ECCFWSD / City of Mabank Purchase Update The construction portion of this project is underway. Triple A Sanitation Construction Company has been awarded the contract. To date the contractor has completed the transfer from Mabank to ECCFWSD water source to the following Subdivisions: Loon Bay Timber Trails Thunderbird Shores All water customers on Harbor Point Road Old Gun Barrel City Hall  Pleasure land will be transferred by February 10, 2012.   As the contractor progresses with the project additional transfers will be added to the above list.  As with any major project the contractor is aware that additional follow-ups will need to be made in regards to backfill settlement and final dress-ups.  If persons have an issue with the construction portion of this project please contact the ECCFWSD General Manager, Bill Goheen at (903) 887-7103

ECCFWSD / City of Mabank Purchase Update  September 21, 2011 ECCFWSD Board of Directors approved by Resolution 2011-004 the issuance and sale of Utility System Revenue Bonds, Series 2011B in the amount of $1,760,000. The District competitively bid out the sale of the bonds.  The low bid was submitted by SAMCO Capital Markets, Inc. at a net interest cost of 3.66%, with the cover bid submitted by Southwest Securities, Inc at a net interest cost of 3.85%.  As part of the sale process, the District’s long term debt rating was upgraded from “A-“ to  “A”  by Standard & Poor’s, Inc.  The District had the bond issue insured by Assured Guaranty Municipal (AGM), which is rated “AA+” by Standard and Poor’s, Inc.  The District’s Financial Advisor, Jim Sabonis of First Southwest Company, complimented the District for the bond rating upgrade.  Also, he indicated that the combination of the positive bond rating, the purchase of bond insurance and the strong municipal bond market resulted in the bids for the bond issue being at lower a lower interest rate than budgeted.  The delivery of Funds is expected to be October, 20, 2011.   ECCFWSD Engineering Firm, KSA is in the process of submitting the final plans and specifications for construction bid letting to TCEQ.   The District expects to advertise for bids in Mid-October and award the project shortly after.  Construction could start sometime in early November 2011.  The next posting will proved a time table for the transferring of Sub-Divisions from the City of Mabank water to ECCFWSD water.

Status Report regarding the ECCFWSD / Mabank Purchase Agreement Gun Barrel City Protest against the Sale, Merger, Transfer (STM) Agreement between East Cedar Creek Fresh Water Supply District (ECCFWSD) and the City of Mabank is nearing the end of the legal process. On February 23, 2011 the Texas Commission of Environmental Quality (TCEQ) Commissioners unanimously ruled in favor for the STM to forward.  On March 8, 2011 at the Gun Barrel City’s regular Council Meeting the council members unanimously voted to discontinue their efforts to block the STM. The District still needs to wait until the TCEQ Commissioner’s ruling is officially documented and the 20-day waiting period for an appeal to reverse the TCEQ’s ruling has expired. The district is in the process of finalizing all the required TCEQ requirements. The District’s financial counsel is working with the assigned TCEQ Department to work out the final details of the Financial, Managerial, and Technical (FMT) review. We expect this to be completed within 60-90 days and then proceed with bonds. Once the entire legal process has taken its course ECCFWSD  then go forward with securing funds, construction bid letting , approval of bids and awarding the construction project. Construction in progress may not occur until late summer or early fall. ECCFWSD will be providing the anticipated scheduling of subdivision transfer from Mabank water service to ECCFWSD water service at least 60-days before a billing switch over would occur.  Within 30-days of the anticipated transfer a public notice will be provided to the Monitor and Cedar Creek Pilot for dissemination. For those who wish to be on an e-mail list for internal correspondence, please e-mail to request to billing@eastcedarcreek.net  and please be sure to inform us of the subdivision your account is assigned or if it is a commercial account.

TCEQ Commissioners hearing on the ECCFWSD – Mabank STM Gun Barrel City, Texas Protest has delayed the approval of the STM for over 1-year On February 23, 2011 the hearing brief went before the TCEQ Commissioners.   The TCEQ commissioners approved the ECCFWSD – Mabank STM application this morning by a 3:0 vote.  Chairman Shaw commented that there was “no question that this application met the requirements of the [Water] Code.”  The commissioners had a number of questions about the district’s service capacities, improvement plans and finances but they were satisfied the hearing record contained evidence resolving these questions in the district’s favor.   The next step is that GBC has 20 days from the date the signed order is mailed (in the next 3-5 days) to file a motion for rehearing, asking the commissioners to reverse themselves.  This is very rarely done except to correct an obvious error in the written order.    The TCEQ has 45 days from the date the signed order is mailed to act on the motion for rehearing. If the rehearing is not reversed GBC will then have 30 days to appeal to a Travis County district court.

Date	Description	Status
09/2010	Lead and Copper / Brookshire Northside TCEQ reported that East Cedar Creek FWSD's 90th percentile lead and copper samples results are .0026 mg/L and 0.39 mg/L. The District's system did not exceed the lead or copper action level.	COMPLIANT
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East Cedar Creek FWSD Customer News Letter Current Events for 2010 – 2011 Article One ECCFWSD – City of Mabank Acquisition In June of 2008 the City of Mabank proposed to the District an opportunity to purchase all their water meters, infrastructure within city limits of Gun Barrel City  and transfer of the CCN encompassing the proposed sale. This included the subdivisions; Loon Bay, Timber Trails, Pleasure land and Thunderbird Shores and all commercial accounts. The agreed upon amount for the purchase was $1,100,000. Here it is January of 2011 and the purchase has not been finalized due to an ongoing protest filed by Gun Barrel City. The protest has gone through many phases of the legal process and in December of 2010 The TCEQ Administrative Law Judge hearing the case has provided to the TCEQ Commission the Judge’s decision and that is to recommend that the acquisition and transfer of CCN be approved. We are now at the point that the City of Gun Barrel has the right to appeal the TCEQ Judge’s recommendation and have a legal decision review for turnover by the Travis County Courts. For all that are interested the district will post updates on our website, www.eastcedarcreek.net. This acquisition would be a positive for the district in many facets; 1) all the customers that are being served by the district for sewer would now be served water. This reduces the confusion to the customer for who to call and who to discuss billing issues with. 2) The additional water customer base will add additional revenue to the bottom line thus reducing the cost of rate increases in the future. The larger the customer base the more meter accounts there are to spread increasing  operating costs due to higher material purchase costs to maintain and or repair the infrastructure, expenses due to unfunded mandates promulgated by EPA and or TCEQ for additional testing and monitoring for additional elements that are now considered additional contaminates and or new treatment techniques necessary to meet new regulations and finally salary increases to insure the district maintains a compensation package to sustain competent staffing. It is the district’s goal to successfully achieve final approval to proceed with purchase and the CCN transfer for the benefit of our customer base as well as the water customers that are currently being served by the City of Mabank in the protested area.             East Cedar Creek FWSD Customer News Letter Current Events for 2010 – 2011 Article Two   District improvements Fiscal year 2010-2011 The Board of Directors in 2008 directed management to set measureable goals and objectives to insure your water and sewer investments are secure and sustainable for the long term.  The highest priority under our 2010-2011 goals is to be fully compliant with all TCEQ drinking water regulations and we are pleased to announce that we have accomplished this goal.  The only compliance issue has been TTHM and HAA5 (disinfection by products) and since the district has changed from a polymer-alum blend treatment chemical to a standard liquid alum chemical we have reduced our levels of TTHM’s and HAA5’s well below the regulation maximum contaminant levels for each of these products. The Board approved the District’s Engineer to begin the older clarifier refurbishing project and we anticipate completion of this project by the end of 2011. The older filter refurbishing is expected to be completed by the middle of February 2011. When both projects are completed the Brookshire Treatment capacity will be 3-million gallons per day. Another key focus has been to install water main valves in well planned and strategically located areas that will lessen wide range water outages during water main repairs due to age, soils shifting and main breaks due to private contractor negligence. To date we have located and or installed over 100 water main valves throughout the district. This exceeds the districts goals and, although we are not through, this will continue throughout the short term or 3-years.  Another key goal is to increase the concentration on sewer preventative maintenance. Management has developed and implemented a scheduled gravity sewer cleaning program and so far this fiscal year have cleaned over 3,000 feet of gravity sewer collection mains. Crews have also rehabilitated over 30 manholes throughout the gravity sewer infrastructure. We have implemented a progressive sanitary sewer lift station maintenance program which includes the addition of radio telemetry at each lift station as funds become available. This fiscal year we have installed 5 additional lift station radio telemetry units which will bring our count to 25 out of 75 lift stations. We will continue to add units list as funds are available. On the long term goals and objectives the district has identified priority projects which will be discussed on the back page.   East Cedar Creek FWSD Customer News Letter Current Events for 2010 – 2011 Article Three Fats, Oil & Grease (FOG) Problems If you listen to the radio or watch television you have probably seen a paid advertisement from one of our major utilities in the area explaining to the listeners that FOG is one of the main reasons they experience sewer blockages. FOG effects even the smallest utility as well as the budget bottom line.   Accompanying this article are a few pictures from your sewer collection system validating what FOG actually does to pumps in the collection system. FOG is the leading cause of residential sewer backups whether it is a gravity sewer or low pressure force main system. With your assistance you can help reduce costs.   After cooking drain the fat, oil and grease into a container and let solidify and dispose of it in your dumpster. Adding a small amount of kitty litter in the container will help absorb the oils. I find empty plastic coffee containers make an excellent choice for the container. Other things that contribute to blockage are non-biodegradable material such as paper products with fiber woven into the paper and discarded plastic covers from personal hygienic products. Cat litter and even disposable hypodermic needles are found in manholes and residential grinder tanks. Help your district cut our costs by disposing of these unwanted products into our sewer collection system responsibly.

East Cedar Creek FWSD Customer News Letter Current Events for 2010 – 2011 Article Four District Priority Projects Infrastructure Improvements Whether the Mabank Acquisition is approved or not ECCFWSD long term goals are dedicated toward cost reduction, compliance and capacity development. It is the intent of the Board of Directors to approve the issuance of bonds in the amount of 1.65 million and approve the issuance of Revenue Refunding Bonds. This action will allow for the Mabank Acquisition or fund the first of three phases of district improvements. Projects will be funded by revenue bonds and the first phase will not increase the annual debt payments due to the refinancing of older bonds at lower interest rates.   The projected growth in the years ahead will assist in spreading out the new debt on phases two and three with minimal impact to the district’s current rate structure.   The projects will extend into the year 2016 and include water and wastewater treatment processing that will assist in reducing annual expenses. Other water projects will include 6-inch and 8-inch water main extensions, additional water valve installations, computerized water and sewer infrastructure mapping and potential site acquisition for a second elevated water tower.   Sewer projects will consist of enlarging key sewer lift stations and funding approximately $500,000 to reduce the inflow / infiltration (I & I) problems the sewer collection system receives during heavy rain events.   We are not waiting for bonds to resolve our total issues. This year to date the district’s staff has located 17 workable valves that were not on old mapping, replaced and installed a total of 27 valves. The district’s overall unaccountable water loss is under 10% and both the McKay and Brookshire Water treatment Plants are in full compliance which includes the disinfection by products; TTHM’s and HAA5’s.   Our sewer preventative maintenance program has resulted in sewer cleaning of 22,573 feet of sewer collection mains and rehabilitated 21 Manholes.   As your General Manager for the District I would like to close by bragging about our accomplishments this year and we will continue to work toward our mission statement:  “To provide safe and adequate potable water and sanitary sewer service for our customers. To provide these services with sound management and operation practices in the most economical manner which meets all legal, general accounting and regulatory standards of the utility profession.”

ECCFWSD Drinking Water Compliance     As your General Manager for your water / sewer district I am pleased to announce that your drinking water meets all State and Federal regulations under the Safe Drinking Water Act regulated by the Environmental Protection Agency (EPA) and Texas Commission of Environmental Quality (TCEQ)   Since we have changed from the alum / polymer to a liquid alum chemical for water treatment we have witnessed a significant drop in the disinfection by products (DBP) known as TTHM’s and HAA5’s. These two elements have been the only non-compliance issues your district has had difficulty with in meeting full compliance. In the past 2-years we have been in and out of compliance regarding DBP elements. We now are confident that our change over to the liquid alum has reduced the risk significantly for non-compliance for DBP’s.   TTHM’s and HAA5’s are collected at sites located on the drinking water distribution piping system. These samples are then forward to a Texas Certified Lab for analysis. The Maximum Contaminant Level (MCL) for TTHM’s is 0.08 mg/L and for HAA5’s is 0.06 mg/L   Listed below are the TTHM and HHA5 4-quarter running average levels in our drinking water for each of the water plant systems for ECCFWSD;   Plant Name                    TTHM Level                  HAA5 Level Brookshire                       0.067 mg/L                    0.055 mg/L McKay                           0.050 mg/L                      0.036 mg/L           For any information regarding your water quality please feel free to e-mail your concerns to bgoheen@eastcedarcreek.net or call our office at (903) 887-7103 and your question will be directed to the appropriate personnel.

ECCFWSD General Manager’s prospective of the Gun Barrel City Protest   East Cedar Creek Fresh Water Supply District intentions were to provide water service to all Gun Barrel City customers to reduce the confusion to residents in subdivision such as Loon Bay, Timber Trails, Thunderbird Shores and Pleasure Land. At times the City of Mabank receive a call from residents in these subdivisions regard sewer problems and they must informed them that they need to contact ECCFWSD. The same thing occurs on water issues, ECCFWSD must inform them they need to call the City of Mabank.   This is still the District’s intent only it appears it will be sometime in the fall of 2011 before construction can begin, providing TCEQ and possibly the Courts of Texas favor on behalf of ECCFWSD in the on going protest by Gun Barrel City to block the Sale, Transfer, Merger application on file with TCEQ for the City of Mabank to sale to ECCFWSD the water system and transfer their CCN to ECCFWSD that is being protested by Gun Barrel City.   The delayed time frame does not interfere with customer service just delays the switch over from the City of Mabank Water to ECCFWSD Water for those water meter accounts in the affected areas. Therefore residents in the above mentioned subdivision will continue to pay their $29.00 monthly minimum, which includes 1,000 gallons of water, and then water rates of $3.70 per thousand for up to 10,000 gallons and there after the water rate is $4.25 per 1,000 gallons.   If this protest had not occurred it is possible that ECCFWSD would be in the preconstruction phase of the purchase and the City of Mabank would have received the funds for the purchase in August 2010. The schedule under the construction phase was to transfer the Loon Bay, Timber Trails, Pleasure Land and Thunderbird Shore subdivisions over to ECCFWSD water and commence charging the customers in those subdivisions the same rate as existing ECCFWSD customers. ECCFWSD water rates are $17.26 for the monthly minimum, no water usage included, $3.25 per 1,000 gallons for the first 3,000 gallons, $3.50 per 1,000 gallons from 3,000 gallons to 10,000 gallons and there after the water rate is $3.75 per 1,000 gallons.             The average residential monthly water usage for ECCFWSD is slightly below 5,000 gallons per month. For easy calculation the average residential monthly water usage is 5,000 gallons per month. Under the City of Mabank this would represent an average water bill for that residential customer to be $43.80 and for the same residential customer under ECCFWSD water rates the monthly water bill would be $33.51 or a difference of $10.29. This equates to an annual difference of $123.48 for the average residential customer.   Since the protest by Gun Barrel City has been recognized as a valid protest ECCFWSD has spent over $15,000 in expenses for attorney fees, engineering fees and travel, this does not include the numerous staff hours associated to this case. It would be wrong and precarious on our part to guess what the other parties involved in this case has expensed.   If one reviews where revenues are generated for budgeted and non-budgeted expenses for such as process it is obvious they come directly from utility customer billings and citizens contributing to the GBC sales tax revenues. Therefore the Gun Barrel City citizens who reside in the above referenced subdivision as well as all the remaining citizens of GBC and all customers of ECCFWSD are being impacted twice by this protest.   Is to own your own water system for approximately 700 active water customers the best alternative to controlling one’s own destiny or is it better to concede and recognize that ECCFWSD is the solution and work in unison for growth, prosperity and maintain economical water and sewer rates through customers by scale a better alternative?   Bill Goheen ECCFWSD General Manager