(per 1,000 gal.) General - American City and County Municipal Cost Index 20-Year Average as of April 2017

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1 TEST YEAR Beginning Fund Balance $ ,009,742 Target Debt Service Coverage Target Days Operating Reserve Schedule 1 CURRENT WATER RATES BUDGET FORECAST INFLATION FACTORS Year 1 Year 2 Year 3 Year 4 Year 5 Minimum Bill Inside Outside Inside Outside Description Meter Size 5 / 8 inch $ $ $ $ General 0.00% 2.51% 2.51% 2.51% 2.51% 3 / 4 inch Salaries 0.00% 3.00% 3.00% 3.00% 3.00% 1 inch Benefits 0.00% 10.00% 10.00% 10.00% 10.00% 1.5 inch Repairs & Maintenance 0.00% 8.57% 8.57% 8.57% 8.57% 2 inch Water Customer Growth 7.00% 7.00% 6.00% 5.00% 4.00% 3 inch Sewer Customer Growth 7.00% 7.00% 6.00% 5.00% 4.00% 4 inch NTMWD Water Contract 0.00% 10.0% 10.0% 7.0% 5.0% 6 inch 1, , , , General Fund Transfer 0.00% 5.51% 5.51% 5.51% 5.51% 8 inch 1, , , , Construction Cost Index 0.00% 3.05% 3.05% 3.05% 3.05% 10 inch 2, , , , None Volumetric Rates Inflation Factor Sources: (per 1,000 gal.) General - American City and County Municipal Cost Index 20-Year Average as of April ,000 $ 4.90 $ 6.13 $ 5.14 $ 6.43 Salaries - Per staff. 5,001-10, Benefits - Per staff. 10, , Repairs & Maintenance - Average annual increase , Water Growth - Per staff. Placeholder Wastewater Growth - Per staff. Placeholder NTMWD Water Contract - Per staff, "Preliminary Customer City Water Rate Projections" Placeholder General Fund Transfer - Per staff, Salaries + CPI. Placeholder Construction Cost Index History - American City and County, 20-Year Average as of April 2017 Placeholder None CURRENT WASTEWATER RATES Inside Outside Inside Outside Minimum Bill Meter Size 5 / 8 inch $ $ $ $ / 8 inch 3 / 4 inch / 4 inch 1 inch inch 1.5 inch inch 2 inch inch 3 inch inch 4 inch , , inch 6 inch 1, , , , inch 8 inch 2, , , , inch 10 inch 3, , , , inch Volumetric Rates (per 1,000 gal.) $ 4.71 $ 5.89 $ 4.71 $ 5.89 Page 1 of 25

2 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 1 CURRENT WATER RATES WATER 2 Personnel Services Supervision $ 73,317 $ 75,516 $ 77,782 $ 80,115 $ 82, Operational 65,354 67,315 69,334 71,414 $ 73, On-call Pay 1,800 1,854 1,910 1,967 $ 2, Longevity Pay $ Employee Merit Overtime 2,200 2,266 2,334 2,404 2, FICA 10,973 11,302 11,641 11,990 12, Retirement 15,506 17,057 18,762 20,638 22, HRA Card Expense 15,133 16,646 18,311 20,142 22, Employee Health Care Cost 16,035 17,639 19,402 21,343 23, Dental Insurance 1,250 1,375 1,513 1,664 1, Life & Disability Insurance 961 1,057 1,163 1,279 1, Deminimis Benefits Employee Testing Worker's Comp Insurance 4,815 5,297 5,826 6,409 7, Unemployment Employment Advertising Misc Employee Costs Total Personnel Services $ 208,114 $ 218,116 $ 228,794 $ 240,207 $ 252, Page 2 of 25

3 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 34 Operating Expenses Office Supplies $ 400 $ 410 $ 420 $ 431 $ Printing Office Equip/Furniture/Fixtures IT Equipment Janitorial Motor Vehicle Fuel 6,000 6,151 6,305 6,463 6, Minor Tools & Equipment 2,500 2,563 2,627 2,693 2, Food Wearing Apparel 1,500 1,538 1,576 1,616 1, Water Distribution Supplies 130, , , , , Chemicals Landscaping Supplies 1,000 1,025 1,051 1,077 1, Miscellaneous Supplies Building/Structures Repair 3,000 3,257 3,536 3,839 4, Office Equip Repair Motor Vehicle Repair 2,500 2,714 2,947 3,199 3, Equip/Machinery Repair 4,000 4,343 4,715 5,119 5, Water & Wastewater Main Repair 25,000 27,142 29,468 31,993 34, Meter Taps & Srv Connect Repair 1,500 1,605 1,701 1,786 1, M/R Pump Station Repair 50,000 54,284 58,936 63,986 69, Pump Station Repairs Miscellaneous Maint & Repairs NTMWD Water Contract 2,290,560 2,519,616 2,771,577 2,965,587 3,113, Communications 1,500 1,538 1,576 1,616 1, Electricity 80,000 80,000 80,000 80,000 80, Natural Gas Water & Sewer Service Page 3 of 25

4 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year Software Costs & IT Support Lease/Rental of Equipment Insurance - Liab & Property 11,540 11,830 12,127 12,431 12, Fees & Permits 10,000 10,251 10,508 10,772 11, Public Communications Training & Travel 5,000 5,126 5,254 5,386 5, Membership Dues Billing & Collection Services Contract Services 7,500 7,688 7,881 8,079 8, Lab Services 3,000 3,075 3,152 3,232 3, Consulting Services Miscellaneous Services Incentive to Developer 100, , , , , Debt Interest Expense 2011 CO Principal Pmt Contra Capital Lease - Principal Capital Lease - Interest Pmt to GF in Lieu of Frch Txs Capital - Vehicles Capital - Machinery & Equip Transfer to General Fund Transfer to Other Funds Transfer to I&S Fund Transfer to W&S Debt Service Contingency 14,784 15,155 15,535 15,925 16, Total Operating Expenses $ 2,739,737 $ 2,980,736 $ 3,245,368 $ 3,452,830 $ 3,615, TOTAL EXPENDITURES - WATER $ 2,962,634 $ 3,214,007 $ 3,489,698 $ 3,708,962 $ 3,884,141 Page 4 of 25

5 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year WASTEWATER 103 Personnel Services Supervision $ - $ - $ - $ - $ Operational 59,987 61,787 63,640 65,549 67, Longevity Pay Employee Merit Overtime 4,000 4,120 4,244 4,371 4, FICA 4,933 5,081 5,233 5,390 5, Retirement 6,970 7,667 8,434 9,277 10, HRA Card Expense 10,089 11,098 12,208 13,428 14, Employee Health Care Cost 10,690 11,759 12,935 14,228 15, Dental Insurance ,008 1,109 1, Life & Disability Insurance Employee Testing Worker's Comp Insurance 2,067 2,274 2,501 2,751 3, Employment Advertising Msc Employee Costs Total Personnel Services $ 100,501 $ 105,692 $ 111,257 $ 117,228 $ 123, Operating Expenses Office Supplies $ 300 $ 308 $ 315 $ 323 $ Motor Vehicle Fuel 8,000 8,201 8,407 8,618 8, Minor Tools & Equipment 2,000 2,050 2,102 2,154 2, Food Wearing Apparel 1,500 1,538 1,576 1,616 1, Wastewater Collect Supplies 1,500 1,538 1,576 1,616 1, Chemicals 4,000 4,100 4,203 4,309 4, Miscellaneous Supplies Page 5 of 25

6 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year Building/Structures Repair Motor Vehicle Repair 3,000 3,257 3,536 3,839 4, Equip/Machinery Repair 2,500 2,714 2,947 3,199 3, Water & Wastewater Main Repair 2,000 2,171 2,357 2,559 2, M/R Meter/Taps & Swr Connects 5,000 5,350 5,671 5,955 6, Lift Station Repairs 15,000 16,285 17,681 19,196 20, Communications 1,536 1,575 1,614 1,655 1, Electricity 10,000 10,000 10,000 10,000 10, Natural Gas Software Costs & IT Support 4,000 4,100 4,203 4,309 4, Lease/Rental of Equipment 2,000 2,050 2,102 2,154 2, Insurance - Liab & Property 2,073 2,125 2,178 2,233 2, Training & Travel 1,500 1,538 1,576 1,616 1, Contract Services 15,000 15,377 15,762 16,158 16, Consulting Services Miscellaneous Services Principal Pmt Contra Capital Lease - Principal Capital Lease - Interest Sabine Creek WW Plant Debt 704, , ,223 1,462,227 1,104, Sabine Creek WW Plant Debt Ph2 327, , , , , Parker Creek Existing Sewer Main 301, , , , , Parker Creek WW Line Debt Ph2 190, , , , , Pmt to GF in Lieu of Frch Txs Contingency 14,786 15,157 15,538 15,928 16, Capital - Vehicles Capital - Machinery & Equip Transfer to 2015 CO WS project Total Operating Expenses $ 1,619,518 $ 2,225,636 $ 1,644,323 $ 2,379,525 $ 2,035, TOTAL EXPENDITURES - WW $ 1,720,019 $ 2,331,328 $ 1,755,581 $ 2,496,753 $ 2,158,668 Page 6 of 25

7 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year ADMINISTRATIVE 186 Personnel Services Supervision $ 91,662 $ 94,412 $ 97,244 $ 100,162 $ 103, Operational Longevity Pay Employee Merit Overtime Auto Allowance 6,000 6,180 6,365 6,556 6, Other Allowances and Reimbursements FICA 7,486 7,711 7,942 8,180 8, Retirement 10,579 11,637 12,801 14,081 15, HRA Card Expense 5,044 5,548 6,103 6,714 7, Employee Health Care Cost 5,345 5,880 6,467 7,114 7, Dental Insurance Life & Disability Insurance Employee Testing Worker's Comp Insurance Unemployment Misc employee costs Total Personnel Services $ 127,558 $ 132,939 $ 138,638 $ 144,678 $ 151, Operating Expenses Office Supplies $ 250 $ 256 $ 263 $ 269 $ Printing Office Equip/Furniture/Fixtures IT Equipment Motor Vehicle Fuel Minor Tools & Equipment Wearing Apparel Page 7 of 25

8 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year Building/Structures Repair Motor Vehicle Repair Miscellaneous Maint & Repairs Communications 14,738 15,108 15,487 15,876 16, Natural Gas Water & Sewer Service 8,000 8,201 8,407 8,618 8, Software Costs & IT Support Lease/Rental of Equipment 2,025 2,076 2,128 2,181 2, Insurance - Liab & Property Cred Cd Merchant Fees Training & Travel Accounting & Auditing Engineering Services 45,000 46,130 47,287 48,474 49, Legal Services 35,000 35,879 36,779 37,702 38, Consulting Services Miscellaneous Services Claims and Damages Principal Pmt Contra Capital Lease - Principal Capital Lease - Interest Pmt to GF in Lieu of Franchise Tx Contingency 27,500 28,190 28,898 29,623 30, Capital - Vehicles Capital - Miscellaneous Transfer to General Fund 794, , , , , Transfer to I&S Fund Transfer to WS Debt Service Fund 47,118 51,100 44,170 42,750 41, Total Operating Expenses $ 976,240 $ 1,027,390 $ 1,070,127 $ 1,121,006 $ 1,174, TOTAL EXPENDITURES - ADMIN $ 1,103,798 $ 1,160,330 $ 1,208,764 $ 1,265,684 $ 1,325, Page 8 of 25

9 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year BILLING 268 Personnel Services Supervision $ - $ - $ - $ - $ Operational 110, , , , , Longevity Pay Employee Merit Overtime 4,532 4,668 4,808 4,952 5, FICA 8,867 9,133 9,407 9,689 9, Retirement 12,530 13,783 15,161 16,677 18, HRA Card Expense 15,089 16,598 18,258 20,083 22, Employee Health Care Cost 16,145 17,760 19,535 21,489 23, Dental Insurance ,008 1,109 1, Life & Disability Insurance Worker's Comp Insurance Misc employee cost Total Personnel Services $ 170,234 $ 178,523 $ 187,379 $ 196,850 $ 206, Operating Expenses Office Supplies $ 3,000 $ 3,075 $ 3,152 $ 3,232 $ 3, Printing Office Equip/Furniture/Fixtures 1,000 1,025 1,051 1,077 1, IT Equipment 3,210 3,291 3,373 3,458 3, Janitorial Wearing Apparel Miscellaneous Supplies Building/Structures Repair Office Equip Repair 1,000 1,025 1,051 1,077 1, Communications Communications - UF Software Costs & IT Support 1,575 1,615 1,655 1,697 1, Software Costs & IT Support -UF 39,715 40,712 41,734 42,781 43,855 Page 9 of 25

10 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year Lease/Rental of Equipment Insurance - Liab & Property Credit Cd Merchant Fees 52,900 54,228 55,589 56,984 58, Training & Travel 1,000 1,025 1,051 1,077 1, Membership Dues Billing & Collection 33,460 34,300 35,161 36,043 36, Web Payment Fees 31,103 31,884 32,684 33,504 34, Contract Services Accounting & Auditing 21,290 21,824 22,372 22,934 23, Legal Services Consulting Services 15,000 15,377 15,762 16,158 16, Bad Debt Expense 17,850 18,298 18,757 19,228 19, Cash Over/Short Capital - Machinery & Equip Total Operating Expenses $ 222,903 $ 228,498 $ 234,233 $ 240,112 $ 246, TOTAL EXPENDITURES - BILLING $ 393,137 $ 407,021 $ 421,612 $ 436,962 $ 453, Capital Improvement Plan 339 Water Projects $ 470,000 $ 505,000 $ 100,000 $ 100,000 $ 100, Wastewater Projects 130, , , , , Blackland Waterline Capital Reserve (New) 800, ,000 1,000,000 1,100,000 1,200, TOTAL EXPENDITURES - CIP $ 1,400,000 $ 1,505,000 $ 1,520,000 $ 1,300,000 $ 1,400, $ 7,579,588 $ 8,617,686 $ 8,395,655 $ 9,208,361 $ 9,221, TOTAL REVENUE REQUIREMENT Page 10 of 25

11 Five-Year Combined Water Wastewater Revenue Requirement (FY ) nh Schedule 2 Fund Account Description Test Year/ Year 1 Year 2 Year 3 Year 4 Year REVENUE OFFSETS 359 Rate Revenues Water Sales Revenue $ - $ - $ - $ - $ WW Collection & Treatment Fees TOTAL RATE REVENUES $ - $ - $ - $ - $ Non - Rate Revenues Credit Card Convenience Fees $ 84,003 $ 84,003 $ 84,003 $ 84,003 $ 84, Transfer Fees New Connection Fees - Water 201, , , , , New Connection Fees - Sewer 75,090 75,090 75,090 75,090 75, Late Payment Penalty - Water 37,820 37,820 37,820 37,820 37, Late Payment Penalty - Sewer 36,720 36,720 36,720 36,720 36, Reconnection Fees - Water 16,880 16,880 16,880 16,880 16, Reconnection Fees - Sewer Re-Read Fees NSF Check Fees 1,000 1,000 1,000 1,000 1, Other Water Fees Developer Contributions NTMWD Rebate 100, , , , , NTMWD Rebate - Waste Water 45,420 45,420 45,420 45,420 45, Investment Income 15,130 15,130 15,130 15,130 15, Write-off Recovery Write-off Recovery Miscellaneous Income 2,090 2,090 2,090 2,090 2, Developer Contribution - Water Developer Contribution - Sewer Transfers in from Sewer Impact 327, , ,318 1,047, , Transfer in from Parker Creek Fund 62, , , , , Transfers Transfer in from Water Capital Replacement 470, , , , , Transfer in from Sewer Capital Replacement 195, , , , , TOTAL NON - RATE REVENUES $ 1,671,029 $ 2,405,593 $ 1,673,064 $ 2,082,359 $ 1,732, Total Revenues $ 1,671,029 $ 2,405,593 $ 1,673,064 $ 2,082,359 $ 1,732, NET REVENUE REQUIREMENT $ 5,908,559 $ 6,212,093 $ 6,722,591 $ 7,126,002 $ 7,488,698 Page 11 of 25

12 Capital Improvement Plan Schedule 3 CIP Funding Year 1 Year 2 Year 3 Year 4 Year 5 Water Capital Improvement Plan Source 1 WoodCreek Tower Beautification Cash $ - $ 105,000 $ - $ - $ - 2 Blackland 12 Inch Waterline Impact Fees - 827, ENT WATER Other Water Capital Projects Cash , , ,000 4 Capital Reserve - Water Cash AMI Register Modernization Cash 470, ,000 6 Total - Water Capital Projects $ 470,000 $ 1,332,000 $ 100,000 $ 100,000 $ 100, Funding Sources 9 Cash $ 470,000 $ 505,000 $ 100,000 $ 100,000 $ 100, Debt Impact Fees - 827, Developer Contributions Total Funding - Water Capital Projects $ 470,000 $ 1,332,000 $ 100,000 $ 100,000 $ 100, Wastewater Capital Improvement Plan 17 Downtown Sewer Rehab Cash $ 100,000 $ 100,000 $ 420,000 $ 100,000 $ 100, WW Study for Joint Plant Cash 30, Other Wastewater Capital Projects Cash Capital Reserve - Wastewater Cash Total - Wastewater Capital Projects $ 130,000 $ 100,000 $ 420,000 $ 100,000 $ 100, Funding Sources 28 Cash $ 130,000 $ 100,000 $ 420,000 $ 100,000 $ 100, Debt Impact Fees Developer Contributions Total Funding - Wastewater Capital Projects $ 130,000 $ 100,000 $ 420,000 $ 100,000 $ 100,000 Page 12 of 25

13 Debt Service t Schedule 3 Year 1 1 Year 2 2 Year 3 Year 4 Year 5 EXISTING DEBT SERVICE (P&I) Series 2010 (2.65M) Annual Debt Service $ 41,868 $ 45,590 $ 44,170 $ 42,750 $ 41,330 CURR % Water 80% $ 33,494 $ 36,472 $ 35,336 $ 34,200 $ 33,064 % Wastewater 20% 8,374 9,118 8,834 8,550 8,266 Series 2011 (7.29M) Annual Debt Service $ 500,725 $ 497,725 $ 499,525 $ 500,925 $ 496,925 % Water 100% $ 500,725 $ 497,725 $ 499,525 $ 500,925 $ 496,925 % Wastewater 0% Series 2015 (3.75M) Annual Debt Service $ 244,225 $ 240,225 $ 240,750 $ 240,725 $ 240,550 % Water 94% $ 230,269 $ 226,498 $ 226,993 $ 226,969 $ 226,804 % Wastewater 6% 13,956 13,727 13,757 13,756 13,746 Total Existing Debt Service $ 786,818 $ 783,540 $ 784,445 $ 784,400 $ 778,805 Water $ 764,489 $ 760,695 $ 761,854 $ 762,094 $ 756,793 Wastewater $ 22,329 $ 22,845 $ 22,591 $ 22,306 $ 22,012 DEBT SERVICE FUNDING SOURCE Water Impact Fee Fund 311 $ 500,725 $ 497,725 $ 499,525 $ 500,925 $ 496,925 Wastewater Impact Fee Fund Water Storage Tank Fund , , , , ,550 Water and Sewer Project Fund , Utility Fund (Operations) Fund ,118 51,100 44,170 42,750 41,330 Total Debt Service Funding $ 792,068 $ 789,050 $ 784,445 $ 784,400 $ 778,805 (1) Annual debt service schedules unchanged from FY 2016 Study data. Payments Updated for current periods. (2) FY FY 2022 annual debt service from Debt Service Funding Sources provided by Fate staff. Page 13 of 25

14 Water Revenue Realized under Proposed Rates Schedule 4 Rate Adjustment 0.00% 2.50% 2.50% 2.50% 2.50% Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Net Water Revenue Requirement $ 3,718,486 $ 4,063,392 $ 4,423,814 $ 4,735,555 $ 5,005,580 Mon CURRENT WATER RATES Inside 5 / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 1, , , , , , inch 2, , , , , , / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 1, , , , , , inch 2, , , , , , City Using residential rates Outside 5 / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , Page 14 of 25

15 Water Revenue Realized under Proposed Rates Schedule 4 Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Minimum Bill Annual Revenue Inside 5 / 8 inch $ 759,589 $ 833,124 $ 905,291 $ 974,209 $ 1,038,383 3 / 4 inch 277, , , , ,545 1 inch 1,918 1,966 2,016 2,066 2, inch inch 2,046 2,098 2,150 2,204 2,259 Total Annual Revenue $ 1,040,884 $ 1,141,381 $ 1,240,071 $ 1,334,440 $ 1,422,304 5 / 8 inch $ 10,489 $ 10,752 $ 11,020 $ 11,296 $ 11,578 3 / 4 inch 2,558 2,622 2,688 2,755 2,824 1 inch 14,708 15,076 15,453 15,839 16, inch 11,511 11,798 12,093 12,396 12,706 2 inch 114, , , , ,493 3 inch 11,513 11,801 12,096 12,398 12,708 Total Annual Revenue $ 165,375 $ 169,510 $ 173,748 $ 178,091 $ 182,544 City 5 / 8 inch $ - $ - $ - $ - $ - 3 / 4 inch 1,791 1,836 1,882 1,929 1,977 1 inch inch 2,558 2,622 2,687 2,755 2,823 2 inch 12,278 12,585 12,900 13,222 13,553 Total Annual Revenue $ 16,627 $ 17,043 $ 17,469 $ 17,905 $ 18,353 Outside 5 / 8 inch $ 8,954 $ 9,834 $ 10,752 $ 11,709 $ 12,355 3 / 4 inch 30,701 33,763 36,623 39,260 42,007 1 inch 1,599 1,639 1,680 1,722 1,765 Total Annual Revenue $ 41,254 $ 45,235 $ 49,054 $ 52,691 $ 56,127 5 / 8 inch $ 320 $ 328 $ 336 $ 344 $ 353 Total Annual Revenue $ 320 $ 328 $ 336 $ 344 $ 353 Total Minimum Bill Revenue $ 1,264,460 $ 1,373,497 $ 1,480,677 $ 1,583,472 $ 1,679,680 Percent RR recovered from Min Bill 34.00% 33.80% 33.47% 33.44% 33.56% Percent RR to be recovered from Volumetric Rates 66.00% 66.20% 66.53% 66.56% 66.44% Page 15 of 25

16 Water Revenue Realized under Proposed Rates Schedule 4 Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Volumetric Revenue Volumetric Rates per 1,000 gallons Inside 0-5,000 $ 4.90 $ 4.90 $ 5.02 $ 5.15 $ 5.28 $ ,001-10, , , , ,000 $ 5.14 $ 5.14 $ 5.27 $ 5.40 $ 5.54 $ ,001-10, , , , Outside 0-5,000 $ 6.13 $ 6.13 $ 6.28 $ 6.44 $ 6.60 $ ,001-10, , , , ,000 $ 6.43 $ 6.43 $ 6.59 $ 6.76 $ 6.92 $ ,001-10, , , , Billing Determinants Gallons Inside 0-5,000 $ 943,624 $ 1,034,922 $ 1,124,575 $ 1,210,299 $ 1,290,107 5,001-10, , , , , ,706 10, , , , , , , , ,068 1,149 1,225 Total Annual Revenue $ 1,972,749 $ 2,163,617 $ 2,351,046 $ 2,530,261 $ 2,697, ,000 $ 22,505 $ 24,682 $ 26,821 $ 28,865 $ 30,768 5,001-10,000 19,233 21,094 22,921 24,668 26,295 10, , , , , , , , , , , , ,142 Total Annual Revenue $ 444,271 $ 487,255 $ 529,465 $ 569,825 $ 607,399 Outside 0-5,000 $ 34,705 $ 38,062 $ 41,360 $ 44,512 $ 47,448 5,001-10,000 15,667 17,183 18,671 20,095 21,420 10, ,000 12,077 13,246 14,393 15,490 16, , Total Annual Revenue $ 62,449 $ 68,491 $ 74,424 $ 80,097 $ 85, ,000 $ 89 $ 97 $ 105 $ 114 $ 121 5,001-10, , , , Total Annual Revenue $ 154 $ 169 $ 184 $ 198 $ 211 Total Volumetric Revenue $ 2,479,623 $ 2,719,532 $ 2,955,119 $ 3,180,381 $ 3,390,097 Percent RR recovered from Volumetric Rates 66.68% 66.93% 66.80% 67.16% 67.73% Page 16 of 25

17 Water Revenue Realized under Proposed Rates Schedule 4 Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Total Water Revenue from Proposed Rates $ 3,744,083 $ 4,093,029 $ 4,435,796 $ 4,763,853 $ 5,069,777 Net Revenue Requirement $ 3,718,486 $ 4,063,392 $ 4,423,814 $ 4,735,555 $ 5,005,580 Over / (Under) Recovery $ 25,597 $ 29,637 $ 11,981 $ 28,298 $ 64,197 Cummulative Over / (Under) Recovery $ 25,597 $ 55,235 $ 67,216 $ 95,514 $ 159,711 Page 17 of 25

18 Wastewater Revenue Realized under Proposed Rates Schedule 5 Rate Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Net Wastewater Revenue Requirement $ 2,190,074 $ 2,148,701 $ 2,298,776 $ 2,390,447 $ 2,483,117 Mon CURRENT WATER RATES Inside 5 / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , City Using residential rates Outside 5 / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , inch 4, , , , , , / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , inch 4, , , , , , Page 18 of 25

19 Wastewater Revenue Realized under Proposed Rates Schedule 5 Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates City 5 / 8 inch $ $ $ $ $ $ / 4 inch inch inch inch inch inch 1, , , , , , inch 2, , , , , , inch 3, , , , , , inch 4, , , , , , Minimum Bill Annual Revenue Inside 5 / 8 inch $ 882,991 $ 944,642 $ 1,001,426 $ 1,051,315 $ 1,093,498 3 / 4 inch 414, , , , ,301 Total Annual Revenue $ 1,297,920 $ 1,388,774 $ 1,472,328 $ 1,545,742 $ 1,607,798 5 / 8 inch $ 5,678 $ 5,678 $ 5,678 $ 5,678 $ 5,678 3 / 4 inch inch 4,889 4,889 4,889 4,889 4, inch 1,956 1,956 1,956 1,956 1,956 2 inch 21,905 21,905 21,905 21,905 21,905 3 inch 17,602 17,602 17,602 17,602 17,602 Total Annual Revenue $ 52,841 $ 52,841 $ 52,841 $ 52,841 $ 52,841 City 5 / 8 inch $ 1,622 $ 1,622 $ 1,622 $ 1,622 $ 1,622 3 / 4 inch inch inch 1,956 1,956 1,956 1,956 1,956 2 inch 3,129 3,129 3,129 3,129 3,129 3 inch 5,867 5,867 5,867 5,867 5,867 Total Annual Revenue $ 12,575 $ 12,575 $ 12,575 $ 12,575 $ 12,575 Outside 5 / 8 inch $ 1,521 $ 1,521 $ 1,521 $ 1,521 $ 1,521 3 / 4 inch 1,014 1,014 1,014 1,014 1,014 Total Annual Revenue $ 2,535 $ 2,535 $ 2,535 $ 2,535 $ 2,535 Total Minimum Bill Revenue $ 1,365,871 $ 1,456,725 $ 1,540,279 $ 1,613,693 $ 1,675,749 Percent RR recovered from Min Bill 62.37% 67.80% 67.00% 67.51% 67.49% Percent RR to be recovered from Volumetric Rates 37.63% 32.20% 33.00% 32.49% 32.51% Volumetric Revenue Volumetric Rates per 1,000 gallons Inside $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 $ 4.71 Outside $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 $ 5.89 Volumetric Annual Revenue Inside Total $ 828,178 $ 886,151 $ 939,465 $ 986,308 $ 1,025,906 Page 19 of 25

20 Wastewater Revenue Realized under Proposed Rates Schedule 5 Current Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Rates Total $ 14,290 $ 14,290 $ 14,290 $ 14,290 $ 14,290 Outside Total $ - $ - $ - $ - $ - Total Volumetric Revenue $ 842,468 $ 900,440 $ 953,754 $ 1,000,598 $ 1,040,196 Percent RR recovered from Volumetric Rates 38.47% 41.91% 41.49% 41.86% 41.89% Total Wastewater Revenue from Proposed Rates $ 2,208,339 $ 2,357,166 $ 2,494,033 $ 2,614,291 $ 2,715,945 Net Revenue Requirement $ 2,190,074 $ 2,148,701 $ 2,298,776 $ 2,390,447 $ 2,483,117 Over / (Under) Recovery $ 18,265 $ 208,465 $ 195,257 $ 223,844 $ 232,827 Cummulative Over / (Under) Recovery $ 18,265 $ 226,730 $ 421,987 $ 645,831 $ 878,659 Page 20 of 25

21 Schedule of Capital Reserve Balances Schedule 6 Capital Reserve Cashflow CURRENT WATER RATES Test Year/ Year 1 Year 2 Year 3 Year 4 Year 5 Water Beginning Balance $ 350,000 $ 168,000 $ 1,000 $ 289,000 $ 627,000 Total Transfers In 288, , , , ,000 Transfers Out Cash CIP 470, , , , ,000 Total Transfers Out 470, , , , ,000 Ending Balance $ 168,000 $ 1,000 $ 289,000 $ 627,000 $ 1,015,000 Wastewater Beginning Balance $ 350,000 $ 666,550 $ 474,050 $ 666,050 $ 1,228,050 Total Transfers In 512, , , , ,000 Transfers Out Cash CIP 130, , , , ,000 Manhole Project 65, ,500 Total Transfers Out 195, , , , ,000 Ending Balance $ 666,550 $ 474,050 $ 666,050 $ 1,228,050 $ 1,840,050 Page 21 of 25

22 Performance Summary Under Proposed Rates Schedule 7 CURRENT WATER RATES Year 1 Year 2 Year 3 Year 4 Year 5 Proposed Rates Proposed Water Rate Increases 0.00% 2.50% 2.50% 2.50% 2.50% Water Rate Revenues $ 3,744,083 $ 4,093,029 $ 4,435,796 $ 4,763,853 $ 5,069,777 Transfers In (impact fees and capital reserve) $ 470,000 $ 505,000 $ 100,000 $ 100,000 $ 100,000 Other Non-Rate Revenues 419, , , , ,141 Water Revenues 1 $ 4,633,224 $ 5,017,170 $ 4,954,936 $ 5,282,994 $ 5,588,918 Water Revenue Requirement² $ 4,607,626 $ 4,987,533 $ 4,942,955 $ 5,254,696 $ 5,524,721 Water Over/(Under) Recovery $25,597 $29,637 $11,981 $28,298 $64,197 Water Revenue Requirement Less: Cash Capital Outlay 758, , , , ,000 Transfer to General Fund 512, , , , ,041 Transfer to WS Debt Service Fund 47,118 51,100 44,170 42,750 41,330 Net Water Operating Expenses $ 3,290,087 $ 3,452,777 $ 3,740,339 $ 3,972,068 $ 4,160,350 Net Available Water Revenues for DSC $ 873,137 $ 1,059,393 $ 1,114,598 $ 1,210,926 $ 1,328,568 excludes transfers in from impact fees and capital reserve Proposed Wastewater Rate Increases 0.00% 0.00% 0.00% 0.00% 0.00% Wastewater Rate Revenues $ 2,208,339 $ 2,357,166 $ 2,494,033 $ 2,614,291 $ 2,715,945 Transfers In (impact fees and capital reserve) $ 585,696 $ 1,285,260 $ 957,731 $ 1,367,026 $ 1,017,656 Other Non-Rate Revenues 196, , , , ,192 Wastewater Revenues 1 $ 2,990,227 $ 3,838,618 $ 3,647,957 $ 4,177,509 $ 3,929,793 Wastewater Revenue Requirement $ 2,971,962 $ 3,630,153 $ 3,452,700 $ 3,953,666 $ 3,696,966 Wastewater Over/(Under) Recovery $ 18,265 $208,465 $195,257 $223,844 $232,827 Wastewater Revenue Requirement Less: Cash Capital Outlay 642, ,000 1,032, , ,000 Transfer to General Fund 282, , , , ,089 Net Wastewater Operating Expenses $ 2,047,472 $ 2,670,098 $ 2,106,221 $ 2,859,859 $ 2,534,877 Net Available Wastewater Revenues for DSC $ 357,060 $ (116,739) $ 584,004 $ (49,376) $ 377,260 excludes transfers in from impact fees and capital reserve NOTES: ( 1 ) Includes rate and non-rate revenues ( 2 ) Does not include depreciation. ( 3 ) Days Operating Reserve = Ending Balance / (O&M without CCO&Transfers)/365 Page 22 of 25

23 Performance Summary Under Proposed Rates Schedule 7 CURRENT WATER RATES Year 1 Year 2 Year 3 Year 4 Year 5 Proposed Rates Combined Utlity Performance Debt Service Coverage Total Available Revenues for Debt Service Coverage $ 1,230,197 $ 1,059,393 $ 1,114,598 $ 1,161,550 $ 1,705,828 Annual Debt Service 786, , , , ,805 Times Coverage Target Debt Service Coverage Ratio Operating Reserve Beginning Balance $ 2,009,742 $ 2,053,605 $ 2,291,707 $ 2,498,945 $ 2,751,087 Total Revenues 1 7,623,451 8,855,788 8,602,893 9,460,503 9,518,711 Total Expenses 2 (7,579,588) (8,617,686) (8,395,655) (9,208,361) (9,221,687) Combined Over/(Under) Recovery 43, , , , ,024 Ending Balance 2,053,605 2,291,707 2,498,945 2,751,087 3,048,111 Total Revenue Requirement² $ 7,579,588 $ 8,617,686 $ 8,395,655 $ 9,208,361 $ 9,221,687 Less: Cash Capital Outlay 1,400,000 1,605,000 1,620,000 1,400,000 1,500,000 Transfers Out 842, , , ,434 1,026,460 O&M (without CCO&Transfers) $ 5,337,558 $ 6,122,874 $ 5,846,560 $ 6,831,927 $ 6,695,227 Days Operating Reserve³ Target Days Operating Reserve Days Total Reserve of Total Revenue Requirement NOTES: ( 1 ) Includes rate and non-rate revenues ( 2 ) Does not include depreciation. ( 3 ) Days Operating Reserve = Ending Balance / (O&M without CCO&Transfers)/365 Page 23 of 25

24 Schedule 8 Heath Farmersville Fate (Current) Rowlett Royse City Sachse Murphy Mesquite McKinney Wylie Rockwall Prosper Garland Frisco CURRENT WATER Richardson Forney Plano Regional Bill Comparison - Fate Monthly Bill for 5,000 gallons $58.95 $55.31 $61.00 $ $70.05 $69.53 $ $71.77 $71.40 $71.04 $70.62 NTMWD Member Water Wastewater $79.52 $76.55 $84.68 $93.49 $ $ $ Page 24 of 25

25 Schedule 8 Regional Bill Comparison - Fate Monthly Bill for 10,000 Gallons Farmersville Princeton Fate (Current) Royse City Heath Rowlett Sachse Garland Mesquite Murphy Frisco Prosper Forney Rockwall McKinney Richardson Plano Wylie Sunnyvale $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $88.65 NTMWD Member Water Wastewater Page 25 of 25