Groundwater Reduction Plan

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=125 BGCOLOR="#996699" TEXT="#080000" bgproperties="fixed" background="1da467d1erlcll.gif"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>Cornerstones Municipal Utility District</B></FONT><B>     </B><B>|     </B><A HREF="index.htm" TARGET="_top" TITLE="Cornerstones Municipal Utility District"><U><B>home</B></U></A></div> <div> back to<B>  </B><A HREF="id36.htm" TARGET="_top" TITLE="FAQs"><U><B>FAQs</B></U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <A HREF="id46.htm" TARGET="_top" TITLE="How Much Water Do You Use?"><U>How Much Water Do You Use?</U></A></div> <div> <B>Groundwater Reduction Plan</B></div> <DIV ALIGN="LEFT"></DIV> <div> <B><IMG SRC="24b50550.gif" border=0 width="80" height="85" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></B></div> </td> <td valign="top" height=355 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B> <A NAME="groundwater_plan"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="1" ALIGN="bottom" WIDTH="1" HSPACE="0" VSPACE="0" ></A></B></div> <div> <B>West Houston County Surface Water Steering Committee Memo Excerpt</B></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B><U>WEST HARRIS COUNTY</U></B></div> <div> <B><U>SURFACE WATER STEERING COMMITTEE</U></B></div> <bR> <div> February 1, 2001</div> <bR> <div> TO:     West Harris County Districts (the "Districts") within Area 3 ("Area 3") of the Harris</div> <div>             Galveston Coastal Subsidence District (the "Subsidence District") and the City of</div> <div>             Katy, Texas ("Katy")</div> <bR> <div> FROM: West Harris County Surface Water Steering Committee (the "Steering Committee")</div> <bR> <div> RE:     Surface Water</div> <bR> <div> The Subsidence District has issued regulations that require the Districts and Katy to reduce ground water usage according to the following schedule: 30% by 20 i 0, 700/0 by 2020, and 80% by 2030. One or more groundwater reduction plans ("GRP's") showing how the Districts and Katy will meet these dates through surface water conversion must be certified by the Subsidence District by January 1, 2003. The Subsidence District has imposed a $3.00 per 1,000 gallon disincentive fee commencing in January, 2003, for failure to submit a GRP or failure to convert to surface water according to the conversion dates.</div> <bR> <div> The City of Houston ("Houston") owns the vast majority of surface water in the region. Steering Committee representatives have had numerous meetings with Houston personnel regarding the provision of surface water to West Harris County. Houston's current proposal is that, beginning in January, 2003: 1) Districts or municipalities purchasing water from Houston pay Houston $1.30 per 1,000 gallons for all surface water purchased; and 2) Districts or municipalities that remain on groundwater pay Houston $1.10 per 1,000 gallons for all ground water pumped. Currently, the total usage for all Area 3 districts is approximately 108,000,000 gallons per day. At $1.10 per 1,000 gallons pumped, Area 3 districts would pay approximately $43,000,000 per year to Houston, <B>without receiving any water.</B></div> <bR> <div> Houston's proposal requires Districts and municipalities to join Houston's GRP. This means that Houston determines when a District or municipality must convert to surface water, how much it must convert, when it may operate its wells, whether it can enter into an interconnect agreement with another District, etc. Houston has indicated that if a District or municipality refuses to join Houston's GRP, it will charge the District or municipality $2.30 per 1,000 gallons to purchase surface water from Houston. Additionally, under Houston's proposal, Houston will design, construct, finance, own, operate, and maintain all of the water treatment facilities and all of the water transmission lines in Houston's extraterritorial jurisdiction to the boundaries of those Districts or municipalities that Houston has determined must convert to surface water. In short, Houston's proposal asks Districts and municipalities to relinquish control over all of their water decisions to Houston and Houston would have the power and authority under its contracts to adjust pricing and make strategic decisions concerning water as it determines appropriate.</div> <bR> <div> The following are examples of annual required payments to Houston at $1.10 per 1,000 gallons pumped for Districts or municipalities with such usage:</div> <bR> <div>      100,000,000 gallons annual usage      $110,000</div> <div>      200,000,000 gallons annual usage      $220,000</div> <div>      300,000,000 gallons annual usage      $330,000</div> <div>      400,000,000 gallons annual usage      $440,000</div> <div>      500,000,000 gallons annual usage      $550,000</div> <bR> <div> We have received feedback from many Districts that Houston's proposal is difficult to decipher, offered at higher than desirable rates, and proposes a very one-sided approach to water allocation. We agree. Steering Committee representatives are continuing to negotiate with Houston in an attempt to improve Houston's proposal. Additionally, to protect the interests of the Districts, the Steering Committee has begun the process of legislatively creating a regional water authority for West Harris County.</div> <bR> <div> The Steering Committee has proposed the creation of an authority for West Harris County (the "Authority") through the Legislature with the following features: 1 ) the area of the Authority would be divided into nine voting districts; 2) the boards of directors of the Districts and the governing bodies of any municipalities within each voting district would vote to select one of nine directors to the board of directors of the Authority; 3) individuals would not be eligible to serve as directors of the Authority unless they have served as a director of a District for at least four years; 4) each District has the opportunity to finance its portion of capital and operating costs as it chooses; for example, through bonds, surplus construction funds, water and sewer fees, etc. to allow each District maximum flexibility and autonomy based on its particular financial situation. Our goal is to defer capital costs until later years and negotiate the best possible water price from Houston based on the strength of our Districts working together through the Authority.</div> <bR> <div> Thank you for your support. We will continue to keep you updated on our progress.</div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <A HREF="#groundwater_plan" TITLE="Groundwater Reduction Plan"><U>top of page</U></A></div> <bR> </td> </tr></table></body>