1. City of Buda ElectroPurification Water Supply Evaluation Drew Hardin, PE Council Workshop - January 20, 2015

2. Key Discussion Points Water Supply Needs & Strategy Electro Purification - Review –Background –Sustainability / Impacts –Cost September 29 Council Meeting - Recap Electro Purification - Contract Terms Status Update – HCPUA Kyle / Buda Pipeline Action & Next Steps

3. Water Supply Needs & Strategy 2.0 MGD 5.6 MGD 3.6 MGD Existing Supply Future Need (2060) Deficit (2060) HCPUA Interim: 1.5 to 2.0 MGD (2017) Permanent: 3.6 MGD (2027) Electro Purification: 1.0 MGD Factor of Safety 2 nd source by 2017 Delay HCPUA Permanent Safety Factor Year Needed 2017 to 2020

4. Private Wholesale Water Supplier Water Source: Trinity – Cow Creek Formation Maximum Projected Production: 5.0 to 6.0 MGD Other Users: –Goforth: 3 MGD –Clark Wilson: 1.3 MGD Delivery Point: Kohler’s & FM 1626 (Utilizes HCPUA Pump Station/ Pipeline) Three alternative delivery points Identified 4 Electro Purification - Background EP HCPUA

5. EP Water - Considerations Viability Sustainability & Impact Cost of Service

6. EP Water - Considerations EP has some history developing water supplies in TX Trinity Aquifer is viable water source at this location. 3 Test Wells = 1.99 MGD. Limited safety factor included by EP. Independent review projects approx. 25% less. Additional wells required to produce > 3 MGD (Goforth). Production of future wells unknown. Water quality does vary significantly between 3 test wells - blended water quality of existing and future wells unknown. No current jurisdictional/permitting limitations at this time. Schedule for delivery of water = 2 to 3.5 years. Viability

7. EP – Impact to Wells Approximately 30 wells within 4 miles of EP well field may be completed in or close proximity to the same producing formation (Cow Creek formation) Approximately 200 - 300+ feet of artesian pressure decline may be experienced in some of these wells If pumps are set deep enough, supplies will likely still be obtainable with small increases in lift cost 7 Sustainability

8. EP – Impact to Springs Cow Creek Springs –Jacob’s Well Spring – 6 miles west of EP wells –Pleasant Valley Spring – 11 miles west of EP wells –Likely no effect to very diffuse effect over long-term, springs likely disconnected to EP wells due to faulting Edwards Springs –Spiller Ranch Spring – 10 miles northeast of EP wells –No effect 8 Sustainability

9. Exist vs Future Pumpage Sustainability

10. Nearby Well Hydrographs Sustainability Top of Cow Creek: ~670 feet MSL Top of Cow Creek: ~230 feet MSL

11. $137 $113 $123 EP Water - Considerations Cost

12. September 29 Council Meeting Council Action: Move forward with EP to secure 1.0 MGD water supply Follow-up: Discuss with HCPUA potential for shared facilities Negotiate terms of contract with EP for 1.0 MGD water.

13. EP Contract Terms Article 1 – Investigation Phase (Option Period) Article 2 – Reservation & Construction Periods Article 3 – Reservation & Supply of Water Article 4 – Fees, Billing & Payment Article 5 – Metering Article 6 – Regulation of Groundwater Article 7 – Indemnity & Force Majeure Article 8 – Term of Contract Article 9 - Seller’s Other Contracts Article 10 – Default & Remedies Article 11 – Notices Article 12 – General Terms

14. EP Contract – Article 1 & 2 Contract Requirements Go Into Effect OPTION PERIOD (9 Months) Buda Requirements Independent Verification EP Requirements Quantity Testing – Prove up 5.65 MGD Quality Testing – Meet TCEQ standards WATER DELIVERY (Term: 30 Years) Buda Requirements Reservation Fee (0.50 MGD): $65,700 Take or Pay Fee (0.50 MGD): $593,125 Total Year 1: $658,825 Kyle/Buda Pipeline by HCPUA required. EP Requirements Delivery 0.50 MGD, Year 1 Escalates to 1.0 MGD over 5 years Water Quality – Chlorine + TCEQ requirements CONSTRUCTION PERIOD (Up to 18 Months) Buda Requirements 18-month notice to construct Reservations Fees: $131,400/yr EP Requirements Construct ALL facilities to Delivery Point Acquire ALL easements RESERVATION PERIOD (Up to 5 Years) Buda Requirements Reservation Fees: $131,400/yr EP Requirements None

15. EP Contract – Articles 3, 4 & 8 Costs decrease over the Term of Contract Cost Performance Index (CPI) escalation added after year 1 to account for inflation. Rates will change if Alternative Delivery Point selected Buda may resale water at own discretion. EP will deliver additional water to Buda if available Groundwater District fees in future would be passed through to Buda Neither party can assign contract without approval. Term is for 30 years with 10 year renewable

16. HCPUA – Kyle/Buda Pipeline Facilities: –5 to 6 MGD Booster Pump Station –Ground Storage Tank –33,000 LF 18” Pipeline Engineering Underway Schedule: –Engineering:2015 –Easement Acquisition: 2015 / 2016 –Bid: Summer 2016 –Construction: Fall 2016 to Early Summer 2017 –Project Complete: Early Summer 2017

17. Action & Next Steps Action: Consider Execution of Contract with ElectroPurification for delivery of 1 MGD water supply to Delivery Point at Kohler’s Crossing and FM 1626. Next Steps…. 1.Execute EP Contract 2.EP to begin test wells 3.Work with HCPUA to confirm final demands for HCPUA water 4.Continued coordination on delivery of Kyle/Buda Pipeline 5.Independent review of test well data when EP Option Period complete

18. Questions

19. Extra slides

20. GWCD Boundaries (from EP)

21. Alternatives Comparison 21 Permanent Water Needed: 3.6 MGD (2060) Interim Water Needed: 2.0 MGD (2017-2028) HCPUAEP Water Water (mgd) (mgd) Alternative 1: 1.6 (5.4%) 2.0 Alternative 2: 3.6 (11.3%) 0 Alternative 3: 2.6 (8.4%) 1.0 Alternative 4: 3.6 (11.3%) 1.0 Feasibility Unlikely

22. Water Supply Cost – Short-Term Feasibility Unlikely

23. Staff Recommendation 23 Key Drivers: Err on side of more water than needed. Possibility of selling water to others in future to off-set cost. Uncertainty with EP supply – not prudent to reduce HCPUA supply at this time. Would potentially allow HCPUA to push back permanent facilities for several years, reducing cost of all customer cities. City will still have some flexibility to adjust HCPUA demands based on EP findings during Option Period, if desired. Diversifies water supply. Preferred Alternative Alternative 4 – HCPUA = 3.6 MGD, EP = 1.0 MGD

24. Electro Purification – Pros & Cons 24 ProsCons If HCPUA supply reduced….. Approx. $4M savings (next 10 yrs) Reduces Buda’s share in HCPUA project - 11.3% to 8.4%. Equates to approx. $10M savings long-term. Blending issues with HCPUA – who is responsible for water quality? Could take up to 12 months to confirm if quantity needed can be produced If added to HCPUA supply…. Potentially delays need for Permanent HCPUA water up to 5 years. Trinity Aquifer – unknown quantity, no Groundwater District, typically lower producing Diversification of Water SupplyPrivate water supplier Requires HCPUA to share facilities. Risk of losing 1.0 MGD from HCPUA if EP goes away in future