2. San Antonio Water System - SAWS
Municipally-Owned Public Water Utility

3. Innovative Successes Largest Recycle System in the Nation
First in Nation conversion from gas to energy
Largest groundwater based ASR System in nation
Largest inland desalination plant just completed
International recognition for water conservation

4. 40% Reduction in the last 30 years Gallons per Person per Day (GPCD)
Continued Focus on Conservation 16,500 acre feet water savings planned by 2020
225
40% Reduction in the last 30 years
Gallons per Person per Day (GPCD)
121
2014

5. Water Management - Planning for the Future
Meeting water demands to sustain Regional economy
Population Growth
Drought and Sustainability
Diversification
Continued Water Conservation
Maintaining Financial Strength
Regulatory and Legal Uncertainty

6. Water Supply Investments Being Funded
Add 63,440 Acre Feet of Supply to Water Supply Portfolio by 2020
Vista Ridge – Up to 50,000 AF by 2020
Brackish Desalination
First Phase - 13,440 AF

7. Previously Planned Projects
Project Name
Year Planned
Planned Yield (Ac-Ft)
Net Yielded
Applewhite Reservoir
1989
35,000
Simsboro Groundwater
1998
55,000
Regional Carrizo Groundwater
2000
62,600
11,688
Lower Guadalupe Project
2001
94,500
LCRA – SAWS Reservoir
2002
150,000
Vista Ridge
2011
50,000
TBD??

8. New Project Delivery Approach
Recognize other tools available
Limited experience with alternative project delivery
Pursue private sector involvement
Minimize or transfer risks
Capital exposure
Regulatory risk
Construction and operational risk
Local opposition
Recognize cost to transfer risk

9. Vista Ridge Regional Water Project
Long Term Diversified Supply
Request for Competitive Sealed Proposals Issued in 2011
Nine Respondents to Public Bid
3 Finalists were interviewed in 2013
Vista Ridge Consortium (Abengoa & BlueWater)
Long Term Production & Export Permits
Localized Support with over 3,400 leases

10. Texas’ First Major Water P3
Project Components
Wells, Transmission Pipeline, Pumps, Storage
50,000 Acre Feet
140 Mile Pipeline
“Water Transmission and Purchase Agreement”
Participants
San Antonio Water System (Buyer)
Vista Ridge LLC (Seller)
Equity, Builder and Operator Entities
Blue Water (Groundwater Lessee)
Central Texas Regional Water Supply Corporation (Non-profit for Eminent Domain, Tax Exemptions)

11. Contract Provisions
Up to 50,000 ac-ft / Yr of water for 30+ years - as early as 2020
SAWS pays only for water made available
Risk Transfer
Vista Ridge builds all infrastructure to San Antonio
Debt - $853 Million
Equity - $74 Million
SAWS build interconnection infrastructure
$143 Million

12. Proposal Costs and Assumptions
Price Components
Escalation
2020
Cost of Infrastructure and Water(1)
None
$1,606
Power(2)
Pass-Through
$191
O&M(2)
$196
Total Price of Project
$1,993
(1) Assumed $1852/AF at contract execution (2) Variable based on actual cost

13. Project Timeline Asset Transfer to SAWS Financial Close
~ 2050
Financial Close
November 2, 2016
Debt Service Drops Off
SAWS pays lower price
Commercial Close
November 4, 2014
Water Delivery Begins
~ 2020
Rate Lock ($1,606/AF)
May 17, 2016

14. Risks Transferred Design and Construction
Completion Risk (Delay and Efficacy)
Construction Cost Overruns
Designer/Builder/Operator disputes
Site Conditions
Regulatory Compliance
O&M Costs – Jointly Determined
Uncontrollable Risks Transferred
Change in Law, Permitting, Force Majeure
Pumping Permit Cut-Backs
Price; not schedule
Interest Rate Capped at 6.04%

15. Project Financing Private Project Financing For Public Infrastructure
Special Purpose Entity Formed
Entity Issues Debt For Project Construction
Debt Is “Non-recourse” to Government or Entity
Financing Integrated With DBO Work
SAWS Makes No Construction Payments
Project Agreement Pledged to Project Debt
Bank Loan or Bond Issue?
Investment Grade Credit Rating Sought

16. Long-Term Financing Strategy
Multiple Options for Long-Term Financing
Bank Facility is expected to be refinanced with either bonds or another credit facility prior to maturity
Upon Substantial Completion, Project Company anticipates being able to achieve an investment grade bond rating
Interest rate swaps can be broken in the event of a long-term fixed rate refinancing
Should a bond takeout prove infeasible, the lenders would consider an extension or rollover of the Credit Facility and continuation of swap agreements

17. Tax-Exempt Interest Rates Commercial Close to Current
Locked in 36 Basis Points off All-Time Low and 126 Basis Points Less than 12/1/16

18. Millions of Dollars in Savings
Interest Rate Lock Saved SAWS ~ $1.9 Million a Year Compared to Financial Close Rate
Date/Contractual
Determined Rate
Capital & Raw Groundwater Unit Price
Annual Cost for 50,000 AF*
Maximum
6.04%
$1,959
$97,950,000
11/4/2014
4.83%
$1,739
$86,950,000
7/22/2015
4.97%
$1,760
$88,000,000
2/19/2016
4.45%
$1,680
$84,000,000
3/7/2016
4.59%
$1,702
$85,100,000
4/12/2016
4.24%
$1,649*
$82,450,000
5/17/2016
3.92%
$1,606
$80,300,000
6/10/2016
3.77%
$1,586*
$79,300,000
11/2/2016
4.19%
$1,643*
$82,150,000
12/1/2016
5.18%
$1,794
$89.700,000
* Staff estimates.

19. November 2nd Project Company Locked in Rates
Financial Close Avoided Post-Election Increase in Interest Rates

20. Vista Ridge Regional Water Project
Tomorrow’s Water at Today’s Price
Unprecedented Risk-shifting
Potential Regional Partnerships
Balanced Planning: Conservation & New Supplies
Secure Water Future
Bexar

21. Success Factors
Courageous and Wise Public Sector Leadership With Long Term Vision
Mayors Taylor and Castro
Trustees Guerra and Williams
CEO Puente and Management Team
Extraordinarily Determined and Experienced Private Entrepreneurs
Historically Low Interest Rates Generally
Compelling Public Purpose, Willingness to Pay