resolution" and "Resolution" mean this resolution authorizing the Bonds.

The term "Bonds" means collectively the Initial Bond as described and defined in Section 1 of this Resolution, and all substitute bonds exchanged therefor as well as all other substitute and replacement bonds issued pursuant to this Resolution.

The term "Contract" shall mean collectively the Trinity East Fork Regional Wastewater Contract dated as of October 1,

1975, among the Issuer and the City of Mesquite, in Dallas County, Texas, and the City of Plano, in Collin County, Texas, the City of Richardson-Trinity East Fork Regional Wastewater System Contract, dated as of January 9, 1978, and amended as of December 1, 1985, between the Issuer and the City of Richardson, in Dallas and Collin Counties, Texas, the City of Allen-Trinity East Fork Regional Wastewater System Contract, dated as of August 24, 1978, between the Issuer and the City of Allen, in Collin County, Texas, the City of McKinney - Trinity East Fork Regional Wastewater System Contract, dated as of August 29, 1979, between the Issuer and the City of McKinney, in Collin County, Texas, the City of Forney - Trinity East Fork Regional Wastewater System Contract, dated as of February 22, 1990, between the Issuer and the City of Forney, in Kaufman County, Texas, the City of Frisco - Trinity East Fork Regional Wastewater System Contract, dated as of November 19, 1996, between the Issuer and the City of Frisco, in Collin and Denton Counties, Texas, the City of Princeton - Trinity East Fork Regional Wastewater System Contract, dated as of November 26, 1996, between the Issuer and the City of Princeton, in Collin County, Texas, the City of Rockwall - Trinity East Fork Regional Wastewater System Contract, dated as of March 29, 2001, between the Issuer and the City of Rockwall, in Rockwall County, Texas, the City of Heath - Trinity East Fork Regional Wastewater System Contract, dated as of March 29, 2001, between the Issuer and the City of Heath, in Rockwall County, Texas, the Town of Prosper - Trinity East Fork Regional Wastewater System Contract, dated as of February 24, 2004, between the Issuer and the Town of Prosper, in Collin and Denton Counties, Texas, the City of Seagoville - Trinity East Fork Regional Wastewater System Contract, dated as of February 24, 2005, between the Issuer and the City of Seagoville, in Dallas and Kaufman Counties, Texas, and City of Melissa – Trinity East Fork Regional Wastewater System Contract dated as of April 1, 2019, between the City of Melissa and the Issuer together with all similar contracts which may be executed in the future between the Issuer and Additional Member Cities, as defined and permitted in the aforesaid contracts.

The terms "District" and "Issuer" shall mean North Texas Municipal Water District.

The terms "District's System", "Issuer's System", and "System" shall mean all of the Issuer's facilities acquired, constructed, used, or operated by the Issuer for receiving, transporting, treating, and disposing of Wastewater of and for Member Cities, pursuant to the Contract, including the contracts with Additional Member Cities (but excluding any facilities acquired or constructed with "Special Facilities Bonds" as hereinafter described, and excluding any facilities required to transport Wastewater to any Point of Entry of the System), together with any improvements, enlargements, or additions to said System facilities and any extensions, repairs, or replacements of said System facilities acquired, constructed, used, operated, or otherwise incorporated into or made a part of said System facilities in the future by the Issuer. Said terms shall include only those facilities which are acquired, constructed, used, or operated by the Issuer to provide service to Member Cities pursuant to the Contract, including the contracts with Additional Member Cities, and which, as determined by the Issuer, can economically and efficiently provide service to Member Cities. Said terms do not include any Issuer facilities which provide Wastewater services of any kind to cities, political subdivisions, or persons which are not Member Cities, nor do they in any way include or affect the Issuer's water supply system. Said terms do not include any facilities acquired or constructed by the Issuer with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being revenue obligations of the Issuer which are not secured by or payable from Annual Payments under the Contract, including the contracts with Additional Member Cities, but which are payable solely from other sources; but Special Facilities Bonds may be made payable from payments from any person, including any Member City, under a separate contract whereunder the facilities to be acquired or constructed are declared not to be part of the System and are not made payable from the Annual Payments as defined in the Contract, including the contracts with Additional Member Cities.

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The term "Gross Revenues of the System" shall mean all of the revenues, income, rentals, rates, fees, and charges of every nature derived by the Board or the Issuer from the operation and/or ownership of the System, including specifically all payments constituting the "Annual Requirement" (consisting of the "Operation and Maintenance Component" and the "Bond Service Component"), and all other payments and amounts received by the Board or the Issuer from the Member Cities pursuant to the Contract, including any contracts with Additional Member Cities.

The term "Member Cities" shall mean collectively the City of Mesquite, in Dallas County, Texas, the City of Plano, in Collin County, Texas, the City of Richardson, in Dallas and Collin Counties, Texas, the City of Allen, in Collin County, Texas, the City of McKinney, in Collin County, Texas, the City of Forney, in Kaufman County, Texas, the City of Frisco, in Collin and Denton Counties, Texas, the City of Princeton, in Collin County, Texas, the City of Rockwall, in Rockwall County, Texas, the City of Heath, in Rockwall County, Texas, the Town of Prosper, in Collin and Denton Counties, Texas, and the City of Seagoville, in Dallas and Kaufman Counties, Texas, together with all Additional Member Cities, as defined in the Contract.

The term "Net Revenues of the System" shall mean the Gross Revenues of the System less the Operation and Maintenance Expense of the System.

The term 1976 Bond Resolution shall mean the resolution adopted by the Board on May 27, 1976, authorizing the issuance of the North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 1976, the initial issuance of bonds by the Issuer to provide the System.

The term "Operation and Maintenance Expense of the System" shall mean all costs of operation and maintenance of the Issuer's System including, but not limited to, repairs and replacements, the cost of utilities, supervision, engineering, accounting, auditing, legal services, insurance premiums, and any other supplies, services, administrative costs, and equipment necessary for proper operation and maintenance of the Issuer's System, payments made for the use or operation of any property, payments of fines, and payments made by Issuer in satisfaction of judgments or other liabilities resulting from claims not covered by Issuer's insurance or not paid by one particular Member City arising in connection with the operation and maintenance of the Issuer's System. Depreciation shall not be considered an item of Operation and Maintenance Expense.

The term "Parity Bonds" shall mean collectively the Bonds and the unpaid and unrefunded bonds out of the following described Series which will be outstanding after the issuance and delivery of the Initial Bond: North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2009, authorized by resolution of the Board on June 25, 2009, North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2012, authorized by resolution of the Board on March 22, 2012, North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2013, authorized by resolution of the Board on March 28, 2013, North Texas Municipal Water District Regional Wastewater System Revenue Refunding and Improvement Bonds, Series 2015, authorized by resolution of the Board on August 27, 2015, North Texas Municipal Water District Regional Wastewater System Revenue Refunding and Improvement Bonds, Series 2016, authorized by resolution of the Board on August 25, 2016, North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2017, authorized by resolution of the Board on March 23, 2017, North Texas Municipal Water District Regional Wastewater System Revenue Refunding Bonds, Series 2017, authorized by resolution of the Board on November 29, 2017, North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2018, authorized by resolution of the Board on February 22, 2018 North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2019, authorized by resolution of the Board of April 25, 2019, and North Texas Municipal Water District Regional Wastewater System Revenue Bonds, Series 2020, authorized by a resolution of the Board on May 28, 2020.

The term "Pledged Revenues" shall mean: (a) the Gross Revenues of the System and (b) any additional revenues, income, receipts, or other resources, including, without limitation, any grants, donations, or income received or to be received from the United States Government, or any other public or private source, whether pursuant to an agreement or otherwise, which in the future may, at the option of the Issuer, be pledged to the payment of the Parity Bonds or the Additional Bonds.

The term "year" shall mean the 12 month period beginning each October 1, or such other 12 month period hereafter

established by the Issuer as a fiscal year for the purposes of this Resolution. PLEDGE. (a) The Bonds authorized by this Resolution are hereby designated as, and shall be, "Additional Bonds" as permitted by Sections 21 and 22, respectively, of the 1976 Bond Resolution and by Sections 22 and 23, respectively, of the resolutions authorizing the Parity Bonds, and it is hereby determined, declared, and resolved that all of the Parity Bonds, including the Bonds authorized by this Resolution, are and shall be secured and payable equally and ratably on a parity, and that Sections 8 through 25 of this Resolution substantially restate and are supplemental to and cumulative of the applicable and pertinent provisions of the resolutions authorizing the issuance of the previously issued Parity Bonds, respectively, with Sections 8 through 25 of this Resolution being equally applicable to all of the Parity Bonds, including the Bonds.

(b) The Parity Bonds and any Additional Bonds, and the interest thereon, are and shall be secured by and payable from a first lien on and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged to the establishment and maintenance of the Interest and Redemption Fund and the Reserve Fund as provided in this Resolution.

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REVENUE FUND. There has been created and established pursuant to the 1976 Bond Resolution, and there shall be maintained at an official depository of the Issuer (which must be a member of the Federal Deposit Insurance Corporation) a separate fund to be entitled the "North Texas Municipal Water District Regional Wastewater System Revenue Bonds Revenue Fund" (hereafter called the "Revenue Fund"). All Gross Revenues of the System shall be credited to the Revenue Fund immediately upon receipt. INTEREST AND REDEMPTION FUND. For the sole purpose of paying the principal of and interest on all outstanding Parity Bonds and any Additional Bonds, as the same come due, there has been created and established pursuant to the 1976 Bond Resolution and shall be maintained at The Bank of New York Mellon Trust Company, National Association, a separate fund to be entitled the "North Texas Municipal Water District Regional Wastewater System Revenue Bonds Interest and Redemption Fund" (hereinafter called the "Interest and Redemption Fund"). RESERVE FUND. There has been created and established pursuant to the Series 1976 Bond Resolution, and there shall be maintained at the The Bank of New York Mellon Trust Company, National Association, a separate fund to be entitled the "North Texas Municipal Water District Regional Wastewater System Revenue Bonds Reserve Fund" (hereinafter called the "Reserve Fund"). The Reserve Fund shall be used solely for the purpose of finally retiring the last of the outstanding Parity Bonds and Additional Bonds, or for paying principal of and interest on any outstanding Parity Bonds and Additional Bonds, when and to the extent the amount in the Interest and Redemption Fund is insufficient for such purpose. DEPOSITS OF PLEDGED REVENUES. The Pledged Revenues shall be deposited into the Interest and Redemption Fund and the Reserve Fund when and as required by this Resolution. INVESTMENTS. Money in the Revenue Fund, the Interest and Redemption Fund, and the Reserve Fund established pursuant to the 1976 Bond Resolution may, at the option of the Issuer, be placed in secured time deposits or secured certificates of deposit, or be invested in direct obligations of the United States of America, obligations guaranteed or insured by the United States of America, which, in the opinion of the Attorney General of the United States, are backed by its full faith and credit or represent its general obligations, including, but not limited to, evidences of indebtedness issued, insured, or guaranteed by such governmental agencies as the Federal Land Bank, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, United States Postal Service, Farmers Home Administration, Federal Home Loan Mortgage Association, Small Business Administration, Federal Housing Association, or Participation Certificates in the Federal Assets Financing Trust; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times. Such investments shall be valued in terms of current market value as of the 15th day of January of each year. Interest and income derived from such deposits and investments shall be credited to the Fund from which the deposit or investment was made. Such investments shall be sold promptly when necessary to prevent any default in connection with the Parity Bonds or Additional Bonds. No investment of any Fund shall be made in any way which would violate any provision of this Resolution, particularly with respect to any surplus in the Reserve Fund or "arbitrage bonds". FUNDS SECURED. Money in all Funds described in this Resolution, to the extent not invested, shall be secured in the manner prescribed by law for securing funds of the Issuer, in principal amounts at all times not less than the amounts of money credited to such Funds, respectively. DEBT SERVICE REQUIREMENTS. (a) Immediately after the delivery of the Initial Bond the Issuer shall deposit to the credit of the Interest and Redemption Fund, from the proceeds received from the sale and delivery of the Initial Bond, all accrued interest, if any, to be used to pay part of the interest coming due on the Bonds.

(b) The Issuer shall transfer from the Pledged Revenues and deposit to the credit of the Interest and Redemption Fund the amounts, at the times, as follows:

(1) such amounts, deposited in approximately equal monthly installments on or before the 25th day of each month hereafter as will be sufficient, together with other amounts, if any, then on hand in the Interest and Redemption Fund and available for such purpose, to pay the interest scheduled to accrue and come due on the Parity Bonds and any Additional Bonds on the next succeeding interest payment date; and

(2) such amounts, deposited in approximately equal monthly installments on or before the 25th day of each month hereafter as will be sufficient, together with other amounts, if any, then on hand in the Interest and Redemption Fund and available for such purpose, to pay the principal scheduled to mature and come due, and/or mandatorily required to be redeemed prior to maturity, on the Parity Bonds and any Additional Bonds on the next succeeding principal payment date or mandatory redemption date.

RESERVE REQUIREMENTS. Out of proceeds of the Bonds, there shall be deposited to the credit of the Reserve Fund an amount of money, if any, sufficient to cause the Reserve Fund to contain money and/or investments in market value equal to the average annual principal and interest requirements on all Parity Bonds which will be outstanding immediately after issuance of the Bonds (the "Required Amount"). So long as the money and investments in the Reserve Fund are at least equal to the Required Amount, no deposits shall be made to the credit of the Reserve Fund; but when and if the Reserve Fund at any time contains less than said Required Amount in market value, then, subject and subordinate to making the required deposits to the credit of the Interest and Redemption Fund, the Issuer shall transfer from Pledged Revenues and deposit to the credit of the Reserve Fund, on or before the 25th day of each month, a sum equal to 1/60th of the average annual principal and interest requirements of all then outstanding Parity Bonds, until the Reserve Fund is restored to said Required Amount. So long as the Reserve Fund contains said Required Amount, all amounts in excess of such Required Amount shall, on or before the 10th day prior to each interest payment date, be deposited to the credit of the Interest and Redemption Fund; and otherwise any earnings from the deposit and investment of the Reserve Fund shall be retained in the Reserve Fund.

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DEFICIENCIES. If on any occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Interest and Redemption Fund and the Reserve Fund, then such deficiency shall be made up as soon as possible from the next available Pledged Revenues, or from any other sources available for such purpose. EXCESS PLEDGED REVENUES. Subject to making the required deposits to the credit of the Interest and Redemption Fund and the Reserve Fund, when and as required by this Resolution, or any Resolution authorizing the issuance of Additional Bonds, the excess Pledged Revenues first shall be used to pay the Operation and Maintenance Expenses of the System, and then, subject to paying such Operation and Maintenance Expenses of the System, may be used for any other lawful purpose. PAYMENT OF BONDS. On or before the last day of each May and of each November hereafter while any of the Parity Bonds or Additional Bonds are outstanding and unpaid, the Issuer shall make available to the paying agents therefor, out of the Interest and Redemption Fund or the Reserve Fund, if necessary, money sufficient to pay such interest on and such principal of the Parity Bonds and Additional Bonds as will accrue or mature on the June 1 or December 1 immediately following. FINAL DEPOSITS. At such times as the aggregate amount of money and investments in the Interest and Redemption Fund and the Reserve Fund are at least equal in market value to (1) the aggregate principal amount of all unpaid (unmatured and matured) outstanding Parity Bonds and Additional Bonds, plus (2) the aggregate amount of all unpaid interest, including all unpaid (unmatured and matured) outstanding interest coupons, appertaining to such Parity Bonds and Additional Bonds, no further deposits need be made into the Interest and Redemption Fund or the Reserve Fund. In determining the amount of such Parity Bonds and Additional Bonds, and unpaid interest appertaining thereto, outstanding at any time, there shall be subtracted and excluded the amount of any such Parity Bonds and Additional Bonds, and unpaid interest appertaining thereto, which shall have been duly called for redemption and for which funds shall have been deposited with the paying agents therefor sufficient for such redemption. ADDITIONAL BONDS. (a) The Issuer shall have the right and power at any time and from time to time, and in one or more Series or issues, to authorize, issue, and deliver additional parity revenue bonds (herein called "Additional Bonds"), in any amounts, for any lawful purpose of relating to the System, including the refunding of any Parity Bonds or Additional Bonds. Such Additional Bonds, if and when authorized, issued, and delivered in accordance with this Resolution, shall be secured by and made payable equally and ratably on a parity with the Parity Bonds, and all other outstanding Additional Bonds, from a first lien on and pledge of the Pledged Revenues.

(b) The Interest and Redemption Fund and the Reserve Fund, established by this Resolution shall secure and be used to pay all Additional Bonds as well as the Parity Bonds. However, each Resolution under which Additional Bonds are issued shall provide and require that, in addition to the amounts required by the provisions of this Resolution and the provisions of any other Resolution or Resolutions authorizing Additional Bonds to be deposited to the credit of the Interest and Redemption Fund, the Issuer shall deposit to the credit of the Interest and Redemption Fund at least such amounts as are required for the payment of all principal of and interest on said Additional Bonds then being issued, as the same come due; and that the aggregate amount to be accumulated and maintained in the Reserve Fund shall be increased (if and to the extent necessary) to an amount not less than the average annual principal and interest requirements of all Parity Bonds and Additional Bonds which will be outstanding after the issuance and delivery of the then proposed Additional Bonds; and that the required additional amount shall be so accumulated by the deposit in the Reserve Fund of all or any part of said required additional amount in cash immediately after the delivery of the then proposed Additional Bonds, or, at the option of the Issuer, by the deposit of said required additional amount (or any balance of said required additional amount not deposited in cash as permitted above) in monthly installments, made on or before the 25th day of each month following the adoption of the Resolution authorizing the issuance of the then proposed Additional Bonds, of not less than 1/60th of said required additional amount (or 1/60th of the balance of said required additional amount not deposited in cash as permitted above).

(c) All calculations of average annual principal and interest requirements made pursuant to this Section shall be

made as of and from the date of the Additional Bonds then proposed to be issued. (d) The principal of all Additional Bonds must be scheduled to be paid or mature on June 1 of the years in which

such principal is scheduled to be paid or mature; and all interest thereon must be payable on June 1 and December 1. FURTHER REQUIREMENTS FOR ADDITIONAL BONDS. Additional Bonds shall be issued only in accordance with this Resolution, but notwithstanding any provisions of this Resolution to the contrary, no installment, Series, or issue of Additional Bonds shall be issued or delivered unless the President and the Secretary of the Board sign a written certificate to the effect that the Issuer is not in default as to any covenant, condition, or obligation in connection with all outstanding Parity Bonds and Additional Bonds, and the Resolutions authorizing same, and that the Interest and Redemption Fund and the Reserve Fund each contains the amount then required to be therein. GENERAL COVENANTS. The Issuer further covenants and agrees that:

(a) PERFORMANCE. It will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Resolution and each resolution authorizing the issuance of Additional Bonds, and in each and every Parity Bond and Additional Bond; that it will promptly pay or cause to be paid the principal of and interest on every Bond and Additional Bond, on the dates and in the places and manner prescribed in such resolutions and Parity Bonds or Additional Bonds; and that it will, at the times and in the manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the Interest and Redemption Fund and the Reserve Fund; and any holder of the Parity Bonds or Additional Bonds may require the Issuer, its Board, and its officials and employees, to carry out, respect, or enforce the covenants and obligations

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of this Resolution or any resolution authorizing the issuance of Additional Bonds, by all legal and equitable means, including specifically, but without limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction, against the Issuer, its Board, and its officials and employees.

(b) ISSUER'S LEGAL AUTHORITY. The Issuer is a duly created and existing conservation and reclamation district of the State of Texas pursuant to Article 16, Section 59 of the Texas Constitution, and Chapter 62, Acts of the 52nd Legislature of Texas, Regular Session, 1951, as amended (originally compiled as Vernon's Ann. Tex. Civ. St. Article 8280-141), and is duly authorized under the laws of the State of Texas to create and issue the Parity Bonds; that all action on its part for the creation and issuance of the Parity Bonds has been duly and effectively taken, and that the Parity Bonds in the hands of the holders and owners thereof are and will be valid and enforceable special obligations of the Issuer in accordance with their terms.

(c) TITLE. It has or will obtain lawful title to, or the lawful right to use and operate, the lands, buildings, and facilities constituting the System, that it warrants that it will defend, the title to or lawful right to use and operate, all the aforesaid lands, buildings, and facilities, and every part thereof, for the benefit of the holders and owners of the Parity Bonds and Additional Bonds against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the Pledged Revenues to the payment of the Parity Bonds and Additional Bonds in the manner prescribed herein, and has lawfully exercised such rights.

(d) LIENS. It will from time to time and before the same become delinquent pay and discharge all taxes, assessments, and governmental charges, if any, which shall be lawfully imposed upon it, or the System, that it will pay all lawful claims for rents, royalties, labor, materials, and supplies which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein, and that it will not create or suffer to be created any mechanic's, laborer's, materialman's, or other lien or charge which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided, however, that no such tax, assessment, or charge, and that no such claims which might be used as the basis of a mechanic's, laborer's, materialman's, or other lien or charge, shall be required to be paid so long as the validity of the same shall be contested in good faith by the Board.

(e) OPERATION OF SYSTEM. While the Parity Bonds or any Additional Bonds are outstanding and unpaid it

will cause the System to be continuously and efficiently operated and maintained in good condition, repair, and working order, and at a reasonable cost.

(f) FURTHER ENCUMBRANCE. While the Parity Bonds or any Additional Bonds are outstanding and unpaid, the Issuer shall not additionally encumber the Pledged Revenues in any manner, except as permitted in this Resolution in connection with Additional Bonds, unless said encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants, and agreements of this Resolution and any resolution authorizing the issuance of Additional Bonds; but the right of the Issuer and the Board to issue revenue bonds payable from a subordinate lien on the Pledged Revenues is specifically recognized and retained.

(g) SALE OF PROPERTY. While the Parity Bonds or any Additional Bonds are outstanding and unpaid, the

Issuer will maintain its current legal corporate status as a conservation and reclamation district, and the Issuer shall not sell, convey, mortgage, or in any manner transfer title to, or lease, or otherwise dispose of the entire System, or any significant or substantial part thereof; provided that whenever the Issuer deems it necessary to dispose of any machinery, fixtures, and equipment, it may sell or otherwise dispose of such machinery, fixtures, and equipment when it has made arrangements to replace the same or provide substitutes therefor, unless it is determined by the Issuer that no such replacement or substitute is necessary.

(h) INSURANCE. (1) It will cause to be insured such parts of the System as would usually be insured by corporations operating like properties, with a responsible insurance company or companies, against risks, accidents, or casualties against which and to the extent insurance is usually carried by corporations operating like properties, including fire and extended coverage insurance. Public liability and property damage insurance shall also be carried unless the general counsel for Issuer, or the Attorney General of Texas, gives a written opinion to the effect that the Issuer, the Board, and its officers and employees, are not liable for claims which would be protected by such insurance. At any time while any contractor engaged in construction work shall be fully responsible therefor, the Issuer shall not be required to carry insurance on the works being constructed, but the contractor shall be required to carry appropriate insurance. All such policies shall be open to the inspection of the Bondholders and their representatives at all reasonable times.

(2) Upon the happening of any loss or damage covered by insurance from one or more of said causes, the Issuer shall make due proof of loss and shall do all things necessary or desirable to cause the insuring companies to make payment in full directly to the Issuer. The proceeds of insurance covering such property, together with any other funds necessary and available for such purpose, shall be used forthwith by the Issuer for repairing the property damaged or replacing the property destroyed; provided, however, that if said insurance proceeds and other funds are insufficient for such purpose, then said insurance proceeds pertaining to the System shall be used promptly as follows:

(a) for the redemption prior to maturity of the Parity Bonds and Additional Bonds, if any, ratably in the

proportion that the outstanding principal of each Series or issue of Parity Bonds or Additional Bonds bears to the total outstanding principal of all Parity Bonds and Additional Bonds; provided that if on any such occasion the principal of any such Series or issue is not subject to redemption, it shall not be regarded as outstanding in making the foregoing computation; or

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(b) if none of the outstanding Parity Bonds or Additional Bonds is subject to redemption, then for the purchase on the open market and retirement of said Parity Bonds and Additional Bonds, in the same proportion as prescribed in the foregoing clause (a), to the extent practicable; provided that the purchase price for any such Parity Bond or Additional Bonds shall not exceed the redemption price of such Parity Bond or Additional Bond on the first date upon which it becomes subject to redemption; or

(c) to the extent that the foregoing clauses (a) and (b) cannot be complied with at the time, the

insurance proceeds, or the remainder thereof, shall be deposited in a special and separate trust fund, at an official depository of the Issuer, to be designated the Insurance Account. The Insurance Account shall be held until such time as the foregoing clauses (a) and/or (b) can be complied with, or until other funds become available which, together with the Insurance Account, will be sufficient to make the repairs or replacements originally required, whichever of said events occurs first.

(3) The annual audit hereinafter required shall contain a list of all such insurance policies carried, together with a

statement as to whether or not all insurance premiums upon such policies have been paid.

(i) RATE COVENANT. It will fix, establish, maintain, and collect such rentals, rates, charges, and fees for the use and availability of the System as are necessary to produce Gross Revenues of the System sufficient, together with any other Pledged Revenues, (a) to make all payments and deposits required to be made into the Interest and Redemption Fund, and to maintain the Reserve Fund, as required by the resolutions authorizing all Parity Bonds and Additional Bonds, and (b) to pay all Operation and Maintenance Expenses of the System.

(j) RECORDS. Proper books of record and account will be kept in which full, true, and correct entries will be made of all dealings, activities, and transactions relating to the System, the Pledged Revenues, and all Funds described in this Resolution; and all books, documents, and vouchers relating thereto shall at all reasonable times be made available for inspection upon request of any bondholder.

(k) AUDITS. Each year while any of the Parity Bonds or Additional Bonds are outstanding, an audit will be made of its books and accounts relating to the System and the Pledged Revenues by an independent certified public accountant or an independent firm of certified public accountants. As soon as practicable after the close of each year, and when said audit has been completed and made available to the Issuer, a copy of such audit for the preceding year shall be mailed to the Municipal Advisory Council of Texas and to any bondholders who shall so request in writing. Such annual audit reports shall be open to the inspection of the bondholders and their agents and representatives at all reasonable times.

(l) GOVERNMENTAL AGENCIES. It will comply with all of the terms and conditions of any and all agreements applicable to the System and the Parity Bonds or Additional Bonds entered into between the Issuer and any governmental agency, and the Issuer will take all action necessary to enforce said terms and conditions; and the Issuer will obtain and keep in full force and effect all franchises, permits, and other requirements necessary with respect to the acquisition, construction, operation, and maintenance of the System.

(m) CONTRACTS WITH MEMBER CITIES. It will comply with the terms and conditions of the Contract, including any contracts with Additional Member Cities, and will cause the Member Cities to comply with all of their obligations thereunder by all lawful means; and the Issuer agrees to prepare an annual budget as required by the Contract. AMENDMENT OF RESOLUTION. (a) The holders or owners of Parity Bonds and Additional Bonds aggregating 51% in principal amount of the aggregate principal amount of then outstanding Parity Bonds and Additional Bonds shall have the right from time to time to approve any amendment to this Resolution or any resolution authorizing the issuance of Additional Bonds, which may be deemed necessary or desirable by the Issuer, provided, however, that nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions in said resolutions or in the Parity Bonds or Additional Bonds so as to:

(1) Make any change in the maturity of the outstanding Parity Bonds or Additional Bonds;

(2) Reduce the rate of interest borne by any of the outstanding Parity Bonds or Additional Bonds;

(3) Reduce the amount of the principal payable on the outstanding Parity Bonds or Additional Bonds;

(4) Modify the terms of payment of principal of or interest on the outstanding Parity Bonds or Additional Bonds, or impose any conditions with respect to such payment;

(5) Affect the rights of the holders of less than all of the Parity Bonds and Additional Bonds then outstanding;

(6) Change the minimum percentage of the principal amount of Parity Bonds and Additional Bonds necessary for

consent to such amendment.

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(b) If at any time the Issuer shall desire to amend a resolution under this Section, the Issuer shall cause notice of the proposed amendment to be published in a financial newspaper or journal published in the City of New York, New York, or in the City of Austin, Texas, once during each calendar week for at least two successive calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the principal office of each Paying Agent for each Series of Parity Bonds and Additional Bonds for inspection by all holders of Parity Bonds and Additional Bonds. Such publication is not required, however, if notice in writing is given to each holder of Parity Bonds and Additional Bonds.

(c) Whenever at any time not less than thirty days, and within one year, from the date of the first publication of

notice or other service of written notice the Issuer shall receive an instrument or instruments executed by the holders or owners of at least 51% in aggregate principal amount of all Parity Bonds and Additional Bonds then outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file as aforesaid, the Issuer may adopt the amendatory resolution in substantially the same form.

(d) Upon the adoption of any amendatory resolution pursuant to the provisions of this Section, the resolution being amended shall be deemed to be amended in accordance with the amendatory resolution, and the respective rights, duties, and obligations of the Issuer and all the holders or owners of then outstanding Parity Bonds and Additional Bonds and all future Additional Bonds shall thereafter be determined, exercised, and enforced hereunder, subject in all respects to such amendment.

(e) Any consent given by the holder or owner of a Parity Bond or Additional Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the first publication of the notice provided for in this Section, and shall be conclusive and binding upon all future holders or owners of the same Parity Bond or Additional Bond during such period. Such consent may be revoked at any time after six months from the date of the first publication of such notice by the holder or owner who gave such consent, or by a successor in title, by filing notice thereof with each Paying Agent for each Series of Parity Bonds and Additional Bonds, Texas, and the Issuer, but such revocation shall not be effective if the holders of 51% in aggregate principal amount of the then outstanding Parity Bonds and Additional Bonds as in this Section defined have, prior to the attempted revocation, consented to and approved the amendment.

(f) For the purpose of this Section, the fact of the holding of Parity Bonds or Additional Bonds in bearer, coupon form by any holder thereof and the amount and numbers of such Parity Bonds and Additional Bonds, and the date of their holding same, may be provided by the affidavit of the person claiming to be such holder, or by a certificate executed by any trust company, bank, banker, or any other depository wherever situated showing that at the date therein mentioned such person had on deposit with such trust company, bank, banker, or other depository, the Parity Bonds or Additional Bonds described in such certificate. The ownership of all registered Parity Bonds and Additional Bonds shall be ascertained by the registration books pertaining thereto kept by the registrar. The Issuer may conclusively assume that such holding or ownership continues until written notice to the contrary is served upon the Issuer.

DEFEASANCE OF BONDS. (a) Each of the Bonds, including the Initial Bond and each of the other Bonds (as

hereinbefore defined), and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of this Resolution, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof (including the giving of any required notice of redemption), or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the Pledged Revenues as provided in this Resolution, and such principal and interest shall be payable solely from such money or Government Obligations.

(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer.

(c) The term "Government Obligations" as used in this Section shall mean (i) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, and (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the Board of Directors adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent.

(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall perform the

services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required by this Resolution.

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DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. In the event any outstanding Bonds or Bond authorized by this Resolution is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.

(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated.

(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond

shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in this Section.

(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Resolution equally and proportionately with any and all other Bonds duly issued under this Resolution.

(e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1201, Texas Government Code, this Section of this Resolution shall constitute authority for the issuance of any such replacement bond without necessity of further action by the governing body of the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the effect, as provided in Section 6(d) of this Resolution for Bonds issued in conversion and exchange for other Bonds. COVENANTS REGARDING TAX-EXEMPTION. (a) Covenants. The Issuer covenants to refrain from any action which would adversely affect, or to take such action to assure, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows:

(1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code, or if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the terms of this Resolution or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code;

(2) to take any action to assure that in the event that the "private business use" described in subsection

(a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use;

(3) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is, directly or indirectly, used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code;

(4) to refrain from taking any action that would otherwise result in the Bonds being treated as "private

activity bonds" within the meaning of section 141(b) of the Code;

(5) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code;

(6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or

to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with --

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(A) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less or, in the case of a current refunding bond and an advance refunding bond, for a period of 90 days or less and 30 days or less, respectively, until such proceeds are needed for the purpose for which the Bonds are issued,

(B) amounts invested in a bona fide debt service fund, within the meaning of section

1.148-1(b) of the Treasury Regulations, and

(C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the stated principal amount (or, in the case of a discount, the issue price) of the Bonds;

(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the

Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage);

(8) to refrain from using the proceeds of the Bonds or proceeds of any prior bonds to pay debt service on another issue more than 90 days after the date of issue of the Bonds in contravention of the requirements of section 149(d) of the Code (relating to advance refundings); and

(9) to pay to the United States of America at least once during each five-year period (beginning on the

date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code.

For purposes of the foregoing (a)(1) and (a)(2), the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bonds.

(b) Compliance with Code. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs its President or Interim Executive Director to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. The Issuer covenants to comply with the covenants contained in this section after defeasance of the Bonds.

(c) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such fund shall not be subject to the claim of any other person, including without limitation, the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code.

(d) Written Procedures. Unless superseded by another action of the Issuer to ensure compliance with the covenants contained herein regarding private business use, remedial actions, arbitrage and rebate, the Issuer hereby adopts and establishes the instructions attached hereto as Exhibit A as their written procedures applicable to Bonds issued pursuant to the Contract. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT; DISPOSITION OF THE PROJECT. (a) The Issuer covenants to account for the expenditure of Bond proceeds and investment earnings to be used for the construction or acquisition of the property constituting the projects financed or refinanced with proceeds of the Bonds (the Project") on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (1) the expenditure is made or (2) such construction or acquisition is completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the Bonds or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bonds or (2) the date the Bonds are retired, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest on the Bonds.(b) The Issuer covenants that the property constituting the Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest on the Bonds.

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INVESTMENTS

The District invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the Board of Directors of the District. Both State law and the District’s investment policies are subject to change. LEGAL INVESTMENTS . . . Under Texas law, the District is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities, including letters of credit; (2) direct obligations of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) certificates of deposit and share certificates meeting the requirements of the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended, (i) that are issued by an institution that has its main office or a branch office in the State of Texas and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for District deposits or (ii) where (a) the funds are invested by the District through a depository institution that has a main office or branch office in the State and that is selected by the District; (b) the depository institution selected by the District arranges for the deposit of funds in one or more federally insured depository institutions, wherever located, for the account of the District; (c) the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States; (d) the depository institution acts as a custodian for the District with respect to the certificates of deposit; and (e) at the same time that the certificates of deposit are issued, the depository institution selected by the District receives deposits from customers of other federally insured depository institutions, wherever located, that is equal to or greater than the funds invested by the District through the depository institution selected under clause (ii)(a) above (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) above, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm at not less than A or its equivalent or (c) cash invested in obligations described in clauses (1) through (6) above, clauses (11) through (13) below, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the District, held in the District's name and deposited at the time the investment is made with the District or a third party designated by the District; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less, (10) certain bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least one nationally recognized credit rating agency, (11) commercial paper with a stated maturity of 270 days or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (12) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that have a dollar weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (13) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, invest exclusively in obligations described in this paragraph, and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. In addition, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations, including letters of credit, of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph. The District may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAAm or an equivalent by at least one nationally recognized rating service. The District is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. INVESTMENT POLICIES . . . Under Texas law, the District is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for District funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All District funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds’ investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield.

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Under Texas law, District investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person’s own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the District shall submit an investment report detailing: (1) the investment position of the District, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest District funds without express written authority from the Board of Directors. ADDITIONAL PROVISIONS . . . Under State law, the District is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or Resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or Resolution; (3) require any investment officers with personal business relationships or relatives with firms seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the District Board of Directors; (4) require the qualified representative of firms offering to engage in an investment transaction with the District to: (a) receive and review the District’s investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the District and the business organization that are not authorized by the District’s investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the District’s entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement in a form acceptable to the District and the business organization attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the District’s investment policy; (6) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse purchase agreement; (8) restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the District’s monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements; and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the District.

TABLE 4 - CURRENT INVESTMENTS As of April 30, 2020, investable funds of the District’s Regional Wastewater System were invested as follows:

Market BookDescription Percent (1) Value Value

FFCB Note 2.88% 3,747,098$ 3,744,299$ FHLB Note 5.89% 7,664,433 7,363,217 FHLMC Note 3.42% 4,451,457 4,450,000 FNMA Note 2.37% 3,088,050 3,001,478 Treasury Note 17.82% 23,167,116 22,996,197 State Pools 60.69% 78,926,957 78,926,957 FHLB D.N. 6.92% 8,995,500 8,948,819

100.00% 130,040,611$ 129,430,967$

_______________ (1) Based Upon Market Value.

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TAX MATTERS OPINION . . . On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel, will render their opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof, ("Existing Law") (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code"). Except as stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See APPENDIX D - Form of Bond Counsel's Opinion. In rendering its opinion, Bond Counsel will rely upon (a) the District's federal tax certificate, (b) covenants of the District with respect to arbitrage, the application of the proceeds to be received from the issuance and sale of the Bonds and certain other matters. Failure of the District to comply with these representations or covenants could cause the interest on the Bonds to become includable in gross income retroactively to the date of issuance of the Bonds. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Bonds in order for interest on the Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel is conditioned on compliance by the District with such requirements, and Bond Counsel has not been retained to monitor compliance with these requirements subsequent to the issuance of the Bonds. Bond Counsel’s opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned representations and covenants. Bond Counsel’s opinion is not a guarantee of a result. The Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that such Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds. Further, no assurances can be given as to whether or not the Internal Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures the Internal Revenue Service is likely to treat the Issuer as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT . . . The initial public offering price to be paid for one or more maturities of the Bonds (the "Original Issue Discount Bonds") may be less than the principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the accrual period or be in excess of one year. In such event, the difference between (i) the "stated redemption price at maturity" of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The "stated redemption price at maturity" means the sum of all payments to be made on the bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under Existing Law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond.

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The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. COLLATERAL FEDERAL INCOME TAX CONSEQUENCES . . . The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. The discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, owners of interest in a FASIT, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed earned income credit, certain S corporations with Subchapter C earnings and profits, taxpayers qualifying for the health insurance premium assistance credit, foreign corporations subject to the branch profits tax, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations. THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation is equal to or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such gain does not exceed the accrued market discount of such bonds, although for this purpose, a de minimis amount of market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. STATE, LOCAL AND FOREIGN TAXES . . . Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. INFORMATION REPORTING AND BACKUP WITHHOLDING . . . Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Bonds will be sent to each registered holder and to the IRS. Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient's federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non-U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof.

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OTHER INFORMATION RATINGS The Bonds and certain Outstanding Bonds are rated "Aa2" by Moody's Investors Service Inc. and "AAA" by S&P Global Ratings, a business unit of Standard & Poor's Financial Services LLC. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the District makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Bonds. LITIGATION At the time of the initial delivery of the Bonds, the District will provide the Initial Purchaser with a certificate to the effect that no litigation of any nature has been filed or is then pending challenging the issuance of the Bonds or that affects the payment and security of the Bonds or in any other manner questioning the issuance, sale or delivery of the Bonds. REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The District assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 1201.041, Texas Government Code, provides that the Bonds are negotiable instruments governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State of Texas. With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State of Texas, the Public Funds Investment Act, Chapter 2256, Texas Government Code, requires that the Bonds be assigned a rating of "A" or its equivalent as to investment quality by a national rating agency. See "OTHER INFORMATION - Ratings" above. In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks, savings banks, trust companies with a capital of one million dollars or more, and savings and loan associations. The Public Funds Collateral Act, Chapter 2257, Texas Government Code, provides that the Bonds are eligible to secure deposits of any public funds of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their market value. No review by the District has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. LEGAL MATTERS The District will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas as to the Bonds to the effect that the Bonds are valid and legally binding obligations of the District, and based upon examination of such transcript of proceedings, the approving legal opinion of Bond Counsel, a copy of which opinion is attached to this Official Statement as Appendix D. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds which would affect the provision made for their payment or security, or in any manner questioning the validity of said Bonds will also be furnished. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained herein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Bonds in the Official Statement to verify that such description conforms to the provisions of the Bond Resolution. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds is contingent upon the sale and delivery of the Bonds. The legal opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book-Entry-Only System. In connection with the issuance of the Bonds, Bond Counsel has been engaged by, and only represents, the District.

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AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained herein have been obtained from District and Member Cities; records, audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. CONTINUING DISCLOSURE OF INFORMATION In the Bond Resolution, the District has made the following agreements for the benefit of the holders and beneficial owners of the Bonds. Under the agreement the District has agreed to provide or cause to be provided with respect to itself and each Significant Obligated Person certain updated financial information and operating data annually and the District will be obligated to provide timely notice of specified material events. For purposes of such agreement, the "Significant Obligated Person" means any Member City, or Additional Member City, or other party contracting with the District whose payments to the District for use of or service from the System in the calendar year preceding any such determination exceeded 10% of the Gross Revenues of the System. The District is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the District will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified events, to the Municipal Securities Rulemaking Board (the "MSRB") through the Electronic Municipal Market Access ("EMMA") system. ANNUAL REPORTS . . . The District will provide or cause each Significant Obligated Person to provide certain updated financial information and operating data annually to the MSRB. The information to be updated includes all quantitative financial information and operating data with respect to the District of the general type included in this Official Statement under tables numbered 1 through 4 and all quantitative financial information and operating data with respect to each Significant Obligated Person of the general type included in Appendix C to this Official Statement. The District will provide, or cause each Significant Obligation Person to provide, this information within 6 months after the end of each fiscal year ending in and after 2020. The District will additionally provide or cause to be provided audited financial statements for the District and each Significant Obligated Person when and if available, and unaudited financial statements within 12 months after fiscal year end, unless audited financial statements have been provided sooner. Any such financial statements will be prepared in accordance with general accepted accounting principles or such other accounting principles as the District or the Significant Obligated Persons may be required to employ from time to time pursuant to State law or regulation. The District or a Significant Obligated Person may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by Rule 15c2-12 (the “Rule”) of the United States Securities and Exchange Commission (the "SEC"). The District’s and each Significant Obligated Person's current fiscal year end is September 30. Accordingly, updated information included in the above-referenced tables and Appendix C must be provided by March 31 in each year, and audited financial statements for the preceding fiscal year must be provided by September 30 of each year, unless the District or a Significant Obligated Person changes its respective fiscal year. If the District or such Significant Obligated Person changes its fiscal year, the District will notify or cause such Significant Obligated Person to notify the MSRB of the change. If the District or Significant Obligated Person fails to provide updated information as described above, the District will provide, or cause the Significant Obligated Person to provide timely notice of the failure to the MSRB. NOTICE OF CERTAIN EVENTS . . . The District will also provide, or cause a Significant Obligated Person to provide, timely notices of certain events to the MSRB. The District will provide notice (not in excess of ten (10) business days after the occurrence of the event) of any of the following events with respect to the Bonds: (1) Principal and interest payment delinquencies; (2) Non-payment related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (7) Modifications to the rights of security holders, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution or sale of property securing repayment of the securities, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the District, or a Significant Obligated Person; (13) the consummation of a merger, consolidation, or acquisition involving the District, or a Significant Obligated Person, or the sale of all or substantially all of the assets of the District, or a Significant Obligated Person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; (15) incurrence of a financial obligation, as defined by the Rule, of the District or a Significant Obligated Person (which includes certain debt, debt-like, and debt-related obligations), if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of any such financial obligation of the District or a Significant Obligated Person any of which affect security holders, if material: (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of any such financial obligation of the District or a Significant Obligated Person, any of which reflect financial difficulties.

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AVAILABILITY OF INFORMATION . . . The District and the Significant Obligated Persons, if any, have agreed to provide the foregoing information to the MSRB. Investors will be able to access continuing disclosure information filed with the MSRB at www.emma.msrb.org. LIMITATIONS AND AMENDMENTS . . . The District has agreed to update, or cause each Significant Obligated Person to update, information and to provide or cause the Significant Obligated Person to provide notices of specified events only as described above. The District has not agreed to provide other information that may be relevant or material to a complete presentation of its or any Significant Obligated Person's financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The District makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the District to comply with its agreement. The District may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the respective Significant Obligated Person, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the Parity Bonds consent to the amendment or (b) any person unaffiliated with the District or the Significant Obligated Person (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds. If the District so amends the agreement, the District has agreed to include or cause the Significant Obligated Person to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS . . . During the last five years, the District believes it has complied in all material respects with its previous continuing disclosure undertakings, entered into pursuant to the Rule, except as follows: Due to an administrative oversight, the current investments table was not included in the 2012-2015 filings for the District’s Water Transmission Facilities Contract Revenue Refunding Bonds (City of Plano Project), Series 2009. The investments table due in 2016 was timely filed, but the District believes it is neither reasonably feasible nor material to create such Tables for prior years. The District has implemented procedures to ensure timely filing of all future information. The ratings on municipal bond insurers have been downgraded with frequency at various times in recent years. Information about the downgrades of municipal bond insurers has been publicly reported. During the previous five years, the District and Significant Obligated Persons have filed notices of downgrades of municipal bond insurers that insured the District or Significant Obligated Person’s outstanding obligations, but no assurances can be made that all the filings have been made or made in a timely manner. On August 4, 2015, Moody’s downgraded from "Aa3" to "A1" the District’s Water Facilities Installment Sale Contract Revenue Bonds (City of Rockwall Pump Station Project), Series 2006 and the District’s City of Rockwall 2007 Sewage Treatment and Disposal Service Contract (Buffalo Creek Plant) Revenue Bonds, Series 2008, and an event notice was not timely filed. The event notice has now been filed, including a notice of late filing. FINANCIAL ADVISOR Hilltop Securities serves as Financial Advisor to the District in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. Hilltop Securities, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. In the normal course of business, the Financial Advisor may from time to time sell investment securities to the District for the investment of bond proceeds or other funds of the District upon the request of the District. The Financial Advisor to the District has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibility to the District and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. INITIAL PURCHASER OF THE BONDS

After requesting competitive bids for the Bonds, the District accepted the bid of ________________________(the "Initial Purchaser") to purchase the Bonds at the interest rates shown on the cover page of the Official Statement at a price of par plus a cash premium (if any) of $_______________. The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the District to the Initial Purchaser of the Bonds. The District has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the sole responsibility of the Initial Purchaser.

http://www.emma.msrb.org/

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FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement, and in any other information provided by the District, that are not purely historical, are forward-looking statements, including statements regarding the District's expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the District on the date hereof, and the District assumes no obligation to update any such forward-looking statements. The District's actual results could differ materially from those discussed in such forward-looking statements. The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the District. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. MISCELLANEOUS The financial data and other information contained herein have been obtained from the District's records, audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the Purchaser will be furnished a certificate, executed by proper officers, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the District contained in this Official Statement, and any addenda, supplement or amendment thereto, on the date of such Official Statement, on the date of sale of said Bonds and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the District and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the District, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the District believes to be reliable and the District has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the District since the date of the last audited financial statements of the District. The Resolution authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Initial Purchaser.


/s/_____________________________________ RODNEY RHOADES

Interim Executive Director/General Manager

APPENDIX A

EXCERPTS FROM THE


COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Year Ended September 30, 2019

The information contained in this Appendix consists of excerpts from the North Texas Municipal Water District Comprehensive Annual Financial Report for the Year Ended September 30, 2019, and is not intended to be a complete statement of the District's financial condition. Reference is made to the complete Report for further information.

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Austin | Conroe | Dallas | Fort Worth | HoustonLos Angeles | Midland | New York City | San Antonio

Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 | Dallas, Texas 75201

Main: 972.490.1970 | Fax: 972.702.8321CPAs AND ADVISORS | WEAVER. COM

Independent Auditor’ s Report

Members of the Board of DirectorsNorth Texas Municipal Water DistrictCity of Wylie, Texas

Report on the Financial Statements

We have audited the accompanying financial statements of each major fund of the North TexasMunicipal Water District ( the District), as of and for the year ended September 30, 2019, and the relatednotes to the financial statements, which collectively comprise the District’ s basic financial statements aslisted in the table of contents.

Management’ s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditor’ s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conductedour audit in accordance with auditing standards generally accepted in the United States of America andthe standards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparationand fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinions.

Members of the Board of DirectorsNorth Texas Municipal Water District

2

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of each major fund of the North Texas Municipal Water District as ofSeptember 30, 2019, and the respective changes in financial position, and cash flows, thereof for the yearthen ended in accordance with accounting principles generally accepted in the United States ofAmerica.

Other Matter

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that themanagement’ s discussion and analysis and the schedules of funding progress for the District’ s RetirementPlan and Other Postemployment Benefits Plan on pages 5-9 and 57-60 be presented to supplement thebasic financial statements. Such information, although not a part of the basic financial statements, isrequired by the Governmental Accounting Standards Board, who considers it to be an essential part offinancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementaryinformation in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information andcomparing the information for consistency with management’ s responses to our inquiries, the basicfinancial statements, and other knowledge we obtained during our audit of the basic financialstatements. We do not express an opinion or provide any assurance on the information because thelimited procedures do not provide us with sufficient evidence to express an opinion or provide anyassurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise the North Texas Municipal Water District’ s basic financial statements. The Introductory Sectionand Statistical Section are presented for purposes of additional analysis and are not a required part ofthe basic financial statements.

The Sewer System Supplemental Schedules are the responsibility of management and were derived fromand relate directly to the underlying accounting and other records used to prepare the basic financialstatements. Such information has been subjected to the auditing procedures applied in the audit of thebasic financial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financialstatements or to the basic financial statements themselves, and other additional procedures inaccordance with auditing standards generally accepted in the United States of America. In our opinion, the Sewer System Supplemental Schedules are fairly stated in all material respects in relation to the basicfinancial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied inthe audit of the basic financial statements and, accordingly, we do not express an opinion or provideany assurance on them.

Members of the Board of DirectorsNorth Texas Municipal Water District

3

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2020, on our consideration of the North Texas Municipal Water District’ s internal control over financialreporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, andgrant agreements and other matters. The purpose of that report is to describe the scope of our testing ofinternal control over financial reporting and compliance and reporting or on compliance. That report isan integral part of an audit performed in accordance with Government Auditing Standards in consideringNorth Texas Municipal Water District’ s internal control over financial reporting and compliance.

WEAVER AND TIDWELL, L.L.P.

Dallas, TexasJanuary 15, 2020

FINANCIAL SECTION

MANAGEMENT’ S DISCUSSION AND ANALYSIS

FINANCIAL

ANNUAL REPORT 2019

5


Management’ s Discussion and Analysis ( Unaudited)

As management of the North Texas Municipal Water District, we offer readers of the District’ s financial statements

this narrative overview and analysis of the financial activities of the District as of and for the fiscal year ended

September 30, 2019

Financial Highlights

Total assets at the end of the year were approximately $ 5 5 billion and exceeded liabilities by approximately

1 62 billion

The District’ s total net position increased by approximately $ 167 million, or 12 percent

During the year, the District’ s operating revenues increased by approximately $ 33 million, or 7 percent, and

operating expenses increased by approximately $ 25 million, or 9 percent

Construction of the Bois d’Arc Lake, Leonard Water Treatment Plant, Trinity River Main Stem Raw Water

Pipeline & Pump Station, Wilson Creek WWTP expansion, and the Princeton Lift Station improvements led

the way in capital expenditures totaling over $ 229 million

The District issued $ 739 million in revenue bonds for various projects and to refinance outstanding debt

to take advantage of favorable interest rates

Overview of the Financial Statements

This discussion and analysis are intended to serve as an introduction to the District’ s basic financial statements which

are comprised of fund financial statements and notes to the financial statements This report also contains other

supplementary information in addition to the basic financial statements themselves

Financial Statements The financial statements are designed to provide readers with an overview of the District’ s

finances, in a manner similar to private- sector business

The Statement of Net Position presents information on all of the District’ s assets and liabilities, with the difference

between the two reported as net position Over time, increases or decreases in net position may serve as a useful

indicator of whether the financial position of the District is improving or deteriorating

The Statement of Revenues, Expenses and Changes in Net Position presents information showing how the District’ s

net position changed during the most recent fiscal year All changes in net position are reported as soon as the

underlying event giving rise to the change occurs, regardless of the timing of related cash flows Thus revenues

and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods

e g, earned but unused vacation leave)

The Statement of Cash Flows presents cash receipts, cash payments, and net changes in cash resulting from

operating activities, capital and related financing activities, and investing activities for the year presented

Enterprise Funds A fund is a grouping of related accounts that is used to maintain control over resources that have

been segregated for specific activities or objectives The District uses fund accounting to ensure and demonstrate

compliance with finance- related legal requirements All of the funds of the District are categorized as enterprise funds

The District reports five major enterprise funds: Water, Regional Wastewater, Sewer, Solid Waste and Interceptor

The basic enterprise fund financial statements can be found on pages 11 through 18 of this report

Notes to the Financial Statements The notes provide additional information that is essential to a full understanding

of the data provided in the fund financial statements The notes to the financial statements can be found starting

on page 19 of this report

Other Information In addition to the basic financial statements and accompanying notes, this report also presents

certain required supplementary information concerning the District’ s progress in funding its obligation to provide

pension and other postemployment benefits to its employees Required supplemental information can be found

beginning on page 57 of this report

Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of the District’ s financial position In the case

of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by

1,619, 182, 701 at the close of the most recent fiscal year

FINANCIAL

ANNUAL REPORT 2019

6


North Texas Municipal Water District’s Net Position

As of September 30

2019 2018

Increase/

Decrease)

Percent

Change

ASSETS:

Current and other assets $ 1, 854, 877, 412 $ 1, 649, 032, 100 $ 205, 845, 312 12 5%

Capital assets- net 3, 610, 359, 013 3, 063, 400, 855 546, 958, 158 17 9

Total assets 5, 465, 236, 425 4, 712, 432, 955 752, 803, 470 16 0

Total deferred outflows of resources 53, 805, 680 45, 391, 397 8, 414, 283 18 5

Total assets and deferred outflows of resources 5, 519, 042, 105 4, 757, 824, 352 761, 217, 753 16 0

LIABILITIES:

Current and other liabilities 332, 396, 256 244, 472, 173 87, 924, 083 36 0

Long- term liabilities outstanding 3, 554, 695, 900 3, 049, 411, 954 505, 283, 946 16 6

Total liabilities 3, 887, 092, 156 3, 293, 884, 127 593, 208, 029 18 0

Total deferred inflows of resources 12, 767, 248 12, 049, 045 718, 203 6 0

Total liabilities and deferred inflows of resources 3, 899, 859, 404 3, 305, 933, 172 593, 926, 232 18 0

NET POSITION

Net investment in capital assets 1, 206, 866, 459 1, 077, 370, 618 129, 495, 841 12 0

Restricted 221, 897, 098 192, 006, 392 29, 890, 706 15 6

Unrestricted 190, 419, 144 182, 514, 170 7, 904, 974 4 3

Total net position $ 1, 619, 182, 701 $ 1, 451, 891, 180 $ 167, 291, 521 11 5%

The largest portion of the District’ s net position ( 75 percent) reflects its investment in capital assets ( e g, land,

reservoir facilities, water treatment facilities and wastewater disposal facilities) less any related debt used to acquire

those assets that is still outstanding The District uses these capital assets to provide services to its member and

customer cities; consequently, these assets are not available for future spending Although the District’ s investment

in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt

must be provided from other resources, since the capital assets themselves are not intended to be used to liquidate

these liabilities

An additional portion of the District’ s net position ( 13 percent) represents resources that are subject to external

restrictions on how they may be used The District’ s restricted net position consist primarily of the reserve funds

required by bond resolutions

The remaining balance of the District’ s net position represents unrestricted net position ( 12 percent) and may be

used to meet the District’ s ongoing obligations The overall increase in net position of $ 167, 291, 521, or 11 5%,

during the current fiscal year indicates an improved financial position

While the Statement of Net Position provides the components of the District’ s assets, deferred outflows of resources,

liabilities, deferred inflows of resources and net position at year- end, the Statement of Revenues, Expenses and

Changes in Net Position provides information on the source of the change during the year The primary sources

of the increase in net position of $ 167, 291, 521 were operating income of $ 227, 410, 122 offset by interest expense

of $ 116, 746, 379

FINANCIAL

ANNUAL REPORT 2019

7


North Texas Municipal Water District’s Changes in Net Position

Year Ended September 30 Increase Percent

2019 2018 ( Decrease) Change

Operating Revenues:

Water sales $ 335, 832, 842 $ 316, 133, 827 $ 19, 699, 015 6 2%

Wastewater service fees 143, 817, 640 131, 381, 838 12, 435, 802 9 5

Solid waste service fees 34, 242, 029 34, 592, 091 ( 350, 062) ( 1 0)

Other operating revenues 2, 999, 773 2, 102, 235 897, 538 42 7

Total Operating Revenues 516, 892, 284 484, 209, 991 32, 682, 293 6 7

Operating Expenses:

Personnel 86, 314, 412 74, 999, 711 11, 314, 701 15 1

Operating Supplies:

Chemicals 38, 265, 482 32, 842, 288 5, 423, 194 16 5

Other supplies 18, 640, 608 15, 218, 144 3, 422, 464 22 5

Operating Services:

Electric power 18, 042, 370 20, 981, 185 ( 2, 938, 815) ( 14 0)

Wholesale water purchases 5, 389, 177 2, 998, 624 2, 390, 553 79 7

Other services 52, 740, 515 49, 974, 608 2, 765, 907 5 5

Depreciation and amortization 70, 089, 598 67, 658, 103 2, 431, 495 3 6

Total Operating Expenses 289, 482, 162 264, 672, 663 24, 809, 499 9 4

Operating Income 227, 410, 122 219, 537, 328 7, 872, 794 3 6

Nonoperating Revenues ( Expenses):

Investment Income 52, 093, 577 20, 129, 032 31, 964, 545 158 8

Miscellaneous Revenue ( Expense) ( 105, 153) 52, 378 ( 157, 531) ( 300 8)

Grant Income 1,610 - 1, 610 ( 100 0)

Federal Program Revenues 3, 905, 636 3, 934, 848 ( 29, 212) ( 0 7)

Gain on Sale of Capital Assets 732, 108 11, 377, 911 ( 10, 645, 803) ( 93 6)

Contribution to Fannin County Electric Cooperative - ( 47, 343, 891) 47, 343, 891 100 0

Interest Expense ( 116, 746, 379) ( 90, 004, 570) ( 26, 741, 809) 29 7

Net Nonoperating Expense ( 60, 118, 601) ( 101, 854, 292) 41, 735, 691 ( 41 0)

Change in Net Position 167, 291, 521 117, 683, 036 49, 608, 485 42 2

Net Position, Beginning of Year 1, 451, 891, 180 1, 334, 208, 144 117, 683, 036 8 8

Net Position, End of Year $ 1,619, 182, 701 $ 1,451, 891, 180 $ 167, 291, 521 11 5%

Total operating revenues for the District for the years ended September 30, 2019 and 2018 were $ 516, 892, 284

and $ 484, 209, 991, respectively The $ 32, 682, 293 increase in total operating revenues was primarily due to a 5%

increase in the member cities water rate and a 9% increase in wastewater service fees to fund capital projects and

operating costs

Total operating expenses for the District for the years ended September 30, 2019 and 2018 were $ 289, 482, 162 and

264, 672, 663, respectively Several key factors account for the $ 24, 809, 499 increase in total operating expenses,

including increased staffing levels ( a total increase of 33 employees across all funds) and salary adjustments resulting

in increased personnel expenses of approximately $ 11 3 million The increase in operating supplies was primarily

driven by the overall increase in chemical expenses of $ 5 4 million Operating services increased $ 2 2 million

primarily as a result of increased wholesale water purchases for reuse water withdrawn out of the Trinity River by

the Main Stem Pump Station and increased special studies and reports Depreciation expense increased over $ 2 4

million

The $ 41 7 million change in net nonoperating expense is primarily due to a $ 32 0 million increase in investment

income offset by an additional $ 26 7 million in interest expense, as well as the fiscal year 2018 $ 47 3 million

contribution resulting from electric power agreements with Fannin County Electric Cooperative related to the

construction of the Bois d’Arc Lake

FINANCIAL

ANNUAL REPORT 2019

8


Capital Assets and Debt Administration

Capital Assets

The District’ s capital assets as of September 30, 2019, amounted to $3,610, 359, 013 ( net of accumulated depreciation)

These capital assets include land and land improvements, reservoir facilities, water treatment and transmission

facilities, wastewater treatment and disposal facilities, buildings and other equipment and water rights The total

increase in the District’ s investment in capital assets for the current year was 17 9%

Major capital asset events during the current fiscal year included the following:

Development of the Bois d’ Arc Lake continued totalling more than $ 368 million in construction in progress

additions

Water Treatment Plant improvements totalling more than $ 48 8 million

South Mesquite Wastewater Treatment Plant SCADA Improvements totalling more than $ 3 5 million

Landfill site facilities development including the 121 Regional Disposal Facility Excavation and further

expansion totalled more than $ 10 5 million

North Texas Municipal Water District’s Capital Assets

net of accumulated depreciation)

As of September 30 Increase Percent


Land $ 76, 280, 557 $ 73, 801, 998 $ 2, 478, 559 3 4%

Easements 62, 468, 212 62, 549, 675 ( 81, 463) - 0 1%

Land improvements 7, 790, 580 2,984, 287 4, 806, 293 161 1%

Water treatment, storage and transmission facilities 1, 222, 470, 041 1, 206, 967, 782 15, 502, 259 1 3%

Wastewater treatment and disposal facilities 480, 379, 072 492, 555, 069 ( 12, 175, 997) - 2 5%

Solid waste transfer and disposal facilities 51, 248, 153 45, 734, 440 5, 513, 713 12 1%

Reservoir facilities and water rights 265, 766, 950 273, 306, 305 ( 7, 539, 355) - 2 8%

Buildings 57, 992, 616 58, 559, 325 ( 566, 709) - 1 0%

Automobiles and trucks 2, 667, 898 3,549, 349 ( 881, 451) - 24 8%

Office furniture and fixtures 431, 510 502, 638 ( 71, 128) - 14 2%

Other equipment 39, 672, 178 28, 254, 392 11, 417, 786 40 4%

Construction in progress 1,343, 191, 246 814, 635, 595 528, 555, 651 64 9%

Total $ 3,610, 359, 013 $ 3, 063, 400, 855 $ 546, 958, 158 17 9%

Additional information on the District’ s capital assets can be found in Note 4 of this report

FINANCIAL

ANNUAL REPORT 2019

9


Debt Administration

At the end of the current fiscal year, the District had total outstanding debt of $ 3, 445, 445, 306 Of this amount 75%

is reflected in the Water System and 10% is reflected in the Regional Wastewater System

North Texas Municipal Water District’ s Outstanding Debt

As of September 30 Increase Percent


U S government contracts payable $ 26, 550, 306 $ 28, 097, 923 $ ( 1, 547, 617) - 5 5%

Revenue bonds 3,418, 895, 000 2, 910, 360, 000 508, 535, 000 17 5%

Total $ 3,445, 445, 306 $ 2,938, 457, 923 $ 506, 987, 383 17 3%

During the current fiscal year, the District refinanced a portion of the existing debt in order to take advantage of

favorable interest rates The result is expected to decrease future debt service payments by $ 18, 194, 964 in the

Water System

The District’ s revenue bonds have been rated as follows:

Moody’ s S & P

Water System Aa2 AAA

Wastewater System Aa2 AAA

Solid Waste System Aa2 AA

Interceptor System Aa1 AAA

Additional information on the District’ s long - term debt can be found in Note 8 of this report

Economic Factors and Next Year’ s Budgets and Rates

The Annual Budget outlines the District’ s plans to continue to provide high quality, cost- effective service to its

member and customer cities As a result of the continued growth in the District’ s service area, the need for the

development of raw water resources and capital expenditures to fund system expansions and improvements

continues to increase Such growth has been considered in developing the District’ s budget for the 2020 fiscal year

The 2020 Water System budget provides funding for debt service for $101 million of SWIFT funds for the continued

development of the Bois D’Arc Lake and construction of the Leonard Water Treatment Plant 70 MGD site In order

to fund these debt service requirements and the additional operations and maintenance costs, the budget requires

a $ 07 per 1,000 gallons rate adjustment Additional rate adjustments can be expected in the future as the District

continues to develop raw water supplies and operational costs continue to increase

Requests for Information

This financial report is designed to provide a general overview of the District’ s finances and to demonstrate the

District’ s accountability for the funds it receives Questions concerning any of the information provided in this report

or requests for additional financial information should be addressed to the office of the Accounting Manager, PO

Box 2408, Wylie, Texas 75098

FINANCIAL SECTION

BASIC FINANCIAL STATEMENTS

FINANCIAL

ANNUAL REPORT 2019

11


STATEMENT OF NET POSITION

September 30, 2019

Regional

Water Wastewater

ASSETS System System

CURRENT ASSETS:

Unrestricted assets:

Cash and cash equivalents $ 42, 685, 455 $ 8,838, 136

Investments 152, 996, 119 -

Accounts receivable 27, 206, 443 1,510, 724

Contracts receivable 26, 400 -

Due from other funds 421, 622 47, 297

Prepaid expenses 3, 134, 504 512, 931

Unbilled receivables 164, 574 1,225, 286

Total unrestricted assets 226, 635, 117 12, 134, 374

Restricted assets:

Cash and cash equivalents 691, 366, 115 51, 486, 734

Investments 518, 171, 460 95, 155, 149

Interest receivable 2, 118, 026 303, 147

Due from other funds 138, 833 -

Unbilled receivables - -

Total restricted assets 1,211, 794, 434 146, 945, 030

TOTAL CURRENT ASSETS 1,438, 429, 551 159, 079, 404

LONG- TERM ASSETS:

Nondepreciable:

Land 62, 435, 172 1,739, 328

Easements 47, 000, 297 -

Construction- in-progress 983, 163, 463 190, 422, 660

Total nondepreciable assets 1,092, 598, 932 192, 161, 988

Depreciable:

Land improvements 3,712, 838 1,321, 303

Water treatment, storage, and transmission facilities 1,582, 646, 459 -

Wastewater treatment and disposal facilities - 301, 772, 756

Solid waste transfer and disposal facilities - -

Reservoir facilities and water rights 376, 541, 067 -

Buildings 28, 540, 437 2,913, 614

Automobiles and trucks 7, 377, 489 1,447, 573

Office furniture and fixtures 961, 571 101, 610

Other equipment 32, 049, 966 12, 649, 915

Total depreciable assets 2,031, 829, 827 320, 206, 771

Less accumulated depreciation ( 520, 825, 192) ( 123, 284, 841)

Net capital assets 2,603, 603, 567 389, 083, 918

TOTAL LONG- TERM ASSETS 2,603, 603, 567 389, 083, 918

TOTAL ASSETS 4,042, 033, 118 548, 163, 322

DEFERRED OUTFLOWS OF RESOURCES:

Deferred loss on refunding 18, 506, 212 2,693, 793

Deferred pension outflow 15, 348, 207 4,124, 149


TOTAL DEFERRED OUTFLOWS OF RESOURCES 34, 613, 093 6,989, 522

TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES $ 4,076, 646, 211 $ 555, 152, 844

See notes to the basic financial statements

FINANCIAL

ANNUAL REPORT 2019

12


Solid Total

Sewer Waste Interceptor Enterprise

System System System Funds

7, 171, 545 $ 6, 876, 722 $ 8, 894, 745 $ 74, 466, 603

5, 997, 662 - 158, 993, 781

779, 807 248, 743 267, 679 30, 013, 396

26, 400

55, 835 347, 598 73 872, 425

328, 947 269, 189 47, 308 4, 292, 879

439, 473 838, 268 139, 238 2, 806, 839

8, 775, 607 14, 578, 182 9, 349, 043 271, 472, 323

24, 621, 172 17, 690, 966 43, 533, 980 828, 698, 967

30, 425, 518 4, 307, 657 97, 531, 433 745, 591, 217

79, 126 14, 000 267, 332 2, 781, 631

138, 833

6, 194, 441 - 6, 194, 441

55, 125, 816 28, 207, 064 141, 332, 745 1, 583, 405, 089

63, 901, 423 42, 785, 246 150, 681, 788 1, 854, 877, 412

436, 498 11, 669, 559 - 76, 280, 557

4, 105, 802 - 11, 362, 113 62, 468, 212

84, 420, 773 2, 611, 451 82, 572, 899 1, 343, 191, 246

88, 963, 073 14, 281, 010 93, 935, 012 1, 481, 940, 015

417, 138 7, 926, 835 - 13, 378, 114

32, 095, 652 - - 1, 614, 742, 111

159, 760, 830 - 255, 598, 589 717, 132, 175

88, 794, 147 - 88, 794, 147

376, 541, 067

187, 506 42, 384, 573 - 74, 026, 130

601, 640 4, 122, 753 450, 791 14, 000, 246

1, 063, 181

4, 086, 004 27, 498, 590 6, 050, 344 82, 334, 819

197, 148, 770 170, 726, 898 262, 099, 724 2,982, 011, 990

70, 552, 438) ( 67, 959, 912) ( 70, 970, 609) ( 853, 592, 992)

215, 559, 405 117, 047, 996 285, 064, 127 3,610, 359, 013

215, 559, 405 117, 047, 996 285, 064, 127 3, 610, 359, 013

279, 460, 828 159, 833, 242 435, 745, 915 5, 465, 236, 425

1, 851, 442 1, 778, 192 2, 306, 061 27, 135, 700

1, 609, 753 3, 928, 343 473, 736 25, 484, 188

85, 606 139, 914 30, 018 1,185, 792

3, 546, 801 5, 846, 449 2, 809, 815 53, 805, 680

283, 007, 629 $ 165, 679, 691 $ 438, 555, 730 $ 5, 519, 042, 105

Continued)

FINANCIAL

ANNUAL REPORT 2019

13


STATEMENT OF NET POSITION

September 30, 2019

Regional

Water Wastewater

LIABILITIES System System


Payable from unrestricted assets:

Accounts payable and accrued liabilities $ 23, 011, 378 $ 3,595, 508


Customers’ advance payments - 3,642, 839

Accrued interest payable on U S government contracts 701, 635 -

Current portion of U S government contracts 1,597, 613 -

Total payable from unrestricted assets 25, 410, 985 7,655, 366

Payable from restricted assets:

Accounts payable and accrued liabilities 88, 649, 589 14, 850, 368


Accrued landfill closure and postclosure care cost - -

Accrued interest payable on revenue bonds 7, 869, 432 4,924, 686

Current portion of revenue bonds 85, 955, 000 14, 690, 000

Total payable from restricted assets 182, 524, 313 34, 498, 292

TOTAL CURRENT LIABILITIES 207, 935, 298 42, 153, 658


Accrued landfill closure costs - -

Accrued vacation— less current portion 1, 357, 078 329, 759

Accrued sick— less current portion 2,125, 918 650, 394

Net pension liability 21, 776, 387 6,133, 298

Net OPEB liability 2, 324, 053 553, 412

Deferred compensation 255, 000 -

Long- term debt— less current portion 2,633, 106, 361 367, 403, 506

TOTAL LONG- TERM LIABILITIES 2,660, 944, 797 375, 070, 369

TOTAL LIABILITIES 2,868, 880, 095 417, 224, 027

DEFERRED INFLOWS OF RESOURCES:

Deferred pension inflow 5, 795, 611 1,554, 146

Deferred OPEB inflow 1,845, 951 422, 184

Deferred insurance proceeds 426, 426 -

TOTAL DEFERRED INFLOWS OF RESOURCES 8,067, 988 1,976, 330

TOTAL LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 2,876, 948, 083 419, 200, 357

NET POSITION:

Net investment in capital assets 868, 154, 047 111, 999, 738

Restricted for debt service 150, 564, 821 24, 821, 251

Unrestricted 180, 979, 260 ( 868, 502)

TOTAL NET POSITION $ 1,199, 698, 128 $ 135, 952, 487


FINANCIAL

ANNUAL REPORT 2019

14


Solid Total



3, 980, 012 $ 2, 539, 287 $ 2, 674, 607 $ 35, 800, 792

240, 302 15, 782 67, 263 840, 725

1, 396, 893 1,887, 351 2,440, 907 9,367, 990

701, 635

1,597, 613

5, 617, 207 4, 442, 420 5, 182, 777 48, 308, 755

7, 264, 560 11, 391, 599 7, 679, 794 129, 835, 910

49, 697 4, 209 33, 097 170, 533

5, 113, 521 - 5, 113, 521

2, 294, 617 180, 307 3, 488, 495 18, 757, 537

12, 720, 000 3, 010, 000 13, 835, 000 130, 210, 000

22, 328, 874 19, 699, 636 25, 036, 386 284, 087, 501

27, 946, 081 24, 142, 056 30, 219, 163 332, 396, 256

1, 080, 920 - 1, 080, 920

173, 281 276, 934 42, 453 2, 179, 505

142, 376 682, 296 90, 242 3,691, 226

2, 409, 473 5, 360, 004 756, 102 36, 435, 264

264, 899 451, 031 89, 027 3, 682, 422

255, 000

170, 469, 297 53, 161, 534 283, 230, 865 3, 507, 371, 563

173, 459, 326 61, 012, 719 284, 208, 689 3,554, 695, 900

201, 405, 407 85, 154, 775 314, 427, 852 3,887, 092, 156

561, 459 1, 402, 701 140, 039 9, 453, 956

210, 338 339, 212 69, 181 2,886, 866

426, 426

771, 797 1,741, 913 209, 220 12, 767, 248

202, 177, 204 86, 896, 688 314, 637, 072 3, 899, 859, 404

56, 648, 258 68, 448, 580 101, 615, 836 1,206, 866, 459

23, 048, 596 4,642, 583 18, 819, 847 221, 897, 098

1, 133, 571 5,691, 840 3,482, 975 190, 419, 144

80, 830, 425 $ 78, 783, 003 $ 123, 918, 658 $ 1,619, 182, 701

Concluded)

FINANCIAL

ANNUAL REPORT 2019

15



YEAR ENDED SEPTEMBER 30, 2019

Regional

Water Wastewater

System System

OPERATING REVENUES:

Water sales $ 335, 832, 842 $ -

Wastewater service fees - 69, 241, 179

Solid waste service fees - -

Other operating revenues 424, 588 111, 868

Total operating revenues 336, 257, 430 69, 353, 047

OPERATING EXPENSES:

Personnel 53, 127, 261 13, 356, 973

Operating Supplies:

Chemicals 29, 811, 353 4,787, 513

Other supplies 7,835, 776 4,557, 435

Operating Services:

Electric power 12, 166, 720 2,793, 273

Wholesale water purchases 5,389, 177 -

Other services 12, 143, 755 15, 474, 701

Depreciation 44, 872, 277 8,467, 260

Total operating expenses 165, 346, 319 49, 437, 155

OPERATING INCOME 170, 911, 111 19, 915, 892

NONOPERATING REVENUES ( EXPENSES):

Investment income 42, 049, 143 4,466, 035

Miscellaneous revenue ( expense) ( 105, 153) -

Grant income 1,610 -

Federal program revenues 3,905, 636 -

Gain ( loss) on sale of capital assets 524, 997 69, 549

Interest expense ( 89, 499, 811) ( 12, 012, 120)

Total nonoperating revenues ( expenses) ( 43, 123, 578) ( 7,476, 536)

CHANGE IN NET POSITION 127, 787, 533 12, 439, 356

NET POSITION AT OCTOBER 1, 2018 1,071, 910, 595 123, 513, 131

NET POSITION AT SEPTEMBER 30, 2019 $ 1,199, 698, 128 $ 135, 952, 487


FINANCIAL

ANNUAL REPORT 2019

16


Solid Total



335, 832, 842

40, 649, 496 - 33, 926, 965 143, 817, 640

34, 242, 029 - 34, 242, 029

444, 348 1, 930, 886 88, 083 2, 999, 773

41, 093, 844 36, 172, 915 34, 015, 048 516, 892, 284

6, 304, 152 11, 480, 590 2,045, 436 86, 314, 412

1, 610, 572 91, 446 1, 964, 598 38, 265, 482

1, 691, 541 3, 785, 545 770, 311 18, 640, 608

1, 753, 965 131, 202 1, 197, 210 18, 042, 370

5, 389, 177

8, 874, 625 10, 165, 500 6, 081, 934 52, 740, 515

5, 532, 510 4, 553, 797 6, 663, 754 70, 089, 598

25, 767, 365 30, 208, 080 18, 723, 243 289, 482, 162

15, 326, 479 5, 964, 835 15, 291, 805 227, 410, 122

1, 496, 997 924, 623 3, 156, 779 52, 093, 577

105, 153)

1, 610

3, 905, 636

1, 711 128, 820 7,031 732, 108

5,451, 529) ( 1, 985, 317) ( 7,797, 602) ( 116, 746, 379)

3,952, 821) ( 931, 874) ( 4,633, 792) ( 60, 118, 601)

11, 373, 658 5, 032, 961 10, 658, 013 167, 291, 521

69, 456, 767 73, 750, 042 113, 260, 645 1, 451, 891, 180

80, 830, 425 $ 78, 783, 003 $ 123, 918, 658 $ 1,619, 182, 701

FINANCIAL

ANNUAL REPORT 2019

17


STATEMENT

OFCASHFLOWSYEARENDEDSEPTEMBER30, 2019

Regional

Water Wastewater

System System


Cash received from customers $ 348, 687, 357 $ 69, 351, 450

Cash received from other funds 11, 794, 605 554, 904

Cash received from ( paid to) others 3, 204, 880 85, 624

Cash paid to suppliers for goods and services ( 105, 604, 204) ( 23, 713, 276)

Cash paid for employee services ( 35, 560, 273) ( 8, 652, 158)

Cash paid to other funds ( 70, 637) ( 8, 905, 301)



Proceeds from the issuance of bonds 532, 151, 507 45, 160, 128

Cash paid for capital assets ( 420, 831, 139) ( 72, 678, 353)

Contribution to Fannin County Electric Cooperative - -

Interest paid on long- term debt ( 96, 909, 581) ( 13, 740, 050)

Interest paid on U S government contracts ( 910, 984) -

Principal payments on long- term debt ( 79, 700, 000) ( 13, 590, 000)

Payments on U S government contracts ( 1, 547, 616) -

Payments for bond issue costs ( 278, 893) ( 806, 660)

Federal Program Revenues 3, 905, 636 -

Net cash provided by ( used for) capital and related financing activities ( 64, 119, 460) ( 55, 654, 935)



Purchases of investments ( 1, 006, 135, 087) ( 99, 612, 663)

Interest received 37, 843, 481 3, 917, 864

Net cash provided by ( used for) investing activities ( 132, 408, 726) 23, 107, 983

NET INCREASE ( DECREASE) IN CASH AND CASH EQUIVALENTS 25, 923, 542 ( 3, 825, 709)

CASH AND CASH EQUIVALENTS— Beginning of year 708, 128, 028 64, 150, 579

CASH AND CASH EQUIVALENTS— End of year $ 734, 051, 570 $ 60, 324, 870


Unrestricted cash and cash equivalents $ 42, 685, 455 $ 8, 838, 136


734, 051, 570 $ 60, 324, 870

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY

OPERATING ACTIVITIES:

Operating income $ 170, 911, 111 $ 19, 915, 892

Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation 44, 872, 277 8, 467, 260

Change in operating assets and liabilities:

Accounts receivable and unbilled receivable 1, 617, 569 ( 363, 083)

Prepaid expenses ( 43, 951) ( 64, 263)

Net pension liability 1, 630, 081 423, 392


Due to/ from other funds ( 42, 253) 153, 178

Accounts payable, accrued liabilities, and developers’ deposits 2, 646, 611 ( 714, 457)

Accrued vacation and accrued sick 585, 151 235, 330

Landfill liability - -

Customers’ advance payments ( 49, 592) 596, 022

51, 540, 617 8, 805, 351

NET CASH PROVIDED BY OPERATING ACTIVITIES $ 222, 451, 728 $ 28, 721, 243


Change in landfill liability $ - $ -

Amortization of bond- related items ( 9, 960, 488) ( 2, 072, 599)

Change in fair value of investments ( 3, 153, 345) ( 608, 829)

Change in actuarial value of net pension liability ( 1, 630, 081) ( 423, 392)

Refunding bonds issued 89, 095, 000 -

Refunding proceeds deposited in escrow - -


FINANCIAL

ANNUAL REPORT 2019

18


Solid Total



39, 333, 179 $ 31, 560, 456 $ 35, 816, 974 $ 524, 749, 416

15, 993 4,077, 528 - 16, 443, 030

583, 475 1,210, 026 159 5,084, 164

11, 662, 025) ( 16, 593, 483) ( 9,170, 664) ( 166, 743, 652)

4,080, 138) ( 7,509, 948) ( 1,363, 172) ( 57, 165, 689)

4,383, 796) ( 1,560, 710) ( 1,522, 582) ( 16, 443, 026)

19, 806, 688 11, 183, 869 23, 760, 715 305, 924, 243

30, 010, 667 ( 144, 596) 52, 634, 287 659, 811, 993

6,933, 722) ( 13, 211, 600) ( 36, 884, 810) ( 550, 539, 624)

6,532, 583) ( 2,295, 106) ( 10, 165, 048) ( 129, 642, 368)

910, 984)

12, 885, 000) ( 11, 855, 000) ( 12, 330, 000) ( 130, 360, 000)

1,547, 616)

724, 133) ( 11, 300) ( 370, 734) ( 2,191, 720)

3,905, 636

2,935, 229 ( 27,517, 602) ( 7,116, 305) ( 151, 473, 073)

12, 326, 081 7,435, 997 100, 591, 754 1,075, 039, 494

27,018, 652) ( 10,702, 595) ( 103, 955, 885) ( 1,247, 424, 882)

1,098, 736 981, 278 2,910, 941 46, 752, 300

13, 593, 835) ( 2,285, 320) ( 453, 190) ( 125, 633, 088)

9,148, 082 ( 18, 619, 053) 16, 191, 220 28, 818, 082

22,644, 635 43,186, 741 36,237, 505 874, 347, 488

31, 792, 717 $ 24, 567, 688 $ 52, 428, 725 $ 903, 165, 570

7,171, 545 $ 6,876, 722 $ 8,894, 745 $ 74,466, 603

24, 621, 172 17, 690, 966 43, 533, 980 828, 698, 967

31, 792, 717 $ 24, 567, 688 $ 52, 428, 725 $ 903, 165, 570

15, 326, 479 $ 5,964, 835 $ 15, 291, 805 $ 227, 410, 122

5,532, 510 4,553, 797 6,663, 754 70, 089, 598

49,108) 170, 992 435, 009 1,811, 379

61, 721) ( 26, 341) 82, 359 ( 113, 917)

182, 076 414, 072 64, 960 2,714, 581

37, 057 56, 953 11, 829 502, 535

79, 023 ( 44, 516) 51, 502 196, 934

191, 797) ( 761, 820) ( 282, 510) 696, 027

65, 322 22, 197 27, 430 935, 430

298, 166 - 298, 166

1,113, 153) 535, 534 1,414, 577 1,383, 388

4,480, 209 5,219, 034 8,468, 910 78, 514, 121

19, 806, 688 $ 11, 183, 869 $ 23, 760, 715 $ 305, 924, 243

298, 166 $ - $ 298, 166

1,237, 735) ( 327, 472) ( 2,467, 591) ( 16, 065, 885)

338, 019) ( 82, 823) 356, 826 ( 3,826, 190)

182, 076) ( 414, 072) ( 64, 960) ( 2,714, 581)

89,095, 000

FINANCIAL

ANNUAL REPORT 2019

19


NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity

The North Texas Municipal Water District ( the District) is a conservation and reclamation district and political

subdivision of the State of Texas, created and functioning under Article XVI, Section 59, of the Texas Constitution,

pursuant to Chapter 62, Acts of 1951, 52nd Legislature of Texas, Regular Session, as amended ( the Act) The

District was created for the purpose of providing a source of water supply for municipal, domestic and industrial

use and for the treatment, processing and transportation of such water to its 13 member cities ( as defined below)

and other customers located in North Central Texas Under the State of Texas Constitution and the Statutes, the

District has broad powers to effect flood control and the conservation and use, for all beneficial purposes, of storm

and floodwaters and unappropriated flow waters and, as a necessary aid to these purposes, the specific authority to

construct, own and operate water supply, treatment, and distribution facilities and sewage gathering, transmission

and disposal facilities and to collect, transport, treat, dispose of and control all municipal, domestic, industrial, or

communal waste, whether in fluid, solid, or composite state

The District comprises all of the territory of its member cities: Allen, Farmersville, Forney, Frisco, Garland, McKinney,

Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City, and Wylie ( the member cities) The District’ s

Administrative Office is located at 501E Brown Street, Wylie, Texas The District is governed by a 25- member

Board of Directors Each member city having a population of 5,000 or more is represented by two members on

the Board of Directors A member city with a population of less than 5,000 ( Farmersville) is represented by one

member on the Board of Directors Members of the Board of Directors are appointed by the governing bodies of

the respective member cities for two- year terms

Measurement Focus

The accompanying basic financial statements are reported using the economic resources measurement focus and

the full accrual basis of accounting Revenues are recorded when earned and expenses are recorded when a liability

is incurred, regardless of the timing of the related cash flows The District’ s operating revenues are derived from

charges to users, primarily for the sale and treatment of water and wastewater The District constructs facilities to

provide services to others, which are financed in part by the issuance of its revenue bonds Users, primarily member

cities, generally contract to pay amounts equal to the District’ s operating and maintenance expenses, debt service

requirements and any other obligations payable from the revenues of the District Grants and similar items are

recognized as revenue as soon as all eligibility requirements imposed by the provider have been met

Basis of Accounting and Financial Presentation

The District presents its financial statements in accordance with GASB Statement 34 guidance for governments

engaged in business type activities Accordingly, the basic financial statements and Required Supplementary

Information ( RSI) of the District consist of MD& A, Statement of Net Position, Statement of Revenues, Expenses

and Changes in Net Position, Statement of Cash Flows, Notes to the Financial Statements, and Trend Information

for the Retirement and Other Post- Employment Benefits Plan

The District presents its activities in five major funds: Water System, Regional Wastewater System, Sewer System,

Solid Waste System and Upper East Fork Interceptor System

Funds

The Water Fund owns and operates a wholesale water treatment and transmission system consisting of raw water

facilities, water treatment works and water transmission facilities and provides treated water to municipalities,

water supply corporations, and individual customers The Regional Wastewater, Sewer, and Interceptor Funds own

and operate wastewater treatment and disposal systems consisting of facilities to receive, treat and dispose of

wastewater The Solid Waste Fund owns and operates landfill sites and solid waste transfer stations

Revenues

Charges for treated water are based upon the current budgeted expenditure requirements ( including debt service

payments and excluding charges for depreciation and amortization) and amounts designated by the Board of

Directors for capital improvements Charges for wastewater and solid waste disposal are based upon the current

budgeted expenditure requirements ( including debt service payments and excluding charges for depreciation and

amortization) and are adjusted for the difference between budgeted and actual expenditures for the same period

The District derives approximately 68% of its revenues from the Cities of Frisco, Garland, McKinney, Mesquite,

Plano, and Richardson Such revenues derived directly from the respective systems are defined by the District as

operating revenues All other revenues not directly related to the operations of the systems are reported as non-

operating revenues Revenues are shown net of rebates and/ or excess billings

FINANCIAL

ANNUAL REPORT 2019

20



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)

Expenses

Direct charges attributable to the operations of the District’ s systems, including depreciation and amortization, are

reported as operating expenses Interest expense and other similar charges not directly related to the systems’

operations are reported as nonoperating expenses

Cash and Cash Equivalents

All highly liquid investments ( including restricted assets) with original maturities of three months or less when

purchased are considered to be cash equivalents

Deposits

The District’ s collateral agreement requires that all deposits be fully collateralized by government securities or Texas

municipal bonds rated A or better that have a market value exceeding the total amount of cash and investments

held at all times

Investments

All of the District’ s investments are reported at fair value in accordance with GASB Statement No 72, Fair Value

Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or

decrease to investment assets and investment income Fair values are determined based on quoted market prices

Investments in U S government securities are guaranteed or insured by the U S government

Accounts Receivable

Management considers accounts receivable to be fully collectible as of September 30, 2019; accordingly, no

allowance for doubtful accounts is deemed necessary As of September 30, 2019, member cities Allen, Garland,

McKinney, Mesquite, Plano, Richardson, Rockwall, and Royse City accounted for approximately 72% of total

accounts receivable

Material and Supplies Inventory

Inventory of supplies and parts is maintained at different warehouses for use in the operation and is recorded as an

expense when consumed or placed in service Inventory is valued based on first- in- first- out methodology

Capital Assets

All purchased capital assets are stated at historical cost unless they are determined to be impaired based on

GASB Statement No 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance

Recoveries Donated capital assets are reported at acquisition value based on GASB Statement No 72, Fair Value

Measurement and Application.

Repairs and maintenance are recorded as expenses; renewals and betterments are capitalized

According to the District’ s capitalization policy, assets capitalized have an original cost of $ 5,000 or more and two

or more years of estimated useful life Depreciation is calculated on each class of depreciable property using the

straight- line method Estimated useful lives are as follows:

Water treatment, storage and transmission facilities 40 to 75 years

Wastewater treatment and disposal facilities 30 to 50 years

Solid waste transfer and disposal facilities 40 years

Land improvements 20 years

Water rights 50 years

Reservoir facilities 50 years

Buildings 10 to 40 years

Automobiles and trucks 5 years

Office furniture and fixtures 7 to 10 years

Other equipment 5 to 20 years

FINANCIAL

ANNUAL REPORT 2019

21



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)

Capitalized Interest

The District early implemented GASB Statement No 89, Accounting for Interest Cost Incurred before the End of a

Construction Period, which states that in financial statements prepared using the economic resources measurement

focus, interest cost incurred before the end of a construction period should be recognized as an expense in the

period in which the cost is incurred Such interest cost should not be capitalized as part of the historical cost of a

capital asset

Compensated Absences

Employees are allowed to accumulate vacation within certain limitations Payment for accrued vacation ( within limits)

upon termination is subject to the employee leaving in good standing Payment for accrued sick leave ( within limits)

is paid upon retirement At September 30, 2019, a liability of $4,359, 845 for unused vacation and $ 6,070, 046 for

unused sick leave has been accrued The short- term portion is included in “ accounts payable and accrued liabilities”

in the accompanying Statement of Net Position

A summary of changes in accrued vacation and sick leave for the year ended September 30, 2019 is as follows:

Amount due

Beginning Ending within

Liability Additions Reductions Liability one year

Vacation $ 3,902,455 $ 664, 723 $ 207,333 $ 4,359,845 $ 2,180,340

Sick 5,457,115 934,443 321,512 6,070,046 2,378,820

Net Position

Net position is reported as (1) net investment in capital assets; ( 2) restricted for debt service and; ( 3) unrestricted

When both restricted and unrestricted net position are available for use, it is the District’ s policy to use restricted

net position first, then unrestricted net position

Budgets and Budgetary Accounting

The District is not required under its enabling act to adopt a budget; therefore, comparative statements of actual

expenses compared to budget expenses are not included

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United

States of America requires management to make estimates and assumptions that affect the amounts reported in

the basic financial statements and accompanying notes Actual results could differ from those estimates

Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of

resources related to pensions, and pension expense, information about the fiduciary net position of the District

has been determined using the flow of economic resources measurement focus and full accrual basis of accounting

Investments are reported at fair value

Postemployment Benefits Other Than Pensions ( OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources

related to OPEB, and OPEB expense, information about the fiduciary net position of the District has been determined

using the flow of economic resources measurement focus and full accrual basis of accounting Investments are

reported at fair value

Subsequent Events

The District has evaluated all events or transactions that occurred after September 30, 2019 up through January 15,

2020, the date the financial statements were available to be issued During this period, the following subsequent

events required disclosure:

The District issued $ 101, 345, 000 of Series 2019, Regional Water System ( SWIFT) Revenue Bonds on November 7,

2019, $ 137, 470, 000 of Series 2019A, Regional Water System Revenue Bonds on November 7, 2019, and $ 9,400, 000

of Series 2019, Buffalo Creek Wastewater Interceptor System Contract Revenue Refunding and Improvement Bonds

on October 30, 2019

FINANCIAL

ANNUAL REPORT 2019

22



NOTE 2. RESTRICTED ASSETS

Restricted assets represent amounts reserved for:

Construction Funds— Construction of facilities, restricted by purpose of the debt issuance

Interest and Redemption ( Sinking) Funds— Current interest and principal of bonded indebtedness

Reserve Funds— Payment of final serial maturity on bonded indebtedness or payment of interest and

principal of bonded indebtedness when and to the extent the amount in the interest and redemption

sinking) fund is insufficient

Contingency Funds – unexpected or extraordinary expenses for which funds are not otherwise available or

for debt service to the extent of interest and redemption ( sinking) fund deficiencies as required by bond

covenants

Reserve for Maintenance – Escrow for future maintenance expenses

FINANCIAL

ANNUAL REPORT 2019

23



NOTE 2. RESTRICTED ASSETS ( CONTINUED)

The cash and cash equivalents, investments, and interest receivable components of each fund represented by

restricted assets are as follows:

Cash and

Cash Interest

Fund Equivalents Investments Receivable

Water:

Construction Fund $ 647, 487, 957 $ 379, 851, 790 $ 1,710, 947

Interest and Redemption Fund 17, 168, 230 1,190, 257 15, 145

Reserve Fund 2, 539, 273 137, 129, 413 391, 934

Contingency Fund 23, 902, 427 - -

Reserve for Maintenance Fund 268, 228 - -

691, 366, 115 518, 171, 460 2,118, 026

Regional Wastewater:

Construction Fund 39, 955, 459 74, 963, 300 246, 492

Interest and Redemption Fund 8, 650, 292 1,595, 025 20, 295

Reserve Fund 847, 139 18, 596, 824 36, 360

Reserve for Maintenance Fund 2, 033, 844 - -

51, 486, 734 95, 155, 149 303, 147

Sewer:


Interest and Redemption Fund 7, 253, 929 792, 503 10, 084

Reserve Fund 1,576, 273 15, 662, 155 48, 268

Reserve for Maintenance Fund 785, 351 - -

Reserve for Equipment Replacement 24, 763 - -

24, 621, 172 30, 425, 518 79, 126

Solid Waste:

Construction Fund 6, 328, 108 1,000, 380 768

Interest and Redemption Fund 456, 926 - -

Reserve Fund 1, 045, 454 3,307, 277 13, 232


Reserve for Equipment Replacement 8,610, 838 - -

17, 690, 966 4,307, 657 14, 000

Interceptor:


Interest and Redemption Fund 6,936, 249 2,333, 425 29, 690

Reserve Fund 657, 801 12, 322, 969 28, 209


43, 533, 980 97, 531, 433 267, 332

Total $ 828, 698, 967 $ 745, 591, 217 $ 2,781, 631

Unbilled receivables of $6,194, 441 that are reflected as restricted assets in the Solid Waste System represent

member cities’ obligations for closure and postclosure costs related to solid waste landfills Based on the contracts

for services, member cities will be billed for the actual costs incurred to close the landfills

FINANCIAL

ANNUAL REPORT 2019

24



NOTE 3. CASH AND INVESTMENTS

The District maintains a cash and investment pool, which includes cash balances and authorized investments of all

funds This pooled cash is invested by the Investment Officer to enhance diversification and interest earnings The

pooled interest earned is allocated to the funds based on each fund’ s cash and investment balance at the end of

each month

A. Deposits

At September 30, 2019, the carrying amount of cash deposits was $ 6,051, 507 and total bank balance was

18, 711 185 During 2018- 2019, the District’ s combined deposits were fully insured by federal depository insurance

or collateralized with securities pledged to the District and held by the entity or its agent in the entity’ s name At

September 30, 2019, the District also held petty cash of $ 2,000

B. Investments

Legal provisions generally permit the District to invest in direct and indirect obligations of the United States of

America or its agencies, certain certificates of deposit, repurchase agreements, public funds investment pools and

mutual funds During the year ended September 30, 2019, the District did not own any types of securities other

than those permitted by statute

The District invests in multiple Local Government Investment Pools ( LGIP), including LOGIC, Texas CLASS, and

TexPool The District has an undivided beneficial interest in the pool of assets held by the related investment pools

These investments and deposits are fully insured by Federal depository insurance or collateralized by securities The

investment objectives of the pools are safety of principal, liquidity in accordance with the operating requirements

of the Participants, and a competitive rate of return Authorized investments include obligations of the United

States of America or its agencies, direct obligations of the State of Texas or its agencies, certificates of deposit and

repurchase agreements

LOGIC

Hilltop Securities INC ( HTS) and J P Morgan Investment Management INC are the Co- Administrators of Texas Local

Government Investment Cooperative ( LOGIC) with HTS providing distribution, administration, Participant support,

and marketing services while J P Morgan Investment Management provides investment management, custody, and

fund accounting services LOGIC was created as an investment pool for its Participants pursuant to the Interlocal

Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256

of the Texas Government Code LOGIC is organized and existing as a business trust under the laws of the State of

Texas with all Participant funds and all investment assets held and managed in trust by a Board of Trustees for the

benefit of the Participants The Board of Trustees is LOGIC’ s governing body and is comprised of employees, officers

or elected officials of Participant Government Entities or individuals who do not have a business relationship with the

Pool and are qualified to advise it A maximum of two advisory board members represent the Co- Administrators of

the Pool LOGIC uses amortized cost rather than the market value to report net position to compute share prices

Accordingly, the fair value of the position in LOGIC is the same as the net asset value of LOGIC shares

Texas CLASS

Public Trust Advisors, LLC provides advisory services and administration and marketing services to Texas Cooperative

Liquid Assets Securities System Trust ( Texas CLASS) The purpose of the Trust is to establish one or more investment

funds through which a Participant may pool any of its funds or funds under its control in order to preserve principal,

to maintain the liquidity of the Participant, and to maximize yield These goals are in accordance with the Public

Funds Investment Act, Section 2256 01, Texas Government Code, or other laws of the State of Texas, from time to

time in effect, governing the investment of funds of a Participant or funds under its control The Board of Trustees

supervises the Trust and its affairs and acts as the liaison between the Participants, the Custodian and the Program

Administrator The Board is comprised of active members of the pool and elected by the Participants, guided by

the Advisory Board The Board is responsible for selecting the Administrator and Investment Advisors Wells Fargo

Bank Texas, NA serves as the Custodian for Texas CLASS

TexPool

The Comptroller of Public Accounts ( the “ Comptroller”) is the sole officer, director and shareholder of the Texas

Treasury Safekeeping Trust Company ( the “ Trust Company”), which is authorized to operate TexPool Federated

Investors, Inc (“ Federated”), under an agreement with the Comptroller, acting on behalf of the Trust Company,

provides administrative and investment services to TexPool The Texas Local Government Investment Pools ( the

TexPool Portfolios”) have been organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the

Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code

The Comptroller maintains oversight of the services provided to the TexPool Portfolios by Federated In addition,

FINANCIAL

ANNUAL REPORT 2019

25



the TexPool Advisory Board advises on the Investment Policies for the TexPool Portfolios The Advisory Board

is composed equally of participants in the TexPool Portfolios and other persons who do not have a business

relationship with the TexPool Portfolios who are qualified to advise the TexPool Portfolios TEXPOOL uses amortized

cost rather than the market value to report net position to compute share prices Accordingly, the fair value of the

position in TEXPOOL is the same as the net asset value of TEXPOOL shares

The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted

accounting principles GASB Statement No 72, Fair Value Measurement and Application provides a framework

for measuring fair value which establishes a three- level fair value hierarchy that describes the inputs that are used

to measure assets and liabilities

Level 1 inputs are quoted prices ( unadjusted) for identical assets or liabilities in active markets that a

government can access at the measurement date

Level 2 inputs are inputs— other than quoted prices included within Level 1—that are observable for an

asset or liability, either directly or indirectly

Level 3 inputs are unobservable inputs for an asset or liability

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs If a

price for an identical asset or liability is not observable, a government should measure fair value using another

valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable

inputs If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value

hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the

entire measurement

FINANCIAL

ANNUAL REPORT 2019

26



NOTE 3. CASH AND INVESTMENTS ( CONTINUED)

The District has recurring fair value measurements as presented in the table below The District’ s investment

balances and weighted average maturity of such investments) are as follows:

Fair Value Measurements Using

Quoted

Prices

in Active Significant

Markets for Other Significant Weighted

Identical Observable Unobservable Percent Average

September 30, Assets Inputs Inputs Total Maturity

2019 ( Level 1) ( Level 2) ( Level 3) Investments ( Days)

Investments not Subject to Level Reporting:

Investment Pools*:

LOGIC $ 399, 890, 499 $ - $ - $ - 22 20% 49

Texas CLASS 450, 610, 611 - - - 25 00% 50

Texpool 46, 610, 953 - - - 2 59% 34

Investments by Fair Value Level:

U S Government Agency Securities:

Federal Farm Credit Bank 25, 003, 490 - 25, 003, 490 - 1 39% 262

Federal Home Loan Bank 236, 456, 148 - 236, 456, 148 - 13 12% 496

Federal Home Loan Bank Discount Note 103, 829, 660 - 103, 829, 660 5 76% 31

Federal Home Loan Mortgage Corp 104, 989, 510 - 104, 989, 510 - 5 83% 1217

Federal Home Loan Mortgage Corp

Disount Note 37, 855, 220 - 37, 855, 220 2 10% 73

Fannie Mae 38, 121, 120 - 38, 121, 120 - 2 12% 683

U S Treasury Note 358, 329, 850 358, 329, 850 - - 19 89% 119

Total Value $ 1,801, 697, 061 $ 358, 329, 850 $ 546, 255, 148 $ -

Portfolio Weighted Average Maturity 205

Investment Pools are exempt for level reporting

U.S. Government Agency Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing

technique Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted

prices

U.S. Treasury Notes classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets

for those securities

GASB Statement No 40, Deposit and Investment Risk Disclosures, addresses common deposit and investment risks

related to credit risk, custodial credit risk, concentration of credit risk, interest rate risk, and foreign currency risk

Credit risk is the risk that a security issuer may default on an interest or principal payment State law and the District’ s

investment policy limits the District to investments in high quality rated instruments that have been evaluated by

agencies such as Standard and Poor’ s or Moody’ s Investor Service

Custodial credit risk is the risk that a depository financial institution will not be able to recover collateral securities

that are in the possession of an outside party The District monitors collateral balances at the bank to ensure they

are backed by quality rated instruments

FINANCIAL

ANNUAL REPORT 2019

27




Concentration of credit risk is the risk associated with holding investments that are not pools and full faith credit

securities in excess of 5% of the total portfolio The investment policy of the District contains no limitations on the

amount that can be invested in any one issuer At September 30, 2019, investments other than external investment

pools that represent 5% or more of the District’ s investments are as follows:

Issue Investment Type Reported Amount

FHLB Discount Note Federal agency notes $ 103, 829, 660

FHLB Federal agency notes 236, 456, 149

FHLMC Federal agency notes 104, 989, 510

T-NOTE T-Note 358, 329, 850

The District held a total of $904, 584, 998 in securities that equated to 50 21% of the total investment portfolio

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market

interest rates There is no formal policy relating to interest rate risk However, the District manages its exposure to

interest rate risk by investing in investment pools which purchase a combination of short term investments with an

average maturity of less than 60 days, thus reducing the interest rate risk The District monitors the interest rate

risk inherent in its portfolio by measuring the weighted average maturity of its portfolio At September 30, 2019,

222, 000, 568 of the District’ s portfolio had a weighted average maturity of greater than one year

Foreign currency risk is the potential for loss due to fluctuations in exchange rates The District is not exposed to

foreign currency risk

In accordance with GASB Statement No 31, Accounting and Financial Reporting for Certain Investments and for

External Investment Pools, investments were stated at fair value using the aggregate method in all funds, resulting

in the following investment income:

Regional Solid

Water Wastewater Sewer Waste Interceptor

System System System System System Total

Investment income:

Interest $ 38, 890, 619 $ 3,857, 206 $ 1,158, 974 $ 841, 800 $ 2,799, 953 $ 47, 548, 552

Net changes in the fair

value of investments 3,158, 524 608, 829 338, 023 82, 823 356, 826 4,545, 025

Investment income: $ 42, 049, 143 $ 4,466, 035 $ 1,496, 997 $ 924, 623 $ 3,156, 779 $ 52, 093, 577

In accordance with GASB Statement No 31, the net changes in the fair value of investments take into account all

changes in fair value ( including purchases and sales) that occurred during the year These portfolio value changes

are unrealized unless sold

FINANCIAL

ANNUAL REPORT 2019

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C. Summary of Cash and Investments

Regional Solid

Wastewater Waste Interceptor

Water System System Sewer System System System Total

Unrestricted:

Cash and cash

equivalents $ 42, 685, 455 $ 8, 838, 136 $ 7, 171, 545 $ 6, 876, 722 $ 8, 894, 745 $ 74, 466, 603

Investments 152, 996, 119 - - 5, 997, 662 - 158, 993, 781

Total unrestricted 195, 681, 574 8,838, 136 7,171, 545 12, 874, 384 8,894, 745 233, 460, 384

Restricted:

Cash and cash

equivalents 691, 366, 115 51, 486, 734 24, 621, 172 17, 690, 966 43, 533, 980 828, 698, 967

Investments 518, 171, 460 95, 155, 149 30, 425, 518 4, 307, 657 97, 531, 433 745, 591, 217

Total restricted 1, 209, 537, 575 146, 641, 883 55, 046, 690 21, 998, 623 141, 065, 413 1, 574, 290, 184

Total $ 1, 405, 219, 149 $ 155, 480, 019 $ 62, 218, 235 $ 34, 873, 007 $ 149, 960, 158 $ 1, 807, 750, 568

Amounts included in unrestricted cash and cash equivalents and investments are comprised of the following:

Regional Solid

Wastewater Waste Interceptor

Water System System Sewer System System System Total

Unrestricted:

Operating Funds $ 27, 983, 879 $ 5,136, 954 $ 4,874, 659 $ 3,726, 204 $ 3,805, 357 $ 45, 527, 053

Capital Improvement

Funds 163, 765, 199 3, 498, 809 589, 990 9, 148, 180 4, 046, 548 181, 048, 726

Preventative

Maintenance - 202, 373 1,706, 896 - 1,042, 840 2,952, 109

U S Government Notes 2, 042, 945 - - - - 2, 042, 945

Employee Insurance

Funds 1, 737, 227 - - - - 1, 737, 227

Retiree Insurance Funds 152, 324 - - - - 152, 324

Total unrestricted 195, 681, 574 8, 838, 136 7, 171, 545 12, 874, 384 8, 894, 745 233, 460, 384

Refer to Note 2 for a detail of restricted assets and Note 11 for commitments under construction contracts

FINANCIAL

ANNUAL REPORT 2019

29




At September 30, 2019, the District had the following deposits and investments:

Credit Weighted

Quality Fair Average

Ratings Value Maturity

Unrestricted Cash and Investments

Cash and cash equivalents:

Deposits with a financial institution Not Rated $ 6,051, 412 n/ a

Cash on hand Not Rated 2, 000 n/ a

TexPool AAAm 39, 945, 013 34 Days

Texas CLASS AAAm 28, 468, 178 50 Days

Total cash and cash equivalents 74, 466, 603

Investments— Securities of U S Government Agencies:

Treasuy Note - US Treasuries N/ A 89, 881, 413 102 Days

FFCB - Federal Farm Credit Bank Aaa 9,002, 520 102 Days

FHLB - Federal Home Loan Bank Agency Note Aaa 54, 125, 208 301 Days

FHLB - Federal Home Loan Bank Discount Note Aaa 2,996, 070 25 Days

FHLMC - Federal Home Loan Mortgage Corp Discount Note Aaa 2,988, 570 73 Days

Total Securities of U S Government Agencies 158, 993, 781

Total Unrestricted Investments and Cash Equivalents 233, 460, 384

Restricted Cash and Investments

Cash and cash equivalents:

Deposits with a financial institution Not Rated 95 n/ a

TexPool AAAm 6,665, 940 34 Days

LOGIC AAAm 399, 890, 499 49 Days

Texas CLASS AAAm 422, 142, 433 50 Days

Total cash and cash equivalents 828, 698, 967

Investments— Securities of U S Government Agencies:

Treasury Note - US Treasuries N/ A 268, 448, 437 125 Days

FFCB - Federal Farm Credit Bank Aaa 16, 000, 970 352 Days

FNMA - Fannie Mae Aaa 38, 121, 120 68 Days

FHLMC - Federal Home Loan Mortgage Corp Agency Note Aaa 104, 989, 510 1217 Days

FHLB - Federal Home Loan Bank Agency Note Aaa 182, 330, 940 555 Days

FHLB - Federal Home Loan Bank Discount Note Aaa 100, 833, 590 31 Days

FHLMC - Federal Home Loan Mortgage Corp Discount Note Aaa 34, 866, 650 73 Days

Total Securities of U S Government Agencies 745, 591, 217

Total Restricted Investments and Cash Equivalents 1,574, 290, 184

Total Cash and Investments $ 1,807, 750, 568

FINANCIAL

ANNUAL REPORT 2019

30



NOTE 4. CAPITAL ASSETS

A summary of changes in capital assets follows:

Balance at Balance at

October 1, Additions and Disposals and September 30,

2018 Transfers Transfers 2019

Nondepreciable:

Land $ 73, 801, 998 $ 2, 509, 040 $ 30, 481 $ 76, 280, 557

Easements 62, 549, 675 - 81, 463 62, 468, 212

Construction in progress 814, 635, 595 615, 121, 918 86, 566, 267 1, 343, 191, 246

Total nondepreciable assets 950, 987, 268 617, 630, 958 86, 678, 211 1, 481, 940, 015

Depreciable:

Land improvements 8, 260, 528 5, 117, 586 - 13, 378, 114

Water treatment, storage and transmission

facilities 1, 563, 099, 797 49, 492, 835 - 1, 612, 592, 632

Wastewater treatment and disposal facilities 713, 879, 210 5, 402, 444 - 719, 281, 654

Solid waste transfer and disposal facilities 81, 868, 330 6,925, 817 - 88, 794, 147

Reservoir facilities and water rights 376, 541, 067 - - 376, 541, 067

Buildings 72, 754, 554 1, 271, 576 - 74, 026, 130

Automobiles and trucks 14, 256, 255 402, 636 658, 645 14, 000, 246

Office furniture and fixtures 1, 063, 181 - - 1, 063, 181

Other equipment 66, 103, 931 17, 599, 468 1, 368, 580 82, 334, 819

Total depreciable assets 2,897, 826, 853 86, 212, 362 2,027, 225 2, 982, 011, 990

Less accumulated depreciation on:

Land improvements ( 5,276, 241) ( 311, 293) - ( 5,587, 534)

Water treatment, storage and transmission

facilities ( 356, 132, 015) ( 33, 990, 576) - ( 390, 122, 591)

Wastewater treatment and disposal facilities ( 221, 324, 141) ( 17, 578, 441) - ( 238, 902, 582)

Solid waste transfer and disposal facilities ( 36, 133, 890) ( 1, 412, 104) - ( 37, 545, 994)

Reservoir facilities and water rights ( 103, 234, 762) ( 7, 539, 355) - ( 110, 774, 117)

Buildings ( 14, 195, 229) ( 1,838, 285) - ( 16, 033, 514)

Automobiles and trucks ( 10, 706, 906) ( 1,284, 087) ( 658, 645) ( 11, 332, 348)

Office furniture and fixtures ( 560, 543) ( 71, 128) - ( 631, 671)

Other equipment ( 37, 849, 539) ( 6, 166, 315) ( 1, 353, 213) ( 42, 662, 641)

Total accumulated depreciation ( 785, 413, 266) ( 70, 191, 586) ( 2, 011, 858) ( 853, 592, 992)

Total depreciable assets— net 2, 112, 413, 587 16, 020, 776 15, 367 2, 128, 418, 998

TOTAL CAPITAL ASSETS— NET $ 3,063, 400, 855 $ 633, 651, 734 $ 86, 693, 578 $ 3, 610, 359, 013

FINANCIAL

ANNUAL REPORT 2019

31



NOTE 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

At September 30, 2019, accounts payable and accrued liabilities consisted of the following:

Regional Solid

Water Wastewater Sewer Waste Interceptor

System System System System System Total

Payable to vendors/ contractors $ 104, 081, 763 $ 15, 086, 317 $ 9, 879, 917 $ 2,741, 295 $ 8,767, 838 $ 140, 557, 130

Insurance claims liability 1,756, 382 - - - - 1,756, 382

Payable to cities 268, 228 2,033, 889 789, 279 9,860, 478 1,432, 574 14, 384, 448

Compensated absences 3,109, 871 652, 738 247, 525 487, 726 61, 300 4,559, 160

Accrued payroll and related

benefits 2,444, 723 672, 932 327, 851 841, 387 92, 689 4,379, 582

Total $ 111, 660, 967 $ 18, 445, 876 $ 11, 244, 572 $ 13, 930, 886 $ 10, 354, 401 $ 165, 636, 702

Payable from unrestricted assets $ 23, 011, 378 $ 3,595, 508 $ 3, 980, 012 $ 2,539, 287 $ 2,674, 607 $ 35, 800, 792

Payable from restricted assets 88, 649, 589 14, 850, 368 7, 264, 560 11, 391, 599 7,679, 794 129, 835, 910

Total $ 111, 660, 967 $ 18, 445, 876 $ 11, 244, 572 $ 13, 930, 886 $ 10, 354, 401 $ 165, 636, 702

NOTE 6. INTERFUND BALANCES

At September 30, 2019 interfund balances consisted of the following:

Due From Due to

Other Funds Other Funds

Water System $ 560, 455 $ 150, 651

Regional Wastewater System 47, 297 450, 257

Sewer System 55, 835 289, 999

Solid Waste System 347, 598 19, 991

Interceptor System 73 100, 360

Total $ 1,011, 258 $ 1,011, 258

The above interfund balances are a result of routine administrative type transactions in the normal course of

business and are expected to be repaid in less than one year

FINANCIAL

ANNUAL REPORT 2019

32



NOTE 7. DEFERRED OUTFLOWS OF RESOURCES

At September 30, 2019 deferred outflows of resources consisted of the following:

Balance at

October 1,

2018

Balance at

September

30, 2019AdditionsDeletions

Water System:

Deferred loss on refunded debt $ 20, 078, 371 $ - $ ( 1, 572, 159) $ 18, 506, 212

Deferred pension outflow 8,653, 060 6,695, 147 - 15, 348, 207

Deferred OPEB outflow 703, 344 55, 330 - 758, 674

29, 434, 775 6, 750, 477 ( 1, 572, 159) 34, 613, 093


Deferred loss on refunded debt 3, 084, 805 - ( 391, 012) 2, 693, 793

Deferred pension outflow 2, 385, 187 1, 738, 962 - 4, 124, 149


5, 629, 308 1, 751, 226 ( 391, 012) 6, 989, 522

Sewer System:

Deferred loss on refunded debt 2, 141, 968 - ( 290, 526) 1, 851, 442

Deferred pension outflow 861, 923 747, 830 - 1, 609, 753

Deferred OPEB outflow 79, 290 6,316 - 85, 606

3, 083, 181 754, 146 ( 290, 526) 3, 546, 801

Solid Waste System:

Deferred loss on refunded debt 2,051, 781 - ( 273, 589) 1,778, 192

Deferred pension outflow 2, 227, 648 1, 700, 695 - 3, 928, 343


4,409, 639 1,710, 399 ( 273, 589) 5,846, 449

Interceptor System:

Deferred loss on refunded debt 2,599, 559 - ( 293, 498) 2,306, 061

Deferred pension outflow 206, 933 266, 803 - 473, 736


2,834, 494 268, 819 ( 293, 498) 2,809, 815

Total $ 45, 391, 397 $ 11, 235, 067 $ ( 2,820, 784) $ 53, 805, 680

FINANCIAL

ANNUAL REPORT 2019

33



NOTE 8. LONG - TERM DEBT

Long- term debt consists of the following at September 30, 2019:

Original

Borrowing

Balance at

October 1,

2018

Balance at

September

30, 2019

Amounts due

Within One

Year

Retired or

Issued Refunded

Water System:

Water revenue bonds

03/ 19- 09/ 48, 770- 6 123% $ 3,496, 508, 000 $ 2, 127, 350, 000 $ 620, 080, 000 $ 180, 025, 000 $ 2,567, 405, 000 $ 85, 955, 000

U S govt contracts payable,

11/ 18- 10/ 51, 3 225- 3 253% 44, 220, 432 28, 097, 923 - 1,547, 617 26, 550, 306 1,597, 613

3,540, 728, 432 2, 155, 447, 923 620, 080, 000 181, 572, 617 2,593, 955, 306 87, 552, 613


Wastewater revenue bonds,

12/ 18- 06/ 49, 2 00- 5 00% 476, 485, 000 324, 520, 000 41, 450, 000 13, 590, 000 352, 380, 000 14, 690, 000

Sewer System:

Rockwall contract revenue bonds,

12/ 18- 06/ 28, 5 375- 5 75% 2,960, 000 1, 850, 000 - 145, 000 1,705, 000 150, 000

Mustang Creek Interceptor System

revenue bonds, 12/ 18- 06/ 48, 3 00-

6 00% 30, 240, 000 9, 445, 000 19, 620, 000 535, 000 28, 530, 000 580, 000

Rockwall- Heath contract revenue

bonds

12/ 18- 06/ 25, 4 00- 4 25% 3,020, 000 1,375, 000 - 170, 000 1,205, 000 180, 000

Terrell contract revenue bonds

12/ 18- 06/ 35, 3 00- 5 00% 10, 465, 000 9, 240, 000 - 395, 000 8,845, 000 415, 000

Stewart Creek contract revenue

bonds, 12/ 18- 06/ 35, 1 580- 5 00% 69, 685, 000 58, 585, 000 - 2,895, 000 55, 690, 000 2,470, 000

Little Elm contract revenue bonds,

12/ 18- 06/ 23, 2 00% 3,555, 000 1,895, 000 - 355, 000 1,540, 000 365, 000

Parker Creek Interceptor System,

revenue bonds, 12/ 18- 06/ 23,

5 125% 2,615, 000 950, 000 - 170, 000 780, 000 180, 000

Sabine Creek Interceptor System

revenue bonds, 12/ 18- 6/ 23, 5 125% 2,115, 000 770, 000 - 140, 000 630, 000 145, 000

Sabine Creek Wastewater System

revenue bonds, 12/ 18- 6/ 36, 2 00-

4 00% 16, 905, 000 13, 625, 000 - 1,035, 000 12, 590, 000 1,060, 000

Muddy Creek Wastewater System

revenue bonds 12/ 18- 06/ 38, 3 00-

5 00% 23, 800, 000 9, 860, 000 8,540, 000 1,860, 000 16, 540, 000 1,850, 000

FINANCIAL

ANNUAL REPORT 2019

34



NOTE 8. LONG - TERM DEBT (CONTINUED)

Original

Borrowing

Balance at

October 1,

2018

Balance at

September

30, 2019

Amounts due

Within One

Year

Retired or

Issued Refunded

Sewer System ( continued):

Muddy Creek Interceptor revenue

bonds 12/ 18- 06/ 24, 3 00- 4 00% 2, 135, 000 1, 375, 000 - 210, 000 1, 165, 000 215, 000

Buffalo Creek Interceptor revenue

bonds 12/ 18- 06/ 27, 4 05- 5 00% 13, 050, 000 8, 305, 000 - 1, 110, 000 7, 195, 000 1, 170, 000

Rockwall Water Pumping Facilities

bonds 12/ 18- 06/ 26, 4 50- 4 60% 2,145, 000 1, 115, 000 - 115, 000 1,000, 000 125, 000

Panther Creek Wastewater System

bonds 12/ 18- 06/ 29, 4 00- 5 00% 51, 200, 000 28, 530, 000 - 2, 695, 000 25, 835, 000 2,715, 000

Lower East Fork Interceptor

bonds 12/ 18- 06/ 26, 3 00- 5 00% 10, 745, 000 8, 860, 000 - 945, 000 7, 915, 000 985, 000

Parker Creek Parallel Interceptor

bonds 12/ 18- 06/ 36, 2 00- 3 00% 3,045, 000 2, 800, 000 - 110, 000 2,690, 000 115, 000

247, 680, 000 158, 580, 000 28, 160, 000 12, 885, 000 173, 855, 000 12, 720, 000

Solid Waste System- revenue

bonds, 03/ 19- 09/ 37, 3 00- 5 00% 79, 705, 000 64, 045, 000 - 11, 855, 000 52, 190, 000 3, 010, 000

Interceptor System - revenue

bonds, 12/ 18- 06/ 49, 3 00- 6 25% 397, 675, 000 235, 865, 000 49, 530, 000 12, 330, 000 273, 065, 000 13, 835, 000

Total $ 4, 742, 273, 432 $ 2, 938, 457, 923 $ 739, 220, 000 $ 232, 232, 617 $ 3, 445, 445, 306 $ 131, 807, 613

Pledged Revenue

Throughout the years, the District has issued revenue bonds and US Government Notes with Pledged Revenues

as collateral

Pledged Revenues generally include gross revenues of the District’ s respective Systems, and includes specifically

certain payments to be received by the District from the Systems’ member cities and contracting parties The

Member Cities and contracting parties are obligated to make payments in amounts sufficient to pay the principal

and interest of the debt, which were issued to provide funding for construction and capital improvement projects

The total amount of the pledge is equal to the remaining outstanding debt service requirements for the District’ s

bonds and notes

For the year ending September 30, 2019, bond debt service of $ 251, 087, 367 was secured by pledged revenues

of $ 247, 024, 252, bond subsidies of $ 3,905, 636 and interest earned on accounts restricted for debt service of

157, 479

For the year ending September 30, 2019, debt service on government notes of $2,458, 601 was secured by pledged

revenues of $ 2,458, 601

FINANCIAL

ANNUAL REPORT 2019

35




In the Statement of Net Position, the long- term liabilities include premiums net of discounts of $ 126, 703, 668 in

the Water System, $ 29, 713, 505 in the Regional Wastewater System, $ 9,334, 297 in the Sewer System, $ 3,981, 534

in the Solid Waste System and $ 24, 000, 866 in the Interceptor System

Other long term debt activity for the year ended September 30, 2019, was as follows:

Balance at Balance at

October 1, September 30,

2018 Additions Deletions 2019

Water System:

Premiums $ 126, 118, 700 $ 12, 166, 886 $ ( 11, 581, 918) 126, 703, 668

126, 118, 700 12, 166, 886 ( 11, 581, 918) 126, 703, 668


Premiums 29, 273, 648 2,903, 468 ( 2,463, 611) 29, 713, 505

29, 273, 648 2,903, 468 ( 2,463, 611) 29, 713, 505

Sewer System:

Premiums 9,751, 994 1,126, 534 ( 1,530, 945) 9,347, 583

Discounts ( 15, 969) - 2,683 ( 13, 286)

9,736, 025 1,126, 534 ( 1,528, 262) 9,334, 297

Solid Waste System:

Premiums 4,686, 112 - ( 704, 578) 3,981, 534

4,686, 112 - ( 704, 578) 3,981, 534

Interceptor System:

Premiums 24, 028, 402 2,733, 553 ( 2,761, 089) 24, 000, 866

24, 028, 402 2,733, 553 ( 2,761, 089) 24, 000, 866

Total $ 193, 842, 887 $ 18, 930, 441 $ ( 19, 039, 458) $ 193, 733, 870

FINANCIAL

ANNUAL REPORT 2019

36




Revenue bonds outstanding at September 30, 2019, are secured as follows:

Water Revenue Bonds — Assignment of the gross revenues to be derived from the operation of the District’ s

Water System

Regional Wastewater Revenue Bonds — Assignment of the gross revenues to be derived from the operation

of the District’ s Regional Wastewater System and payments made to the District from the Cities of Plano,

Mesquite, McKinney, Forney, Allen, Frisco, Princeton, Prosper, Rockwall, Seagoville and Heath, Texas

Rockwall Contract Revenue Bonds — Assignment of the gross revenues to be derived from the operation

of the District’ s sewage disposal system serving the City of Rockwall, Texas

Stewart Creek Contract Revenue Bonds — Assignment of the gross revenues to be derived from the

operation of the Stewart Creek Wastewater System and payments made to the District by the City of Frisco,

Texas

Little Elm Contract Revenue Bonds — Payments made to the District by the Town of Little Elm, Texas

Parker Creek Interceptor System — Assignment of the gross revenues to be derived from the operation

of the Parker Creek Interceptor System and payments made to the District by the Cities of Fate and Royse

City, Texas

Sabine Creek Interceptor System — Assignment of the gross revenues to be derived from the operation of

the Sabine Creek Interceptor System and payments made to the District by the City of Royse City, Texas

Sabine Creek Wastewater System — Assignment of the gross revenues to be derived from the operation

of the Sabine Creek Wastewater System and payments made to the District by the City of Fate and the

City of Royse City, Texas

Muddy Creek Wastewater System — Assignment of the gross revenues to be derived from the operation

of the Muddy Creek Wastewater System and payments made to the District by the Cities of Murphy and

Wylie, Texas

Muddy Creek Interceptor System — Assignment of the gross revenues to be derived from the operation

of the Muddy Creek Interceptor System and payments made to the District by the Cities of Murphy and

Wylie, Texas

Buffalo Creek Interceptor System — Assignment of the gross revenues to be derived from the operation

of the Buffalo Creek Interceptor System and payments made to the District by the Cities of Forney, Heath

and Rockwall, Texas

Rockwall/ Heath Water Storage Facilities — Payments to be made to the District by the Cities of Rockwall

and Heath, Texas

Terrell Water Transmission Facilities — Payments to be made to the District by the City of Terrell, Texas

Rockwall Water Pumping Facilities — Payments to be made to the District by the City of Rockwall, Texas

Panther Creek Wastewater System — Assignment of the gross revenues to be derived from the operation

of the Panther Creek Wastewater System and payments made to the District by the City of Frisco, Texas

Lower East Fork Interceptor System — Assignment of the gross revenues to be derived from the operation

of the District’ s Lower East Fork Interceptor System and payments made to the District by the Cities of

Mesquite and Seagoville, Texas

Parker Creek Parallel Wastewater Interceptor System — Assignment of the gross revenues to be derived

from the operation of the Parker Creek Interceptor System and payments made to the District by the City

of Fate, Texas

Mustang Creek Interceptor — Payments to be made to the District by the City of Forney, Texas

Solid Waste Revenue Bonds — Assignment of the gross revenues to be derived from the operation of the

District’ s Solid Waste System

Interceptor Revenue Bonds — Assignment of the gross revenues to be derived from the operation of the

District’ s Upper East Fork Interceptor System

FINANCIAL

ANNUAL REPORT 2019

37




Interest and redemption ( sinking) funds, reserve funds and contingency funds have been established, as required, in

accordance with bond resolutions Funds may be placed in secured time deposits or invested in direct obligations of,

or obligations guaranteed by, the U S government Interest earned is retained in the applicable funds or transferred

to meet debt service requirements in accordance with bond resolutions

The Water Fund’ s long- term debt payable to the U S government is pursuant to contracts covering the Chapman

and Lavon Reservoirs

Premiums and discounts on bonds are amortized over the life of the debt using the effective interest method

During the year, the District issued revenue bonds in the amounts of $ 530, 985, 000 in the Water System primarily for

the improvement of the District’ s Water system, including costs related to Bois D’Arc Lake Reservoir, the Leonard

Water Treatment Plant, and associated pipelines, $ 41, 450, 000 in the Wastewater System for the construction and

inspection of the Floyd Branch RWWTP Optimization Process improvements, design of the Regional Water Resource

Facility, construction of the Wilson Creek Maintenance Facility, Solids Operations Facility, other system improvements,

49, 530, 000 in the Interceptor System primarily for the construction and inspection of the Plano Spring Creek Force

Main Parallel, Plano Spring Creek Lift Station No 2 improvements, Wilson creek Station improvements, and other

system improvements, $ 28,160, 000 in the Sewer System primarily for the acquisition and construction of an Aeration

Basin, Odor Control, Backup Power for Muddy Creek WWTP and for the acquisition, construction and improvement

of the Mustang Creek WW Interceptor System, Lift Station, and other system improvements

During the year, the District issued revenue refunding bonds in the amounts of $89, 095, 000 in the Water System to

refund a portion of the District’ s outstanding debt As a result of the current refunding, the District decreased its

aggregate debt service payment to maturity by $ 18, 194, 964 and realized an economic gain ( difference between

the present value of debt service payments of the old debt and the new debt) of $14,352, 739

During the year, the District had a cash defeasance of the Regional Solid Waste Disposal system Refunding Bond

Series 2010 in the amount of $8,915, 000

At September 30, 2019, defeased bonds outstanding totaled $ 2,415, 000

For current and advance refunding resulting in defeasance of debt, the difference between the reacquisition price

and the net carrying amount of the old debt is deferred and amortized as interest expense over the remaining

life of the old debt or the life of the new debt, whichever is shorter At September 30, 2019, the amount of the

unamortized deferred amount on refundings is $ 27,135, 700

FINANCIAL

ANNUAL REPORT 2019

38




Annual requirements to retire revenue bonds outstanding, including interest, are:

Water System Regional Wastewater System

Principal Interest Total Principal Interest Total

2020 $ 85, 955, 000 $ 94, 453, 759 $ 180, 408, 759 $ 14, 690, 000 $ 14, 769, 541 $ 29, 459, 541

2021 87, 930, 000 91, 427, 438 179, 357, 438 15, 320, 000 14, 095, 275 29, 415, 275

2022 88, 065, 000 88, 245, 070 176, 310, 070 15, 985, 000 13, 374, 625 29, 359, 625

2023 92, 065, 000 85, 034, 314 177, 099, 314 12, 960, 000 12, 634, 225 25, 594, 225

2024 95, 370, 000 81, 600, 470 176, 970, 470 13, 540, 000 12, 023, 625 25, 563, 625

2025- 2029 500, 685, 000 353, 791, 531 854, 476, 531 70, 590, 000 50, 383, 700 120, 973, 700

2030- 2034 539, 035, 000 253, 603, 805 792, 638, 805 51, 345, 000 36, 547, 544 87, 892, 544

2035- 2039 436, 505, 000 156, 856, 003 593, 361, 003 53, 490, 000 26, 035, 825 79, 525, 825

2040- 2044 390, 370, 000 82, 871, 585 473, 241, 585 66, 595, 000 14, 516, 919 81, 111, 919

2045- 2049 251, 425, 000 18, 238, 576 269, 663, 576 37, 865, 000 2, 716, 625 40, 581, 625

2, 567, 405, 000 $ 1, 306, 122, 551 $ 3, 873, 527, 551 $ 352, 380, 000 $ 197, 097, 904 $ 549, 477, 904

Sewer System Solid Waste System


2020 $ 12, 720, 000 $ 6,883, 848 $ 19, 603, 848 $ 3,010, 000 $ 2, 163, 681 $ 5,173, 681

2021 13, 265, 000 6, 398, 001 19, 663, 001 3, 135, 000 2, 020, 881 5, 155, 881

2022 13, 835, 000 5, 806, 565 19, 641, 565 3, 275, 000 1, 872, 131 5, 147, 131

2023 14, 460, 000 5,185, 458 19, 645, 458 3,460, 000 1, 716, 681 5,176, 681

2024 12, 385, 000 4, 534, 348 16, 919, 348 3, 615, 000 1, 552, 281 5, 167, 281

2025- 2029 45, 570, 000 15, 709, 059 61, 279, 059 17, 215, 000 5, 003, 156 22, 218, 156

2030- 2034 35, 830, 000 8,429, 950 44, 259, 950 12, 415, 000 2, 194, 850 14, 609, 850

2035- 2039 15, 785, 000 2,812, 794 18, 597, 794 6,065, 000 346, 531 6,411, 531

2040- 2044 6, 085, 000 1, 229, 213 7, 314, 213 - - -

2045- 2049 3, 920, 000 336, 319 4, 256, 319 - - -

173, 855, 000 $ 57, 325, 555 $ 231, 180, 555 $ 52, 190, 000 $ 16, 870, 192 $ 69, 060, 192

FINANCIAL

ANNUAL REPORT 2019

39




Interceptor System Total All Systems


2020 $ 13, 835, 000 $ 10, 882, 298 $ 24, 717, 298 $ 130, 210, 000 $ 129, 153, 127 $ 259, 363, 127

2021 14, 020, 000 10, 622, 311 24, 642, 311 133, 670, 000 124, 563, 906 258, 233, 906

2022 14, 645, 000 9,936, 886 24, 581, 886 135, 805, 000 119, 235, 277 255, 040, 277

2023 15, 330, 000 9,220, 961 24, 550, 961 138, 275, 000 113, 791, 639 252, 066, 639

2024 16, 095, 000 8,491, 711 24, 586, 711 141, 005, 000 108, 202, 435 249, 207, 435

2025- 2029 78, 840, 000 31, 176, 206 110, 016, 206 712, 900, 000 456, 063, 652 1,168, 963, 652

2030- 2034 58, 260, 000 15, 926, 369 74, 186, 369 696, 885, 000 316, 702, 518 1,013, 587, 518

2035- 2039 32, 210, 000 6,950, 861 39, 160, 861 544, 055, 000 193, 002, 014 737, 057, 014

2040- 2044 15, 250, 000 3,595, 350 18, 845, 350 478, 300, 000 102, 213, 067 580, 513, 067

2045- 2049 14, 580, 000 1,233, 600 15, 813, 600 307, 790, 000 22, 525, 120 330, 315, 120

273, 065, 000 $ 108, 036, 553 $ 381, 101, 553 $ 3,418, 895, 000 $ 1,685, 452, 755 $ 5,104, 347, 755

Annual requirements to amortize contracts payable, including interest, are:

Water System

Principal Interest Total

2020 $ 1,597, 613 $ 860, 987 $ 2, 458, 600

2021 1,649, 224 809, 377 2, 458, 601

2022 1,702, 502 756, 098 2,458, 600

2023 1,757, 501 701, 099 2, 458, 600

2024 1,814, 277 644, 323 2, 458, 600

2025- 2029 4,737, 610 2,508, 776 7,246, 386

2030- 2034 2,304, 670 2,016, 731 4, 321, 401

2035- 2039 2,704, 719 1,616, 682 4, 321, 401

2040- 2044 3,174, 209 1,147, 192 4,321, 401

2045- 2049 3,725, 194 596, 207 4, 321, 401

2050- 2051 1,382, 787 67, 833 1, 450, 620

26, 550, 306 $ 11, 725, 305 $ 38, 275, 611

FINANCIAL

ANNUAL REPORT 2019

40



NOTE 9. DEFERRED INFLOWS OF RESOURCES

At September 30, 2019, deferred inflows of resources consisted of the following:

Balance at

October 1,

2018

Balance at

September

30, 2019AdditionsDeletions

Water System:

Deferred pension inflow $ 5, 939, 588 $ - $ ( 143, 977) $ 5, 795, 611

Deferred OPEB inflow 1, 039, 482 806, 469 - 1,845, 951

Deferred insurance proceeds 716, 542 - ( 290, 116) 426, 426

7, 695, 612 806, 469 ( 434, 093) 8,067, 988


Deferred pension inflow 1, 591, 541 - ( 37, 395) 1, 554, 146

Deferred OPEB inflow 243, 435 178, 749 - 422, 184

1, 834, 976 178, 749 ( 37, 395) 1, 976, 330

Sewer System:

Deferred pension inflow 577, 540 - ( 16, 081) 561, 459


695, 843 92, 035 ( 16, 081) 771, 797

Solid Waste System:

Deferred pension inflow 1, 439, 271 - ( 36, 570) 1, 402, 701


1, 637, 036 141, 447 ( 36, 570) 1, 741, 913

Interceptor System:

Deferred pension inflow 145, 776 - ( 5, 737) 140, 039


185, 578 29, 379 ( 5,737) 209, 220

Total $ 12, 049, 045 $ 1, 248, 079 $ ( 529, 876) $ 12, 767, 248

The Water Fund has an additional deferred inflow that represents an acquisition of net position that applies to a

future period The $ 426, 426 represents the unspent portion of the advance funds the District received from the

insurance company for the hail damage repairs during the 2016 fiscal year

FINANCIAL

ANNUAL REPORT 2019

41



NOTE 10. RETIREMENT PLAN

Plan Description

The District provides a Retirement Plan for Employees of North Texas Municipal Water District ( the Plan), a single

employer defined benefit pension plan, for all of its eligible full- time employees through an AETNA Life Insurance

Company group pension defined benefit fund contract The Plan is administered by the District’ s Executive Director/

General Manager The Plan does not issue separate financial statements An employee will become a participant

in the Plan on the first day of the month which coincides with or next follows the attainment of age 21 and the

completion of two years of eligibility service

Benefits Provided

Benefits are established and may be amended by the District’ s Board of Directors Benefits provided by the Plan

include retirement, disability and preretirement death benefits The benefit formula provides for a 10- year certain

and continuous annuity Preretirement death benefits are provided as a lump sum equal to the greater of the present

value of the accrued benefit or current vested wages The benefit at retirement is calculated as follows:

Normal Retirement ( age 65) — 3% of career compensation plus 1% of all yearly compensation in excess of

covered compensation for each year

Early Retirement ( over age 55 with at least 20 years of service) — The annual accrued benefit equals the

accrued benefit based on service to the early retirement date, reduced by 5% for each year a member

retires before the normal retirement date There is no reduction in benefits for a member who retires whose

age plus years of service total at least 85 ( 80 effective January 1, 2018)

Late Retirement ( after normal retirement date) — The benefit accrued to the late retirement date

Disability ( certified to be permanently and totally disabled on or after May 1, 1990) — 60% of final average

monthly compensation reduced by 64% of Social Security disability

Employees Covered by Benefit Terms

As of January 1, 2019, the participants comprised the following:

Active participants 715

Terminated vested participants 100

Disabled Participants 7

Retired participants 146

Beneficiaries 14

Total number of participants 982

The Plan’ s assets are invested in pooled mutual and commingled funds and are stated at fair value as determined

by the Plan’ s custodian

Contributions

The District’ s annual minimum contribution is actuarially calculated based on the amount required to prevent the

unfunded liability from increasing The significant actuarial assumptions used to compute the actuarially determined

contribution requirement are the same as those used to compute the actuarial accrued liability as set forth below

The unfunded actuarial accrued liability is amortized over a closed period of 30 years beginning January 1, 2014

Effective January 1, 2018, employees who enter service on or after January 1, 2018 shall make mandatory

contributions to the Plan at the rate of 5% of annual earnings and subject to 3 5% plan interest rate credits per year

For the plan years ended December 31, 2018, 2017, and 2016, the District made contributions of $ 6,450, 000,

6,765, 000, and $ 5,957, 000, respectively which represent 15 72%, 20 14%, and 18 75%, respectively of annual

covered payroll These contributions were based on actuarially determined contribution requirements through an

actuarial valuation performed at January 1, 2019, 2018, and 2017

FINANCIAL

ANNUAL REPORT 2019

42



NOTE 10. RETIREMENT PLAN (CONTINUED)

Actuarial Assumptions

Valuation date January 1, 2018 January 1, 2019

Measurement date December 31, 2017 December 31, 2018

Actuarial cost method Entry Age Normal Entry Age Normal

Inflation 2 25% 2 00%

Salary increases including inflation 4 00% 4 00%

Mortality

SOA RP- 2014 adjusted to 2006

mortality tables ( blue collar) and MP

2017 mortality improvement scales

SOA RP- 2014 adjusted to 2006

mortality tables ( blue collar) and MP

2018 mortality improvement scales

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions

about the probability of occurrence of events far into the future Examples include assumptions about future

employment and mortality trends Amounts determined regarding the funded status of the plan and the annual

required contributions of the employer are subject to continual revision as actual results are compared with past

expectations and new estimates are made about the future The schedule of funding progress, presented as required

supplementary information following the notes to the financial statements, presents multi- year trend information

that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial

accrued liabilities for benefits

Discount Rate

December 31, 2017 December 31, 2018

Discount rate 8 00% 8 00%

Long- term expected rate of return, net of investment expense 8 00% 8 00%

Long- Term Expected Rate of Return

Asset Class Index

Target

Allocation*

Long- Term Expected

Arithmetic Real Rate

of Return

Long- Term Expected

Geometric Real Rate

of Return

US Cash BAML 3- Mon Tbill 1 00% 0 39% 0 39%

US Short Bonds Barclays 1- 3 Yr Gvt/ Credit 4 00% 1 62% 1 58%

US Long Bonds Barclays LT Gvt/ Credit 5 00% 3 01% 2 61%

US Credit Bonds Barclays Credit 4 00% 3 09% 2 91%

US Large Caps S& P 500 21 00% 4 72% 3 62%

US Small Caps Russell 2000 32 00% 5 92% 4 11%

US Large Growth Russell 1000 Growth 11 00% 5 39% 3 91%

US Large Value Russell 1000 Value 11 00% 4 65% 3 57%

US Mid Cap Growth Russell MidCap Growth 11 00% 6 04% 3 86%

Assumed Inflation - Mean 2 30% 2 30%

Assumed Inflation - Standard Deviation 1 66% 1 66%

Portfolio Real Mean Return 5 01% 3 96%

Portfolio Nominal Mean Return 7 33% 6 35%

Portfolio Standard Deviation 14 73%

Long- Term Expected Rate of Return 8. 00%

As outlined in the Plan’ s investment policy dated December 31, 2015

FINANCIAL

ANNUAL REPORT 2019

43




Sensitivity Analysis

The following presents the net pension liability of the NTMWD, calculated using the discount rate of 8 00%, as well

as what the NTMWD’ s net pension liability would be if it were calculated using a discount rate that is 1 percentage

point lower ( 7 00%) or 1 percentage point higher ( 9 00%) than the current rate

1% Decrease

7.00%

Current Discount

Rate 8.00%

1% Increase

9.00%

Total pension liability $ 133, 331, 972 $ 116, 921, 100 $ 103, 382, 226

Fiduciary net position 80, 485, 836 80, 485, 836 80, 485, 836

Net pension liability 52, 846, 136 36, 435, 264 22, 896, 390

Pension Expense

For the year ended September 30, 2019, the District recognized pension expense of $8,964, 581 of which $ 5,383, 158

was allocated to the Water System, $ 1,398, 193 was allocated to the Wastewater System, $ 601, 286 was allocated

to the Sewer System, $ 1,367, 424 was allocated to the Solid Waste System, and $ 214, 520 was allocated to the

Interceptor System The breakdown of the components of pension expense are as follows:

Pension Expense

October

1, 2017 to

September 30,

2018

October

1, 2018 to

September 30,

2019

Service cost $ 2,897, 116 $ 3,428, 327

Interest on total pension liability 8,582, 317 9,450, 734

Effect of plan changes ( 842, 623) -

Administrative expenses - -

Member contributions - ( 97, 590)

Expected investment income ( net of expense) ( 5,793, 926) ( 6,781, 263)

Recognition of deferred inflows/ outflows of resources

Recognition of economic/ demographic gains or losses 600, 582 1,644, 208

Recognition of assumptions changes or inputs ( 1, 322, 756) ( 1,727, 834)

Recognition of investment gains or losses 628, 835 3,047, 999

Pension expense $ 4, 749, 545 $ 8,964, 581

FINANCIAL

ANNUAL REPORT 2019

44




Deferred Outflows/ Inflows of Resources Related to Pensions

At September 30, 2019, the District reported deferred outflows of resources and deferred inflows of resources

related to pensions from the following sources:

Deferred Inflows of

Resources

Deferred Outflows

of Resources

Differences between expected and actual experience $ ( 1, 515, 132) $ 13, 382, 000

Changes of assumptions ( 7, 938, 824) -

Net difference between projected and actual earnings - 8, 552, 184

Contributions made subsequent to measurement date - 3, 550, 004

Total $ ( 9, 453, 956) $ 25, 484, 188

The net amounts of the employer’ s balances of deferred outflows and inflows of resources related to pensions,

excluding contributions made subsequent to the measurement date, will be recognized in pension expense as

follows:

Year Ended September 30 Amount

2020 $ 3, 524, 823

2021 2, 251, 030

2022 2, 282, 568

2023 2, 953, 680

2024 625, 935

Thereafter 842, 192

12, 480, 228

Net Pension Liability

Increase ( Decrease)

Total Pension

Liability ( a)

Plan Fiduciary Net

Position ( b)

Net Pension

Liability ( a) - ( b)

Balances as of September 30, 2018 $ 106, 101, 709 $ 83, 770, 223 $ 22, 331, 486

Changes for the year:

Service cost 3, 428, 327 3, 428, 327

Interest on total pension liability 9,450, 734 9,450, 734

Effect of plan changes - -

Effect of economic/ demographic gains or losses 5,496, 264 5,496, 264

Effect of assumptions changes or inputs ( 3, 038, 517) ( 3, 038, 517)

Benefit payments ( 4, 517, 417) ( 4, 517, 417) -

Employer contributions 6, 450, 000 ( 6, 450, 000)

Member contributions 97, 590 ( 97, 590)

Net investment income ( 5,314, 560) 5,314, 560


Balances as of September 30, 2019 $ 116, 921, 100 $ 80, 485, 836 $ 36, 435, 264

FINANCIAL

ANNUAL REPORT 2019

45




Net Pension Liability - continued


Total pension liability $ 106, 101, 709 $ 116, 921, 100

Fiduciary net position 83, 770, 223 80, 485, 836


Fiduciary net position as a % of total pension liability 78 95% 68 84%

Covered payroll 33, 587, 415 41, 021, 844

Net pension liability as a % of covered payroll 66 49% 88 82%

The District’ s total pension liability was determined by an actuarial valuation as of the valuation date, calculated

based on the discount rate and actuarial assumptions described above There have been no significant changes

between the valuation date and the fiscal year end Any significant changes during this period must be reflected

as prescribed by GASB 67 and 68

The plan has not had a formal actuarial experience study performed

Pension plan fiduciary net position


Assets

Cash and cash equivalents $ 578, 390 $ 798, 902

Receivables and prepaid expenses - -

Investments:

Fixed income 10, 949, 158 10, 872, 839

Stocks 72, 242, 675 68, 814, 095

Total investments 83, 191, 833 79, 686, 934

Total assets 83, 770, 223 80, 485, 836

Liabilities

Total liabilities - -

Net position restricted for pensions $ 83, 770, 223 $ 80, 485, 836

FINANCIAL

ANNUAL REPORT 2019

46




Investment gains/ losses are recognized in pension expense over a period of five years; economic/ demographic

gains/ losses and assumption changes or inputs are recognized over the average remaining service life for all active

and inactive members Amounts reported as deferred outflows of resources and deferred inflows of resources

related to pensions will be recognized in pension expense as follows:

Original

Amount

Date

Established

Original

Recognition

Period*

Amount

Recognized

in Pension

Expense

for FYE

9/ 30/ 2019

Amount

Recognized

in Pension

Expense

through

9/ 30/ 2019

Balance of

Deferred

Inflows as of

9/ 30/ 2019

Balance of

Deferred

Outflows as

of 9/ 30/ 2019

Economic/$ 5, 496, 264 9/ 30/ 2019 7 5 $ 732, 732 $ 732, 732 $ - $ 4, 763, 532

demographic 6, 366, 137 9/ 30/ 2018 7 6 837, 650 1, 675, 300 - 4, 690, 837

gains) or ( 2, 503, 263) 9/ 30/ 2017 7 6 ( 329, 377) ( 988, 131) ( 1, 515, 132) -

losses 8, 442, 147 9/ 30/ 2016 7 5 1, 128, 629 4, 514, 516 - 3, 927, 631

4, 870, 706) 9/ 30/ 2015 4 7 ( 725, 426) ( 4, 870, 706) - -

Total 1, 644, 208 1, 063, 711 ( 1, 515, 132) 13, 382, 000

Assumption ( 3, 038, 517) 9/ 30/ 2019 7 5 ( 405, 078) ( 405, 078) ( 2, 633, 439) -

changes or ( 1, 928, 083) 9/ 30/ 2018 7 6 ( 253, 695) ( 507, 390) ( 1,420, 693) -

inputs ( 1, 115, 300) 9/ 30/ 2017 7 6 ( 146, 750) ( 440, 250) ( 675, 050) -

6, 898, 886) 9/ 30/ 2016 7 5 ( 922, 311) ( 3, 689, 244) ( 3, 209, 642) -

Total ( 1, 727, 834) ( 5, 041, 962) ( 7,938, 824) -

Investment 12, 095, 823 9/ 30/ 2019 5 0 2, 419, 165 2, 419, 165 - 9, 676, 658

gains) or ( 3, 891, 989) 9/ 30/ 2018 5 0 ( 778, 398) ( 1, 556, 796) ( 2, 335, 193)

losses ( 157, 685) 9/ 30/ 2017 5 0 ( 31, 537) ( 94, 611) ( 63, 074) -

6, 368, 973 9/ 30/ 2016 5 0 1, 273, 795 5, 095, 180 - 1, 273, 793

824, 874 9/ 30/ 2015 5 0 164, 974 824, 874 - -

Total 3, 047, 999 6, 687, 812 ( 2, 398, 267) 10, 950, 451

Total for economic/ demographic gains or losses

and assumption changes or inputs ( 9, 453, 956) 13, 382, 000

Net deferred ( inflows)/ outflows for investment gains or losses - 8,552, 184

Total deferred ( inflows)/ outflows ( 9, 453, 956) 21, 934, 184

Total net deferrals 12, 480, 228

In addition to this retirement plan, the District provides health and dental care benefits for certain retirees and

their spouses up to age 65 The District pays 100 percent of the health and dental care premiums for participants

currently eligible for benefits

For the year ended September 30, 2019, the District contributed $ 1,275, 000, related to these benefits, of which

767, 995 was allocated to the Water System, $ 194, 235 was allocated to the Wastewater System, $ 87, 275 was

allocated to the Sewer System, $ 193, 470 was allocated to the Solid Waste System, and $ 32, 025 was allocated to

the Interceptor System See Note 14 for additional disclosure information related to the District’ s postemployment

benefits

FINANCIAL

ANNUAL REPORT 2019

47



NOTE 11. COMMITMENTS AND CONTINGENCIES

Commitments

Remaining commitments under construction contracts as of September 30, 2019 were as follows:

Capital

Improvement

FundsPayablefrom:

Restricted

Bond Funds

Total

Commitments

Regional Water System $ 107, 431, 553 $ 887, 804, 773 $ 995, 236, 326

Regional Wastewater System 1, 589, 042 98, 581, 936 100, 170, 978

Regional Sewer System 4, 102, 942 21, 865, 592 25, 968, 534

Regional Solid Waste System 378, 693 5,169, 999 5,548, 692

Upper East Fork Interceptor System 978, 442 66, 093, 498 67, 071, 940

114, 480, 672 $ 1,079, 515, 798 $ 1, 193, 996, 471

Contingencies

The District is involved in threatened litigation and lawsuits arising in the ordinary course of business, including

claims involving contract disputes In the opinion of the District’ s management, potential liability in these matters

will not have a material impact on the financial statements as of September 30, 2019

NOTE 12. CLOSURE AND POSTCLOSURE CARE COSTS

State and Federal laws and regulations require the District to place a final cover on its landfill sites when it stops

accepting waste and to perform certain maintenance and monitoring functions at the sites for 30 years after

closure Although closure and postclosure care costs will be paid only near or after the date that the landfill stops

accepting waste, the District accrues a portion of these estimated closure and postclosure care costs in each period

based on landfill capacity used as of each balance sheet date At September 30, 2019, a liability of $6,194, 441 for

landfill closure and postclosure care costs has been accrued in the Solid Waste System Fund in the accompanying

statement of net position

Beginning Liability Additions Reductions Ending Liability

5, 896, 275 $ 298, 166 $ - $ 6,194, 441

The $ 6,194, 441 reported as landfill closure and postclosure care liability at September 30, 2019, includes $ 215, 179

for Transfer Stations, $ 1,539, 942 for the Maxwell Creek Landfill, $ 2, 870, 453 for the McKinney Landfill and $ 1, 568, 867

for the 121 Regional Disposal Facility, which represents the cumulative amount reported to date based on the use of

15% of the estimated capacity of the 121 Regional Disposal Facility The Maxwell Creek Landfill was closed during

2006 and the McKinney Landfill was closed during 2009 The District will recognize the remaining cost of closure

and postclosure care of $ 8,939, 284 for the 121 Regional Disposal Facility as the remaining estimated capacity is

filled These amounts are based on what it would cost to perform all closure and postclosure care at September

30, 2019 Based upon the current utilization of capacity, the remaining expected life of the 121 Regional Disposal

Facility is estimated to be 83 years Actual costs may be higher due to inflation, changes in technology, or changes

in laws or regulations

The District is required to provide financial assurance for closure and postclosure care to the State of Texas In

accordance with current regulations, a local government may demonstrate financial assurance for closure and

postclosure care, or corrective action by satisfying certain requirements Management of the District believes they

have satisfied such requirements

FINANCIAL

ANNUAL REPORT 2019

48



NOTE 13. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors

and omissions; injuries to employees; and natural disasters Commercial insurance is purchased for fire and extended

coverage for the buildings, plants, structures and contents with a $25, 000 deductible per occurrence Commercial

insurance is also provided under a commercial floater policy, which covers the heavy off- road equipment with a

10, 000 deductible per occurrence The District is a member of a public entity risk pool operating as a common

risk management and insurance program for a number of water districts and river authorities within the State of

Texas Coverage provided by the pool consists of workers’ compensation, general liability, automobile liability,

directors’ and officers’ liability, and automobile physical damage Annual premiums are paid to the pool The pool

is self- sustaining through member premiums and the purchase of reinsurance through commercial companies The

amount of settlements did not exceed insurance coverage for the last three fiscal years

The District maintains a self- insurance program for the employee group medical program A third- party administrator

is utilized to provide claims administration and payment of claims Insurance is purchased to provide specific stop

loss and aggregate stop loss protection

The liability for insurance claims is based on GASB Statement No 10, which requires that a liability for claims be

reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has

been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated These

liabilities are based upon the insurance company’ s figures for the District’ s liability for termination claims upon the

termination of the policy year and the stop loss premium for any claims above the District’ s liability Additionally, the

liability for unpaid claims includes the effects of specific incremental claims, adjustment expenses, and if probable

and material, salvage, and subrogation The liability is reported with accounts payable and accrued liabilities in the

statement of net position Changes in the employees’ health claims liability amount in fiscal September 30, 2019

and 2018 were:

Claims

Liability Incurred and Current Year Liability

Fiscal Beginning Change in Claim End of

Year of Year Estimates Payments Year

2018 $ 1, 764, 616 $ 11, 419, 840 $ 11, 336, 818 $ 1, 847, 638

2019 1, 847, 638 13, 054, 407 13, 145, 663 $ 1, 756, 382

FINANCIAL

ANNUAL REPORT 2019

49



NOTE 14. OTHER POSTEMPLOYMENT BENEFITS

Plan Description and Benefits Provided

The District’ s defined benefit other postemployment benefits ( OPEB) plan provides OPEB in the form of health and

dental insurance benefits for certain retirees and their spouses up to age 65 through a single- employer defined

medical plan These benefits are funded 100 percent by the District for the currently eligible retirees and their

spouses A third- party administrator is utilized to provide claims administration and payment of claims Insurance

is purchased to provide specific stop loss and aggregate stop loss protection

The District does not issue separate audited financial statements for its plan

Employees Covered by Benefit Terms

As of September 30, 2019, the participants comprised the following:

Actives 705

Retirees 38

Beneficiaries -

Spouses of Retirees 21

Total number of participants 764

Contributions

The District’ s funding policy is established and may be amended by the District’ s Board of Directors The District

has established an irrevocable trust fund to accumulate assets for payment of future OPEB benefits The District

pre- funds benefits through contributions to the trust The current funding policy is to contribute at least the

Actuarially Determined Contribution as calculated by the actuary The Actuarially Determined Contribution is the

sum of the current year’ s normal cost plus an amount necessary to amortize the unfunded liability over a closed

20 year period beginning October 1, 2017

OPEB Plan Fiduciary Net Position

September 30, 2018 September 30, 2019

Assets

Cash and cash equivalents $ 158, 824 $ -

Receivables and prepaid expenses - -

Investments:

Fixed income 2,222, 180 2,033, 868

Stocks 4,175, 627 4,869, 514

Real estate 324, 034 -

Alternative investments 1,112, 322 1,316, 447

Total investments 7,834, 163 8,219, 829

Total assets 7,992, 987 8,219, 829

Liabilities

Total liabilities - -

Net position restricted for OPEB $ 7,992, 987 $ 8,219, 829

FINANCIAL

ANNUAL REPORT 2019

50



NOTE 14. OTHER POSTEMPLOYMENT BENEFITS ( CONTINUED)

Net OPEB Liability

The District’ s total OPEB liability was determined by an actuarial valuation as of the valuation date, calculated

based on the discount rate and actuarial assumptions below, and then was projected to the measurement date

Any significant changes during this period have been reflected as prescribed by GASB 75

Actuarial Methods and Assumptions

The total OPEB liability in the September 30, 2019, actuarial valuation was determined using the following actuarial

assumptions, applied to all periods included in the measurement, unless otherwise specified:

Inflation 2 30%

Salary increases including inflation 3 00%

Long - Term Expected Rate of Return 7 50%

4 8% for 2019, gradually increasing to an

Healthcare Cost Trend Rates ( Medical) ultimate rate of 5 0% between 2033 and 2041

and gradually decreasing to 3 9% in 2075

4 1% for 2019, gradually increasing until 2027

Healthcare Cost Trend Rates ( Dental) to a rate of 5 0% through 2036 and increasing to

5 1% through 2041 and gradually decreasing to 3 9% in 2075

Mortality rates ( preretirement) were based on the RP- 2014 Blue Collar Mortality Table for healthy employees

projected backward to 2006 with Mortality Improvement Scale MP- 2014 and then forward with Mortality Improvement

Scale MP- 2018 on a generational basis Mortality rates ( post- retirement) were based on the RP- 2000 Blue Collar

Mortality Table for healthy annuitants projected with Mortality Improvement Scale MP- 2018 on a generational basis

The plan has not had a formal actuarial experience study performed

Long- Term Expected Rate of Return

The assumption for the long- term expected rate of return is determined by adding expected inflation to expected

long- term real returns and reflecting expected volatility and correlation The capital market assumptions are per

Milliman’ s investment consulting practice as of June 30, 2019

Asset Class Index

Target

Allocation*

Long- Term

Expected

Arithmetic Real

Rate of Return

Long- Term

Expected

Geometric Real

Rate of Return

US Core Fixed Income Barclays Aggregate 15 00% 1 83% 1 73%

US High Yield Bonds BAML High Yield 5 00% 4 00% 3 54%

Global Bonds Citi WGBI 5 00% 0 48% 0 22%

US Large Caps S& P 500 10 00% 4 44% 3 33%

US Equity Market Russell 3000 15 00% 4 71% 3 52%

US Small Caps Russell 2000 6 00% 5 76% 3 91%

US Mid Caps Russell MidCap 3 00% 4 81% 3 38%

Foreign Developed Equity MSCI EAFE NR 10 00% 6 06% 4 55%

Emerging Markets Equity MSCI EM NR 15 00% 8 23% 5 43%

FINANCIAL

ANNUAL REPORT 2019

51




Long- Term Expected Rate of Return - continued

Asset Class Index

Target

Allocation*

Long- Term

Expected

Arithmetic Real

Rate of Return

Long- Term

Expected

Geometric Real

Rate of Return

Strategic Global Convertibles HFRI FOF Strategic 5 00% 2 98% 2 50%

Income Opportunity HFRI Event- Driven 6 00% 3 59% 3 23%

Assumed Inflation - Mean 2 30% 2 30%

Assumed Inflation - Standard Deviation 1 85% 1 85%

Portfolio Real Mean Return 4 54% 3 87%

Portfolio Nominal Mean Return 6 75% 6 15%

Portfolio Standard Deviation 11 61%

Long- Term Expected Rate of Return 7.50%

Discount Rate

The plan’ s fiduciary net position was not projected to be available to make all projected future benefit payments of

current active and inactive employees Therefore, the discount rate for calculating the total OPEB liability is equal

to the single equivalent rate that results in the same actuarial present value as the long- term expected rate of

return applied to benefit payments, to the extent that the plan’ s fiduciary net position is projected to be sufficient

to make projected benefit payments, and the municipal bond rate applied to benefit payments, to the extent that

the plan’ s fiduciary net position is not projected to be sufficient

Changes in Net OPEB Liability

Increase ( Decrease)

Total OPEB

Liability ( a)

Plan Fiduciary

Net Position ( b)

Net OPEB

Liability ( a) - ( b)

Balances as of September 30, 2018 $ 12, 335, 323 $ 7,992, 987 $ 4,342, 336

Changes for the year:

Service cost 373, 671 373, 671

Interest on total OPEB liability 953, 174 953, 174


Effect of economic/ demographic gains or losses ( 1,676, 805) ( 1,676, 805)

Effect of assumptions changes or inputs ( 83, 112) ( 83, 112)

Benefit payments - - -

Employer contributions - -

Member contributions - -

Net investment income 226, 842 ( 226, 842)


Balances as of September 30, 2019 $ 11, 902, 251 $ 8,219, 829 $ 3,682, 422

FINANCIAL

ANNUAL REPORT 2019

52




Sensitivity Analysis

The following presents the net OPEB liability of the District, calculated using the discount rate of 7 5%, as well as

what the District’ s net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point

lower ( 6 5%) or 1 percentage point higher ( 8 5%) than the current rate

1% Decrease

6. 50%

Current Discount

Rate 7. 50%

1% Increase

8. 50%

Total OPEB liability $ 12, 885, 761 $ 11, 902, 251 $ 11, 036, 295


Net OPEB liability 4, 665, 932 3, 682, 422 2, 816, 466

The following presents the net OPEB liability of the District, calculated using the current healthcare cost trend

rate of 4 8%, as well as what the District’ s net OPEB liability would be if it were calculated using a healthcare cost

trend rate that is 1 percentage point lower ( 3 8%) or 1 percentage point higher ( 5 8%) than the current healthcare

cost trend rate

1% Decrease

3. 8%

Current Trend

Rate 4. 8%

1% Increase

5. 8%

Total OPEB liability $ 10, 944, 996 $ 11, 902, 251 $ 13, 014, 948


Net OPEB liability 2, 725, 167 3, 682, 422 4, 795, 119

OPEB Expense

For the year ended September 30, 2019, the District recognized OPEB expense of $ 502, 535 The breakdown of

the components of OPEB expense are as follows:

OPEB Expense

October 1, 2017

to September 30,

2018

October 1, 2018

to September 30,

2019

Service cost $ 406, 197 $ 373, 671

Interest on total OPEB liability 831, 865 953, 174



Member contributions - -

Expected investment income ( net of expense) ( 540, 785) ( 599, 474)

Recognition of deferred inflows/ outflows of resources

Recognition of economic/ demographic gains or losses ( 19, 331) ( 221, 356)

Recognition of assumptions changes or inputs ( 29, 899) ( 69, 912)

Recognition of investment gains or losses ( 8, 094) 66, 432

OPEB expense $ 639, 953 $ 502, 535

FINANCIAL

ANNUAL REPORT 2019

53




Deferred Outflows/ Inflows of Resources Related to OPEB

At September 30, 2019, the District reported deferred inflows and outflows of resources from the following sources:

Deferred

Inflows of

Resources

Deferred

Outflows of

Resources

Differences between expected and actual experience $ ( 2,322, 056) $ 811, 071

Changes of assumptions ( 564, 810) 70, 340

Net difference between projected and actual earnings - 304, 381

Total $ ( 2,886, 866) $ 1,185, 792

Amounts currently reported as deferred outflows and inflows of resources related to OPEB will be recognized in

OPEB expense as follows:

Year Ended

December 31 Amount

2020 $ ( 224, 836)

2021 ( 224, 834)

2022 ( 194, 281)

2023 ( 216, 740)

2024 ( 291, 268)

Thereafter ( 549, 115)

1,701, 074)

Note that additional future deferred inflows and outflows of resources may impact these numbers

FINANCIAL

ANNUAL REPORT 2019

54




Schedule of Deferred Inflows and Outflows of Resources Related to OPEB

Investment gains/ losses are recognized in OPEB expense over a period of five years; economic/ demographic gains/

losses and assumption changes or inputs are recognized over the average remaining service life for all active and

inactive members Amounts reported as deferred outflows of resources and deferred inflows of resources related

to OPEB were recognized in OPEB expense as follows:

Original

Amount

Date

Established

Original

Recognition

Period*

Amount

Recognized

in Expense

for FYE

9/ 30/ 2019

Amount

Recognized

in Expense

through

9/ 30/ 2019

Balance of

Deferred

Inflows

9/ 30/ 2019

Balance of

Deferred

Outflows

9/ 30/ 2019

Economic/

demographic $ ( 1, 676, 805) 9/ 30/ 2019 8 3 $ ( 202, 025) $ ( 202, 025) $ ( 1,474, 780) $ -

demographic 1, 046, 165 9/ 30/ 2018 8 9 117, 547 235, 094 - $ 811, 071

gains) or losses ( 1, 257, 910) 9/ 30/ 2017 9 2 ( 136, 878) ( 410, 634) ( 847, 276) -

Total ( 221, 356) ( 377, 565) ( 2, 322, 056) 811, 071

Assumption ( 83, 112) 9/ 30/ 2019 8 3 ( 10, 013) ( 10, 013) ( 73, 099) -

changes or ( 634, 235) 9/ 30/ 2018 8 9 ( 71, 262) ( 142, 524) ( 491, 711) -

inputs 104, 429 9/ 30/ 2017 9 2 11, 363 34, 089 - 70, 340

Total ( 69, 912) ( 118, 448) ( 564, 810) 70, 340

Investment 372, 632 9/ 30/ 2019 5 0 74, 526 74, 526 - 298, 106

gains) or 112, 301 9/ 30/ 2018 5 0 22, 460 44, 920 - 67, 381

losses ( 152, 768) 9/ 30/ 2017 5 0 ( 30, 554) ( 91, 662) ( 61, 106) -

Total 66, 432 27, 784 ( 61, 106) 365, 487

Total for economic/ demographic gains or losses

and assumption changes or inputs ( 2, 886, 866) 881, 411

Net deferred ( inflows)/ outflows for investment gains or losses - 304, 381

Total deferred ( inflows)/ outflows ( 2,886, 866) 1,185, 792

Total net deferrals ( 1,701, 074)

FINANCIAL SECTION

REQUIRED SUPPLEMENTARY INFORMATION

PENSION & OPEB TREND INFORMATION ( UNAUDITED)

FINANCIAL

ANNUAL REPORT 2019

57


North Texas Municipal Employee Retirement System

Schedule of Changes in Net Pension Liability and Related Ratios

Last 10 Fiscal Years

Dollar amounts in 1,000s)

Year Ended

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Total Pension Liability

Service cost $ 3,428 $ 2,897 $ 2,517 $ 3,058 $ 2, 166 $ 2,005 N/ A N/ A N/ A N/ A

Interest on total pension

liability 9,451 8, 582 7,643 6, 614 6, 387 5, 854 N/ A N/ A N/ A N/ A

Effect of plan changes - ( 843) - - - N/ A N/ A N/ A N/ A N/ A

Effect of economic/

demographic gains or

losses) 5,496 6, 366 ( 2,503) 8, 442 ( 4, 871) 1, 527 N/ A N/ A N/ A N/ A

Effect of assumptions

changes or inputs ( 3,039) ( 1, 928) ( 1,115) ( 6, 899) - 154 N/ A N/ A N/ A N/ A

Benefit payments ( 4,517) ( 3,507) ( 3,092) ( 2,617) ( 2, 055) ( 1,700) N/ A N/ A N/ A N/ A

Net change in total pension

liability 10, 819 11, 568 3,450 8, 599 1, 627 N/ A N/ A N/ A N/ A N/ A

Total pension liability,

beginning 106, 102 94, 534 91, 085 82, 486 80, 859 73, 020 55, 436 47, 048 39, 331 34, 596

Total pension liability,

ending ( a) 116, 921 106, 102 94, 534 91, 085 82, 486 80, 859 73, 020 55, 436 47, 048 39, 331

Fiduciary Net Position

Employer contributions $ 6,450 $ 6, 765 $ 5,957 $ 4, 999 $ 5, 595 $ 4, 945 N/ A N/ A N/ A N/ A

Member contributions 98 - - - - N/ A N/ A N/ A N/ A N/ A

Investment income net of

investment expenses ( 5,315) 9, 686 5,284 ( 1, 337) 3, 689 7, 436 N/ A N/ A N/ A N/ A

Benefit payments ( 4,517) ( 3, 507) ( 3,092) ( 2, 617) ( 2, 055) ( 1, 700) N/ A N/ A N/ A N/ A

Administrative expenses - - - ( 195) ( 180) ( 159) N/ A N/ A N/ A N/ A

Net change in fiduciary net

position ( 3,284) 12, 944 8,149 850 7, 049 10, 522 N/ A N/ A N/ A N/ A

Fiduciary net position,

beginning 83, 770 70, 827 62, 678 61, 828 54, 779 44, 257 35, 949 32, 430 27, 146 19, 735


ending ( b) 80, 486 83, 770 70, 827 62, 678 61, 828 54, 779 44, 257 35, 949 32, 430 27, 146

Net pension liability, ending

a) - ( b) 36, 435 22, 331 23, 708 28, 407 20, 658 26, 081 28, 763 19, 487 14, 618 12, 185

Fiduciary net position as a

of total pension liability 68 84% 78 95% 74 92% 68 81% 74 96% 67 75% 60 61% 64 85% 68 93% 69 02%

Covered payroll $ 41, 022 $ 33, 587 $ 31, 778 $ 30, 085 $ 26, 655 $ 25, 929 $ 24, 859 $ 24, 256 $ 23, 572 $ 22, 514

Net pension liability as a %

of covered payroll 88 82% 66 49% 74 60% 94 42% 77 50% 100 58% 115 70% 80 34% 62 02% 54 12%

Notes to Schedule:

Changes of assumptions. The mortality assumptions were updated from Projection Scale MP- 2016 to Projection Scale MP- 2017.

Data prior to 2014 is not available Additional years’ information will be displayed as it becomes available

NOTE: The District implemented GASB Statement No 68 in FY 2015 Information in this table has been determined as of the

measurement date ( December 31) of the net pension liability and will ultimately contain information for ten years

FINANCIAL

ANNUAL REPORT 2019

58


North Texas Municipal Employee Retirement System

Schedule of Employer Contributions



Fiscal Year Ending September 30,

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Actuarially Determined

Contribution $ 5, 195 $ 5, 213 $ 5, 034 $ 4, 600 $ 4, 386 $ 4, 504 $ 4, 555 $ 3, 841 $ 3, 291 $ 3, 333

Actual Employer

Contribution 6, 450 6, 765 5, 957 4, 999 5, 595 4, 945 5, 022 3, 925 3, 345 3, 351

Contribution Deficiency

Excess) ( 1, 255) ( 1, 552) ( 923) ( 399) ( 1, 209) ( 441) ( 467) ( 84) ( 54) ( 18)

Covered Payroll*$ 47, 598 $ 33, 587 $ 31, 778 $ 30, 085 $ 26, 655 $ 25, 929 $ 24, 859 $ 24, 256 $ 23, 572 $ 22, 514

Contributions as a %

of Covered Payroll 13 55% 20 14% 18 75% 16 62% 20 99% 19 07% 20 20% 16 18% 14 19% 14 89%

Covered payroll for 2019 is for the fiscal year period ending September 30 Covered payroll for 2010- 2018 is for the fiscal year period

ending December 31 within each year

FINANCIAL

ANNUAL REPORT 2019

59


North Texas Municipal Employee Other Postemployment Benefits Plan

Schedule of Changes in Net OPEB Liability and Related Ratios




2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Total OPEB Liability

Service cost $ 374 $ 406 $ 432 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Interest on total OPEB liability 953 832 826 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Changes on benefit terms - - - N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Effect of economic/

demographic gains or ( losses) ( 1, 677) 1,046 ( 1, 258) N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Effect of assumptions changes

or inputs ( 83) ( 634) 104 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Benefit payments - - 0 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Net change in total OPEB

liability ( 433) 1,650 104 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Total OPEB liability, beginning 12, 335 10, 685 10, 581 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Total OPEB liability, ending ( a) 11, 902 12, 335 10, 685 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Fiduciary Net Position

Employer contributions - 696 600 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Net investment income 227 428 600 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Benefit payments - - - N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Administrative expenses - - - N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Net change in fiduciary net

position 227 1,124 1, 200 N/ A N/ A N/ A N/ A N/ A N/ A N/ A


beginning 7, 993 6,869 5, 669 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Fiduciary net position, ending

b) 8, 220 7,993 6, 869 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Net OPEB liability, ending =

a) - ( b) 3, 682 4,342 3, 816 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Fiduciary net position as a %

of total OPEB liability 69 06% 64 80% 64 28% N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Covered payroll ( as reported

with pension data)$ 47, 598 $ 33, 587 $ 31, 778 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Net OPEB liability as a % of

covered payroll 7 74% 12 93% 12 01% N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Notes to Schedule:

Changes of benefit terms. There were no substantial changes to benefits between 2018 and 2019.

Changes of assumptions. The mortality table was updated to reflect the MP- 2018 improvement scale ( from MP- 2017)


FINANCIAL

ANNUAL REPORT 2019

60


North Texas Municipal Employee Other Postemployment Benefits Plan

Schedule of NTMWD Contributions




2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Actuarially Determined

Contribution $ 864 $ 832 $ 669 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Actual Employer

Contribution - 696 600 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Contribution Deficiency

Excess) 864 137 69 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Covered Payroll $ 47, 598 $ 33, 587 $ 31, 778 N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Contributions as a %

of Covered Payroll 0 00% 2 07% 1 89% N/ A N/ A N/ A N/ A N/ A N/ A N/ A

Notes to Schedule:

Valuation Timing

Actuarial valuations for funding purposes are performed

annually as of October 1

Actuarial Cost Method Entry Age Normal

Amortization Method N/ A

Asset Valuation Method Market Value

Inflation 2 30%

Salary Increases 3 00%

Discount Rate 7 50%

Healthcare Cost Trend

Rates ( Medical)

4 8% for 2019, gradually increasing to an ultimate rate of 5 0% between 2033 and 2041 and gradually

decreasing to 3 9% in 2075

Healthcare Cost Trend

Rates ( Dental)

4 1% for 2019, gradually increasing until 2027 to 5 0% through 2036 and increasing to 5 1% through

2041 and gradually decreasing to 3 9% in 2075

Retirement age

Participants are assumed to retire at the earlier of their Normal Retirement Age or the eligibility for

unreduced early retirement benefit under the

Retirement Plan

Mortality Adjusted RPH- 2014 Blue Collar with MP- 2018 Projection

2017 and 2018 payroll as reported with pension data 2019 payroll shows fiscal year ending September 30, 2019 reported with OPEB data


APPENDIX B


MISCELLANEOUS STATISTICAL DATA

FISCAL YEAR ENDED SEPTEMBER 30, 2019

B - 1

MISCELLANEOUS STATISTICAL DATA Authority created under Chapter 62, Acts of 1951, and 52nd Legislature.

Year of Creation 1951

Domicile Wylie, Texas

District Population 1,700,000

District Service Area 2,200 Square Miles

Water Treatment Plant 420 acres

Average Annual Rainfall 58.52 inches

Total Employees 826

REGIONAL WATER SYSTEM

Raw Water Supply: Safe Yield

Lake Lavon 102.6 MGD

Lake Texoma 82.8 MGD

Jim Chapman Lake 44.6 MGD

Lake Bonham 4.8 MGD

Lake Tawakoni 45.7 MGD

Wilson Creek Reuse 44.0 MGD

East Fork Raw Water Supply 27.0 MGD

Ray Hubbard Pass Through 18.8 MGD

Total 370.3 MGD

Water Treatment Plants: Capacity

Wylie - Plant I 70 MGD

Wylie - Plant II 280 MGD

Wylie - Plant III 280 MGD

Wylie - Plant IV 140 MGD

Bonham 6.6 MGD

Tawakoni 30 MGD

Total 806.6 MGD

Transmission Pipelines

12" to 24" Diameter 116.0 Miles



Total 576.0 Miles

B - 2

RAW WATER PUMP STATIONS

Lavon - 3 sites

Total raw water pumps 17

Total raw water pumping capacity 940 MGD

Texoma - 1 site



Jim Chapman - 1 site



East Fork Raw Water Supply - 2 sites



Lake Tawakoni - 2 sites



Wylie Water Plant - treated water pump stations 7

Wylie Water Plant - treated water pumping capacity 953.5 MGD

NTMWD treated water storage reservoirs

Treatment plant storage 42.0 million gallons

Transmission system storage 368.00 million gallons

410.00 million gallons

Total City delivery points 82

B - 3

REGIONAL WASTEWATER SYSTEM REGIONAL SYSTEM

Permitted

Regional Wastewater Plants Capacity

Floyd Branch RWWTP* 4.750 MGD

South Mesquite RWWTP* 33.000 MGD

Rowlett Creek RWWTP* 24.000 MGD

Wilson Creek RWWTP* 56.000 MGD SEWER SYSTEM

City System

Farmersville Farmersville No. 1 Plant 0.225 MGD

Farmersville No. 2 Plant 0.530 MGD

Frisco Cottonwood Creek Plant** 0.300 MGD

Panther Creek Plant* 10.000 MGD

Stewart Creek West Plant* 5.000 MGD

Lavon Bear Creek Plant 0.250 MGD

Rockwall North Rockwall Plant* 1.200 MGD

South Rockwall Plant* 2.250 MGD

Royse City Royse City Plant 0.500 MGD

Royse City and Fate Sabine Creek Plant* 3.000 MGD

Seis Lagos MUD Seis Lagos Plant 0.250 MGD

Wylie and Murply* Muddy Creek Plant* 10.000 MGD

Wylie Wylie Plant* 2.000 MGD

Total Treatment Capacity 153.255 MGD

Total number of plants - 17

* Number of plants owned by NTMWD - 11** The Cottonwood Creek Plant has since been decomissioned

REGIONAL INTERCEPTORS

Regional Interceptors: (Pipeline Length)

Upper East Fork Interceptor Systems 163.0 Miles

Lakeside Interceptor (Rockwall) 4.3 Miles

Muddy Creek Interceptor 4.2 Miles

Forney Interceptor 7.2 Miles

Sabine Creek Interceptor 3.2 Miles

Parker Creek Interceptor 5.1 Miles

Buffalo Creek Interceptor 16.3 Miles

McKinney Interceptor System 3.1 Miles

Mustang Creek Interceptor System 7.6 Miles

Parker Creek Parallel Interceptor 1.5 MilesLower East Fork Interceptor 9.4 Miles

Total 224.7 Miles

APPENDIX C

NORTH TEXAS MUNICIPAL WATER DISTRICT REGIONAL WASTEWATER SYSTEM

WATERWORKS AND SEWER SYSTEM FINANCIAL DATA (1)(2)

FOR CERTAIN MEMBER CITIES

_______________ (1) Financial data is being presented herein only for the Member Cities which meet the definition of a "Significant Obligated

Person" for purposes of continuing disclosure as described herein under "OTHER INFORMATION – Continuing Disclosure ofInformation."

(2) The following condensed operating schedules in this Appendix C have been compiled using a presentation customarilyemployed in the determination of net revenues available for debt service, and in all instances exclude depreciation, transfers,debt service payments and expenditures identified as capital.

C - 1

CITY OF MESQUITE

WATERWORKS AND SEWER SYSTEM CONDENSED STATEMENT OF OPERATIONS

2019 2018 2017 2016 2015Revenues (1) 70,519,694$ 68,430,178$ 63,465,144$ 59,676,483$ 53,676,246$

Expenditures (2)

Personal Services 6,921,044$ 6,865,091$ 6,940,303$ 6,470,854$ 6,062,692$

Supplies 278,465 534,318 383,017 1,598,254 1,353,570

Contractual Services 46,507,634 39,770,192 36,333,541 33,411,148 30,126,661

Transfers Out 1,072,020 5,072,020 6,265,095 5,419,554 -

54,779,163$ 52,241,621$ 49,921,956$ 46,899,810$ 37,542,923$

Net Income 15,740,531$ 16,188,557$ 13,543,188$ 12,776,673$ 16,133,323$

Water Customers 40,709 40,633 40,471 40,304 40,115

Sewer Customers 38,972 38,877 38,735 38,601 38,811


Waterworks and Sewer System Revenue Bonds Outstanding (as of 9-30-19) 85,235,000$

Average Annual Principal and Interest Requirements, 2020-2039 5,520,543$

Coverage of Average Annual Principal and Interest Requirements by 9-30-19 by Net Income 2.85 Times

Interest and Sinking Fund (as of 9-30-19) 3,021,000$

Reserve Fund (as of 9-30-19) 808,652$ _______________ (1) Includes operating and non-operating income(2) Effective with fiscal year 2016, transfers out are included in Expenditures.(3) Remaining required balance with surety bond policies.

C - 2

MONTHLY WATER RATES - (EFFECTIVE OCTOBER 1, 2019)

Residential and Commercial

0.625 inch meter 15.16$ (Minimum)

1.000 inch meter 21.06 (Minimum)






0-1,000 gallons -$ included in minimum

1,001 - 5,000 gallons 6.58 per 1,000 gallons




70,001 - 500,000 gallons 8.14 per 1,000 gallonsOver 500,000 gallons 6.73 per 1,000 gallons

Apartments (per unit)

0-1,000 gallons -$ minimum per unit(1)

1,001 - 5,000 gallons 6.58 per 1,000 gallons per unit(1)





Over 500,000 gallons 6.73 per 1,000 gallons per unit(1)

_______________ (1) Apartment complexes with more than one unit are billed by dividing the total number of gallons consumed by the number ofunits in the apartment complex and computing the bill as though each unit was a separate residence using the average number ofgallons

MONTHLY SEWER RATES - (EFFECTIVE OCTOBER 1, 2019)

Residential

First 1,000 Gallons of water used $16.39

Over 1,000 Gallons if water used

(8,000 gallons maximum) $6.44/1,000 gallons

Commercial


Over 1,000 Gallons if water used $6.44/1,000 gallons

Apartments


Over 1,000 Gallons if water used $6.44/1,000 gallons

C - 3

CITY OF PLANO



2019 2018 2017 2016 2015

Revenues 168,466,426$ 170,102,046$ 144,235,884$ 141,042,921$ 132,436,606$

Expenditures (1)

Water Purchased 74,718,352$ 72,334,642$ 65,688,523$ 59,057,251$ 50,579,800$

Sewer Contract 32,027,437 31,430,015 30,197,147 27,597,420 24,639,784

Other 35,138,202 32,072,386 32,921,969 32,293,404 29,136,782

141,883,991$ 135,837,043$ 128,807,639$ 118,948,075$ 104,356,366$

Net Income 26,582,435$ 34,265,003$ 15,428,245$ 22,094,846$ 28,080,240$

Water Customers 81,772 81,346 84,081 82,388 80,371

Sewer Customers 79,232 78,952 79,225 77,767 77,591

_______________ (1) Excludes depreciation and bonded debt amortization.

Waterworks and Sewer System Revenue Bonds Outstanding (as of 1/31/20) 32,515,000$


Coverage of Average Annual Principal and Interest Requirements by 9-30-19 by Net Income 10.25 Times

MONTHLY WATER RATES (Effective November 1, 2019)

Meter Size Rate Meter Size Rate

up to 3/4" 25.00$ 1 1/2" 110.68$ 1" 25.00 2" 174.68

All Residential Meter Charges

First 1,000 Gallons Included in Minimum Meter Charge

1,001 - 5,000 Gallons $0.77 per 1,000 Gallons5,001 - 20,000 Gallons $3.78 per 1,000 Gallons

20,001 - 40,000 Gallons $7.56 per 1,000 GallonsAll over 40,000 Gallons $9.16 per 1,000 Gallons

Residential Consumption Charges

SEWER RATES (Effective November 1, 2019)

All Residential Consumption Charges Minimum Meter Charge $14.67

First 1,000 Gallons Included in Minimum Meter ChargeAll over 1,000 Gallons $5.80 per 1,000 Gallons

First 1,000 Gallons Included in Minimum Meter ChargeAll over 1,000 Gallons $5.80 per 1,000 Gallons

All Non-Residential Consumption Charges

C - 4

CITY OF RICHARDSON, TEXAS



2019 2018 2017 2016 2015

Revenues 81,562,045$ 79,302,800$ 69,006,580$ 64,002,691$ 60,347,922$

Expenditures (1)

Sewage Disposal Contract 19,273,271$ 16,344,041$ 14,256,944$ 13,700,322$ 12,183,605$

Water Purchased 30,820,711 29,720,231 26,680,040 24,219,789 20,750,908

Other 24,822,340 23,960,704 24,349,888 20,005,163 18,396,572

74,916,322$ 70,024,976$ 65,286,872$ 57,925,274$ 51,331,085$

Net Income 6,645,723$ 9,277,824$ 3,719,708$ 6,077,417$ 9,016,837$

Water Customers 22,773 24,203 22,522 33,249 33,046

Sewer Customers 30,121 30,016 29,983 29,869 29,681 _______________

(1) Excludes depreciation and bonded debt amortization.

MONTHLY WATER RATES – EFFECTIVE NOVEMBER 1, 2019

Monthly Minimum Charge 8.00$ plus per each 1,000 gallons consumed

Water Usage Charges: Rate0 to 11,000 Gallons 6.61$ per 1,000 Gallons

11,001 to 20,000 Gallons 7.16 per 1,000 Gallons20,001 to 40,000 Gallons 7.46 per 1,000 Gallons40,001 to 60,000 Gallons 8.68 per 1,000 Gallons

All over 60,000 Gallons 9.08 per 1,000 Gallons

Apartments will be treated and billed as a commercial water account.

Homeowner Association Irrigation Rates

Homeowner Associations responsible for maintaining common areas in a residential subdivision may receive a discount of 40 percent of the waterusage charges for water used through an irrigation meter. There is no

monthly minimum charge.

MONTHLY SEWER RATES – EFFECTIVE NOVEMBER 1, 2019

Monthly Minimum Charge 8.00$

Rates per 1,000 gallons and portionof metered water:

0 to 11,000 4.71$ All over 11,000 9.34$

Apartments will be treated as commercial accounts for sewer billing purposes.

C - 5

CITY OF MCKINNEY, TEXAS

WATERWORKS AND SEWER SYSTEM STATEMENT OF OPERATIONS


2019 2018 2017 2016 2015

Revenues 97,348,390$ 94,797,855$ 80,127,546$ 71,714,020$ 59,442,114$

Expenses

Water Purchased 54,249,763$ 49,182,830$ 44,038,937$ 39,129,803$ 33,894,557$

Contract Payments 5,229,837 5,178,748 4,480,309 4,211,032 3,282,479

Other 16,339,100 17,068,637 13,472,405 14,256,935 12,633,025

Total Expenses 75,818,700$ 71,430,215$ 61,991,651$ 57,597,770$ 49,810,061$

Net Income 21,529,690$ 23,367,640$ 18,135,895$ 14,116,250$ 9,632,053$

Water Customers 60,730 58,955 56,512 53,989 51,636

Sewer Customers 61,337 55,736 53,352 50,865 48,449

The condensed statements above have been compiled using accounting principles customarily employed in the determination of net revenues available for debt service, and in all instances excluding depreciation, transfers (except operating transfers), debt service payments and expenditures identified as capital. Gross revenues include all revenues associated with the operation of the Water/Wastewater system including receipts of contributions from developers.

Waterworks and Sewer System Revenue Bonds Outstanding (as of 1/31/20) 133,020,000$


Coverage of Average Annual Principal and Interest Requirements by 9-30-19 Net Income 2.37 times

Maximum Principal and Interest Requirement, 2020 13,614,824$

Coverage at Maximum Principal and Interest Requirement 1.58 times

Interest and Sinking Fund (as of 9-30-19) 8,476,386$

Reserve Fund (as of 9-30-19) 7,764,448$

C - 6

MONTHLY WATER RATES – (EFFECTIVE OCTOBER 1, 2019)

Residential Meters ……………………………………………… 16.50$ Non-residential & ALL Irrigation Meters:

3/4 inch ……………………………………………… 16.50$ 1 inch ……………………………………………… 28.95$

1 1/2 inch ……………………………………………… 49.60$ 2 inch ……………………………………………… 69.55$ 3 inch ……………………………………………… 122.45$ 4 inch ……………………………………………… 182.05$ 6 inch ……………………………………………… 339.40$ 8 inch ……………………………………………… 670.45$

10 inch ……………………………………………… 1,268.65$ 12 inch ……………………………………………… 2,371.75$

Volumetric Rates per 1,000 Gallons:Residential & ALL Irrigation Meters: 1 to 7,000 Gallons 4.00$ 7,001 to 20,000 Gallons 5.50$ 20,000 to 40,000 Gallons 6.95$ More than 40,000 Gallons 8.35$

MONTHLY WASTEWATER RATES – (EFFECTIVE OCTOBER 1, 2019)

Residential Meters ……………………………………………… 18.80$ Non-residential Meters:

3/4 inch ……………………………………………… 18.80$ 1 inch ……………………………………………… 30.85$

1 1/2 inch ……………………………………………… 50.95$ 2 inch ……………………………………………… 66.30$ 3 inch ……………………………………………… 104.00$ 4 inch ……………………………………………… 147.40$ 6 inch ……………………………………………… 251.85$ 8 inch ……………………………………………… 492.85$ 8 inch ……………………………………………… 1,014.55$ 8 inch ……………………………………………… 2,069.35$

Volumetric Rates per 1,000 Gallons:Residential Meters: 1 to 8,000 Gallons (Using Winter Quarter Avg.) 5.25$ Municipal Sewer Rate 4.00$ All Other Meters 5.25$

APPENDIX D

FORM OF BOND COUNSEL'S OPINION

July 29, 2020

NORTH TEXAS MUNICIPAL WATER DISTRICTREGIONAL WASTEWATER SYSTEM REVENUE BONDS,

SERIES 2020A DATED JUNE 15, 2020

$______________

AS BOND COUNSEL for the North Texas Municipal Water District (the "Issuer"), inconnection with the issuance of the Regional Wastewater System Revenue Bonds, Series 2019 (the"Bonds"), we have examined into the legality and validity of the Bonds, which bear interest fromthe dates and mature on the dates, and are subject to redemption, in accordance with the terms andconditions stated in the text of the Bonds. Terms used herein and not otherwise defined shall havethe meaning given in the Resolution of the Issuer authorizing the issuance and sale of the Bonds (the"Resolution").

WE HAVE EXAMINED the applicable and pertinent provisions of the Constitution and lawsof the State of Texas, and a transcript of certified proceedings of the Issuer, and other pertinentinstruments relating to the authorization of the Bond to be initially delivered (the "Initial Bond") andthe Bonds to be delivered in substitution therefor (the "Definitive Bonds") and the issuance anddelivery of the Initial Bond, including the executed Initial Bond and a printed form for the DefinitiveBonds initially made available by the Issuer for conversion of and exchange for the Initial Bond.

BASED ON SAID EXAMINATION, IT IS OUR OPINION that the Bonds have been dulyauthorized and the Initial Bond has been duly issued and delivered, all in accordance with law, andthat, except as may be limited by laws relating to sovereign immunity and to bankruptcy,reorganization, and other similar matters affecting creditors' rights, (i) the covenants and agreementsin the Bond Resolution constitute valid and binding obligations of the Issuer, and the Initial Bondconstitutes and Definitive Bonds will constitute valid and legally binding special obligations of theIssuer, which, together with other bonds, are secured by and payable from a first lien on and pledgeof the Issuer's "Pledged Revenues," as defined in the Bond Resolution, including the GrossRevenues of the Issuer's Trinity East Fork Regional Wastewater System, and including specificallycertain payments to be received by the Issuer from the Cities of Mesquite, Plano, Richardson, Allen,McKinney, Forney, Frisco, Princeton, Rockwall, Heath, Prosper, and Seagoville, Texas(collectively, the "Member Cities"), and any future Additional Member Cities, under the "TrinityEast Fork Regional Wastewater System Contract", dated October 1, 1975, among the Cities ofMesquite and Plano and the Issuer, the "City of Richardson-Trinity East Fork Regional WastewaterSystem Contract", dated January 9, 1978, and amended as of December 1, 1985, between the Cityof Richardson and the Issuer, the "City of Allen-Trinity East Fork Regional Wastewater SystemContract", dated August 24, 1978, between the City of Allen and the Issuer, the "City of McKinney-Trinity East Fork Regional Wastewater System Contract", dated August 23, 1979, between the Cityof McKinney and the Issuer, the "City of Forney - Trinity East Fork Regional Wastewater System

Contract", dated February 22, 1990, between the City of Forney and the Issuer, the City of Frisco -Trinity East Fork Regional Wastewater System Contract, dated as of November 19, 1996, betweenthe City of Frisco and the Issuer, the City of Princeton - Trinity East Fork Regional WastewaterSystem Contract, dated as of November 26, 1996, between the City of Princeton and the Issuer, the"City of Rockwall - Trinity East Fork Regional Wastewater System Contract," dated March 29,2001, between the City of Rockwall and the Issuer, "City of Heath - Trinity East Fork RegionalWastewater System Contract," dated March 29, 2001, between the City of Heath and the Issuer,"Town of Prosper - Trinity East Fork Regional Wastewater System Contract," dated as of February24, 2004, between the Town of Prosper and the Issuer, the "City of Seagoville - Trinity East ForkRegional Wastewater System Contract," dated as of February 24, 2005, between the City ofSeagoville, Texas and the Issuer, and the "City of Melissa - Trinity East Fork Regional WastewaterSystem Contract," dated as of April 1, 2019, between the City of Melissa and the Issuer(collectively, the "Contract") and all similar contracts with any Additional Member Cities as definedin and permitted by the Contract and (ii) the Contract has been duly executed, is valid and is legallybinding upon and enforceable by the parties thereto in accordance with its respective terms andconditions.

THE ISSUER has reserved the right, subject to the restrictions stated in the Bond Resolution,to issue additional parity revenue bonds which also may be secured by and made payable from a firstlien on and pledge of the aforesaid Pledged Revenues.

THE ISSUER also has reserved the right, subject to the restrictions stated in the BondResolution, to amend the Bond Resolution with the approval of the holders or owners of fifty-onepercent in principal amount of all outstanding bonds which are secured by and payable from a firstlien on and pledge of the aforesaid Pledged Revenues.

THE REGISTERED OWNERS of the Bonds shall never have the right to demand paymentof the principal thereof or interest thereon out of any funds raised or to be raised by taxation, or fromany source whatsoever other than specified in the Bond Resolution.

IN OUR OPINION, except as discussed below, the interest on the Bonds is excludable fromthe gross income of the owners for federal income tax purposes under the statutes, regulations,published rulings, and court decisions existing on the date of this opinion. We are further of theopinion that the Bonds are not "specified private activity bonds" and that, accordingly, interest onthe Bonds will not be included as an alternative minimum tax preference item under section 57(a)(5)of the Internal Revenue Code of 1986, as amended (the "Code"). In expressing the aforementionedopinions, we have relied on, certain representations, the accuracy of which we have notindependently verified, and assume compliance with certain covenants regarding the use andinvestment of the proceeds of the Bonds and the use of the property financed therewith. We callyour attention to the fact that if such representations are determined to be inaccurate or if the Issuerfails to comply with such covenants, interest on the Bonds may become includable in gross incomeretroactively to the date of issuance of the Bonds.

OUR OPINIONS ARE BASED ON EXISTING LAW, which is subject to change. Suchopinions are further based on our knowledge of facts as of the date hereof. We assume no duty toupdate or supplement our opinions to reflect any facts or circumstances that may thereafter cometo our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal RevenueService (the "Service"); rather, such opinions represent our legal judgment based upon our reviewof existing law and in reliance upon the representations and covenants referenced above that wedeem relevant to such opinions. The Service has an ongoing audit program to determine compliancewith rules that relate to whether interest on state or local obligations is includable in gross incomefor federal income tax purposes. No assurance can be given whether or not the Service willcommence an audit of the Bonds. If an audit is commenced, in accordance with its current publishedprocedures the Service is likely to treat the Issuer as the taxpayer. We observe that the Issuer hascovenanted not to take any action, or omit to take any action within its control, that if taken oromitted, respectively, may result in the treatment of interest on the Bonds as includable in grossincome for federal income tax purposes.

EXCEPT AS STATED ABOVE, we express no opinion as to any other tax consequencesof acquiring, carrying, owning, or disposing of the Bonds.

OUR SOLE ENGAGEMENT in connection with the issuance of the Bonds is as BondCounsel for the Issuer, and, in that capacity, we have been engaged by the Issuer for the sole purposeof rendering our opinions with respect to the legality and validity of the Bonds under theConstitution and laws of the State of Texas, and with respect to the exclusion from gross income ofthe interest on the Bonds for federal income tax purposes, and for no other reason or purpose. Wehave not been requested to investigate or verify, and have not independently investigated or verified,any records, data, or other material relating to the financial condition or capabilities of the Issuer orthe Member Cities, or the adequacy of the Pledged Revenues, and have not assumed anyresponsibility with respect thereto. We express no opinion and make no comment with respect tothe marketability of the Bonds. Our role in connection with the Issuer's Official Statement preparedfor use in connection with the sale of the Bonds has been limited as described therein

THE FOREGOING OPINIONS represent our legal judgment based upon a review ofexisting legal authorities that we deem relevant to render such opinions and are not a guarantee ofa result.

Respectfully,

Financial Advisory ServicesProvided By

Regional Service Through Unity… Meeting our Region’s Needs Today and Tomorrow

TAWAKONI WTP POWER AGREEMENTScott Puckett

June 25, 2020

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TAWAKONI WATER TREATMENT PLANT

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POWER AGREEMENT FOR TAWAKONI WTP

Farmers Electric Cooperative (FEC):

• Is a singly certified electric cooperative by the PUCT• Not apart of the deregulated power market in Texas

• Sole source provider

Original Agreement Highlights:

• Expires June 30, 2020 (10 yr. term) • Included contribution in aid for construction• Set rate Structure

• Base Charge $650 per month• Wholesale power passed through at cost• Demand Minimum (10,000 kW) & Demand Charge ($4.45/kW)

Purposed Agreement (changes from original agreement):

• Expires June 30, 2030 (10 yr. term)• No contribution in aid requirements• Change in rate Structure

• Demand Minimum (3,000 kW) & Demand Charge ($8.00/kW)• Reviewed by Lloyd Gosselink

Board UpdateJune 25, 2020

BOIS D'ARC LAKE UPDATE

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Agenda• Pre-impoundment Items Status

• CMAR 1 Dam Schedule/Notch Closure/Fencing

• Archeology Update

• CMAR 4 Construction Update

CLICK TO EDIT MASTER TITLE STYLEBOIS D’ARC LAKE UPDATE


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Archeology Update• 58 archeologists working in the field• Schedule Impacts

o Site 118 – July 15, 2020o Site 120 – July 15, 2020 (new burial)o Site 178 – July 15, 2020 o Site 244 – Started week of May 4, 2020 (site prep)o Site 151 – Opened blocks/exhuming burials (ultimately 50 people

working)o Site 114 – Access road construction

• Archeologists site visit June 23 – virtual tour


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Site 114 Schedule• Site 114 SOW submitted – 4/16/2020 revised 4/28/2020• Chairman Francis, Caddo Nation, approved work plan• 12 month schedule – May 1, 2021 (Nov 2020 start impoundment)

o Assumptions– Up to 20 burials (4 known burials)– Up to 2 flood events– Hand excavate the entire Knoll– 30 people working ultimately– Caddo Nation responsive– Geophysical anomalies outside site boundary are not cultural

• Site Boundary within current buffer

– Lake and groundwater kept below elevation 531

BOIS D’ARC LAKE UPDATE

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CMAR 1 Archer Western - Dam Schedule• March 3 Started Phase II• March 20 – Cofferdam overtopped• March 27 – April 8: Rebuild Cofferdam• March 27 – May 6: Remove debris from dam and notch• April 20 – Start closing the Notch• May 28 – letter from AW; claim from P&J for 168 additional days of

contract time- FNI response – No additional time

• Meetings with AW & FNI to understand schedule impact- Closing the notch later causes soil cement to be installed in winter- Winter weather is not conducive for soil cement

• AW/P&J current schedule 159 days behind

BOIS D’ARC CREEK NOTCH (MAY 6, 2020)

BOIS D’ARC CREEK NOTCH CLOSURE (JUNE 5, 2020)

BOIS D’ARC LAKE LEFT SIDE

SERVICE SPILLWAY LABYRINTH SLAB

CMAR 4 – FM 897 BRIDGE

CMAR 4 – LAKE OPERATIONS CENTER & WAREHOUSE