1. HAYS CALDWELL PUBLIC UTILITY AGENCY HAYS COUNTY COMMISSIONER’S COURT WORKSHOP JULY 22, 2014

2. AGENDA You already know the growth in the area, the current water supply situation and pressures this puts on water systems, this presentation will focus on our journey to secure long-term water for the future of our Sponsors THE HAYS CALDWELL PUBLIC UTILITY AGENCY Origins of the ProjectActivities-to-Date Binding AgreementsItems on the Horizon Water PlanningLesson Learned

3. AGENCY SPONSORS Created under Ch. 572 of LGC San Marcos Kyle Buda Canyon Regional Water Authority, represents: –Crystal Clear SUD –County Line SUD –Maxwell WSC –Martindale WSC –8 other water entities THE HAYS CALDWELL PUBLIC UTILITY AGENCY All Sponsors are not-for-profit cities or water companies

4. PROJECT BEGINNINGS Kyle & Canyon Regional Water Authority commissioned a study to determine alternative water supplies. Others jumped in quickly. Other participants in initial study, other than Sponsors: THE HAYS CALDWELL PUBLIC UTILITY AGENCY Wimberley WSCGoforth WSC LockhartCreedmoor-Maha WSC Monarch Water Co.Polonia WSC

5. WATER SUPPLY AGREEMENT Binds the Sponsors together beyond the simple governance and bylaws States individual Sponsor project shares: Includes provisions for debt issuances; extreme flexibility including Sponsor issuances, Agency issuances in bulk and/or Agency issuances with separate series/terms for each Sponsor THE HAYS CALDWELL PUBLIC UTILITY AGENCY SponsorShare of Project Costs Acre-Feet/Year of Capacity Buda5.08%1,687 Kyle28.17%9,355 San Marcos35.86%11,910 Canyon Regional Water Authority30.89%10,260

6. STATE WATER PLAN State divided into 16 regions based on river basins Sponsors and Project are (mostly) in Region L Important to be in plan for permitting and financing HCPUA in Regional & State Plan since 2007 for 35,000 acre-feet per year Top-ranked project for SWIFT funding in Region L that has not been built THE HAYS CALDWELL PUBLIC UTILITY AGENCY

7. GROUNDWATER MANAGEMENT Production & Transport permits are issued by groundwater districts Districts jointly plan for aquifer’s through “Groundwater Management Areas” Process essentially determines the amount of water that may be produced from aquifers over 50 years THE HAYS CALDWELL PUBLIC UTILITY AGENCY

8. PROJECT PLANNING To properly plan a project must know: –How much is needed? –When is the water required? Important to continually monitor and update the information – growth projections are a moving target THE HAYS CALDWELL PUBLIC UTILITY AGENCY Timing and Phasing - Absolute Key Planning Document!

9. PROJECT TIMING & PHASING THE HAYS CALDWELL PUBLIC UTILITY AGENCY

10. HAYS CALDWELL PUBLIC UTILITY AGENCY REQUIRED INFRASTRUCTURE THE HAYS CALDWELL PUBLIC UTILITY AGENCY $200 Million+ in Today’s Prices

11. HAYS CALDWELL PUBLIC UTILITY AGENCY Leased 17,385 acres of water rights Generally leased on a 50-yr renewable term Leases are split between two groundwater districts 80+ Landowners Partnership forged with landowners – became very helpful during permitting WATER RIGHTS LEASING THE HAYS CALDWELL PUBLIC UTILITY AGENCY

12. HAYS CALDWELL PUBLIC UTILITY AGENCY Permit for 10,300 acre-feet per year to Gonzales District in March 2010 Includes 15 production wells Permit was approved on November 13, 2012 Production permits issued on 5-year terms Transportation permit issued on a 3/30-year term EXISTING PERMIT THE HAYS CALDWELL PUBLIC UTILITY AGENCY

13. HAYS CALDWELL PUBLIC UTILITY AGENCY THE HAYS CALDWELL PUBLIC UTILITY AGENCY Permit includes the following phasing schedule: Conditions Water can only be used in service area included in permit Agency agreed to Negotiated Export Fees Agreement, Mitigation Agreement and a Monitoring Agreement Permit Phasing Schedule PhaseStartEndCumulative Production (ac-ft/yr) I201220170 II201720222,000 III202220276,600 IV2027203210,300 PERMIT TERMS

14. HAYS CALDWELL PUBLIC UTILITY AGENCY PERMITTING IN PLUM CREEK DISTRICT Process: Get permits for test hole and test well drilling Produce hydrogeologic report on condition of aquifer Submit report and permits for production and transportation of water Hearing on permits before the PCCD Board Currently conducting test well drilling Test Well THE HAYS CALDWELL PUBLIC UTILITY AGENCY

15. HAYS CALDWELL PUBLIC UTILITY AGENCY EXPENDITURES TO DATE Through May 2014 spent approximately $9.1 million o 65% on Leasing & Directly to Landowners o 12% on Staff and Engineering Services o 11% on General and Special Legal Counsels o 13% on Other (Hydrogeologists, lobbyists, public relations, auditors, etc.) THE HAYS CALDWELL PUBLIC UTILITY AGENCY

16. HAYS CALDWELL PUBLIC UTILITY AGENCY ON-GOING ACTIVITIES THE HAYS CALDWELL PUBLIC UTILITY AGENCY Continually participating in the following activities: o Region L Planning (critical for groundwater permitting, funding, etc.) o GMA 13 – ultimately sets amount of groundwater available o Groundwater Districts – monitor rules changes & other projects that affect our interests o Legislature – mixture of defense & offense o Evaluate partnership opportunities

17. HAYS CALDWELL PUBLIC UTILITY AGENCY PROJECTS IN STATE WATER PLAN THE HAYS CALDWELL PUBLIC UTILITY AGENCY

18. HAYS CALDWELL PUBLIC UTILITY AGENCY TWA - ACTIVE DISCUSSIONS THE HAYS CALDWELL PUBLIC UTILITY AGENCY

19. HAYS CALDWELL PUBLIC UTILITY AGENCY SAWS – VISTA RIDGE THE HAYS CALDWELL PUBLIC UTILITY AGENCY

20. HAYS CALDWELL PUBLIC UTILITY AGENCY OUR LESSONS LEARNED THE HAYS CALDWELL PUBLIC UTILITY AGENCY EASY to get distracted from the goal Demand projections change – must monitor and update frequently Rural areas in particular have challenges planning for “full” future Projects / plans of other groups change frequently – may impact us (e.g. see Austin & San Antonio) Overall key: Delivered Water Costs – successful projects must ultimately be affordable to water users

21. QUESTIONS www.hcpua.org Graham Moore, P.E. TRC Engineers, Inc. (512) 684-3144 or (512) 294-3214 gmmoore@trcsolutions.com THE HAYS CALDWELL PUBLIC UTILITY AGENCY