HILLSBOROUGH COUNTY, FLORIDA $18035000 Utility Revenue Bonds

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NEW ISSUE -- Book-Entry Only RATINGS: See "RATINGS" herein In the opinion of Edwards Angell Palmer & Dodge LLP, Bond Counsel, based upon an analysis of existing law and assuming, among other matters, compliance with certain covenants, interest on the Series 2010A Bonds is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). Interest on the Series 2010A Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, and such interest is not included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel is also of the opinion that the Series 2010 Bonds and the interest thereon are exempt from taxation under the existing laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein. In the opinion of Bond Counsel, under existing law, interest on the Series 2010B Bonds and Series 2010C Bonds is included in gross income of the holders thereof for federal income tax purposes under the Code. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Series 2010 Bonds. See "TAX MATTERS" herein.

HILLSBOROUGH COUNTY, FLORIDA

$18,035,000 $110,265,000 $21,700,000 Utility Revenue Bonds Utility Revenue Bonds, Series 2010B Utility Revenue Bonds, Series 2010C Series 2010A (Federally Taxable – (Federally Taxable – (Tax-Exempt) Build America Bonds – Recovery Zone Economic Direct Payment) Development Bonds – Direct Payment)

Dated: Date of Delivery Due: August 1, as shown on the inside cover hereof Hillsborough County, Florida (the "County" or the "Issuer"), is issuing the $18,035,000 Utility Revenue Bonds, Series 2010A (Tax-Exempt) (the "Series 2010A Bonds"), $110,265,000 Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment) (the "Series 2010B Bonds") and $21,700,000 Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment) (the "Series 2010C Bonds" and collectively with the Series 2010A and the Series 2010B Bonds, the "Series 2010 Bonds") as fully registered bonds in denominations of $5,000 or any integral multiples thereof. The Series 2010 Bonds, when issued and delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Ownership interest in the Series 2010 Bonds may be purchased only in book-entry form in denominations of $5,000 and in integral multiples thereof. Purchasers of beneficial ownership interest in the Series 2010 Bonds will not receive physical certificates representing their ownership interest in such Series 2010 Bonds. So long as the Series 2010 Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Series 2010 Bondholder shall mean Cede & Co. and shall not mean the ultimate purchasers of the Series 2010 Bonds. See "DESCRIPTION OF THE SERIES 2010 BONDS – Book-Entry Only System" herein. Interest on the Series 2010 Bonds will be paid semiannually on February 1 and August 1 of each year, commencing February 1, 2011. So long as the Series 2010 Bonds are registered in the name of Cede & Co., as nominee of DTC, payments of the principal of, premium, if any, and interest on the Series 2010 Bonds will be made directly to DTC or its nominee, Cede & Co., by the Clerk of the Circuit Court of the County, as registrar and paying agent. Disbursement of such payments to DTC's Participants (as defined herein) is the responsibility of DTC. The Series 2010A Bonds are not subject to redemption prior to their respective dates of maturity. The Series 2010B Bonds and the Series 2010C Bonds are subject to optional, mandatory and extraordinary redemption prior to their respective dates of maturity. See "DESCRIPTION OF THE SERIES 2010 BONDS – Optional Redemption – Mandatory Redemption – Extraordinary Optional Redemption for the Series 2010B Bonds and the Series 2010C Bonds." This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2010 Bonds are being issued to provide funds sufficient, together with other available moneys, for the purpose of (1) financing the costs of the 2010 Project (as defined herein), (2) making a deposit into the Reserve Account (as defined herein) in an amount sufficient to satisfy the Reserve Requirement (as defined herein), (3) fund capitalized interest on the Series 2010 Bonds through August 1, 2012, and (4) paying certain costs and expenses relating to the issuance of the Series 2010 Bonds. The Series 2010 Bonds are being issued on a parity with the County's Junior Lien Refunding Utility Revenue Bonds, Series 2001, currently outstanding in the principal amount of $64,255,000. There are no outstanding Senior Lien Utility Revenue Bonds. See "SECURITY FOR THE BONDS – No Further Issuance of Bonds with a Senior Lien on Pledged Revenues." THE SERIES 2010 BONDS DO NOT CONSTITUTE GENERAL OBLIGATIONS OR INDEBTEDNESS OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF FLORIDA, BUT ARE PAYABLE SOLELY FROM AND SECURED BY A LIEN UPON AND A PLEDGE OF THE PLEDGED REVENUES AND THE FUNDS AND THE EARNINGS THEREON PLEDGED TO THE PAYMENT OF THE SERIES 2010 BONDS, IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. NO BONDHOLDER SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE AD VALOREM TAXING POWER OF THE COUNTY OR TAXATION IN ANY FORM ON ANY REAL OR PERSONAL PROPERTY TO PAY THE SERIES 2010 BONDS OR THE INTEREST THEREON, NOR SHALL ANY BONDHOLDER BE ENTITLED TO PAYMENT OF SUCH PRINCIPAL AND INTEREST FROM ANY OTHER FUNDS OF THE COUNTY OTHER THAN THE PLEDGED REVENUES AND THE FUNDS AND THE EARNINGS THEREON PLEDGED TO PAYMENT OF THE SERIES 2010 BONDS, ALL IN THE MANNER AND TO THE EXTENT PROVIDED IN THE RESOLUTION. ______THE MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND INITIAL CUSIP NUMBERS OF THE SERIES 2010 BONDS ARE DESCRIBED ON THE INSIDE COVER HEREOF. The Series 2010 Bonds are offered when, as and if issued and received by the Original Purchaser(s), subject to the approval of legality by Edwards Angell Palmer & Dodge LLP, West Palm Beach, Florida, Bond Counsel. Law Offices of Carol D. Ellis, P.A., Palm Beach, Florida, is serving as Co-Bond Counsel. Certain legal matters will be passed upon for the Issuer by Renée Francis Lee, Esq., County Attorney, or a Senior Assistant County Attorney and certain disclosure matters will be passed upon by GrayRobinson, P.A., Tampa, Florida, as Disclosure Counsel to the Issuer. Lansing C. Scriven, P.A., Tampa, Florida, is serving as Co-Disclosure Counsel to the Issuer. Public Financial Management, Inc. has acted as Financial Advisor for the Issuer. It is expected that the Series 2010 Bonds will be available for delivery in New York, New York, via DTC on or about November 16, 2010.

______BofA Merrill Lynch Wells Fargo Bank, National Association Original Purchaser of Series 2010A Bonds Original Purchaser of Series 2010B Bonds and Series 2010C Bonds Dated: October 19, 2010 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND INITIAL CUSIP NUMBERS

HILLSBOROUGH COUNTY, FLORIDA

$18,035,000 $110,265,000 $21,700,000 Utility Revenue Bonds, Utility Revenue Bonds, Series 2010B Utility Revenue Bonds, Series 2010C Series 2010A (Federally Taxable – (Federally Taxable – (Tax-Exempt) Build America Bonds – Recovery Zone Economic Direct Payment) Development Bonds – Direct Payment)

$18,035,000 Series 2010A Serial Bonds

Maturity Date Interest Initial CUSIP (August 1) Principal Amount Rate Yield Price Numbers* 2013 $2,355,000 3.00% 1.02% 105.274 432347KY7 2014 2,425,000 3.00 1.30 106.133 432347KZ4 2015 2,500,000 3.00 1.56 106.511 432347LA8 2016 2,575,000 2.25 1.87 102.047 432347LB6 2017 2,635,000 4.00 2.13 111.629 432347LC4 2018 2,740,000 2.50 2.39 100.768 432347LD2 2019 2,805,000 3.00 2.62 102.939 432347LE0

$59,455,000 Series 2010B Serial Bonds

Maturity Date Interest Initial CUSIP (August 1) Principal Amount Rate Yield Price Numbers* 2020 $4,675,000 3.85% 3.90% 99.594 432347LF7 2021 4,790,000 4.05 4.10 99.565 432347LG5 2022 4,920,000 4.20 4.25 99.537 432347LH3 2023 5,050,000 4.35 4.40 99.511 432347LJ9 2024 5,195,000 4.60 4.65 99.490 432347LK6 2025 5,350,000 4.80 4.85 99.471 432347LL4 2026 5,515,000 5.00 5.05 99.454 432347LM2 2027 5,695,000 5.10 5.15 99.436 432347LN0 2028 5,885,000 5.20 5.25 99.419 432347LP5 2029 6,085,000 5.30 5.35 99.404 432347LQ3 2030 6,295,000 5.40 5.45 99.391 432347LR1

$27,495,000 5.50% Term Bond, due August 1, 2034, Yield 5.55%/Price 99.335, Initial CUSIP Number 432347LT7* $23,315,000 5.55% Term Bond, due August 1, 2037, Yield 5.60%/Price 99.302, Initial CUSIP Number 432347LS9*

Series 2010C Term Bond

$21,700,000 5.85% Term Bond, due August 1, 2040, Yield 5.85%/Price 100, Initial CUSIP Number 432347LU4*

* The County is not responsible for the use of CUSIP numbers, nor is a representation made as to their correctness. The CUSIP numbers are included solely for the convenience of the readers of this Official Statement.

HILLSBOROUGH COUNTY, FLORIDA BOARD OF COUNTY COMMISSIONERS

Ken Hagan ...... Chair Mark Sharpe...... Vice Chair Kevin Beckner ...... Commissioner Rose Ferlita...... Commissioner Jim Norman ...... Commissioner Al Higginbotham...... Commissioner Kevin White...... Commissioner

CLERK OF THE CIRCUIT COURT AND EX-OFFICIO CLERK OF THE BOARD OF COUNTY COMMISSIONERS Pat Frank

INTERIM COUNTY ADMINISTRATOR Michael Merrill

COUNTY ATTORNEY Renée Francis Lee, Esq.

BOND COUNSEL Edwards Angell Palmer & Dodge LLP West Palm Beach, Florida

CO-BOND COUNSEL Law Offices of Carol D. Ellis, P.A. Palm Beach, Florida

DISCLOSURE COUNSEL GrayRobinson, P.A. Tampa, Florida

CO-DISCLOSURE COUNSEL Lansing C. Scriven, P.A. Tampa, Florida

FINANCIAL ADVISOR Public Financial Management, Inc. Atlanta, Georgia

UTILITY CONSULTANTS Feasibility Consultant Consulting Engineers Public Resources Management Group, Inc. Brown & Caldwell Maitland, Florida Maitland, Florida

No dealer, broker, salesman or other person has been authorized to make any representations other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2010 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information contained in this Official Statement has been obtained from public documents, records and other sources considered to be reliable and, while not guaranteed as to completeness or accuracy, is believed to be correct. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not as representations that such estimates, assumptions and opinions will be realized or fulfilled. Any information, estimates, assumptions and matters of opinion contained in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in the affairs of the County since the date hereof or the earliest date on which such information was given.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2010 BONDS, THE ORIGINAL PURCHASER(S) MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2010 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE SERIES 2010 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE RESOLUTION (AS DEFINED HEREIN) BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2010 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2010 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2010 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANY REPRESENTATIONS TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM ("ORIGINAL BOUND FORMAT") OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: www.i-dealprospectus.com. THIS OFFICIAL STATEMENT MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR AS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITE.

TABLEF O CONTENTS

INTRODUCTION...... 1 THE 2010 PROJECT ...... 1 SENIOR AND JUNIOR LIEN STRUCTURE ...... 2 ESTIMATED SOURCES AND USES OF FUNDS ...... 2 DESCRIPTION OF THE SERIES 2010 BONDS...... 2 General ...... 2 Designation of Series 2010B Bonds as "Build America Bonds" and Series 2010C Bonds as "Recovery Zone Economic Development Bonds" ...... 3 Optional Redemption...... 4 Mandatory Redemption ...... 4 Extraordinary Optional Redemption for the Series 2010B and the Series 2010C Bonds...... 5 Pro Rata Selection of Series 2010B Bonds and Series 2010C Bonds to be Redeemed...... 6 Book-Entry Only System...... 7 SECURITY FOR THE BONDS ...... 8 General ...... 8 Flow of Funds ...... 9 Pledged Capacity Fees ...... 11 Deposit of Pledged Water Capacity Fees in the Pledged Water Capacity Fee Account and Deposit of Contracted Water Supply Capacity Fees in the Contracted Water Supply Capacity Fee Account and Disposition Thereof...... 13 Deposit of Pledged Wastewater Capacity Fees in the Pledged Wastewater Capacity Fee Account and Disposition Thereof...... 13 Reserve Account ...... 13 Renewal and Replacement Account ...... 14 Rate Stabilization Account...... 15 Rate Covenant...... 15 Additional Parity Bonds...... 15 Qualified Derivative Agreements...... 18 No Further Issuancef o Bonds with a Senior Lien on Pledged Revenues ...... 18 DEBT SERVICE SCHEDULE...... 19 HILLSBOROUGH COUNTY ...... 20 Management and Organization...... 20 B udget Process ...... 20 THE UTILITY SYSTEM: GENERAL INFORMATION ...... 20 Background...... 20 General System Description...... 21 Management and Organization...... 21 Water Resources Division...... 21 Plant Operations Group ...... 22 Field Maintenance Services Group...... 22 Engineering Services Group...... 22 Service Management and Accounting Group...... 22 Regulatory Services...... 22 Strategic Water Management...... 23 Administrative Division...... 23 WATER SYSTEM...... 23 General ...... 23 Water Supply...... 24 Potable Water Distribution...... 24

Potable Water Treatment ...... 24 Historical Customer Statistics and Sales...... 25 Potable Water Source – Tampa Bay Water...... 25 WASTEWATER SYSTEM...... 29 General ...... 29 Wastewater Collection...... 29 Wastewater Treatment...... 29 Historical Customer Statistics and Sales...... 29 Wastewater Pumping and Treatment...... 30 Potential Numeric Nutrient Water Quality Criteria Regulations ...... 30 Mandatory Connections...... 31 TEN LARGEST WATER AND WASTEWATER CUSTOMERS ...... 31 RECLAIMED WATER...... 31 RATES, FEES AND CHARGES...... 32 GOVERNMENTAL REGULATION OF UTILITY SYSTEM...... 36 CAPITAL IMPROVEMENT PROGRAM...... 36 HISTORICAL OPERATING RESULTS ...... 38 SUMMARY OF PROJECTED OPERATING RESULTS ...... 40 FINDINGS AND CONCLUSIONS OF FEASIBILITY CONSULTANT AND CONSULTING ENGINEERS...... 41 LITIGATION...... 42 LEGAL MATTERS ...... 43 TAX MATTERS...... 43 The Series 2010A Bonds ...... 43 The Series 2010B Bonds and the Series 2010C Bonds...... 44 U.S. Holders...... 45 Non-U.S. Holders...... 46 Information Reporting and Backup Withholding—U.S. Holders and Non-U.S. Holders...... 47 Circular 230 Disclaimer...... 47 DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ...... 47 RATINGS...... 48 FINANCIAL ADVISOR ...... 48 ORIGINAL PURCHASER(S) ...... 48 FORWARD LOOKING STATEMENTS...... 48 CONTINUING DISCLOSURE ...... 48 FINANCIAL STATEMENTS ...... 49 INVESTMENT POLICY OF THE COUNTY...... 49 MISCELLANEOUS...... 50 AUTHORIZATION OF OFFICIAL STATEMENT...... 51

APPENDIX A - GENERAL INFORMATION REGARDING HILLSBOROUGH COUNTY APPENDIX B - ANNUAL FINANCIAL REPORT – WATER AND WASTEWATER SYSTEM ENTERPRISE ORFUND F FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 APPENDIX C - CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT APPENDIX D - FFORM O THE RESOLUTION APPENDIX E - FFORMS O APPROVING OPINION OF BOND COUNSEL APPENDIX F - FFORM O CONTINUING DISCLOSURE CERTIFICATE

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OFFICIAL STATEMENT

Relating To

HILLSBOROUGH COUNTY, FLORIDA

INTRODUCTION

The purpose of this Official Statement, which includes the cover page and the appendices, is to furnish information with respect to the sale by Hillsborough County, Florida of $18,035,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010A (Tax-Exempt) (the "Series 2010A Bonds"), $110,265,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment) (the "Series 2010B Bonds") and $21,700,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment) (the "Series 2010C Bonds" and collectively with the Series 2010A Bonds and the Series 2010B Bonds, the "Series 2010 Bonds").

The Series 2010 Bonds are issued pursuant to and under the authority of (i) the Constitution of the State of Florida, the Hillsborough County Charter, Chapter 159, Part I, Florida Statues, Chapter 125, Florida Statutes, and other applicable provisions of law (collectively, the "Act"), and (ii) the Amended and Restated Utility System Bond Resolution No. R03-112 adopted on June 4, 2003, as amended and supplemented, including, particularly by Resolution No. R10-151 adopted on October 6, 2010, as amended and supplemented from time to time (collectively, the "Resolution"). The Series 2010 Bonds are being issued on a parity with the County's Junior Lien Refunding Utility Revenue Bonds, Series 2001 (the "Series 2001 Bonds"). There are currently no outstanding Senior Lien Utility System Bonds. The Series 2010 Bonds, the Series 2001 Bonds and any Additional Parity Bonds of the County hereafter issued pursuant to the Resolution (the "Additional Parity Bonds") shall herein be referred to collectively as the "Bonds."

The Series 2010 Bonds are being issued to provide funds, together with other available moneys, for the purpose of (1) financing the 2010 Project (as defined herein), (2) making a deposit, if necessary, into the Reserve Account (as defined herein) in an amount sufficient to satisfy the Reserve Requirement (as defined herein), (3) fund capitalized interest on the Series 2010 Bonds through August 1, 2012, and (4) paying certain costs and expenses relating to the issuance of the Series 2010 Bonds. See "THE 2010 PROJECT" herein.

Capitalized terms used but not defined herein have the same meaning as when used in the Resolution unless the context would clearly indicate otherwise. Complete descriptions of the terms and conditions of the Series 2010 Bonds are set forth in the Resolution, a form of which is contained in APPENDIX D of this Official Statement. The description of the Series 2010 Bonds, the documents authorizing and securing the same, and the information from various reports and statements contained herein are not comprehensive or definitive. All references herein to such documents, reports and statements are qualified by the entire, actual content of such documents, reports and statements. Copies of such documents, reports and statements referred to herein that are not included in their entirety in this Official Statement may be obtained from the County.

THE 2010 PROJECT

The proceeds of the Series 2010 Bonds will be used to provide approximately $134.6 million in capital project funding planned for the County's Utility System's Capital Improvement Program ("CIP") towards project appropriations that were previously approved by the Hillsborough County Board of County Commissioners (the

"Board") in prior years as well as additional appropriations planned for Fiscal Years 2011 through 2013. The use of the Series 2010 Bonds to fund project appropriations during such period is anticipated to account for approximately 45.23% of the total capital appropriations as identified by the County's Water Resource Services department. See "CAPITAL IMPROVEMENT PROGRAM and APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Capital Improvement Program."

SENIOR AND JUNIOR LIEN STRUCTURE

The Series 2001 Bonds, the Series 2010 Bonds and any Additional Parity Bonds hereafter issued are secured by a pledge of and first lien upon the Pledged Revenues on parity and equal status. There are currently no outstanding bonds under the Resolution that are senior to the Bonds. The County has covenanted in the Resolution not to issue any bonds or other obligations having a priority to the lien as to the Bonds. See "SECURITY FOR THE BONDS," herein.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds to be received from the sale of the Series 2010 Bonds are expected to be applied as follows:

Series 2010A Series 2010B Series 2010C Bonds Bonds Bonds Total SOURCES OF FUNDS

Series 2010 Bond Principal Amount $18,035,000.00 $110,265,000.00 $21,700,000.00 $150,000,000.00 Original Issue Premium (Discount) 898,319.50 (658,694.25) -- 239,625.25 Plus Other Available Funds 5,559,030.41 -- -- 5,559,030.41

Total Sources of Funds $24,492,349.91 $109,606,305.75 $21,700,000.00 $155,798,655.66

USES OF FUNDS

Construction Account $12,138,573.41 $99,173,574.14 $19,593,788.08 $130,905,935.63 Reserve Account (Series 2010 Sub Account) 1,392,467.32 8,513,468.76 1,675,438.92 11,581,375.00 Capitalized Interest 10,800,142.18(1) -- -- 10,800,142.18 Costs of Issuance(2) 120,000.00 520,000.00 112,000.00 752,000.00 Original Purchaser(s)'s Discount 41,167.00 1,399,262.85 318,773.00 1,759,202.85

Total Uses of Funds $24,492,349.91 $109,606,305.75 $21,700,000.00 $155,798,655.66 ______(1) Includes $5,559,030.41 from County funds. (2) Includes legal, financial and administrative expenses, rating agencies' fees, and any other costs associated with the issuance of the Series 2010 Bonds.

DESCRIPTION OF THE SERIES 2010 BONDS

General

Series 2010 Bonds will be dated the date of delivery, will be issued in fully registered form, without coupons, in the denominations of $5,000 each or integral multiples thereof, and will bear interest, computed on the basis of a 360-day year, consisting of twelve 30-day months, at the rates and mature on the dates set forth on the inside cover page of this Official Statement. Principal of and interest on the Series 2010 Bonds will be payable semiannually on February 1 and August 1 of each year, with the first interest payment date being February 1, 2011. While the Series 2010 Bonds are registered through the book-entry only system described below, principal of and interest on the Series 2010 Bonds will be payable in any coin or currency of the United States of America that is

legal tender for the payment of public and private debts by wire transfer of the Clerk of the Circuit Court and Ex- officio Clerk of the Board of County Commissioners (the "Clerk"), as Paying Agent and Registrar, to Cede & Co., as registered owner of the Series 2010 Bonds. In the event that the book-entry only registration of the Series 2010 Bonds is terminated, interest on the Series 2010 Bonds will be payable in any coin or currency of the United States of America that is on the respective dates of payment thereof legal tender for the payment of public and private debts by check, mailed to the registered owners thereof, as the same shall become due and payable and principal of and redemption premium, if any, on the Series 2010 Bonds will be payable in lawful money of the United States of America, upon presentation and surrender thereof at the principal office of the Paying Agent, as of the relevant record date. Interest on the Series 2010 Bonds will be payable by check or draft of the Paying Agent mailed to the respective addresses of the registered owners thereof as shown on the registration books of the Clerk as the Registrar at the close of business on the Record Date therefor as set forth in the Resolution.

New Series 2010 Bonds delivered upon any transfer or exchange will be valid obligations of the County, evidencing the same debt as the Series 2010 Bonds surrendered, will be secured by the Resolution, and will be entitled to all of the security and benefits of the Resolution to the same extent as the Series 2010 Bonds surrendered, as more particularly described in the Resolution.

The County and the Registrar may treat the registered owner of any Series 2010 Bond as the absolute owner thereof for all purposes (whether or not such Series 2010 Bond is overdue) and will not be bound by any notice to the contrary.

See "APPENDIX D – FORM OF THE RESOLUTION" attached hereto for a more complete description of the Series 2010 Bonds.

Designation of Series 2010B Bonds as "Build America Bonds" and Series 2010C Bonds as "Recovery Zone Economic Development Bonds"

Build America Bonds

The County currently intends to elect to treat the Series 2010B Bonds and the Series 2010C Bonds as "Build America Bonds" for purposes of the American Recovery and Reinvestment Act of 2009 (the "Recovery Act"), and, pursuant to the Resolution and County Resolution No. R09-172 adopted by the Board of County Commissioners of the County on December 16, 2009, further to designate the Series 2010C Bonds as "Recovery Zone Economic Development Bonds" for purposes of the Recovery Act. As such, the County expects to receive Federal Direct Payments from the United States Treasury in an amount equal to 35% of interest payable on the Series 2010B Bonds, and 45% of interest payable on the Series 2010C Bonds. Interest on the Series 2010B Bonds and the Series 2010C Bonds will be included in the gross income of holders thereof for federal income tax purposes, and such holders will not be entitled to any federal tax credits otherwise applicable to certain Build America Bonds. To receive Federal Direct Payments, under currently existing procedures, the County will have to file a tax return (now designated as Form 8038-CP) between 90 and 45 days prior to the corresponding Interest Payment Date. The County should receive the Federal Direct Payment contemporaneously with the Interest Payment Date with respect to the Series 2010B Bonds and Series 2010C Bonds issued as Build America Bonds. Depending on timing of the filing and other factors, the Federal Direct Payment may be received before or after the corresponding Interest Payment Date.

The entitlement of the County to receive the Federal Direct Payments is subject to the condition that the County complies with all applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code") which must be satisfied subsequent to the issuance of the Series 2010B Bonds and the Series 2010C Bonds. Failure to comply with such requirements may cause the irrevocable loss of the County's entitlement to receive the Federal Direct Payments. Also, the Federal Direct Payments are treated as overpayments of tax, and accordingly, are subject to offset against certain amounts that may, for unrelated reasons, be owed by the County to the federal government or any agency of the United States of America.

No assurance can be given that any future legislation, clarification, amendments to the Code, if enacted into law, or judicial decisions will not potentially reduce or eliminate Federal Direct Payments expected to be received by the County with respect to the Series 2010B Bonds and the Series 2010C Bonds. Such Federal Direct Payments

constitute a component of the Pledged Revenues. However, payment of debt service on the Series 2010 Bonds is not contingent upon receipt by the County of Federal Direct Payments. Federal Direct Payments do not constitute a full faith and credit guarantee of the United States, but are required by the Recovery Act to be paid by the United States Treasury. For more information, see "TAX MATTERS" herein.

In the Resolution, Federal Direct Payments are taken into account as a deduction from interest coming due on any Build America Bonds, including the Series 2010B Bonds and the Series 2010C Bonds, for purposes of calculating debt service, and are therefore taken into account in the calculations determining compliance with the coverage requirement when issuing additional bonds on a parity with the Series 2010 Bonds (Federal Direct Payments are not treated as "Gross Revenues" to avoid double counting). Failure of the County to receive Federal Direct Payments with respect to any Build America Bonds, including the Series 2010B Bonds and the Series 2010C Bonds, whether due to an offset for money owed by the County to the federal government or its agencies, a failure to satisfy other eligibility requirements or for any other reason, could result in such tests being calculated by taking into account a deduction against interest coming due for an amount of anticipated Federal Direct Payments that are not, in fact, received by the County. This could result in the incurrence of indebtedness that would otherwise not be permitted under the Resolution if such Federal Direct Payments were not taken into consideration for purposes of calculating debt service. For more information, see "SECURITY FOR THE SERIES 2010 BONDS—Additional Parity Bonds" herein.

Optional Redemption

The Series 2010A Bonds are not subject to Optional Redemption.

Excluding extraordinary optional redemption described below, the Series 2010B and Series 2010C Bonds maturing on or prior to August 1, 2020, are not subject to optional redemption prior to maturity. The Series 2010B and Series 2010C Bonds maturing on or after August 1, 2021 are subject to redemption prior to their stated dates of maturity at the option of the County in whole or in part on any date on or after August 1, 2020, and if in part, to be selected in the manner described below, at the redemption price equal to 100% of the principal amount to be redeemed, plus accrued interest to the redemption date.

Mandatory Redemption

The Series 2010B Bonds maturing on August 1, 2034 are subject to mandatory redemption or purchase prior to their stated dates of maturity, in part, to be selected in the manner described below, from Amortization Installments deposited by the County in the Debt Service Account, at the principal amount thereof, unless purchased pursuant to the operation of such Account, plus accrued interest to the redemption date, on August of the years and on the date set forth in the redemption notice and in the principal amounts, both set forth below:

Mandatory Redemption Date (August 1) Amount 2031 $6,515,000 2032 6,750,000 2033 6,990,000 2034* 7,240,000 ______* Final Maturity.

The Series 2010B Bonds maturing on August 1, 2037 are subject to mandatory redemption or purchase prior to their stated dates of maturity, in part, to be selected in the manner described below, from Amortization Installments deposited by the County in the Debt Service Account, at the principal amount thereof, unless purchased pursuant to the operation of such Account, plus accrued interest to the redemption date, on August of the years and on the date set forth in the redemption notice and in the principal amounts, both set forth below:

Mandatory Redemption Date (August 1) Amount 2035 $7,495,000 2036 7,770,000 2037* 8,050,000 ______* Final Maturity.

The Series 2010C Bonds are subject to mandatory redemption or purchase prior to their stated dates of maturity, in part, to be selected in the manner described below, from Amortization Installments deposited by the County in the Debt Service Account, at the principal amount thereof, unless purchased pursuant to the operation of such Account, plus accrued interest to the redemption date, on August of the years and on the date set forth in the redemption notice and in the principal amounts, both set forth below:

Mandatory Redemption Date (August 1) Amount 2038 $7,005,000 2039 7,230,000 2040* 7,465,000 ______* Final Maturity.

Extraordinary Optional Redemption for the Series 2010B and the Series 2010C Bonds

There is no extraordinary optional redemption for the Series 2010A Bonds.

Prior to August 1, 2020, the Series 2010B Bonds and the Series 2010C Bonds are subject to redemption at any time prior to their maturity at the option of the County, in whole or in part, and if in part, to be selected in the manner described below, upon the occurrence of an Extraordinary Event (as hereinafter defined), at a redemption price equal to the greater of (i) 100% of the principal amount of the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed plus interest accrued to the redemption date; or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which the Series 2010B Bonds and/or the Series 2010C Bonds are to be redeemed on a semi-annual basis, assuming a 360 day year consisting of twelve 30-day months, at the Treasury Rate, plus 100 basis points (1.00%); plus, in each case, accrued interest on the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed to the redemption date.

An "Extraordinary Event" will have occurred if a material adverse change has occurred to Sections 54AA, 1400U-1, 1400U-2, 6431 (as such Sections were added by Sections 1531 and 1401 of the Recovery Act, pertaining to "Build America Bonds" and "Recovery Zone Bonds") or other applicable provisions of the Code pursuant to which the County's 35% cash subsidy payment in regard to the Series 2010B Bonds and/or 45% cash subsidy payment in regard to the Series 2010C Bonds from the United States Treasury is reduced or eliminated at any point prior to the first optional redemption date of August 1, 2020. At the request of the Paying Agent, the redemption price of the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed at the option of the County will be determined by an independent accounting firm, investment banking firm or financial advisor retained by the County at the County's expense to calculate the redemption price. The Paying Agent and the County may conclusively rely on the determination of such redemption price by such independent accounting firm, investment banking firm or financial advisor and will not be liable for such reliance.

"Treasury Rate" means, with respect to any redemption date for a particular Series 2010B Bond or Series 2010C Bond, the rate per annum, expressed as a percentage of the principal amount, equal to the semiannual equivalent yield to maturity or interpolated maturity of the Comparable Treasury Issue, assuming the Comparable Treasury Issue is purchased on the redemption date for a price equal to the Comparable Treasury Price, as calculated by the Designated Financial Institution.

"Comparable Treasury Issue" means, with respect to any redemption date for a particular Series 2010B Bond or Series 2010C Bond, the United States Treasury security or securities selected by the Designated Financial Institution which has an actual or interpolated maturity comparable to the remaining average life of the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed, and that would be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average life of the Series 2010B Bonds and/or the Series 2010C Bonds to be redeemed.

"Comparable Treasury Price" means, with respect to any redemption date for a particular Series 2010B Bond or Series 2010C Bond, (i) if the Designated Financial Institution receives at least four Reference Treasury Dealer Quotations, the average of such quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Designated Financial Institution obtains fewer than four Reference Treasury Dealer Quotations, the average of all such quotations.

"Designated Financial Institution" means any nationally recognized investment banking firm selected by the Clerk that is a primary U. S. Government securities dealer.

"Reference Treasury Dealer" means each of four firms, specified by the Clerk from time to time, that are United States Government securities dealers (each a "Primary Treasury Dealer"); provided, however, that if any of them ceases to be a Primary Treasury Dealer, the Clerk will substitute another Primary Treasury Dealer.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date for a particular Series 2010B Bond or Series 2010C Bond, the average, as determined by the Designated Financial Institution, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Designated Financial Institution by such Reference treasury Dealer at 3:30 P.M. New York City time, on the third Business Day preceding such redemption date.

"Business Day" means any day other than (a) a Saturday, a Sunday or any other day on which banks located in the cities in which the principal offices of the County, the Paying Agent or the Reference Treasury Dealer are located are authorized or required to remain closed or (b) a day on which the New York Stock Exchange is closed.

Pro Rata Selection of Series 2010B Bonds and Series 2010C Bonds to be Redeemed

If less than all of the Series 2010B Bonds and/or Series 2010C Bonds of any maturity shall be called for redemption as set forth above, such redemption shall be allocated among the registered owners of such Series 2010B Bonds and/or Series 2010C Bonds as nearly as practicable in proportion to the principal amounts of such Series 2010B Bonds and/or Series 2010C Bonds owned by each registered owner, subject to the authorized denominations applicable to such Series 2010B Bonds and/or Series 2010C Bonds. The allocation for each registered owner will be calculated based on the following formula:

(principal to be redeemed) x (principal amount owned by owner) (principal amount outstanding)

However, so long as DTC or its nominee is the sole registered owner of the Series 2010B Bonds and Series 2010C Bonds, the particular Series 2010B Bond or Series 2010C Bond or portion to be redeemed shall be selected in accordance with DTC procedures. The currently promulgated procedures of DTC with respect to the redemption of less than all of a maturity of the Series 2010B Bonds and Series 2010C Bonds indicate that such redemption will be accomplished by lot. See "- Book-Entry Only System" below.

It is the County's intent that redemption allocations made with respect to Series 2010B Bonds and Series 2010C Bonds in book-entry only form be made in accordance with the same proportional provisions set forth above with respect to such Series 2010B Bonds and Series 2010C Bonds not in book-entry only form. However, the County can provide no assurance that DTC, the DTC Participants or any other intermediaries will allocate redemptions among Beneficial Owners on such a proportional basis for the Series 2010B Bonds and the Series 2010C Bonds in book-entry only form.

Book-Entry Only System

The Depository Trust Company ("DTC"), New York, New York, or its successor, will act as securities depository for the Series 2010 Bonds. The Series 2010 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representation of DTC. One fully-registered Series 2010 Bond certificate will be issued for each maturity in the aggregate principal amount of such maturity of the Series 2010 Bonds and will be deposited with DTC. References herein to Registered Owners of the Series 2010 Bonds shall mean DTC or Cede & Co., and shall not mean the Beneficial Owners referred to below. Certain portions of the following information have been furnished by DTC. So long as Cede & Co. is the Registered Owner of the Series 2010 Bonds, payments of the principal of and interest due on the Series 2010 Bonds will be payable directly to DTC.

DTC, the worlds' largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the Series 2010 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2010 Bonds on DTC's records. The ownership interest of each actual purchaser of the Series 2010 Bonds (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2010 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in Series 2010 Bonds, except in the event that use of the book-entry system for the Series 2010 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2010 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2010 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2010 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2010 Bonds are credited, which may or may not be the Beneficial

Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices will be sent to DTC. If less than all of the Series 2010 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2010 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2010 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Series 2010 Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Paying Agent or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the County or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Series 2010 Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2010 Bond certificates are required to be printed and delivered.

The County may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Series 2010 Bond certificates will be printed and delivered. Thereafter, the Series 2010 Bond certificates may be transferred and exchanged as described in the Resolution. See "THE RESOLUTION" included in APPENDIX A.

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof.

For every transfer of ownership interests in the Series 2010 Bonds, the Beneficial Owner may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto.

SECURITY FOR THE BONDS

General

The payment of the principal of, interest, and premium, if any, on the Bonds is equally and ratably secured by an irrevocable lien on the Pledged Revenues and moneys deposited into the funds and accounts created by the Resolution, and all earnings thereon, all in the manner and to the extent provided in the Resolution, prior and superior to all other liens or encumbrances on the Pledged Revenues and as provided in the Resolution. "Pledged Revenues" is defined in the Resolution to mean, collectively, Net Revenues, Pledged Capacity Fees, proceeds from the sale or condemnation of property of the System and proceeds from property and casualty insurance insuring the System's property, any Qualified Derivative Payments and Federal Direct Payments received by the County.

"Federal Direct Payments" are direct payments from the United States Treasury with respect to the Series 2010B Bonds and the Series 2010C Bonds.

Certain debt service costs of Tampa Bay Water, the successor to the West Coast Regional Water Supply Authority ("Tampa Bay Water" or the "Authority") are paid by the County pursuant to certain water supply contracts as a Cost of Operation and Maintenance of the System and are therefore payable from Gross Revenues before the payment of debt service on the Bonds. See "WATER SYSTEM – Water Supply" herein.

The Bonds do not constitute general obligations or indebtedness of the County within the meaning of the Constitution of Florida, but are payable solely from and secured by a lien upon and a pledge of the Pledged Revenues and the funds and the earnings thereon pledged to the payment of the Bonds, in the manner and to the extent provided in the Resolution. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the County or taxation in any form on any real or personal property to pay the Bonds or the interest thereon, nor shall any Bondholder be entitled to payment of such principal and interest from any other funds of the County other than the Pledged Revenues and the funds and the earnings thereon pledged to payment of the Bonds, all in the manner and to the extent provided in the Resolution.

Under Section 679.1091(4)(n), Florida Statutes, transfers by a government or a governmental unit are exempt from the perfection and priority requirements of Chapter 679, Florida Statutes (Uniform Commercial Code – Secured Transactions – Article 9), and therefore, the filing of financing statements is not necessary in order to perfect the security interest of the Bondholders.

See "APPENDIX D – FORM OF THE RESOLUTION" for definitions of terms used in the Resolution and herein and for a more complete description of the security for the Bonds.

Flow of Funds

The Resolution establishes a Utilities Bond Fund and various accounts therein: the "Construction Account," the "General Revenue Account," the "Operation and Maintenance Account," the "Debt Service Account" (including a "Federal Direct Payments Subaccount" therein), the "Reserve Account," the "Renewal and Replacement Account," the "Swap Obligations Account," if any, the "Subordinate Indebtedness Account," the "Other Indebtedness Account," the "Rebate Account," the "Rate Stabilization Account," the "General Purpose Account," the "Pledged Water Capacity Fee Account," the "Pledged Wastewater Capacity Fee Account" and the "Contracted Water Supply Capacity Fee Account." Such accounts are funds held in trust by the County for the purposes provided in the Resolution. The accounts (except the Rebate Account) are subject to a lien and charge in favor of the Bondholders, and shall at all times be kept separate and distinct from all other funds of the County (except to the extent that pooled investments are specifically authorized by the Resolution) and used only as provided in the Resolution.

(i) All Gross Revenues are required to be deposited into the General Revenue Account immediately upon receipt. In addition, all Federal Direct Payments received in connection with the Series 2010B Bonds and the Series 2010C Bonds shall be deposited into the Federal Direct Payments Subaccount of the Debt Service Account. Amounts on deposit in the General Revenue Account are required to be disposed of on or before the 15th day of each month, in the following order and priority:

First, to the Operation and Maintenance Account, an amount which, together, with other amounts deposited therein from the Contracted Water Supply Capacity Fee Account to pay the Debt Service Component of the Cost of Contracted Water Supply and all other funds then on deposit therein, will equal the amount required to pay the Cost of Operation and Maintenance for the month following the month of such deposit. All monthly deposits into the Operation and Maintenance Account from the Contracted Water Supply Capacity Fee Account shall be made before the amount of the required monthly deposit into the Operation and Maintenance Account from the General Revenue Account is calculated.

Second, into the Debt Service Account*, an amount which, together with amounts deposited therein from the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account, and other deposits made therein, will equal 1/6th of the interest payable on the Bonds on the next interest payment date, 1/12th of the next principal payment with respect to Serial Bonds that mature annually, 1/6th of all principal maturing on the next maturity date on all Serial Bonds that mature semi-annually, 1/12th of the next Amortization Installment due with respect to Term Bonds, and 1/6th of the next Amortization Installment with respect to all Term Bonds which come due semi-annually and which come due on the next redemption date in such Bond Year. All monthly deposits into the Debt Service Account from the Pledged Water Capacity Fee Account or Pledged Wastewater Capacity Fee Account shall be made before the amount of the required monthly deposit into the Debt Service Account from the General Revenue Account is calculated. Moneys in the Debt Service Account shall be used to pay at redemption or maturity the principal or Amortization Installment of and interest on and any required redemption premiums with respect to the Bonds, as the same shall become due. Deposits shall be increased or decreased to the extent required to pay principal and interest coming due, after making allowance for any accrued and capitalized interest and Federal Direct Payments allocated to the payment of interest on Bonds, which have been received and deposited in the Federal Direct Payments Subaccount or for which moneys have been set aside in the Federal Direct Payments Subaccount in an amount not less than the anticipated amount of such Federal Direct Payments and deposited in the Federal Direct Payments Subaccount. Additionally, if variable rate Bonds are outstanding on the 15th day of such month, the County shall deposit into the Debt Service Account in lieu of the one-sixth (1/6th) interest deposit described above, the interest actually accruing on such Bonds for such month, assuming the interest rate thereon on the 15th day of such month will continue through the end of such month, plus any deficiencies in interest deposits for the preceding month. Monthly deposits into the Debt Service Account shall be increased as necessary to pay fees and costs billed by the Registrar and the Paying Agent, if any. Federal Direct Payments, if any, shall be deposited into the Federal Direct Payments Subaccount of the Debt Service Account.

Third, to the Reserve Account, an amount which, together with amounts concurrently deposited therein from the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account and other funds therein on deposit therein, will be sufficient to make the amount on deposit therein equal to the Reserve Requirement. In lieu of the deposit of money into the Reserve Account, the County may deposit an insurance policy or surety bond therein (see "SECURITY FOR THE BONDS – Reserve Account" herein).

Fourth, to the Renewal and Replacement Account, an amount equal to 1/12th of five percent of the Gross Revenues for the preceding Fiscal Year or such greater or lesser amount as shall be determined by the Qualified Independent Consultant, plus an amount equal to unrestored withdrawals made to cure deficiencies in the Debt Service Account, until the amounts on deposit therein are equal to the Renewal and Replacement Account Requirement; provided, however, that (a) such Renewal and Replacement Account Requirement may be increased or decreased as the Qualified Independent Consultant shall certify to the County is necessary for the purposes of the Renewal and Replacement Account, and (b) in the event that the Qualified Independent Consultant shall certify that the Renewal and Replacement Account Requirement is excessive for the purposes of the Renewal and Replacement Account such excess amount as may be on deposit therein may be used by the County for any lawful purpose relating to the System. In determining the amounts on deposit or required to be deposited into the Renewal and Replacement Account, including the determination of satisfaction of the Renewal and Replacement Account Requirement, the Qualified Independent Consultant shall take into account: (i) moneys in the General Purpose Account and Construction Account and (ii) available proceeds from Subordinate Indebtedness and non-operating grants that, in each case, have been dedicated by the Issuer to be applied toward the purposes of the Renewal and Replacement Account.

Fifth, to the Subordinate Indebtedness Account, an amount sufficient to pay debt service, reserve, rebate, credit enhancement and other required payments and deposits with respect to any Subordinate Indebtedness then outstanding.

* There is a requirement for deposits on a parity into the Swap Obligations Account. See "APPENDIX D – FORM OF THE RESOLUTION – Creation and Use of Bond Fund Accounts – Disposition of Pledge Revenues – Deposit of Gross Revenues into the General Reserve Account and Disposition Thereof – Debt Service Account and Swap Obligations Account Deposits." There are no Qualified Derivative Agreements outstanding with respect to any of the Bonds.

Sixth, to the Other Indebtedness Account, an amount sufficient to pay debt service, reserve, rebate, credit enhancement and other required payments and deposits with respect to any Other Indebtedness then outstanding.

Seventh, to the Rate Stabilization Account in such amounts as shall be determined from time to time by the County.

Eighth, the balance of any moneys remaining in the General Revenue Account after making the deposits referred to above may be deposited by the County in the General Purpose Account and paid to the County for open market purchase and/or redemption of the Bonds or may be used for any lawful purpose relating to the System; provided, however, such moneys may not be used for any purposes other than those specified in paragraphs First through Fourth above, unless all current payments, including any deficiencies for prior payments, have been made in full and the County shall have complied fully with the provisions and covenants of the Resolution.

"Gross Revenues" or "Revenues" means all fees, revenues, charges, income or earnings, including any income from the investment of funds unless otherwise provided in the Resolution, derived by the County from the operation of the System, including, but not limited to accrued guaranteed revenue fees and Installation Charges, non- ad valorem special assessments, to the extent legally available, of the System that do not secure other indebtedness, transfers from the Rate Stabilization Account to the General Revenue Account, and any other operating grants received from the County or other governmental agencies, provided, however, that Gross Revenues or Revenues shall not include: (1) proceeds from the sale of any Bonds, (2) proceeds from insurance or the disposition of property to the extent otherwise provided by the Resolution, (3) non-operating grants from the County or other governmental agencies and interest earned on such grants, (4) any capacity or impact fees whether or not pledged under the Resolution, (5) unrealized losses or gains from investments, (6) any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Capacity Fees, (7) the proceeds of bonds or other indebtedness which is secured by non-ad valorem special assessments levied or imposed by the County in lieu of levying or imposing Capacity Fees, (8) moneys deposited into the Rate Stabilization Account from the General Revenue Account in the Fiscal Year of such deposit into the Rate Stabilization Account, or (9) Federal Direct Payments.

Pledged Capacity Fees

"Pledged Capacity Fees" means, collectively, the Pledged Water Capacity Fees and the Pledged Wastewater Capacity Fees.

"Pledged Water Capacity Fees" means the Water Capacity Fees, less the Contracted Water Supply Capacity Fees, including any income from the investment of funds deposited into the Pledged Water Capacity Fee Account; provided, however, that that "Pledged Water Capacity Fees" in each year shall not exceed (a) the Bond Service Requirement for all Bonds for such Bond Year multiplied by the Water Expansion Project Percentage, plus (b) the Water Capacity Fee Carryforward Amount.

"Water Capacity Fees" means the water capacity fees received during the Fiscal Year as described in the Ordinance and all other nonrefundable (except at the option of the County) impact fees, capital expansion fees, system improvement fees or other similar fees and charges separately imposed by the County against benefited properties as a capacity, connection or impact fee or charge for the proportionate share of the capital cost associated with providing, expanding, oversizing or constructing new additions to the Water System (including for the purposes of this definition, those by the Authority that are included as a cost component of the capacity fee imposed by the County) acquired to serve such properties, including without limitation any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Water Capacity Fees to the extent not pledged to secure other special assessment obligations of the County; provided, however, the term "Water Capacity Fees" does not include (i) accrued guaranteed revenue fees, (ii) the proceeds of bonds or other indebtedness which is secured by non-ad valorem special assessments levied or imposed by the County in lieu of imposing Water Capacity Fees, or (iii) any non-ad valorem special assessments which are pledged to secure other special assessment obligations of the County, and which were levied and imposed to provide installment financing of any Water Capacity Fees.

attributable to any improvements, extensions and additions to the Water System, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the Water System, whether actual or anticipated, created by new users connecting to the Water System, as shall be determined by the Qualified Independent Consultant and set forth in a certificate each time a Series of Bonds is issued under the Resolution. The Water Expansion Project Percentage equals 6.2% as of the date of the delivery of the Series 2010 Bonds.

"Water Capacity Fee Carryforward Amount" means, as calculated once per year as of September 30th, (a) the amount of debt service on the Bonds or any indebtedness refinanced thereby which legally could have been paid with Water Capacity Fees pursuant to resolution of the County since October 1, 1986, less (b) the amount of debt service on the Bonds or any indebtedness refinanced thereby which has actually been paid with Water Capacity Fees since October 1, 1986. The Water Capacity Fee Carryforward Amount equals $9.97 million as of the date of delivery of the Series 2010 Bonds.

"Pledged Wastewater Capacity Fees" means the Wastewater Capacity Fees including any income from the investment of funds deposited into the Pledged Wastewater Capacity Fee Account; provided, however, that the "Pledged Wastewater Capacity Fees" in each year shall not exceed (a) the Bond Service Requirement for all Bonds for such Bond Year multiplied by the Wastewater Expansion Project Percentage, plus (b) the Wastewater Capacity Fee Carryforward Amount.

"Wastewater Capacity Fees" means the wastewater capacity fees received during the Fiscal Year as described in the Ordinance and all other nonrefundable (except at the option of the County), impact fees, capital expansion fees, system improvement fees or other similar fees and charges separately imposed by the County against benefited properties as a capacity, connection or impact fee or charge for the proportionate share of the capital cost associated with providing, expanding, oversizing or constructing new additions to the Wastewater System acquired to serve such properties, including without limitation any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Wastewater Capacity Fees to the extent not pledged to secure other special assessment obligations of the County; provided, however, the term "Wastewater Capacity Fees" does not include (i) accrued guaranteed revenue fees, or (ii) the proceeds of bonds or other indebtedness which is secured by non ad valorem special assessments levied or imposed by the County in lieu of imposing Wastewater Capacity Fees, or (iii) any non-ad valorem special assessments which are pledged to secure other special assessment obligations of the County, and which were levied and imposed to provide installment financing of any Wastewater Capacity Fees.

"Wastewater Expansion Project Percentage" means that number, expressed as a percentage, which represents that portion of the total cost of any Project or Projects financed or refinanced from the proceeds of the Bonds which is attributable to any improvements, extensions and additions to the Wastewater System, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the Wastewater System, whether actual or anticipated, created by new users connecting to the Wastewater System, as shall be determined by the Qualified Independent Consultant and set forth in a certificate each time a Series of Bonds is issued under the Resolution. The Wastewater Expansion Project Percentage equals 52.8% as of the date of delivery of the Series 2010 Bonds.

"Wastewater Capacity Fee Carryforward Amount" means, as calculated once per year as of September 30th, (a) the amount of debt service on the Bonds or any indebtedness refinanced thereby which legally could have been paid with Wastewater Capacity Fees pursuant to resolution of the County since October 1, 1986, less (b) the amount of debt service on the Bonds or any indebtedness refinanced thereby which has actually been paid with Wastewater Capacity Fees since October 1, 1986. The Wastewater Capacity Fee Carryforward Amount equals $67.89 million as of the date of delivery of the Series 2010 Bonds.

Deposit of Pledged Water Capacity Fees in the Pledged Water Capacity Fee Account and Deposit of Contracted Water Supply Capacity Fees in the Contracted Water Supply Capacity Fee Account and Disposition Thereof

All Pledged Water Capacity Fees shall be deposited into the Pledged Water Capacity Fee Account. All moneys remaining on deposit in such Account shall be utilized on a monthly basis in the following priority:

(1) Deposit into the Debt Service Account and/or Swap Obligations Account (if applicable) on a pro rata basis, but in no event shall such deposit exceed in any Bond Year the lesser of (i) the amount of Water Capacity Fees for such Bond Year allocable to the Water System or (ii) the Bond Service Requirement allocable to the Water System for such Bond Year.

(2) Such moneys shall, in the case of a deficiency in the Reserve Account, next be applied and allocated to the Reserve Account to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein to the extent such moneys are lawfully available for such purpose.

(3) Such moneys, after meeting the above-referenced applications, shall be maintained in the Pledged Water Capacity Fee Account for use in accordance with the foregoing priority in subsequent Fiscal Years.

All Contracted Water Supply Capacity Fees shall be deposited into the Contracted Water Supply Capacity Fee Account. All moneys on deposit in such account shall be utilized on a monthly basis in the following priority:

(1) Deposit into the Operation and Maintenance Account, in an amount equal to all payments due in such Bond Year representing the Debt Service Component, provided that such payments shall not exceed in any Bond Year the lesser of (a) the Debt Service Component, or (b) the Contracted Water Supply Expansion Project Percentage of the Debt Service Component, plus the Contracted Water Supply Capacity Fee Carryforward Amount.

(2) Such moneys, after meeting the above-referenced applications, shall be maintained in the Contracted Water Supply Capacity Fee Account for use in subsequent Fiscal Years.

Deposit of Pledged Wastewater Capacity Fees in the Pledged Wastewater Capacity Fee Account and Disposition Thereof

All Pledged Wastewater Capacity Fees shall be deposited into the Pledged Wastewater Capacity Fee Account. All moneys remaining on deposit in such Account shall be utilized as follows:

(1) First, such moneys shall, in the case of a deficiency in the Debt Service Account and/or the Swap Obligations Account (if applicable), first be applied and allocated to the respective Accounts, pro rata if applicable, to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(2) Second, such moneys shall, in the case of a deficiency in the Reserve Account, be applied and allocated to the Reserve Account to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(3) At least once per year, all remaining moneys in the Pledged Wastewater Capacity Fee Account shall be deposited into the General Purpose Account and may be applied by the County for any use allowed by law relating to the provisions of the wastewater capacity or expansion.

Reserve Account

At the time of issuance of the Series 2001 Bonds, an AMBAC Surety Bond in the amount of $10,672,266.25, was deposited in the Reserve Account and is currently on deposit therein. The Ambac Surety Bond

expires August 1, 2015 upon the maturity of the Series 2001 Bonds. Upon issuance of the Series 2010 Bonds, the Reserve Requirement with respect to the Series 2010 Bonds is $11,581,375 and proceeds from the Series 2010 Bonds will be deposited in the Reserve Account in the amount of the Reserve Requirement for the Series 2010 Bonds only. The amount of the Reserve Requirement deposited in a sub-account of the Reserve Account for the Series 2010 Bonds is solely for the benefit of the Series 2010 Bonds and is not for the benefit of the Series 2001 Bonds.

See "APPENDIX D – FORM OF THE RESOLUTION – Section 9.03(3)," with respect to alternative provisions for the funding of the Reserve Account by the County.

"Reserve Requirement" is defined in the Resolution to mean, as of any date of calculation, an amount equal to the least of the following: (i) the Maximum Bond Service Requirement, (ii) 125% of the average annual Bond Service Requirement, or (iii) 10% of the aggregate stated original principal amount of the Bonds (except that, in determining the aggregate stated original principal amount of any Series of Bonds for purposes of (iii), (a) the issue price of that Series of Bonds (net of pre-issuance accrued interest) shall be substituted for the original stated principal amount if that Series of Bonds is sold at either a net original issue discount or premium exceeding two percent (2%) of its stated redemption price at maturity, and (b) to the extent that no Bonds of a particular Series are Outstanding any longer, the aggregate stated original principal amount for such Series shall be deemed to equal zero). If a Subsequent Resolution authorizing the issuance of a Series of Bonds provides for or permits the establishment of a separate Reserve Account subaccount to secure only such Series of Bonds (with such Series of Bonds having no claim on the other moneys, if any, deposited to the credit of the Reserve Account), the Reserve Requirement for such Series of Bonds shall be calculated as set forth in or pursuant to the related Subsequent Resolution, and (x) in such event that the Subsequent Resolution permits the establishment of a separate Reserve Account subaccount to secure only such Series of Bonds (with such Series of Bonds having no claim on the other moneys, if any, deposited to the credit of the Reserve Account) or (y) in the event that a Subsequent Resolution relating to a Series of Bonds, provides or permits that such Series of Bonds shall not be secured by the Reserve Account (or any subaccount therein) each such Series of Bonds shall not be deemed Outstanding for purposes of calculating the Reserve Requirement under this Resolution.

With respect to the AMBAC Surety Bond, Fitch Ratings withdrew its rating of the Insurer Financial Strength of Ambac on June 26, 2008. Moody's Investors Service downgraded Ambac's Insurer Financial Strength on March 26, 2010 to "Caa2" (Positive Watch). Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. downgraded Ambac's Insurer Financial Strength on March 25, 2010 to "R" (Not Meaningful). The Resolution does not require a cash deposit or substitute of a surety bond in the event of a downgrade in the claims paying ability of the issuer of a surety bond.

Renewal and Replacement Account

Funds on deposit in the Renewal and Replacement Account shall be used only (i) at any time for the purpose of curing deficiencies in the Debt Service Account (after the application of funds from the Reserve Account) or for curing deficiencies in the Reserve Account, or both, or (ii) when no such deficiencies exist, as needed for the purpose of paying the cost of the replacement of capital assets of the System, including land, or any unusual, unanticipated or extraordinary maintenance or repairs which the Director of the Water Department of the County shall certify are necessary for the System and are consistent with the Qualified Independent Consultant's annual recommendations for renewals and replacements or (iii) to redeem Bonds in the manner described in the Resolution. If the funds on deposit in the Renewal and Replacement Account exceed the Renewal and Replacement Account Requirement and the County obtains a certificate from the Qualified Independent Consultant that funds or a portion thereof in excess of that amount are not needed for the purposes described in clause (ii) above, and so long as no deficiencies described in clause (i) above exist, such excess funds may be used for any lawful purpose relating to the System.

"Renewal and Replacement Account Requirement" is defined in the Resolution to mean, on the date of calculation, an amount of money equal to (1) five percent of the original cost of the assets and capitalized lease obligations and capacity entitlement programs of the System for the preceding Fiscal Year (as shown on the audited financial statements of the System), or (2) such greater or lesser amount as may be certified to the County by the Qualified Independent Consultant as an amount appropriate for the purposes of the Resolution.

In determining the amounts on deposit or required to be deposited into the Renewal and Replacement Account, including the determination of satisfaction of the Renewal and Replacement Account Requirement, the Qualified Independent Consultant shall take into account: (i) moneys in the General Purpose Account and Construction Account and (ii) available proceeds from Subordinate Indebtedness and non-operating grants that, in each case, have been appropriated by the Issuer to be applied toward the purposes that are comparable to the use of funds on deposit in the Renewal and Replacement Account.

Rate Stabilization Account

Each month the County shall transfer from the Rate Stabilization Account to the General Revenue Account the amount budgeted for transfer into the General Revenue Account for the then current month as set forth in the then current annual budget for the System or the amount otherwise determined by the County to be deposited into such Account for the month.

The County may, from time to time, withdraw amounts on deposit in the Rate Stabilization Account and (i) transfer such amounts to any other Fund or Account established under the Resolution, (ii) use such amounts to purchase or redeem Bonds and/or Subordinated Indebtedness and/or indebtedness of the County incurred in connection with the System, or (iii) use such amounts for any other lawful purpose in connection with the System.

Rate Covenant

The County has covenanted in the Resolution to adopt (unless the existing rate resolution is sufficient for the purposes hereof) and cause to be in effect a rate resolution, and the County covenants with the Bondholders to fix, establish, revise from time to time whenever necessary, maintain and collect fees, rates, rentals and other charges for the use of the System that will always provide (i) Gross Revenues which, together with Pledged Capacity Fees and Qualified Derivative Receipts available to pay debt service on the Bonds, shall be at least equal to one hundred percent (100%) of the Required Deposits under the Resolution, including the payment of Policy Costs then due and owing, (ii) Net Revenues which, together with Pledged Capacity Fees available to pay debt service on the Bonds, shall be at least equal to one hundred twenty percent (120%) of the Bond Service Requirement for such Fiscal Year, and (iii) Net Revenues which shall be at least equal to one hundred percent (100%) of the Bond Service Requirement for such Fiscal Year. For purposes of calculating Gross Revenues in (i) above, not more than 10% of such Gross Revenues shall be derived from transfers from the Rate Stabilization Account in any Fiscal Year; provided, however, in calculating the amount of Gross Revenues in (i) above the County shall not take into account any transfers from the Rate Stabilization Account while the Series 2001 Bonds are outstanding.

In determining compliance by the County with the rate covenant, the County shall reduce the Bond Service Requirement by an amount equal to the amount of Pledged Revenues transferred from the General Purpose Account and deposited into the Bond Fund to pay any portion of the Bond Service Requirement in such Bond Year.

Additional Parity Bonds

The County may issue Additional Parity Bonds payable from the Pledged Revenues on a parity with the Series 2001 Bonds, the Series 2010 Bonds and any then Outstanding Additional Parity Bonds only upon compliance with the conditions set forth in the Resolution, which include without limitation, the following:

(1) The County shall have obtained and filed with the Governing Body a certificate of an independent certified public accountant of suitable experience and responsibility stating the following:

(a) That the accountant has audited the books and records of the County relating to the collection and receipt of Gross Revenues and Pledged Capacity Fees available to make Required Deposits for the last Fiscal Year which has been audited and which precedes the date of sale of the proposed Additional Parity Bonds with respect to which such certificate is made;

(b) That the amount of such Gross Revenues and Pledged Capacity Fees is available to make Required Deposits; and

(2) Certificate of Qualified Independent Consultant. There shall have been obtained and filed with the Board (as hereinafter defined) a certificate of a Qualified Independent Consultant which shall state and certify that the requirements of both (a) and (b) below have been met:

(a) the sum of Adjusted Gross Revenues, Adjusted Pledged Capacity Fees and Qualified Derivative Receipts for the Computation Period as hereinafter defined, will be at least equal to one hundred percent (100%) of the Required Deposits under the Resolution (See "– Flow of Funds"), including the repayment of Policy Costs then due and owing; and

(b) the sum of Adjusted Net Revenues, Adjusted Pledged Capacity Fees and Qualified Derivative Receipts for the Computation Period, will be at least equal to one hundred twenty percent (120%) of the Maximum Bond Service Requirement for all Bonds then Outstanding under the Resolution and the Additional Parity Bonds proposed to be issued hereunder.

For purposes of this paragraph (2) the terms "Adjusted Gross Revenues," "Adjusted Net Revenues," and "Adjusted Pledged Capacity Fees" shall mean the Gross Revenues, Net Revenues or the Pledged Water Capacity Fees and Pledged Wastewater Capacity Fees ("Pledged Capacity Fees"), as the case may be, as shown in the most recent annual audit or as certified by the Independent Certified Public Accountant, giving effect to the following adjustments, (provided each such adjustment shall be certified by a Qualified Independent Consultant or Independent Certified Public Accountant in a certificate or report which shall set forth the assumptions upon which it is based and shall state that such assumptions, in the opinion of the Qualified Independent Consultant or Independent Certified Public Accountant, as the case may be, form a reasonable basis for the conclusions expressed therein):

(a) If the County, prior to the issuance of the proposed Additional Parity Bonds, shall have adopted or put into effect an increase in the rates, fees, rentals or other charges for the services of the System, then Gross Revenues, Net Revenues and the Pledged Capacity Fees may be adjusted to include the additional Gross Revenues, Net Revenues and Pledged Capacity Fees which would have been received during the Computation Period if such increased rates, fees, rentals or other charges had been in effect during all of such period.

(b) If the number of connections as of the first day of the month preceding the month in which the proposed Additional Parity Bonds are to be issued exceeds the average number of such connections during the most recent full Fiscal Year, then the Gross Revenues, Net Revenues, and Pledged Capacity Fees may be adjusted to include the Gross Revenues, Net Revenues and Pledged Capacity Fees which would have been received during the Computation Period if those additional connections had also been connected to the System during all of such period.

(c) If the County shall acquire by the issuance of the Additional Parity Bonds any privately or publicly owned existing water system, wastewater system or water and wastewater system, the cost of which shall be paid from all or part of the proceeds of the issuance of the proposed Additional Parity Bonds, then the Gross Revenues and the Net Revenues during the Computation Period may be increased by adding to the Gross Revenues or Net Revenues as applicable during the Computation Period the additional Gross Revenues or Net Revenues (to the extent such amounts were not reflected in such respective revenues) which, on the basis of operating data pertaining to the acquired system during the Computation Period, would have been derived from such existing water system, wastewater system, or other utility system as if such existing water system, wastewater system or other utility system had been operated by the County as a part of the System during the Computation Period.

(d) If the County shall have entered into a contract, which contract shall be for a duration of not less than the final maturity of the proposed Additional Parity Bonds, with any public body whereby the County shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system or other utility system, then the Gross Revenues or Net Revenues as applicable during the Computation Period may be increased (to the extent such amounts

were not reflected in such Gross Revenues or Net Revenues) by the minimum amount which such public body shall guarantee, under a legally enforceable agreement with the County, to pay in any Fiscal Year for the furnishing of such services by the County, which would also consider the estimated additional Cost of Operation and Maintenance attributable in such Fiscal Year to provide such services.

(e) The Gross Revenues or Net Revenues as applicable may be increased (to the extent the following amounts are not otherwise reflected in such Gross Revenues or Net Revenues) by seventy-five percent (75%) of the amount of additional Gross Revenues or Net Revenues as applicable and Pledged Capacity Fees which would have been received during the Computation Period from any existing occupied structures which are to be connected to the System within the following eighteen (18) months of the issuance of the Additional Parity Bonds.

(f) The applicable Gross Revenues or Net Revenues may reflect any adjustments necessary for any period during the Computation Period in the opinion of a Qualified Independent Consultant or Independent Certified Public Accountant to reflect government ownership of the System or any facilities constituting a part thereof.

For purposes of this paragraph (2) "Computation Period" means either (i) any twelve (12) consecutive of the eighteen (18) complete calendar months or (ii) the most recent complete Fiscal Year, in either case, immediately preceding the date of issuance of Additional Parity Bonds.

The certificate of the Qualified Independent Consultant shall additionally certify to the following:

(a) With respect to any proposed Project, the cost of which is to be paid in whole or in part from the proceeds of such Additional Parity Bonds, the date on which construction of such Project is expected to commence, the anticipated construction and disbursement schedule with respect thereto and the date on which such Project is expected to be placed in service;

(b) The anticipated cost of such proposed Project, itemizing separately the expected financing costs of such Additional Parity Bonds issued to pay the cost thereof, the Required Deposits, if any, into the Reserve Account and any capitalized interest to be funded from the proceeds of the Additional Parity Bonds;

(3) The Chief Financial Officer of the County shall certify that the County is not in default in the performance of any of the covenants and obligations assumed by it under the Resolution, and that all Required Deposits therein required to have been made into the funds and accounts provided therein shall have been made in full to the extent required.

(4) The County Attorney or an Assistant County Attorney of the County shall submit an opinion to the Governing Body of the County to the effect that the issuance of such Additional Parity Bonds has been duly authorized and that all conditions precedent to the delivery of such Additional Parity Bonds have been fulfilled.

(5) Each resolution, ordinance or enabling instrument authorizing the issuance of such Additional Parity Bonds will recite that all of the covenants contained in the Resolution will be fully applicable to such Additional Parity Bonds as if originally issued thereunder.

(6) The County need not comply with the provisions of the above paragraphs (1) and (2) above if and to the extent the Additional Parity Bonds to be issued are for purposes of refunding Bonds previously issued, if the County shall cause to be delivered a certificate of the Chief Financial Officer of the County setting forth the average Bond Service Requirement (i) for the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the average Bond Service Requirement pursuant to (ii) above is not greater than that set forth pursuant to (i) above.

(7) The County need not comply with the provisions of the above paragraphs (1) and (2) if and to the extent the Additional Parity Bonds to be issued are for the purpose of providing any necessary additional funds

required for completion of any improvements to the System ("Completion Bonds") if originally financed with the proceeds of Bonds; provided that such Completion Bonds for which the County need not comply with the provisions of such paragraphs (1) and (2) may not exceed 10% of the total principal amount of Bonds estimated to be required for such improvements to the System at the time of issuance of the initial Series of Bonds to finance such improvements.

(8) An opinion of Bond Counsel shall be delivered to the Governing Body of the County to the effect that the issuance of such Additional Parity Bonds will not impair the exemption from federal income tax of interest paid on any Bonds issued under the Resolution and then outstanding.

(9) All Additional Parity Bonds shall bear interest payable on the date or dates and shall mature on the date or dates as may be provided by Subsequent Resolution.

(10) Any Additional Parity Bonds may be secured on parity and equal status with all other Bonds issued under the Resolution by the Reserve Account. Any deposits necessitated by the issuance of Additional Parity Bonds shall either be fully funded from the proceeds of such obligations or funded in any manner authorized in the Resolution. No Additional Parity Bonds may be issued without the prior written consent of the provider(s) of a surety bond or bonds on deposit in the Reserve Account if any Policy Costs are past due and owing to such provider(s).

(11) Additional Parity Bonds issued pursuant to the terms and conditions of the Resolution shall be deemed on a parity with all Bonds then outstanding, and all of the covenants and other provisions of the Resolution shall be for the equal benefit, protection and security of the holders of any Bonds originally authorized and issued pursuant to the Resolution and the holders of any Additional Parity Bonds evidencing additional obligations subsequently created within the limitations of and in compliance with the Resolution.

Qualified Derivative Agreements

The County may enter into one or more Qualified Derivative Agreements with respect to one or more Series of Bonds (or portions thereof). "Qualified Derivative Agreements" means an agreement, such as an interest rate swap, collar, cap, or other functionally similar agreement, between the County and a counterparty whose long- term unsecured debt at the time of entering into such Agreement is then rated at least "AA-" by S&P and "Aa3" by Moody's, which is entered into by the County as a debt management tool with respect to the Bonds or a portion thereof issued under the Resolution, provided that the payments to be made by the counterparty thereunder have been pledged to the payment of the Bonds. Qualified Derivative Receipts payable by such counterparty would constitute Pledged Revenues, and Qualified Derivative Payments payable to such counterparty will be payable from the Swap Obligations Account on a parity with interest payments with respect to Bonds issued and Outstanding under the Resolution. The County may grant to the counterparties to such Qualified Derivative Agreements a parity lien on the Pledged Revenues to secure payment of Qualified Derivative Payments under such Qualified Derivative Agreements. There are no Qualified Derivative Agreements outstanding with respect to any of the Bonds. See "APPENDIX D – FORM OF THE RESOLUTION" attached hereto.

No Further Issuance of Bonds with a Senior Lien on Pledged Revenues

The County has agreed in the Resolution not to issue any bonds or other obligations which have a lien on Pledged Revenues which is senior to that of the holders of the Bonds.

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DEBT SERVICE SCHEDULE

The following table sets forth the annual debt service schedule for the outstanding Series 2001 Bonds and the Series 2010 Bonds for Bond Years ended August, 1 2011 and thereafter. Series 2010A Bonds Series 2010B Bonds Series 2010C Bonds Total Principal and Interest Bond Anticipated Anticipated Net Debt for Series Year Series Direct Direct Service 2001 Bonds Ended 2001 Subsidy Subsidy for Series and Series Aug. 1 Bonds Principal Interest Principal Interest Payments Principal Interest Payments 2010 Bonds(3) 2010 Bonds 2011 $20,624,356 $378,524(1) $3,992,822(2) $(1,397,488) $899,194(2) $(404,637) $ - $20,624,356 2012 20,622,900 534,388(1) 5,636,925(2) (1,972,924) 1,269,450(2) (571,253) - 20,622,900 2013 10,626,900 $2,355,000 534,388 5,636,925 (1,972,924) 1,269,450 (571,253) 7,251,586 17,878,486 2014 10,669,975 2,425,000 463,738 5,636,925 (1,972,924) 1,269,450 (571,253) 7,250,936 17,920,911 2015 11,070,240 2,500,000 390,988 5,636,925 (1,972,924) 1,269,450 (571,253) 7,253,186 18,323,426 2016 - 2,575,000 315,988 5,636,925 (1,972,924) 1,269,450 (571,253) 7,253,186 7,253,186 2017 - 2,635,000 258,050 5,636,925 (1,972,924) 1,269,450 (571,253) 7,255,249 7,255,249 2018 - 2,740,000 152,650 5,636,925 (1,972,924) 1,269,450 (571,253) 7,254,849 7,254,849 2019 - 2,805,000 84,150 5,636,925 (1,972,924) 1,269,450 (571,253) 7,251,349 7,251,349 2020 - - - $4,675,000 5,636,925 (1,972,924) 1,269,450 (571,253) 9,037,199 9,037,199 2021 - - - 4,790,000 5,456,938 (1,909,928) 1,269,450 (571,253) 9,035,207 9,035,207 2022 - - - 4,920,000 5,262,943 (1,842,030) 1,269,450 (571,253) 9,039,110 9,039,110 NV 2023 - - - 5,050,000 5,056,303 (1,769,706) 1,269,450 (571,253) 9,034,794 9,034,794 2024 - - - 5,195,000 4,836,628 (1,692,820) 1,269,450 (571,253) 9,037,005 9,037,005 2025 - - - 5,350,000 4,597,658 (1,609,180) 1,269,450 (571,253) 9,036,675 9,036,675 2026 - - - 5,515,000 4,340,858 (1,519,300) 1,269,450 (571,253) 9,034,755 9,034,755 2027 - - - 5,695,000 4,065,108 (1,422,788) 1,269,450 (571,253) 9,035,517 9,035,517 2028 - - - 5,885,000 3,774,663 (1,321,132) 1,269,450 (571,253) 9,036,728 9,036,728 2029 - - - 6,085,000 3,468,643 (1,214,025) 1,269,450 (571,253) 9,037,815 9,037,815 2030 - - - 6,295,000 3,146,138 (1,101,148) 1,269,450 (571,253) 9,038,187 9,038,187 2031 - - - 6,515,000 2,806,208 (982,173) 1,269,450 (571,253) 9,037,232 9,037,232 2032 - - - 6,750,000 2,447,883 (856,759) 1,269,450 (571,253) 9,039,321 9,039,321 2033 - - - 6,990,000 2,076,633 (726,821) 1,269,450 (571,253) 9,038,009 9,038,009 2034 - - - 7,240,000 1,692,183 (592,264) 1,269,450 (571,253) 9,038,116 9,038,116 2035 - - - 7,495,000 1,293,983 (452,894) 1,269,450 (571,253) 9,034,286 9,034,286 2036 - - - 7,770,000 878,010 (307,304) 1,269,450 (571,253) 9,038,904 9,038,904 2037 - - - 8,050,000 446,775 (156,371) 1,269,450 (571,253) 9,038,601 9,038,601 2038 ------$7,005,000 1,269,450 (571,253) 7,703,198 7,703,198 2039 ------7,230,000 859,658 (386,846) 7,702,812 7,702,812 2040 ------7,465,000 436,703 (196,516) 7,705,186 7,705,186 Totals $73,614,371 $18,035,000 $3,112,862 $110,265,000 $110,372,694 $(38,630,443) $21,700,000 $36,470,704 $(16,411,817) $236,548,999 $310,163,369 ______(1) Interest payments will be paid from capitalized interest. See "ESTIMATED SOURCES AND USES OF FUNDS." (2) Net interest payments after anticipated Direct Subsidy Payments will be paid from capitalized interest. Se e "ESTIMATED SOURCES AND USES OF FUNDS." (3) Netf o capitalized interest and anticipated Direct Subsidy Payments.

HILLSBOROUGH COUNTY

The County is located on the central-west coast of Florida with Tampa serving as the County seat. The County's 2008 population is estimated to be 1,224,520 according to the United States Bureau of the Census.

Management and Organization

The County is a political subdivision of the State of Florida governed by the State Constitution, general laws of the State of Florida and the County Charter.

The Board is comprised of seven members and is the legislative and governing body of the County. Three County Commissioners are elected at-large and four County Commissioners are elected from single-member districts. All Commissioners are elected for four-year terms of office (two-year terms in certain years for single- member districts). The Board elects a chair who serves as presiding officer.

The Clerk of the Circuit Court (the "Clerk") is the Clerk of the County Court, ex-officio Clerk to the Board of County Commissioners and auditor, recorder and custodian of all County funds. The Clerk is an elected constitutional officer. The Property Appraiser, Sheriff, Supervisor of Elections and Tax Collector are also separate constitutional officers under the laws of the State.

The County Administrator, the chief administrative official of the County, is appointed by and serves at the pleasure of the Board. This official is directly responsible to the Board for administration and operation of all operating departments of the County. The County Administrator is also responsible to the Board for the execution of all Board policies and the preparation of the County Budget.

Budget Process

The County's budgetary procedures are mandated by Chapter 129, Florida Statutes. On or before July 15 of each year, the County Administrator submits to the Board a tentative budget for the ensuing Fiscal Year commencing the following October 1. At the first of two public hearings the Board adopts a tentative budget after submitting the budget and proposed millage rates to the public for review, complaints and comments. This budget includes all changes, and revisions made by the Board after examination and review of each fund, and must be in balance. A summary of the tentative budget is advertised and publicly reviewed and revised prior to final approval and adoption by the Board before Fiscal Year end.

During the Fiscal Year the Board amends its adopted budget as is legally permissible. These amendments will generally include the realignment of existing appropriations within or between departments or from reserve accounts, budgeted transfers between funds where proper, and the addition of new revenues from a source not anticipated or received for a particular purpose.

For further information about the County, see "APPENDIX A – GENERAL INFORMATION REGARDING HILLSBOROUGH COUNTY."

THE UTILITY SYSTEM: GENERAL INFORMATION

Background

The County entered into the water and wastewater utility business in 1967 with the acquisition of two private utility systems. The County has since acquired numerous other private utilities. The System has expanded and improved the acquired systems to create a comprehensive water and wastewater utility network in a large portion of the unincorporated area of the County.

General System Description

The County's Public Utilities Department (the "Department") is responsible for providing customers primarily located within unincorporated areas of the County with: (i) potable water treatment and distribution; (ii) wastewater collection, treatment, and disposal; and (iii) production and distribution of reclaimed water for irrigation and other non-potable purposes.

The utility service areas served by the System are collectively referred to as the Urban Services Area. The Urban Services Area is made up of two distinct geographic regions: (i) the Northwest service area, with an area of about 87 square miles; and (ii) the South/Central service area, with an area of approximately 193 square miles. The Department has the exclusive right to provide water, wastewater, and reclaimed water within the Urban Service Area that is not provided by a municipality or by a private utility that is franchised by the County. Currently, there are seven (7) utility franchises located in the County that approximate 3,500 water and wastewater customers (a small percentage of the population in the Urban Services Area). Based on the exclusive right and responsibility to provide service within the Urban Service Area, there is no opportunity for any additional entities to provide utility service within the Urban Service Area without the consent of the County.

Management and Organization

The System is operated by the Department with Mr. Paul J. Vanderploog as the Director. Mr. Vanderploog was named permanent director on May 13, 2005 after serving as Interim Director when the former Director retired in July 2004. Prior to joining the Department, Mr. Vanderploog was the County's Transportation Division Director and previously served as the Quartermaster General for the U.S. Army.

The Director oversees all of the Department functions and is supported by Operational Analysis and Management comprised of 11 staff positions in support of the following functions: (i) Review and Analysis and Performance Reporting, (ii) Process Flows, (iii) GIS Mapping, and (iv) Administrative Support/Courier. Four additional staff members manage Facilities and Vehicle/Equipment.

Mr. Vanderploog's resume is included in "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Utility Management and Administration – Utility Organization."

Water Resources Division

The Water Resources Division is administered by the Director and nine managers, as described below:

SECTION MANAGER Plant Operations Group Thomas F. Rawls, P.E. Field Maintenance Services Group Rich Cummings Engineering Services Group Charles Hammett, P.E. Service Management and Accounting Group Rebecca Garland Business Services John R. Sheahen, CPA Operations Management Dr. Ken Griffin Employee Services Lori Krieck Plans/Programs Thomas B. Weiss Regulatory Services Pamela Marlowe Greene

Resumes of the nine group managers are included in "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Utility Management and Administration – Utility Organization."

This Division is responsible for the day-to-day operation and maintenance of the water, wastewater, and reclaimed water facilities, including infrastructure. The following groups operate and maintain plant and monitor compliance with local, state, and federal regulations. A description of these groups and their functions are as follows:

Plant Operations Group

The Plant Operations Group is responsible for the potable water and wastewater operations and maintenance at the treatment plants. The Plant Operations Group has a total of 202 staff positions. Operation and maintenance of wastewater lift stations is under the jurisdiction of the Field Maintenance Services Group as further discussed below. The Plant Operations Group is responsible for the following:

1. The Potable Water Operations and Management Sub-Group consist of three teams based on function and geography. The first team covers potable water facilities in the Northwest service area and the second team covers the South-Central service area. The third team oversees the electric, electronics, and mechanical maintenance at potable water and reclaimed water facilities in both geographic service areas. At the end of Fiscal Year 2009, the Potable Water Operations Team employed 22 licensed Drinking Water Treatment Plant Operators. This staffing level complies with the Florida Department of Environmental Protection ("FDEP") permit requirements and is consistent with standard utility practices for similar-size water systems.

2. At the end of Fiscal Year 2009, the Wastewater Operations and Management Sub-Group employed 46 licensed Wastewater Treatment Plant Operators. This staffing level complies with Florida Department of Environmental Protection permit requirements and is consistent with standard utility practices for similar-size wastewater systems.

Field Maintenance Services Group

The Field Maintenance Services Group is responsible for installation, maintenance, and repair of potable water, reclaimed water, and wastewater piping and related infrastructure as well as wastewater lift stations. The Field Maintenance Services Group has a total of 210 positions. The facilities that are managed by the Field Maintenance Service Group includes approximately 2,336 miles of potable water distribution lines, 331 miles of reclaimed water lines, 583 miles of wastewater forcemains, 1,522 miles of gravity sanitary sewers, and 79 miles of low-pressure mains, as well as the 26,890 water valves, 144,000 meters, 12,670 hydrants, 31,050 manholes, services, 545 air release assemblies, and other appurtenances associated with this underground infrastructure. Additionally, the Field Maintenance Group maintains 699 wastewater pump stations and 1,200 low pressure pump stations.

Engineering Services Group

The Engineering Group provides technical and regulatory support services to all potable water, wastewater, and reclaimed water programs of the Department. The Engineering Group has 71 staff positions and is organized into four sections: Project Controls, Engineer Data Services, Project Management, and Planning and Design.

Service Management and Accounting Group

The Service Management and Accounting Group ("SMAG") establishes, maintains, and tracks the customer account records from the initial establishment of an account, through the life of an account, and finally the closing of an account. The group is comprised of 123 staff positions and is divided into two sections based on geography: Northwest Service and South-Central Service. Each of these sections is further subdivided into teams consisting of customer response, walk-in center, field services (meter reading), and payments/accounting.

Regulatory Services

Regulatory Services has 31 staff members and is divided between four sections: (i) Industrial Pretreatment and Grease Management; (ii) Regulations and Permits; (iii) Laboratory Analytical Services and (iv) Acquisitions and Contracts. The Environmental Laboratory is certified by the Florida Department of Health and is responsible for environmental sampling and analysis, including compliance and operational testing for the water and wastewater treatment plants, biosolids management facility, groundwater monitoring wells, surface water outfalls, potable water distribution system, plus 67 remote facilities for four other County departments.

Strategic Water Management

Strategic Water Management includes 8 staff members responsible for the operation and maintenance of one of the largest retail residential reclaimed water system in the United States. Utilizing over 21 million gallons per day of reclaimed water, their role is central to the utilities ability to meet the changing regulatory standards concerning surface water discharges. In addition to their primary roles, they also work as liaisons with Tampa Bay Water, the Florida Department of Environmental Protection, and the Southwest Florida Water Management District ("SWFWMD").

Administrative Division

The day-to-day administration of the Water Resources Division is backed by five support units. A description of these five support units and their functions are as follows:

1. Operations Management. Operations Management is responsible for overseeing long-term planning and the County's new Capital Asset Management System ("CAMS") program. Operations Management is comprised of 10 staff positions. The main purpose of the new CAMS program is to implement a work management system that monitors work performed on the systems and tracks assets, including their condition and performance. Additional functions include material management, emergency planning and response and real estate.

2. Business Services. Business Services provides financial support services to the System and is comprised of 11 staff positions to support the following functions: (i) Budget and Rates; (ii) Fiscal Operations; (iii) Bond Compliance; and (iv) Indexing and Pass-through rate adjustments.

3. Employee Services. Employee Services provides human resources support services for the Department. Employee Services coordinates with the County's Human Resources Department but functions independently on most day-to-day activities. Responsibilities of this unit include personnel actions, development, and administration of safety programs and training, coordination of travel and related record-keeping. Employee Services has 9 staff members.

4. Plans/Programs. Plans/Programs is comprised of 9 staff positions in support of the following functions: (i) Water Conservation coordinates a successful education and enforcement program, while conducting research to find ways to increase water conservation and reduce potable water demands; (ii) Energy Management to evaluate most efficient use of power utilized in treatment and delivery processes; and (iii) Feasibility Modeling related to operations and processes.

5. Information Management. Information Management is comprised of 4 positions in support of the following functions: (i) Support for Asset Management and Customer Billing; (ii) Electronic Customer Interface; (iii) Communications/Call Center; (iv) Continuity of Business; and (v) Software System Administration.

WATER SYSTEM*

General

The County's potable water system is comprised of a treatment, and transmission and distribution system (the "Water System"), which during the Fiscal Year 2009 provided service on average to 141,615 retail accounts and 191,810 corresponding equivalent residential connections (ERCs) within the Water System service area. An ERC for the Water System represents the equivalent usage requirements of an individually metered residential customer and equates to approximately 300 gallons per day ("gpd") of metered water service pursuant to the County's policies and regulations. For more information, see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – The System – Water System Overview."

* For more information regarding the Water System see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Water System."

Water Supply

As a Member Government of Tampa Bay Water, A Regional Water Supplier, the County obtains the majority of its potable water from this Authority. Formed in 1998 as a successor to the West Coast Regional Water Supply Authority, Tampa Bay Water has an unequivocal obligation to provide 100% of the water supply needs to its Member Governments, including the County.

To serve the customer base of the water service area, the County entered into an Amended and Restated Interlocal Agreement in 1998 with Tampa Bay Water to secure a long-term water supply. For the Fiscal Years 2009, Tampa Bay Water provided approximately 98% of the total potable water needs of the Water System; the remainder is derived from certain municipal public utilities due to the proximity of the service requirements.

Cone Ranch. Cone Ranch, 12,900 acres of undeveloped land in northeastern Hillsborough County, was transferred from the Department to the County's Environmental Lands Acquisition and Preservation Program ("ELAPP"). The County acquired Cone Ranch in 1988 on behalf of the Department. Tampa Bay Water has held the right to develop wellfields there but has subsequently found alternative sources of water. The Department received $11.8 million in proceeds from the County's General Obligation Bonds (Environmental Lands Acquisition and Protection Program), Series 2009A and its Taxable General Obligation Bonds (Environmental Lands Acquisition and Protection Program), Series 2009B (Federally Taxable-Build America Bonds-Direct Subsidy), the amount equal to the value recorded on the Department's financial statements ("book value"). Ambac Assurance Corporation, the insurer of the Series 2001 Bonds, was required to consent to the transfer at book value because the Resolution required the transfer at fair market value, which consent was received on January 27, 2010. As a result of the transfer to ELAPP, Cone Ranch is no longer an asset of the System.

Potable Water Distribution

The County's potable water facilities includes six potable water treatment plants in service and one booster pumping station and approximately 2,336 miles of potable water transmission and distribution pipelines. The County treatment facilities receive most of their water from Tampa Bay Water, provide additional treatment, and pump the finished potable water into the Department transmission and distribution system for ultimate delivery to retail customers. The potable water portion of the System is divided into two general service areas: Northwest and South-Central.

The Department's total annual average daily potable water demand during Fiscal Year 2009 was 46.02 million gallons a day ("mgd"). The average daily water demand of 14.44 mgd in the Northwest service area during Fiscal Year 2009 was well below the existing permitted water treatment capacity of 41.8 mgd for the Northwest service area. The average daily water demand of 31.58 mgd in the South/Central service area was well below the existing permitted water treatment capacity of 73.1 mgd for the South/Central service area.

The quality of the potable water produced by the Utility System and delivered to Department's customers is, in the opinion of the Consulting Engineers, excellent, complying with U.S. Environmental Protection Agency ("EPA"), FDEP and Hillsborough County Health Department standards.

Potable Water Treatment

Raw water supplied to the County by Tampa Bay Water is treated to drinking water quality in six potable water treatment plants owned and operated by the County. The Central Hillsborough Water Treatment Facility was recently constructed and operation started in February 2009. This plant provides potable water to the South-Central service area. It has a permitted treatment (maximum day) capacity of 19.0 mgd, a firm pumping capacity of 32.0 mgd, and a storage capacity of 10.0 million gallons ("mg"). The Lithia Water Treatment Plant is also located in the South-Central service area. This plant currently has a permitted treatment capacity of 54.1 mgd.

The Northwest Hillsborough Potable Water Facility is located in the Northwest Service Area of the County. This plant has a permitted treatment capacity of 25 mgd, a firm pumping capacity of 31.0 mgd with a storage capacity of 10.0 mg. The Lake Park Water Treatment Plant is also located in the Northwest service area. This plant

has a permitted treatment capacity of 15.5 mgd, a firm pumping capacity of 25.0 mgd with a storage capacity of 10.0 mg. The Manors of Crystal Lakes Water Treatment Plant is part of a neighborhood water system located in the Northwest service area. It was constructed in 1985 and has been in operation for approximately 20 years without major expansion or refurbishment. This facility is supplied by two wells owned by Tampa Bay Water that have a firm pumping capacity 0.576 mgd. The well pumps provide adequate pressurize throughout the small distribution system. The County acquired the Sun City Water Treatment Plant and made it part of the System in 2000. The Sun City Water System is a relatively small neighborhood system located in the South Central service area. The water treatment plant is supplied by two on-site wells owned by the County.

Historical Customer Statistics and Sales

The Water System has experienced an increase in customers and water sales over the past several years due to the continued development located within the service area. The table below summarizes the historical accounts served and the corresponding ERC provided water service, billed water sales, and average ERC usage statistics for the Water System.

Summary of Historical Customer Statistics and Sales - Water System

Fiscal Year Ended September 30, 2005 2006 2007 2008 2009 Average Annual Accounts 131,571 137,935 141,034 141,370 141,198 Billed Potable Water Sales $15,633,604 $17,971,297 $18,113,216 $16,997,650 $16,199,364 Average Monthly Use per Account 9,902 10,857 10,703 10,020 9,561 Total Equivalent Residential Connections 176,295 185,198 192,152 193,199 191,810 Average Monthly Use per ERC 7,390 8,087 7,855 7,332 7,038 ______Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Table 1."

Potable Water Source – Tampa Bay Water*

Water Supply and Transmission Facilities

As a Member Government of Tampa Bay Water, the County obtains the majority of its potable water from Tampa Bay Water. In 2009, Tampa Bay Water's production was 171.14 mgd of which the County received 47.17 mgd, or approximately 27.6%. Tampa Bay Water's peak day production in 2009 was 237.59 mgd. Tampa Bay Water has a series of facility expansion projects and new production facilities underway or nearing completion that will provide additional water to the tri-county area. Notable among these are its Surface Water Treatment Plant expansion to a 120 mgd capacity, its Tampa Bypass Canal Pump Station expansion to a 200 mgd, construction of hydrogen sulfide treatment facilities at the County's Lithia Water Treatment Plant, and a new pipeline to supply potable water to the County's Northwest Hillsborough Water Treatment Plant.

A fundamental responsibility of Tampa Bay Water is to meet the Quality Water needs of its Member Governments as set forth in the Master Water Supply Contract. To do this Tampa Bay Water is charged with the obligation to design, acquire, construct, operate, and maintain water supply facilities. Tampa Bay Water is required to update its Master Water Plan every five years to meet projected needs of the Member Governments for the next 20 years. The policy objectives of the Tampa Bay Water Board include, among others:

i Meeting the performance requirements of the Master Water Supply Contract in providing service to the Member Governments.

i Achieving the objectives of the Partnership Agreement with SWFWMD through the planning, design, construction and operation of water production and transmission facilities to improve both supply

* Tampa Bay Water and information from "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Water System" are the sources for the statements included hereunder.

delivery and environmental stewardship. Among these objectives, the goal of achieving and maintaining compliance with regulatory requirements is paramount.

i Safeguarding the public investment of $1.85 billion in Tampa Bay Water's potable water supply to ensure both water quality and quantity.

Under the Master Water Supply contract, Tampa Bay Water charges a uniform rate per 1,000 gallons to the Member Governments, with the exception of water delivered to the City of Tampa from the Tampa Bypass Canal. This uniform charge is calculated annually based on projected revenue requirements for operation and maintenance expenses, debt service payments, renewal and replacement expenditures, reserve deposits, and capital expenditures. The amounts billed are subject to a true-up calculation annually based on actual volumes purchased by Member Governments for the year. During the Fiscal Year 2009, the County purchased 47.17 mgd of water from Tampa Bay Water and paid approximately $41.6 million to Tampa Bay Water for such water purchases. The current uniform rate (reflects average rate for all costs billed by the entity) being charged by Tampa Bay Water during the current Fiscal Year 2010 is $2.3980 per 1,000 gallons.

Interlocal Agreement

The Interlocal Agreement entered into by and among the Member Governments (the "Interlocal Agreement"), reorganized West Coast Regional Water Supply Authority (the "Predecessor Authority") created pursuant to Section 373.1962 and 163.01, Florida Statutes, and other applicable laws, for the purpose of developing, recovering, storing and supplying water for county and municipal purposes in such a manner as to give priority to reducing adverse environmental effects of excessive withdrawals of water from concentrated areas.

Unless terminated earlier pursuant to the terms of the Interlocal Agreement, the Interlocal Agreement shall expire upon the later of the following dates: (i) the fortieth anniversary of the commencement date of the Interlocal Agreement, or (ii) the date on which no Tampa Bay Water Obligations (as defined in the Interlocal Agreement) remain outstanding.

Pursuant to the Interlocal Agreement, Tampa Bay Water became the exclusive provider of water for the Member Governments for the geographic territory of Hillsborough, Pasco and Pinellas Counties.

Pursuant to the Interlocal Agreement, Tampa Bay Water has the absolute and unequivocal obligation to meet the quality water needs of the Member Governments which needs are required to be satisfied before quality water is delivered to any other customer of Tampa Bay Water. Accordingly, Tampa Bay Water must oppose any permit, order, rule or other regulatory effort to reduce or limit the permitted capacity of its water supply facilities, unless (i) the reduction or limitation results from an agreement to which all Member Governments are parties, or (ii) the reduction or limitation will not become effective until adequate replacement capacity has been placed in service.

Master Water Supply Contract

Tampa Bay Water and the Member Governments entered into the Master Water Supply Contract to establish the format for the supply of water to all of the Member Governments by Tampa Bay Water and to develop a plan to share the costs of operating, acquiring, constructing, equipping and expanding Tampa Bay Water's System. Under the terms of the Master Water Supply Contract, Tampa Bay Water is required to provide sufficient water to each Member Government to meet that Member Government's needs. The Member Governments agree in the Master Water Supply Contract to provide water service to the customers in their Water Service Areas (as defined in the Master Water Supply Contract) only from water supplied from Tampa Bay Water (except for those facilities retained by the Member Governments through the exceptions to exclusivity allowed in the Interlocal Agreement).

The term of the Master Water Supply Contract commenced on September 29, 1998 and ends on the date the Interlocal Agreement is terminated in accordance with its provisions or the date on which no Obligations remain outstanding pursuant to Tampa Bay Water's financing documents and bond resolutions. The Master Water Supply Contract contains procedures for the annual setting of the Uniform Rate to be charged to the Member Governments for water, billing procedures and related provisions.

BECAUSE PAYMENTS TO TAMPA BAY WATER, WHETHER TO REIMBURSE TAMPA BAY WATER FOR DEBT SERVICE COSTS OR TO PAY COSTS DIRECTLY, ARE TREATED BY THE COUNTY AS COSTS OF OPERATION AND MAINTENANCE, HILLSBOROUGH COUNTY WATER SYSTEM OPERATING REVENUES WILL BE APPLIED TO TAMPA BAY WATER DEBT PAYMENTS BEFORE SUCH REVENUES BECOME AVAILABLE FOR PAYMENT OF THE BONDS.

Description of the Tampa Bay Water System

Tampa Bay Water's water utility system consists of a number of wellfields, surface water supply facilities, a seawater desalination facility, transmission pipelines, water treatment and storage facilities, metered interconnects, and booster pump stations (the "Tampa Bay Water System"). The water supply sources, treatment facilities, storage facilities and distribution facilities described below make up the Tampa Bay Water System which supplies all the water to meet the water demands of all of the Member Governments.

Water Demand

Tampa Bay Water expects annual average water demand for all of the Member Governments for Fiscal Year 2010 to be approximately 153 mgd while average demand for Fiscal Year 2011 is projected to be approximately 163 mgd. As a result of current economic conditions, conservation efforts and more frequent rainfall, averages, Tampa Bay Water has experienced a decline in demand in the short-term. However, in the long-term the Member Governments' forecast demands are expected to increase, albeit more slowly than previously. Tampa Bay Water is required under the terms and conditions of the Master Water Supply Contract to meet those water demands, Therefore, Tampa Bay Water continues to develop and implement its long-term demand forecasting program and its short and long-term planning for facility development and expansion to meet future water demands.

Expansion Program

Tampa Bay Water is currently under construction with a number of surface water and Regional System facility expansion projects and interconnection improvements that, when complete, will increase Tampa Bay Water's ability to harvest high seasonal flows from the Tampa Bypass Canal and Hillsborough River. This program, termed Configuration II, is co-funded by SWFWMD and includes as its main water supply facility, an expansion of the existing surface water treatment plant from the current permitted capacity of 72 mgd to 120 mgd. System expansions to the Tampa Bypass Canal, Morris Bridge, Cypress Creek, and High Service pump stations, and a new Interconnect between the Regional system and the County's Northwest Potable Water Treatment Facility are the other major components of the Configuration II program.

Permits, Regulation and Compliance

The key regulations affecting the operations of Tampa Bay Water are state regulations applicable to Tampa Bay Water's withdrawals of water from its water supply sources, and state and federal regulations applicable to operation of Tampa Bay Water's treatment and distribution systems and its Seawater Desalination Plant. Withdrawals of water are regulated under Water Use Permits issued by SWFWMD. The water treatment facilities, desalination facility, and distribution system are regulated through permits issued by FDEP.

The Consolidated Permit, issued by SWFWMD in January 1999, regulates withdrawals from 11 of the 13 regional wellfield systems operated by Tampa Bay Water. The Consolidated Permit included initial withdrawal limits for each wellfield (annual average) and for each well within each wellfield (peak month and annual average). A condition of the Consolidated Permit is to manage withdrawals from the wellfields to minimize environmental impacts through optimum distribution of pumping among all wells according to an approved Operations Plan.

Since January 1, 2003, the 11 wellfields of the Consolidated Permit no longer have individual withdrawal limits and are considered a single system for the purpose of measuring compliance with the permitted annual average withdrawal quantity. Beginning January 1, 2008, withdrawals from the 11 wellfields were limited to 90 mgd on a 12-month running average basis.

The remaining two regional wellfield systems, the South-Central Hillsborough Regional Wellfield and the Brandon Urban Dispersed Wells, as well at the Carrollwood Wells and the Eagles Wells, are regulated under separate Water Use Permits issued by SWFWMD. Withdrawals from the Brandon Urban Dispersed Wells are limited to 6 mgd on a 12-month running average basis. Withdrawals from the South-Central Hillsborough Regional Wellfield are limited to 24.1 mgd on a 12-month running average basis. Withdrawals from the Carrollwood Wells are limited to 0.82 mgd on a 12-month running average basis. Withdrawals from the Eagles Wells are limited to 0.198 mgd on a 12-month running average basis. Withdrawals from the Tampa Bypass Canal are separately permitted and limited to 20 mgd on a 12-month running average basis and provides water to the City of Tampa through augmentation of the Hillsborough River Reservoir on an as-needed basis.

The two surface water facilities that comprise the withdrawal component of the Enhanced Surface Water System are the Tampa Bypass Canal Pump Station and the Alafia River Pump Station. The Tampa Bypass Canal Pump Station and transmission facilities convey water during high flow periods from the Tampa Bypass Canal and Hillsborough River to the Regional Surface Water Treatment Plant. The Alafia River Pump Station and transmission facilities also convey water during high-flow periods to the Regional Surface Water Treatment Plant. The Water Use Permits for these two surface water sources allow the harvesting of high flows from these river systems when a minimum threshold flow is exceeded in each system. It is estimated that the Enhanced Surface Water System (including the Tampa Bypass Canal/Hillsborough River system, Alafia River, and C.W. Bill Young Regional Reservoir), along with the expanded permitted withdrawals of the Tampa Bypass Canal and expansion of the Surface Water Treatment Plant, will meet the future drinking water needs of Tampa Bay Water's six Member Governments through at least 2017.

The Regional Surface Water Treatment Plant is designed to treat up to 72 mgd from the surface water sources and deliver that water to the Regional System. This Plant is currently undergoing expansion and is expected to be able to treat up to a maximum capacity of 120 mgd at completion of the project, which is on schedule for completion in the fall of 2010. The C.W. Bill Young Regional Reservoir provides storage capacity during high river flow periods so that the stored water can be utilized as a reliable water source when surface water is not available for withdrawal from the river systems. The designed storage capacity of the reservoir is approximately 15 billion gallons. Production from the Tampa Bay Seawater Desalination Plant is also used to meet drinking water demands. The desalination facility has the capability of providing 25 mgd to the Regional System on a nominal basis.

The permitted quantity withdrawal limit for the 11 wellfields as stated in the Consolidated Permit is listed below together with the permitted quantities for the remaining four wellfields and the surface water facilities:

Permitted Water Supply Facility Capacity in mgd Consolidated Permit Wellfields – Total * 90.000 South-Central Hillsborough Regional Wellfield 24.100 Brandon Urban Dispersed Wells 6.000 Carrollwood Wells 0.820 Eagles Wells 0.198 Enhanced Surface Water System (consisting of Tampa Bypass Canal/Hillsborough River, Alafia River, C.W. Bill Young Regional Reservoir) ** 72.000 Tampa Bay Seawater Desalination Plant ** 28.750 ______* Consolidated Permit Wellfields – Cross Bar Ranch, Cypress Creek, Cypress Bridge, Morris Bridge, Starkey, North Pasco, South Pasco, Eldridge-Wilde, Cosme/Odessa, Section 21, and Northwest Hillsborough (inclusive of Crystal Lakes). These wellfields are permitted as a single system, and there is no annual withdrawal quantity assigned to any individual wellfield. These wellfields are operated in compliance with the Optimized Regional Operations Plan. ** The Water Use Permits for the Tampa Bypass Canal/Hillsborough River and the Alafia River facilities do not have assigned average annual quantities. The permit authorizes the harvest of high river flows after a threshold flow has been exceeded in each river system. The quantity shown represents the rated capacity of the plant for both the Enhanced Surface Water System and the Seawater Desalination Plant, and sustained delivery rates will be less depending on river flow.

SWFWMD has adopted Minimum Flows and Levels ("MFLs") for some wetlands, lakes, rivers, springs, and aquifers and is in the final stages of adoption of other "MFLs" which may affect Tampa Bay Water's development of certain new sources. It is not anticipated that MFL's will affect existing sources through the year 2020. At that time, Tampa Bay Water is required to develop a plan that identifies mitigation actions for any adverse

environmental impacts due to wellfield pumpage that continue to exist following the reduction in ground water pumpage. Following SWFWMD adoption of any additional MFLs, Tampa Bay Water expects that administrative challenges may be filed which could delay their effectiveness for up to two years and may lead to further revisions to MFLs by SWFWMD. For these reasons, the final impact of MFLs on Tampa Bay Water, if any, is speculative.

The Interlocal Agreement (discussed above) and the Master Water Supply Contract require Tampa Bay Water to provide water which meets all state and federal drinking water standards as defined by Chapter 62-550 with the exception of regulations pertaining to disinfection and corrosivity. Tampa Bay Water must also meet certain water quality standards at the points of connection under the terms of the Interlocal Agreement and Master Water Supply Contract.

WASTEWATER SYSTEM*

General

The County's wastewater system is comprised of collection, treatment, and disposal (effluent and residuals) systems (the "Wastewater System") which during the Fiscal Year 2009 provided service to an average of 131,588 retail accounts and 205,121 corresponding equivalent residential connections (ERCs) within the Wastewater System service area. An ERC for the Wastewater System represents the equivalent usage requirements of an individually metered residential customer and equates to approximately 200 gallons per day (gpd) based on metered water service delivered to the customer premises pursuant to the County's policies and regulations. The Wastewater System consists of seven (7) wastewater treatment facilities, a biosolids management facility, and wastewater effluent disposal by rouse (the primary method of effluent disposal) and surface water discharge (the secondary method of effluent disposal).

Wastewater Collection

Wastewater is collected in gravity sewers and force mains constructed mainly of reinforced concrete pipe, ductile iron pipe, polyvinyl chloride pipe, or other common sewer pipe materials. As with drinking water distribution, the wastewater collection system is divided into the Northwest and South/Central service areas. Sewer flow is directed from the gravity sewers and force mains to lift stations serving housing subdivisions, commercial developments, or specific neighborhoods.

Wastewater Treatment

Collected wastewater is treated on a regional basis in one of seven treatment facilities. The total permitted capacity for all of the facilities combined equals 56.2 mgd. On average, the daily flow treated by the facilities is approximately 35.2 mgd. Solids (or sludge) generated at each of the facilities is transported to the Northwest Residuals Resource Recovery Facility in the Northwest service area. Wastewater that has been treated to tertiary quality standards is introduced into the County's reclaimed wastewater distribution system.

Historical Customer Statistics and Sales

The Wastewater System has also experienced an increase in customers and billed wastewater flow (sales) over the past several years due to the continued development located within the service area. The table below summarizes the historical accounts and ERCs provided wastewater service, billed wastewater flow (sales), and average ERC usage statistics for the Wastewater System.

* For more information regarding the Wastewater System see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Wastewater System."

Summary of Historical Customer Statistics and Sales - Wastewater System

Fiscal Year Ended September 30, 2005 2006 2007 2008 2009 Average Annual Accounts 123,159 129,418 132,420 131,890 130,844 Billed Wastewater Flow $11,873,215 $12,626,931 $12,889,891 $12,784,865 $12,640,777 Average Monthly Billed Flow per Retail Account 8,034 8,131 8,112 8,078 8,051 Total Equivalent Residential Connections 183,785 193,319 202,338 204,815 205,121 Average Monthly Billed Flow per ERC 5,384 5,443 5,309 5,202 5,135 ______Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Table 2."

Wastewater Pumping and Treatment

The Wastewater System is comprised of wastewater collection and transmission, treatment, biosolid, and effluent disposal facilities, which provided service on average to over 131,000 accounts during the Fiscal Year 2009. The wastewater collection and treatment system is divided into two general service areas: Northwest and South- Central.

There are seven County wastewater treatment plants ("WWTPs") that are designed as advanced waste treatment ("AWT") plants with surface water discharge and reclaimed water use. In the Northwest service area, the WWTPs are the Northwest Regional Water Reclamation Facility, a 10-mgd plant, River Oaks, a 10-mgd facility, Dale Mabry, a 6-mgd facility, and VanDyke, a 1.7-mgd plant. The Northwest Regional Biosolids Recovery Facility is a Type 1 biosolids management facility with a capacity of 25 dry tons per day. It receives solids from the four WWTPs in the Northwest service area.

In the Central service area, the WWTPs are Falkenburg, a 12-mgd facility and Valrico, a 12-mgd facility. In the South service area, the WWTP is South County, a 4.5-mgd facility (under design for an upgrade to 10-mgd). All seven WWTPs treat domestic water to AWT quality limits, including nutrient removal, which is nitrogen removal to 3 parts per million and phosphorus removal to 1 part per million.

In the past, WWTPs in the County have been overloaded and not in compliance with regulatory requirements. Fifteen years ago, the County undertook its CIP to remedy the situation. As a result, the River Oaks, Dale Mabry, and South County WWTPs were modified and expanded and new plants were built, Falkenburg, Valrico and Northwest. The expansion of the Falkenburg WWTP was completed in March 2009, major expansion of the Northwest WWTP to 10 mgd was completed in June 2009, and expansion of the Valrico WWTP was completed in June 2009. The South County WWTP is under design for upgrade to 10 mgd. Consequently, regulatory requirements have been met and capacity is available at all plants. For more information regarding regulatory matters regarding the Wastewater System, see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Wastewater System – Regulatory Status of Wastewater System."

Potential Numeric Nutrient Water Quality Criteria Regulations

The EPA announced on January 14, 2009, its intention to promulgate numerical nutrient criteria for Florida beginning in 2010 as part of a legal settlement agreement in a matter not involving the County. The EPA's proposed schedule may result in new criteria for the County by October 2014 that could supersede the nutrient reduction requirements currently in place. Although the EPA has not adopted specific criteria, the proposed nutrient criteria are stringent and would result in significant reductions to nitrogen and phosphorus discharges well below levels currently required for the Wastewater System. If such a rule were successfully passed, it could require a substantial investment in additional facility upgrades beyond those currently planned. See "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Wastewater System – Regulatory Status of Wastewater System."

Mandatory Connections

Pursuant to County Ordinance, all proposed development which can be feasibly connected to a publicly owned or investor-owned wastewater collection system must do so as a condition of development. Any existing development which is using an on-site wastewater disposal system and which can be feasibly connected to a publicly owned or investor-owned wastewater collection system is exempt from such connection unless the on-site system is not operating in compliance with State of Florida regulations or is deemed to constitute a public health hazard.

TEN LARGEST WATER AND WASTEWATER CUSTOMERS

Percent of Total Rate Total System Account (1) Revenue (2) Rate Revenues Federation of Kings Point C, Inc. $1,719,350 1.03% Lake Carlton Arms 834,022 0.50% Hunter Run Partners Ltd. 319,710 0.19% Cypress Meadows 318,464 0.19% Camden Operating LP 310,280 0.19% Strawberry Ridge 301,601 0.18% Parkers Landing Venture II 269,848 0.16% Cornerstone Group 268,133 0.16% Sheldon Road Associates 245,178 0.15% ERP Operating Limited Partnership 222,816 0.13% Total $4,809,402 2.89% Total Water, Wastewater, and Reclaimed Water Rate Revenues (3) $166,434,000 ______(1) Based on information provided by the Department; reflects amounts for the twelve (12) months ended September 30, 2009 (the most recently completed fiscal year for the System). (2) Multi-family customers represent accounts which are served by a master meter generally serving a number of dwelling units. (3) Amount shown reflects revenues derived from monthly water and wastewater rates, including revenues derived from the application of the purchased water pass- through revenue, reclaimed water revenue, and customer charges; amounts do not include any other operating revenue or income available to or earned by the System.

Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Historical and Projected System Sales and Customer Usage Statistics – Ten Largest Customers of the System."

RECLAIMED WATER*

The County's Reclaimed Water System currently includes eleven reclaimed water pump stations, of which many also include reclaimed water storage. The Reclaimed Water System provided reclaimed water service on average to over 15,000 residential, commercial and large user accounts during the Fiscal Year 2009. The reclaimed water transmission and distribution system is located in the same two general service areas as discussed above for the Wastewater System: Northwest and the South-Central.

In the Northwest service area, the Dale Mabry reclaimed water pump station, has 9.6 mgd of pumping capacity to 17.0 mgd, the Northdale tank and reclaimed water pump station has a firm pumping capacity of 6.47 mgd, the Northlakes reclaimed water pump station has a firm capacity of 3.88 mgd, the Northwest reclaimed water pumping station has a firm pumping capacity of 15.55 mgd to 28.06 mgd, the River Oaks reclaimed water pump station has a firm pumping capacity of 12.37 mgd and the Van Dyke reclaimed water pump station has a firm pumping capacity of 7.19 mgd.

* For more information regarding the Reclaimed Water see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Reclaimed Water System."

In the South-Central service area, the Falkenburg Road reclaimed water pump station has 7.91 mgd to 10.21 mgd of pumping capacity, the Valrico reclaimed water pump station has a firm pumping capacity of 19.57 mgd, the Lithia Pinecrest reclaimed water pump station has a firm pumping capacity of 10.58 mgd, the South County reclaimed water pump station has a firm pumping capacity of 12.09 mgd and the Summerfield reclaimed water pump station has a firm pumping capacity of 7.63 mgd.

RATES, FEES AND CHARGES

Retail service charges are established to cover the costs of providing water and wastewater service for domestic, commercial and industrial uses, and for fire fighting purposes. Such costs of service include repayment of moneys borrowed to acquire or construct the System, operation and maintenance, environmental compliance and renewals, replacements, extensions, and betterments to the System.

The monthly user charges for water and wastewater service have six components: a customer service charge, a water base facility charge, a wastewater base facility charge, a Tampa Bay Water pass-through consumption charge, a water conservation consumption charge and a wastewater usage charge.

The customer service charge is established to cover a portion of the costs associated with customer service functions such as billing, record keeping, and customer assistance. Base charges are equivalent to readiness to serve charges and are established to cover a portion of the costs associated with maintaining service availability. Consumption and usage charges are established to cover the costs associated with water production, treatment and delivery and wastewater collection, and treatment and sludge disposal.

On May 20, 2009, the Board of County Commissioners implemented Index Rates. The monthly user rates (the "Applicable Rates") shall be increased by Department each year by applying the price index factor established for that year (the "Price Index Factor") to the Applicable Rates to offset the effects of inflation on the cost of operating and maintaining the Utility System. All Applicable Rates so adjusted (the "Indexed Rates") shall be implemented by Department. Each implementation of Indexed Rates ("Rate Indexing") shall occur without a public hearing and without the need of the Board of County Commissioners to act. Rate Indexing shall not be employed more than once in any calendar year. Indexed Rates shall be implemented by Department not later than June 1 of the year in which the Price Index Factor was established. Only the following Applicable Rates shall be subject to Rate Indexing:

(a) The water and wastewater user charges (excluding the Purchased-water Pass-through Consumption Charge);

(b) The reclaimed water user charges (excluding Committed-Class connections); and

Rate Indexing shall be suspended if the amount of the "Pledged Revenues" Account for the prior Fiscal Year (the 12-month period ending September 30) exceeds 135% of the amount of the "Required Deposits" Account as such Accounts are defined in the Resolution and the amounts thereof reported in the audited financial statements of the Enterprise System (the "Annual Report") for such Fiscal Year.

The rate adjustment for the Fiscal Year ending September 30, 2010 was 1.72%, amounting to an additional $.93 per month on the typical household use of 6,000 gallons of water. The "Purchased-Water Pass Through Charge" for water purchased from Tampa Bay Water increased by $.18 per thousand gallons.

MONTHLY USER RATES EFFECTIVE: October 1, 2009 Potable Water Charges Base Facility Charge (Per ERC) $8.04 Tampa Bay Water Pass-Through Consumption Charge (Per 1000 gallons) $2.43 (current amount, subject to change) Conservation Consumption Charges (Per 1000 gallons) Block 1 0 – 5000 gallons per ERC $.66 Block 2 5,001 - 15,000 gallons per ERC $1.83 Block 3 15,001 - 30,000 gallons per ERC $3.06 Block 4 30,001 gallons or more per ERC $4.58 Wastewater Charges Base Facility Charge (per ERC) $12.97 Usage Charge (per 1000 gallons) $4.17 Customer Service Charge Per Bill $3.87 ______Source: Water Resource Services, Hillsborough County.

Reclaimed Water User Charges

Single-Family Residential Accounts – Monthly user charges for single-family residential reclaimed water accounts shall be assessed in accordance with the following table.

MONTHLY USER RATES – SINGLE FAMILY RESIDENTIAL Charges by Connection Subclass Unmetered Metered TYPE OF CHARGE Initial (1)(2) Committed(2)(3) Base Facility Charge $6.00 $9.14 $3.81 Usage Charge (per 1000 gallons) None None Per usage blocks Block 1 0 to 5,000 gallons N/A N/A $0.25 Block 2 5,001 to 15,000 gallons N/A N/A $0.41 Block 3 Above 15,000 gallons N/A N/A $0.56 ______Source: Water Resource Services, Hillsborough County. (1) Residential properties in reclaimed water improvement units created pursuant to County ordinances (RWIUs) on or before April 1, 1997 were eligible for Initial-Class reclaimed water connections. Initial- Class rates remained fixed through March 31, 2007. Beginning April 1, 2007, Initial-Class rates are increased over a 3-year phase-in period to the then-current rates for Committed-Class connections. (2) The rates in this subclass apply only to reclaimed water connections of 1 inch or smaller. Connections larger than 1 inch are subject to Metered-Class rates. (3) Residential properties in RWIUs created prior to November 20, 2001 and residential properties in neighborhoods for which a conditional approval for connection of the neighborhood to the County's reclaimed water system was issued prior to November 20, 2001 are eligible for Committed-Class reclaimed water connections. The owners of residential properties within such neighborhoods or their legal representatives may enter into an agreement with the County – individually or collectively – documenting a 30-year exemption from metered reclaimed water service within the neighborhood. For more information on rates, fees and charges, see "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Rates, Fees and Charges."

Comparison of Typical Residential Bills

The following table compares typical water and wastewater residential bills by the County and nearby utility systems.

Residential Water and Wastewater Service Assuming 6,000 Gallons of Utility Service (1) Water Wastewater Total Hillsborough County Prior Rates (2) $31.62 $37.99 $69.61 Existing Rates (3) 31.67 38.16 69.83 Other Surveyed Utilities Charlotte County (3) 49.79 50.86 100.65 City of Clearwater(3) 32.31 40.14 72.45 Collier County (3) 32.51 48.37 80.88 Lee County 27.64 44.16 71.80 Manatee County (3) 17.28 41.81 59.09 City of North Port (3) 36.40 53.85 90.25 Pasco County (4) 21.20 37.76 58.96 Pinellas County 30.96 33.03 63.99 Polk County (3) 17.64 58.79 76.43 Sarasota County (3) 31.35 58.94 90.29 City of St. Petersburg (3) 26.46 32.20 58.66 City of Tampa (3) 13.59 31.36 44.95 Other Utilities' Average $28.09 $44.27 $72.37 ______(1) Unless otherwise noted, amounts shown reflect residential rates in effect January 2010 and are exclusive of taxes or franchise fees, if any, and reflect rates charged for inside city service. All rates are as reported by the respective utility. This comparison is intended to show comparable charges for similar service for comparison purposes only and is not intended to be a complete listing of all rates and charges imposed by each listed utility. (2) Amounts shown include the current Purchased Water Pass-Through Consumption Charge of $2.43 per 1,000 gallons for all billed water consumption. (3) Existing rates include the imposition of the price index rate adjustment which became effective June 1, 2010; prior rates shown for comparative purposes since such rates were in effect during a portion of Fiscal Year 2010. (4) Utility is currently involved in a rate study, is planning to conduct a rate study, or plans to implement a rate revision or price index / pass through adjustment within the next twelve months following the comparison preparation date. Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Rate Comparison."

The County also imposes Water Capacity Fees and Wastewater Capacity Fees for the purposes of recovering the proportionate share of the cost of expanding, oversizing, or constructing improvements to the System. Capacity Fees are pledged to secure the payment of principal of, redemption premium, if any, and interest on the Bonds only to the extent permitted in the Resolution. See "SECURITY FOR THE BONDS" herein.

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Accrued Guaranteed Revenue Fees

Accrued Guaranteed Revenue Fees ("AGRFs") are charged for each new connection to the System and are intended to reimburse the System for the costs of financing, operating and maintaining unused water and wastewater capacity of the System prior to such connection. AGRF's revenues are treated as Gross Revenues of the System under the Resolution. AGRF's for connection to the System are currently calculated as follows:

Master-Metered Customer Class Residential Residential Commercial Per Per Per AGRF ERC ERC ERC Effective: July 1, 2003 through March 31, 2004 (1) Water $890 $890 $890 Wastewater $1,055 $1,055 $1,055 Water & Wastewater $1,945 $1,945 $1,945 (1) Rates will remain in effect until changed by Board Action. ______Source: Water Resource Services, Hillsborough County.

Water and Wastewater Capacity Fees are paid by an applicant for water and wastewater service for new construction as a precondition to receiving a certificate of occupancy, as follows: Water Capacity Fees Customer Class All Service Areas Single Family Residential (1)(4) (Per dwelling unit) $1,750 Master-Metered Residential(2)(4) (Per dwelling unit) $875 Commercial(3)(4)(5) (Per ERC) $1,750 ______Source: Water Resource Services, Hillsborough County. (1) Single-family residential class (as used throughout this Schedule of Rates) includes all connections for individually metered dwelling units as such units are defined by the Land Development Code. Each such unit represents one equivalent residential connection (ERC). Each ERC represents an average daily potable water flow of 300 gpd (gallons per day). (2) Master-metered residential class (as used throughout this Schedule of Rates) includes all master-metered connection for apartments, condominiums, cooperatives, quadraplexes, triplexes, duplexes, manufactured housing, and mobile homes used for multi-family residential purposes. Each such dwelling unit represents 0.5 ERC of potable water usage including that unit's share of any common-areas usage. Common-area uses include but are not limited to those for irrigation, laundry facilities, recreation facilities, and management and maintenance offices. The total ERCs for any such connection shall be based solely on the number of dwelling units approved for that connection. Connections in this class may not include usage for any other commercial, industrial, or institutional purpose. For purposes of this Schedule of Rates, "master-metered residential" and "multi-family residential" are synonymous. Multi-family residential properties that are individually metered by the County are considered to be single-family residential class customers. (3) Commercial class (as used throughout this Schedule of Rates) includes all connections used primarily for commercial, industrial, and/or institutional purposes except connections used solely for multi-family residential purposes as defined above in note (2). Any connection which combines one or more dwelling units with any commercial, industrial, or institutional purpose other than the common-area usage associated with those dwellings is considered to be a commercial class customer. (4) Meter sizing is independent of capacity fee determination. (5) The water capacity fees for any connection shall be initially determined by summing the water flows from Table 1 that apply to the connection, dividing the total by 300 gpd, and multiplying the resulting number of ERCs by the capacity fee specified for 1 ERC. However, the minimum water capacity fees for any connection shall be the fee specified for 1 ERC. If the average daily flow for a connection during any consecutive 12-month period is greater than the average daily flow for which capacity fees have been paid, an additional capacity fee shall be assessed for the excess flow. If the average daily flow during any consecutive 3-month period is more than 15% greater than the average daily flow for

which capacity fees have been paid, an additional capacity fee shall be assessed for the excess flow. All such additional fees shall be determined by dividing the total increase in the average daily flow by 300 gpd, and multiplying the resulting number of ERCs by the capacity fee specified for 1 ERC.

Wastewater Capacity Fees

Customer Class All Service Areas Single Family Residential (1)(2) (Per dwelling unit) $1,800 Master-Metered Residential(2)(3) (Per dwelling unit) $1,260 Commercial(2)(4) (Per ERC) $1,800 ______Source: Water Resource Services, Hillsborough County.

(1) Each ERC represents an average daily wastewater flow of 200 gpd. (2) Wastewater capacity fees for single-family residential, master-metered residential, and commercial class customers served by a low pressure sewer system (LPSS) are reduced to account for a corresponding reduction in wastewater flow requiring treatment in the County's wastewater system. The reduced wastewater capacity fees are calculated as follows: (wastewater flows/200 gpd) x (0.80) x (capacity fee per ERC). (3) Each master-metered residential class dwelling unit represents to 0.7 ERCs of wastewater usage. (4) The wastewater capacity fees for any connection shall be initially determined by summing the wastewater flows from Table 1 that apply to the connection, dividing the total by 200 gpd, and multiplying the resulting number of ERCs by the capacity fee specified for 1 ERC. However, the minimum wastewater capacity fees for any connection shall be the fee specified for 1 ERC. If the average daily flow for a connection during any consecutive 12-month period is greater than the average daily flow for which capacity fees have been paid, an additional capacity fee shall be assessed for the excess flow. If the average daily flow during any consecutive 3-month period is more than 15% greater than the average daily flow for which capacity fees have been paid, an additional capacity fee shall be assessed for the excess flow. All such additional fees shall be determined by dividing the total increase in the average daily flow by 200 gpd, and multiplying the resulting number of ERCs by the capacity fee specified for 1 ERC.

Pursuant to the Resolution, Capacity Fees are only pledged to secure the Bonds to the extent that Wastewater Capacity Fees do not exceed the Wastewater Expansion Project Percentage (currently, 52.8%) multiplied by the Bond Service Requirement for the Bonds plus the Wastewater Capacity Fee Carryforward Amount ($67.89 million as of the date of issuance of the Series 2010 Bonds) and to the extent that Water Capacity Fees do not exceed the Water Expansion Project Percentage (currently, 6.2%), multiplied by the Bond Service Requirement for the Bonds plus the Water Capacity Fee Carryforward Amount ($9.97 million as of the date of delivery of Series 2010 Bonds). As of September 30, 2009, there is a combined Capacity Fees Carryforward Amount equal to $77.86 million.

Capacity Fee revenues fluctuate with the amount of new construction which occurs within the service area of the System. There can be no assurance that such revenues will not decrease or be eliminated altogether in the event that new construction, for whatever reason, might decrease or cease within the County.

GOVERNMENTAL REGULATION OF UTILITY SYSTEM

The County's wastewater treatment and biosolids management facilities are permitted and regulated by the FDEP. Information regarding the regulatory status of the Wastewater System and Wastewater Collection System are set forth in "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Wastewater System – Regulatory Status of Wastewater System – Wastewater Collection System."

CAPITAL IMPROVEMENT PROGRAM

The Department has planned capital improvements associated with providing renewals and replacements of existing System facilities as well as the expansion of water and wastewater capacity and reliability of the System during the next several years. The total projected cost of such improvements for the Forecast Period (which encompasses the six fiscal year period ending September 30, 2015), including those projects that were initiated

during or prior to the Fiscal Year 2009 that are still underway (referred to as a "project carryforward"), is anticipated by the Department to be approximately $483.7 million. The cost of the capital improvement plan is based on capital plans prepared by the Department and other engineers employed by the Department as part of its ongoing capital program, and discussions with Department staff. A summary of the capital appropriations estimate by project-type or function for the combined Forecast Period is summarized below.

Summary of Capital Improvement Plan By Facility Function for the Forecast Period (Dollars in 000s) Fiscal Year Ending September 30, Carry- Total Forward 2010 2011 2012 2013 2014 2015 Period Water Treatment $20,520 $8,200 $1,000 $500 $1,000 $1,000 $1,000 $3,220 Water Distribution 12,598 4,550 11,550 5,150 3,570 5,280 3,000 45,698 Wastewater Treatment (1) 22,763 12,760 16,040 24,750 71,500 30,500 27,500 205,813 Wastewater Collection 48,723 30,646 16,750 28,829 11,320 11,180 8,500 155,948 Reclaimed Water 7,293 670 670 1,300 300 2,750 8,050 21,033 General (2) 0 3,132 6,069 5,285 2,792 2,342 2,341 21,961

Total Capital Program $111,897 $59,958 $52,079 $65,814 $90,482 $53,052 $50,391 $483,673 ______(1) The significant project appropriation shown in Fiscal Year 2012 for the wastewater treatment plant function is associated almost exclusively with the 7.5 mgd expansion of the South County Regional AWWTF from 4.5 mgd to 7.50 mgd and then from 7.50 mgd to 12.0 mgd (phased expansion program which initiates during Fiscal Year 2012). (2) Amounts reflect project expenditures for General Plant such as equipment, machinery, and vehicles and for customer service building rehabilitation. Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Capital Improvement Program"

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HISTORICAL OPERATING RESULTS

The information in the following table sets forth the historical Revenues and a pro forma Debt Service Coverage of the System. The historical data has been developed from the supplemental data contained in the audited financial statements of the System for the Fiscal Years ended September 30, 2005 through 2009. System Historical Operating Results and Estimated Bond Service Coverage Analysis ($ in 1,000s) (1) Fiscal Year Ended September 30, 2004 2005 2006 2007 2008 2009 Gross Revenues (2) $175,641 $189,104 $208,812 $208,876 $193,348 $183,260

Less Total Cost of Operation and Maintenance 96,780 110,271 118,220 134,471 145,429 139,269

Net Revenues 78,861 78,823 90,592 74,405 47,919 43,991

Pledged Capacity Fees (3) 17,962 8,929 11,488 6,892 4,649 6,071

Pledged Revenues $96,823 $87,762 $102,080 $81,297 $52,568 $50,062

Total Bond Service Requirement (4) $27,760 $27,868 $27,456 $27,466 $27,443 $21,094

Bond Service Coverage Compliance (5):

Rate Covenant – Test 1 (6) Required Deposits (7) 132,172 146,430 153,809 171,087 182,787 169,756 Test 1 Coverage: Coverage Ratio – Calculated 1.46x 1.35 x 1.43 x 1.26 x 1.08 x 1.12 x Coverage Ratio – Required 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x

AND

Rate Covenant – Test 2 (6) Bond Service Requirement (8) $27,309 $27,556 $26,506 $26,455 $26,912 $20,820

Test 2 Coverage: Coverage Ratio – Calculated 3.55 x 3.18 x 3.85 x 3.07 x 1.95 x 2.40 x Coverage Ratio – Required 1.20 x 1.20 x 1.20 x 1.20 x 1.20 x 1.20 x

AND

Rate Covenant – Test 3 (6) Bond Service Requirement (8) $27,309 $27,556 $26,506 $26,455 $26,912 $20,820 Test 3 Coverage: Coverage Ratio – Calculated 2.89 x 2.86 x 3.42 x 2.81 x 1.78 x 2.11 x Coverage Ratio – Required 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x

Net Revenues After Payment of Bond Service Requirement $51,552 $51,277 $64,086 $47,950 $21,007 $23,171

Other Required Transfers (9): Renewal & Replacement Account Requirement (10) 8,083 8,603 9,083 10,161 10,446 9,667 Debt Service Reserve Account (11) ------

Total Other Required Transfers (12) 8,083 8,603 9,083 10,161 10,446 9,667 Excess of Net Revenues above Required Transfers (13) $43,469 $42,674 $54,003 $37,789 $10,561 $13,504 ______*Footnotes appear on following page*

______(1) Unless otherwise noted, amounts shown for each respective fiscal year were derived from: (i) audited Annual Financial Reports for the Department; and (ii) other financial information as provided by the Department and other County staff. (2) Amounts include other operating revenue and unrestricted income. (3) Amounts reflect Capacity Fees and interest income earned on such funds adjusted by the estimated Expansion Percentage to recognize the amount of fees collected which are pledged to the total aggregate Bond Service Requirement attributable to Expansion Facilities; for the Historical Period, all Capacity Fees received by the System were recognized as a component of Pledged Revenues (for the payment of the Debt Service Component of the Cost of Contracted Water Supply or the payment of the Bond Service Requirement). (4) Amounts shown based on an accrual basis of reporting (when deposits are made to the Debt Service Account and not when the cash payment of the interest and principal payments may be made). Additionally, amounts shown do not include the Debt Service Account interest income in the determination of the annual Bond Service Requirement. (5) The Resolution requires that the utility maintain revenues and fees to generate sufficient: (i) Gross Revenues, together with Pledged Capacity Fees (as defined in the Resolution) at least equal to 100% of the Required Deposits; (ii) Net Revenues (as defined in the Resolution), together with Pledged Capacity Fees (as defined in the Resolution) at least equal to 120% of the Bond Service Requirement; and (iii) Net Revenues at least equal to 100% of the Bond Service Requirement. (6) The Rate Covenant as defined in the Resolution is as follows: Test 1: Gross Revenues plus Pledged Capacity Fees must be at least equal to 100% of Required Deposits; Test 2: Net Revenues plus Pledged Capacity Fees must be at least equal to 120% of Bond Service Requirement; and Test 3: Net Revenues must be at least equal to 100% of Bond Service Requirement. (7) Required deposits as defined in the Resolution included transfers to the Operation and Maintenance Account, Debt Service Account, Reserve Account, and the Renewal and Replacement Account; amounts shown do not include transfers to the Subordinate Indebtedness or Other Indebtedness Accounts (if any) as provided in the Resolution. (8) As defined in the Resolution, the Bond Service Requirement is not to include any capitalized investment earnings that have been deposited into the Debt Service Account, or any interest from the investment of funds on deposit in both the Debt Service Account and the Reserve Account. (9) Reflects other required transfers which are recognized in the Resolution, payments which are subordinate to the payment of the Bond Service requirements. (10) Amounts shown reflect deposit to the Renewal and Replacement Account equal to 5% of the previous year Gross Revenues as defined in the Resolution; the Department may have deposited an amount greater than the Renewal and Replacement Account Requirement. (11) No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Historical Period by: (i) proceeds from the issuance of the Bonds Outstanding; or (ii) secured by a debt service reserve credit facility during such period. (12) As reported by the County, no other Subordinate or Other Indebtedness payable from the Pledged Revenues of the System were outstanding or required during the Historical Period. (13) Amounts shown do not include Pledged Capacity Fees which are deposited in a restricted account and used for the payment of the Debt Service Component of the Contracted Cost of Water Supply, expansion-related debt service payments or for expansion-related capital improvements for the System. ______Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Historical Operating Results."

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SUMMARY OF PROJECTED OPERATING RESULTS

The following projections of operating results for the System were derived from the Consulting Engineers and Bond Feasibility Report.

System Projected Operating Results and Estimated Debt Coverage Analysis ($ in 1,000s) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Gross Revenues (1) $178,918 $184,801 $189,984 $192,494 $197,214 $199,860

Less Total Cost of Operation and Maintenance 138,092 144,070 150,845 155,859 161,362 164,623

Net Revenues $40,826 $40,731 $39,139 $36,635 $35,852 $35,237

Pledged Capacity Fees (2) 6,547 6,484 6,895 7,276 7,814 8,107

Total Pledged Revenues $47,373 $47,215 $46,033 $43,911 $43,665 $43,344

Total Bond Service Requirement (3) $20,620 $20,624 $20,219 $18,209 $18,311 $16,797

Bond Service Requirement Coverage Compliance (4):

Rate Covenant – Test 1 (5) $168,896 $174,903 $181,399 $184,347 $189,922 $191,968 Required Bond Service Coverage Deposits (6) Coverage Ratio - Calculated 1.10 x 1.09 x 1.09 x 1.08 x 1.08 x 1.08 x Coverage Ratio - Required 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x

AND

Rate Covenant – Test 2 (5) Bond Service Requirement(7) $20,571 $20,362 $19,963 $17,776 $17,689 $16,315 Bond Service Coverage: Coverage Ratio – Calculated 2.30 x 2.32 x 2.31 x 2.47 x 2.47 x 2.66 x Coverage Ratio – Required 1.20 x 1.20 x 1.20 x 1.20 x 1.20 x 1.20 x

AND

Rate Covenant – Test 3 (5) Bond Service Requirement (7) $20,571 $20,362 $19,963 $17,776 $17,689 $16,315 Debt Service Coverage: Coverage Ratio – Calculated 1.98 x 2.00 x 1.96 x 2.06 x 2.03 x 2.16 x Coverage Ratio – Required 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x 1.00 x

Net Revenues After Payment of Bond Service Requirement $20,255 $20,369 $19,175 $18,859 $18,162 $18,922

Other Required Transfers (8): Renewal and Replacement Account Requirement 10,233 10,472 10,590 10,711 10,871 11,030 Debt Service Reserve Account (9) ------Subordinate Indebtedness Account (10) ------Other Indebtedness Account (10) ------

Total Other Required Transfers 10,233 10,472 10,590 10,711 10,871 11,030

Excess of Net Revenues above Required Transfers and Coverage Requirements (11) $10,022 $9,898 $8,585 $8,148 $7,292 $7,892 ______*Footnotes appear on following page*

______(1) Amounts include other operating revenue and unrestricted investment income. (2) Amounts reflect Capacity Fees and interest income earned on such funds adjusted by the estimated Expansion Percentage to recognize the amount of fees collected which are pledged to the total aggregate Bond Service Requirement attributable to Expansion Facilities; for the Forecast Period, all Capacity Fees received by the System were assumed to be recognized as a component of Pledged Revenues. (3) Amounts shown based on an accrual basis of reporting (when deposits are made to the Debt Service Account and not when the cash payment of the interest and principal payments may be made). Also, see the "DEBT SERVICE SCHEDULE" herein for the combined Series 2001 Bonds and the Series 2010 Bonds. (4) The Resolution requires that the Department maintain revenues and fees to generate sufficient: (i) Gross Revenues, together with Pledged Capacity Fees (as defined in the Resolution) at least equal to 100% of the Required Deposits; and (ii) Net Revenues, together with Pledged Capacity Fees (as defined in the Resolution) at least equal to 120% of the Bond Service Requirement. In addition, the Department must also generate Net Revenues (as defined in the Resolution) at least equal to 100% of the Bond Service Requirement. (5) The Rate Covenant as defined in section 11.02 of the Bond Resolution is as follows: Test 1: Gross Revenues plus Pledged Capacity Fees/Required deposits must be at least equal to 100%. Test 2: Net Revenues, plus Pledged Capacity/Bond Service Requirement must be at least equal to 120%. Test 3: Net Revenues/Bond Service Requirement must be at least equal to 100%. (6) Required deposits as defined in the Resolution included transfers to the Operation and Maintenance Account, Debt Service Account, Reserve Account, and the Renewal and Replacement Account; amounts shown do not include transfers to the Subordinate Indebtedness or Other Indebtedness Accounts (if any) as provided in the Resolution. (7) As defined in the Resolution, the Bond Service Requirement is not to include any capitalized investment earnings that have been deposited into the Debt Service Account, or any interest from the investment of funds deposited into the Debt Service Account and the Reserve Account. (8) Reflects other required transfers which are recognized in the Resolution, payments which are subordinate to the payment of the Bond Service Requirements. (9) No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Forecast Period by: (i) proceeds from the issuance of the Bonds Outstanding; or (ii) secured by a debt service reserve credit facility during such period. (10) As reported by the County, no other Subordinate or Other Indebtedness payable from the Pledged Revenues of the System are currently outstanding and it was not assumed that any future Subordinate or Other Indebtedness would be issued by the County during the Forecast Period. (11) Amount shown does not include Pledged Capacity Fees which are deposited in a restricted account and used for the payment of the Debt Service Component of the Contracted Cost of Water Supply, expansion-related debt service payments or for expansion-related capital improvements for the System. ______Source: "APPENDIX C – CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT – Projected Operating Results."

FINDINGS AND CONCLUSIONS OF FEASIBILITY CONSULTANT AND CONSULTING ENGINEERS

The conclusions of Public Resources Management Group, Inc., the Feasibility Consultant and Brown & Caldwell, the Consulting Engineers, set forth in their Consulting Engineers and Bond Feasibility Report (for purposes of this Section, the "Report") included in APPENDIX C, which Report should be read in its entirety, are set forth below.

1. Based upon the intended use of the System facilities, general field observations of the aboveground facilities, discussions with Department staff, and a review of documents, permit data, and System reports filed with regulatory agencies, the existing facilities of the System appear to be in good to excellent condition. The System appears to be properly operated and maintained in accordance with prudent utility practice, and can reasonably be expected to provide sufficient and reliable service to meet the existing requirements of the utility.

2. The Department has historically provided for adequate operation by employing personnel capable of operating, maintaining, and expanding the water, wastewater and reclaimed water systems as necessary. Current management of the System appears to be well qualified for the positions for which they are responsible.

effluent compliance with regulatory agencies, is that of the proposed numeric nutrient water quality criteria that was signed by and sent to the Federal Register for publication by the EPA on January 14, 2010.

4. The existing facilities of the System, together with planned renewals, replacements and additions, can reasonably be expected to meet the projected demand requirements of the System, at least through the Fiscal Year ending September 30, 2015.

5. The System, taking into account expansion related improvements as discussed later in the Report, will have sufficient capacity to meet the service area needs through September 30, 2015, the last year of the financial forecast included in the Report, based on the customer and sales forecast assumed for the purposes of the Report.

6. During the course of the engineering due diligence investigations, the only issue that has come to the attention of the Consulting Engineer that has the potential to require significant funds for System improvements beyond those identified herein is the proposed numeric nutrient water quality limits from the EPA for wastewater effluent. The final outcome and therefore impact of this proposed rule is unknown at this time but may be significant.

7. The projected growth in customers and usage of the System represent reasonable and attainable projections of the purposes of the Report.

8. The projected growth in Operating Expenses represents reasonable projections for the purposes of the Report.

9. The System revenues for the Fiscal Years ending September 30, 2010 through September 30, 2015 under the County approved rates as contained in the County's Rate Resolution as defined in the Report, which assumes that annual application of a price index (inflationary) rate adjustment as contained in the County's Index Resolution adopted by the Board on May 20, 2009 and the annual application of the Purchased - Water Pass- Through Consumption Charge as discussed in the Report, should be sufficient to pay the projected Cost of Operation and Maintenance, pay the Bond Service Requirement on the Outstanding Bonds and anticipated Series 2010 Bonds coming due in such years, and make the projected deposits to the Renewal and Replacement Account, which is available for paying the cost of the replacement of capital assets of the System or any unusual, unanticipated or extraordinary maintenance or repairs to the System.

10. Based on the assumptions identified in the Report, the Pledged Revenues of the System are projected to be in compliance with the rate covenant as contained in the Resolution.

11. The approved rates for water and wastewater service are considered as being comparable to charges for similar service provided by other publically-owned utilities located in proximity to the central and western portions of Florida. Based on the assumptions presented in the Report, no additional rate increase above the annual price index (inflationary) allowance and Purchased – Water Pass-Through Consumption Charge adjustment has been projected or assumed to meet the annual expenditure requirements of the System or meet the rate covenant requirements defined in the Resolution. The anticipated price index rate adjustments and Purchased – Water Pass- Through Consumption Charge adjustment as represented in the Report are not expected by the Department to negatively affect the competitiveness of the County's monthly user rates over the Forecast Period.

12. The Capacity Fees are comparable to the fees charged by neighboring utilities. The Feasibility Consultant considers the Capacity Fees to be reasonable and was based on the utility plant in service and the capital requirements of the System contained in the System's adopted capital improvement plan at the time of fee determination. Based on discussions with Department staff, the application of the Capacity Fees is not expected to negatively affect System growth.

LITIGATION

The County's System is the subject from time to time of litigation that is incidental to the conduct of its activities. In the opinion of the County Attorney, any pending litigation which represents potential liability for the

County will not have a material adverse impact on the County's financial position or its ability to perform its obligations to the Series 2010 Bondholders.

LEGAL MATTERS

Legal matters in connection with the authorization, issuance and sale of the Series 2010 Bonds are subject to the approval of legality by Edwards Angell Palmer & Dodge LLP, West Palm Beach, Florida, Bond Counsel. Law Offices of Carol D. Ellis, P.A., Palm Beach, Florida, is serving as Co-Bond Counsel. The form of the approving opinion of Bond Counsel is attached hereto as APPENDIX E. GrayRobinson, P.A., Tampa, Florida, is serving as Disclosure Counsel to the County. Lansing C. Scriven, P.A., Tampa, Florida, is serving as Co-Disclosure Counsel to the County. Certain legal matters will be passed upon for the County by Renée Francis Lee, Esq., County Attorney, or a Senior Assistant County Attorney.

Bond Counsel has not been engaged to, nor has it undertaken to, review the accuracy, completeness or sufficiency of this Official Statement or any other offering material relating to the Series 2010 Bonds; provided, however, that Bond Counsel will render an opinion to the Original Purchaser(s) and the County relating to the accuracy of certain statements contained herein under the heading "TAX MATTERS" and certain statements which summarize provisions of the Resolution and the Series 2010 Bonds.

TAX MATTERS

The Series 2010A Bonds

In the opinion of Edwards Angell Palmer & Dodge LLP, Bond Counsel to the County ("Bond Counsel"), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Series 2010A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code. Bond Counsel is of the further opinion that interest on the Series 2010A Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, and Bond Counsel observes that such interest is not included in adjusted current earnings when calculating corporate alternative minimum taxable income. Although a portion of the interest on certain tax- exempt obligations earned by certain corporations may be included in the calculation of adjusted current earnings for purposes of the federal corporate alternative minimum tax, interest on certain tax-exempt obligations issued in 2009 and 2010, including the Series 2010A Bonds, is excluded from that calculation as a result of the enactment of the Recovery Act. Bond Counsel expresses no opinion regarding any other federal tax consequences arising with respect to the ownership or disposition of, or the accrual or receipt of interest on, the Series 2010A Bonds.

The Code imposes various requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series 2010A Bonds. Failure to comply with these requirements may result in interest on the Series 2010A Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 2010A Bonds. The County has covenanted to comply with such requirements to ensure that interest on the Series 2010A Bonds will not be included in federal gross income. The opinion of Bond Counsel assumes compliance with these covenants.

Bond Counsel is also of the opinion that the Series 2010A Bonds and the interest thereon are exempt from taxation under existing laws of the State except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein. A complete copy of the proposed form of opinion of Bond Counsel for the Series 2010A Bonds is set forth in APPENDIX E-1 attached hereto.

To the extent the issue price of any maturity of the Series 2010A Bonds is less than the amount to be paid at maturity of such Series 2010A Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Series 2010A Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each owner thereof, is treated as interest on the Series 2010A Bonds which is excluded from gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of the Series 2010A Bonds is the first price at which a substantial amount of such maturity of the Series

2010A Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Series 2010A Bonds accrues daily over the term to maturity of such Series 2010A Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Series 2010A Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Series 2010A Bonds. Bondholders should consult their own tax advisors with respect to the tax consequences of ownership of Series 2010A Bonds with original issue discount, including the treatment of purchasers who do not purchase such Series 2010A Bonds in the original offering to the public at the first price at which a substantial amount of such Series 2010A Bonds is sold to the public.

The Series 2010A Bonds purchased, whether at original issuance or otherwise, for an amount greater than the stated principal amount to be paid at maturity of such Series 2010A Bonds, or, in some cases, at the earlier redemption date of such Series 2010A Bonds ("Premium Bonds"), will be treated as having amortizable bond premium for federal income tax purposes. No deduction is allowable for the amortizable bond premium in the case of obligations, such as the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, a Bondholder's basis in a Premium Bond will be reduced by the amount of amortizable bond premium properly allocable to such Bondholder. Holders of Premium Bonds should consult their own tax advisors with respect to the property treatment of amortizable bond premium in their particular circumstances.

Prospective Bondholders should be aware that certain requirements and procedures contained or referred to in the Resolution and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Series 2010A Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Series 2010A Bonds may adversely affect the value of, or the tax status of interest on, the Series 2010A Bonds. Further, no assurance can be given that pending or future legislation, including amendments to the Code, if enacted into law, or any proposed legislation, including amendments to the Code, or any future judicial, regulatory or administrative interpretation or development with respect to existing law, will not adversely affect the value of, or the tax status of interest on, the Series 2010A Bonds. Prospective Bondholders are urged to consult their own tax advisors with respect to proposals to restructure the federal income tax.

Although Bond Counsel is of the opinion that interest on the Series 2010A Bonds is excluded from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on, the Series 2010A Bonds may otherwise affect a Series 2010A Bondholder's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Bondholder or the Series 2010A Bondholder's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences, and Series 2010A Bondholders should consult with their own tax advisors with respect to such consequences.

The Series 2010B Bonds and the Series 2010C Bonds

In the opinion of Bond Counsel, under existing law, interest on the Series 2010B Bonds and the Series 2010C Bonds is included in the gross income of the owners thereof for federal income tax purposes under the Code. Bond Counsel expresses no opinion regarding any other federal tax consequences related to the ownership or disposition of, or accrual or receipt of interest on, the Series 2010B Bonds and the Series 2010C Bonds.

Bond Counsel will opine that under existing law and regulations the Series 2010B and the Series 2010C Bonds and the interest thereon are exempt from taxation under existing laws of the State except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein. Complete copies of the proposed forms of opinion of Bond Counsel for the Series 2010B Bonds and the Series 2010C Bonds are set forth in APPENDICES E-2 and E-3, respectively, attached hereto.

The following discussion summarizes certain U.S. federal tax considerations generally applicable to beneficial owners of the Series 2010B Bonds and the Series 2010C Bonds that acquire their bonds in the initial offering. The discussion below is based upon laws, regulations, rulings, and decisions in effect and available on the

date hereof, all of which are subject to change, possibly with retroactive effect. Prospective investors should note that no rulings have been or are expected to be sought from the Internal Revenue Service ("IRS") with respect to any of the U.S. federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary positions. Further, the following discussion does not deal with all U.S. federal income tax consequences applicable to any given investor, nor does it address the U.S. federal income tax considerations applicable to investors who may be subject to special taxing rules (regardless of whether or not such persons constitute U.S. Holders), such as certain U.S. expatriates, banks, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt organizations, dealers or traders in securities or currencies, partnerships, S corporations, estates and trusts, investors who hold their Series 2010B Bonds or Series 2010C Bonds as part of a hedge, straddle or an integrated or conversion transaction, or investors whose "functional currency" is not the U.S. dollar. Furthermore, the following discussion does not address (i) alternative minimum tax consequences or (ii) the indirect effects on persons who hold equity interests in a beneficial owner of Series 2010B Bonds or Series 2010C Bonds. In addition, this summary generally is limited to investors who become beneficial owners of Series 2010B Bonds or Series 2010C Bonds pursuant to the initial offering for the issue price that is applicable to such Series 2010B Bonds and Series 2010C Bonds (i.e., the price at which a substantial amount of such Series 2010B Bonds and Series 2010C Bonds is first sold to the public) and who will hold their Series 2010B Bonds and Series 2010C Bonds as "capital assets" within the meaning of the Code.

As used herein, "U.S. Holder" means a beneficial owner of a Series 2010B Bond or Series 2010C Bond who for U.S. federal income tax purposes is an individual citizen or resident of the United States, a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), an estate the income of which is subject to U.S. federal income taxation regardless of its source or a trust with respect to which a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have the authority to control all substantial decisions of the trust (or a trust that has made a valid election under Treasury Regulations to be treated as a domestic trust). As used herein, "Non-U.S. Holder" generally means a beneficial owner of a Series 2010B Bond or Series 2010C Bond (other than a partnership) who is not a U.S. Holder. If an entity classified as a partnership for U.S. federal income tax purposes is a beneficial owner of Series 2010B Bonds and Series 2010C Bonds, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and upon the activities of the partnership. Partners in such partnerships should consult their own tax advisors regarding the tax consequences of an investment in the Series 2010B Bonds or the Series 2010C Bonds (including their status as U.S. Holders or Non-U.S. Holders).

U.S. Holders

Interest. Stated interest on the Series 2010B Bonds and the Series 2010C Bonds generally will be taxable to a U.S. Holder as ordinary interest income at the time such amounts are accrued or received, in accordance with the U.S. Holder's method of accounting for U.S. federal income tax purposes.

"Original issue discount" will arise for U.S. federal income tax purposes in respect of any Series 2010B Bond or Series 2010C Bond if its stated redemption price at maturity exceeds its issue price by more than a de minimis amount (as determined for tax purposes). For any Series 2010B Bond or Series 2010C Bond issued with original issue discount, the excess of the stated redemption price at maturity of that Bond over its issue price will constitute original issue discount for U.S. federal income tax purposes. The stated redemption price at maturity of a Series 2010B Bond or Series 2010C Bond is the sum of all scheduled amounts payable on such Bond other than qualified stated interest. U.S. Holders of Series 2010B Bonds and Series 2010C Bonds generally will be required to include any original issue discount in income for U.S. federal income tax purposes as it accrues, in accordance with a constant yield method based on a compounding of interest (which may be before the receipt of cash payments attributable to such income). Under this method, U.S. Holders of Series 2010B Bonds and Series 2010C Bonds issued with original issue discount generally will be required to include in income increasingly greater amounts of original issue discount in successive accrual periods.

"Premium" generally will arise for U.S. federal income tax purposes in respect of any Series 2010B Bonds and Series 2010C Bonds to the extent its issue price exceeds its stated principal amount. A U.S. Holder of a Series 2010B Bond or Series 2010C Bond issued at a premium may make an election, applicable to all debt securities

purchased at a premium by such U.S. Holder, to amortize such premium, using a constant yield method over the term of such Bond.

Disposition of the Series 2010B Bonds and Series 2010C Bonds. Unless a nonrecognition provision of the Code applies, the sale, exchange, redemption, retirement (including pursuant to an offer by the State), reissuance or other disposition of a Series 2010B Bond or Series 2010C Bond will be a taxable event for U.S. federal income tax purposes. In such event, a U.S. Holder of a Series 2010B Bond or Series 2010C Bond generally will recognize gain or loss equal to the difference between (i) the amount of cash plus the fair market value of property received (except to the extent attributable to accrued but unpaid interest on such Bond which will be taxed in the manner described above under "Interest") and (ii) the U.S. Holder's adjusted tax basis in such Bond (generally, the purchase price paid by the U.S. Holder for such Bond, increased by the amount of any original issue discount previously included in income by such U.S. Holder with respect to such Bond and decreased by any payments previously made on such Bond, other than payments of qualified stated interest, or decreased by any amortized premium). Any such gain or loss generally will be capital gain or loss. A material modification of the terms of any Series 2010B Bond or Series 2010C Bond may result in a deemed reissuance thereof, in which event a beneficial owner of the modified Bonds generally will recognize taxable gain or loss equal to the difference between the amount realized from the sale, exchange or retirement (less any accrued qualified stated interest which will be taxable as such) and the beneficial owner's adjusted tax basis in such Bond.

Medicare Tax on Unearned Income. The Health Care and Education Reconciliation Act of 2010 (P.L. 111- 152) requires certain U.S. Holders that are individuals, estates or trusts to pay an additional 3.8% tax on, among other things, interest and gains from the sale or other disposition of Series 2010B Bonds and the Series 2010C Bonds for taxable years beginning after December 31, 2012. U.S. Holders that are individuals, estates or trusts should consult their tax advisors regarding the effect, if any, of this legislation on their ownership and disposition of Series 2010B Bonds and Series 2010C Bonds.

In the case of a non-corporate U.S. Holder of a Series 2010B Bond or Series 2010C Bond, the maximum marginal U.S. federal income tax rate applicable to any such gain may be lower than the maximum marginal U.S. federal income tax rate applicable to ordinary income if such U.S. holder's holding period for such Bond exceeds one year. The deductibility of capital losses is subject to limitations.

Non-U.S. Holders

The following discussion applies only to non-U.S. Holders. This discussion does not address all aspects of U.S. federal income taxation that may be relevant to non-U.S. Holders in light of their particular circumstances. For example, special rules may apply to a non-U.S. Holder that is a "controlled foreign corporation" or a "passive foreign investment company," and, accordingly, non-U.S. Holders should consult their own tax advisors to determine the United States federal, state, local and other tax consequences of holding the Series 2010B Bonds or the Series 2010C Bonds that may be relevant to them.

Interest. Subject to the discussion below under the heading "Information Reporting and Backup Withholding," payments of principal of, and interest on, any Series 2010B Bond or Series 2010C Bond to a Non- U.S. Holder, other than a bank which acquires such Bond in consideration of an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business, generally will not be subject to any U.S. withholding tax provided that the beneficial owner of such Bond provides a certification completed in compliance with applicable statutory and regulatory requirements, which requirements are discussed below under the heading "Information Reporting and Backup Withholding," or an exemption is otherwise established.

Disposition of Series 2010B Bonds or Series 2010C Bonds. Subject to the discussion below under the heading "Information Reporting and Backup Withholding," any gain realized by a Non-U.S. Holder upon the sale, exchange, redemption, retirement (including pursuant to an offer by the County) or other disposition of a Series 2010B Bond or Series 2010C Bond generally will not be subject to U.S. federal income tax, unless (i) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the United States; or (ii) in the case of any gain realized by an individual Non-U.S. Holder, such holder is present in the United States for 183 days or more in the taxable year of such sale, exchange, redemption, retirement (including pursuant to an offer by the County) or other disposition and certain other conditions are met.

U.S. Federal Estate Tax. A Series 2010B Bond or Series 2010C Bond that is held by an individual who at the time of death is not a citizen or resident of the United States will not be subject to U.S. federal estate tax as a result of such individual's death, provided that at the time of such individual's death, payments of interest with respect to such Bond would not have been effectively connected with the conduct by such individual of a trade or business within the United States.

Information Reporting and Backup Withholding—U.S. Holders and Non-U.S. Holders

Interest on, and proceeds received from the sale of, a Series 2010B Bond or Series 2010C Bond generally will be reported to U.S. Holders, other than certain exempt recipients, such as corporations, on IRS Form 1099. In addition, a backup withholding tax may apply to payments with respect to the Series 2010B Bonds and Series 2010C Bonds if the U.S. Holder fails to furnish the payor with a correct taxpayer identification number or other required certification or fails to report interest or dividends required to be shown on the U.S. Holder's federal income tax returns.

In general, a non-U.S. Holder will not be subject to backup withholding with respect to interest payments on the Series 2010B Bonds and Series 2010C Bonds if such non-U.S. Holder has certified to the payor under penalties of perjury (i) the name and address of such non-U.S. Holder and (ii) that such non-U.S. Holder is not a United States person, or, in the case of an individual, that such non-U.S. Holder is neither a citizen nor a resident of the United States, and the payor does not know or have reason to know that such certifications are false. However, information reporting on IRS Form 1042-S may still apply to interest payments on the Series 2010B Bonds and Series 2010C Bonds made to non-U.S. Holders not subject to backup withholding. In addition, a non-U.S. Holder will not be subject to backup withholding with respect to the proceeds of the sale of a Series 2010B Bond or Series 2010C Bond made within the United States or conducted through certain U.S. financial intermediaries if the payor receives the certifications described above and the payor does not know or have reason to know that such certifications are false, or if the non-U.S. Holder otherwise establishes an exemption. Non-U.S. Holders should consult their own tax advisors regarding the application of information reporting and backup withholding in their particular circumstances, the availability of exemptions and the procedure for obtaining such exemptions, if available.

Backup withholding is not an additional tax, and amounts withheld as backup withholding are allowed as a refund or credit against a holder's federal income tax liability, provided that the required information as to withholding is furnished to the IRS.

The foregoing summary is included herein for general information only and does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular holder of Series 2010B Bonds or Series 2010C Bonds in light of the holder's particular circumstances and income tax situation. Prospective investors are urged to consult their own tax advisors as to any tax consequences to them resulting from the purchase, ownership and disposition of Bonds, including the application and effect of state, local, foreign and other tax laws.

Circular 230 Disclaimer

The preceding tax matters discussion related to the Series 2010 Bonds is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under federal tax law in connection with the Series 2010 Bonds. Such discussion was written to support the promotion or marketing of the Series 2010 Bonds. Each purchaser of the Series 2010 Bonds should seek advice based on such purchaser's particular circumstances from an independent tax advisor.

DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS

Section 517.051, Florida Statutes, and the regulations promulgated thereunder require that the County make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed and that are or have been in default as to principal or interest at any time after December 31, 1975. The County is not and has not since December 31, 1975 been in default as to principal and interest on its bonds or other debt obligations.

RATINGS

Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc. and Fitch, Inc. expect to assign ratings of "AA+," "Aa1" and "AA+," respectively, to the Series 2010 Bonds. Such ratings reflect only the respective views of such rating agencies and an explanation of the significance of any ratings may be obtained only from the rating agency furnishing the same. There is no assurance that any rating will continue for any given period of time or that it will not be lowered or withdrawn entirely by such rating agency, if in its judgment, circumstances so warrant. Any downward change in or withdrawal of such rating may have an adverse effect on the market price of the Series 2010 Bonds.

FINANCIAL ADVISOR

Public Financial Management, Inc. has acted as Financial Advisor to the County in connection with the issuance of the Series 2010 Bonds. The Financial Advisor will not engage in any underwriting activities with respect to the Series 2010 Bonds.

ORIGINAL PURCHASER(S)

The Series 2010A Bonds are being purchased by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as successful bidder and the representative of the syndicate listed in the successful bid for the Series 2010A Bonds pursuant to the Official Notice of Sale related to such Series of Bonds (the "Series 2010A Bonds Original Purchaser"), the Series 2010B Bonds are being purchased by Wells Fargo Bank, National Association, as successful bidder and the representative of the syndicate listed in the successful bid for the Series 2010B Bonds pursuant to the Official Notice of Sale related to such Series of Bonds (the "Series 2010B Bonds Original Purchaser") and the Series 2010C Bonds are also being purchased by Wells Fargo Bank, National Association, as successful bidder and the representative of the syndicate listed in the successful bid for the Series 2010C Bonds pursuant to the Official Notice of Sale related to such Series of Bonds (the "Series 2010C Bonds Original Purchaser"). The Series 2010A Bonds Original Purchaser, the Series 2010B Bonds Original Purchaser and the Series 2010C Bonds Original Purchaser are herein referred to as the "Original Purchaser(s)." The Series 2010A Bonds Original Purchaser has agreed to purchase the Series 2010A Bonds at an aggregate purchase price of $18,892,152.50 (which includes the Series 2010A Original Purchaser's discount of $41,167.00 and an original issue premium of $898,319.50). The Series 2010B Bonds Original Purchaser has agreed to purchase the Series 2010B Bonds at an aggregate purchase price of $108,207,042.90 (which includes the Series 2010B Original Purchaser's discount of $1,399,262.85 and an original issue discount of $658,694.25). The Series 2010C Bonds Original Purchaser has agreed to purchase the Series 2010C Bonds at an aggregate purchase price of $21,381,227.00 (which includes the Series 2010C Original Purchaser's discount of $318,773.00).

FORWARD LOOKING STATEMENTS

This offering statement contains certain "forward-looking statements" concerning the County's operations, performance and financial condition, including its future economic performance, plans and objectives and the likelihood of success in developing and expanding. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the County. The words "may," "would," "could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate" and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements.

CONTINUING DISCLOSURE

The County has covenanted for the benefit of Series 2010 Bondholders to provide certain financial information and operating data relating to the County and the Series 2010 Bonds in each year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated material events. Such covenant shall only apply so long as the Series 2010 Bonds remain outstanding under the Resolution. The covenant shall also cease upon the termination of the continuing disclosure requirements of S.E.C. Rule 15c2-12(b)(5) (the "Rule") by legislative, judicial or administration action. The Annual Report and any notices of material events will be filed by the County

with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System ("EMMA") described in the Form of Continuing Disclosure Certificate attached hereto as APPENDIX F. The specific nature of the information to be contained in the Annual Report and the notices of material events are described in "APPENDIX F - FORM OF CONTINUING DISCLOSURE CERTIFICATE," which shall be executed by the County at the time of issuance of the Series 2010 Bonds. These covenants have been made in order to assist the Original Purchaser(s) in complying with the Rule.

With respect to the Series 2010 Bonds, no party other than the County is obligated to provide, nor is expected to provide, any continuing disclosure information with respect to the aforementioned Rule. The County has not failed to comply with the requirements of any undertaking of the County entered into in compliance with the Rule.

FINANCIAL STATEMENTS

The audited financial statements of the County's Water and Wastewater System Enterprise Fund as and for Fiscal Years ended September 30, 2009 and 2008 included in this Official Statement as APPENDIX B have been audited by Ernst & Young, LLP, independent auditors, as stated in their report included in APPENDIX B. The audited financial statements have been included herein as a publicly available document without the consent of Ernst & Young LLP.

INVESTMENT POLICY OF THE COUNTY

Pursuant to the requirements of Section 218.415, Florida Statutes, as amended, and various County ordinances, including Ordinance No. 08-6, enacted on March 19, 2008, the Board has adopted a written investment policy applicable to all funds held by or for the benefit of the County, except for bond proceeds deposited in escrow and debt service funds that are governed by their bond documents. See "HILLSBOROUGH COUNTY – State Board of Administration's Local Government Surplus Funds Trust Fund Investment Pool."

The objectives of the investment policy, listed in order of importance, are:

A. Safety of Principal.

The foremost objective of the investment program is the safety of the principal of funds. Investment transactions shall seek to keep capital losses at a minimum, whether they are from securities defaults or erosion of market value. To attain this objective, investments will be diversified to the extent practicable to control the risk of loss resulting from over concentration of assets in a specific maturity, issuer, instrument, dealer, or financial institution in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

From time to time, securities may be traded for other similar securities to improve yields, adjust maturity or reduce credit risk. For these transactions, a loss may be incurred for accounting purposes, provided any of the following occurs with respect to the replacement security:

i. The yield has been increased;

ii. Maturity has been favorably adjusted; or

iii. Quality of the investment has been improved.

B. Maintenance of Liquidity.

The funds shall be managed such that they are available to meet reasonably anticipated cash flow requirements. Periodic cash flow analyses shall be completed in order to ensure that the funds are positioned to provide sufficient liquidity.

C. Return on Investment.

Investment portfolios shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.

Securities purchased shall have a final maturity of ten (10) years or less from the date of purchase. The overall weighted average duration of the entire portfolio shall be less than three (3) years.

To enhance safety, the investment policy requires the diversification of the portfolio to reduce the risk of loss resulting from over-concentration of assets in a specific class of security. The investment policy also requires the preparation of quarterly reports for the Board including the following information:

1. A listing of individual securities held at the end of the reporting period; 2. Percentage of available funds represented by each investment type; 3. Year-to-date earnings rate; 4. Days to maturity of all investments; and 5. Book value and market value of individual securities An annual report shall be submitted to the Board and shall provide all, but not limited to, the following: a complete list of all invested funds, name or type of security in which the funds are invested, the amount invested, the maturity date, earned income, the book value, the market value and the yield to maturity on each investment. The annual report will show performance on both a book value and total rate of return basis and will compare the results to the above-stated performance benchmarks. All investments shall be reported at fair value per Governmental Accounting Standards Board standards.

The investment policy may be modified by ordinance as enacted by the Board pursuant to applicable law.

Notwithstanding the foregoing, monies held in the funds and accounts established under the Resolution may be invested only in Investment Obligations, as described in the Resolution.

MISCELLANEOUS

All information included herein has been provided by the County, except where attributed to other sources. The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. The information contained herein has been compiled from official and other resources and, while not guaranteed by the County, is believed to be correct. So far as any statements made in this Official Statement and the appendices attached hereto involve matters of opinion or of estimates whether or not expressly stated, they are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.

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AUTHORIZATION OF OFFICIAL STATEMENT

The delivery of this Official Statement has been duly authorized by the Board. At the time of delivery of the Series 2010 Bonds, the Chair or Vice Chair of the Board and the Interim County Administrator will furnish a certificate to the effect that neither the Chair or Vice Chair nor said Interim County Administrator has any knowledge or reason to believe that this Official Statement, as of its date and as of the date of delivery of the Series 2010 Bonds, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made herein, in light of the circumstances under which they were made, not misleading.

HILLSBOROUGH COUNTY, FLORIDA

By: /s/ Ken Hagan Chair, Board of County Commissioners

By: /s/ Michael Merrill Interim County Administrator

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APPENDIX A

GENERAL INFORMATION REGARDING HILLSBOROUGH COUNTY

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GENERAL INFORMATION REGARDING HILLSBOROUGH COUNTY

The County

Hillsborough County (the "County") was established on January 25, 1834. The County gained its name from Wills Hills (1718-1793), a viscount of Hillsborough, who became secretary of state for the colonies in 1768. Hillsborough County's boundaries of 1834 included the present-day counties of Pasco, Charlotte, Desoto, Hardee, Pinellas, Sarasota, Manatee and Polk.

The County is located on central Florida's western coast, nestled between Tampa Bay on the west and Polk County on the east. The County is bounded to the north by Pasco County and to the south by Manatee County. In area, it is the seventh largest county in the State of Florida. Hillsborough County covers a total area of 1,266 square miles, of which 215 square miles is water area. The County is part of a four-county Metropolitan Statistical Area (MSA) referred to as Tampa, St. Petersburg-Clearwater MSA.

Tampa, Plant City and Temple Terrace are the three incorporated cities in the County. Tampa, the largest of the three incorporated cities in the County is the County seat and also a center of international, national, and intrastate commerce. The Tampa International Airport and the Port of Tampa connect Hillsborough County to other major cities in the nation and major markets throughout the world.

Government

Hillsborough County operates under a home-rule charter enacted by the voters on September 20, 1983. Under the charter, the Board of County Commissioners (the "BOCC") consists of seven Commissioners; three elected county-wide and four elected from single member districts. As a result of this charter, each voter has a chance to influence the election of a majority of board members. The BOCC is restricted to performing the legislative functions of government and developing policy for the management of Hillsborough County. The County Administrator, appointed by the BOCC, together with her staff, are responsible for implementing these policies throughout the County.

In addition to the members of the BOCC, there are five elected Constitutional Officers: the Clerk of Circuit Court, Property Appraiser, Sheriff, Supervisor of Elections, and Tax Collector.

The County provides a variety of services characteristic of local multi-purpose governments including law enforcement, maintenance of roads and bridges, animal services, social services programs, planning and growth management, environmental protection, fire protection and emergency rescue, consumer protection, parks and recreation programs, mosquito control, employment services, emergency disaster preparedness, traffic control, water/wastewater utilities, solid waste disposal, medical examiner services, agricultural cooperative extension services, children's services, indigent health care, public assistance programs, aging services programs, emergency medical services, and library services.

^JN In addition to their legislative duties, members of the BOCC serve as the County's Environmental Protection Commission. Individual members of the BOCC also take turns serving on various boards, authorities and commissions such as the Children's Board, Tampa Bay Regional Planning Council, Metropolitan Planning Organization, Hillsborough County Tourist Development Council, Tampa Bay Water, Tampa Port Authority, Hillsborough County Aviation Authority, Hillsborough Area Regional Transit Authority, Hillsborough County Public Transportation Commission, Tampa-Hillsborough County Expressway Authority, Tampa Sports Authority, Arts Council of Hillsborough County, Value Adjustment Board, Hillsborough County Hospital Authority, Council of Governments and the Tampa Hillsborough Economic Development Corporation.

Population

Hillsborough County is the fourth most populous county in the state of Florida. As of December 2009, the County's population was 1,196,892, a decrease of 0.3 percent from 2008. Between 2000 and 2009, the County's population increased by approximately 23.5 percent. Hillsborough County's population is projected to be 1,394,600 by the year 2015.

A majority of the County's 2009 population (815,910 or 67 percent) lives in the unincorporated part of the County. Population grew at an average annual percentage rate of 3.2 percent between year 2000 and 2009 in unincorporated Hillsborough County. Communities in unincorporated Hillsborough County with increasing population growth were Balm/Wimauma, Ruskin/Greater Sun City Center, Thonotosassa and Tampa Palms/Hunter's Green. The median age for Hillsborough County in 2008 was 36.6.

Population Increase 1950 (a) 249,894 -- 1960 (a) 397,788 59.2% 1970 (a) 490,265 23.2 1980 (a) 646,960 32.0 1990 (a) 834,054 28.9 2000 (a) 998,948 4.3 2005 (b) 1,131,546 13.3 2006 (b) 1,164,425 2.9 2007 (b) 1,192,861 2.4 2008 (b) 1,200,541 0.6 2009 (b) 1,196,892 -0.3 Sources: (a) U.S. Census Bureau. (b) Florida Research & Economic Database

^JO Hillsborough County, State of Florida, United States Population 2004-2009

2004 2005 2006 2007 2008 2009

Hillsborough County (a) 1,108,435 1,131,546 1,164,425 1,192,861 1,200,541 1,196,892 State of Florida (a) 17,280,558 17,918,227 18,349,132 18,680,367 18,807,219 18,748,925 United States (b) 293,638,158 296,507,061 299,398,484 301,621,157 306,160,744 307,006,550 ______Sources: (a) Florida Research & Economic Database. (b) U.S. Census Bureau

Hillsborough County, State of Florida, United States Population by Age 1990 and 2000

Hillsborough County Florida United States Age 1990 2000 1990 2000 1990 2000 0 – 14 179,480 212,554 2,412,069 3,034,565 53,567,871 60,253,375 15 – 24 120,985 133,655 1,669,825 1,942,377 36,774,327 39,183,891 25 – 44 284,369 316,603 3,927,400 4,569,347 80,754,835 85,040,251 45 – 64 156,087 216,463 2,559,201 3,628,492 46,371,009 61,952,636 65 and over 102,133 119,673 2,369,431 2,807,597 31,241,831 34,991,753 Total 843,054 998,948 12,937,926 15,982,378 248,709,873 281,421,906

Source: Bureau of the Census.

Property Taxes

Tax Rate Limits. The constitutional limit on municipal, county and school district ad valorem taxes is ten mills each; and for special districts as provided by law and approved at referendum. A county providing municipal services may levy additional taxes within the limits fixed for municipal purposes (10 mills). The constitutional limit may be exceeded for periods not in excess of two years only by approval of voters in a tax referendum. The constitutional limit shall not apply to the millage rate levied for the payment of principal of and the interest on any debt service secured by the full faith and credit of a county, and such taxes shall be in addition to all other taxes authorized or limited by law. A referendum is required for a county to pledge its full faith and credit.

Exemptions. Property tax exemptions, applicable only to state residents who meet the requirement, may be obtained by homesteaders, senior citizens, widows and disabled persons. The homestead exemption is fixed at $25,000. At the January 29, 2008 special election, over 60% of the electors voting approved an increase in the homestead exemption by exempting the assessed value of a homestead property between $50,000 and $75,000. See "– Recent Legislative Initiatives" below. At the November 3, 1998 general election ballot, the voters approved an amendment proposed by the Constitutional Revision Commission permitting counties and municipalities to grant an additional homestead exemption not to exceed $25,000 to persons who have attained the age of 65, who hold title to the real property, and who maintain a permanent residence thereon and whose incomes do not exceed $20,000 (subject to adjustment). Hillsborough County enacted an ordinance to implement that exemption effective January 1,

^JP 2000. At the November 7, 2006 general election, the voters of Florida approved amendments to the Florida Constitution increasing the amount of this low-income seniors homestead exemption effective January 1, 2007 from not to exceed $25,000 to not to exceed $50,000 and to provide a discount from the amount of ad valorem taxes for certain permanently disabled veterans effective December 7, 2006. Hillsborough County adopted an ordinance to implement an increase in the low-income senior exemption to not to exceed $40,000 effective January 1, 2008. The extent to which these amendments may affect the ad valorem tax collections of the County in future years is not currently known. The other property tax exemptions are fixed at $500. There is a limit of two exemptions per household. There are also exemptions for religious, charitable and educational uses as well as government and special classifications for agricultural and certain other uses.

Limitation on Assessment Increases. A statewide voter-initiated petition placed an amendment on the November 3, 1992 general election ballot which was approved by the voters ("Save Our Homes"). The amendment limits annual increases in ad valorem tax assessments for those properties with homestead exemptions to the lesser of three percent (3%) or the annual rate of inflation. The amendment provides that such property be assessed at just value after any change in ownership and that changes, additions, reductions or improvements to such property shall be assessed as provided by general law. See "– Recent Legislative Initiatives" below regarding the portability of accumulated Save Our Homes 3% cap protection.

Recent Legislative Initiatives. During a special legislative session held between June 12 and June 14, 2007, the Florida Legislature adopted a property tax plan which impacts ad valorem tax collections for Florida local governments. This legislation generally limits how much the aggregate amount of ad valorem tax revenues may increase in future Fiscal Years based upon growth in per capita income.

Notwithstanding the foregoing, the governing body of a county, city or special district may levy a millage rate in excess of the then applicable rolled back millage rate upon a two- thirds or unanimous vote of such governing body (or three-fourths vote, if such governing body has nine or more members), depending on the level of the proposed increase. The rolled back millage rate may also be exceeded based on an affirmative vote of the voters in such jurisdiction. Additionally, based upon the increase in the homestead exemption described in the following paragraphs, for Fiscal Year 2008-2009, counties, cities and special districts were required to calculate their rolled-back millage rates based on the taxable value of property located therein along with the increase in the homestead exemption, which will likely result in a further reduction in ad valorem tax revenues. In the event a county or city fails to comply with certain of the requirements of the legislation, the legislation provides that such county or city shall forfeit its distribution of the half cent sales tax revenues for the 12-months following a determination of non-compliance.

The Legislature began another special session on October 15, 2007 to address the challenge to the constitutional amendment and to consider other property tax reform issues. That Special Session ended on October 29, 2007. The Legislature enacted legislation that proposed a new constitutional amendment which was placed on the ballot for the January 29, 2008 special election to replace the prior proposed amendment prohibited by the Hersh case described above. The new constitutional amendment was approved by more than the required 60% of electors

^JQ voting, and provides, among other provisions, for the portability by homesteaded property owners of up to $500,000 of their accumulated Save Our Homes annual 3% cap protection for a new home. Such portability allows the full amount if "upsizing" and a pro-rata share if "downsizing." The amendment also increases the homestead exemption by exempting the assessed value between $50,000 and $75,000. In addition, the amendment caps annual assessment increases to 10% for non-homesteaded homeowners and for commercial property owners. Also, the amendment authorizes an exemption from property tax of $25,000 of the assessed value of tangible personal property. This approved amendment was effective for the Fiscal Year ending September 30, 2009.

Tax Due Date and Payments. Tax statements are normally mailed in October by the Hillsborough County Tax Collector (the "Tax Collector"). Taxes are due each November 1 and become delinquent April 1 of the following year. The Tax Collector receives all payments and distributes the revenues among the local governmental units.

Discounts, Penalties and Fees. Taxes levied are discounted under Florida law by 4% if paid in November, 3% if paid in December, 2% if paid in January and 1% if paid in February.

Delinquent taxes are subject to 1.5% monthly interest charge with a minimum of 3% on real property and a 1.5% monthly interest charge for tangible personal property. The property owner is also assessed advertising, court and other charges.

Tax Certificates on Real Property. It is the Tax Collector's duty, on or before June 1 of each year, to advertise and sell tax certificates on real property on delinquencies extending from the previous April 1. The tax certificates must be not less than the amount of the taxes plus interest from April 1 to the date of sale at 18% per annum, together with the cost of advertising and expenses of sale. Delinquent taxes may be redeemed prior to sale of the tax certificates upon payment of all costs, delinquent taxes and interest at the rate of 18% per annum, except that the minimum charge for delinquent taxes paid prior to the sale of a tax certificate is 3% of the delinquent taxes and costs.

The face value of each certificate includes taxes due, 3% interest, advertising costs (approximately $2.00 per parcel), and a 5% commission charged by the Tax Collector. Prospective buyers are determined by the lowest interest charges bid on the certificates.

The property owner may redeem a tax certificate by paying the Tax Collector the face value of the certificate and accrued interest, plus a redemption fee of $6.25. The redeemer must pay a minimum of 5% interest unless the certificate was bid at no interest.

The Tax Collector notifies the certificate holder of the redemption and makes the distribution of funds to certificate holders. In some instances, the County itself acquires the tax certificates as a lien against the property.

Tax Deeds. After two years from the date of delinquency (April 1), a private holder of any unredeemed tax certificate may apply for a tax deed to the property.

The request for a tax deed is referred to the Clerk of the Circuit Court (the "Clerk") who will hold an auction after the proposed sale of the tax deed has been advertised for four

^JR consecutive weeks in a newspaper and notice to the title holder and other interested parties as prescribed by law. The minimum acceptable bid for a tax deed must cover the face value of the certificate, and all other outstanding certificates, accrued interest, costs of a title search and all court and advertising costs, and in the case of homestead property, one-half of the assessed value of the property.

Tangible Personal Property. Delinquent personal property taxes must be published in a newspaper within 45 days after the taxes become delinquent. If taxes due remain unpaid, the Tax Collector petitions the Clerk for warrants to seize the tangible property. Seizure can be effected upon issuance of the warrant. To satisfy the judgment, tangible property owners must pay taxes due, 1.5% interest per month of delinquency ($2.00 delinquency fee) and advertising, warrant and court costs.

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^JS Hillsborough County, Florida Taxable Assessed Value and Actual Value of Property Last Ten Years (In Millions of Dollars)

Estimated Actual Value (a) Exemptions (b) Assessed Value (c) Tangible Centrally Tangible Centrally Tangible Centrally Fiscal Real Personal Assessed Real Personal Assessed Real Personal Assessed Total Taxable Total Direct Year Property Property (d) Property (e) Property Property (d) Property (e) Property Property (d) Property (e) Assessed Value Tax Rate (f) 2000 $42,400 $7,278 82 $10,700 $1,184 -- $31,700 $6,094 82 $37,876 13.452 2001 48,164 7,527 78 11,791 1,194 -- 36,373 6,332 78 42,784 13.322 2002 52,952 7,438 80 13,094 1,171 -- 39,858 6,267 80 46,205 13.066 2003 57,521 7,479 112 13,761 1,146 -- 43,760 6,333 112 50,205 13.047 2004 63,183 8,011 112 14,398 1,281 -- 48,775 6,730 112 55,617 13.016 2005 73,192 8,643 70 15,972 1,549 -- 57,220 7,095 70 64,385 12.900 2006 88,280 8,774 76 17,445 1,455 -- 70,835 7,319 76 78,230 12.303 2007 97,915 8,988 77 17,866 1,432 -- 80,049 7,556 77 87,682 10.815 2008 100,896 9,120 75 24,489 1,905 2 76,407 7,215 73 83,695 10.813 2009 88,961 9,195 75 23,168 1,899 2 65,793 7,296 73 73,162 10.761

^JT ______(a) Section 192.001, Florida Statutes, defines assessed value of property as "an annual determination of the just or fair market value of an item or property." Therefore, gross assessed value is defined to be Estimated Actual Value. (b) Exemptions allowed include those for governmental as well as qualified agricultural, religious, or other non-profit properties. In addition, there are also additional exemptions if a property owner is a widow, widower, disabled, or 65 or older. A new expanded homestead exemption and the existing 3% and new 10% homestead cap differentials are not included in this chart. Note that the new homestead exemption does not apply to property taxes for the School Board. (c) Assessed value is the estimated actual value less exemptions. (d) Tangible personal property represents business property such as furniture, computers, machinery and equipment, as well as mobile homes that are not permanently affixed to land. With the passing of Amendment 1 on January 29, 2008 an exemption of $25,000 for tangible property is included in the chart above. (e) Centrally assessed property is primarily railroad that is assessed by the state of Florida rather than by the Property Appraiser since the property is located in more than one county. (f) Total Direct Tax Rate shows Hillsborough County tax rates applicable to residents of the unincorporated areas of the county. See "Property Tax Millage Rates for Direct and Overlapping Governmental Entities" for more information.

Source: Hillsborough County Property Appraiser. Hillsborough County, Florida Property Tax Levied and Collections Last Ten Years (a) (In Millions of Dollars)

Collected Within the Fiscal Year of the Levy Total Taxes Collected Taxes Levied Collections in Fiscal for the Percentage of Subsequent Percentage Year Fiscal Year Amount Levy Years Amount of Levy 2000 $396,193 $388,930 98.2% $980 $389,910 98.4% 2001 429,559 422,776 98.4 2,887 425,663 99.1 2002 482,663 474,844 98.4 2,797 477,641 99.0 2003 508,616 500,980 98.5 644 501,624 98.6 2004 553,131 547,054 98.9 1,227 548,281 99.1 2005 614,133 608,746 99.1 2,232 610,978 99.5 2006 701,730 696,591 99.3 802 697,393 99.4 2007 814,609 808,864 99.3 618 809,482 99.4 2008 801,724 795,084 99.2 1,321 796,405 99.3 2009 757,541 745,239 98.4 1,483 746,722 98.6 (b) (c) (d) ______(a) Since 2009 property tax rolls were not levied and opened for collections until November 1, 2009, final data for the 2009 property tax levy is not available. Taxes levied during a fiscal year are collected in the following fiscal year. Therefore, the amounts shown as levied for fiscal year 2008 were actually received in fiscal year 2009. (b) The tax levy is the entire property tax due to Hillsborough County before any tax reductions are determined by the Value Adjustment Board and before any tax amounts are determined to be uncollectible due to insolvencies. The tax levy represents only the taxes due to the Hillsborough County financial reporting entity and therefore, excludes taxes due to the School Board, the City of Tampa, and certain other governmental entities. (c) There is a four percent early payment discount available to taxpayers who pay their property taxes in November, with the discount declining one percentage point each month thereafter. To accurately compare taxes collected to the taxes levied, discounts taken were added into the amounts collected, making them directly comparable. (d) Includes all delinquent tax collections received during the year regardless of the year in which the taxes were originally levied. Source: Hillsborough County Tax Collector.

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^JU Hillsborough County, Florida Property Tax Millage Rates for Direct and Overlapping Governments Last Ten Tax Years (Millage Rates Rounded to Nearest Thousandth)

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Countywide (BOCC): BOCC General Revenue 5.742 5.744 5.745 6.520 6.926 7.176 7.188 7.198 7.435 7.534 BOCC Library Service 0.558 0.558 0.608 0.692 0.692 0.642 0.642 0.642 0.642 0.642 Environmentally sensitive lands (voted) 0.060 0.060 0.060 0.067 0.084 0.097 0.105 0.114 0.127 0.149 Total millage 6.360 6.412 5.805 6.587 7.010 7.273 7.293 7.312 7.562 7.683 Maximum millage per statute (a) 10.060 10.060 10.060 10.067 10.084 10.097 10.105 10.114 10.127 10.149 Unincorporated Area (BOCC): BOCC Municipal Service Taxing Unit 4.375 4.375 4.376 4.995 5.162 5.062 5.062 5.062 5.062 5.062 Parks and Recreation (voted) 0.026 0.026 0.026 0.029 0.036 0.040 0.050 0.050 0.058 0.068 Total millage 4.401 4.401 5.010 5.716 5.890 5.744 5.754 5.754 5.762 5.772 Maximum millage per statute (a) 10.026 10.026 10.026 10.029 10.036 10.040 10.050 10.050 10.058 10.068 Countywide (Other): Tampa Port Authority 0.193 0.195 0.198 0.220 0.260 0.260 0.290 0.290 0.290 0.295 Southwest Florida Water Management District 0.387 0.387 0.387 0.422 0.422 0.422 0.422 0.422 0.422 0.422 School Board 7.692 7.777 7.523 7.823 7.937 8.361 8.480 8.595 8.586 8.715 Children's Board 0.500 0.500 0.463 0.500 0.500 0.500 0.500 0.500 0.417 0.417

^JV Unincorporated Area (Other): Southwest Florida Water Management District (b): Alafia River Basin 0.216 0.216 0.216 0.240 0.240 0.240 0.240 0.240 0.240 0.240 Hillsborough River Basin 0.242 0.255 0.255 0.285 0.285 0.285 0.285 0.285 0.285 0.285 NW Hillsborough Basin -- 0.242 0.242 0.268 0.268 0.268 0.268 0.268 0.268 0.268 Transit Authority 0.468 0.468 0.450 0.500 0.500 0.500 0.500 0.500 0.500 0.500 Municipalities: Tampa 5.733 5.733 5.733 6.408 6.539 6.539 6.539 6.539 6.539 6.539 Temple Terrace 5.283 4.569 4.569 4.910 4.910 4.910 4.910 4.910 4.910 4.910 Plant City 4.716 4.165 4.165 4.700 4.700 4.700 4.700 4.700 4.700 4.700 Total millage for unincorporated area within the Alafia River Basin excluding any special district assessments (for analysis only) 20.217 20.306 20.052 22.008 22.759 23.300 23.479 23.613 23.779 24.044 ______(a) Section 200.071, Florida Statutes, states that the maximum ad valorem tax millage for either the countywide or unincorporated area (municipal services taxing unit) of the BOCC is set at 10 mills plus any voted levies. (b) Dependent on its location, property within Tampa may either be in the Alafia, the Hillsborough River, or the NW Hillsborough Watershed Basin. Plant City may be in either the Alafia or the Hillsborough River Basin. During fiscal year 2009, the NW Hillsborough Basin was merged into the Hillsborough River Basin. Source: Office of Tax Collector, Hillsborough County.

The following shows the total taxes levied against the ten largest taxpayers in the most recent year as well as nine years earlier. Property located within the geographic boundaries of Hillsborough County is subject to tax levies by Hillsborough County as well as several other taxing authorities. The Hillsborough County Tax Collector collects taxes for all of these taxing authorities. Taxing authorities such as the City of Tampa and the School Board are not a part of the Hillsborough County financial reporting entity. Their tax levies, however, are included in the chart below in order to show the total taxes due from each of the ten largest taxpayers. The total taxes levied by all of these taxing authorities against property located within the geographic boundaries of Hillsborough County was $1,942,651,000 for 2008 and $931,014,000 for 1999. Hillsborough County, Florida Principal Taxpayers Latest Fiscal Year Compared to the Fiscal Year Nine Years Earlier (Amount in Thousands)

2008 1999 Percentage of Percentage of Taxes Total Taxes Taxes Total Taxes Taxpayer Type of Business Levied (a) Rank Levied Levied (a) Rank Levied Tampa Electric Company Electric utility $31,181 1 1.6% $30,622 1 3.3% Verizon Communications Inc. Telecommunications 25,857 2 1.3 28,605 2 3.1 (b) Hillsborough County Aviation Authority Airport 12,008 3 0.6 -- -- Mosaic Company Mining/fertilizer minerals 8,101 4 0.4 6,226 3 0.7 (c) Highwoods/Florida Holding LP Real estate management 6,455 5 0.3 -- -- Camden Operating LP Real estate 5,759 6 0.3 3,490 4 0.4 Liberty Property Property management 5,286 7 0.3 -- -- Post Apartment Homes LP Real estate 5,245 8 0.3 -- -- Wal-Mart Retail stores 4,309 9 0.2 -- -- Tampa Port Authority Cargo/Cruise/Real Estate 4,071 10 0.2 -- -- Busch Entertainment Corporation Entertainment -- -- 2,742 5 0.3 Time Warner Entertainment Company Publishing and entertainment -- -- 2,582 6 0.3 Metropolitan Life Insurance Insurance -- -- 2,366 7 0.3 Gilmer University Mall Ltd. Partnership Real Estate -- -- 2,068 8 0.2 $108,272 5.5% $78,701 8.6% ______(a) Dollar amounts in thousands. (b) Verizon and Verizon Data Services, Inc. were shown separately in 1999, but are now known as Verizon Communications Inc. (c) IMC - Agrico Company and Cargill Fertilizer, Inc. were shown separately in 1999, but are now known as Mosaic Company. Source: Hillsborough County Tax Collector.

^JNM Hillsborough County, Florida Direct and Overlapping Governmental Activities Debt September 30, 2009 (Amounts in Thousands)

Estimated Outstanding Percentage Direct and Governmental Unit Debt Applicable Overlapping Debt Direct Debt of Hillsborough County: General obligation bonds $14,055 100% $14,055 Limited ad valorem tax bonds 9,695 100 9,695 Total direct and overlapping debt $23,750

Hillsborough County School Board, Tampa Port Authority, Children's Board, and Southwest Florida Water Management District do not have any general obligation bonds, therefore their bonds are not presented in this chart. ______Source: Hillsborough County School Board, Tampa Port Authority, and Southwest Florida Water Management District. Employees

Hillsborough County employees provide a variety of services to a population of over one million residents. As of September 2009, there were approximately 10,194 employees of Hillsborough County, Florida. County organizations and their employees are as follows: Sheriff – 3,353, Tax Collector – 278, Property Appraiser – 139, Clerk of Circuit Court – 810, Supervisor of Elections – 47, and Board of County Commissioners – 5,567. Several categories of employees are represented by labor unions.

Source: Hillsborough County Civil Service Board; Payroll Department, Hillsborough County Clerk of Circuit Court.

Florida Retirement System

As is the case with many local governments in Florida, the County participates in the Florida Retirement System (the "FRS System"), a cost sharing, multiple-employer public employee retirement system, which covers substantially all of the full-time and part-time employees. The FRS System is noncontributory (by employees) and is totally administered by the State of Florida. Benefits under the plan vest after six years of service. Employees who retire at or after age 62 (age 55 for special risk employment categories) or 30 years of service (25 years for special risk employment categories), with six years credited of service, are entitled to an annual retirement benefit, payable monthly for life. The FRS System also provides for early retirement at reduced benefits and death and disability benefits. These benefit provisions and all other requirements are established by Chapters 112 and 121, Florida Statutes.

Pension costs for the County as required and defined by state statute ranged between 9.85 percent and 20.92 percent of gross salaries for Fiscal Year 2007. For Fiscal Years ended September 30, 2006, 2007 and 2008, the County contributed 100 percent of the required

^JNN contributions. These contributions aggregated $58,089,000, $71,808,000 and $73,404,000, respectively.

A copy of the FRS System's June 30, 2008 annual report can be obtained by writing to the State of Florida Department of Management Services, Division of Retirement, 2639 North Monroe Street, Building C, Tallahassee, Florida 32399-1650, or by phoning (850) 488-5540. The report may also be viewed at the FRS' website at http://www.frs.state.fl.us under the Publications section.

In accordance with Section 112.0801, Florida Statutes, because the County provides medical plans to employees of the County and their eligible dependents, the County is also required to provide retirees the opportunity to participate in the group employee health plan at group rates. This statutory requirement to allow retirees to purchase health care coverage at group rates is considered a post-employment benefit. As with all governmental entities providing similar plans, the County was required to comply with the Governmental Accounting Standards Board's Statement No. 45 – Accounting and Financial Reporting by Employers for Postemployment Benefit Plans Other Than Pensions (GASB 45) no later than its Fiscal Year ending September 30, 2008. Similar to most other jurisdictions, the County has historically paid for its implicit OPEB (as defined below) subsidy to retirees as part of its annual budget, on a pay as you go basis. GASB 45 applies accounting methodology similar to that used for pension liabilities (GASB 27) to other post employment benefits ("OPEB") and attempts to more fully reveal the costs of employment by requiring governmental units to include future OPEB costs in their financial statements. While GASB 45 requires recognition and disclosure of the annual required contribution liability for OPEB, there is no requirement that the liability of such plan be funded.

For more information regarding OPEB Benefits, see Note 9 to the Notes to the Financial Statements included in Appendix B to the attached Official Statement.

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^JNO Employment Indicators

Hillsborough County has a diversified economic base, including large service, manufacturing and retail trade sectors. Hillsborough County's largest industrial sectors include the Administration/Support/Waste Management and Remediation Services, Retail Trade, and the Health Care and Social Assistance sectors. The principal employers serving the county are the Hillsborough County School Board and the Hillsborough County Government. The vast majority of the county's labor force was employed in non-agricultural jobs in 2008.

Employment By Industry Employees Natural Resources and Mining 12,030 Construction 38,171 Manufacturing 28,611 Trade, Transportation, and Utilities 121,713 Information 20,587 Financial Activities 58,762 Professional and Business Services 113,341 Leisure and Hospitality 61,960 Education and Health Services 112,851 Other Services 17,462 Public Administration 27,040 Other 204 Total 612,732 ______Sources: Hillsborough County City-County Planning Commission

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^JNP Hillsborough County, Florida Principal Employers Latest Fiscal Year Compared to the Fiscal Year Nine Years Earlier 2009 2000 Employer Type of Operation Employees % Rank Employees % Rank (a) Hillsborough County School Board Public education 25,596 4.5 1 25,494 4.6 1 Hillsborough County Government Government 10,194 1.8 2 10,461 1.9 3 University of South Florida Education services 8,600 1.5 3 9,966 1.8 4 Verizon Communications Inc. Telecommunications and data processing 7,850 1.4 4 14,000 2.5 2 Tampa International Airport International airport 7,500 1.3 5 8,000 1.5 5 MacDill Air Force Base Military base 6,734 1.2 6 5,580 1.0 6 Tampa General Hospital Medical facilities 6,020 1.1 7 3,465 0.6 13 Publix Food Centers Supermarkets 5,714 1.0 8 5,100 0.9 7 James A. Haley – VA Hospital Medical facilities 4,900 0.9 9 -- -- City of Tampa Government 4,154 0.7 10 4,300 0.8 9 H. Lee Moffitt Cancer Center Medical facilities 3,927 0.7 11 -- -- Bank of America Banks 3,876 0.7 12 4,000 0.7 11 St. Joseph Hospital Medical facilities 3,770 0.7 13 4,356 0.8 8 Busch Entertainment Corporation Tourist attraction 3,737 0.7 14 2,800 0.5 16 University Community Hospital Medical facilities 3,108 0.5 15 3,150 0.6 14 SweetBay Supermarkets Supermarket 2,811 0.5 16 3,075 0.6 15 (b)

^JNQ Tampa Electric Company Electric utility 2,711 0.5 17 3,592 0.7 12 USF Health Science Center Medical facilities 2,611 0.5 18 -- -- U.S. Postal Service Postal services 2,342 0.4 19 4,150 0.8 10 Hillsborough Community College Education services 2,237 0.4 20 -- -- Brandon Regional Hospital Medical facilities 1,654 0.3 21 1,323 0.2 21 (c) Tribune Company Newspaper publishing -- – 2,200 0.4 17 IBM Corporation Marketing and info network -- – 1,400 0.3 20 Chase Manhattan Bank Financial Services -- – 2,014 0.4 18 Citibank Travelers checks and finance -- – 2,200 0.4 17 Time Customer Services Inc. Magazine subscription -- – 1,900 0.3 19 Metropolitan Life Insurance Co. Computer services -- 1,400 0.3 20 Total 120,046 21.1 123,926 22.5 ______(a) Percentages shown represent the number of employees as a percent of total Hillsborough County employment. Total Hillsborough County employment for 2009 was not available so the 2008 figure of 567,648 was used instead. Total Hillsborough County employment for 2000 was 550,232. (b) Kash 'N' Karry was shown separately in 2000, but was shown as SweetBay Supermarkets in 2009. (c) Columbia Hospital – Brandon was shown separately in 2000, but was shown as Brandon Regional Hospital in 2009. Source: Hillsborough County City-County Planning Commission, 2009

The following table shows the average civilian (non-military) labor force, the average number of individuals employed and related unemployment statistics for the County:

Hillsborough County Florida National Calendar Labor Number Number Unemployment Unemployment Unemployment Year Force Employed Unemployed Rate Rate Rate 2000 528,979 511,734 17,245 3.3% 3.8% 4.0% 2001 536,841 514,554 22,287 4.2 4.7 4.7 2002 543,421 514,371 29,050 5.3 5.7 5.8 2003 549,815 521,920 27,895 5.1 5.3 6.0 2004 566,827 542,298 24,529 4.3 4.7 5.5 2005 583,343 562,139 21,204 3.6 3.9 5.1 2006 599,481 579,860 19,621 3.3 3.4 4.6 2007 610,845 586,639 24,206 4.0 4.0 4.6 2008 605,536 567,648 37,888 6.3 6.2 5.8 2009 603,130 537,873 65,257 10.8 10.5 9.3 ______Sources: Florida Agency for Workforce Innovation, Labor Market Statistics; Hillsborough County City-County Planning Commission.

Demographics and Economics

The following table outlines some of the general demographic and economic statistics for the County.

Hillsborough County, State of Florida and the United States Demographic and Economic Statistics Last Ten Years

Public Total Personal Personal High School Public Income Income Median Graduation School Unemployment Year Population (in thousands) Per Capita Age Rates Enrollment Rate 1999 971,079 $26,483,397 $26,889 36 69.5% 168,360 2.7% 2000 998,948 28,645,545 28,552 35 71.4 173,953 3.3 2001 1,026,906 29,828,798 29,207 35 74.4 179,362 4.2 2002 1,055,617 31,150,902 29,568 36 77.5 184,483 5.3 2003 1,079,587 31,932,807 30,329 35 75.8 191,186 5.1 2004 1,108,435 34,848,801 32,068 36 79.3 197,500 4.3 2005 1,131,546 37,379,401 33,651 36 79.5 193,669 3.6 2006 1,164,425 40,757,703 35,641 36 77.3 193,480 3.3 2007 1,192,861 42,859,565 36,616 36 79.1 193,180 4.0 2008 1,200,541 * * 36 80.0 191,965 6.3 2009 1,196,892 * * * * * 10.8 (a) (b) (a) (c) (d) (e) (f) ______*This information was not available at time of reporting. Sources: (a) Florida Research & Economic Database (b) U.S. Department of Commerce, Bureau of Economic Analysis (c) U.S. Census Bureau (d) Florida Department of Education (e) Hillsborough County School Board (f) Florida Agency for Workforce Innovation, Labor Market Statistics Center, Local Area Unemployment Statistics Program, in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics.

^JNR Banking and Finance

A total of 332 commercial and savings bank offices were located in Hillsborough County as of June 30, 2009. Commercial bank offices accounted for 92% or 293 of the total number of banks in the County in 2009. Twenty-six savings institution offices were located in the County. Commercial and savings bank deposits increased slightly since 2008. The following table presents commercial bank and savings institutions deposit for each year since 2000:

Calendar Year Commercial Bank Deposits Savings Bank Deposits Total Deposits 2000 $10,308,000,000 $407,000,000 $10,715,000,000 2001 10,966,000,000 441,000,000 11,407,000,000 2002 11,294,000,000 450,000,000 11,744,000,000 2003 12,578,000,000 515,000,000 13,093,000,000 2004 15,090,000,000 577,000,000 15,667,000,000 2005 16,163,000,000 715,000,000 16,878,000,000 2006 17,282,000,000 843,000,000 18,125,000,000 2007 16,326,000,000 1,074,000,000 17,400,000,000 2008 19,319,000,000 885,000,000 20,204,000,000 2009 20,319,000,000 884,000,000 21,203,000,000 ______Sources: Federal Deposit Insurance Corporation; Hillsborough County City-County Planning Commission.

Education

Hillsborough County Public Schools is the eighth largest district in the nation and third largest in Florida.

A total of 268 elementary, middle, senior high, and adult schools accommodate students, both day and evening. Total student membership from pre-kindergarten through senior high as of November 2008 was 191,965. All Hillsborough County Public Schools fully meet the standards established by the Florida Department of Education. In addition, all high schools are duly accredited by the South Association of Colleges and Schools (SACS). All elementary and middle schools meet or exceed SACS standards.

Hillsborough County also has several universities and colleges. The University of South Florida serves more than 46,000 students and is one of the nation's top 63 public research universities. The University of Tampa is a private university located on approximately 100 acres of prime riverfront land in the heart of downtown Tampa. Hillsborough Community College has five primary campus locations, two satellite locations, a very active distant learning program (eCampus), and a comprehensive corporate training center. Some other colleges in the area include Florida College, Stetson University of College Law, and Keller Graduate School of Management.

Source: Florida Department of Education www.fldoe.org Hillsborough County School Board www.sdhc.k12.fl.us/ Hillsborough Community College www.hccfl.edu The University of Tampa www.ut.edu University of South Florida www.usf.edu

^JNS Medical Facilities

There are thirteen general, specialty, and military hospitals in Hillsborough County with approximately 3,699 hospital beds, 3,168 acute care beds, 531 specialty beds, and 3,831 nursing home beds. The County's medical resources include more than 3,177 physicians, with specialists in all types of medicine and surgery, 609 dentists.

Sources: Florida Department of Health; Florida Agency for Health Care Administration

Communication

Six television stations, along with twenty-five radio stations serve the County. Daily newspapers include The Tampa Tribune and Tampa News Daily. There are also three other weekly, and two monthly newspapers. Verizon and Brighthouse Networks are the primary providers for telecommunications and cable services, respectively. There are 48 Post Offices in Hillsborough County and 14 internet access or DSL providers.

Sources: Florida Smart - News and Media Directory; Greater Tampa Chamber of Commerce - Committee of One Hundred

Transportation

Tampa International Airport (TIA) is a major airport for the west central region of Florida serving primarily Hillsborough, Pinellas (which includes the cities of St. Petersburg and Clearwater), Pasco, Manatee, Polk, and Hernando Counties.

TIA, a facility of approximately 3,400 acres, is used primarily for commercial aviation by certified scheduled airlines. TIA is primarily an origin-destination airport and the service region is a large air traffic hub, as defined by the Federal Aviation Administration. During 2008, 9.4 million domestic passengers enplaned at the airport, 212.6 million pounds of cargo were handled, and 14.9 million pounds of mail were transported. TIA is highly regarded for its efficiency and passenger convenience receiving numerous awards over the years.

At the beginning of 2009, TIA was served by fifteen majors/nationals, two regionals/commuters, and three foreign flag carriers, and eight all-cargo airlines. Three general aviation airports serve as reliever airports, primarily to accommodate light and medium weight aircraft in the general aviation category. These include Peter O. Knight Airport, a 139-acre facility located six miles southeast of TIA; Plant City Airport, a 199-acre facility located 22 miles east of TIA; and Tampa Executive Airport (formerly Vandenberg Airport), a 407-acre facility located 12 miles east of TIA. In addition, there are two full service general aviation executive terminals located at the Airport.

AMTRAK provides passenger rail service to major cities throughout the United States. This rail service is provided by the Palmetto and Silver Service Trains (the Silver Meteor and the Silver Star) which offer service between Florida, Georgia, and New York City. The restored Tampa Union Station has seven northbound and seven southbound departures on AMTRAK weekly.

^JNT Freight rail service is provided to the County by CSX Transportation Systems. CSX rail units possess some of the world's most technologically advanced terminal equipment and operate on regular schedules throughout the network. Major transports include coal, wood products, phosphate, chemicals, construction materials, semi-tractor trailers, automobiles, and automobile products.

The Hillsborough Area Regional Transit Authority (HART) is Hillsborough County's public transportation system. HART offers local and express routes for residents and visitors alike. Local service seven days a week provides access to area shopping malls, businesses, government buildings, attractions and recreational facilities. An estimated eleven million riders use the system annually.

The County is also served by numerous intrastate and interstate motor common carriers, moving goods between Tampa, other points in Florida, and markets throughout the United States. Tampa is the transportation hub of the west coast of Florida with major trucking firms maintaining terminals serving Florida and major southern cities.

Three interstates and seven other major highways serve the County. All parts of Florida and bordering states to the north and west can be reached within one day of travel by truck or automobile.

Sources: Hillsborough County Aviation Authority; Amtrak, www.amtrak.com

Local Industries

Service, retail, finance, insurance, and real estate sectors lead regional and county industry. Bioscience and other high-tech industries are expanding, thanks in part to research at university and college campuses throughout the area. Manufacturing in Hillsborough County is also participating in the high-tech trend as the County is home to companies in the microelectronics, medical devices, software, and defense systems industries.

Business and Information Services. Tampa Bay has been called "Wall Street South" for the size and scope of its financial services industry. Worldwide organizations which have a major presence in Hillsborough County include JPMorgan Chase, Citigroup, Depository Trust and Clearing Corp, MetLife, Progressive Insurance and USAA Insurance. Hillsborough County is also a major player in a new industry segment called the Shared Accounting Services industry where national and international companies such as Coca Cola Enterprises create additional value by co-locating their accounting and financial services for multiple businesses in one location.

Biomedical/Life Sciences Technologies/Health Care. Tampa Bay is a center for numerous hospital, research and medical related firms – and the gateway to the Florida High Tech Corridor, a 23-county area that is home to more than 3,000 high-tech companies. Biomedical and life science centers of excellence in the County include University of South Florida, H. Lee Moffitt Cancer Center and Research Institute, and Johnnie B. Byrd, Sr. Alzheimer's Center and Research Institute. Hillsborough County is also home to major health care plan developers and providers such as Wellcare.

^JNU Port/Maritime. With three seaports, Tampa Bay is a major entry point for domestic and international shipping. The Port of Tampa comprises nearly half of all sea borne commerce in the state and is the state's largest seaport.

Manufacturing (Microelectronics, Medical Devices, Software, and Defense Systems). High tech manufacturing companies in the County include CAE (flight and military simulation systems), B&M Precision (implants and components for brain probes and liposuction), and systems software development companies CIBERsites (application development), Computer Associates (internet security) and Quadrant Software (electronic document distribution).

Sources: Hillsborough County Economic Development Department; Tampa Bay Partnership

Agriculture

Hillsborough County has 2,843 farms, the 2nd largest number of farms of any county in the state of Florida and 20th highest in the country. Diversity is one of the keys to the success of Hillsborough County agriculture. In addition to eight major commodities, a variety of specialty crops contributed to sales of more than $803 million of products in 2008. Hillsborough County ranks as the 4th largest producer of agricultural products in the state (out of 67 counties) and 59th in the United States (out of 3,141 counties). Hillsborough County is in the top 2% of agricultural counties in the country. Approximately 36% of the County's land area is in agricultural production. Urban development and rising land values influence the agricultural sector, encouraging production of high-value commodities such as strawberries, tropical fish, ornamental plants, and enterprises for niche markets. Hillsborough County produces the most tropical fish and strawberries of all counties in the state. The majority of agricultural goods produced in Hillsborough County are sold outside of the County.

Commodity sales are estimated as follows: Commodity 2008 Acreage 2008 Annual Sales Aquaculture 1,088 $29,250,000 Beef Cattle/Pasture 88,590 12,558,875 Bees/Honey Production N/A 610,962 Blueberries 420 3,700,000 Citrus 13,217 24,154,000 Dairy 1,550 6,983,535 Forestry 95,000 1,000,000 Goats 338 100,625 Hay 5,433 2,184,066 Ornamental Plants 3,993 180,600,194 Poultry 18 22,403,700 Sod 4,769 13,372,218 Strawberries 8,730 315,545,850 Vegetables 12,382 138,000,000 Miscellaneous 3,760 52,640,000 Total 239,288 $803,104,025

^JNV Local agriculture generates additional local economic impact by supporting related businesses such as banking, real estate, legal services, transportation, packaging, equipment, seed, agricultural suppliers and services, and marketing firms. Each year, agriculture production and its related businesses in Hillsborough County generate an economic impact of more than $1.4 billion and employ approximately 20,100 people with $293 million in annual earnings.

Sources: Hillsborough County Cooperative Extension Service; Hillsborough County Economic Development Department.

Port Facilities

The Port of Tampa is a very significant economic engine in West Central Florida. Designated as a Foreign Trade Zone (FTZ No. 79), the port handled 37.8 million tons of cargo during fiscal year 2009. The 5,000- acre Port is home to many businesses which handled 3,163 vessels during 2009. With a 43-foot-deep main channel and one of the largest shipbuilding and repair centers in the Southeast, the Port is a full-service facility for shipping lines and is the closest major U.S. port to the Panama Canal. The Port also hosts North America's largest dockside cold storage terminal. Proximity to Mexico, the Caribbean cruise market, and developing Central and South American markets make the Port of Tampa a gateway to several destinations both inbound and outbound. The Port also handled 803,000 cruise passengers during 2009 on 185 sailings.

Seventy-five percent of Port cargo is inbound, and with its location on the west end of Florida's Interstate 4 corridor, the Port is ideally located to supply in-state demands for construction materials, commodities and consumer products.

Port officials have worked closely with the community to develop a dynamic downtown waterfront. In 2001, the Port completed "Channelside," an entertainment complex opened on the waterfront just a short walk from the Port of Tampa's cruise facilities. Channelside has a multiplex cinema, an IMAX theater, and lots of entertainment, shopping, and restaurants all in a comfortable seaside atmosphere.

Sources: Tampa Port Authority, www.tampaport.com

Military Facilities

MacDill Air Force Base is located eight miles south of downtown Tampa on the Southwestern tip of the Interbay Peninsula on the west coast of Florida. The host organization is the 6th Air Mobility Fueling Wing, which uses KC-135 Stratotankers and C-37As to conduct its air mobility mission. It is headquarters for two non-aviation units: the United States Central Command and the United States Special Operations Command. It is also home to the National Oceanic and Atmospheric Administration, along with 47 other tenant units. The total number of jobs supported includes nearly 12,000 military and over 7,000 civilian employees.

Source: MacDill Air Force Base

^JOM Recreational Facilities

A variety of entertainment activities may be found in Hillsborough County including numerous parks, beaches, restaurants with international flair, excellent golf courses, racquetball courts, saltwater fishing, tennis and shopping. Recreational facilities that appeal to both County residents and visitors are either located within the County or are only a short drive away. Walt Disney World including Hollywood Studios Theme Park, Universal Studios and Sea World are all just over an hour's drive to the east. Two-thirds of the state's major attractions lie within a 100-mile radius of Tampa. Busch Gardens located in Tampa is a family adventure park offering an array of attractions based on exotic encounters with the African continent. It offers an appealing blend of thrilling rides, one of the country's premier zoos featuring more than 2,700 animals, live shows, restaurants, shops and games. Adventure Island, which is located next to Busch Gardens, features a beach volleyball complex and 17 water play areas situated on 30 acres.

Hillsborough County is home to the Tampa Bay Buccaneers of the National Football League (NFL), who were the Superbowl XXXVII Champions in 2003. The Tampa Bay Buccaneers and University of South Florida Bulls football teams play their home games at Raymond James Stadium in Tampa. Raymond James Stadium is a combination of modern stadium design and its own innovations. Raymond James Stadium has a seating capacity of 65,657, expandable to 75,000, 12,000 club seats, 195 luxury suites, and 600 points of sale for food, beverages and merchandise. Raymond James Stadium has hosted special events such as Super Bowl XXXV in January 2001 and Super Bowl XLIII in February 2009.

In the heart of downtown Tampa's Channelside District, located between the Tampa Convention Center and the Florida Aquarium, lies the St. Pete Times Forum, one of the premier entertainment venues in the Southeast and home of the National Hockey League's Tampa Bay Lightning, who were the 2004 Stanley Cup Champions. The St. Pete Times Forum also hosts the Arena Football League's Tampa Bay Storm and more than 150 concerts, family shows and sporting events each year. In addition, the New York Yankees Major League Baseball franchise has spring training at the County's George M. Steinbrenner Field baseball stadium. The University of South Florida Sun Dome is a multipurpose 11,400-seat arena located on the campus of the University of South Florida (USF) and is home to the National Collegiate Athletic Association's USF Men's and Women's basketball teams as well as other University events. Thoroughbred horse racing are also seasonally available in the County.

Sources: Busch Gardens, Tampa www.buschgardens.com Adventure Island www.adventureisland.com City of Tampa www.tampagov.net Raymond James Stadium www.raymondjames.com/stadium/ Tampa Bay Buccaneers www.buccaneers.com Tampa Sports Authority www.tampasportsauthority.com USF Sun Dome http://usfweb2.usf.edu/Sundome/

^JON Hillsborough County, Florida Hotel/Motel Information

The Tampa Bay Convention & Visitors Bureau reports that there were approximately 21,000 hotel/motel rooms in Hillsborough County during 2008. The number of anticipated new hotel rooms in Hillsborough County for 2009 is 1,000 rooms.

Year Average Daily Rate Occupancy 2002 $79.70 62.2% 2003 79.23 62.5 2004 81.57 67.9 2005 87.87 68.6 2006 96.54 67.8 2007 102.25 63.7 2008 103.88 58.2

During the 2008 Calendar Year, the Tampa Convention Center held 57 major events (excluding public shows), attracting approximately 279,000 delegates for an economic impact of approximately $111,600,000. Related thereto, total hotel room nights for the 2008 Year were 388,000, of which 196,398 was for convention center groups.

The Embassy Suites Downtown Tampa opened in November 2006 directly across the street from the Tampa Convention Center. The hotel has 360 guest suites and 9,300 square feet of meeting space.

Source: Tampa Bay Convention & Visitors Bureau.

Cultural Facilities

Hillsborough County offers a variety of cultural facilities to residents and visitors. Lowry Park Zoo was ranked the number-one family-friendly zoo in the United States in 2009 by Parents magazine and in 2004 by Child magazine and recognized by the State of Florida as a center for Florida wildlife conservation and biodiversity. Natural outdoor exhibits covering 56 acres for more than 2,000 animals from Florida and similar habitats include a Native Florida Wildlife Center and manatee hospital, Asian Gardens, Primate World, Free-Flight Aviaries, Wallaroo Station children's zoo, and Safari Africa. The Zoo also features rides, shows and hands-on interactive exhibits. The Florida Environmental Education Center (Zoo School) serves more than 147,000 children annually. Programs offered are summer and holiday camps, daycare, preschool, and kindergarten. The 200,000 sq-ft Florida Aquarium is among the top aquariums in the world and has more than 20,000 aquatic plants and animals from Florida and around the world.

The Tampa Bay Performing Arts Center is located on a nine-acre site along the east bank of the Hillsborough River. As the largest performing arts complex south of the Kennedy Center, the 335,000 square-foot Center provides an environment for a wide variety of world-class events. It boasts one of the nation's leading Broadway series and is nationally respected for producing

^JOO grand opera, as well as presenting a wide variety of concerts, performances and events. The Tampa Convention Center, located directly on the waterfront in the heart of downtown Tampa, hosts a variety of conventions, tradeshows, and other special events year-round. The 600,000 square foot building offers 200,000 square feet of exhibit space, a 36,000 square foot ballroom, and 36 breakout rooms which total over 42,000 square feet of additional meeting space. Add to that, over 84,000 square feet of flexible space and you have the best venue for any meeting, convention or special event. After a busy day of lectures, seminars or classes, attendees are welcome to visit Ybor City or Channelside (movie theaters, restaurants, shops and nightclubs) located just a few steps away.

Museums in the area include the Museum of Science and Industry (MOSI), a science and technology center encompassing over 400,000 square-feet on a 74-acre campus of exhibits and hands-on displays. MOSI is now the largest science center in the southeast and 5th largest in the United States. Features include a hurricane simulator, a planetarium, and an IMAX Dome theater. The new 60,000 square-foot Tampa Bay History Center Museum located in the Channelside district had its grand opening celebration in January 2009. Other museums in the area are the Tampa Museum of Art, the historic H. B. Plant Museum at the University of Tampa, the Contemporary Art Museum at the University of South Florida, the Scarfone Gallery at the University of Tampa, the Veteran's Memorial Museum and Park, the Ybor City State Museum, and the Florida Museum of Photographic Arts.

Graphicstudio at the University of South Florida is one of the world's premiere experimental printmaking facilities, hosting renowned artists on a regular basis to test new theories and methods of producing art. In addition, there are over 20 other visual art galleries that showcase work from local, regional, and national artists.

Sources: Tampa Bay Performing Arts Center www.tbpac.org City of Tampa www.tampagov.net Museum of Science and Industry www.MOSI.org Arts Council of Hillsborough County www.tampaarts.com Lowry Park Zoo www.lowryparkzoo.com Florida Aquarium www.flaquarium.org Tampa Bay History Center www.tampabayhistorycenter.org

^JOP Housing (Standing Units)

Housing units in the County are shown in the table below.

Hillsborough County Housing Characteristics 2002-2008

2002 2003 2004 2005 2006 2007 2008* Single Family Detached 253,345 259,845 267,871 274,581 283,733 287,771 291,353 Single Family Attached 34,159 35,692 37,380 39,675 43,266 47,788 51,180 Apartments 120,478 123,061 126,593 129,243 129,942 131,074 132,044 Mobile Homes 43,631 43,950 44,307 44,580 44,942 45,093 45,246 Total 451,613 462,548 476,151 488,079 501,305 511,726 519,823 * As of April 1, 2009. ______Source: Hillsborough County City-County Planning Commission.

Housing (Permits Issued)

Building permit activity in the County is shown in the table below.

Hillsborough County New Residential Units 2002-2008

Single Family Single Family Mobile Year Detached Attached Apartments Homes Total 2002 7,855 1,936 2,720 287 12,798 2003 8,481 2,074 4,772 254 15,581 2004 9,012 2,797 1,758 252 13,819 2005 9,339 6,318 1,483 304 17,444 2006 6,171 5,317 2,355 196 14,039 2007 3,420 2,468 2,103 125 8,116 2008 2,391 1,192 2,845 111 6,539 ______Source: Hillsborough County City-County Planning Commission.

Hillsborough County Web Site

The Hillsborough County internet web site is located at http://hillsboroughcounty.org. This site provides a convenient directory of government services and other useful information.

^JOQ

APPENDIX B

ANNUAL FINANCIAL REPORT WATER AND WASTEWATER SYSTEM ENTERPRISE FUND FOR FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(THIS PAGE INTENTIONALLY LEFT BLANK) Hillsborough County Florida Annual Financial Report

The Brandon Support Operations Complex on Falkenburg Road was completed in 2009. The complex consolidates several mission support functions, including customer service and warehouse operations, at one location.

Water Resource Services Enterprise Fund For Fiscal Years Ended September 30, 2009 and 2008

_JN

HILLSBOROUGH COUNTY, FLORIDA

WATER RESOURCE SERVICES ENTERPRISE FUND ANNUAL FINANCIAL REPORT FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Prepared by:

FINANCE DEPARTMENT CLERK OF CIRCUIT COURT PAT FRANK, Clerk

_JO HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND PRINCIPAL OFFICIALS SEPTEMBER 30, 2009

Board of County Commissioners Ken Hagan, Vice-Chair Mark Sharpe, Vice-Chair Kevin Beckner Rose Ferlita Al Higginbotham Jim Norman Kevin White

Constitutional Officers Pat Frank, Clerk of Circuit Court Doug Belden, Tax Collector David Gee, Sheriff Earl Lennard, Supervisor of Elections Rob Turner, Property Appraiser

Appointed Officials Pat Bean, County Administrator Renee Lee, County Attorney Paul Vanderploog, Director, Water Resource Services James Barnes, Internal Performance Auditor

_JP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND ANNUAL FINANCIAL REPORT FOR FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

REPORT CONTENTS

Page Report of Independent Certified Public Accountants 1 Financial Statements: Management’s Discussion and Analysis 6 Balance Sheets 14 Statements of Revenues, Expenses, and Changes in Net Assets 17 Statements of Cash Flows 18 Financial Statement Notes 21

Supplemental Information (Unaudited): Comparison of Actual Revenues and Expenses to Budget (Budgetary Basis) 44 Debt Service Schedules - Exhibit A 45 Rate Covenant Tests 47 Reconciliation of Excess Funds Available (Per Rate Covenant Test) 49 To Change in Net Assets Combining Statement of Receipts and Disbursements for 50 Accounts Restricted by Bond Covenants and by BOCC Policy

Statistical Section (Unaudited):

Financial Trends 52 Debt Coverage Schedules 56

General Operating Statistics 58

_JQ

Ernst & Young LLP Suite 1200 401 East Jackson Street Tampa, Florida 33602

Tel: +1 813 225 4800 Fax: +1 813 225 4711 www.ey.com

Report of Independent Certified Public Accountants

The Board of County Commissioners Hillsborough County, Florida

We have audited the accompanying financial statements of Hillsborough County, Florida, Water Resource Services Enterprise Fund (the System) as of and for the years ended September 30, 2009 and 2008, as listed in the table of contents. These financial statements are the responsibility of the System’s management. Our responsibility is to express our opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the System’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the System’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1, these financial statements present only the System and do not purport to, and do not, present fairly the financial position of Hillsborough County, Florida as of September 30, 2009 and 2008, the changes in its financial position, or, where applicable, its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hillsborough County, Florida, Water Resource Services Enterprise Fund as of September 30, 2009 and 2008, and the changes in financial position and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

0912-1118397

A member firm of Ernst & Young Global Limited _JR

In accordance with Government Auditing Standards, we have also issued our report dated January 19, 2010 on our consideration of the System’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The management’s discussion and analysis, as listed in the table of contents, is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming an opinion on the System’s basic financial statements. The accompanying supplementary information and statistical section listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying supplementary information and statistical section as listed in the table of contents have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.  January 19, 2010

0912-1118397 A member firm of Ernst & Young Global Limited _JS

Ernst & Young LLP Suite 1200 401 East Jackson Street Tampa, FL 33602

Tel: +1 813 225 4800 Fax: +1 813 225 4711 www.ey.com

Report of Independent Certified Public Accountants on Bond Compliance

The Board of County Commissioners Hillsborough County, Florida

We have audited, in accordance with auditing standards generally accepted in the United States, the basic financial statements of the Hillsborough County, Florida, Water Resource Services Enterprise Fund (the System), as of and for the year ended September 30, 2009, and have issued our report thereon dated January 19, 2010.

In connection with our audit, nothing came to our attention that caused us to believe that the Hillsborough County, Florida, Water Resource Services Enterprise Fund failed to comply with the terms, covenants, provisions, or conditions of Hillsborough County Resolution No. 03-112, dated June 4, 2003, governing the Refunding Utility Revenue Bonds, Series 2001 insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of any such noncompliance.

This report is intended solely for the information and use of Hillsborough County, Florida officials and management, and is not intended to be and should not be used by anyone other than these specified parties.  January 19, 2010

0912-1118397

A member firm of Ernst & Young Global Limited _JT

FINANCIAL STATEMENTS

_JU HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

The Hillsborough County Water Resource Services Enterprise Fund (System) management presents the following review of its financial activities for the fiscal years ended September 30, 2009 and 2008. Readers of these financial statements are encouraged to consider information presented here together with the accompanying financial statement notes to obtain a comprehensive view of the System’s financial condition and operating results for the fiscal years ended September 30, 2009 and 2008. All amounts, unless otherwise stated, are presented in thousands of dollars.

Fiscal Year 2009 Financial Summary

System fiscal year 2009 operating revenues of $175,692 were $5,023 or 2.8% less than fiscal year 2008 primarily due to the severe drought triggering mandatory lawn watering restrictions and to increased service disconnections caused by the continuing economic down-turn in the residential and commercial real estate markets.

The System recognized $43,733 from impact fee and reclaimed water improvement unit special assessment contributions and related accounts receivables during fiscal year 2009.

On June 16, 2009, the System, as permitted under the governing bond resolution, defeased all outstanding Series 2003 Bonds in the amount of $24,385 and a portion of outstanding Series 2001 Bonds in the amount of $10,000. As a result, these transactions reduced System fiscal year 2009 bond service requirements paid from user rates by approximately $6 million. See Note 7(B) in the accompanying financial statement for additional information.

On December 13, 2008, the System’s $75 million Commercial Paper Note Program and supporting Letter of Credit expired. Rather than renew the program, System management will participate in the BOCC’s $300 million County-wide Commercial Paper Note Program to meet future short-term capital funding requirements.

The System exceeded its rate covenant test requirements by the following amounts:

Test Requirements I II III Funds in Excess of Requirements $23,592 $29,095 $23,171

Fiscal Year 2008 Financial Summary

System fiscal year 2008 operating revenues of $180,715 were $7,671 or 4.1% less than fiscal year 2007 primarily as the result of mandatory lawn watering restrictions and a significant increase in service disconnections related to the economic down-turn affecting the residential housing market.

The System recognized $27,403 from impact fee and reclaimed water improvement unit special assessment contributions and related accounts receivable during the fiscal year.

_JV HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

The System exceeded its rate covenant test requirements by the following amounts:

Test Requirements I II III IV Funds in Excess of Requirements $18,773 $23,837 $21,008 $21,008

The System was compliant with all covenant requirements for the fiscal years ended September 30, 2009 and 2008. Rate Covenant Test IV was no longer required for the fiscal year ended September 30, 2009, due to expiration of the System’s Commercial Paper Note Program. Please refer to Note 6(C) in the accompanying financial statement notes and to the rate covenant test in the supplemental information section of this annual financial report.

System net assets increased $39,076 and $47,273, respectively, for the fiscal years ended September 30, 2009 and 2008. A significant portion of each fiscal year’s net asset increase was attributable to capital contributions of $56,007 and $55,063, respectively. System total net assets on September 30, 2009, were $1,106,080 compared to $1,067,004 last year.

Overview of the Financial Statements

This analysis is intended to serve as an introduction to the System’s financial statements. These statements consist of two parts: the financial statements and the accompanying financial statement notes. Also, the accompanying report contains supplementary and statistical information, which may provide additional insight to financial statement users.

Required Financial Statements

The System reports its financial activities by using accounting methods similar to those in the private business sector. The financial statements offer both current and noncurrent data about its financial activities. The Balance Sheet includes the System’s assets and liabilities and provides summary information about amounts invested in assets and amounts owed to creditors. The assets and liabilities are presented in a classified format, which list current and noncurrent amounts. The System’s operating results are reported on the Statement of Revenues, Expenses, and Changes in Net Assets. This statement displays the System’s operating activities for the fiscal year concluded. Also, this statement indicates whether the System recovered all its operating and nonoperating costs through user fees and other revenues. The last required statement is the Statement of Cash Flows. The purpose of this statement is to provide data about the System’s cash activities during the year. The statement presents cash receipt and disbursement activities, as well as changes in cash balances resulting from the System’s operating, capital improvement, borrowing, and investing transactions.

Financial Analysis

A measure of the System’s financial viability is its net assets and the percentage of unrestricted net assets compared to total net assets. An analysis of the System’s Balance Sheet including net assets on September 30, 2009, compared to September 30, 2008, follows:

_JNM HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Condensed Balance Sheets

Assets: 2009 2008 Change Percent Current, restricted and other assets $342,402 $403,984 $(61,582) (15.2%) Capital assets, net 884,455 849,859 34,596 4.1 Total assets $1,226,857 $1,253,843 $(26,986) (2.2%) Liabilities: Current liabilities $57,117 $81,974 $(24,857) (30.3%) Noncurrent liabilities 63,660 104,865 (41,205) (39.3) Total liabilities 120,777 186,839 (66,062) (35.4) Net assets: Invested in capital assets, net of related debt 811,720 726,046 85,674 11.8 Restricted net assets 32,686 51,073 (18,387) (36.0) Unrestricted net assets 261,674 289,885 (28,211) ( 9.7) Total net assets 1,106,080 1,067,004 39,076 3.7 Total liabilities and net assets $1,226,857 $1,253,843 $(26,986) (2.2%)

Total net assets – Total net assets increased $39,076 or 3.7% for the fiscal year ended September 30, 2009, primarily due to capital contributions.

As shown above, the Balance Sheet presents the System’s financial position and its net asset components as of September 30, 2009, compared to September 30, 2008. The Statement of Revenues, Expenses, and Changes in Net Assets presents the System’s operating results for fiscal year 2009 compared to fiscal year 2008 as follows:

Condensed Statements of Revenues, Expenses, and Changes in Net Assets

2009 2008 Change Percent Revenues: Operating revenues $175,692 $180,715 $(5,023) (2.8%) Nonoperating revenues 15,247 21,386 (6,139) (28.7) Total revenues 190,939 202,101 (11,162) (5.5%) Expenses: Operating expenses, before depreciation 140,773 147,720 (6,947) (4.7) Nonoperating expenses 14,343 10,726 3,617 33.7 Depreciation and amortization 52,754 51,445 1,309 2.5 Total expenses 207,870 209,891 (2,021) (1.0) Loss before capital contributions (16,931) (7,790) (9,141) 117.3 Capital contributions 56,007 55,063 944 1.7 Change in net assets 39,076 47,273 (8,197) (17.3) Net assets, beginning of year 1,067,004 1,019,731 47,273 4.6 Net assets, end of year $1,106,080 $1,067,004 $39,076 3.7%

_JNN HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Operating revenues - Fiscal year 2009 operating revenues of $175,692 decreased $5,023 or 2.8% compared to fiscal year 2008. This was primarily due to the commercial and residential real estate market down-turn and to mandatory water use restrictions related to the prolonged region- wide drought.

Nonoperating revenues - Fiscal year 2009 nonoperating revenues of $15,247 decreased $6,139 or 28.7% compared to fiscal year 2008. This was primarily due to a reduction in investment earnings related to the upheaval in the financial markets and to a decline in funds available for investment due to cash outflows on planned capital improvement and modernization projects.

Total expenses - Fiscal year 2009 total expenses of $207,870 decreased $2,021 or 1.0% compared to fiscal year 2008. This decrease was related to the following net factors. First, there was an increase of $1,868 or 4.1% in personnel costs. This was related to a cost of living salary increase and to increased employee benefit costs. Second, there was a net decrease in contractual service costs of $5,330 or 7.2%. This net decrease was primarily related to a comparative reduction in new accounting and inventory systems’ consultant fees from last year and a decrease in purchased water supply costs related to severe water use restrictions reducing total water consumption compared to last year. These decreases were partially offset by an increase in administrative overhead costs assessed by the BOCC to the System. Third, there was a decrease of $3,817 or 20.7% in communications, fleet, repair and maintenance, supplies and other general operating and nonoperating costs related to the fiscal year 2009 decrease in System operating revenues. Fourth, there was a comparative decrease in long-term debt interest costs of $3,370 or 33.1% related to the June 16, 2009, debt refunding. These cost decreases were partially offset by an increase of $1,815 or 2.9% in plant utility costs, an increase in depreciation and amortization costs over last year, and a $6,813 non-cash debt defeasance loss.

Capital contributions - Fiscal year 2009 capital contributions were $56,007 compared to $55,063 last year. The $944 or 1.7% increase was primarily due to special assessment impact fee contributions partially offset by a reduction in capital asset contributions from developers compared to last year. Comparative 2009 and 2008 capital contributions were as follows:

2009 2008 Contributed assets $9,122 $25,323 Impact fees collections 3,152 2,810 Special assessment contributions 43,733 27,403 Capital improvement grants - (473) Total capital contributions $56,007 $55,063

_JNO HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

An analysis of the System’s Balance Sheet including net assets on September 30, 2008, compared to September 30, 2007, follows:

Condensed Balance Sheets

Assets: 2008 2007 Change Percent Current, restricted and other assets $403,984 $525,553 $(121,569) (23.1)% Capital assets, net 849,859 688,214 161,645 23.5 Total assets $1,253,843 $1,213,767 $40,076 3.3% Liabilities: Current liabilities $81,974 $70,642 $11,332 16.0% Noncurrent liabilities 104,865 123,394 (18,529) (15.0) Total liabilities 186,839 194,036 (7,197) (3.7) Net assets: Invested in capital assets, net of related debt 726,046 545,229 180,817 33.2 Restricted net assets 51,073 132,958 (81,885) (61.6) Unrestricted net assets 289,885 341,544 (51,659) (15.1) Total net assets 1,067,004 1,019,731 47,273 4.6 Total liabilities and net assets $1,253,843 $1,213,767 $40,076 3.3%

Total net assets – Total net assets increased $47,273 or 4.6% for the fiscal year ended September 30, 2008, primarily due to capital contributions.

As shown above, the Balance Sheet presents the System’s financial position and its net asset components as of September 30, 2008, compared to September 30, 2007. The Statement of Revenues, Expenses, and Changes in Net Assets presents the System’s operating results for fiscal year 2008, compared to 2007, as follows:

Condensed Statements of Revenues, Expenses and Changes in Net Assets

2008 2007 Change Percent Revenues: Operating revenues $180,715 $188,386 $(7,671) (4.1)% Nonoperating revenues 21,386 32,359 (10,973) (33.9) Total revenues 202,101 220,745 (18,644) (8.4) Expenses: Operating expenses, before depreciation 147,720 135,740 11,980 8.8 Nonoperating expenses 10,726 12,103 (1,377) (11.4) Depreciation and amortization 51,445 49,846 1,599 3.2 Total expenses 209,891 197,689 12,202 6.2 (Loss) income before capital contributions (7,790) 23,056 (30,846) (133.8) Capital contributions 55,063 58,633 (3,570) (6.1) Change in net assets 47,273 81,689 (34,416) (42.1) Net assets, beginning of year 1,019,731 938,042 81,689 8.7 Net assets, end of year $1,067,004 $1,019,731 $47,273 4.6%

_JNP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Operating revenues - Fiscal year 2008 operating revenues of $180,715 decreased $7,671 or 4.1% compared to fiscal year 2007. This was primarily due to the following factors: negligible customer growth; mandatory lawn irrigation restrictions to lessen the impact of the continuing region-wide drought; and to an increase in service disconnections caused by the economic downturn.

Nonoperating revenues - Fiscal year 2008 nonoperating revenues of $21,386 decreased $10,973 or 33.9% compared to fiscal year 2007. This was primarily due to a reduction in investment earnings related to the upheaval in the financial markets and to the reduced level of funds to invest as moneys were expended on planned capital improvement projects.

Total expenses - Fiscal year 2008 total expenses of $209,891 increased $12,202 or 6.2% over fiscal year 2007. This increase was related to the following factors. First, there was an increase of $2,993 or 7.0% in personnel costs. This was related to annual salary increases, and to increased employee benefit costs. Second, there was an increase in contractual service costs of $5,587 or 8.2%. This was primarily due to an increase in the contractual water supply cost and to other contractual costs related to implementing new capital asset and customer accounting financial systems. Third, there were net increases in communications, fleet, utilities, supplies, depreciation, and other costs of $5,018 or 6.7% due to inflation and other costs related to system operations. These cost increases were partially offset by a decrease in long-term debt interest costs of $1,396 due to scheduled bond principal payments.

Capital contributions - Fiscal year 2008 capital contributions were $55,063 compared to $58,633 last year. The $3,570 or 6.1% decrease was primarily due to a reduction in impact fee collections and special assessment contributions, partially offset by an increase in contributed assets from developers compared to fiscal year 2007. Comparative 2008 and 2007 capital contributions were as follows:

2008 2007 Contributed assets $25,323 $19,522 Impact fees collections 2,810 9,176 Special assessment contributions 27,403 29,194 Capital improvement grants (473) 741 Total capital contributions $55,063 $58,633

Fiscal Year 2009 Capital Asset Activities

On September 30, 2009, System capital assets, net of accumulated depreciation, were $884,455 compared to $849,859 for fiscal year 2008. The net increase of $34,596 or 4.1% over last year was related to the following net factors. First, the System expended $78,943 on the acquisition and construction of capital assets. Second, the System received contributed assets of $9,122 from developers. Third, these capital asset additions were partially offset by the fiscal year 2009 charge for depreciation and amortization together with net asset disposals for combined deductions of $53,469. See Note 5(B) in the accompanying financial statement notes for additional information on the System’s fiscal year 2009 capital asset activities.

_JNQ HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Fiscal Year 2008 Capital Asset Activities

On September 30, 2008, System’s capital assets, net of accumulated depreciation, were $849,859 compared to $688,214 for fiscal year 2007. The net increase of $161,645 or 23.5% over last year was related to the following net factors. First, the System expended $188,437 on the acquisition and construction of capital assets. Second, the System received contributed assets of $25,323 from developers. Third, these capital asset additions were partially offset by the fiscal year 2008 depreciation and amortization charge together with net asset disposals for combined deductions of $52,115. See Note 5(C) in the accompanying financial statement notes for additional information on the System’s fiscal year 2008 capital asset activities.

Fiscal Year 2009 Debt Administration

The System’s noncurrent liabilities on September 30, 2009, were $63,660 compared to $104,865 for fiscal year 2008. This decrease of $41,205 or 39.3% from last year was primarily due to the scheduled fiscal year 2009 principal bond payments of $15,560 in conjunction with the June 16, 2009, debt defeasance. The refunding reduced the System’s total fiscal year 2009 bond service obligation by approximately $6 million. See Note 7(E) in the accompanying financial statement notes for additional information on the System’s fiscal year 2009 noncurrent liability transactions.

Fiscal Year 2008 Debt Administration

The System’s noncurrent liabilities on September 30, 2008, were $104,865 compared to $123,394 for fiscal year 2007. This decrease of $18,529 or 15.0% from last year was primarily due to the scheduled fiscal year 2008 principal bond payments of $19,815 combined with related net amortization of deferred refunding losses and bond issuance premiums. See Note 7(E) in the accompanying financial statement notes for additional information on the System’s fiscal year 2008 noncurrent liability transactions.

Economic Factors and Next Year’s Budget and Rates

The System did not require a fiscal year 2009 general rate increase with the exception of the water supplier’s annual cost of increase pass-through adjustment. However, based on the continued decline in operating revenues related to lack of new housing starts, continued water restrictions during a fourth year of drought conditions, and the adverse impact on the general economy in the service area, management identified seventeen efficiencies that are expected to result in an annual savings of $5.5 million in fiscal year 2010. Nine of these efficiencies were implemented in the third quarter of fiscal year 2009, including the elimination of twenty-eight funded positions. In addition, System management, as permitted under the governing bond resolution, refunded all outstanding Series 2003 Bonds in the amount of $24,385, and a portion of outstanding Series 2001 Bonds in the amount of $10,000. As a result, these transactions reduced System fiscal year 2009 bond service requirements paid from user rates by approximately $6 million.

_JNR HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND MANAGEMENT’S DISCUSSION AND ANALYSIS FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

On May 20, 2009, the Board of County Commissioners approved an amendment to the rate resolution that provides for automatic annual rate adjustments by indexing of the user changes by an index factor published by the Florida Public Service Commission. As a result, the user charges [excluding the purchased-water pass-through charge, which is subject to pass-through] will be indexed by 1.72% beginning October 2009. This indexing is expected to enhance annual operating revenue by approximately $1.3 million. The indexing will be automatically applied not later than June 1 in subsequent fiscal years, subject to suspension when the Pledged Revenues in the prior fiscal year exceeds 135% of the amount of the Required Deposits in that same fiscal year. These actions were taken to manage the System costs within the available revenues, while achieving continued compliance with the provisions in the Rate Covenant Section of the Bond Resolution.

Requests for Information

The purpose of this analysis as well as the financial statements, financial statement notes, and supplemental financial information is to provide a general overview of the System’s financial position and operating results for the fiscal years ended September 30, 2009 and 2008. Additional information concerning System operations and the services provided to Hillsborough County residents may be obtained from:

Hillsborough County Water Resource Services Attention: Director P. O. Box 1110 Tampa, FL 33601

_JNS HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND BALANCE SHEETS SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

September 30, ASSETS 2009 2008 Current assets: Cash and cash equivalents 41,825$ $ 73,973 Investments 111,264 170,498 Accounts receivable, net 15,665 17,099 Accounts receivable, long-term, current portion 1,186 909 Interest receivable 589 1,590 Due from other governments 13 13 Inventories 1,350 1,679 Other current assets 319 40 Total unrestricted current assets 172,211 265,801 Restricted current assets: Cash and cash equivalents 16,234 20,768 Investments 43,192 47,864 Accounts receivable 7,566 1,816 Interest receivable 245 449 Due from other governments 137 78 Total restricted current assets 67,374 70,975 Total current assets 239,585 336,776 Capital assets, net of accumulated depreciation and amortization: Buildings and utility plants 183,957 191,650 Building improvements 555,574 375,453 Construction work in progress 86,709 224,058 Equipment 8,992 9,627 Land 40,490 40,489 Intangibles 8,733 8,582 Total capital assets, net 884,455 849,859 Other noncurrent assets: Accounts receivable 102,593 66,659 Deferred costs 224 549 Total other noncurrent assets 102,817 67,208 Total noncurrent assets 987,272 917,067 Total assets $ 1,226,857 $ 1,253,843

_JNT

September 30, LIABILITIES AND NET ASSETS 2009 2008 Current liabilities: Accounts and contracts payable 13,041$ 30,674$ Accrued liabilities 1,915 1,839 Compensated absences, current portion 2,976 2,746 Unearned revenues 7,377 7,861 Current liabilities 25,309 43,120 Current liabilities payable from restricted assets: Accounts and contracts payable 3,131 5,200 Accrued interest on debt 2,355 2,911 Deposits 9,972 9,938 Unearned revenues 80 35 Revenue bonds payable, current maturities 16,270 20,770 Current liabilities payable from restricted assets 31,808 38,854 Total current liabilities 57,117 81,974 Noncurrent liabilities: Compensated absences, less current portion 1,210 1,557 Revenue bonds payable, net, less current maturities 62,450 103,308 Total noncurrent liabilities 63,660 104,865 Total liabilities 120,777 186,839 Net Assets: Invested in capital assets, net of related debt 811,720 726,046 Restricted net assets: Bond covenants and debt service 30,367 32,519 Capital projects 2,319 18,554 Unrestricted net assets 261,674 289,885 Total net assets 1,106,080 1,067,004 Total liabilities and net assets 1,226,857$ 1,253,843$

The accompanying notes are an integral part of this statement.

_JNU HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS FOR FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

Year ended September 30, 2009 2008 Operating revenues: Charges for services 175,692$ 180,715$ Operating expenses: Personnel services 47,486 45,618 Contractual services 68,320 73,650 Communication services 1,350 1,393 Fleet services 1,506 2,131 Repairs and maintenance 7,692 7,903 Utilities 10,917 10,411 Supplies 1,196 3,840 Depreciation and amortization 52,754 51,445 Other 2,306 2,774 Total operating expenses 193,527 199,165 Operating loss (17,835) (18,450) Nonoperating revenues (expenses): Investment earnings 12,091 17,564 Interest expense (6,814) (10,184) Loss on debt refunding (6,813) - Asset disposal (loss) gain (303) 153 Other revenues 3,156 3,669 Other expenses (413) (542) Total nonoperating revenues 904 10,660 Loss before capital contributions (16,931) (7,790) Capital contributions 56,007 55,063 Change in net assets 39,076 47,273 Net assets, beginning of year 1,067,004 1,019,731 Net assets, end of year $ 1,106,080 $ 1,067,004

The accompanying notes are an integral part of this statement.

_JNV HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND STATEMENTS OF CASH FLOWS FOR FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

Year ended September 30, 2009 2008 Cash flows from operating activities: Cash received from customers 176,608$ 180,654$ Cash received from other operating sources 9,876 9,151 Cash payments to suppliers for goods and services (112,939) (91,249) Cash payments for personnel services (47,527) (45,164) Net cash provided by operating activities 26,018 53,392 Cash flows from capital and related financing activities: Capital grant revenue - 2,335 Capital contributions - impact fees 3,152 3,245 Surplus capital asset sale proceeds 398 827 Short-term note proceeds - 1,376 Capital asset acquisition and construction (78,943) (188,437) Revenue bond and short-term note interest payments (6,090) (7,964) Revenue bond and short-term note principal maturity payments (15,560) (22,534) Revenue bonds defeased (37,697) - Other debt service costs (88) (167) Net cash used by capital and related financing activities (134,828) (211,319) Cash flows from investing activities: Investment maturity and sale proceeds 461,668 534,132 Investment purchases (398,254) (510,335) Investment earnings 8,714 15,736 Net cash provided by investing activities 72,128 39,533 Change in cash and cash equivalents (36,682) (118,394) Cash and cash equivalents, beginning of year 94,741 213,135 Cash and cash equivalents, end of year 58,059$ 94,741$ Cash and cash equivalent components: Cash and cash equivalents 41,825$ 73,973$ Restricted cash and cash equivalents 16,234 20,768 Total cash and cash equivalents 58,059$ 94,741$

_JOM

Year ended September 30, 2009 2008 Reconciliation of operating loss to net cash provided by operating activities: Operating loss $ (17,835) (18,450)$ Depreciation and amortization 52,754 51,445 Other nonoperating revenues 9,876 9,151 Changes in assets and liabilities: Change in accounts receivable 1,346 (148) Change in allowance for doubtful accounts 34 (188) Change in inventories 329 (79) Change in due from other governments (59) (79) Change in other current assets (279) (2) Change in accounts and contracts payable (19,702) 10,934 Change in deposits 34 821 Change in accrued and other liabilities (363) (107) Change in compensated absences (117) 94 Total adjustments 43,853 71,842 Net cash provided by operating activities $ 26,018 53,392$

Noncash investing, capital, and financing activities: Contributed capital assets $ 9,122 25,323$ Special assessment impact fee contributions 43,733 27,403 GASB Statement 31- investment fair value change (492) (1,351)

The accompanying notes are an integral part of this statement.

_JON HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

(1) Significant Accounting Policies Summary

The following is a summary of the significant accounting policies applied in the preparation of the accompanying Water Resource Services Enterprise Fund (System) financial statements:

(A) Financial Reporting Entity

The System is an enterprise fund of the Hillsborough County, Florida, Board of County Commissioners (BOCC). The System's financial statements are included in the BOCC's basic financial statements and in the Hillsborough County, Florida, Comprehensive Annual Financial Report.

(B) Presentation Basis

The accompanying financial statements were prepared in conformity with accounting principles generally accepted in the United States as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

Governmental accounting requires reporting business activities similar to those found in the private business sector in an enterprise fund. An enterprise fund is used to account for an operation that is financed primarily through user charges, or where the governing body has decided that the determination of net income and capital maintenance is appropriate.

The accrual accounting basis was used to report the System's operations. Under this accounting basis, revenues are recognized in the period earned and expenses are recognized in the period liabilities are incurred.

(D) Cash, Cash Equivalents, and Investments

Cash consists of checking and savings accounts, and is collectively designated as demand deposits. Demand deposits are carried at cost, which approximates fair value. For financial statement presentation purposes, cash equivalents are highly liquid investments with an original maturity of three months or less.

Cash is deposited in qualified public depositories. Deposits are fully insured by the Federal Deposit Insurance Corporation and secured by multiple financial institutions collateral pool established under Chapter 280, Florida Statutes. In accordance with these statutes, qualified public depositories must pledge eligible collateral in varying percentages. Public depositor losses are covered by applicable deposit insurance, by sale of pledged securities, and if necessary, by assessments against other qualified public depositories.

_JOO HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

County Ordinance 08-6 and Section 218.415, Florida Statutes, authorize investments in United States Government obligations or its agencies and certain other investments. Investments are stated at fair value. See Note 2 for more information.

(E) Allowance for Doubtful Accounts

The System utilizes the allowance method for recognizing bad debt expense and for recording bad debt recoveries. During fiscal year 2009 and 2008, the System’s bad debt expense, recorded as an operating expense, was $453 and $395, respectively.

(F) Inventories

Inventories, consisting of maintenance materials and supplies, are stated at the lower of cost, based the average cost method, or market. Materials are charged to operating expense when consumed.

(G) Capital Assets

The System records capital asset equipment additions with an original cost of at least one thousand dollars and with an estimated useful life in excess of two years. Donated capital assets are valued at their estimated fair value on the date received and are recorded as capital contributions on the Statement of Revenues, Expenses, and Changes in Net Assets. Maintenance and repair costs are expensed as incurred, while renewal and betterment disbursements are capitalized and depreciated over their estimated useful lives. Reimbursable water and sewer line construction costs incurred by the System on behalf of customers, developers, and property owners are capitalized. Subsequent customer reimbursements are recorded as capital contributions. Depreciation is provided in amounts sufficient to allocate depreciable capital asset costs to operations over their estimated service lives using the straight-line method.

The System's capital assets have estimated useful lives as follows:

Capital asset categories Estimated useful life (in years) Buildings and utility plants 5 – 50 Building improvements 10 – 35 Equipment 5 – 10

(H) Bond Issuance Costs and Bond Market Issue Premiums

Bond issuance costs are deferred and recorded as deferred bond issuance costs on the Balance Sheet. Bond market issue premiums are deferred and recorded as an increase in bonds payable on the Balance Sheet. These deferrals are amortized using the installment method over the life of the debt issue. Bond issuance costs are amortized to nonoperating expense, while bond market issue premiums are amortized to interest expense. For fiscal years 2009 and 2008, bond issuance costs, amortized to and increasing

_JOP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) other nonoperating expenses were $131 and $210, respectively. Deferred bond market issue premiums, amortized to and decreasing interest expense, were $671 and $1,236, respectively.

(I) Compensated Absences Obligation

Governmental accounting standards require accruing a liability for compensated absences, such as vacation and sick leave, as well as other salary-related costs associated with the payment of compensated absences. Vacation leave accrues as a liability as the employee earns the benefit. Sick leave accrues as the employee earns the benefit, but only to the extent that it is probable that employees will be compensated for this benefit through cash payments at termination or retirement.

The System’s compensated sick leave liability consists of two parts. Under Hillsborough County Civil Service Rules, sick leave is paid at termination under two conditions. First, sick leave compensation for employees in “Plan A” includes payment at termination for all sick time hours accrued up to 480 hours and half of the sick time accrued over 960 hours. Second, sick leave compensation for employees in “Plan B” includes payment at termination for the employee’s unused sick leave hours accrued on February 2, 1997. Payment is made only for each sick time hour up to 480 hours and half of the sick time accrued over 960 hours as of that date. The liability for employees in Plan A and Plan B is calculated using each employee’s hourly pay rate. Plan B employees hired after February 2, 1997, will not receive a sick leave payment at termination and therefore, no sick leave liability was recorded for those employees.

In addition to the preceding benefits, other salary costs associated with compensated absence payments were included. These costs include the System's share of social security and medicare taxes as well as the System's required Florida Retirement System pension contributions.

(J) Deferred Refunding Debt Losses

Governmental accounting standards require the deferral and amortization of losses incurred on refunding debt transactions. The amount deferred is reported as a component of noncurrent bonds payable on the Balance Sheet. The amount amortized, using the effective interest method, is reported as an interest expense component on the Statement of Revenues, Expenses and Changes in Net Assets. The refunding loss amortization period is the shorter of the remaining life of the old debt, or the life of the new debt. For fiscal years 2009 and 2008, the deferred refunding losses, amortized to and increasing interest expense, were $1,951 and $3,487, respectively.

(K) Operating and Nonoperating Revenues and Expenses

The System reports its operating revenues and expenses separately from its nonoperating revenues and expenses. Operating revenues are earned from the principal activities of providing potable water and the treatment and environmentally safe disposal of wastewater. Operating expenses include employee salaries and benefits, contractual costs, plant operating and maintenance costs, and capital asset depreciation. Nonoperating revenues and expenses are those transactions unrelated to the System’s principal activities

_JOQ HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) such as investment earnings, long-term debt interest charges and losses incurred on debt defeasance transactions.

(L) Use of Restricted or Unrestricted Current Assets

When an expense is incurred for which restricted and unrestricted resources are available, System policy is to liquidate the expense with restricted resources first, as appropriate.

(M) Proprietary Fund Financial Reporting

Governmental accounting standards provide guidance on business-type accounting and financial reporting to governmental entities that use proprietary fund accounting. This guidance offers governmental entities the option of (a) following all applicable GASB pronouncements and those Financial Accounting Standards Board (FASB) pronouncements issued on or before November 30, 1989 (unless those FASB pronouncements conflict with, or contradict, GASB pronouncements), or (b) following all applicable GASB and FASB pronouncements (unless those FASB pronouncements conflict with, or contradict, GASB pronouncements). The System follows all applicable GASB pronouncements and only those applicable FASB pronouncements issued on or before November 30, 1989.

(N) Self-Insurance

The System participates in a self-insurance internal service fund maintained by the BOCC. This BOCC Self-Insurance Internal Service Fund encompasses two major sections -- risk management and employee group health insurance.

Risk management includes workers' compensation, automotive, and general liability. The BOCC is self- insured for workers' compensation claims up to a maximum of $350 per occurrence with unlimited excess coverage above the self-insurance cap. Also, the BOCC is self-insured against general liability and automotive claims with limited liability per Section 768.28, Florida Statutes, of $100 per person and $200 per occurrence. The BOCC has commercial insurance with a limit of $2,000 per occurrence to address automotive and general liability claims above the State statutory limits. Negligence claims in excess of the statutory limits can only be recovered through a special State of Florida legislative act. For fiscal years 2009, 2008, and 2007, settled claims did not exceed insurance coverage. During fiscal years 2009 and 2008, the System paid $2,182 and $2,692, respectively, to the BOCC Internal Service Fund for workers' compensation, automotive and general liability insurance coverage.

The System, through the BOCC, provides health, life and disability insurance for its employees and eligible dependents on a cost-sharing basis with employees. The BOCC has an employee group health self-insurance plan to account for and to finance its uninsured losses. Under this plan, the BOCC provides coverage of up to $400 per person annually. Stop-loss insurance was purchased to cover an unlimited lifetime amount per person above the $400 per person deductible. Claims exceeding the $1 million policy limit are paid through the group health plan. Maximum stop-loss reimbursements are limited to $600 per person per year. During fiscal years 2009 and 2008, the System paid $5,993 and $5,144, respectively, to the BOCC Internal Service Fund for group health, life and disability insurance coverage.

_JOR HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

Based on actuarial estimates, liabilities have been established in the BOCC self-insurance fund for claims reported but not paid, and incurred but not reported. GASB 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, establishes accounting and financial reporting standards for the BOCC Self-Insurance Internal Service Fund’s transactions. Insurance coverage costs paid by the System are reflected in the financial statements as a current year operating expense.

(O) Fair Value Investment Accounting and Financial Reporting

Governmental accounting standards require governmental entities, as of the Balance Sheet date, to calculate investments at fair value and to record the related change as an investment earnings component on the Statement of Revenues, Expenses, and Changes in Net Assets. For the fiscal years ended September 30, 2009 and 2008, the investment earnings components were as follows:

2009 2008 Interest and dividends $12,583 $18,915 Fair value change (492) (1,351) Investment earnings, as reported $12,091 $17,564

(P) GASB Statement Implementation

On October 1, 2008, the System implemented GASB Statement Number 49, Accounting and Financial Reporting for Pollution Remediation Obligations. This GASB standard requires the recognition of a pollution liability when any one of five specified obligating events occurs as follows: a government is compelled to take pollution remediation action because of an imminent endangerment; a government violates a pollution prevention–related permit or license; a government is named, or evidence indicates that it will be named, by a regulator as a responsible party or potentially responsible party for remediation, or as a party responsible for sharing costs; a government is named, or evidence indicates that it will be named, in a lawsuit to compel participation in pollution remediation; and, a government commences or legally obligates itself to commence pollution remediation. The implementation of this standard did not have any impact on the System’s Statement of Revenues, Expenses, and Changes in Net Assets for the fiscal years ended September 30, 2009 and 2008.

(Q) Reclassifications

Certain fiscal year 2008 financial statement amounts were reclassified for consistency with the fiscal year 2009 presentation.

(2) Cash Deposits and Investments

(A) Deposits

On September 30, 2009 and 2008, total System cash deposits were $19,249 and $18,087, respectively, and System total bank balances were $7,796 and $6,614, respectively. Bank balances are fully insured by

_JOS HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) federal depository insurance or through financial institutions participating in the Florida Security for Public Deposits Act pursuant to Chapter 280, Florida Statutes.

(B) Investments

In accordance with GASB Statement 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments are reported at fair value. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. If quoted market prices are available, they are used to determine fair value. For investments in open-end mutual funds, fair value is determined by the fund's current share price.

The Florida Local Government Surplus Funds Trust Fund, (managed by State Board of Administration), now known as SBA FLORIDA PRIME, is a 2a-7 like pool, carried at amortized cost. A 2a-7 like pool is not registered with the Securities and Exchange Commission (SEC) as an investment company, but operates in a manner consistent with the SEC’s Rule 2a-7 of the Investment Company Act of 1940, which regulates money market funds. Therefore, SBA FLORIDA PRIME operates essentially as a money market fund. The fair value of the System’s position in the pool is the same as the value of the pool shares. Regulatory oversight of the State Board of Administration is provided by three elected officials who are accountable to the electorate: the Governor of the State of Florida, as Chairman; the Chief Financial Officer, as Treasurer; and the Attorney General, as Secretary. External oversight of the State Board of Administration is provided by the Investment Advisory Council, which reviews investment performance, strategy and decision-making, and provides insights, advice and counsel on these and other matters when appropriate. Audit oversight is provided by the Florida Auditor General’s Office.

System investments are listed by category of investment, fair value, effective duration in years, and credit rating. As United States Treasury Securities, with the explicit backing of the United States Government, are considered not to have credit risk, they are shown with the highest credit rating. For repurchase agreements, the credit rating reflects the credit rating of the underlying collateral provided to the BOCC. All investment income, including investment fair value changes, was reported as a component of investment earnings on the Statement of Revenues, Expenses, and Changes in Net Assets.

_JOT HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

System cash, cash equivalents, and investments on September 30, 2009 and 2008, were as follows:

Fair Value Duration (years) Credit Rating 2009 2008 U. S. Treasury Securities 1.1 Exempt $52,223 $93,249 Federal Agency Securities 1.5 AAA 89,512 107,264 Corporate Notes-FDIC guaranteed .3 AAA 9,408 8,871 Corporate Notes .1 AAA 914 - SBA Fund B 6.7 Unrated 2,399 5,286 Certificates of Deposit - AAA - 3,692 Total investments 154,456 218,362 Open-end mutual funds .2 AAA 1,540 5,844 Commercial paper notes .1 A1+ 12,016 - SBA FLORIDA PRIME .01 AAAm 25,254 70,810 Total cash equivalents and investments 193,266 295,016 Cash deposits 19,249 18,087 Total cash, cash equivalents, and investments $212,515 $313,103

Reconciliation of total cash, cash equivalents, and investment components to amounts reported on the Balance Sheet follows:

2009 2008 Cash and cash equivalents: Current $41,825 $73,973 Restricted 16,234 20,768 Total cash and cash equivalents 58,059 94,741 Investments: Current 111,264 170,498 Restricted 43,192 47,864

Total investments 154,456 218,362

Total cash, cash equivalents, and investments $212,515 $313,103

Effective duration is a measure of interest rate risk. It measures the sensitivity of an investment’s price to interest rate changes. To illustrate, if an investment security has an effective duration of two years then a one-percentage point increase in the market interest rate will cause the value of the security to decline by two percent. Conversely, a one percentage point decline in the market interest rate will cause the value of the security with an effective duration of two years to increase in value by two percent. The effective duration of the BOCC investment portfolio at September 30, 2009 and 2008, was approximately 1.1 and .09 years, respectively.

The credit rating is a measure of credit risk, the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Custodial credit risk, a subset of credit risk, is the risk that counterparty fails to fulfill its obligations. All the System’s investments are insured or registered, or held by the BOCC

_JOU HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) or its agent in the BOCC’s name, except for overnight repurchase agreements, which are held by the counterparty. On September 30, 2009 and 2008, there were no amounts held by counterparties. Excluding the United States Government, its agencies or instrumentalities, and mutual funds or investment pools that invest in such securities, no one issuer represents five percent or more of the BOCC’s total investments.

Section 218.415, Florida Statutes, authorizes the BOCC to invest surplus moneys in the following: a. The State of Florida's SBA FLORIDA PRIME Fund. b. Direct obligations of the United States. c. Obligations of the United States Government such as Government National Mortgage Association. d. Obligations of United States Government sponsored agencies such as the Federal Farm Credit Banks, Freddie Mac and the Federal Home Loan Mortgage Corporation. e. Interest bearing time deposits or savings accounts in qualified public depositories as defined in Section 280.02 Florida Statutes. f. United States Securities and Exchange Commission money market funds with the highest credit quality ratings from a nationally recognized rating agency. g. Securities of, or other interests in, any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, as amended, provided the portfolio of such investment company or investment trust is limited to United States Government obligations and to repurchase agreements fully collateralized by United States Government obligations and provided such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. h. Other investments authorized for the BOCC by law, county ordinance, or resolution.

In addition to the preceding, Hillsborough County Ordinance 08-6 restricts BOCC investments as follows: a. The entire portfolio may be invested in United States Treasury securities with a maximum maturity length of ten-years, but investments in Treasury Strips are limited to ten percent of the portfolio. b. A maximum of fifty percent of the portfolio may be invested in the State of Florida’s SBA FLORIDA PRIME fund. c. A maximum of fifty percent of the portfolio may be invested in United States Government agency securities, with no more than ten percent of the portfolio invested in any individual United States Government agency.

_JOV HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) d. A maximum of sixty percent of the portfolio may be invested in obligations of United States Government instrumentalities with a maturity length of ten-years, provided that no more than thirty percent of the portfolio is invested in any one issuer and no more than twenty-five percent of the portfolio is invested in callable securities. e. A maximum of twenty percent of the portfolio may be invested in repurchase agreements excluding one business day agreements and overnight sweep agreements, with no more than ten percent of the portfolio in the repurchase agreements of a single institution. f. A maximum of twenty percent of the portfolio may be invested in non-negotiable interest bearing certificates of deposit with a institution having deposits secured by the Florida Security for Public Deposits Act, provided that the maximum maturity on any certificate of deposit is no greater than one-year and no more than ten percent of the portfolio is invested with any one issuer. g. A maximum of twenty percent of the portfolio may be invested in prime commercial paper (i.e. rated Prime-1 by Moody’s, A-1 by Standard and Poor’s, or AA by two nationally recognized rating agencies if backed by a letter of credit), provided no more than five percent of the portfolio is invested in the commercial paper of a single issuer. The maximum length to maturity shall be two hundred seventy days from the purchase date. h. A maximum of fifty percent of the portfolio may be invested in money market funds offered by registered investment companies and operated in accordance with 17 CFR 270.2a-7, provided that the money market funds are rated AAAM-G or better by Standard &Poor’s or the equivalent by another nationally recognized rating agency. No more than ten percent of the portfolio may be invested in any one money market fund. i. A maximum of fifteen percent of the portfolio may be invested in high quality corporate notes (rated Aa by Moody’s and AA by Standard and Poor’s) provided no more than five percent of the portfolio is invested in a single issuer’s notes. j. A maximum of twenty percent of the portfolio may be invested in intergovernmental investment pools, provided that the total does not exceed twenty-five percent of the intergovernmental pool. k. A maximum of twenty-five percent of the portfolio may be invested in state or local government taxable or tax exempt general obligation or revenue bonds (rated Aa by Moody’s an AA by Standard and Poor’s) or short-term debt (rated MIG-2 by Moody’s and SP-2 by Standard and Poor’s). l. A maximum of twenty percent of the portfolio may be invested in bankers acceptances issued by a domestic bank or federally chartered domestic office of a foreign bank (rated P-1 by Moody’s and A-1 by Standard and Poor’s) with a maximum of five percent of available funds invested with any one issuer. The maximum length to maturity shall be one hundred eighty days from purchase date. m. Investment in reverse repurchase agreements is prohibited. n. The maximum maturities shown above may be exceeded if investments are acquired to fulfill long-term debt service reserve requirements in which case investments are permitted to have maturities dates throughout the debt service reserve term.

_JPM HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

Deposits in excess of each fund’s operating requirements are pooled and invested by the BOCC in various investments, as specified, to attain maximum yield. Investment earnings are distributed based on the average daily balance of each fund’s equity in the pool or as prescribed by the investment ordinance. In accordance with bond resolutions or other legal agreements, certain deposits are invested outside the pool to prevent commingling of funds.

At year-end, the System had investments in callable United States Government sponsored agency securities. Those securities were purchased because in management’s opinion the advantage gained from their higher rate of return more than offsets the reinvestment risk, the risk that the securities may be called and the proceeds reinvested at a lower interest rate.

GASB Technical Bulletin 2003-1, Disclosure Requirements for Derivatives Not Reported at Fair Value on the Statement of Net Assets. This pronouncement identifies a financial instrument or contract as a derivative security if the instrument has these three characteristics: a. It has one or more underlying references (interest rate, security price, index, asset price, or other variable) and one or more notional amounts (contract value or currency amounts) or payment provisions. b. It requires no initial net investment or an initial net investment that is smaller than would be required for other contracts that would be expected to have a similar response to changes in market factors. c. Its terms require or permit net settlement, it can readily be settled net by a means outside the contract, or it provides for the delivery of an asset that puts the recipient in a position not substantially different from settlement.

During fiscal year 2009, SBA FLORIDA PRIME in which the System invests, held high quality floating rate and adjustable rate securities. This is part of the State Board of Administration’s investment strategy to hedge against interest rate risk and to provide portfolio diversification. Floating rate and adjustable rate securities are no longer considered derivative investments as they do not meet the derivative definition criteria (b) and (c) as stated in GASB Technical Bulletin No. 2003-1.

On November 29, 2007, the trustees of the SBA suspended deposits and withdrawals from the Florida Local Government Investment Pool (Investment Pool. This action was taken to stop withdrawals causing the Investment Pool’s assets to fall from approximately $27 billion to $14 billion in a month’s time. Some local governments initiated withdrawals due to fears associated with securities that were downgraded below the credit quality guidelines set for initial purchase as well as some limited defaults, although the Investment Pool continued to receive most principal and interest payments timely. On December 4, 2007, the SBA split the Investment Pool into two funds: eighty-six percent was allocated to the Local Government Investment Pool, now known as SBA FLORIDA PRIME, designated to hold high-quality money-market appropriate securities and fourteen percent was allocated to the Fund B Surplus Funds Trust Fund, now known as SBA Fund B, a fluctuating net asset value pool, designated to hold higher-risk securities such as those in default, having payment extensions or having significant changes in credit risk. In addition, the Investment Pool’s entire November 2007 interest and loan loss reserve was placed in SBA

_JPN HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

Fund B to offset a portion of the lost value. Subsequently, the SBA contracted with a third party administrator to manage SBA FLORIDA PRIME and SBA Fund B.

Fiscal year 2009 and 2008 investment earnings were recorded net of all fair value changes through year- end. As a result, the unrealized loss associated with Fund B was included in the fair value component of investment earnings reported on the Statement of Revenues, Expenses, and Changes in Net Assets.

(3) Accounts Receivable, net

Accounts receivable has three components. The first component consists of customer billings based on metered consumption determined at various dates each month. At fiscal year end, a receivable was recorded and revenue was recognized for the estimated unbilled consumption since the last monthly meter reading. The second component consists of restricted impact fee billings. The third component consists of noncurrent accounts receivable. These receivables represent long-term impact fee charges, impact fee special assessments, reclaimed water improvement special assessments for lawn irrigation and water conservation construction projects, and amounts due from Tampa Bay Water (TBW). The twenty-year impact fee and reclaimed water improvement special assessment receivables are fully guaranteed through a lien on real property and through delinquent ad-valorem tax certificate sales. On September 30, 2009 and 2008, accounts receivable components were as follows:

Customer receivables: 2009 2008 Customer receivables – billed $7,932 $9,744 Customer receivables – unbilled 8,117 7,705 Current-portion long-term receivables 1,186 909 Total customer receivables 17,235 18,358 Less allowance for doubtful accounts 384 350 Net customer receivables 16,851 18,008 Restricted receivables: Impact assessment fees 7,566 1,816 Total restricted receivables 7,566 1,816 Non-current accounts receivable, less current portion: Impact fees 361 291 Special assessment units 93,616 57,814 Tampa Bay Water 14,478 14,978 TBW deferred asset sale gain (5,862) (6,424) Total non-current receivables 102,593 66,659 Total accounts receivable, net $127,010 $86,483

_JPO HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

(4) Due from Other Governments

Due from other governments represents unrestricted special assessment revenues and collection fee refunds due from the Hillsborough County Tax Collector, and restricted amounts due for unreimbursed capital and operating grant expenditures. On September 30, 2009 and 2008, current and restricted amounts due from other governments were $150 and $91, respectively.

(5) Capital Assets

System capital asset activities for the fiscal years ended September 30, 2009 and 2008 were as follows:

(A) Goodwill

As permitted under the election to follow all applicable GASB pronouncements and those applicable non- conflicting and non-contradicting FASB pronouncements issued before November 30, 1989, the System recorded goodwill of $10,155 during fiscal year 2004. This amount represents the excess paid to acquire four independent water and wastewater franchise providers over the fair value of the tangible capital assets acquired and is amortized over thirty-years. The implementation of GASB Statement 51, Accounting and Financial Reporting for Intangible Assets, will have no impact on the System’s goodwill accounting.

(B) Fiscal Year 2009 Changes:

Balance Additions/ Deletions/ Balance 10/01/08 Transfers-in Transfers-out 9/30/09 Capital assets, non-depreciable: Land $40,489 $1 $- $40,490 Construction work in progress 224,058 72,404 209,753 86,709 Total non-depreciable capital assets 264,547 72,405 209,753 127,199 Capital assets, depreciable: Buildings and utility plants 364,981 1,666 - 366,647 Building improvements, as adjusted 768,126 220,761 2,715 986,172 Equipment 22,889 2,410 2,208 23,091 Intangibles-goodwill and ROW 10,155 540 3 10,692 Total depreciable capital assets 1,166,151 225,377 4,926 1,386,602 Less accumulated depreciation: Buildings and utility plants 173,331 9,359 - 182,690 Building improvements 392,673 40,036 2,111 430,598 Equipment 13,262 2,973 2,136 14,099 Intangibles-goodwill 1,573 386 - 1,959 Total accumulated depreciation 580,839 52,754 4,247 629,346 Total depreciated capital assets, net 585,312 172,623 679 757,256 Total capital assets, net $849,859 $245,028 $210,432 $884,455

_JPP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

During fiscal year 2009, substantially completed construction projects of $209,753 were transferred from construction work in progress to building improvements. On September 30, 2009 and 2008, the System’s construction work in progress of $86,709 and $224,058 respectively, related to the expansion of the water and wastewater system to accommodate customer growth and to rehabilitate existing facilities. Projects include installation of new water and sewer lines, reclaimed water distribution facilities, and water and wastewater treatment plant construction and upgrades.

Balance Additions/ Deletions/ Balance 10/01/07 Transfers-in Transfers-out 9/30/08 Capital assets, non-depreciable: Land $40,456 $137 $104 $40,489 Construction work in progress 90,451 180,185 46,578 224,058 Total non-depreciable capital assets 130,907 180,322 46,682 264,547 Capital assets, depreciable: Buildings and utility plants, as adjusted 337,574 27,407 - 364,981 Building improvements 726,241 47,695 5,810 768,126 Equipment 18,978 4,918 1,007 22,889 Intangibles-goodwill 10,155 - - 10,155 Total depreciable capital assets 1,092,948 80,020 6,817 1,166,151 Less accumulated depreciation: Buildings and utility plants, as adjusted 164,437 8,894 - 173,331 Building improvements 358,276 39,722 5,325 392,673 Equipment 11,685 2,499 922 13,262 Intangibles-goodwill 1,243 330 - 1,573 Total accumulated depreciation 535,641 51,445 6,247 580,839 Total depreciated capital assets, net 557,307 28,575 570 585,312 Total capital assets, net $688,214 $208,897 $47,252 $849,859

During fiscal year 2008, substantially completed construction projects of $46,578 were transferred from construction work in progress to buildings and building improvements. September 30, 2008 and 2007, the System’s construction work in progress of $224,058 and $90,451, respectively, related to the expansion of the water and sewer system to accommodate customer growth and to rehabilitate existing facilities. Projects include installation of new water and sewer lines, reclaimed water distribution facilities, and water and wastewater treatment plant construction and upgrades.

_JPQ HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

(6) Current Liabilities

(A) Accounts Payable

Accounts and contracts payable balances on September 30, 2009 and 2008 were as follows:

2009 2008 Vouchers payable $11,917 $28,167 Contracts payable 4,255 7,707 Total accounts and contracts payable $16,172 $35,874

(B) Unearned Revenues

Unearned revenues represent developer advance payments on the accrued guaranteed revenue fee (AGRF). The AGRF reimburses the System for a portion of the capital carrying costs and maintenance expenses incurred and paid by the System to provide the developer access to water and wastewater connections. The deposit is earned when the developer is issued a certificate of occupancy. On September 30, 2009 and 2008, unearned AGRF restricted and unrestricted deposits were $7,457 and $7,896, respectively.

On December 13, 2008, the System’s $75 million Commercial Paper Note Program and supporting Letter of Credit expired. Rather than renew this program, System management will participate in the BOCC’s $300 million County-wide Commercial Paper Note Program to meet future short-term capital funding requirements.

(7) Noncurrent Liabilities

(A) Revenue Bonds

On July 18, 2003, the BOCC issued $50,440 in Junior Lien Refunding Utility Revenue Bonds, Series 2003. Bond proceeds were combined with a bond market issue premium of $6,009 and surplus unrestricted System moneys of $72,883 to refund $112,560 of outstanding Refunding Utility Revenue Bonds, Series 1993, to terminate a forward interest rate swap agreement, and to pay bond issuance costs.

_JPR HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

On May 17, 2001, the BOCC issued $186,105 in Junior Lien Refunding Utility Revenue Bonds, Series 2001, to refund outstanding debt obligations as follows:

$181,145 of outstanding Refunding Utility Revenue Bonds, Series 1991A, issued on September 24, 1991; $13,145 of outstanding Refunding Utility Revenue Bonds, Series 1991B, issued on September 24, 1991; and $18,570 of outstanding Refunding Utility Revenue Bonds, Series 1993, issued on August 12, 1993.

The Series 2001 bonds consist of $186,105 in serial bonds. The interest rate is 5.06% with interest payable semiannually. On September 30, 2009 and 2008, the unpaid principal of the series 2001 bonds, including current maturities of $16,270 and $15,560, respectively, was $80,525 and $106,085, respectively.

(B) Debt Defeasance Transaction

On June 16, 2009, the System, as permitted by the bond resolution, defeased outstanding bonds with unrestricted cash reserves as follows: $24,385 of Refunding Utility Revenue Bonds, Series 2003; and, $10,000 of Refunding Utility Revenue Bonds, Series 2001. The funds were deposited with a trustee and placed in an irrevocable trust account to meet scheduled debt payments until maturity. The purpose of this transaction was to lower the System’s fiscal year 2009 and subsequent fiscal years debt service requirements paid from user fees. On September 30, 2009, these bonds were legally defeased and the related noncurrent liability was removed the System’s Balance Sheet.

While the debt defeasance reduced current and future debt service requirements, it resulted in an accounting loss of $6.8 million. Under governmental accounting rules, the entire $6.8 million loss was recorded as a nonoperating expense on the Statements of Revenues, Expenses, and Changes in Net Assets as the related defeased debt was removed from noncurrent liabilities on the Balance Sheet.

Under the System’s Bond Resolution, R03-112, operating revenues are pledged and distributed as follows: first, to payment of the costs of operations and maintenance; and, second, to annual debt service requirement on the outstanding bonds. More information is provided in the Rate Covenant Test in the Supplemental Information section of this annual financial report.

There are other various requirements relating to the flow and to the amount of money required to be on deposit in bond covenant established accounts. The bonds are collateralized by a pledge of System net revenues and pledged impact fees. The bonds are also collateralized by proceeds from the sale or condemnation of System property and by property and casualty insurance proceeds.

_JPS HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

A summary of the outstanding bonds debt service requirements, including current maturities of $16,270, follows:

Fiscal Year Ending September 30, Principal Interest Total 2010 $16,270 $4,349 $20,619 2011 17,105 3,519 20,624 2012 18,040 2,583 20,623 2013 9,035 1,592 10,627 2014 9,575 1,095 10,670 2015 10,500 570 11,070 Total principal and interest 80,525 $13,708 $94,233 Add deferred bond issuance premiums 1,011 Deduct deferred refunding losses (2,816) Revenue bonds payable, net 78,720 Deduct current maturities 16,270 Noncurrent revenue bonds payable, net $62,450

(D) Compensated Absences Obligation

Governmental accounting rules require recording a liability for unpaid compensated absences. On September 30, 2009 and 2008, the current and noncurrent accumulated compensated absences liabilities were $4,186 and $4,303, respectively.

(E) Changes in Total Noncurrent Liabilities

The change in the System’s total noncurrent liabilities for the fiscal years ended September 30, 2009 and 2008 were as follows:

Fiscal Year 2009 Changes: Balance Balance Due within 10/1/08 Additions Reductions 9/30/09 One year 2001 bonds $106,085 $ - $25,560 $80,525 $16,270 2003 bonds 24,385 - 24,385 - - Deferred bond issuance premiums 3,159 - 2,148 1,011 - Deferred bond refunding losses (9,551) - (6,735) (2,816) - Compensated absences 4,303 2,858 2,975 4,186 2,976 Total noncurrent liabilities $128,381 $2,858 $48,333 $82,906 $19,246

_JPT HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

Fiscal Year 2008 Changes: Balance Balance Due within 10/1/07 Additions Reductions 9/30/08 One year 2001 bonds $120,935 $ - $14,850 $106,085 $15,560 2003 bonds 29,350 - 4,965 24,385 5,210 Deferred bond issuance premiums 4,395 - 1,236 3,159 - Deferred bond refunding losses (13,038) - (3,487) (9,551) - Compensated absences 4,210 2,839 2,746 4,303 2,746 Total noncurrent liabilities $145,852 $2,839 $20,310 $128,381 $23,516

(8) Defeased Debt Summary

On September 30, 2009 and 2008, outstanding principal balances on defeased debt were as follows:

2009 2008 1983 Refunding Utility Revenue Bonds $10,800 $15,465 2001 Refunding Utility Revenue Bonds 10,000 - 2003 Refunding Utility Revenue Bonds 19,175 - Total Defeased Debt $39,975 $15,465

(9) Capital Contributions

Capital contributions for fiscal years 2009 and 2008 were as follows:

2009 2008 Special assessment contributions $43,733 $27,403 Impact fee collections 3,152 2,810 Contributed facilities 9,122 25,323 Capital improvement grants - (473) Total capital contributions $56,007 $55,063

(10) Net Asset Restrictions

Under governmental accounting standards, restricted net assets are either: (a) restricted externally by constraints imposed by creditors through bond covenants, grant agreements and laws; or (b) restricted by enabling legislation to the sole purpose specified by that legislation. The System restricts net assets in accordance with these requirements as follows:

2009 2008 Net assets externally restricted - bond covenants and debt service $30,367 $32,519 Net assets restricted for capital projects 2,319 18,554 Restricted net assets $32,686 $51,073

_JPU HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

(11) Defined Benefit Pension Plan

Plan Description. With a few exceptions, all full and part-time System employees working in regularly established positions are Florida Retirement System (FRS) members. FRS is a cost sharing, multiple- employer, public retirement system administered by the State of Florida. FRS is a defined benefit pension plan, qualified under Section 401(a) of the Internal Revenue Code. As a general rule, FRS membership is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries as well as a Deferred Retirement Option Program (DROP) to participants.

DROP provides payment of FRS member retirement benefits for a maximum of five years. Under this program, an employee may retire and have his benefits accumulate in the FRS Trust Fund, earning interest, while continuing to work for a system employer. When the DROP period ends, employment terminates, the employee receives payment of the accumulated DROP benefits, and the monthly retirement benefits or investment plan withdrawals commence. Benefits are established by Chapter 121, Florida Statutes, and Chapter 22B, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature.

Benefits are computed on the basis of age, average final compensation, and service credit. Average final compensation is the average of the employee's five highest fiscal years of salary earned during credited service. Regular class employees who retire at or after age sixty-two with six-years credited service years or thirty-years credited service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation. Final average compensation is equal to the average of the employee’s five highest years of salary earned during credited service. Vested employees with less than thirty years of service may retire before age sixty-two and receive reduced retirement benefits. A post-employment health insurance subsidy is also provided to eligible retired employees through the FRS in accordance with Florida Statutes. Additionally, the System provides post-employment benefits in the form of a health insurance stipend based on an employee’s years of service. The stipend is provided until the employee qualifies for Medicare.

The State of Florida issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report was for the fiscal year ended June 30, 2009. That report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, 2639 North Monroe Street, Tallahassee, Florida 32399-1560.

Funding Policy. FRS is non-contributory for members. Governmental employers make required FRS contributions based on state-wide contribution rates. FRS establishes contribution rates by calendar year. For fiscal years 2009 and 2008, the contribution rate for the regular job classification was 9.85% of covered payroll. The System's FRS contributions for the fiscal years ended September 30, 2007 through 2009, were $2,967, $3,167, and $3,216, respectively, which equaled each fiscal year’s actuarially determined contribution. All pension expenses and related liabilities are recorded in the financial statements in accordance with governmental accounting requirements.

_JPV HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

The System’s pension expenses and related liabilities, which are included in accrued liabilities at year- end, were reported in conformity with GASB No. 27, Accounting for Pensions by State and Local Governmental Employers.

(12) Other Post-Employment Benefits (OPEB)

GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, requires public sector employers to record an expense for the future portion of post-employment benefits earned by the employee in the current period rather than recognizing these obligations on a “pay as you go” basis.

The BOCC provides the following OPEB to retirees: (a) retirees are permitted to purchase healthcare coverage at the same “group insurance rates” current employees are charged in accordance with Florida Statute 112.0801. Allowing retirees to purchase health insurance at group rates is a benefit and represents an “implicit subsidy” as retirees may purchase health insurance at a cost below the comparable market cost associated with their age category; and, (b) with some exceptions, retirees between the ages of sixty- two and sixty-five are provided a health insurance stipend to partially offset health insurance costs. This benefit is subject to BOCC cancellation at any time.

On September 30, 2009, the BOCC’s annual OPEB cost, as calculated by an independent actuary in accordance with GASB 45, was $5.2 million. This annual cost represents a thirty-year annual funding level that will subsidize all current and future employee as well as earned retiree OPEB benefits including amortization of prior year unfunded OPEB liabilities, if any. For fiscal years 2009 and 2008, the BOCC OPEB liability allocated to and paid by the System was $443 and $437, respectively. For fiscal year 2010, the System’s budgeted OPEB expense is $212.

(13) Outstanding Purchase Orders and Contracts

On September 30, 2009 and 2008 outstanding purchase orders and contracts were $45,057 and $87,219, respectively.

(14) Regional Water Supply Authority

On May 1, 1998, the West Coast Regional Water Supply Authority (WCRWSA) members reorganized in accordance with Section 30, Chapter 97-160, Laws of Florida, and Chapter 373, Florida Statutes. The purpose of the reorganization was to establish a sole water supplier to meet the region's current and future water supply requirements. The reorganization resulted in a forty-year master regional water supply contract and interlocal governance agreement. The WCRWSA was renamed Tampa Bay Water. The new regional water supply agreement obligates Tampa Bay Water to provide water to the members from existing water supply sources and to develop new water supply sources for the future. This new agreement secures the System's ability to meet its customer’s water supply requirements. The new regional water supply agreement commenced on September 29, 1998, to coincide with Tampa Bay Water's issuance of Utility System Revenue Bonds, Series 1998A and 1998B. As a part of the agreement, members agreed to sell certain fixed assets to Tampa Bay Water and Tampa Bay Water agreed to assume

_JQM HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands) all outstanding member debt and to contribute certain fixed assets to the members. Tampa Bay Water purchased capital assets from, and contributed assets to, the BOCC in the amounts of $19,326 and $18,818, respectively. With respect to Tampa Bay Water's $19,326 capital asset purchase, the BOCC agreed to defer this payment by recording a long-term receivable. Payments will be received as water supply purchase credits plus interest over the thirty-year term of Tampa Bay Water’s 1998A and 1998B bond issues. The amount due from Tampa Bay Water on September 30, 2009 and 2008, including current receivable maturities of $499 and $478 respectively, was $14,978 and $15,456, respectively.

This transaction resulted in a $12,926 deferred gain. On September 30, 1998, this gain was recorded as a reduction of Tampa Bay Water’s long-term receivable. The deferred gain will be amortized on the installment method over the thirty-year term of Tampa Bay Water’s 1998A and the 1998B bond issues. The deferred gain on September 30, 2009 and 2008 was $5,862 and $6,424, respectively. For fiscal years 2009 and 2008, the deferred gain amortized to other nonoperating revenues was $562 and $581, respectively.

The BOCC, as one of six participants governing Tampa Bay Water, has a direct ongoing financial responsibility to contractually purchase water solely from Tampa Bay Water. Tampa Bay Water has set water rates to produce sufficient revenue from its members to meet fiscal year 2010 operating costs and debt service requirements. Tampa Bay Water's audited financial statements for the fiscal year ended September 30, 2009, may be obtained from:

Finance Director Tampa Bay Water 2575 Enterprise Road Clearwater, Florida 33763-1102

(15) Contingent Liabilities

(A) Litigation

The System is involved in certain litigation arising in the ordinary course of operations. Management believes, after consulting with legal counsel, that any potential losses would not materially affect the System's financial condition.

(B) State and Federal Grants

Grant funds received and disbursed are for specific purposes and are subject to review by grantor agencies and their independent auditors. Such audits may result in requests for repayments due to disallowed expenditures. Management believes that such repayments, if any, would not materially affect the System's financial condition.

_JQN HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND FINANCIAL STATEMENT NOTES FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 (Amounts in Thousands)

(16) No Commitment Special Assessment Debt

(A) Fiscal Year 2006

On May 3, 2006, the BOCC issued $101.1 million in Capacity Assessment Special Assessment Revenue Bonds, Series 2006, with interest rates from 3.55% to 5.00%. Interest is payable semiannually. Bond proceeds were combined with a market issue premium of $5 million and used to fund a System capital improvement account deposit of $93.8 million, to fund a debt service reserve of $9 million, to fund capitalized interest costs of $3 million, and to pay bond issuance costs of $.3 million. To secure repayment of the bonds, the System irrevocably pledged (“sold”) $97.8 million in long-term impact fee assessment accounts receivable and the related annual special assessment collections of approximately $10 million to the bondholders for the $93.8 million capital improvement account funding. On September 30, 2009 and 2008, the Capacity Assessment Special Assessment Revenue Bonds, Series 2006, outstanding balance was $88,685 and $93,035, respectively.

(B) Fiscal Year 2001

On December 8, 2000, the BOCC issued $4.9 million in Reclaimed Water Special Assessment Revenue Bonds, Series 2000 and $29.6 million in Capacity Assessment Special Assessment Revenue Bonds, Series 2000. These bonds have interest rates that vary from 4.30% to 5.00% with interest payable semiannually. Reclaimed Water Special Assessment net bond proceeds were used to redeem approximately $4 million in outstanding System notes payable. Impact Fee Assessment bond proceeds were used to expand the System’s water and wastewater facilities. Payment of debt service is secured and payable from impact fee assessment unit and reclaimed water improvement unit special assessment revenues. On September 30, 2009 and 2008, the Capacity Assessment Special Assessment Revenue Bonds, Series 2000, outstanding balance was $18,325 and $19,760, respectively; and the Reclaimed Water Improvement Special Assessment Revenue Bonds, Series 2000, outstanding balance was $2,745 and $3,025, respectively.

These no-commitment special assessment debt obligations are not recorded in the County’s financial statements, since neither the BOCC nor the System are legally obligated to repay the bonds.

_JQO

SUPPLEMENTAL INFORMATION

_JQP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND COMPARISON OF ACTUAL REVENUES AND EXPENSES TO BUDGET (BUDGETARY BASIS) UNAUDITED FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 (Amounts in Thousands)

CHANGE POSITIVE BUDGET ACTUAL (NEGATIVE) Operating revenues: Charges for services $ 189,855 $ 175,692, $ (14,163) Operating expenses: Personal services 50,864 47,486 3,378 Contractual services 73,623 68,320 5,303 Communication services 1,632 1,350 282 Fleet services 1,514 1,506 8 Repairs and maintenance 7,674 7,692 (18) Utilities 14,268 10,917 3,351 Supplies 1,870 1,196 674 Other 2,837 2,306 531 Total operating expenses before depreciation and amortization expense 154,282 140,773 13,509 Operating income before depreciation and amortization expense 35,573$ 34,919 (654)$

Depreciation and amortization expense * 52,754 Operating loss (17,835)$

* Depreciation and amortization expenses are not budgeted.

_JQQ EXHIBIT A HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND REFUNDING UTILITY REVENUE BONDS SERIES, 2001 ISSUED MAY 17, 2001 DEBT SERVICE SCHEDULE UNAUDITED (Amounts in Thousands)

FISCAL YEAR PRINCIPAL INTEREST TOTAL 2010 16,270$ 4,349$ 20,619$ 2011 17,105 3,519 20,624 2012 18,040 2,583 20,623 2013 9,035 1,592 10,627 2014 9,575 1,095 10,670 2015 10,500 570 11,070 80,525$ 80,525$ 13,708$ 94,233$

_JQR HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICE ENTERPRISE FUND RATE COVENANT TEST UNAUDITED FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 (Amounts in Thousands)

REQUIREMENTS I II III Operating revenues 175,692$ Plus Investment earnings 12,091 Add Fair value change 492 Less: Investment earnings: Impact fee assessment bond proceeds 16 Impact fee assessment unit non-bonded revenues 69 Impact fee construction accounts 317 Impact fee revenue account 6 Infrastructure assessment non-bonded revenue account 1 Debt defeasance account 3 Debt service sinking fund account 274 RWIU non-bonded revenue account 15 Special assessment revenue installment interest charges 4,314 Gross revenues 183,260$ 183,260$ 183,260$ Pledged available impact fees: Impact fee revenues 3,152 Impact fee assessment unit revenues 6,861 Investment earnings 75 Pledged available impact fees 10,088 10,088 - Total funds available 193,348 193,348 183,260 Funds and deposits required: Total operating expenses 193,527 Less: Depreciation and amortization 52,754 Capitalized operating expenses 1,504 Operation and maintenance costs 139,269 139,269 139,269 Renewal and replacement deposit 9,667 - - Bond service requirements: 2001 bond interest requirement 5,128 2003 bond interest requirement 406 2001 bond principal requirement 15,560 Total bond service requirement (Note 1) 21,094 Less debt service sinking fund investment earnings 274 Total senior lien - bond service requirements 20,820 20,820 20,820 Requirement II - 20% of total bond service requirements - 4,164 - Total funds and deposits required 169,756 164,253 160,089 Funds in Excess of requirements - September 30, 2009 23,592$ 29,095$ 23,171$

Note 1: On June 16, 2009, the System, as permitted under the bond resolution, refunded all outstanding Series 2003 and a portion of outstanding Series 2001 bonds from available unrestricted cash reserves. As a result, the refunding reduced the reduced the System's total fiscal year 2009 bond service obligation paid from user rates by approximately $6 million.

_JQS HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND RATE COVENANT TEST UNAUDITED FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 ______

NOTES ______

This report was prepared in accordance with BOCC Resolutions R03-112, the amended and restated BOCC Utility System Bond Resolution, Article XI, Section 11.02. The following requirements were met for the fiscal year ended September 30, 2009.

I. Gross Revenues together with Pledged Impact Fees, exceeded Required Deposits;

II. Net Revenues, together with Pledged Impact Fees, exceeded 120% of Bond Service Requirements; and,

III. Net Revenues exceeded Bond Service Requirements.

(Net Revenues = Gross Revenues less the Cost of Operations and Maintenance)

_JQT HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND RECONCILIATION OF EXCESS RATE COVENANT TEST FUNDS TO CHANGE IN NET ASSETS UNAUDITED FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 (Amounts in Thousands)

REQUIREMENTS I II III Funds in Excess of Covenant Requirements - September 30, 2009 23,592$ $ 29,095$ $ 23,171$ $ Items considered in determining the change in net assets, but not considered for the rate covenant calculation: Investment earnings on restricted accounts: Debt defeasance account 3 3 3 Impact fee revenue account 666 Impact assessment unit account 69 69 69 Impact fee construction accounts 317 317 317 Impact assessment unit bond proceeds 16 16 16 Infrastructure assessment unit account 111 Reclaimed water improvement assessment unit account 15 15 15 Special assessment revenue installment interest charges 4,314 4,314 4,314 Fair value change (492) (492) (492) Depreciation and amortization (52,754) (52,754) (52,754) Capitalized operating expenses (1,504) (1,504) (1,504) Loss on asset disposal (303) (303) (303) Loss on debt defeasance (6,813) (6,813) (6,813) Nonoperating revenues 3,156 3,156 3,156 Nonoperating expenses (413) (413) (413) Difference between interest expense as reported on the Statement of Revenues, Expenses and Changes in Net Assets and the Rate Covenant Test due to amortization of deferred refunding losses and bond issuance premiums: Rate Covenant Test $5,534 Statement of Revenues, Expenses and Changes in Net Assets 6,814 Difference (1,280) (1,280) (1,280) Items considered for rate covenant requirements, but not considered in determining the change in net assets: Pledged impact fees (10,088) (10,088) - Principal bond service requirements: 2003 bond issue 15,560 15,560 15,560 Additional 20% of bond service requirements - 4,164 - Renewal and replacement account deposit 9,667 - - Capital contributions 56,007 56,007 56,007 Change in net assets - September 30, 2009 39,076$ 39,076$ 39,076$

_JQU HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND COMBINING SCHEDULE OF RECEIPTS AND DISBURSEMENTS FOR ACCOUNTS RESTRICTED BY BOND COVENANT AND BOCC POLICY UNAUDITED FOR FISCAL YEAR ENDED SEPTEMBER 30, 2009

Impact Debt Impact Fee Non- Non- Non- Impact Fee Service Debt Renewal Assm UnitBonded Bonded Bonded Fee Construction Sinking Defeasance and Bond Impact Fee RWIU Infrastructure Total (Amounts in thousands) Revenues Accounts Fund Fund Replacement Proceeds Assmt Units Assmt Units Assmt Units System Balance, October 1, 2008 -$ 18,291$ 3,583$ -$ $ 28,893 $ 265 43$ 202$ 61$ 51,338$ Receipts: Impact fee revenues 3,152 ------3,152 Impact fee investment earnings 6 - - - - - 69 - - 75 GASB 31 - fair value change 7 18 (58) (3) - 1 (14) (1) - (50) Investment earnings - debt service account - - 274 3 - - - - - 277 Investment earnings - construction accounts - 317 - - - 16 - 15 1 349 Other revenues 54 ------54 Proceeds from asset sales - - - - 398 - - - - 398 Special assessment revenues ------6,861 748 6 7,615 Transfers from rate stablization account - - - 37,742 - - - - - 37,742 Transfers from IAU non-bonded account 6,835 ------6,835 Transfer from impact fee account - - 3,790 ------3,790 Transfers from the revenue account - - 17,122 - 10,233 - - - - 27,355 Tampa Bay Water - water purchase credits - - - - 1,238 - - - - 1,238 Total receipts 10,054 335 21,128 37,742 11,869 17 6,916 762 7 88,830 Disbursements: Capital expenditures - 17,331 - - 14,035 282 - - - 31,648 Operating expenditures - - - 45 - - 66 8 - 119 Interest payments - - 5,535 ------5,535 Principal payments - - 15,560 ------15,560 Revenue bonds defeased - - - 37,697 - - - - - 37,697 Other debt service costs - - 88 ------88 Transfers to impact fee account ------6,835 - - 6,835 Transfers to operating and maintenance account 6,210 ------6,210 Transfers to debt service sinking account 3,790 ------3,790 Total disbursements 10,000 17,331 21,183 37,742 14,035 282 6,901 8 - 107,482 Balance, September 30, 2009 54$ 1,295$ 3,528$ -$ $ 26,727 $ - 58$ 956$ 68$ 32,686$

Notes: (A) (B) (A) (A) (A) (B) (B) (1) Investment earnings of $1,422 from the renewal and replacement account were deposited into the revenue account. Restricted net assets: (2) The System's fiscal year 2009 fair value change was $(492) of which $(50) was recorded Bond covenants and debt service (A) 30,367$ in the above accounts and $(442) was recorded in the System's unrestricted accounts. Capital projects (B) 2,319 (3) Restricted by BOCC Policy includes the following accounts: Total 32,686$ Federal and State grants and the System's bond proceed and impact fee funded capital improvement program. _JQV HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND STATISTICAL SECTION UNAUDITED FISCAL YEAR 2009

SECTION CONTENTS

Financial Trends Information: These schedules present comparative financial data over the last nine fiscal years. This provides information to financial statement user concerning the financial management and performance of the System. Schedules: Net Assets Summary Current Ratio Return on Capital Assets Accounts Receivable Collection Days Revenues, Expenses, and Changes in Net Assets Charges for Services - Components Other Revenue Components

Debt Capacity Information: These schedules present the System's comparative outstanding debt and debt service requirements to net assets, charges for services and rate covenant requirements. Schedules: Outstanding Debt Compared to Net Assets Annual Debt Service Compared to Charges for Services Historical Debt Service Coverage

General Operating Statistics: These schedules present key System operating data and general statistics. Capital Assets Operating Staff Number of Customer Accounts Average Daily Flow Operating Costs

_JRM HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Financial Trend Schedules:

Net Assets by Category Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule shows the System's increase in comparative net value (total assets less total liabilities = net assets).

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Invested in capital assets, net of related debt $811,720 $726,046 $545,229 $467,644 $434,986 $405,444 $384,945 $309,172 $257,978 Restricted net assets 32,686 51,073 132,958 157,340 73,570 53,496 64,897 45,678 47,484 Unrestricted net assets 261,674 289,885 341,544 313,058 337,114 319,423 239,001 280,692 241,991 Total net assets $1,106,080 $1,067,004 $1,019,731 $938,042 $845,670 $778,363 $688,843 $635,542 $547,453

Current Ratio Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule shows the System's ability to pay its current liabilities such as accounts payable, payroll, and short-term borrowing costs. The generally accepted current ratio standard is 2:1, whereby current assets exceed current liabilities.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Total current assets $239,585 $336,776 $482,379 $478,811 $348,522 $317,486 $278,383 $321,383 $280,884 Total current liabilities $57,117 $81,974 $70,642 $54,052 $54,721 $44,044 $40,153 $45,755 $32,939 Ratio 4.2:1 4.1:1 6.8:1 8.9:1 6.4:1 7.2:1 6.9:1 7.0:1 8.5:1 _JRN HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Financial Trend Schedules (continued):

Return on Capital Assets Fiscal Years - 2001 through 2009 (amounts in thousands)

Return on capital assets provides a means for evaluating management's effectiveness at generating an operating profit from the amounts invested in capital assets.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Change in net assets $39,076 $47,273 $81,689 $92,372 $67,307 $89,520 $53,301 $88,089 $70,036 Average total capital assets, net $867,157 $769,037 $658,314 $619,669 $603,338 $592,019 $588,440 $570,168 $556,931 Return on Capital Assets 4.5% 6.1% 12.4% 14.9% 11.2% 15.1% 9.1% 15.4% 12.6%

Accounts Receivable Collection Days over 365 Collection Days and Bad Debt Expenses Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule shows the average number of days required to collect charges for services billed to customers and amounts deemed uncollectible.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Charges for services $175,692 $180,715 $188,386 $188,120 $173,094 $163,016 $149,488 $141,712 $134,295 Accounts receivable before allowance $16,103 $17,499 $17,839 $15,640 $15,373 $14,050 $13,628 $12,916 $10,827 Accounts Receivable Collection days 33.0 34.9 34.1 29.9 31.9 31.0 32.8 32.8 29.0 Bad debt expense $453 $395 $472 $463 $229 $328 $221 $180 $307 Percent of charges for services 0.3% 0.2% 0.3% 0.2% 0.1% 0.2% 0.1% 0.1% 0.2% _JRO HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Financial Trend Schedules (continued):

Revenues, Expenses, and Changes in Net Assets Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule presents annual operating data to assist the financial statement user with evaluating the System's annual financial performance.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Operating revenues: Charges for services $175,692 $180,715 $188,386 $188,120 $173,094 $163,016 $149,488 $141,712 $134,295 Operating expenses: Personal services 47,486 45,618 42,625 39,275 36,058 33,155 29,147 26,890 24,683 Contractual services 68,320 73,650 68,063 58,437 55,255 48,520 42,553 36,167 31,575 Communication services 1,350 1,393 1,287 1,178 1,058 941 989 841 770 Fleet services 1,506 2,131 1,701 1,669 1,570 1,426 685 677 733 Repairs and maintenance 7,692 7,903 6,801 6,373 6,640 6,882 8,910 9,352 6,804 Utilities 10,917 10,411 7,822 7,246 5,825 5,192 4,615 4,458 3,865 Supplies 1,196 3,840 5,012 2,804 3,534 1,792 1,203 1,144 1,178 Depreciation and amortization 52,754 51,445 49,846 48,144 47,772 41,929 38,227 34,529 32,449 Other 2,306 2,774 2,429 2,338 3,105 2,255 2,316 1,921 1,845 Total operating expenses 193,527 199,165 185,586 167,464 160,817 142,092 128,645 115,979 103,902 Operating expenses - percentage of revenue 110.2% 110.2% 98.5% 89.0% 92.9% 87.2% 86.1% 81.8% 77.4% Operating (loss) income ($17,835) ($18,450) $2,800 $20,656 $12,277 $20,924 $20,843 $25,733 $30,393 Nonoperating revenues (expenses): Investment earnings 12,091 17,564 28,297 24,928 13,636 10,605 12,434 21,820 28,853 Interest expense (6,814) (10,184) (11,580) (13,042) (14,432) (15,846) (19,071) (19,227) (26,540) Other revenues 3,156 3,822 4,062 4,989 5,016 6,568 8,156 4,215 3,086 Loss on debt defeasance (6,813) ------Other expenses (716) (542) (523) (3,350) (882) (3,999) (1,470) (1,459) (3,685) Total nonoperating revenues (expenses) 904 10,660 20,256 13,525 3,338 (2,672) 49 5,349 1,714 (Loss) income before contributions and transfers (16,931) ($7,790) $23,056 $34,181 $15,615 $18,252 $20,892 $31,082 $32,107 Capital contributions 56,007 55,063 58,633 58,141 49,875 71,163 32,268 56,996 37,926 Transfers in - - - 50 1,817 105 141 11 3 Change in net assets 39,076 $47,273 $81,689 $92,372 $67,307 $89,520 $53,301 $88,089 $70,036 Net assets, beginning of year, as restated 1,067,004 1,019,731 938,042 845,670 778,363 688,843 635,542 547,453 477,417 Net assets, end of year 1,106,080$ $1,067,004 $1,019,731 $938,042 $845,670 $778,363 $688,843 $635,542 $547,453 _JRP HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Financial Trend Schedules (Continued):

Charges for Services - Components Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule identifies the principal components of the System's charges for services.

Restated Restated Restated Restated 2009 PCT 2008 PCT 2007 PCT 2006 PCT 2005 PCT 2004 PCT 2003 PCT 2002 PCT 2001 PCT Water charges $76,203 43.4% $79,101 43.8% $82,788 43.9% $80,008 42.5% $67,638 39.1% $62,982 38.6% $53,793 36.0% $52,579 37.1% $47,056 35.0% Wastewater charges 83,201 47.4% 84,159 46.6% 83,274 44.2% 81,063 43.1% 76,736 44.3% 72,852 44.7% 67,566 45.2% 66,026 46.6% 63,101 47.0% Reclaimed water charges 1,819 1.0% 1,818 1.0% 1,401 0.7% 1,312 0.7% 1,302 0.8% 1,296 0.8% 1,165 0.8% 1,005 0.7% 1,731 1.3% Accrued guaranteed revenue fees 5,030 2.9% 5,840 3.2% 11,063 5.9% 16,056 8.5% 17,841 10.3% 17,579 10.8% 19,053 12.7% 15,215 10.7% 16,067 12.0% Customer billing charges 7,030 4.0% 7,082 3.9% 6,970 3.7% 6,873 3.7% 6,593 3.8% 6,256 3.8% 5,836 3.9% 5,589 3.9% 5,253 3.9% Other general operating revenues 2,409 1.4% 2,715 1.5% 2,890 1.5% 2,808 1.5% 2,984 1.7% 2,051 1.3% 2,075 1.4% 1,298 0.9% 1,087 0.8% Charges for services $175,692 100.0% $180,715 100.0% $188,386 100.0% $188,120 100.0% $173,094 100.0% $163,016 100.0% $149,488 100.0% $141,712 100.0% $134,295 100.0%

Other Non-Operating Revenues Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule identifies the principal components of the System's other nonoperating revenues.

Restated Restated Restated Restated 2009 PCT 2008 PCT 2007 PCT 2006 PCT 2005 PCT 2004 PCT 2003 PCT 2002 PCT 2001 PCT Investment earnings $12,091 17.0% $17,564 23.0% $28,297 31.1% $24,928 28.3% $13,636 19.4% $10,605 12.0% $12,434 16.1% $21,820 26.3% $28,853 41.3% Capital contributions 56,007 78.6% 55,063 72.0% 58,633 64.4% 58,141 66.0% 49,875 70.9% 71,163 80.5% 56,721 73.2% 56,996 68.6% 37,926 54.3% Other general revenues 3,156 4.4% 3,822 5.0% 4,062 4.5% 4,989 5.7% 5,016 7.1% 6,568 7.4% 8,156 10.5% 4,215 5.1% 3,086 4.4% Transfers in 0 0.0% - 0.0% - 0.0% 50 0.1% 1,817 2.6% 105 0.1% 141 0.2% 11 0.0% 3 0.0% Total other non-operating revenues $71,254 100.0% $76,449 100.0% $90,992 100.0% $88,108 100.0% $70,344 100.0% $88,441 100.0% $77,452 100.0% $83,042 100.0% $69,868 100.0% _JRQ HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Debt Schedules:

Outstanding Debt Compared to Net Assets Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule shows the System's outstanding debt as a percentage of its net assets.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Revenue bonds and notes outstanding $80,525 $130,470 $151,628 $171,980 $190,015 $207,555 $224,152 $293,883 $309,610 Net assets $1,106,080 $1,067,004 $1,019,731 $938,042 $845,670 $778,363 $688,843 $635,542 $547,453 Percent 7.3% 12.2% 14.9% 18.3% 22.5% 26.7% 32.5% 46.2% 56.6%

Annual Debt Service Compared to Charges for Services Fiscal Years - 2001 through 2009 (amounts in thousands)

This schedule shows the annual rate covenant debt service requirements as a percentage of annual charges for services.

Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Rate covenant test-bond service requirement $20,820 $26,912 $26,455 $26,506 $27,556 $27,309 $29,616 $29,113 $32,398 Charges for services $175,692 $180,715 $188,386 $188,120 $173,094 $163,016 $149,488 $141,712 $134,295 Percent 11.9% 14.9% 14.0% 14.1% 15.9% 16.8% 19.8% 20.5% 24.1% _JRR HILSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

Debt Schedules (Continued):

Historical Debt Service Coverage Fiscal Years - 2001 through 2009 (amounts in thousands) Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Gross Revenues (1) $183,260 $193,349 $206,971 $202,554 $182,309 $170,338 $159,254 $153,250 $146,591 Less Cost of Operation & Maintenance (3) 139,269 145,429 134,471 118,220 110,271 96,780 87,117 80,956 71,157 Total Net Revenues $43,991 $47,920 $72,500 $84,334 $72,038 $73,558 $72,137 $72,294 $75,434 Pledged Impact Fees (2) 10,088 8,211 11,798 20,535 15,184 19,916 13,099 10,773 15,032 Total Pledged System Revenues $54,079 $56,131 $84,298 $104,869 $87,222 $93,474 $85,236 $83,067 $90,466

Required Deposits Cost of Operation and Maintenance (3) 139,269 145,429 134,471 118,220 110,271 96,780 87,117 80,956 71,157 Bond Service Requirement 20,820 26,912 26,455 26,506 27,556 27,309 29,616 29,113 32,398 Deposit to Renewal and Replacement Account 9,667 10,446 10,161 9,083 8,603 8,083 7,681 7,527 6,845 Total Required Deposits $169,756 $182,787 $171,087 $153,809 $146,430 $132,172 $124,414 $117,596 $110,400

20% of Bond Service Requirements $4,164 $5,382 $5,291 $5,301 $5,511 $5,462 $5,923 $5,822 $6,479

Subordinate Debt Service Requirement - - - $3,778 - - - - - Required Coverage: (A).=> 100% 1.14 1.10 1.28 1.45 1.35 1.44 1.39 1.39 1.46 (B).=> 120% 2.60 2.09 3.19 3.96 3.17 3.42 2.88 2.85 2.79 (C).=> 100% 2.11 1.78 2.74 3.18 2.61 2.69 2.44 2.48 2.33 (D).=> 100% 1.78 1.78 2.74 2.78 - - - - -

(A). Gross Revenues, plus Pledged Impact Fees Divided by Required Deposits (Required Coverage = 1.00). (B). Net Revenues, plus Pledged Impact Fees Divided by Bond Service Requirement (Required Coverage = 1.20). (C). Net Revenues Divided by the Bond Service Requirement (Required Coverage = 1.00). (D). Net Revenues Divided by the Sum of the Bond Service Requirement and Subordinate Debt Service requirement (Required Coverage = 1.00).

(1) Includes meter installation fees and interest income on operating reserves. (2) Impact Fees are pledged to the extent that Wastewater Impact Fees do not exceed the Wastewater Expansion Project Percentage. (3) Includes the Tampa Bay Water contracted water supply cost.

_JRS HILLSBOROUGH COUNTY, FLORIDA WATER RESOURCE SERVICES ENTERPRISE FUND UNAUDITED FISCAL YEAR 2009

General Operating Statistics: Fiscal Years - 2001 through 2009 Restated Restated Restated Restated 2009 2008 2007 2006 2005 2004 2003 2002 2001 Capital Assets: Number of Water Plants 4 3 3 3 3 3 3 3 3 Number of Wastewater Treatment Plants 7 7 7 7 7 7 7 7 7 Water Distribution line miles (estimated) 2,255 2,227 2,192 1,994 1,930 1,910 1,890 1,690 1,690 Wastewater Transmission line miles (estimated) 2,063 2,007 1,864 1,740 1,710 1,680 1,650 1,510 1,400 Reclaimed Water Transmissions line miles (estimated) 328 325 323 310 300 290 280 225 220 Number of Pump Stations 690 682 674 640 622 602 573 500 476

Staffing: Number of budgeted positions per 1,000 customers 4.6 4.7 4.3 4.4 4.5 4.6 4.6 4.7 4.7

Average Number of Customer Accounts Billed Monthly Water Customers 141,615 141,690 141,355 139,609 135,033 128,080 121,521 111,296 104,662 Percent Change -0.1% 0.2% 1.3% 3.4% 5.6% 6.8% (2) 9.5% (1) 3.6% 4.6% Wastewater Customers 131,588 131,890 132,420 130,821 126,308 119,483 113,072 103,711 97,364 Percent Change -0.2% -0.4% 1.2% 3.6% 4.5% 6.8% (2) 7.8% (1) 4.2% 4.6%

(1) Acquisition of 3,500 connections from a private franchise in September 2003 (2) Acquisition of 1,200 connections from a private franchise in April 2004

Use/Flows Annual Water Consumption (thousands of gallons) 16,379 17,014 18,137 17,971 15,633 15,262 13,159 13,885 13,506 Annual Treated Wastewater Flows (thousands of gallons) 12,907 12,434 12,303 12,473 11,873 11,277 10,244 10,127 9,656

Operating Costs (amounts in thousands): Operating Expenses $ 193,527 $ 199,165 $185,586 $167,464 $160,817 $142,092 $128,645 $115,979 $103,902 Less: Depreciation and amortization 52,754 51,445 49,846 48,144 47,772 41,929 38,227 34,529 32,449 Less: Purchased Water 42,733 43,395 41,380 39,326 34,572 31,631 28,022 23,686 20,030 Net Operating Cost $ 98,040 $ 104,325 $94,360 $79,994 $78,473 $68,532 $62,396 $57,764 $51,423 Number of Accounts Billed Annually 1,844 1,845 1,837 1,805 1,728 1,651 1,529 1,453 1,388 Monthly Operating Cost per Statement 53$ 57$ $51 $44 $45 $42 $41 $40 $37

Sources: Water Resources Services Annual Audited Financial Reports for Fiscal Years 2001 through 2009 FAMIS Accounting Data Water Resources Services Operating Data

_JRT (THIS PAGE INTENTIONALLY LEFT BLANK)

APPENDIX C

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

(THIS PAGE INTENTIONALLY LEFT BLANK)

HHIILLLLSSBBOORROOUUGGHH CCOOUUNNTTYY,, FFLLOORRIIDDAA

CCOONNSSUULLTTIINNGG EENNGGIINNEEEERRSS AANNDD BBOONNDD FFEEAASSIIBBIILLIITTYY RREEPPOORRTT For the Issuance of

UTILITY REVENUE BONDS, SERIES 2010A (Tax-Exempt)

UTILITY REVENUE BONDS, SERIES 2010B (Federally Taxable-Build America Bonds-Direct Payment)

and

UTILITY REVENUE BONDS, SERIES 2010C (Federally Taxable Recovery Zone Economic Development Bonds-Direct Payment)

Appendix C

August 2, 2010

Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants

`JN

Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants

August 2, 2010

The Honorable Chairman and Board of County Commissioners Hillsborough County 601 E. Kennedy Boulevard Tampa, FL 33601

Subject: Consulting Engineers and Bond Feasibility Report – Utility Revenue Bonds, Series 2010A, Utility Revenue Bonds, Series 2010B, and Utility Revenue Bonds, Series 2010C

Ladies and Gentlemen:

Presented herein is a joint Consulting Engineers and Bond Feasibility Report (the "Report") prepared by Brown and Caldwell (the "Consulting Engineer") in its capacity as the consulting engineer to Hillsborough County, Florida (the "County") and Public Resources Management Group, Inc. (the "Feasibility Consultant") in its capacity as the feasibility consultant to the County for inclusion in the Official Statement that summarizes our analyses, studies and conclusions with regard to the proposal by the County to issue approximately $19,385,000[1] Utility Revenue Bonds, Series 2010A (Tax-Exempt) (the "Series 2010A Bonds"), approximately $108,915,000[1] Utility Revenue Bonds, Series 2010B (Federally Taxable-Build America Bonds- Direct Payment) (the "Series 2010B Bonds"), and approximately $21,700,000[1] Utility Revenue Bonds, Series 2010C (Federally Taxable Recovery Zone Economic Development Bonds-Direct Payment) (the "Series 2010C Bonds" and collectively with the Series 2010A Bonds and the Series 2010B Bonds, the "Series 2010 Bonds"). The County plans to issue the Series 2010 Bonds, together with the use of available other funds, to: i) fund certain capital improvements to the water, wastewater, and reclaimed water system (the "2010 Project"); ii) fund a deposit to the debt service Reserve Account equal to the Reserve Account Requirement for the Series 2010 Bonds; iii) pay the interest expense on the Series 2010 Bonds through August 1, 2013; and iv) pay certain expenses related to the issuance and sale of the Series 2010 Bonds. Capitalized undefined terms referenced in this letter shall have the meaning ascribed thereto in the Bond Resolution as defined later in this Report.

[1] Preliminary, subject to change.

341 N. MAITLAND AVENUE, SUITE 300 850 TRAFALGAR COURT, SUITE 300 MAITLAND, FL 32751 MAITLAND, FL 32751 TELEPHONE: (407) 628-2600 y FAX: (407) 628-2610 TELEPHONE: (407) 661-9524 y FAX: (407) 661-9599 EMAIL: [email protected] EMAIL: WWW.BROWNANDCALDWELL.COM

`JO The Honorable Chairman and Board of County Commissioners Hillsborough County August 2, 2010 Page 2

The primary purpose of this Report is to present a summary description of the existing County water, wastewater, and reclaimed water systems (the "System") and to summarize the financial projections of the County's System for the fiscal years ending September 30, 2010 through September 30, 2015 (the "Forecast Period") and the ability of the revenues derived from System operations to meet the expenditure and funding obligations of such System. The Report includes, among other things, a discussion of: i) current management and operation of the System; ii) the System service areas; iii) the facilities that comprise the System and a general assessment of the general condition of the facilities and compliance with regulatory and permit requirements; iv) projections of customer growth and capacity needs; v) the schedule of currently effective rates and fees for service; vi) the projects to be financed by the Series 2010 Bonds, as well as other sources; and vii) the recent historical and projected financial operating results of the System. The forecast of operating results include projections of the ability of the System to meet the rate covenant requirements as delineated in The Amended and Restated Utility System Bond Resolution No. R03-112 adopted by the Board of County Commissioners of Hillsborough County (the "Board") on June 4, 2003, as supplemented by Resolution No. R03-116 dated June 4, 2003 and as amended and supplemented from time to time (collectively, the "Bond Resolution") authorizing the issuance of the Series 2010 Bonds.

Findings and Conclusions Based upon the principal considerations and assumptions and the results of our studies and analyses, as summarized in this Report, which should be read in its entirety in conjunction with the following, we are of the opinion that:

1. Based upon the intended use of the System facilities, general field observations of the aboveground facilities, discussions with the Public Utilities Department (Water Resource Division) (referred to in the Bond Resolution and the Report as the "Department") staff, and a review of documents, permit data, and System reports filed with regulatory agencies, the existing facilities of the System appear to be in good to above-average condition. The System appears to be properly operated in accordance with prudent utility practice, and can reasonably be expected to provide sufficient and reliable service to meet the existing requirements of the utility.

`JP The Honorable Chairman and Board of County Commissioners Hillsborough County August 2, 2010 Page 3

3. The System has the regulatory permits (or has applied for timely renewals) necessary for the operation of the facilities and is expected to receive all permits necessary for continued operations. The only item that has come to the attention of the Consulting Engineer that has the potential to negatively affect wastewater effluent compliance with regulatory agencies, is that of the proposed numeric nutrient water quality criteria that was signed by and sent to the Federal Register for publication by the Environmental Protection Agency (EPA) on January 14, 2010.

5. The System, taking into account expansion related improvements as discussed later in this Report, will have sufficient capacity to meet the service area needs through September 30, 2015, the last year of the financial forecast included in this Report, based on the customer and sales forecast assumed for the purposes of this Report.

7. The projected growth in customers and usage of the System represent reasonable and attainable projections for the purposes of this Report.

8. The projected growth in Operating Expenses represents reasonable projections for the purposes of this Report.

9. The System revenues for the Fiscal Years ending September 30, 2010 through September 30, 2015 under the County approved rates contained in the County’s Rate Resolution as defined hereafter in the Report, which assumes the annual application of a price index (inflationary) rate adjustment as contained in the County’s Index Resolution adopted by the Board on May 20, 2009 and the annual application of the Purchased-Water Pass-Through Consumption Charge as defined or discussed hereinafter in the Report, should be sufficient to pay the projected Cost of Operation and Maintenance, pay the estimated Bond Service Requirement on the Outstanding Bonds and anticipated Series 2010 Bonds coming due in such years, and make the projected deposits to the Renewal and Replacement Account which is available for paying the cost of the replacement of capital

`JQ The Honorable Chairman and Board of County Commissioners Hillsborough County August 2, 2010 Page 4

assets of the System or any unusual, unanticipated or extraordinary maintenance or repairs to the System.

10. Based on the assumptions identified in this Report, the Pledged Revenues of the System are projected to be in compliance with the rate covenant as contained in the Bond Resolution.

11. The approved rates for water and wastewater service are considered comparable to charges for similar service provided by other publicly-owned utilities located in proximity to the County in the central and southwestern portions of Florida. Based on the assumptions presented in this Report, no additional rate increase above the annual price index (inflationary) allowance and Purchased-Water Pass-Through Consumption Charge adjustment has been projected or assumed to meet the annual expenditure requirements of the System or meet the rate covenant requirements defined in the Bond Resolution. The anticipated price index rate and Purchased-Water Pass-Through Consumption Charge adjustments as represented in this Report are not expected by the Department to negatively affect the competitiveness of the County's monthly user rates over the Forecast Period.

12. The Water and Wastewater System Capacity Fees (referred to in the Rate Resolution as "Impact Fees") are comparable to the fees charged by neighboring utilities. The Feasibility Consultant considers the Capacity Fees to be reasonable and was based on the utility plant in service and the capital requirements of the System contained in the System's adopted capital improvement plan at the time of fee determination. Based on discussions with Department staff, the application of the Capacity Fees is not expected to negatively affect System growth.

(Remainder of page intentionally left blank)

`JR The Honorable Chairman and Board of County Commissioners Hillsborough County August 2, 2010 Page 5

The financial projections in the Report, associated with the issuance of the Series 2010 Bonds, were based on discussions with and information provided by the County, the financial advisors for the County, as well as certain assumptions and analyses made by us with respect to such financial projections. The ability of the System to meet the debt service requirements and comply with the rate covenant set forth in the Bond Resolution are subject to the assumptions and considerations identified in the Report and information obtained during preparation of the Report regarding the System and the respective financial projections as presented therein. As such, the Report should be read in its entirety with respect to such projections.

Respectfully submitted, Public Resources Management Group, Inc. Brown and Caldwell

Robert J. Ori James H. Peters, P.E. President Senior Consultant

Echo M. Peacock June A. Smith, P.E. Rate Analyst Principal Engineer

RJO/dlc Attachments

`JS

HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

TABLE OF CONTENTS

Title Page No.

Letter of Transmittal Table of Contents ...... i List of Tables and Figures...... v

Introduction ...... 1 Hillsborough County ...... 4 Government Structure ...... 5 Utility Management and Administration ...... 6 Utility Organization ...... 7 The System...... 14 Water System Overview ...... 15 Wastewater System Overview ...... 15 Reclaimed Water System Overview ...... 16 Service Area Agreements ...... 16 Water System ...... 18 Potable Water Supply ...... 18 Potable Water System ...... 22 Potable Water Treatment Plants ...... 24 Existing Water Storage Facilities ...... 25 Water Distribution System ...... 26 Re-pump Station ...... 27 Operational Performance of Potable Water System ...... 27 Regulatory Status of Potable Water System ...... 28 Condition of Potable Water System ...... 29

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HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

TABLE OF CONTENTS (cont'd.)

Title Page No.

Wastewater System ...... 29 Wastewater Treatment Plants ...... 29 Wastewater Gravity Mains and Manholes ...... 33 Wastewater Pumping Stations and Forcemains ...... 35 Operational Performance of Wastewater Treatment Plants ...... 36 Regulatory Status of Wastewater System ...... 36 Wastewater Collection System (MOM) Program ...... 39 Condition of Wastewater System ...... 39 Reclaimed Water System ...... 39 Reclaimed Water Pump Stations ...... 40 Reclaimed Water Distribution System ...... 43 Operational Performance ...... 43 Regulatory Status Summary ...... 44 Condition of Reclaimed Water System ...... 44 Capital Improvement Program (CIP) ...... 44 General ...... 44 The 2010 Project ...... 45 Potable Water Projects ...... 50 Wastewater Projects ...... 51 Reclaimed Water Projects ...... 55 Other System Projects ...... 56 Ability to Implement Identified Projects ...... 56 Funding Sources for Capital Program ...... 57 Renewal and Replacement Fund Summary ...... 58

-ii- `JU

HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

TABLE OF CONTENTS (cont'd.)

Title Page No.

Historical and Projected System Sales and Customer Usage Statistics ...... 59 General ...... 59 Water System ...... 60 Wastewater System ...... 67 Customers Served ...... 72 Reclaimed Water System ...... 73 Ten Largest Customers of the System ...... 76 Rates, Fees, and Charges ...... 76 General ...... 76 Water and Wastewater Rates ...... 77 Annual Purchased-Water Pass-Through Consumption Charge ...... 79 Annual Price Index Adjustment ...... 79 Impact (Capacity) Fees and Accrued Guaranteed Revenue Fee ...... 80 Reclaimed Water Service ...... 80 Miscellaneous Service Charges ...... 81 Customer Deposit and Billing Procedures ...... 81 Water Meter Installation Charges ...... 82 Line Extension Charges ...... 83 Other Miscellaneous Service Charges ...... 83 Fire Protection Charges ...... 85 Emergency Water Conservation Charges ...... 86 Rate Comparisons ...... 86

-iii- `JV

HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

TABLE OF CONTENTS (cont'd.)

Title Page No.

Historical Operating Results ...... 89 General ...... 89 Summary of Historical Operating Results ...... 90 Issuance of Additional Bonds ...... 94 Projected Operating Results ...... 99 General ...... 99 Principal Considerations and Assumptions Regarding Projected Operating Results ...... 100 Summary of Projected Operating Results ...... 123 Findings and Conclusions ...... 125

-iv- `JNM

HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

LIST OF TABLES AND FIGURES

Table No. Description 1 Summary of Historical Customer Statistics and Sales – Water System 2 Summary of Historical Customer Statistics and Sales – Wastewater System 3 Summary of Historical Customer Statistics and Sales – Reclaimed Water System 4 Summary of Projected Customer Statistics – Water System 5 Summary of Projected Customer Statistics – Wastewater System 6 Summary of Projected Customer Statistics – Reclaimed Water System 7 Summary of Historical Operating Results and Bond Service Coverage 8 Summary of Capital Improvement Project – Appropriations Basis 9 Summary of Projected Operating Expenses for the Forecast Period 9A Summary of Projected Operating Expenses for the Forecast Period – Escalation References 10 Summary of Projected Operating Results and Bond Service Coverage 11 Summary of Projected Cash, Interest Income, and Investments for the Forecast Period 12 Comparison of Typical Monthly Residential Bills for Water Service 13 Comparison of Typical Monthly Residential Bills for Wastewater Service 14 Comparison of Typical Monthly Residential Bills for Water and Wastewater Service 15 Comparison of Typical Monthly Residential Bills for Reclaimed Water Service 16 Comparison of Capital Facility Charge for Water and Wastewater Service

Figure No. Description Page 1 Location of Hillsborough County within Florida 4 2 Department Organizational Chart for Fiscal Year 2010 8 3 Potable Water Service Areas and Major Facilities 23 4 Wastewater Service Areas and Treatment Facilities 30

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HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, AND UTILITY REVENUE BONDS, SERIES 2010C

INTRODUCTION Presented herein is a joint Consulting Engineers and Bond Feasibility Report (the "Report") prepared by Brown and Caldwell (the "Consulting Engineer") in its capacity as the consulting engineer to Hillsborough County, Florida (the "County") and Public Resources Management Group, Inc. (the "Feasibility Consultant") in its capacity as the feasibility consultant to the County. The Report summarizes our analyses and studies with regard to the proposal by the County to issue in the principal amount of $19,385,000[1] Utility Revenue Bonds, Series 2010A (Tax-Exempt) (the "Series 2010A Bonds"), approximately $108,915,000[1] Utility Revenue Bonds, Series 2010B (Federally Taxable-Build America Bonds-Direct Payment) (the "Series 2010B Bonds"), and approximately $21,700,000[1] Utility Revenue Bonds, Series 2010C (Federally Taxable Recovery Zone Economic Development Bonds-Direct Payment) (the "Series 2010C Bonds" and collectively with the Series 2010A Bonds and the Series 2010B Bonds, the "Series 2010 Bonds"). The Series 2010 Bonds are being issued under the authority of The Amended and Restated Utility System Bond Resolution No. R03-112 adopted by the Board of County Commissioners of Hillsborough County (the "Board") on June 4, 2003, as supplemented by Resolution No. R03-116 dated June 4, 2003 and as amended and supplemented from time to time (collectively, the "Bond Resolution") authorizing the issuance of the Series 2010 Bonds. For a more complete description of the Bond Resolution, please refer to Appendix "D" – "Form of the Resolution" in the Official Statement relating to the Series 2010 Bonds. Capitalized, undefined terms used in this Report shall have the meaning ascribed thereto in the Bond Resolution.

The County plans to issue the Series 2010 Bonds, together with other available funds, to: i) fund certain capital improvements to the water, wastewater, and reclaimed water system (the "2010 Project"); ii) fund a deposit to the debt service Reserve Account equal to the Reserve Account Requirement for the Series 2010 Bonds; iii) pay the interest expense on the Series 2010 Bonds through August 1, 2013; and iv) pay certain expenses related to the issuance and sale of the Series 2010 Bonds. The Series 2010 Bonds are being issued on a parity basis with the County's outstanding Junior Lien Refunding Utility Revenue Bonds, Series 2001 (the "Outstanding Bonds" and including the Series 2010 Bonds, the "Bonds"). Payment of Bonds issued by the County, together with the interest thereon, shall be payable solely from, and secured equally by, a lien on the Pledged Revenues (as such term is defined in the Bond Resolution) of the County's water, wastewater, and reclaimed water system (the "System"). Neither the credit nor taxing power of Hillsborough County will be pledged for the debt repayment of the Bonds.

[1] Preliminary; subject to change.

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The primary purpose of this Report is to present a summary description of the System and to summarize the financial projections of the County System for the fiscal years ending September 30, 2010 through and including 2015 (the "Forecast Period") and the ability of the revenues derived from System operations to meet the expenditure and funding obligations of such System. The Report includes, among other things, a discussion of the: i) current management and operation of the System; ii) System service areas; iii) facilities that comprise the System and an assessment of the general condition of the facilities and compliance with regulatory and permit requirements; iv) projections of customer growth and capacity needs; v) schedule of currently effective rates and fees for service; vi) projects to be financed by the Series 2010 Bonds, as well as other sources; and vii) recent historical and projected financial operating results of the System.

Brown and Caldwell (the "Consulting Engineer") was responsible for coordinating the review of the System as it related to the organization, permitting, regulation, and general condition of the System. Brown and Caldwell is an environmental and infrastructure consulting engineering firm that provides water and sewer management system planning, permitting, design, construction administration and operational assistance to counties, municipal governments, and other public agencies. Brown and Caldwell is a professional engineering firm that has a favorable reputation for skill and expertise in design, construction, and operation of facilities comparable in size and character to the System. Brown and Caldwell staff is familiar with the Department and the System, having previously served as Bond Engineer for Hillsborough County for the periods between 1991-1997 and 2004-2009.

With respect to the evaluation of the condition of the System and based on their experience working with the County as the Consulting Engineer, Brown and Caldwell has performed a general due diligence investigation of the System. Included in this investigation was a review of available reports and documents, a visual field review of the System, review of Florida Department of Environmental Protection (FDEP) and Southwest Florida Water Management District (SWFWMD) permit records, and meetings and discussions with affected parties. The field review of the facilities performed by Brown and Caldwell involved a walk-through evaluation of most major aboveground structures, buildings and equipment, including water and wastewater treatment facilities, storage tanks, and water pumping stations. Based on Brown and Caldwell's review and general understanding of the System, the overall System is considered to be in good to above-average condition, is functioning as intended, and it appears that the System does not have any major deficiencies. This was confirmed with interviews with Department staff, a review of the applicable System reports and field inspections while serving as the Bond Engineer. Brown and Caldwell did not perform an inspection of the existing water distribution, wastewater collection and other associated belowground facilities nor did it include independent reviews of any engineering matters related to such facilities. Accordingly, nothing in this Report is intended to indicate conformance with respect to the physical aspects of the System's belowground facilities.

Public Resources Management Group, Inc. (PRMG) (the "Feasibility Consultant"), was responsible for the compilation of the historical customer, operating and financial results, and the operating and financial projections of the System. PRMG, a recognized utility management consulting firm, specializes in the development of rates, charges, and financial projections for

-2- `JNP

publicly-owned and not-for-profit utility systems, primarily in Florida. The firm has been involved in a number of utility financings involving the preparation of financial forecasts on behalf of local governments and utility corporations in Florida that are issuing utility bonds secured for repayment by the revenues of such utility. The firm has provided utility rate and consulting services on behalf of the System on an ongoing basis since 1995.

In preparation of this Report, Brown and Caldwell and PRMG have relied upon financial, statistical and operational data regarding the System derived from: i) operating reports and records prepared by the Department management and staff; ii) information presented in operating and financial records and the Annual Financial Reports (annual audits) prepared by the County; and iii) other information provided by the County and Public Utilities Department (Water Resource Division) (referred to in the Bond Resolution and the Report as the "Department"). In addition, we have been furnished information, assumptions, and projections from the Department and others, including the estimated levels of debt service requirements by the County's Financial Advisors, and we have utilized information obtained from other utility systems in Florida and other sources. Brown and Caldwell and PRMG believe the sources of such information, assumptions, and projections to be reasonable for the purposes of this Report. We have no reason to believe that such information is unreliable for purposes of this Report. The actual results achieved during the Forecast Period reflected in this Report may vary from those projected and such variations could be material. Such projections are, therefore, subject to adjustment and we can give no assurances that the projections will be realized.

This Report was prepared for the County in accordance with professional standards at the time the services were performed and in accordance with the contract between the County and its consultants responsible for this Report. This document is governed by the specific scope of work authorized by the County; it is not intended to be relied upon by any other party except for prospective bond purchasers contemplated by the scope of work. We have relied on information or instructions provided by the County and other parties and, unless otherwise expressly indicated, have made no independent investigation as to the validity, completeness, or accuracy of such information.

This document sets forth the results of certain services performed by Brown and Caldwell as the Consulting Engineer with respect to the property or facilities described herein (the "Property"). The County recognizes and acknowledges that these services were designed and performed within various limitations, including budget and time constraints. These services were not designed or intended to determine the existence and nature of all possible environmental risks (which term shall include the presence or suspected or potential presence of any hazardous waste or hazardous substance, as defined under any applicable law or regulation, or any other actual or potential environmental problems or liabilities) affecting the Property.

This Report summarizes the results of our studies and analyses up to the date of this Report. Prospective purchasers of the Series 2010 Bonds should not rely upon the information contained in this Report for a current description of any matters set forth herein as of any date subsequent to the date of this Report. Changed conditions occurring or becoming known after such date could affect the material presented herein to the extent of such changes.

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The Report provides a discussion of the: i) the System facilities in service including compliance with operating and other regulatory permits and statistics regarding capacity utilization and availability; ii) the capital improvement program identified by the County, of which a portion (the 2010 Project) will be funded from the proceeds of the Series 2010 Bonds; iii) a review of the System rates, fees and charges for utility service rendered by the County; iv) projections of customers served and service area needs; v) a presentation of the historical operating results of the System; and vi) a forecast of anticipated financial operations and the ability of the estimated Pledged Revenues to meet the rate covenant requirements set forth in the Bond Resolution during the Forecast Period.

HILLSBOROUGH COUNTY

Figure 1 The County is located midway along the Central West coast Location of Hillsborough County of Florida as shown on Figure 1. The County’s boundaries embrace 1,048 square miles of land and 24 miles of inland water for a total of 1,072 square miles. With the largest bay in Florida opening to the Gulf of Mexico, its coast spans 76 miles. The major rivers in the County are the Hillsborough, Alafia and the Little Manatee, all of which flow into Tampa Bay. The unincorporated area encompasses 87% of the total County land area. The municipalities of Tampa (the County Seat), Temple Terrace, and Plant City account for the remainder of the land area.

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According to the latest estimates prepared and published by the University of Florida’s Bureau of Economic and Business Research (BEBR) as reported in the Florida Statistical Abstract 2008 dated October 2008, the County's total population as of April 1, 2008 was 1,199,186 making it the fourth most populous county in the State of Florida. Based on information from the Florida Legislative Office of Economics and Demographic Research, the total population of Hillsborough County was estimated to be 1,201,681 in 2009. The County’s population is estimated to have grown from 998,948 (2000 Census) to 1,201,681 persons in 2009, which represents an overall increase of 20% or 22,525 persons per year.

The County reports that it has a diversified economic base including a large service sector, a large manufacturing sector, and a thriving retail trade sector. According to 2007 information published by The Greater Tampa Chamber of Commerce, the five largest employers in the public sector are Hillsborough County School Board followed by MacDill Air Force Base, the University of South Florida, Hillsborough County government, and Tampa International Airport. Major private-sector employers are Verizon Communications (telecommunications), St. Joseph's Hospital (medical facility), JP Morgan Chase (Financial Services), Verizon Information Technologies, Publix Supermarkets, Bank of America (banking services), Outback Steakhouse (restaurants), and Tampa Electric Corporation (electric utility).

According to the Greater Tampa Chamber of Commerce, the Port of Tampa is designated as a foreign trade zone and handles 50 million tons of cargo per year and is the largest cargo volume port in Florida. The 5,000 acre port is home to 250 businesses and more than 22,000 workers. It has a 43-foot deep main channel and one of the largest ship building and repair centers in the Southeast. The Garrison Seaport Center is a cruise terminal and entertainment complex. Along with the Florida Aquarium, it is helping spur redevelopment in the area known as the Channel District.

Another significant element of the economy is agriculture. The County's total agricultural production ranks 4th in the state and 59th out of 3,076 counties in the United States as reported by Hillsborough County. The County ranks number two in Florida for the number of farms. In 2008, sales of crops were estimated at $803 million. The crop with the highest sales in 2008 was strawberries.

Tourism is another major component of the economy. The number of tourists visiting Florida is expected to continue growing. Busch Gardens of Tampa is one of the leading tourist attractions in the nation. There are numerous other attractions in Hillsborough County such as the Florida Aquarium, the Museum of Science and Industry, the Lowry Park Zoo, the New York Yankees spring training facility, the Tampa Bay History Museum and the St. Petersburg Times Forum in downtown Tampa. The County is also the home of the 2003 Super Bowl Champions, the Tampa Bay Buccaneers, as well as the 2004 National Hockey League Stanley Cup Champion, the Tampa Bay Lightning.

GOVERNMENT STRUCTURE A political subdivision of the State of Florida, the County is guided by an elected seven-member Board of County Commissioners (the "Board"). Through partisan elections, three are elected to represent the entire County as a district and four are elected to represent single-member districts.

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Under a Charter Ordinance effective May 1985, the Board is restricted to performing the legislative functions of government by developing policy for the management of the County. The County Administrator, a professional appointed by the Board, and their staff are responsible for the implementation of those polices. A 2002 charter amendment created the position of County Internal Performance Auditor reporting to the Board of County Commissioners. Another charter amendment approved by referendum in 2004 has the County Attorney directly reporting to the Board. The Board is responsible for functions and services delivered throughout the County including municipalities and for municipal services to residents and businesses in the unincorporated area. The Countywide responsibilities include such services as local social services, health care for the medically indigent, animal services, mosquito control, consumer protection, and a regional park system. Its responsibilities to the residents and businesses in the unincorporated area include, for example, fire protection, local parks, emergency medical services, planning, zoning, and code enforcement.

The Board also serves as the Environmental Protection Commission. Individual Board members serve on various other boards, authorities, and commissions, such as the Hillsborough Area Regional Transit Authority, Tampa Bay Regional Planning Council, Tampa Bay Water, Aviation Authority, Expressway Authority, Sports Authority, Arts Council, Drug Abuse Coordinating Council, Metropolitan Planning Organization Council of Governments, and the Committee of 100 of the Greater Tampa Chamber of Commerce. The Board appoints the County Administrator who is responsible for carrying out all decisions, policies, ordinances, and motions of the Board. The departments under the County Administrator are responsible for providing services such as social services and public assistance to residents countywide. These departments are also responsible for providing municipal-type services to residents of the unincorporated areas of Hillsborough County such as road construction and maintenance, solid waste disposal, fire and emergency rescue services, parks and recreation, code enforcement and water and wastewater treatment. In addition to the members of the Board, citizens also elect five Constitutional Officers which include the Tax Collector, Property Appraiser, Clerk of the Circuit Court, Sheriff, and Supervisor of Elections. These Officers are not governed by the Board, but the County funds all or, in some cases, a portion of the operating budgets of these Constitutional Officers. The Constitutional Officers maintain separate accounting systems and expanded budget detail information. Citizens also elect the State Attorney and the Public Defender. Based on the extent of budgetary authority, taxing authority, the ability to obligate funds to finance any deficits and the ability to fund any significant operational subsidies, several other governmental entities also have their budgets reviewed and approved by the Board of County Commissioners. These are the Environmental Protection Commission, the Civil Service Board, the Planning Commission, the Legislative Delegation, Soil and Water Conservation Board, Metropolitan Planning Organization and the Law Library Board.

UTILITY MANAGEMENT AND ADMINISTRATION The Department is responsible for providing customers primarily located within unincorporated areas of the County with: (1) potable water treatment and distribution; (2) wastewater collection, treatment, and disposal; and (3) production and distribution of reclaimed water for irrigation and other non-potable purposes. The Department reports to the County Administrator. The mission of the Department is:

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"To protect the health & safety of our customers by providing high quality drinking water and wastewater treatment with beneficial use of reclaimed water."

The Department provides essential water, wastewater and reclaimed water services to customers for quality of life and to meet the requirements for a Certificate of Occupancy. The primary clients of the System are customers that require service now or in the future. Customers include residents and existing commercial establishments and businesses, developers and builders. Other stakeholders include Bondholders, Commissioners, sister agencies (e.g., Public Works) and neighboring utilities.

The utility service areas served by the System are collectively referred to as the Urban Services Area. The Urban Services Area is made up of two distinct geographic regions: i) the Northwest service area, with an area of about 87 square miles; and ii) the South-Central service area, with an area of approximately 193 square miles. Figures 3 and 4 included later in this Report illustrate the location of the County's utility service for the respective water and wastewater systems and the utility service areas for the other municipal utility systems located within the County. The Department has the exclusive right to provide water, wastewater, and reclaimed water within the Urban Service Area when it is not provided by a municipality or by a private utility that is franchised by the County. Currently, the Department reports that there are seven (7) utility franchises located in the County that approximate 3,500 water and wastewater customers (a small percentage of the population in the Urban Services Area). Based on the exclusive right and responsibility to provide service within the Urban Service Area, there is no opportunity for any additional entities to provide utility service within the Urban Service Area without the consent of the County.

Utility Organization The organization of the Department includes a Utility Director and managers who have experience in utility management, engineering, financing, and operations. Figure 2 shows the Fiscal Year 2010 Department Organizational Chart.

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Figure 2. Department Organizational Chart for Fiscal Year 2010

Note: circled amounts represent number of budgeted employees per specific core group or division.

A brief biography for personnel strategically involved in the management of the utility is presented in the following paragraphs.

Mr. Paul J. Vanderploog is the Director of the Public Utilities Department. Mr. Vanderploog was born and raised in Rochester, New York and was awarded a Bachelor of Science Degree in Business (Production Management) from Syracuse University. Mr. Vanderploog also holds a Masters Degree in Management from Virginia Commonwealth University. He also is a graduate of the Industrial College of the Armed Forces, U.S. Marine Corps Command and Staff College, and the Army Logistics Management Center, and participated in the Senior Executive Management Training Program, Ashridge Management College, in London, England. Upon graduation from Syracuse University, Mr. Vanderploog pursued a military career that ultimately spanned over 33 years of service. Major General Vanderploog (U.S. Army) was retired from the active roles in 1996. Following his military service, Mr. Vanderploog served as an independent management consultant in Central Asia and equatorial Africa from 1996 to 1998. In this endeavor, he was instrumental in furthering democratization and the development of enhanced management skills and systems in developing nations. Mr. Vanderploog joined the County as the Manager of the West Service Unit, Public Works Department in October 1998. While there, Mr. Vanderploog accomplished a restructuring of the organization and implemented an innovative Neighborhood Servicing Program, a partnering venture with neighborhoods to

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improve maintenance of County assets and customer relations. Mr. Vanderploog served from June 2000 through July 2004 as the Director of Transportation Maintenance in the Public Works Department. Among his many accomplishments, he developed and implemented a new, comprehensive maintenance management system, brought the Right of Way Management Office to fruition, and added new facilities and equipment vital to mission success. All of these initiatives supported the County’s Performance Excellence Program and provided enhancements to productivity and the efficiency of maintenance operations. Most recently, Mr. Vanderploog was appointed Director of the Public Utilities Department in June 2010. He will continue to oversee the Water Resource Division where he has previously served as department director since July 2004. While serving as department director of Water Resource Services, Mr. Vanderploog launched a full-scale restructuring and revitalization of the department to include a major expansion and renewal of the utility's infrastructure and the fielding of a comprehensive work management / customer care and billing system. Numerous structural and management changes have become the cornerstone of a new way of doing business and the foundation for enhanced operational effectiveness in support of the County’s strategic plan. Mr. Vanderploog has been recognized by the Department of Defense and the U.S. Army for Distinguished Service, received the Distinguished Service Medal of the State of Alabama and the Commander’s Cross of the Order of Merit, presented by the Federal Republic of Germany. Among his accomplishments, he served as the 41st Quartermaster General of the U.S. Army and is a recent inductee in the Quartermaster Hall of Fame. Mr. Vanderploog has also been recognized by the County for Service and Program Improvement, and the American Public Works Association for Meritorious Service.

Mr. John R. Sheahen, CPA is the Manager of the Business Services. Mr. Sheahen received his AA degree from Florida College in Temple Terrace, Florida in 1969 after having his education interrupted by fulfilling his military obligation, including service in Vietnam. He continued his education at the University of South Florida where he received his BA in accounting. Mr. Sheahen became licensed as a Certified Public Accountant in 1975. Mr. Sheahen joined a private CPA firm in 1971 and immediately became involved with the audits of privately and publicly owned utilities. Over the next 26 years, he served as an expert witness in water, wastewater, and solid waste rate regulation throughout the State of Florida. He has participated in over 100 rate cases, including mediation, arbitration, law suits, and regulatory rate hearings before the Florida Public Service Commission and home rule counties in Florida. Mr. Sheahen has been nominated on three different occasions for appointment by the Governor to the Florida Public Service Commission. In 1997, Mr. Sheahen became the Finance Director for the City of Temple Terrace, Florida, where he has lived continuously since 1979. This opportunity allowed him to transition from the private sector to public service. In 2000, Mr. Sheahen returned to the utilities arena, this time as the Manager of Business Services for the Department.

Ms. Lori Krieck is the Manager of the Employee Services for the Department. Ms. Krieck has a Master of Public Administration, Bachelor of Science in Recreation, and holds certifications as a Professional in Human Resources and Certified Florida Public Sector Labor Relations Professional. Ms. Krieck has held the position of Employee Services Manager from 2006 to present; Employee Relations Manager and various other related titles with the County’s Human Resources Department 1991 – 2006; and Recreational Therapist with the County’s Aging Services 1987 – 1991. Ms. Krieck is a member of the Society for Human Resource

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Management, Florida Public Employer Labor Relations Association, National Public Employer Labor Relations Association, and the Florida Public Personnel Association.

Mr. Thomas B. Weiss is the Manager of the Administrative Division and the Manager of Plans/Programs. Mr. Weiss is a registered Professional Geologist with the State of Florida and has over 20 years of experience in the water resource industry. Over the last eight years, he has been the County’s lead expert on water resource, supply, and conservation issues. Prior to working for the County he was a Senior Project Manager for the Southwest Florida Water Management District where he was involved in policy development, rulemaking, and project management which included construction of the Nation’s first large scale seawater desalination facility. Mr. Weiss’s educational background includes a B. A. in History from Erskine College, a B.S. in Geology from Texas A&M Corpus Christi, and a Masters of Business Administration from Saint Leo University. Mr. Weiss remains active in several professional organizations including being the Chair of the Water Reuse Association's Florida Chapter’s Education & Outreach Committee.

Dr. Ken Griffin is Manager of Operations Management. He is a registered Professional Engineer with the State of Florida and four other states. Dr. Griffin has 24 years of utility leadership experience including serving as: Hillsborough County's Assistant County Administrator for Infrastructure & Planning; thirteen years as State Agency Head and Executive Director of the Pearl River Valley Water Supply District, the largest water supply district in Mississippi; and founding City Engineer and Director of Public Works for the City of Sedona Arizona, where he supervised the planning, funding, design and construction of a new wastewater collection, treatment and disposal system for the entire city. Dr. Griffin has a PhD in Leadership from the University of Mississippi, a MS in Environmental Engineering for the University of Southern California, a MS in Chemical Limnology from Cornell, and a BS in Biological Sciences from the University of California. He is a graduate of Harvard University's John F. Kennedy's Executive Program in Strategic Public Sector Negotiations and has authored texts and taught courses to public works professionals on asset management and maintenance management systems.

Ms. Rebecca Garland is the Director of Water Resource Division and Manager of the Service Management and Accounting Group (SMAG). Ms. Garland received her Bachelor of Science in Physics and Education from the University of Tennessee at Chattanooga in 1975. She earned a Master of Science in Physics from University of Memphis in 1977 and received an Executive MBA from University Of Memphis in 1990. Ms. Garland has over 32 years of experience in the utility industry. She first served as research analyst for the Tennessee Valley Authority and then moved to their largest distributor and the largest three-service municipal utility, Memphis Light, Gas and Water (MLGW) until retiring in 2002. While at MLGW, she was responsible for all energy programs including an $80 million energy loan program, an energy services company an international acclaimed bottled water program, and customer service for residential and commercial and industrial customers. Ms. Garland is a Certified Energy Manager and Life Member of the Association of Energy Engineering. Ms. Garland joined the Department in 2003.

Ms. Pamela Marlowe-Greene is the Manager of Regulatory Services. She received her Bachelor of Arts degree from Stetson University in Deland, Florida in 1984 and her Masters of Public Administration degree from the University of South Florida in Tampa, Florida in 2000. Ms.

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Marlowe-Greene began her career in Sarasota County, Florida in 1984 as a land use planner, concentrating in long-range and comprehensive planning, facilities siting, community relations, and intergovernmental relations. She joined Sarasota County's Utilities Department as the Assistant to the Director in 1990, and spent the next eight years involved in capital project planning and implementation, utilities operations and management, master planning, regulatory oversight and public relations. Ms. Marlowe-Greene came to Hillsborough County in 1998 as the Department's Water Supply Program Manager, serving as the Department's liaison with Tampa Bay Water and the Southwest Florida Water Management District regarding water resource issues. She was appointed to her current position in June 2008 and is responsible for the direction and oversight of the Department’s regulatory and laboratory operations.

Mr. Charles Hammett, P.E. is the Manager of the Engineering Services Group. Mr. Hammett received his BS degree from the University of Miami, Fl, in 1969. He then spent five and a half years as an officer in the United States Air Force, including a tour in Vietnam and Thailand in 1972-1973. Upon his honorable discharge from the Air Force in 1975, Mr. Hammett pursued and was awarded his Master of Science of Engineering degree from the University of South Florida while working as a consulting engineer during that time. He received his license as a Professional Engineer in the State of Florida in 1982. Mr. Hammett’s engineering career has spanned both the private and public sectors. As a private consulting engineer, he has served as the engineer of record for many water and wastewater projects throughout the State of Florida, with responsibilities ranging from design engineer to the Director of Engineering and Chief Engineer for local consulting firms. Mr. Hammett has also served as an expert witness on engineering matters associated with civil design and construction. In the Public Sector, Mr. Hammett served as the County Drainage Engineer and Chief Engineer with the County Department of Water and Wastewater Utilities from 1981 through 1985. He then went back into private practice, returning to Hillsborough County in 1993 as a Professional Engineer and project manager, until ultimately being appointed in 2007 as the Manger of Engineering Services Group for the Department.

Mr. Thomas F. Rawls, P.E, is the Manager of the Plant Operations Group. Mr. Rawls joined the County’s Public Works Department in 2000 as the Transportation Maintenance Division’s Chief of Engineering, which led to the development, implementation, and management of Hillsborough County’s Right-of-Way Management Office. Mr. Rawls accepted a position with the Department in 2007 to manage the department’s $180 million Capital Improvement Program. In 2008, Mr. Rawls became the Manager of the Plant Operations Group. During the ten years prior to his employment with the County, Mr. Rawls managed public and private sector planning, design, and construction projects for transportation, theme park, and utility infrastructure, primarily in Central and South Florida. Mr. Rawls is a licensed professional engineer in the State of Florida, and holds a Bachelor of Science degree from Washington & Lee University and a Master of Engineering degree from the University of South Florida.

Mr. Rich Cummings is the Manager of the Field Maintenance Services Group. Mr. Cummings has been employed with Hillsborough County since June 2001. Mr. Cummings has 29 years experience as a utilities mechanic, engineer, and executive manager over underground infrastructure operations and maintenance. He has previous experience as an operator and maintenance engineer with EG&G Inc. (Base Operations Contractor) at the Kennedy Space

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Center Florida for 17 years, and was the Field Operations Superintendent with Sarasota County Environmental Services Business Center for three and a half years. He began his career with the US Air Force as an Environmental Support Specialist. As the Group Manager for Field Maintenance Services, Mr. Cummings has the responsibility to execute field operations work with repair and renovations in water, wastewater, and reclaimed water piping systems. Mr. Cummings has a BS degree in Engineering Technology from the University of Central Florida, and two Associates Degrees. He holds licenses in wastewater treatment and collections, water treatment and distribution, and is certified in plumbing design (CPD).

The following paragraphs summarize the responsibilities of each organizational function within the Department related to the Water Resource Division.

Director – The Director oversees all of the Department functions and is supported by Operational Analysis & Management comprised of 11 staff positions in support of the following functions: i) Review and Analysis and Performance Reporting, ii) Process Flows, iii) GIS Mapping, and iv) Administrative Support/Courier. Four additional staff members manage Facilities and Vehicle/Equipment.

Water Resource Division – This division is responsible for the day-to-day operation and maintenance of the water, wastewater, and reclaimed water facilities, including infrastructure. The following groups operate and maintain plant and monitor compliance with local, state, and federal regulations. A description of these groups and their functions are as follows:

Plant Operations Group – The Plant Operations Group is responsible for the potable water and wastewater operations and maintenance at the treatment plants. The Plant Operations Group has a total of 202 staff positions. Operation and maintenance of wastewater lift stations is under the jurisdiction of the Field Maintenance Services Group as further discussed below. The Plant Operations Group is responsible for the following:

1. The Potable Water Operations and Management Sub-Group consist of three teams based on function and geography. The first team covers potable water facilities in the Northwest service area and the second team covers the South-Central service area. The third team oversees the electric, electronics, and mechanical maintenance at potable water and reclaimed water facilities in both geographic service areas. At the end of Fiscal Year 2009, the Potable Water Operations Team employed 22 licensed Drinking Water Treatment Plant Operators. This staffing level complies with Florida Department of Environmental Protection permit requirements and is consistent with standard utility practices for similar- size water systems.

Field Maintenance Services Group – The Field Maintenance Services Group is responsible for installation, maintenance, and repair of potable water, reclaimed water, and wastewater piping

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and related infrastructure as well as wastewater lift stations. The Field Maintenance Services Group has a total of 210 positions. The facilities that are managed by the Field Maintenance Service Group includes approximately 2,336 miles of potable water distribution lines, 331 miles of reclaimed water lines, 583 miles of wastewater forcemains, 1,522 miles of gravity sanitary sewers, and 79 miles of low-pressure mains, as well as the 26,890 water valves, 144,000 meters, 12,670 hydrants, 31,050 manholes, services, 545 air release assemblies, and other appurtenances associated with this underground infrastructure. Additionally, the Field Maintenance Group maintains 699 wastewater pump stations and 1,200 low pressure pump stations.

Engineering Services Group – The Engineering Group provides technical and regulatory support services to all potable water, wastewater, and reclaimed water programs of the Department. The Engineering Group has 71 staff positions and is organized into four sections: Project Controls, Engineer Data Services, Project Management, and Planning and Design.

Service Management and Accounting Group (SMAG) – The Service Management and Accounting Group establishes, maintains, and tracks the customer account records from the initial establishment of an account, through the life of an account, and finally the closing of an account. The group is comprised of 123 staff positions and is divided into two sections based on geography: Northwest Service and South-Central Service. Each of these sections is further subdivided into teams consisting of customer response, walk-in center, field services (meter reading), and payments/accounting.

Regulatory Services – Regulatory Services has 31 staff members and is divided between four sections: i) Industrial Pretreatment and Grease Management; ii) Regulations and Permits; iii) Laboratory Analytical Services and iv) Acquisitions & Contracts. The Environmental Laboratory is certified by the Florida Department of Health and is responsible for environmental sampling and analysis, including compliance and operational testing for the water and wastewater treatment plants, biosolids management facility, groundwater monitoring wells, surface water outfalls, potable water distribution system, plus 67 remote facilities for four other County departments.

Strategic Water Management – Strategic Water Management includes 8 staff members responsible for the operation and maintenance of one of the largest retail residential reclaimed water system in the United States. Utilizing over 21 million gallons per day (MGD) of reclaimed water, their role is central to the utilities ability to meet the changing regulatory standards concerning surface water discharges. In addition to their primary roles, they also work as liaisons with Tampa Bay Water, the Florida Department of Environmental Protection, and the Southwest Florida Water Management District.

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Administrative Division – The day-to-day administration of the Water Resource Division is backed by five support units. A description of these five support units and their functions are as follows:

1. Operations Management. Operations Management is responsible for overseeing long-term planning and the County’s new Capital Asset Management System (CAMS) program. Operations Management is comprised of 10 staff positions. The main purpose of the new CAMS program is to implement a work management system that monitors work performed on the systems and tracks assets, including their condition and performance. Additional functions include material management, emergency planning & response and real estate.

2. Business Services. Business Services provides financial support services to the System and is comprised of 11 staff positions to support the following functions: i) Budget and Rates; ii) Fiscal Operations; iii) Bond Compliance; and iv) Indexing and Pass-through rate adjustments.

3. Employee Services. Employee Services provides human resources support services for the Department. Employee Services coordinates with the County’s Human Resources Department but functions independently on most day-to-day activities. Responsibilities of this unit include personnel actions, development, and administration of safety programs and training, coordination of travel and related record-keeping. Employee Services has 9 staff members.

4. Plans/Programs. Plans/Programs is comprised of 9 staff positions in support of the following functions: i) Water Conservation coordinates a successful education and enforcement program, while conducting research to find ways to increase water conservation and reduce potable water demands; ii) Energy Management to evaluate most efficient use of power utilized in treatment and delivery processes; and iii) Feasibility Modeling related to operations and processes.

5. Information Management. Information Management is comprised of 4 positions in support of the following functions: i) Support for Asset Management and Customer Billing; ii) Electronic Customer Interface (VOIP/IVR/IWR); iii) Communications / Call Center; iv) Continuity of Business; and v) Software System Administration.

THE SYSTEM The County’s water, wastewater, and reclaimed water utility system (previously defined as the "System") currently operates the following County-owned facilities:

• Potable water treatment plants, booster pumping station, transmission and distribution systems, as well as storage and associated plant metering systems;

• Wastewater treatment plants, wastewater collection system, as well as associated storage and plant metering systems; and

• Reclaimed water storage, pumping, and transmission systems.

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The Department is in its fifth year of implementing a system-wide Asset Management Program. Over the past two years, contractors have obtained asset data within three categories of the Department assets. These include aboveground assets such as fire hydrants, valves, and blow- offs; gravity systems including gravity sewer pipes and manholes; and underground pressure pipe such as watermains, reclaimed watermains and sewer forcemains. Data collected included Global Positioning System (GPS) mapping and condition assessments and was completed in Fiscal Year 2009. The data awaits review by Department staff prior to inputting into the Comprehensive Asset Management System (CAMS). A goal CAMS is to alert Field Maintenance Services Group staff when infrastructure is near the end of its useful life. The Department anticipates that the capital improvement program will be prioritized based on the results of assets condition assessments.

Water System Overview The County's potable water system is comprised of a treatment, and transmission and distribution system (the "Water System"), which during the Fiscal Year 2009 provided service to an average of 141,615 retail accounts or 191,810 corresponding equivalent residential connections (ERCs) within the Water System service area. With respect to the reported accounts, 96% are classified as individually metered residential with the remaining 4% consisting of master-metered residential, commercial, and irrigation services. An ERC for the Water System represents the equivalent usage requirements of an individually metered residential customer and equates to approximately 300 gallons per day (gpd) of metered water service pursuant to the County's policies and regulations. Since commercial and master metered residential customers can be served by larger sized meters than the standard residential customer, it is more useful to equate such customers on a basis equivalent to the residential class for a more consistent presentation of the total customer base served.

To serve the customer base of the water service area, the Department entered into the Amended and Restated Interlocal Agreement in 1998 with Tampa Bay Water to secure a long-term water supply. For the Fiscal Years 2009, Tampa Bay Water provided approximately 98% of the total potable water needs of the Water System; the remainder is derived from certain municipal public utilities due to the proximity of the service requirements. Additionally, the Water System consists of four (4) regional and two (2) neighborhood potable water treatment facilities, one booster pumping station, and approximately 2,300 miles of potable water transmission and distribution pipelines ranging in size from 1 inch to 42 inches in diameter.

Wastewater System Overview The County's wastewater system is comprised of collection, treatment, and disposal (effluent and residuals) systems (the "Wastewater System") which during the Fiscal Year 2009 provided service to an average of 131,588 retail accounts or 205,121 corresponding equivalent residential connections (ERCs) within the Wastewater System service area. An ERC for the Wastewater System represents the equivalent usage requirements of an individually metered residential customer and equates to approximately 200 gallons per day (gpd) based on metered water service delivered to the customer premises pursuant to the County's policies and regulations. The Wastewater System consists of seven (7) wastewater treatment facilities, a biosolids management facility, and wastewater effluent disposal by water reuse (the primary method of effluent disposal) and surface water discharge (the secondary method of effluent disposal).

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The Wastewater System also includes approximately 2,100 miles of gravity sewers and forcemains, 699 master and local pumping stations, and over 31,000 manholes.

Reclaimed Water System Overview The County’s reclaimed water system is comprised of pumping, transmission and distribution, and storage facilities (the "Reclaimed Water System") which during the Fiscal Year 2009 provided service to approximately 15,100 retail residential, commercial and large user (bulk) accounts. The Reclaimed Water System consists of 12 master pumping stations, over 300 miles of transmission mains, and 97 MG of reclaimed water storage facilities.

Service Area Agreements As shown on Figure 3 later in this Report, the County's water service area encompasses a large portion of the unincorporated western section of the County where the majority of the population resides. As illustrated in Figure 3, the County's water service area does not include the City of Tampa (the County's largest municipality and the County seat), the City of Plant City, or the City of Temple Terrace. Water service is provided by the respective municipalities to the customers located within the corporate limits of such respective cities. As shown on Figure 4 later in this Report, the County's wastewater service area also encompasses a large portion of the unincorporated western section of the County and is very similar to the service area boundaries of the Water System. As was discussed for the Water System, the Wastewater System service area does not include the cities of Tampa, Plant City, or Temple Terrace.

The County has entered into a series of Interlocal and/or service agreements with the municipalities in the County which established the service area boundaries for the Water and Wastewater Systems. The following is a summary of the service area agreements by entity:

1. City of Tampa – With respect to the City of Tampa, the two parties entered into an Interlocal Agreement dated June 26, 1979, which has been amended and supplemented from time to time (most recently on April 5, 2000), which established the water and wastewater service boundaries between the two entities (the "Tampa Service Area Agreement"). The Tampa Service Area Agreement provides, among other things, for the area to be served by each party, the construction of interconnections at certain delivery points, and rates for wholesale service as may be required by the entities. The County currently purchases wholesale water and/or wastewater service from the City of Tampa primarily to: i) serve the Seaboard (water and wastewater service) and Herschel Heights (water-only service) utility systems that were previously acquired from Florida Water Services Corporation by the County locations which were not located in the City's utility system but were served on a wholesale basis by the City; and ii) certain other small isolated service areas located in unincorporated County that were considered by the Department to best served through purchases from the City as opposed to connecting such areas to the County's regional system. The agreement has a term of forty (40) years and the County expects to enter into a similar service area agreement prior to the expiration of the term of the Tampa Service Area Agreement which is not anticipated to significantly modify the service area boundaries (some adjustment may be considered to achieve a common provider of both water and wastewater service).

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2. City of Plant City – With respect to Plant City, the County only provides water and wastewater service to an area referred to as the Oak Utility Service Area. This utility was acquired by the County (as a separate utility which was not part of the System) through a receivership which was granted to the County on May 23, 1989 and the County formally incorporated the system into the County System during Fiscal Year 2003. The County and Plant City entered into an Interlocal Agreement to Provide Water and Wastewater Service to the Oak Utility Service Area on March 20, 1996 (the "Plant City Service Area Agreement"), which has been amended from time to time. The County purchases wholesale water and wastewater service from Plant City to service the Oak Utility service area. The Plant City Service Area Agreement provides, among other things: i) the basis for the wholesale rates for service; ii) the identification of the service area as the Oak View Estates subdivision (serves approximately 200 residential customers); and iii) the option for Plant City to acquire the County utility if such facilities are annexed into the City (currently, the subdivision does not reside in the Plant City corporate limits) and that the system meets the City’s specifications and requirements. The term of the Plant City Service Area Agreement is for a period of ten (10) years with the ability to be renewed for additional five (5) year terms upon expiration of the initial term and every fifth year thereafter. Such term has been extended through and including March 19, 2011 and it is expected by the County that the Plant City Service Area Agreement will be extended prior to its expiration date.

3. City of Temple Terrace – With respect to the City of Temple Terrace, the County and the City entered into the Agreement to Establish Potable Water and Wastewater Service Areas in an Urban Expansion Area in Unincorporated Hillsborough County and for the City of Temple Terrace to Provide Bulk Domestic Wastewater Service to Hillsborough County for said Wastewater Service Area on April 3, 2002, which has been amended from time to time (the "Temple Terrace Service Area Agreement"). This agreement was entered into by the parties to allow the County to serve a portion of the Urban Expansion Area located east of the City of Temple Terrace with water and wastewater service. Currently, service provided on a wholesale basis by Temple Terrace is for a very limited number of water and wastewater customers (three metered connections that represent 20 equivalent residential connections). The Temple Terrace Service Area Agreement provides, among other things: i) the basis for the wholesale rates for service; ii) the identification of the service area to be served on a retail basis by the County; and iii) the term of service. The term of the Temple Terrace Service Area Agreement shall run in perpetuity, provided however that either party may terminate and withdraw from the agreement upon 36 months written notice by either party. The County does not anticipate this agreement to be terminated by either party during the Forecast Period.

4. City of Oldsmar – With respect to the City of Oldsmar (which is located in Pinellas County), the City provides wholesale water service to a single customer located in Northwest Hillsborough County (service is provided to one metered account representing one equivalent residential connection).

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WATER SYSTEM As previously mentioned, the Water System is comprised of a treatment, transmission, and distribution system which provided service on average to approximately 142,000 accounts during the Fiscal Year 2009. The water treatment and distribution system is divided into two general service areas: Northwest and the South-Central. The limits of these service areas and the water treatment facilities are illustrated in Figure 3 later in this Report. The following section provides a discussion of the facilities that comprise the Water System.

Potable Water Supply The County currently receives the majority of its water resources or supply needs from Tampa Bay Water. Tampa Bay Water was organized in 1998 as the successor to the West Coast Regional Water Supply Authority. Tampa Bay Water currently provides water to the County, Pasco County, Pinellas County, the City of New Port Richey, the City of St. Petersburg and the City of Tampa (collectively, the "Member Governments") all within the Tampa Bay area. In turn, the Member Governments supply water to over 2.3 million residents of the Tampa Bay area. Total Fiscal Year 2009 production from Tampa Bay Water managed facilities was approximately 62,455.15 million gallons, an average of approximately 171.14 million gallons per day. During the Fiscal Year 2009, Tampa Bay Water provided approximately 47.17 MGD or 98% of the total Water System potable water needs to the County, which equated to approximately 27.6% of the total reported water production by Tampa Bay Water.

A fundamental duty of Tampa Bay Water is to provide an adequate supply of potable water to all customers served by the member governments. To do this, Tampa Bay Water is charged with the obligation to design, acquire, construct, operate, and maintain water supply facilities. Tampa Bay Water is required to update its Master Water Plan every five years to meet projected needs of the member governments for the next 20 years. Water supplies must be developed in a manner that balances the need for water production with environmental concerns.

Tampa Bay Water publishes a uniform rate per 1,000 gallons to the member governments with the exception of water delivered to the City of Tampa from the Tampa Bypass Canal. This uniform rate is calculated annually based on projected revenue requirements for operation and maintenance expenses, debt service payments, renewal and replacement expenditures, reserve deposits, and capital expenditures and the anticipated quantity of water to be sold during the fiscal year. Monthly invoices are provided by Tampa Bay Water to the Department that account for fixed costs, water quantity sold to the Department, and credits for water quality and for facility acquisitions by Tampa Bay Water from the County. The amounts billed are subject to a true-up calculation annually based on actual volumes purchased by member governments for the year. During the Fiscal Year 2009, Hillsborough County purchased 17.2 billion gallons of water from Tampa Bay Water and paid approximately $41.5 million to Tampa Bay Water for such water purchases. The current uniform rate (reflects average rate for all costs billed by the entity) being charged by Tampa Bay Water during the current Fiscal Year 2010 is $2.3980 per 1,000 gallons.

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The following is a description of Tampa Bay Water and how it relates to the Department:

Tampa Bay Water Governance. The Interlocal Agreement entered into by and among the Member Governments (the "Interlocal Agreement"), reorganized West Coast Regional Water Supply Authority (the "Predecessor Authority") created pursuant to Section 373.1962 and 163.01, Florida Statutes, and other applicable laws, for the purpose of developing, recovering, storing and supplying water for county and municipal purposes in such a manner as to give priority to reducing adverse environmental effects of excessive withdrawals of water from concentrated areas. Pursuant to the Interlocal Agreement, Tampa Bay Water essentially became the exclusive provider of water for the Member Governments for the geographic territory of Hillsborough, Pasco and Pinellas Counties. According to the provisions of the Interlocal Agreement, Tampa Bay Water has the absolute and unequivocal obligation to meet the quality water needs of the Member Governments which needs are required to be satisfied before quality water is delivered to any other customer of Tampa Bay Water. Accordingly, Tampa Bay Water must oppose any permit, order, rule or other regulatory effort to reduce or limit the permitted capacity of its water supply facilities, unless: (i) the reduction or limitation results from an agreement to which all Member Governments are parties, or (ii) the reduction or limitation will not become effective until adequate replacement capacity has been placed in service. Unless terminated earlier pursuant to the terms of the Interlocal Agreement, the Interlocal Agreement shall expire upon the later of the following dates: (i) the fortieth anniversary of the commencement date of the Interlocal Agreement, or (ii) the date on which no Tampa Bay Water Obligations (as defined in the Interlocal Agreement) remain outstanding.

Tampa Bay Water and the Member Governments entered into the Master Water Supply Contract to establish the format for the supply of water to all of the Member Governments by Tampa Bay Water and to develop a plan to share the costs of operating, acquiring, constructing, equipping, and expanding Tampa Bay Water's System. Under the terms of the Master Water Supply Contract, Tampa Bay Water is required to provide sufficient water to each Member Government to meet that Member Government's needs. The Member Governments agree in the Master Water Supply Contract to provide water service to the customers in their Water Service Areas (as defined in the Master Water Supply Contract) only from water supplied from Tampa Bay Water (except for those facilities retained by the Member Governments through the exceptions to exclusivity allowed in the Interlocal Agreement).

Tampa Bay Water is governed by a Board of Directors that represents the member governments. All Board Members are elected officials of the various governments served by Tampa Bay Water and are entitled to one vote. The three counties are represented by two Board Members from

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each county and the three cities are represented by one Board Member from each city (total of 9 Board Members).

Water Supplies of Tampa Bay Water. Since its beginning as Tampa Bay Water on October 1, 1998, the water resource provider has developed a diverse group of water supply sources. These sources include water from three rivers, a 15 billion gallon surface water reservoir, a surface water treatment plant, a seawater desalination plant, groundwater from wells, and the purchase of water from the City of Tampa’s Bypass Canal. During Fiscal Year 2009, groundwater provided 70.1%, surface water 18.8%, desalination 9.8%, and the purchase of water from the City of Tampa Bypass Canal 1.3% of the total Tampa Bay Water pumpage of 62,455.15 billion gallons (171.11 million gallons per day average). In 1998 when Tampa Bay Water was formed, 100% of its water was supplied from groundwater wells. Water is delivered throughout the tri-county area to member governments by large diameter transmission mains and large pump stations. In Fiscal Year 2009, Tampa Bay Water supplied approximately 17.218 billion gallons of water to the County. Tampa Bay Water has an existing total permitted water supply capacity of 217.1 MGD (annual average daily flow basis). Tampa Bay Water expects to complete construction of the following six major projects by the end of 2012:

1. System Interconnect – South Central Hillsborough Infrastructure Project Phase 2: Installation of chloramination facilities at the Brandon Wells;

2. System Interconnect – Northwest Hillsborough Pipeline Project: Regional system delivery point for Hillsborough County;

3. System Interconnect – Cypress Creek Pump Station Expansion: Regional system delivery pressurization;

4. System Interconnect – Morris Bridge Booster Station: Regional system delivery point to City of Tampa;

5. Northwest Hillsborough Well No. 7 Connection: Interconnection of Northwest Hillsborough Well No. 7 to the Section 21 Wellfield pipeline; and

6. Lithia Hydrogen Sulfide Treatment Plant – South Central Hillsborough Infrastructure Project Phase 3.

With these improvements, Tampa Bay Water expects to increase reliability and efficiency of the existing system and to increase total permitted water supply capacity to 244.1 MGD (annual average daily flow) by the end of 2012. Tampa Bay Water has projected a total water demand of 251.6 MGD (annual average daily flow) for all water demand planning areas by the end of 2015 (projection includes water that may be self-supplied by member governments; in Fiscal Year 2009 member governments self-supplied approximately 59.30 MGD). Tampa Bay Water has projected a water demand of 52.5 MGD (annual average daily flow) for Hillsborough County by the end of 2015.

In 1998, the Tampa Bay Water Board of Directors approved a large program of system-wide improvements including the development of new and diverse water supply sources. These

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improvements are known as the Configuration I projects and were funded by revenue bonds issued by Tampa Bay Water, Southwest Florida Water Management District grants and Federal funds. These projects were completed in 2007 and are projected to meet the regional water demands through 2012. In 2006, the Board of Directors chose Enhancements Phases A/B for Configuration II projects. These projects are under construction and were funded from the issuance of additional Tampa Bay Water revenue bonds and the receipt of additional grants from the Southwest Florida Water Management District and are projected to meet the regional water demands through 2019. The subsequent 2019 or longer term water demands are anticipated by Tampa Bay Water to be met from the construction of the future Configuration III Projects which are currently estimated at $458 million. Updated demand forecasting is underway by Tampa Bay Water, which may delay or hasten the timing of new water supplies to serve the region.

There have been two large Tampa Bay Water projects that have been in the news for the past few years. These include the Sea Water Desalination Plant and the Regional Reservoir. The Sea Water Desalination Plant project began in 2001 and was designed to deliver 25 million gallons per day of treated water under a design-build-own-operate-transfer arrangement with Tampa Bay Water. However, upon completion, the plant did not meet performance tests and the contractor filed for bankruptcy. Tampa Bay Water selected an interim operator of the facility that later evolved into a contract for construction completion, operations, maintenance and management of the plant. The contract was awarded in November 2004 and improvements undertaken. These have centered on pretreatment of the seawater prior to entering the membrane filtration process. The project received a construction grant from the Southwest Florida Water Management District. The last grant payment was received in 2010 when the plant consistently produced 25.0 MGD.

In March 2005, the C.W. "Bill" Young Regional Reservoir was completed with a capacity of 15 billion gallons. After the reservoir was completed and filled, a problem developed with the interior erosion control structure and the reservoir was drained. A surface plate soil cement problem was discovered and a permanent remedy is currently being sought. The problem is not structural in nature and the reservoir does not leak. Temporary repairs were made in 2009 and the reservoir is currently full. Protocols are in place to utilize the reservoir at 100% capacity until permanent repairs are made. The Fiscal Year 2010 Tampa Bay Water Budget contains a recommendation that the 2008 Revenue Bond resolution be amended to provide for the design, permitting and construction cost to permanently repair the facility. An unfunded amount of $125 million for this purpose is included in the Fiscal Year 2010 Tampa Bay Water Capital Budget.

Tampa Bay Water is subject to regulation by the Florida Department of Environmental Protection, the Florida Department of Health and Rehabilitation Services, and the United States Environmental Protection Agency for matters related to the quality of water and the construction of its facilities. In addition, the Southwest Florida Water Management District regulates consumptive uses of water via permit.

As the primary wholesale supplier of the County’s potable water supply, Tampa Bay Water has sufficient capacity to meet the Water System projected water demand through 2012. Tampa Bay Water is pursuing additional water supplies that are expected to meet the Department potable

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water supply demands through 2019 and it is anticipated by Tampa Bay Water that such additional supplies will be available to meet the County water capacity demand when required.

Tampa Bay Water Financials. Tampa Bay Water has felt the impact of the national and regional economic slowdown in Fiscal Year 2009 and expects it to continue into Fiscal Year 2010. The economic slowdown impact has been exacerbated by reduced water demand due to irrigation restrictions and increased use of reclaimed water for lawn irrigation. As a result, the uniform rate charged to the member governments is budgeted by the entity to increase by 6.8% from $2.2451/1,000 gallons in Fiscal Year 2009 to $2.3980/1,000 gallons in Fiscal Year 2010.

Other Water Providers. In addition to the purchases of water from Tampa Bay Water, the County also purchases water from the Cities of Tampa, Plant City, Temple Terrace, and Oldsmar. Purchases from Tampa Bay Water provide the majority of the water needs of the Water System; the additional purchases from the other municipal utility providers during the Fiscal Year 2009 amounted to approximately 2% of the total water requirements as shown below:

Summary of Fiscal Year 2009 Water Purchases – (000s of Gallons) Amount Purchased Percent Tampa Bay Water 17,218,690 98.08% City of Tampa 319,230 1.82% City of Plant City 15,164 0.09% City of Temple Terrace 2,333 0.01% City of Oldsmar 31 N/A Total Fiscal Year 2009 Purchases 17,555,448 100.00%

The Department reports that the purpose of the additional municipal purchases is to provide water and wastewater service to areas that are within the County’s Water System service area which cannot readily be served directly by the County transmission facilities (and thus through purchases from Tampa Bay Water). The purchases made from the other municipalities are for certain distinct service areas and are considered by the County as being insignificant to the overall water requirements of such municipalities (based on the amount of customers served relative to each individual city’s customer base) and the County does not anticipate any issues relative to the continued supply of such water resources from the respective municipal utilities.

Potable Water System The County potable water facilities includes four (4) regional and two (2) neighborhood potable water treatment plants in service, one booster pumping station, and approximately 2,336 miles of potable water transmission and distribution pipelines. The County treatment facilities receive most of their water from Tampa Bay Water, provide additional treatment, and pump the finished potable water into the water transmission and distribution system for ultimate delivery to retail customers. The potable water portion of the Water System is divided into two general service areas: Northwest and South-Central. The limits of these service areas and the location of the potable water treatment facilities are illustrated on Figure 3.

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Figure 3. Potable Water Service Areas and Major Facilities

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Potable Water Treatment Plants The County currently owns and operates six potable water treatment plants. A description of each facility follows.

Regional Water Treatment Plants:

Central Hillsborough Water Treatment Facility. The Central Hillsborough Water Treatment Facility was recently constructed and operation started in February 2009. The facility provides potable water to the South-Central service area. This facility has a permitted treatment (maximum day) capacity of 19.0 MGD, a firm pumping capacity of 32.0 MGD, and a storage capacity of 10.0 million gallons (MG). The source water utilized by this facility is provided by Tampa Bay Water. The source water consists of a treated and blended mix of groundwater, surface water, and desalinized water.

The Administration Building and other key structures at this site were designed to withstand a Category 4 hurricane. The facility also includes redundant equipment for reliability. Brown and Caldwell inspected this facility on October 5, 2009 and found it to be in excellent condition.

Lake Park Water Treatment Plant. The Lake Park Water Treatment Plant is located in the Northwest Service Area of Hillsborough County. This plant has a permitted treatment capacity of 15.5 MGD, a firm pumping capacity of 35.0 MGD with a storage capacity of 10.0 MG. The plant receives raw water from Tampa Bay Water’s Section 21 Wellfield and a treated and blended mix of groundwater, surface water, and desalinized water from the regional system.

The Lake Park Water Treatment Plant was originally constructed in 1984. In 1988, a 5.0-MG storage tank was added along with associated yard piping and, in 2002, the plant was renovated and expanded. Brown and Caldwell inspected this facility on March 10, 2009 and found it to be in excellent condition.

Lithia Water Treatment Plant. The Lithia Water Treatment Plant is located in the South-Central Service Area of Hillsborough County. The plant currently has a permitted treatment capacity of 54.1 MGD and a storage capacity of 20.0 MG. The plant receives raw water from Tampa Bay Water's South-Central Hillsborough County Regional Wellfield and a treated and blended mix of groundwater, surface water, and desalinized water from the regional system.

The Lithia Water Treatment Plant was constructed in 1988. Brown and Caldwell inspected this facility on March 13, 2009 and found the facility to be in excellent condition.

Northwest Hillsborough (Fawn Ridge) Potable Water Facility. The Northwest Hillsborough Potable Water Facility is located in the Northwest Service Area of Hillsborough County. The plant has a permitted treatment capacity of 25.0 MGD, a firm pumping capacity of 31.0 MGD with a storage capacity of 10.0 MG. The plant receives raw water from Tampa Bay Water’s Northwest Hillsborough County Regional Wellfield and a new point of connection is under construction to obtain a treated and blended mix of groundwater, surface water, and desalinized water from the regional system.

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The Northwest Hillsborough Potable Water Facility was initially constructed in 1993. Brown and Caldwell inspected this facility on March 10, 2009 and found it to be in generally very good condition.

Neighborhood Water Treatment Plants:

Manors of Crystal Lakes Water Treatment Plant. The Manors of Crystal Lakes Water Treatment Plant is part of a neighborhood water system located in the Northwest Service Area. It was constructed in 1985 and has been in operation for approximately 25 years without major expansion or refurbishment. This facility is supplied by two wells owned by Tampa Bay Water. The well pumps provide adequate pressure throughout the small distribution system.

Brown and Caldwell inspected this facility on October 13, 2009 and found it to be in very good condition.

Sun City Water Treatment Plant. Hillsborough County acquired the Sun City Water Treatment Plant and made it part of the County Water System in 2000. The Sun City Water System is a relatively small neighborhood system located in the South-Central Service Area. The water treatment plant is supplied by two on-site wells currently owned by the County.

Brown and Caldwell inspected the plant on October 7, 2009 and found the facility to be in generally average condition and is currently planned by the Department that the facility will be taken offline and removed from service and the service area connected to the County’s regional distribution system (reference is made to the section in this Report regarding the capital improvement plan [CIP No. 31965]).

Existing Water Storage Facilities To augment the treatment capacity of the Water System treatment plants, the County currently has ten water storage reservoirs. The County's potable water treatment plant capacities and the corresponding water storage reservoirs are summarized below by service area location and type.

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Potable Water Treatment Plants and Storage Reservoirs Permitted Water Storage Treatment Capacity Location Capacity (MGD) (MG) Storage Type Northwest Service Area Lake Park WTP 15.5 10.0 2 Ground Storage Tanks Manors of Crystal Lakes WTP 1.3 0.005 1 Hydropneumatic Tank Northwest Hillsborough (Fawn Ridge) PWF 25.0 10.0 2 Ground Storage Tanks Total Northwest Service Area 41.8 20.005

South-Central Service Area Central Hillsborough WTF 19.0 10.0 2 Ground Storage Tanks Lithia WTP 54.1 20.0 4 Ground Storage Tanks Total South –Central Service Area 73.1 30.0 System Total 114.9 50.005 ______WTP = Water Treatment Plant PWF = Potable Water Facility WTF = Water Treatment Facility

The FDEP rules require that a water system have at least 25% of the maximum daily flow retained in storage. The maximum daily flow is considered as the water treatment plant capacity. The total FDEP-rated Water System capacity is currently 114.9 MGD. The County's available 50.0 MG of storage exceeds the FDEP mandated requirement. The County's ground storage tanks are all pre-stressed concrete design. The reservoirs have been inspected and found to be in good to above-average condition and serviceable.

Water Distribution System The potable water distribution system consists primarily of watermains, fire hydrants, and valves. The following tabulation provides a summary of the approximate quantities of these major distribution components.

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Major Components of Hillsborough County Potable Water Distribution System Northwest South-Central Component Service Area Service Area Total Valves (number) Air Release Valves 190 355 545 Gate/Plug/Butterfly 8,390 18,500 26,890 Fire Hydrants (County) 3,990 8,680 12,670 Fire Hydrants (Private) 355 540 895 Watermains and Laterals (feet) 1-inch 78,510 574,300 652,810 1.5-inch 2,500 5,000 7,500 2-inch 147,300 353,000 500,300 2.5-inch 14,200 18,300 32,500 3-inch 8,080 114,700 122,780 4-inch 415,000 873,000 1,288,000 6-inch 1,260,500 3,080,000 4,340,500 8-inch 994,500 1,880,500 2,875,000 10-inch 201,800 242,500 444,300 12-inch 382,000 820,000 1,202,000 14-inch 0 5,000 5,000 16-inch 124,000 207,000 331,000 18-inch 2,780 35,000 37,780 20-inch 67,000 90,500 157,500 24-inch 69,000 61,000 130,000 30-inch 20,000 25,500 45,500 36-inch 2,900 79,000 81,900 42-inch 1,000 78,500 79,500 Total (feet) 3,791,070 8,542,800 12,333,870 Total (miles) 718 1,618 2,336

The water distribution facilities are equipped with isolation valves throughout the Water System for repairs and maintenance without shutting down significant portions of the system. The water distribution system also includes approximately 12,670 County fire hydrants to provide fire protection throughout the Water System service area.

Re-pump Station The potable water distribution system contains one re-pump station. The Riverview Re-pump Station is located in the South-Central Service Area. This facility has two storage tanks with a total volume of 1.5 MG and a pumping capacity of 10,000 gpm. No chemical feed facilities exist at this site. The storage tanks are filled when potable water demand in the South-Central service area distribution system is low. Water is pumped out of the tanks during high demand periods. Brown and Caldwell inspected this facility on October 7, 2009 and found it to be in generally fair condition.

Operational Performance of Potable Water System As shown in the tabulation below, the total annual average daily potable water demand for the Water System during Fiscal Year 2009 was 46.02 MGD. The average daily water demand of

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14.44 MGD in the Northwest service area during Fiscal Year 2009 was well below the existing permitted water treatment capacity of 41.8 MGD for the Northwest service area. The average daily water demand of 31.58 MGD in the South-Central service area was well below the existing permitted water treatment capacity of 73.1 MGD for the South-Central service area.

Hillsborough County Actual Water Demand – Fiscal Year 2009 Average Annual Facility Daily Flow, MGD Northwest Service Area Lake Park WTP 7.65 Manors of Crystal Lakes WTP 0.096 Northwest Hillsborough Fawn Ridge PWF 6.69 Total – Northwest Service Area 14.44

South-Central Service Area Central Hillsborough WTF 4.06 Lithia WTP 24.45 Oakview Estate Water System 0.04 Seaboard Water System 0.98 Sun City Water WTP 0.013 Tampa-Hillsborough Interconnect 2.04 Total – South-Central Service Area 31.58 Total – Hillsborough County 46.02 ______WTP = Water Treatment Plant PWF = Potable Water Facility WTF = Water Treatment Facility

The historical average "unaccounted for water" has been approximately 7.5 percent but, in Fiscal Year 2009, it was reduced to 6.7 percent due to an effort by the Department to document non- metered water for line flushing and fire flows and because of customer account validations. For purposes of this Report, the more conservative 7.5 percent unaccounted for water factor was used to estimate total water purchases for the Forecast Period. "Unaccounted for water" includes water used for purposes such as fire fighting, watermain flushing, and meter errors; and is calculated based on subtracting the number of gallons billed from the number of gallons purchased. This unaccounted water loss is within the acceptable range of 12 percent as benchmarked by the Southwest Florida Water Management District.

Regulatory Status of Potable Water System The quality of the potable water produced by the System and delivered to its customers is excellent, complying with U.S. Environmental Protection Agency (EPA), Florida Department of Environmental Protection (FDEP) and Hillsborough County Health Department standards. The Department annually publishes Consumer Confidence Reports (CCR) that summarizes the quality of the potable water for the System. The most recent reports provide data from January 1, 2009 through December 31, 2009. All primary drinking water standards were met but there was one exceedance of a secondary drinking water standard for color. It is not considered to have an adverse health effect. The Department reports that there were no other regulatory violations or exceedance during Calendar Year 2009.

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Condition of Potable Water System During March and April 2009, Brown and Caldwell inspected the potable water components of the Water System. Based on observations made during these inspections and discussions with Department staff, it is Brown and Caldwell’s opinion that the potable Water System is being operated and maintained in an acceptable manner.

WASTEWATER SYSTEM As previously mentioned, the Wastewater System is comprised of wastewater collection and transmission, treatment, biosolids, and effluent disposal facilities, which provided service on average to over 131,000 accounts during the Fiscal Year 2009. The wastewater collection and treatment system is divided into two general service areas: Northwest and South-Central. The limits of these service areas and the location of the wastewater treatment facilities are illustrated on Figure 4. The following section provides a discussion of the facilities that comprise the Wastewater System.

Wastewater Treatment Plants Hillsborough County owns and operates seven wastewater treatment plants and one biosolids facility. These facilities are described below.

Dale Mabry Regional Advanced Wastewater Treatment Plant (AWWTP). The Dale Mabry AWWTP is located in the Northwest Service Area. The plant has a permitted annual average daily flow (AADF) capacity of 6.0 MGD. Treated effluent from the plant is either pumped to the Hillsborough County Northwest Master Reuse System for distribution to reclaimed water customers or discharged to Brushy Creek which eventually flows into Channel "A" and Old Tampa Bay. Two 5.0-MG reclaimed water storage tanks are located on-site. The site also provides for an additional 36 MG of effluent storage in four ponds. The plant provides influent screening and grit removal, biological nitrogen and phosphorus removal, secondary clarification, filtration, high-level disinfection utilizing gaseous chlorine, and post aeration with dechlorination (for surface water discharge). Residual solids are pumped to the County’s Northwest Regional Biosolids Recovery Facility for further treatment and disposal.

The facility was originally constructed in the 1970s and has been upgraded and expanded several times since. The second biological process train and many of the current headworks, filtration, solids handling, chemical conditioning, and reclaimed water facilities were added during a major plant expansion in the late 1980s. Brown and Caldwell inspected this facility on February 10, 2009 and found it to be in very good condition overall.

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Figure 4. Wastewater Service Areas and Treatment Facilities

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Falkenburg Road Advanced Wastewater Treatment Plant (AWWTP). The Falkenburg Road Regional AWWTP is located in the Central Service Area. Construction was substantially completed on a recent plant expansion in March 2009.

This facility has a permitted capacity of 12.0 MGD AADF. Treated effluent from the plant either is pumped to the South-Central Hillsborough County Master Reuse System for distribution to reclaimed water customers or is discharged to the Palm River, which eventually flows into Tampa Bay. Two 5.0-MG effluent storage tanks are located on-site and two new reject tanks have been installed during the recent plant expansion project.

The plant provides influent screening and grit removal, biological nitrogen and phosphorus removal, secondary clarification, filtration and high-level disinfection utilizing ultraviolet treatment. Post-aeration is available for surface water discharge. A sodium hypochlorite storage and feed system is available on-site for use in tank cleaning. Residual solids are thickened and then hauled to the Northwest Regional Biosolids Recovery Facility. Brown and Caldwell inspected the Falkenburg Road AWWTP on October 5, 2009 and found it to be in very good condition.

Northwest Regional Water Reclamation Facility (WRF). The Northwest Regional WRF is located in the Northwest Service Area. This facility was originally constructed in the early 1990s with a permitted flow capacity of 6.0 MGD, calculated as a 3-month average daily flow. A major expansion of the facility to 10.0 MGD AADF was substantially completed in June 2009.

Treated effluent from the Northwest Regional WRF either is pumped to the Northwest Master Reuse System for distribution to reclaimed water customers or is discharged to Channel “A” which eventually discharges to Old Tampa Bay. Effluent from the plant can also be reused directly for process water or cooling water at the Northwest Regional Resource Recovery Facility which is located on the same site.

The Northwest Regional WRF provides influent screening and grit removal, biological nitrogen and phosphorus removal, secondary clarification, filtration, high-level disinfection utilizing an ultraviolet disinfection system. Post-aeration and dechlorination processes are located at the site of surface water discharge. Residual solids are normally pumped directly to the Northwest Regional Biosolids Recovery Facility, located adjacent to the site. An on-site holding tank is also available for short-term storage of biosolids when necessary. The site also includes a truck unloading station for receiving wastewater collected by County vehicles that clean sewer manholes. Brown and Caldwell inspected the Northwest Regional Water Reclamation Facility on October 13, 2009 and found it to be in generally very good condition.

Northwest Regional Biosolids Recovery Facility. The Northwest Regional Biosolids Recovery Facility is located in the Northwest Service Area. It currently operates under the same FDEP permit as the Northwest Regional Water Reclamation Facility.

The Northwest Regional Biosolids Recovery Facility is a Type I biosolids management facility with a capacity of 25 dry tons per day. It receives biosolids from the seven wastewater treatment plants in the Northwest and South-Central Service Areas. The biosolids are screened, stabilized

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using aerobic digestion, dewatered utilizing gravity belt filtration, and dried using the pelletization process. The end product is sold to commercial end users. The pelletized product meets Class AA requirements for biosolids. Brown and Caldwell inspected this facility on October 13, 2009 and found it to be in excellent condition.

River Oaks Advanced Wastewater Treatment Plant (AWWTP). The River Oaks AWWTP is located in the Northwest Service Area. This facility has a permitted AADF capacity of 10.0 MGD. Effluent from the plant either is pumped to the Northwest Master Reuse System for distribution to reclaimed water customers or is discharged to Channel “A” which eventually flows into Old Tampa Bay.

This facility provides influent flow screening, primary clarification, biological nitrification and denitrification, secondary clarification, filtration, high-level disinfection utilizing sodium hypochlorite and post-aeration and dechlorination (for surface water discharge). Residual solids generated at the River Oaks AWWTP are aggregated in a blend tank and pumped to the Northwest Regional Biosolids Recovery Facility for further treatment and disposal.

This facility was originally constructed in the 1970s and has been upgraded and expanded several times since then. Brown and Caldwell inspected this plant on February 20, 2009 and found it to generally be in good condition.

South County Regional Advanced Wastewater Treatment Facility (AWWTF). The South County Regional AWWTF is located in the South Service Area. The plant currently has a permitted AADF capacity of 4.5 MGD and is under design for an upgrade to 10.0 MGD. Treated effluent from the plant either is pumped to the South-Central Hillsborough County Master Reuse System for distribution to reclaimed water customers or is discharged to the Port Redwing Canal which discharges to Tampa Bay. Up to 2.5 MGD of effluent can also be conveyed to the Tampa Electric Company’s Big Bend Generating Station for industrial process use. Approximately 0.15 MGD of treated effluent is conveyed to National Gypsum and 1.2 MGD is available to Cargill (an agricultural products manufacturing facility) for reuse purposes. A 30.0-MG effluent storage pond is located at the Tampa Electric Company (TECO) Big Bend electric generation plant site.

This facility provides influent screening and grit removal, biological nitrogen and phosphorus removal, final clarification, filtration, high-level disinfection utilizing an ultraviolet system, and post-aeration and dechlorination (for surface water discharge). Residual solids are thickened on two gravity-belt thickeners and then hauled to the biosolids management facility at the Northwest Regional Biosolids Recovery Facility. Brown and Caldwell inspected this facility on February 18, 2009 and found it to generally be in average to good condition.

Valrico Advanced Wastewater Treatment Facility (AWWTF). The Valrico AWWTF is located in the Central Service Area. Substantial completion of construction activities associated with an expansion of this facility was completed in June 2009. The plant has a permitted treatment capacity of 12.0 MGD. Treated effluent from the plant is currently pumped to the South-Central Hillsborough County Master Reuse System for distribution to reclaimed water customers or discharged to Turkey Creek which discharges to the Alafia River and eventually Tampa Bay.

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Four 5.0-MG effluent storage tanks are located on-site. The plant provides influent screening and grit removal, biological nitrogen and phosphorus removal, secondary clarification, filtration, and high-level disinfection utilizing an ultraviolet system. A post-aeration process is available at this facility should disposal of effluent to surface water be required. Class B sludge is produced utilizing sludge holding tanks and two new centrifuges and then hauled to the Northwest Regional Biosolids Recovery Facility where it undergoes pelletization. Brown and Caldwell inspected the Valrico AWWTF on October 5, 2009 and found the facility to be in excellent condition.

Van Dyke Wastewater Treatment Plant (WWTP). The Van Dyke WWTP is located in the Northwest Service Area. This facility was originally constructed in 1985 and has been in operation for over 20 years. No expansions have been performed since the plant was originally constructed. However, the filtration system was modified and upgraded in the mid-1990s to comply with FDEP requirements for reuse systems.

The Van Dyke WWTP has a permitted AADF capacity of 1.7 MGD. Effluent from the plant is discharged to the Northwest Hillsborough County Master Reuse System which supplies reclaimed water to customers in the Van Dyke service area. There is no surface water discharge from this plant.

The plant provides influent screening, biological treatment, secondary clarification, filtration, and high level disinfection utilizing gaseous chlorine and ammonia. Residual solids generated at the plant are stored in an on-site holding tank and transported to the Northwest Regional Biosolids Recovery Facility for treatment and disposal. Brown and Caldwell inspected the Van Dyke WWTP on October 13, 2009 and found it to generally be in good condition.

Wastewater Gravity Mains and Manholes Major components of the gravity wastewater collection system are presented in the following table. As shown, the wastewater collection system consists of over 1,500 miles of gravity sewer mains and over 31,000 manholes.

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Major Components of the Hillsborough County Wastewater Collection System – Gravity Mains and Manholes Northwest South-Central Component Service Area Service Area Total Gravity Pipe (feet) 4-inch 241,000 471,050 712,050 6-inch 220,700 406,000 626,700 8-inch 2,641,100 3,842,600 6,483,700 10-inch 80,000 34,500 114,500 12-inch 29,000 20,500 49,500 15-inch 10,000 7,000 17,000 18-inch 6,600 900 7,500 21-inch 40 3,000 3,040 24-inch 2,000 11,540 13,540 30-inch 0 5,000 5,000 36-inch 0 800 800 42-inch 0 4,900 4,900 Total (feet) 3,230,440 4,807,790 8,038,230

Total (miles) 612 911 1,522

Gravity Manholes (number) 12,900 18,150 31,050

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Wastewater Pumping Stations and Forcemains The following table summarizes the current quantities of pump stations, valves, and forcemains contained in the County's Wastewater System. Major Components of the Hillsborough County Wastewater Collection System – Pump Stations, Valves and Forcemains Northwest South-Central Component Service Area Service Area Total Pump Stations (number) County 296 403 699 Low Pressure 0 1,200 1,200 Valves (number) Air Release Valves 293 582 875 Valves 1,440 2,910 4,350

Low Pressure Forcemain (feet) 1.25-inch 0 100 100 1.5-inch 0 102,000 102,000 2-inch 0 200 200 2.5-inch 0 90 90 3-inch 0 214,000 214,000 4-inch 0 47,800 47,800 6-inch 0 21,000 21,000 8-inch 0 15,000 15,000 10-inch 0 5,800 5,800 12-inch 0 5,000 5,000 14-inch 0 6,200 6,200 16-inch 0 0 0 18-inch 0 0 0 20-inch 0 0 0 Total (feet) 0 417,190 417,190 Total (miles) 0 79 79

Forcemain (feet) 1.25-inch 5 45 50 1.5-inch 270 720 990 2-inch 13,700 14,100 27,800 2.5-inch 0 220 220 3-inch 11,700 17,000 28,700 4-inch 310,000 450,000 760,000 6-inch 252,000 331,000 583,000 8-inch 156,000 310,000 466,000 10-inch 92,000 122,000 214,000 12-inch 122,000 218,000 340,000 14-inch 2,500 0 2,500 16-inch 68,000 209,000 277,000 18-inch 2,700 7,000 9,700 20-inch 45,400 123,000 168,400 24-inch 65,500 98,000 163,500 30-inch 9,710 9,500 19,210 36-inch 14,450 1,500 15,950 Total (feet) 1,165,935 1,911,085 3,077,020 Total (miles) 221 362 583

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Operational Performance of Wastewater Treatment Plants The Department's seven wastewater treatment facilities treated an average of 35.601 MGD AADF of wastewater during Fiscal Year 2009 (does not include wastewater treatment services purchased from the City of Tampa). This wastewater flow is approximately 63.3 percent of the County's 56.2 MGD permitted capacity. A summary of the Fiscal Year 2009 actual operating flows and permitted WWTP capacities is shown below:

Fiscal Year 2009 Wastewater Treatment Plant Operating Flows and Permitted Capacities Actual Current Permitted Wastewater Fiscal Year 2009 Treatment Capacity, Annual Wastewater Flow, Facility Name Average Daily Flow (AADF), MGD AADF, MGD Northwest Service Area: Dale Mabry AWWTP 6.00 4.547 Van Dyke WWTP 1.70 1.081 Northwest Regional WRF 10.00 5.482 River Oaks AWWTP 10.00 7.114 Northwest Service Area Total 27.70 18.224

South-Central Service Area: Falkenburg Road AWWTP 12.00 8.230 Valrico AWWTF 12.00 5.200 South County Regional AWWTF 4.50 3.947 SR60 City of Tampa Interconnect 2.48 0.560 [1] South-Central Service Area Total 30.98 17.937 Wastewater System Total 58.68 36.161 ______[1] Flow temporarily diverted from Falkenburg Road AWWTP during expansion which ended June 2009; the total permitted capacity without the recognition of the City of Tampa Interconnect is 56.20 MGD.

AWWTP = Advanced Wastewater Treatment Plant WWTP = Wastewater Treatment Plant WRF = Water Reclamation Facility AWWTF = Advanced Wastewater Treatment Facility

Wastewater facilities in the Northwest service area treated an AADF of 18.224 MGD equal to 65.8 percent of their permitted capacity. Wastewater facilities in the South-Central service area treated an AADF of 17.377 MGD. An additional 0.56 MGD was temporarily diverted from the Falkenburg AWWTP to the City of Tampa. The total flow of 17.937 MGD is 62.9% of the permitted capacity of the South-Central facilities.

Regulatory Status of Wastewater System The County wastewater treatment and biosolids management facilities are permitted and regulated by the FDEP. The following paragraphs are descriptions of the regulatory status of each wastewater system followed by a section that discloses a proposed wastewater effluent quality rule-change from EPA that has the potential for significant impact on the Department.

Dale Mabry AWWTP. The Dale Mabry AWWTP operates under FDEP Permit Number FL0036820. The permit was issued on March 11, 2010 and will expire on March 10, 2015.

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There have been no regulatory issues reported by the County for this advanced wastewater treatment plant during the Fiscal Year 2009.

Falkenburg Road AWWTP. The Falkenburg Road AWWTP operates under FDEP Permit Number FL0040614, which was issued on June 16, 2009 and which expires on June 15, 2014. The permit was issued with an effluent limit 22 ug/l for dichloro-bromomethane. The plant is equipped with an ultraviolet disinfection system that is designed so the plant can meet this standard. There were no regulatory issues reported by the County at the Falkenburg Road AWWTP during Fiscal Year 2009. However, FDEP is expected to issue a short form consent order due to effluent quality exceedances that occurred between 2007 and 2009 prior to the plants expansion and conversion to ultraviolet disinfection. Penalty negotiations are ongoing and the only penalty the Department currently anticipates will be less than $100,000.

Northwest Regional WRF and Northwest Regional Biosolids Recovery Facility. These two facilities operate under FDEP Permit Number FL0041670 that expired on April 27, 2010. This permit was issued on April 28, 2005, and a renewal application was timely filed on October 28, 2009. During FDEP’s review, the permit is administratively continued. On October 31, 2008, the permit was revised to include a new ultraviolet disinfection system that was installed at the water reclamation facility. It is expected by the Department that the operating permit will be issued by FDEP.

Toxicity tests have been required of the effluent at the plant since 1991. Continuing intermittent exceedances of permit limits for total nitrogen and toxicity at the Northwest Regional WRF led to the negotiation of a Consent Order between Hillsborough County and the FDEP in December 2004. The County met all requirements and deadlines of the Consent Order. The final compliance report for the Consent Order was submitted by the Department and a letter from FDEP closed the issue on December 8, 2009. It is expected by the Department that the operating permit for this wastewater treatment facility will be issued by the FDEP.

River Oaks AWWTP. The River Oaks AWWTP operates under FDEP Permit Number FL0027821 which was issued on October 22, 2004 and expired on October 21, 2009. The application to renew the operation permit was timely submitted on April 22, 2009 and requested additional information was supplied by the Department on September 25, 2009. It is expected by the Department that the operating permit for this wastewater treatment facility will be issued by the FDEP. The Department anticipates an administrative order from FDEP due to the plant's exceedance of the annual average limit to dichloro-bromomethane. Fines or penalties are not expected but a compliance schedule is anticipated.

A series of wastewater forcemain failures in 2008 and 2009 caused four sanitary sewer overflows within this plant's service area. The enforcement case has been deferred from FDEP to the Hillsborough County Environmental Protection Commission (EPC) where a draft Consent Order is expected to be prepared and sent to the Department. Department staff is uncertain as to its provisions but it might include a monetary penalty in a form of a fine; the Department is of the opinion that this contingent liability will not be significant (less than $100,000). The Department is pursing legal action against the pipe installation contractor as a result of the forcemain failures.

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South County Regional AWWTF. The South County Regional AWWTF operates under FDEP Permit Number FL0028061, which was issued on January 15, 2009 and revised on October 1, 2009; the operating permit expires on January 14, 2014. The plant has experienced intermittent failures with the chronic toxicity tests and studies are underway to determine the cause. Additional testing will be performed as required by FDEP.

Valrico AWWTF. The Valrico AWWTF operates under FDEP Permit Number FL0040983, which was issued on June 16, 2009 and which expires on June 15, 2014. The new permit was modified to include the 12.0 MGD expansion, a new UV disinfection system, and the new THM limit for dichloro-bromomethane 22 ug/L. Ultraviolet disinfection was installed at the facility as part of the expansion project in order to meet the THM (trihalomethane) limits. Earlier, the County entered into a consent order with FDEP regarding dichloro-bromomethane and total nitrogen (TN). Interim limits of 30 ug/L dichloro-bromomethane and 7 ug/L TN as annual averages were established in the consent order and have been met by the County. Final compliance with the consent order was met in December 2009 and a letter received from FDEP on January 19, 2010 closing the issue.

During Fiscal Year 2009, the FDEP issued a Short Form Consent Order to the Department regarding the operation of the 2.0 MGD sprayfield at the Valrico AWWTP facility. The County has established a capital improvement project to facilitate rehabilitation of the sprayfield and to comply with the consent order.

Van Dyke WWTP. The Van Dyke WWTP operates under FDEP permit Number FLA012234, which was issued on August 23, 2007 and is due to expire on August 22, 2012. There is no surface water discharge from this facility because all effluent from this facility serves as source water for the Northwest Hillsborough County Master Reuse System. There have been no regulatory actions reported by the County at this plant during the Fiscal Year 2009.

Potential Numeric Nutrient Criteria Regulations. On January 14, 2009, the Environmental Protection Agency (EPA) made a determination that numeric water quality criteria for lakes and flowing waters and for estuaries and coastal waters are necessary for the State of Florida to meet requirements of the Clean Water Act. This was followed by an August 2009 legal settlement with environmental third parties committing the EPA to establish final nutrient standards for lakes and flowing waters in Florida by October 2010 and for estuarine and coastal waters by October 2011. Proposed requirements were published in the Federal Register in January 2010 and public hearings conducted in Florida in February and April 2010. On June 7, 2010, EPA and Earth Justice filed a joint notice with the U.S. District Court to extend the proposed numeric nutrient criteria deadlines to November 2011 for canals, estuaries, and coastal waters. EPA plans to submit the "underlying methodologies, analysis, and data" for peer review by the Science Advisory Board. It is anticipated the proposed nutrient criteria will be very stringent and will result in significant reductions to nitrogen and phosphorus discharges well below levels currently required for the Department. If the rule is finalized, it could require a substantial investment in additional facility updates, possibly in conjunction with treatment plant permits renewals through FDEP. There is uncertainty surrounding the proposed rule, including compliance schedules. Historically FDEP has allowed, on a case by case basis, up to three years for completion of projects necessary to meet new permit requirements. However, EPA compliance schedules

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associated with any enacted numeric nutrient criteria are unknown. The proposed criteria are the subject of legal challenges by numerous stakeholder organizations.

Wastewater Collection System (MOM) Program In response to the Department's Management, Operations and Maintenance (MOM) Programs Self-Assessment Report submitted in June 2006, the Environmental Protection Agency (EPA) issued a Draft Administrative Order on Consent (the "Order") in August 2007. The Order alleged that the Department has discharged untreated sanitary sewage containing pollutants to Waters of the United States at locations not authorized by a National Pollutant Discharge Elimination System (NPDES) permit. Without denying or admitting EPA charges, the Department entered into an Administrative Order on Consent with EPA in June 2008.

Fines and penalties were not assessed against the Department, and the Order acknowledges activities already underway to reduce Sanitary Sewer Overflows (SSOs). The Order requires the submission of various reports to EPA over a five-year period. The first requirement was met in 2009 when the Department submitted its first annual report to EPA in March. The report provided an overview of MOM efforts conducted during Calendar Year 2008, with an emphasis on the reduction of SSOs during the reporting period. An average of 19 SSOs occurred per month in Fiscal Year 2009. In 2009, there were 74 SSOs of 1,000 gallons or less that did not reach surface waters, with 43 of those being less than 100 gallons. During Fiscal Year 2009, a total of 230 SSOs were reported which is comparable to recent historical trends (245 SSOs reported during Fiscal Year 2008, 287 SSOs reported during Fiscal Year 2007 and 229 SSO reported during Fiscal Year 2006). All SSOs were reported to the FDEP and EPC within the required timeframe. Required Order submissions to EPA in Fiscal Year 2010 include a second Annual Report for Calendar Year 2009, which was provided to EPA on March 31, 2010, and a Comprehensive MOM Plan which was submitted on June 4, 2010.

Condition of Wastewater System Brown and Caldwell inspected the treatment facilities and samplings of the collection system making up the Wastewater System during February, March, and October 2009. Based on observations made during these inspections, it is Brown and Caldwell’s opinion that the wastewater collection and treatment components of the Wastewater System are being operated and maintained in an acceptable manner.

RECLAIMED WATER SYSTEM The County’ Reclaimed Water System currently includes twelve reclaimed water pump stations, of which many of these sites also include reclaimed water storage. The Reclaimed Water System provided reclaimed water service on average to over 15,000 residential, commercial and large user accounts during the Fiscal Year 2009. The reclaimed water transmission and distribution system is located in the same two general service areas as discussed for the Wastewater System: Northwest and the South-Central. The following section provides a discussion of the facilities that comprise the Reclaimed Water System.

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Reclaimed Water Pump Stations Brown and Caldwell inspected all twelve of the reclaimed water pump stations that are currently part of the Reclaimed Water System during March 2009. Based on the observations made during the inspections, the reclaimed water facilities are currently being operated and maintained in an acceptable manner. The reclaimed water facilities appear to have excellent operation and maintenance programs in place. Nevertheless, refurbishment of several facilities may be needed within the next five years simply due to the age of the equipment. Brown and Caldwell developed lists of suggested renewal and replacement (R&R) projects and identified operation and maintenance (O&M) needs at the reclaimed water pump stations following completion of the facility inspections. The R&R projects and O&M needs are generally associated with replacement of pumps and electrical equipment and equipment painting and leak repair. None of the O&M needs affect the current level of service provided by the reclaimed water pump stations. Such improvements have been included as a component of the System’s six-year capital program as presented later in this Report. The following is a summary discussion of the reclaimed water pump stations:

Dale Mabry Reclaimed Water Pump Station. The Dale Mabry Reclaimed Water Pump Station is located in the Northwest Service Area at the site of the Dale Mabry AWWTP. The facility was recently expanded from 9.6 MGD of pumping capacity to 17.0 MGD. Construction of this expansion was completed in 2008. The facility also includes two 5.0-MG reclaimed water ground storage tanks. The ground storage tanks receive reclaimed water from the wastewater treatment plant. A total of six export pumps supply reclaimed water into the Northwest Hillsborough County Master Reuse System for distribution to reclaimed water customers. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in very good condition.

Falkenburg Road Reclaimed Water High Pressure and Low Pressure Pump Station. The Falkenburg Road Reclaimed Water Pump Station is located in the South-Central Service Area at the site of the Falkenburg Road AWWTP. The facility has two pump stations (a high and low pressure station) and two 5.0-MG reclaimed water ground tanks. The ground storage tanks receive reclaimed water from the wastewater treatment plant. The high pressure station supplies reclaimed water to the South-Central Hillsborough County Master Reuse System including the South County Resource Recovery Facility and customers in areas referred to as Sabal Park and Valrico at a firm pumping capacity of 10.21 MGD. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in good condition The low pressure pump station has a firm pumping capacity of 7.91 MGD and pumps into the South County distribution system which feeds the commercial users such as: Cargill, National Gypsum, and TECO and the Summerfield reclaimed water storage tank for use in the South County distribution system. The low pressure pump station was constructed in Fiscal Year 2004. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in good condition.

Lithia Pinecrest Reclaimed Water Pump Station. The Lithia Pinecrest Reclaimed Water Pump Station is located in the South-Central Service Area of the County and was constructed during the Fiscal Year 2009. It has a firm pumping capacity of 13.61 MGD and includes a 5.0-MG reclaimed water ground storage tank. It supplies reclaimed water to the South/Central

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Hillsborough Master Reuse System. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in excellent condition.

Northdale Tank and Reclaimed Water Pump Station. The Northdale Tank and Reclaimed Water Pump Station is part of the Northwest Hillsborough County Master Reuse system. The station has a firm pumping capacity of 6.47 MGD and a storage capacity of 10.0-MG. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in overall excellent condition.

Northlakes Reclaimed Water Pump Station. The Northlakes Reclaimed Water Pump Station is a component of the Northwest Hillsborough County Master Reuse System. The facility has a firm pumping capacity of 2.16 MGD and reclaimed water storage capacity of 10.0-MG. This pump station supplies reclaimed water to Lake Heather Oaks, Avila Golf Course, and Avila Residential areas. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in very good condition.

Northwest Reclaimed Water Pump Station. The Northwest Reclaimed Water Pump Station is located in the Northwest Service Area at the site of the Northwest Regional WRF. The facility was recently expanded from a firm pumping capacity of 15.55 MGD to 28.06 MGD. The facility ground storage was expanded from one 3.0-MG reclaimed water ground storage tank to 13.0 MG by adding two 5.0-MG tanks. The ground storage tank receives reclaimed water from the treatment plant. The expanded pump station has a total of six export pumps that supply reclaimed water into the Northwest Hillsborough County Master Reuse System for distribution to reclaimed water customers. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in very good condition.

River Oaks Reclaimed Water Pump Station. The River Oaks Reclaimed Water Pump Station is located in the Northwest Service Area at the site of the River Oaks AWWTP. The facility has a firm pumping capacity of 12.37 MGD and one 5.0-MG reclaimed water ground storage tank. The ground storage tank receives reclaimed water from the wastewater treatment plant. A total of four export pumps supply reclaimed water into the Northwest Hillsborough County Master Reuse System for distribution to reclaimed water customers. Three of the pumps were replaced in Fiscal Year 2003. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in good condition.

South County Reclaimed Water Pump Station. The South County Reclaimed Water Pump Station is a component of the South-Central Hillsborough County Master Reuse System and is located at the site of the South County Regional AWWTF. The facility has a firm pumping capacity of 12.09 MGD and includes two 6.0-MG reclaimed water ground storage tanks. The ground storage tanks receive reclaimed water from the treatment plant. A total of five export pumps supply reclaimed water to Cypress Creek Golf Course, Caloosa Golf Course, Cypress Greens Golf Course, and South Golf Course. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in good condition.

Summerfield Reclaimed Water Pump Station. The Summerfield Reclaimed Water Pump Station is a component of the South-Central Hillsborough County Master Reuse System. The

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Department recently constructed a new pump station at this site. A total of five export pumps now supply flow to the South-Central Hillsborough Master Reuse System. The facility has a firm pumping capacity of 7.63 MGD and includes one 4.0-MG reclaimed water ground storage tank. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in very good condition.

Valrico Reclaimed Water Pump Station. The Valrico Reclaimed Water Pump Station is a component of the South/Central Hillsborough County Master Reuse System and is located at the site of the Valrico AWWTF. The recently expanded facility has a firm pumping capacity of 19.57 MGD and includes four 5-MG reclaimed water ground storage tanks. The ground storage tanks receive reclaimed water from the wastewater treatment plant. Five export pumps supply reclaimed water to the Diamond Hill Golf Course and residential and commercial reclaimed water customers located in the South-Central service area. Brown and Caldwell inspected this facility on March 5, 2009 and found it to be in excellent condition.

Van Dyke Reclaimed Water Pump Station. The Van Dyke Reclaimed Water Pump Station is a component of the Northwest Hillsborough County Master Reuse System and is located at the site of the Van Dyke WWTP. The facility has a firm pumping capacity of 6.05 MGD and includes 9.8-MG of reclaimed water storage in a lined pond and a 6.0-MG ground storage tank. The Department expects to remove the pond from service once another ground storage tank is constructed in the future. The Department also expects to rehabilitate the existing filters in the future. This pumping system supplies reclaimed water to areas such as the Cheval Golf Course and part of the Cheval subdivision, and to the residential areas of Heritage Harbor. Brown and Caldwell inspected this facility on March 6, 2009 and found it to be in good condition.

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Reclaimed Water Distribution System The following table presents the major components of the Hillsborough County reclaimed water distribution system.

Major Components of the Hillsborough County Reclaimed Water Distribution System Northwest South-Central Component Service Area Service Area Total Valves (number) Air Release Valves 125 180 305

Gate/Plug/Butterfly Valves 1,610 935 2,545

Reclaimed Watermains (feet) 2-inch 2,000 0 2,000 2.5-inch 1,446 0 1,446 3-inch 294 150 444 4-inch 378,000 163,000 541,000 6-inch 179,000 67,000 246,000 8-inch 103,000 52,000 155,000 10-inch 43,500 6,200 49,700 12-inch 109,000 96,000 205,000 14-inch 4,000 0 4,000 16-inch 90,400 76,000 166,400 18-inch 2,000 90 2,090 20-inch 56,000 16,500 72,500 24-inch 17,500 155,000 172,500 30-inch 14,200 59,000 73,200 36-inch 26,900 26,000 52,900 40-inch 1,160 0 1,160 Total (feet) 1,028,400 716,940 1,745,340 Total (miles) 195 136 331

Operational Performance On a system-wide basis, an average annual daily flow (AADF) of 21.26 MGD of reuse water was distributed by the Department through its Reclaimed Water System during Fiscal Year 2009. Of the total amount of reclaimed water distributed during the Fiscal Year 2009, approximately 11.60 MGD was in the Northwest service area and approximately 9.66 MGD was in the South and Central service areas. Approximately 60% of all effluent discharged by the County's wastewater treatment facilities was reused in Fiscal Year 2009, the remaining effluent was discharged to surface waters.

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The following table summarizes the use of reclaimed water service by category that occurred in Fiscal Year 2009 as reported by the Department.

Breakdown of Reclaimed Water Use by Category – Fiscal Year 2009 South-Central Northwest Service Area Service Area Total County Service Area Average Average Average Reclaimed Water Daily Flow Percent of Daily Flow Percent of Day Flow Percent of Use Category (MGD) Total (MGD) Total (MGD) Total Golf Course Irrigation 0.728 6% 0.907 9% 1.635 8% Commercial Irrigation 1.439 12% 1.044 11% 2.483 12% Industrial Process 1.817 16% 4.208 44% 6.025 28% Residential Irrigation 7.624 66% 3.496 36% 11.120 52% Total 11.608 100% 9.655 100% 21.264 100%

Regulatory Status Summary There were no regulatory compliance issues for the reclaimed water system for Fiscal Year 2009. In general, the quality of the reclaimed water depends on the quality of the wastewater treatment facility effluent. At each of the wastewater treatment facilities providing reclaimed water, if the wastewater treatment facility effluent does not meet reclaimed water standards, it is automatically rejected from the reclaimed water distribution system.

Condition of Reclaimed Water System Brown and Caldwell inspected the reclaimed water pump stations in March 2009. Based on observations made during these inspections, it is Brown and Caldwell’s opinion that the reclaimed water pump stations are currently being operated and maintained in an acceptable manner.

CAPITAL IMPROVEMENT PROGRAM (CIP)

General The Department has planned capital improvements associated with providing renewals and replacements of existing System facilities as well as the expansion of water and wastewater capacity and reliability of the System during the next several years. The total projected cost of such improvements for the "Forecast Period" (which encompasses the six fiscal year period ending September 30, 2015), including those projects that were initiated during or prior to the Fiscal Year 2009 that are still underway (referred to as a "project carryforward"), is anticipated by the Department to be approximately $483.7 million. The cost of the capital improvements is based on capital plans prepared by the Department and other engineers employed by the Department as part of its ongoing capital improvement plan program. A summary of capital appropriations estimate by project-type or function for the combined Forecast Period is summarized on the following table and shown on Table 8 at the end of this Report.

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Summary of Capital Improvement Plan By Facility Function for the Forecast Period (Dollars in 000s) [1] Fiscal Year Ending September 30, Carry- Total Forward 2010 2011 2012 2013 2014 2015 Period Water Treatment $20,520 $8,200 $1,000 $500 $1,000 $1,000 $1,000 $33,220 Water Distribution 12,598 4,550 11,550 5,150 3,570 5,280 3,000 45,698 Wastewater Treatment [2] 22,763 12,760 16,040 24,750 71,500 30,500 27,500 205,813 Wastewater Collection 48,723 30,646 16,750 28,829 11,320 11,180 8,500 155,948 Reclaimed Water 7,293 670 670 1,300 300 2,750 8,050 21,033 General [3] 0 3,132 6,069 5,285 2,792 2,342 2,341 21,961 Total Capital Program $111,897 $59,958 $52,079 $65,814 $90,482 $53,052 $50,391 $483,673 ______[1] Amounts shown derived from Table 8 at end of Report; amounts reflect capital project appropriations and not when funds are anticipated to be expended on such capital projects. [2] The significant project appropriation shown beginning in Fiscal Year 2012 for the wastewater treatment plant function is associated almost exclusively with the 7.5 MGD expansion of the South County Regional AWWTF from 4.5 MGD to 7.50 MGD and then from 7.50 MGD to 12.0 MGD (phased expansion program which initiates during Fiscal Year 2012). [3] Amounts reflect project expenditures for General Plant such as equipment, machinery, and vehicles and for customer service building rehabilitation.

The 2010 Project The Department staff has identified a listing of projects by priority that are planned to be constructed in the next 36 months following the issuance of the Series 2010 Bonds and are thus considered as being available for funding from such bond proceeds. The following is a summary of these projects as identified by the Department:

Summary of Capital Projects Available to be Funded from Series 2010 Bonds Capital Improvements Amount Available Priority for Funding from Rank [1] CIP No. Project Name Appropriations [2] Series 2010 Bonds [3] 1 10143 South County Regional AWWTF Expansion from 4.5 MGD to 7.50 MGD [4] $52,000,000 $15,000,000 2 10197 Golf And Sea Wastewater Pumping Station #1 & #2 (Conversion To Gravity Sewer) 1,500,000 1,500,000 3 10745 Regional Wastewater Treatment Plant Renewals And Replacements – Countywide Master Project 11,752,687 7,500,000 4 10198 South Hillsborough Aquifer Recharge Program (Sharp) 3,500,000 3,500,000 5 10167 Faulkenburg AWTP Sludge Dewatering Upgrade 7,000,315 6,500,000 6 10138 Countywide Major Wastewater Pump Station R&R Master Project 11,154,333 10,000,000 7 10168 Dale Mabry AWTP Headworks Rehabilitation 3,000,000 2,000,000 8 10170 Northwest Biosolids Gravity Belt Thickener Rehabilitation 800,000 500,000 9 10744 Manhole Inspection And Rehabilitation – Countywide Master Project 4,509,058 2,500,000 10 10163 Crosby Road Reclaimed Water Transmission Main 5,991,819 4,500,000 11 10171 Wastewater Forcemain Renewals And Replacements – Countywide Master Project 2,989,866 1,000,000 ______Table continued on following page.

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Summary of Capital Projects Available to be Funded from Series 2010 Bonds (cont'd.) Capital Improvements Amount Available for Priority CIP Funding from Series Rank [1] No. Project Name Appropriations [2] 2010 Bonds [3] 12 10199 River Oaks AWTP Headworks Rehabilitation 2,500,000 2,500,000 13 31978 BSOC Command / Emergency Operations Center 4,250,000 4,250,000 14 30116 Water Treatment Plant Renewals And Replacements – Countywide Master Project 5,362,934 2,000,000 15 10149 Big Bend Road Wastewater Pumping Station 2,233,029 2,200,000 16 10173 Vandyke Headworks Rehabilitation 2,500,000 2,200,000 17 10200 Valrico AWTP RAS Pump Replacement 550,000 550,000 18 10140 Wastewater Pump Station Replacements – Countywide Master Project 7,363,071 3,900,000 19 10794 Pump Station SCADA Phase II (A) 20,112,811 12,000,000 20 10176 Comanche Wastewater Pumping Stations Replacement and Rehabilitation 600,000 250,000 21 31977 Countywide Water Transmission Main/ Distribution Line R&R 3,000,000 2,000,000 22 31964 South County Potable Water Repump Station 6,646,254 6,500,000 23 10150 Symmes Road Wastewater Pumping Station 759,626 600,000 24 10177 Boyette Road Forcemain Phase III 4,520,167 5,500,000 25 31957 Fire Flow Deficiency - Countywide Master Project 8,778,606 3,500,000 26 31960 Lithia Water Treatment Plant Auxiliary Power Improvements 5,037,157 3,200,000 27 10152 U.S. Highway 301 Forcemain (Valencia Lakes To State Road 674) 2,834,441 1,500,000 28 31971 Williams Road Water Transmission Main (U.S. Highway 92 to Bartolotti Loop) 1,300,000 1,300,000 29 31963 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 3,867,230 1,000,000 30 10157 U.S. Highway 41 Forcemain (J Taylor Project To Big Bend Road) 422,000 400,000 31 10159 Gibsonton Road Forcemain (Gibson Elementary To Old Gibsonton Drive) 400,000 320,000 32 10145 State Road 674 Forcemain (Clubhouse Pump Station To U.S. Highway 301) 4,445,646 3,000,000 33 10146 State Road 674 Forcemain (Clubhouse Pump Station To South County Regional AWWTF) 3,950,730 3,000,000 34 10202 Brushy Creek Pump Station Rehabilitation 2,000,000 2,000,000 35 10178 Valrico Sprayfield Rehabilitation 1,096,649 900,000 36 31973 State Road 60 Water Transmission Main (Miller Road to Valrico Road) 350,000 350,000 37 31979 Countywide Nonurgent Facility R&R (Master Project) $600,000 $600,000 38 10191 Valrico AWTP 5 Mg Reclaimed Water Storage Tank Rehabilitation 1,000,000 900,000 39 10768 Low Pressure Sewer System (LPSS) – Countywide Master Project 5,591,739 2,000,000 40 10206 Del Webb South Pump Station Rehabilitation 1,750,000 1,750,000 41 31980 Manors Of Crystal Lakes Interconnection 2,500,000 2,500,000 42 10144 County Road 672 Forcemain (Balm Riverview Road To U.S. Highway 301) 9,374,325 4,500,000 ______Table continued on following page.

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Total $223,248,981 $134,570,000 ______[1] Priority of project spending developed by Department; does not represent all capital projects during presentation period (see note 2 below). [2] Reflects unspent capital project appropriations in prior years (carryforward projects) as well as capital project appropriations for Fiscal Years 2010 through 2012. [3] Reflects amount estimated by Department to be spent during the 36 months following issuance of Series 2010 Bonds, and thus considered to be available for funding from such bond proceeds. [4] Represents initiation of the construction of the South County Regional AWWTP expansion project from 4.50 MGD to 7.50 MGD; majority of project cost appropriation occurs in Fiscal Year 2013 for project construction and is assumed in this Report to be funded from Series 2012 Bonds.

Capital expenditures anticipated by the Department to be funded in part by the issuance of the Series 2010 Bonds are summarized below by project type and category. As can be seen below, it is estimated that approximately 59% of the capital expenditures will be for renewals and replacements of existing assets and the remainder will be for expansion-related projects.

Summary of Capital Projects by Type and Category Available to be Funded from Series 2010 Bond Proceeds [*] Project Type Project Category Renewals and Replacements Total Individual Available Facility Master CIP No. Project Name Project Cost New Projects Projects Projects Potable Water System 30116 Water Treatment Plant R&R – Master Project $2,000,000 $- $- $2,000,000 31957 Fire Flow Deficiency Master Project 3,500,000 - - 3,500,000 31960 Lithia WTP Auxiliary Power Improvements 3,200,000 - 3,200,000 - 31963 Lithia WTP Hydrogen Sulfide Treatment 1,000,000 1,000,000 - - 31964 South County Potable Water Repump Station 6,500,000 6,500,000 - - 31971 Williams Road Water Transmission Main (US Hwy.92 to Bartolotti Loop) 1,300,000 1,300,000 - 31973 State Road 60 Water Transmission Main (Miller Rd. to Valrico Rd.) 350,000 350,000 - - 31976 Old Hillsborough Ave. Water Transmission Main 500,000 500,000 - - 31977 County-wide Water Transmission Main / Distribution Line R&R 2,000,000 - - 2,000,000 31980 Manors of Crystal Lakes Interconnection 2,500,000 2,500,000 - - Total Potable Water System $22,850,000 $12,150,000 $3,200,000 $7,500,000 ______Table continued on following page.

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Summary of Capital Projects by Type and Category Available to be Funded from Series 2010 Bond Proceeds [*] (cont'd.) Project Type Project Category Renewals and Replacements Total Individual Available Facility Master CIP No. Project Name Project Cost New Projects Projects Projects Wastewater System 10138 Countywide Major Wastewater Pump Station R&R $10,000,000 $- $- $10,000,000 10140 Countywide Major Wastewater Pump Station Rebuilds 3,900,000 - - 3,900,000 10144 County Road 672 Forcemain (Balm Riverview Rd to US Hwy 301) 4,500,000 4,500,000 - - 10143 South County Regional AWWTF Expansion from 4.5 MGD to 12.0 MGD 15,000,000 15,000,000 - - 10145 State Road 674 Forcemain (Clubhouse PS to U.S. Hwy 301) 3,000,000 3,000,000 - - 10146 State Road 674 Forcemain (Clubhouse PS to SCAWTP) 3,000,000 3,000,000 - - 10149 Big Bend Road Wastewater Pumping Station 2,200,000 2,200,000 - - 10150 Symmes Road Wastewater Pumping Station 600,000 600,000 - - 10152 US Highway 301 Forcemain (Valencia Lakes to S.R. 674) 1,500,000 1,500,000 - - 10157 US Highway 41 Forcemain (J Taylor Proj to Big Bend Road) 400,000 400,000 - - 10159 Gibsonton Road Forcemain (Gibson Elementary to Old Gibsonton Rd) 320,000 320,000 - - 10167 Faulkenburg AWTP Sludge Dewatering Upgrade 6,500,000 - 6,500,000 - 10168 Dale Mabry AWTP Headworks 2,000,000 - 2,000,000 - 10170 Northwest Biosolids Gravity Belt Thickener Rehabilitation 500,000 - 500,000 - 10171 Wastewater Forcemain R&R Master Project 1,000,000 - - 1,000,000 10173 Van Dyke Headworks Rehabilitation 2,200,000 - 2,200,000 - 10176 Comanche Wastewater Pumping Stations Replacement / Rehabilitation 250,000 - 250,000 - 10177 Boyette Road Forcemain Phase III 5,500,000 - 5,500,000 - 10187 Swindon Road Pump Station Phase II 900,000 900,000 - - 10197 Golf and Sea Wastewater Pump Stations #1 and 2 (conversion to gravity) 1,500,000 - 1,500,000 - 10199 River Oaks AWTP Headworks Rehabilitation 2,500,000 - 2,500,000 - 10200 Valrico AWTP RAS Pump Replacement 550,000 - 550,000 - 10202 Brushy Creek Pump Station Rehabilitation 2,000,000 - 2,000,000 - 10203 River Oaks ASTP Sodium Aluminate / Bisulfite Rehabilitation 1,300,000 - 1,300,000 - 10206 Del Webb South Pump Station Rehabilitation 1,750,000 - 1,750,000 - 10744 Manhole Inspection and Rehabilitation - Countywide 2,500,000 - - 2,500,000 10745 Regional Wastewater Treatment Plant R&R – County- wide Master Project 7,500,000 - - 7,500,000 10768 Low Pressure Sewer System Master Project 2,000,000 - - 2,000,000 10794 Pump Station SCADA Phase II A 12,000,000 - 12,000,000 - Total Wastewater System $96,870,000 $31,420,000 $38,550,000 $26,900,000

Reclaimed Water System 10163 Crosby Road Reclaimed Water Transmission Main $4,500,000 $4,500,000 $- $- 10178 Valrico Sprayfield Rehabilitation 900,000 - 900,000 - 10191 Valrico AWTP 5.0 MG Reclaimed Water Storage Tank Rehabilitation 900,000 - 900,000 - 10198 South Hillsborough Aquifer Recharge Program (SHARP) 3,500,000 3,500,000 - - 10795 Reclaimed Water Pump Station Refurbish. – County-wide Master Project 200,000 - - 200,000 Total Reclaimed Water System $10,000,000 $8,000,000 $1,800,000 $200,000 ______Table continued on following page.

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The proceeds of the Series 2010 Bonds are anticipated to be used in order to provide funds for the majority variety of the capital projects presented above. Specifically, it is anticipated that the Series 2010 Bonds will provide approximately $131.0 million in capital project funding towards project appropriations that were previously approved by the Board in prior years as well as additional appropriations planned for in Fiscal Years 2010 through 2012. It should be noted that the capital projects shown below are on an "appropriations" basis and may not necessarily represent the cash flow expenditures for such projects. It is anticipated that the expenditures to be funded from bond proceeds will be completed in 36 months from the date of issue of the Series 2010 Bonds. As can be seen in the following table, the use of the Series 2010 Bonds to fund project appropriations is anticipated to account for approximately 46% of the total capital appropriations by the Department during this portion of the Forecast Period.

Estimated Capital Appropriations Funding From Series 2010 Bonds (Dollars in 000s) Fiscal Year Ending September 30, Prior Appropriations [1] 2010 2011 2012 Total Period Total Capital Project Appropriations $111,897 $59,958 $52,079 $65,814 $289,748

Projects Funded by Series 2010 Bonds 26,100 19,873 35,638 49,431 131,042 Percent of Total Capital Projects 23.33% 33.14% 68.43% 75.11% 45.23% ______[1] Reflects project appropriations in prior fiscal years that are considered as a carryforward project (will be completed during Forecast Period) by the Department; project appropriations for Fiscal Year 2010 and Prior Years which have not been encumbered (liability for expenditure) will have prior funding realigned to be funded from proceeds Series 2010 Bonds.

The appropriation of the capital project expenditures that have been approved in prior years, the current Fiscal Year, and over the next two fiscal years for projects that comprise the 2010 Project as summarized earlier in this Report are expected by the Department to be spent over the next 36 months from the date of the issuance of the Series 2010 Bonds. The following is a summary of the estimated draw down (spending) of the funds on deposit in the Construction Account as established from the proceeds of the Series 2010 Bonds.

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Estimated Capital Expenditures for Projects Funded From Series 2010 Bonds (Dollars in 000s) Fiscal Year Ending September 30, 2011 2012 2013 Totals Total Capital Project Appropriations [1] $131,042

Capital Project Expenditures [2] $42,529 $54,303 $34,210 $131,042 Percent of Total Capital Projects 32.45% 41.44% 26.11% 100.00% ______[1] Includes capital project appropriations that were approved for expenditure during or prior to the Fiscal Year 2010, which have not been encumbered as of the issuance of the Series 2010 Bonds. The Department plans to adjust the funding responsibility of such projects from other capital project funding sources (e.g., Renewal and Replacement Account) to the Series 2010 Bonds for future capital funding purposes. [2] Represents capital expenditures for all projects that have been identified by the Department to be funded from Series 2010 Bonds (i.e., spending of cash proceeds).

The following is a summary description of the capital projects that are available and anticipated to be funded by the Department from available proceeds from the Series 2010 Bonds as well as from other available funds for this portion of the Forecast Period.

Potable Water Projects

30116 Water Treatment Plant Renewals and Replacements – Countywide Master Project This project allows for performing renewal and replacement type work on outdated equipment at various water treatment facilities.

31957 Fire Flow Deficiency – Countywide Master Project This project allows for the design and construction of water distribution piping in areas that cannot currently support fire flow and hydrants to bring specific areas up to technical manual standards.

31960 Lithia Water Treatment Plant Auxiliary Power Improvements Design and construct the replacement of three (3) 1125 kVA – 480 volt emergency generator sets with two (2) new 2000 kVA – 480 volt emergency sets. Project will include the demolition of the three old generator sets, expansion of the existing emergency generator building to house the second 2000 kVA set including pad, controls, additional diesel fuel storage tank and ancillary piping and new breakers, motor control center, cabling, miscellaneous concrete, lighting, and SCADA programming.

31963 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration Design and construct a piping connection from the regional water supply line to Storage Tank No. 1 at the Lithia WTP, a 1.0 MG chlorine contact tank, above-grade piping with chemical injection points and static mixers between the H2S facility and the storage tanks, chemical feed piping, sample stations, monitoring equipment, and a telemetry system for chemical addition.

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31964 South County Potable Water Repump Station Design and construct a repump facility in the southern portion of the South-Central Potable Water System to assist in meeting peak demands. The repump facility will require approximately 20.0 MGD of firm capacity, 5.0 MG of storage, and other modifications with the influent and effluent piping from/to the distribution system.

31971 Williams Road Water Transmission Main (U.S. Highway 92 to Bartolotti Loop) Design and construct approximately 6,000 LF of 12-inch DIP water transmission main along Williams Road between Bartolotti Loop and U.S. Highway 92.

31973 State Road 60 Water Transmission Main (Miller Road to Valrico Road) Design and construct approximately 2,700 LF of 12-inch DIP water transmission main along State Road 60 from Miller Road to Valrico Road.

31976 Old Hillsborough Avenue Water Transmission Main Replacement Construct approximately 5,400 LF of water transmission piping along U.S. Highway 92 between Williams Road and Mobile Drive. In addition, construct approximately 1,400 LF of water transmission piping along Mobile Villa Drive between U.S. Highway 92 and Old Hillsborough Avenue. Transfer all water services on the 2-inch watermain to the new 8-inch watermain on Mobile Village Drive then take the existing 2-inch watermain out of service. Installs fire protection in adhering with the current recommended standards.

31977 Countywide Water Transmission Main/Distribution Line R&R Performance of Countywide Water Transmission Main/Distribution Line renewals and replacements includes water distribution projects that improve level of service, pressure, quality, quantity, and fire protection. This project will allow for limited line extensions to loop systems or provide upgraded fire protection.

31980 Manors of Crystal Lakes Interconnection Design and construct approximately 5.1 miles of potable water transmission main to integrate the Manors of Crystal Lakes Water Treatment Plant into the County’s water distribution system. Transmission route is along U.S. Highway 41 from Chapman Road to Sunset Lane, and along Crystal Lake Road from U.S. Highway 41 to Idlewild Church. There will be some additional looping requirements as a part of this project.

Wastewater Projects

10138 Countywide Major Wastewater Pump Station R&R Master Project This project provides for the annual major rehabilitation of various lift stations as deemed necessary in offsetting system outages and in reducing overall O&M costs.

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10140 Wastewater Pump Station Replacements – Countywide Master Project This project provides for the complete replacement and/or possible relocation of a target of at least 3 wastewater pump stations per year.

10143 South County Regional AWWTF Expansion Initiation of the construction of a capacity expansion during the Forecast Period in two phases to a capacity of 12.0 MGD. The first phase of the project will increase the treatment plant capacity by 3.0 million gallons per day (from 4.5 MGD to 7.5 MGD) and the second phase of the project shall increase the treatment plant capacity by 4.5 MGD (from 7.5 MGD to 12.0 MGD). Project for both construction phases includes the construction of new headworks, biological treatment trains, clarifiers, filters, ultraviolet disinfection, electrical, yard piping, odor control, solids handling and other necessary components.

10144 County Road 672 Forcemain (Balm Riverview Road to U.S. Highway 301) Design and construct approximately 19,500 LF of 30-inch forcemain along County Road 672. The proposed forcemain will extend from the intersection of Balm Riverview Road and County Road 672 to U.S. Highway 301 and County Road 672.

10145 State Road 674 Forcemain (Clubhouse Pump Station to U.S. Highway 301) Design and construct approximately 11,000 LF of 30-inch forcemain along State Road 674. The forcemain will extend from Clubhouse Pump Station east along State Road 674 to U.S. Highway 301. This forcemain will parallel an existing 12-inch forcemain and will tie into the existing 16-inch and 12-inch forcemains on State Road 674.

10146 State Road 674 Forcemain (Clubhouse Pump Station to South County Regional AWWTF) Design and construct approximately 6,600 LF of 36-inch forcemain along State Road 674. The forcemain will extend from the Clubhouse Pump Station west to the South County Regional AWWTF.

10149 Big Bend Road Wastewater Pumping Station Design and construct a 6,500 GPM Master Pump Station in the vicinity of the intersection of Interstate 75 and Big Bend Road. The pump station will require an emergency generator, variable frequency drives (VFD), and connection to the Department's proposed SCADA system.

10150 Symmes Road Wastewater Pumping Station Design and construct a 1,500 GPM Master Pump Station in the vicinity of the intersection of Symmes Road and U.S. Highway 301. The pump station will require an emergency generator along with VFDs and provide for a connection to the Department's proposed SCADA system.

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10152 U.S. Highway 301 Forcemain (Valencia Lakes to State Road 674) Design and construct approximately 11,000 LF of wastewater forcemain. The forcemain will extend north from the intersection of State Road 674 and U.S. Highway 301 to the entrance of the Valencia Lakes Development. This forcemain will tie into an existing 16-inch forcemain.

10157 U.S. Highway 41 Forcemain (J Taylor Project to Big Bend Road) Design and construct approximately 6,000 LF of 6-inch wastewater forcemain along U.S. Highway 41. The forcemain will extend from the Joelson-Taylor project south to Big Bend Road.

10159 Gibsonton Road Forcemain (Gibson Elementary to Old Gibsonton Drive) Design and construct approximately 4,600 LF of 6-inch wastewater forcemain along Gibsonton Road. The forcemain will extend east from Gibsonton Elementary to Old Gibsonton Drive and connect to an existing 6-inch forcemain.

10167 Faulkenburg AWWTP Sludge Dewatering Upgrade Design and construct a new centrifuge sludge dewatering system, including new controls and electrical upgrades, which replaces the two existing gravity belt presses and increase the processing capacity for the upgraded treatment plant capacity to 12.0 MGD.

10168 Dale Mabry AWWTP Headworks Rehabilitation Design and replace or rehabilitate the existing influent headworks of the Dale Mabry Advanced Wastewater Treatment Plant. Improvements would include new influent piping, raw wastewater meter and sampling station, mechanically cleaned screens, and a grit removal system. The new headworks design also needs to include the integration of the existing odor control system. Existing facility is in need of rehabilitation.

10170 NW Biosolids Gravity Belt Thickener Rehabilitation Design and replace or rehabilitate the two existing gravity belt thickeners located at the NW Regional Residuals Treatment Facility.

10171 Wastewater Forcemain Renewals and Replacements – Countywide Master Project This project provides for the design and construction of countywide wastewater forcemains that require replacement and/or necessary system upgrades.

10173 Van Dyke WWTP Headworks Rehabilitation Design and construct a rehabilitation or replacement of the Van Dyke WWTP headworks. Existing facility is in need of rehabilitation.

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10176 Comanche Wastewater Pumping Stations Replacement / Rehabilitation Design and construct an upgrade to this Master Pump Station in adding a new emergency backup power generator and automatic transfer switch.

10177 Boyette Road Forcemain Phase III Construction installation/relocation of the 24-inch Sanitary Transmission Main during the ongoing road widening of Boyette Road from 2 lanes to 4 lanes (related to the Public Works CIP 69104 Road Project).

10187 Swindon Road Pump Station Phase II Design and construct a new duplex wastewater pumping station and associated gravity sewer to divert flows from the Berkeley Preparatory property.

10197 Golf and Sea Wastewater Pumping Stations #1 & #2 (Conversion to Gravity Sewer) Design and construct approximately 1,150 LF of gravity sewer pipelines to include a conversion of the existing Golf & Sea Wastewater Pumping Stations #1 & #2 to gravity sewer manholes.

10199 River Oaks AWWTP Headworks Rehabilitation Replace and/or repair the deteriorated structural and mechanical systems of the River Oaks Advanced Wastewater Treatment Plant. Work includes repair of deteriorated concrete, channel liners, mechanical degritting system and associated support equipment, barscreens, valving, piping, and odor control equipment.

10200 Valrico AWWTF Return Activated Study Pump Replacement Replace three (3) return activated sludge pumps and associated power and control systems to bring entire treatment train to full and reliable treatment capacity.

10202 Brushy Creek Pump Station Rehabilitation Repair and/or rehabilitation of the existing wastewater transfer pump station to include replacement of pumps, drives, motor control systems, valves, and associated accessories. Work also includes any structural repairs or rehabilitation necessary during construction.

10203 River Oaks AWWTP Sodium Aluminate / Bisulfite Rehabilitation Repair and/or replacement of the existing sodium aluminate and sodium bisulfate chemical feed systems with new and appropriately sized storage, pumping, monitoring, control, and piping facilities. Work also includes the demolition of two unused tanks onside.

10206 Dell Webb South Pump Station Rehabilitation Repair and/or replacement of the existing Del Webb South wastewater pumping station to include ground stabilization, and upgrades to; or replacement of existing

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piping, pumps, wetwell, and control systems. Work also includes any necessary work on incoming or discharge forcemains that may be required by the associated work and that also may require various site revisions during construction.

10744 Manhole Inspection and Rehabilitation – Countywide Master Project This project provides for the inspection and necessary repair of the existing 30,000 wastewater manholes over a 10 year period.

10745 Regional Wastewater Treatment Plant Renewals and Replacements – Countywide Master Project This project provides for the various annual renewal and replacement type projects necessary to maintain the 7 Wastewater Treatment Plants.

10768 Low Pressure Sewer System (LPSS) – Countywide Master Project This project allows for the retrofit and installation of LPSS units on an as needed basis within our South County Service Area.

10794 Pump Station SCADA Phase II (A) Follow-on design and installation of a remote monitoring and telemetry system at all Wastewater System pumping stations (approximately 700). The goal of this and the previous project (19125) is to eliminate sewer overflows and increase the operational efficiency of the pump stations.

Reclaimed Water Projects

10163 Crosby Road Reclaimed Water Transmission Main Design and construct approximately 10,560 LF of 24-inch reclaimed water transmission main from the existing 24-inch Reclaimed Water Transmission Main at the intersection of Miller and Crosby Roads to the reclaimed water storage tanks at the Valrico AWWTF site.

10178 Valrico Sprayfield Rehabilitation Design and replace or rehabilitate the existing Valrico AWWTP reclaimed water sprayfield system to include repair and/or replacement of sprayheads, control valves, electrical wiring, and instrumentation control system.

10191 Valrico AWWTF 5 MG Reclaimed Water Storage Tank Rehabilitation Repair and/or totally rehabilitate an existing 5.0 million gallon reclaimed water ground storage tank at the Valrico AWWTF that is leaking.

10198 South Hillsborough Aquifer Recharge Program (SHARP) Design and construct a new reclaimed water deep recharge well, three new ground water monitoring wells, electrical controls, wellhead and piping, dissolved oxygen

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(DO) reduction system, and other appurtenances. Project will also require computer modeling and extensive monitoring to include Groundwater Flow and Solute Transport modeling and Metal Mobilization Monitoring and Analysis.

10795 Reclaimed Water Pump Station Refurbishment – Countywide Master Project This project provides for the repair and/or replacement of outdated equipment that fails at our reclaimed water pumping stations such as pumps and control panels on an annual basis and as determined necessary.

Other System Projects

31978 BSOC Command / Emergency Operations Center Design and construct an approximately 10,000 square foot two story addition to the existing Brandon Support Operations Complex (BSOC). Facility is to be constructed to withstand a CAT IV hurricane and will have all required facilities to allow occupancy during emergency operations to include 24-hour command operations center, uplinks to all water and wastewater SCADA systems, communications equipment, kitchen and eating facilities, showers and restrooms, a sleeping area, conference room, and other accommodations as necessary for full operation during emergency conditions.

31979 Countywide Non-Urgent Facility Renewals and Replacements (Master Project) Repair / Renovation and/or Replacement of Countywide buildings and structures operated and maintained by the Department.

Ability to Implement Identified Projects Actual expenditures by the Department during the last four fiscal years for Capital Improvement Plan projects are presented in the following table. As discussed previously, the Department has identified approximately $119.9 million in Capital Improvement Plan project expenditures as available for funding from the proceeds of the Series 2010 Bonds.

Historical Expenditures by Department for Capital Improvements Plan Projects Fiscal Year 2006 Fiscal Year 2007 Fiscal Year 2008 Fiscal Year 2009 Preliminary Design $37,891 $115,353 $0 $0 Final Design 10,054,319 9,074,972 11,105,724 11,502,270 Construction 29,260,975 59,743,929 165,096,347 60,369,870 Administration 1,724,943 1,054,801 1,812,275 1,571,751 Installed Equipment 2,639,963 9,061,879 5,423,995 2,050,949 Acquisition 40,790 0 0 0 $43,758,881 $79,050,934 $183,438,341 $75,494,840

The Department utilizes project management software to track project progress, identify critical path items, and address issues within a timely fashion. Utilizing this software, the Department has determined actual past project delivery performance, presented in the following table. Project delivery performance is based on compliance with established project schedule.

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Historical Project Delivery Performance by Department Percent Compliance with Fiscal Year Established Project Schedule 2001 88% 2002 80% 2003 96% 2004 86% 2005 93% 2006 90% 2007 89% 2008 100% 2009 92%

Based on historical expenditures and project delivery performance, it appears highly probable that the Department will be capable of implementing the volume of Capital Improvement Plan projects identified within the 36-month expenditure timeframe associated with the Series 2010 Bond issue.

Funding Sources for Capital Program As can be seen on Table 8 at the end of this Report, the Department has identified approximately $483.7 million in capital requirements either underway or to be performed over the next five years ending Fiscal Year 2015 (includes remaining expenditures for capital projects which were initiated either during or prior to the Fiscal Year 2009), which are allocable to both new and existing customers. The Department has identified several funding sources for the construction of the above referenced capital projects. Based on an analysis of available funds to the County (e.g., Capacity [Impact] Fee Account, Renewal and Replacement Account, General Purpose Account, etc.), the funding sources for the total appropriations-based capital improvement program as assumed for the financial forecast is as follows:

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Summary of Appropriations Based Capital Funding Sources for the Forecast Estimated Funding Source [1] Percent Capacity (Impact) Fees [2] $765,055 0.16% Renewal and Replacement Account 108,150,202 22.36% General Purpose Account [3] 148,555,590 30.72% Series 2010 Bonds [4] 131,042,304 27.09% Additional Future Bonds [5] 86,000,000 17.78% Outside Agency Grants 3,700,000 0.76% Miscellaneous Reserves [6] 232,190 0.05% Annual Operations (System Operations) [7] 5,227,315 1.08% Total Funding Sources $483,672,656 100.00% ______[1] Amounts derived from detailed capital improvement plan funding analysis assumed for the purposes of this Report; amounts shown include use of available unrestricted funds at beginning of Forecast Period (i.e., October 1, 2009) as well as estimated deposits to such accounts during the Forecast Period from System operations and other sources. Amounts shown do not include potential additional capital project expenditures associated with the compliance of the numeric nutrient criteria currently being proposed by the EPA. [2] Amounts reflect use of available funds at beginning of Forecast Period; all Impact Fees anticipated to be received during the Forecast Period is assumed to be pledged towards: i) the Debt Service Component associated with the Cost of Contracted Water Supply or ii) the payment of the debt service on the Outstanding and Additional Parity Bonds allocable to the System. [3] The County has deposited funds in a separate Capital Expenditure Account, which is an account created by the County within the General Purpose Account, the purpose to fund additional capital expenditures of the System. Generally, any funds earned which are in addition to the required deposits as delineated in the Bond Resolution have generally been deposited into such account for the long-term benefit of the utility ratepayers. [4] Represents deposit to Project Fund from Series 2010 Bonds proceeds being issued for the funding of capital improvements on behalf of the System. [5] Amounts shown represent the issuance of Additional Parity Bonds during the Forecast Period to provide additional funds for the capital program; reference is made to the Projected Operating Results section of this Report for a description of the timing and assumptions associated with the issuance of such additional bonds. [6] Reflects funding of reclaimed water improvement units from miscellaneous cash reserves (cash on deposit) of the System associated with this extension program. [7] Amounts shown represent funds derived annually from System rates and are for ongoing purchases of general plant (vehicles, equipment, furniture, etc.) which is not funded from the Renewal and Replacement Account by the County.

As can be seen above, approximately 55% of the capital program is anticipated by the County to be funded from internal sources (e.g., Impact Fees, available reserve funds, and Renewal and Replacement Account). Additionally, it is anticipated that the County will issue Additional Parity Bonds during the Forecast Period, which includes the Series 2010 Bonds, in order to fund the capital program with such source of funds accounting for approximately 45% of the capital program funding requirements.

Renewal and Replacement Fund Summary Pursuant to the terms and conditions of the Bond Resolution, the County must establish and maintain a Renewal and Replacement Account. With respect to the Renewal and Replacement Account, such amounts shall be used by the County for the purpose of paying the costs of the replacement of capital assets of the System, including land, or any unusual, unanticipated, or extraordinary maintenance or repairs which the Director of the Department certifies are necessary. The required annual deposit to such fund shall be at least equal to five percent (5%) of the Gross Revenues derived from the operation of the System during the immediately preceding fiscal year or such other amount as determined and certified by the County's Qualified Independent Consultant until the amount on deposit therein is equal to the Renewal and

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Replacement Account Requirement. Typically, the County annually funds a deposit to the Renewal and Replacement Account in order to accrue moneys for facility replacement and betterment. The Renewal and Replacement Account for the projected period reflected in the forecast of System operations (projections of System cash flow); the amount is equal to the minimum funding requirements of the Bond Resolution. Additionally, the County has historically designated moneys on deposit in the General Purpose Fund to finance capital projects in addition to the funds on deposit in the Renewal and Replacement Account.

As provided in the Bond Resolution, the proceeds of any sale of utility system assets are deposited into the Renewal and Replacement Account. As part of entering into the Amended and Restated Interlocal Agreement, which along with the Master Water Supply Contract are the primary agreements with the Member Governments which govern the activities of Tampa Bay Water, the water supply facilities were purchased from the Member Governments (which includes the County) by Tampa Bay Water. The purchase of such facilities is being paid to the County by Tampa Bay Water based on a debt service equivalent computed on a 30-year amortization of the net purchase price, compounded semiannually at 4.865% which equated to a payment by Tampa Bay Water of $1,238,468 made annually (through Fiscal Year 2027). In addition to the annual deposit to the Renewal and Replacement Account from System operations (as defined in the Bond Resolution), the County has deposited the total annual benefit (both principal and interest) received from the sale of the water supply facilities by the County to Tampa Bay Water in the Renewal and Replacement Account for future capital improvement funding.

HISTORICAL AND PROJECTED SYSTEM SALES AND CUSTOMER USAGE STATISTICS

General This section of the Report summarizes the recent trends in water, wastewater, and reclaimed water system customers, projected water production and wastewater treatment requirements, and associated sales and usage characteristics for the water, wastewater, and reclaimed water systems. The historical period reflected in this Report covers the fiscal years ended September 30, 2004 through 2009 (the "Historical Period") and the projected or Forecast Period is for the Fiscal Years 2010 through 2015. Table 1 at the end of this Report reflects the historical customers or accounts (terms used synonymously) as well as metered water sales (gallons sold) for the Water System. Similar information regarding the historical customers and billed wastewater flow (revenue gallons) for the Wastewater System is shown on Table 2 at the end of this Report. Table 3 at the end of this Report provides historical account and sales information for the Reclaimed Water System. Tables 4 through 6 at the end of this Report summarizes the projected customers and metered water sales, billed wastewater flow, and metered reclaimed water sales for the Water, Wastewater, and Reclaimed Water Systems, respectively for the Forecast Period. The forecast in System sales and customer statistics served as the basis for the projection of revenues derived from the application of the current rates for monthly water, wastewater, and reclaimed water service as discussed later in this Report.

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The following is a discussion of the historical and projected customer and sales statistics for the individual water, wastewater, and reclaimed water utility systems.

Water System The Water System has experienced an increase in customers and water sales over the past several years due to i) continued development located within the service area; and ii) the acquisition of certain private (franchised) utility systems. Table 1 at the end of this Report summarizes the historical accounts served and the corresponding equivalent residential connections (ERC) provided water service, billed water sales, and average ERC usage statistics for the Water System. An ERC is representative of the average daily capacity of a single-family residential unit and generally represents the lowest level and the most common level of use and is used to evaluate the size and capacity needs of a utility system. For the purposes of calculating the ERCs: i) all individually metered single-family residential accounts are considered by the County as 1 ERC; ii) ERCs for multi-family residential accounts were determined by applying an equivalent factor of 0.5 per dwelling unit consistent with the County's Rate Resolution as subsequently defined; and iii) commercial or general service ERCs were predicated on the capacity reserved by the account or the actual demand experienced by the specific account. Table 4 provides projected Water System statistics for the Forecast Period (i.e., Fiscal Years 2010 to 2015).

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The historical and projected customer statistics for the Water System are summarized below:

Water System [1] Fiscal Year Ended Average Annual Water Sales Average Monthly Use September 30 (Historical) ERCs Served [2] (000s Gallons) per ERC (Gallons) 2004 [3] 167,415 15,226,602 7,579 2005 [3] 176,295 15,633,604 7,390 2006 185,198 17,971,297 8,087 2007 192,152 18,113,216 7,855 2008 [4] 193,199 16,997,650 7,332 2009 [4][5] 191,810 16,199,364 7,038 Average Annual Historical Growth Rate 2.76% 1.25% (1.47%)

Fiscal Year Ended Average Annual Water Sales Average Monthly Use September 30 (Projected) ERCs Served [2] (000s Gallons) per ERC (Gallons) 2010 [4][5][6] 191,810 15,561,696 6,800 2011 191,810 15,561,696 6,800 2012 192,535 15,753,899 6,819 2013 193,435 15,761,084 6,790 2014 194,785 15,847,708 6,780 2015 196,360 15,964,068 6,775 Average Annual Projected Growth Rate [7] 0.47% (0.40%) (0.07%) ______[1] Amounts derived from Table 1 and Table 4 at the end of this Report; amounts shown include all customer classes. It should be noted that the average use per single family residential customer, the largest customer class of the System, averaged approximately 7,500 gallons per month of water use during the last five years ended Fiscal Year 2009. [2] Reflects average annual statistics; ERC means Equivalent Residential Connection and represents an average daily potable water flow of 300 gallons per day (gpd) as defined in Resolution No. R05-106 adopted by the County on May 5, 2005, as amended and supplemented from time to time (the "Rate Resolution"). [3] Average customer statistics and corresponding sales include the incremental customer additions associated with the purchase of the Seaboard, Hershel Heights, and Valrico Hills systems from Florida Water Services, Inc. (September 2003) and the Carrollwood System from the Florida Governmental Utility Authority (April 2004). [4] During this period and continuing today, the SWFWMD had imposed water use restrictions on the use of potable water in order to reduce water demand during an extreme period of drought that occurred throughout the State of Florida; reduction in water use demand was a direct result of such restrictions coupled with the reduction in Water System ERCs (see Footnote 5). [5] The decline in Water System ERCs was anticipated by the County to be a direct result of: i) the economic downturn in the Florida economy, which materially affected new construction and development and which has resulted in an increase in inactive accounts and ii) the continuation of water restrictions by the SWFWMD on non-essential potable water use. Additionally, effective February 2009 the County implemented a new utility billing system which i) resulted in the reclassification of certain customers and ii) changed the basis for billing certain customers which may have resulted in a reduction in billed customers and ERCs (one time occurrence). [6] Amounts shown based on four (4) months of actual customer information for Fiscal Year 2010, which supports the continuation of lower water sales. [7] Reflects average annual compound growth rate from Fiscal Year 2009 through Fiscal Year 2015.

As can be seen above, the Water System has incurred a historical growth rate in the average number of ERCs served of approximately 2.8% per year since the Fiscal Year 2004. As mentioned in the table during the historical period presented, the County purchased the Seaboard, Hershel Heights (water-only system), and Valrico Hills utility systems from Florida Water Services Corporation, Inc., which accounted for an increase of approximately 3,500 water customers and 4,000 water ERCs served and also acquired the Florida Governmental Utility Authority Carrollwood System, which accounted for a further increase of 1,190 water customers and 1,400 ERCs served. Overall, the Water System since the Fiscal Year 2004 has experienced

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an average increase in water ERCs of approximately 5,100 ERCs per year, except in Fiscal Year 2009, when the System experienced a decline in ERCs likely due to the current negative economic conditions being experienced in the County (a significant recession which is affecting utilities all across the State of Florida and the nation). In addition to the decline in active accounts served, during the Fiscal Years 2008 and 2009 the average water use (billed sales) per ERC as shown in the above table also declined to the lowest levels reported by the Department for the last six Fiscal Years. Besides the affects of the recent economic downturn on the general use of potable water, the region has been under drought conditions for several years of the Historical Period which resulted in SWFWMD imposing certain water restrictions on the use of potable water at various times throughout such period. The following is a summary of certain actions imposed by SWFWMD during the Historical Period which has affected the use of potable water:

SWFWMD Water Use Restrictions Summary for Hillsborough County District Administrative Item Date Summary Description HCO 04-28E and June 8, 2004 / Emergency amendment restricting irrigation to one day per week for HCO 04-38E June 30, 2004 a period of thirty (30) days for all of unincorporated Hillsborough County; subsequently extended to August 4, 2004

HCO 04-39 August 4, 2004 Reinstated 2-day per week watering, except in South-Central Service Area where 1-day per week restrictions remained until May 31, 2005. 2-day per week watering in the South-Central Service Area reinstated on June 1, 2005.

HCO 06-11 May 19, 2006 Reinstates single-day per week watering throughout all of unincorporated Hillsborough County through August 2, 2006; automatically returning to 2-day per week watering on August 3, 2006.

HCO 06-38 and SWF December 16, 2006/ Amendment to allow only one day per week watering effective 07-02 (still in effect) June 9, 2007 immediately. Was extended 5 separate times by District through February 27, 2009 at various dates (June 9, 2007 first extension).

HCO 08-22 (still in October 1, 2008 Designate alternative two day per week irrigation schedule to effect) apportion water demands over six days per week in anticipation of repeal of SWF 07-02.

SWF 08-044 (still in October 28, 2008/ Enacts Modified Phase III Water Shortage, includes continuing effect) December 16, 2008 Water Shortage Order SWF 07-02 through June 30, 2009; modification to Phase III requirements but June 30, 2009 Shortage Order continued.

SWF 09-012 March 31, 2009 Effective April 3, 2009, City of Tampa water customer ban on use of in-ground irrigation systems; TBW members (including the County) limited to 12:01am – 4am one day per week irrigation which expired on July 31, 2009.

SWF 07-02 (still in February 22, 2010 Extended one day per week watering through June 30, 2010. effect)

SWF 07-02 (expired) July 1, 2010 District allowed SWF 07-02 to expire without an administrative item; reverted back to year-round water conservation measures as contained in District Rule 40D-22 (allows for two-day per week irrigation)

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As can be seen above, the SWFWMD recently lifted the 1-day water irrigation after June 30, 2010 due to the return of normal rainfall to the region and the general increase in the availability of water supply. The SWFWMD is still encouraging year-round conservation of water resources and, to the extent there is a need to promote additional conservation of regional water resources, the SWFWMD may impose additional water use restriction as may be required. In addition, the ongoing economic downturn facing the County as mentioned earlier is also considered by the Department to be having an effect on water use. During the first several months of the Fiscal Year 2010, water sales continue to be below recent historical usage levels which are having a direct effect on sales revenues. As a result of these trends and the external factors facing the utility industry, the financial forecast recognizes i) growth during the Forecast Period (with no growth at the beginning of such period); and ii) a level of water use reflective of immediate per customer usage characteristics which is less than long-term historical trends. As such, it is estimated that projected water sales will be less than recent historical sales.

As can be seen above, the level of water use restrictions mandated by the SWFWMD in certain times has been severe and has had a direct effect on potable water use and billed sales. Currently, the District is imposing a 1-day a week irrigation schedule which is assumed to continue during the Forecast Period (assumes to be the maximum number of days that irrigation can occur).

The Water System customer base consists primarily of single-family residential customers being serviced through a 5/8-inch or 3/4-inch meter service. As shown in the table below, this class accounts for approximately 96% of the total average annual accounts served during the Fiscal Year 2009 (which represents the most recently completed fiscal year as of the date of this Report). Average Annual Water Accounts – Fiscal Year 2009 Average Annual No. of Accounts Percent to Total Single-Family Residential 136,204 95.9% Master-Metered Residential 838 0.6% Commercial 4,573 3.2% Subtotal 141,615 99.97% Fire Line 394 0.3% Totals 142,009 100.0%

The County reports that the ERC information by customer class is not available and therefore is not presented above. It should be noted that the number of ERCs served on a total Water System basis is greater than the number of accounts served as shown below.

Comparison of Average Annual Water Accounts to ERCs Served – Fiscal Year 2009 Average Annual Average Annual No. of Accounts No. of ERCs Total System (without Fire Line) 141,615 191,810 Percent Difference 35.4%

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As previously mentioned, an ERC represents the equivalent usage requirements of a single- family residential customer. Since commercial or multi-family customers are generally served by larger sized meters than the standard residential customer (require a greater water demand), it is useful to identify the total amount of ERCs served (on a comparative basis equivalent to the residential class) for a more consistent presentation of the size or magnitude of the total customer base served.

The forecast of Water System ERCs and water sales was based on recent historical trends, discussions with Department planning staff associated with the permitting of new development, and the assumption that growth will be less than recent historical trends as the service area continues to be developed (built-out and assuming no change in the utility service area boundaries). With respect to the Fiscal Years 2010 and 2011, it was assumed that no increase in Water System customers or ERCs would result due to the continuing downturn in the economy which has affected new construction as well as the general financial condition of the existing customer base. Furthermore, it was assumed that the recent average use per ERC as experienced by the Water System would generally be maintained, with no increase in average water use per ERC occurring during the Forecast Period. The water customer statistical projections shown on Table 4 served as the basis for the projection of revenues derived from monthly water user charges for the Forecast Period reflected in the Report.

Beginning during Fiscal Year 1996, the Department instituted an alternative method of paying Impact [Capacity] Fees from developers, builders, and property owners (referred to as "applicants") which essentially was an installment method of collection. As opposed to paying the fee when due (at time of connecting to the System) and in order to lock-in the fee at the then current levels (and reserve capacity for their project), applicants could elect to participate in the County’s Impact Fee Assessment Unit (IFAU) program (previously referred to as the Capacity Assessment Unit Program) in accordance with Division 3 of the Department’s Public Utility Connections Regulations. The amount of fees defined as the Assessable Fees (i.e., unpaid Impact Fees) in the Rate Resolution (as defined and discussed later in this Report) shall be assessed as a non-ad valorem assessment on the annual property tax bill, with the first annual assessment scheduled for payment not earlier than one year following the date on which the IFAU is created. Since 1996, a significant amount of applicants have used the IFAU program for the payment of Impact Fees and to secure capacity in the System facilities. The following tabulation summarizes the total ERCs utilizing the IFAU program:

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Current Summary of IFAU ERCs Wastewater Water System System Total Estimated IFAU ERCs [1] 72,995.53 78,753.88 Estimated Vacant Properties [2] 8,532.90 8,520.11 Percent Considered Vacant 11.69% 10.82%

Total Estimated IFAU ERCs [1] 72,995.53 78,753.88 Less Bonded IFAU ERCs [3] (45,066.63) (47,245.49) Net Non-bonded IFAU ERCs 27,928.90 31,508.39

Estimated Vacant Properties [2] 7,783.00 7,783.00 Percent Considered Vacant 27.87% 24.70% ______[1] Amounts through September 2009; represents total estimated number of ERCs that have utilized the IFAU program since implementation during Fiscal Year 1996 and which an assessment is being received. [2] Represents vacant properties for applicants that have previously utilized the IFAU program and are recognized as being a potential for future development (new account additions). [3] Represents ERCs which the County issued Assessment Bonds to fund expansion- related capital projects which were secured for repayment only by the IFAU assessments. Based on information provided by the Department, the majority of the respective ERCs has connected to the System and is receiving utility service.

As can be seen above, there are over 8,500 ERCs that have been reserved by applicants for capacity that have not yet requested service, which illustrates the near-term growth potential of the System. Furthermore, most of the vacant properties are associated with those ERCs that recently entered the IFAU program; almost all of the ERCs (properties) whose assessment installment payments that have been secured for the payment of assessment bonds are developed and are now accounts being served by the System (the assessment bonds represent debt of the General Fund and not of the System so such outstanding debt is not reflected in this Report). It should be noted that this does not include any potential development that has not elected to use the IFAU program. With respect to the ERC forecast and based on discussions with Department staff, the projections assume an increase during the Forecast Period of 4,550 ERCs for the Water System which is approximately 53% of the ERCs utilizing the IFAU program. Additionally, most of the growth is anticipated to occur at the end of the Forecast Period coincident with the assumed improvement in the economy and the increase in new construction. As such, the projection of ERCs and the corresponding water sales appears to be attainable and reasonable for the purposes of this Report.

The forecast of water purchase requirements was based on the projection of water sales shown on Table 4, adjusted for an allowance for unaccounted and / or unbilled water to recognize that a certain percentage of the potable water produced that may not be billed due to line flushing and leaks (unaccounted for water), unbilled internal water use (e.g., Department use at wastewater lift stations), and other factors. Once the forecast of total needs were identified, such amounts were subsequently allocated among the various service providers based on the anticipated water ERC growth anticipated for each specific area served by the various water providers. Table 4 at the end of this Report summarizes the projected water purchases for the various water providers and served as the basis for determination of the estimated purchased water costs for the Forecast Period.

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As previously mentioned, the Water System currently has two distinct water service areas which are referred to as the Northwest Area (serves an area northwest of the City of Tampa) and the South-Central service area (serves the area east and south of the City of Tampa). Figure 3 presented previously in this Report illustrates the location of the two utility service areas for the Water System. In order to meet the potable water service area demands for the Northwest and South-Central Service Areas, the forecast of potable water purchases shown on Table 4 was allocated between the respective service areas based on recent trends in customer growth in such areas and discussions with the Utility Department’s planning engineers. With respect to the Northwest Service Area, the water treatment capacity is planned to be maintained during the Forecast Period by the Department at 23.9 million gallons per day (MGD) expressed on an average daily flow basis (does not recognize capacity of other water providers other than TBW due to immateriality of capacity provided relative to overall needs). Recognizing the respective treatment capacity of the Northwest Service area, it is anticipated that there will be sufficient water treatment capacity to meet the respective service area demands for the Forecast Period as summarized below.

Water Production – Northwest Service Area (Finished Water) Fiscal Year Annual Average Permitted Percent Ending Daily Flow Capacity Capacity September 30, (MGD) [1] (AADF – MGD) Utilized 2010 16.60 30.10 55.15% 2011 16.60 30.10 55.15% 2012 16.61 30.10 55.18% 2013 16.62 30.10 55.22% 2014 16.64 30.10 55.28% 2015 16.66 30.10 55.35% ______[1] Amounts shown based on the forecast of total System water purchases as shown on Table 4 allocated to the Northwest Service Area, adjusted for unaccounted for or unbilled water factor of 7.5% based on recent historical trends.

Based on the water capacity requirements forecast for the Northwest Service Area as reflected above, it is anticipated that the approximately 55% of the Northwest Service Area capacity (30.1 MGD) will be utilized by the Fiscal Year 2015.

With respect to the South-Central Service Area and based on treatment capacity of the System for this specific service area, it is anticipated that the water treatment capacity will be sufficient to meet the capacity / demands for the Forecast Period. This is summarized below.

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Water Production – South-Central Service Area (Finished Water) Fiscal Year Annual Average Permitted Percent Ending Daily Flow Capacity Capacity September 30, (MGD) [1] [2] (MGD) Utilized 2010 29.60 58.00 51.03% 2011 29.60 58.00 51.03% 2012 29.78 57.20 52.06% 2013 30.00 57.20 52.45% 2014 30.34 57.20 53.04% 2015 30.73 57.20 53.72% ______[1] Million of gallons per day (MGD) [2] Amounts shown based on the forecast of total System water purchases as shown on Table 4 allocated to the South-Central Service Area, adjusted for unaccounted for or unbilled water factor of 7.5% based on recent historical trends.

Based on the water capacity requirements forecast for the South-Central Service Area as reflected above, it is anticipated that the approximately 54% of the South-Central Service Area capacity (57.2 MGD) will be utilized by the Fiscal Year 2015.

Based on recent historical trends in customer growth, discussions with members of the Department, and a review of information regarding the reservation of water capacity through the IFAU program, it has been assumed that water customers will increase during the Forecast Period reflected in this Report at growth rates which are lower than that recently experienced by the Water System based on historical information provided by the County. Based on reported development/service area information provided by the County, growth is expected to continue to be primarily residential in nature consistent with the land use requirements of the service area. The Water System customer statistical projections shown on Table 4 served as the basis for the projection of revenues derived from monthly water user charges for the Forecast Period reflected in the Report.

Wastewater System The Wastewater System has also experienced an increase in customers and billed wastewater flow (sales) over the past several years due to the continued development located within the service area. Table 2 at the end of this Report summarizes the historical accounts and ERCs provided wastewater service, billed wastewater flow (sales), and average ERC usage statistics for the Wastewater System. Table 5 provides similar projected statistics for the Forecast Period (i.e., Fiscal Years 2010 to 2015). The historical and projected customer statistics for the Wastewater System are summarized below:

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Wastewater System [1] Fiscal Year Ended September 30, Average Annual Wastewater Sales Average Monthly (Historical) ERCs Served [2] (000s Gallons) Use Per ERC (gallons) 2004 [3] 174,212 11,320,250 5,396 2005 [3] 183,785 11,873,215 5,384 2006 193,319 12,626,931 5,443 2007 202,338 12,889,873 5,309 2008 [4] 204,815 12,784,865 5,202 2009 [4] [5] 205,121 12,640,778 5,135 Average Annual Historical Growth Rate 3.32% 2.23% (0.98%)

Fiscal Year Ending September 30, Average Annual Wastewater Sales Average Monthly (Projected) ERCs Served (000s Gallons) Use Per ERC (gallons) 2010 [4] [5] 205,121 12,553,405 5,100 2011 205,121 12,553,405 5,100 2012 205,884 12,634,622 5,114 2013 206,840 12,658,608 5,100 2014 208,284 12,746,981 5,100 2015 209,972 12,850,286 5,100 Average Annual Projected Growth Rate [6] 0.47% 0.47% 0.00% ______[1] Amounts derived from Table 2 and Table 5 at the end of this Report. [2] Reflects average annual statistics; ERC means Equivalent Residential Connection and represents an average daily wastewater flow of 200 gpd as defined in the Rate Resolution. [3] Average customer statistics and corresponding sales include the incremental customer additions associated with the purchase of the Seaboard and Valrico Hills systems from Florida Water Services, Inc. (September 2003) and the Carrollwood System from the Florida Governmental Utility Authority (April 2004). [4] During this period and continuing today, the SWFWMD had imposed water use restrictions on the use of potable water in order to reduce water demand during an extreme period of drought that occurred throughout the State of Florida; since billed wastewater flow is based on metered water consumption, an estimated reduction in billed wastewater occurred which is considered to be a direct result of such restrictions coupled with no growth in Wastewater System ERCs (see note 5). [5] No growth in the Wastewater System ERCs was anticipated by the County to be a direct result of the economic downturn in the Florida economy, which materially affected new construction and development and which has resulted in an increase in inactive accounts. Additionally, effective February 2009 the County implemented a new utility billing system which i) resulted in the reclassification of certain customers and ii) changed the basis for billing certain customers which may have resulted in a reduction in customers and ERCs billed (one time occurrence). [6] Reflects average annual compound growth rate from Fiscal Year 2009 through Fiscal Year 2015.

As can be seen above, the Wastewater System has incurred a historical growth rate in the average number of ERCs served of approximately 3% per year since the Fiscal Year 2004 which is similar to the historical growth rate recently experienced for the Water System (most new water accounts receive wastewater service). As mentioned previously, during the Historical Period the County purchased the Seaboard and Valrico Hills utility systems which accounted for an increase in of approximately 3,200 wastewater customers and 3,300 wastewater ERCs served and also acquired the Florida Governmental Utility Authority Carrollwood System which accounted for a further increase of 1,190 wastewater customers and 1,400 ERCs served. Overall and not including the incremental customer additions due to the County’s acquisition actions, the Wastewater System since the Fiscal Year 2004 has experienced an average increase in wastewater ERCs of approximately 5,200 ERCs per year. This growth is due to both the infill of existing developments where service was available as well as the continued addition of new development within the utility service area (the urban service area).

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The County reports that the ERC information by customer class is not available and therefore is not presented above. It should be noted that the number of ERCs served on a total Wastewater System basis is greater than the number of accounts served as shown below.

Comparison of Average Annual Wastewater Accounts to ERCs Served – Fiscal Year 2009 Average Annual Average Annual No. of Accounts No. of ERCs Total System 131,588 205,121 Percent Difference 55.9%

Wastewater billed flow (sometimes referred to as "revenue gallons") as shown in the above table represents the metered water consumption for which the County's wastewater flow or usage charge is billed. As subsequently discussed in the section of this Report regarding the rates for monthly service, water consumption provides the basis for the billing of wastewater usage charges and not all metered water use is billed a wastewater charge (e.g., water-only service associated with separately metered irrigation service). As was the case with the Water System, average monthly wastewater gallons billed expressed on a per ERC basis has generally decreased over the recent Historical Period, concurrent with the decrease in billed water consumption (although not as pronounced since individually-metered residential wastewater service has a monthly billing cap and therefore is not as affected by changes in non-essential irrigation water use which has been the targeted by SWFWMD through conservation efforts to reduce potable water demands). Projections of wastewater gallons billed per ERC are anticipated to remain relatively constant generally at current (reduced) levels during the Forecast Period as a result of the assumption of continued (assumed permanent) water restrictions being instituted by the SWFWMD which will have an effect on billed wastewater flow, the continuing effects of conservation on water use including the recognition of an overall general downward trend in indoor water use (e.g., all new development must install conservation-promoting fixtures such as low flow toilets), and that the customers will not rebound to pre-water restriction and favorable economic times usage levels (customers have responded and it is assumed such reduction will be permanent).

Although the service areas are different and the County does provide service to water-only and wastewater-only customers, it should be noted that most of the water customers added to the System which are associated with property development (not due to extensions of service to existing areas or acquisition of utility systems) are expected to receive wastewater service. As shown below, the amount of average annual wastewater customers billed (receiving service) approximated 92% of the number of average annual water customers receiving service during the Fiscal Year 2009:

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Average Annual Accounts – Fiscal Year 2009 Water Wastewater Percent to Accounts Accounts Water Accounts Residential Service: Single-Family (Individual Metered) 136,204 127,638 93.7% Multi-Family (Master Metered) 838 612 73.0% Commercial 4,573 3,338 73.0% Fire Line Service 394 N/A N/A Totals 142,009 131,588 92.7%

As was previously discussed for the Water System, there are several vacant properties (service is constructed and available) located within the System which will result in the ability to increase the wastewater customers and ERC base. Furthermore, it is anticipated that the relationship of water customers receiving wastewater service as shown in the preceding table will remain the same or slightly increase since the majority of the new development is anticipated by the Department to be receiving both utility services (which is also evidenced by the number of ERCs that are considered vacant that have elected to pay Impact Fees on an installment basis through the IFAU program).

The Utility Department currently owns and operates seven separate wastewater treatment plants with a combined wastewater treatment capacity of 56.2 MGD expressed on an annual average daily flow basis. A summary of the current wastewater treatment plant capacity by specific facility and service area location is summarized below:

Current Permitted Wastewater Treatment Plant Capacity (MGD) [1] Northwest South-Central Treatment Facility: Service Area Service Area Dale Mabry AWWTP 6.00 --- Northwest Regional WRF 10.00 --- River Oaks AWWTP 10.00 --- Van Dyke WWTP 1.70 --- Falkenburg Road AWWTP --- 12.00 South County Regional AWWTF --- 4.50 Valrico AWWTF -- 12.00 Total Wastewater Capacity 27.70 28.50 ______[1] The permitted capacity for the Northwest Wastewater Treatment Plant is in terms of a 3-month maximum daily flow basis; all other facilities are permitted on an average annual daily flow basis with the Florida Department of Environmental Protection.

As previously mentioned and as shown above, the Wastewater System also has two distinct service areas. As can be seen above, the current permitted capacity for the Northwest Service Area is 27.7 MGD and the South-Central Service Area current permitted capacity is 28.5 MGD.

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Recognizing the respective treatment capacity of the Northwest Service area, it is anticipated that there will be sufficient wastewater treatment capacity to meet the respective service area demands for the Forecast Period as summarized below.

Wastewater Treatment – Northwest Service Area Fiscal Year Annual Average Permitted Percent Ending Daily Flow Capacity Capacity September 30, (MGD) [1][2] (MGD) Utilized 2010 18.20 27.70 65.70% 2011 18.20 27.70 65.70% 2012 18.21 27.70 65.74% 2013 18.22 27.70 65.78% 2014 18.24 27.70 65.85% 2015 18.26 27.70 65.92% ______[1] Million gallons per day (MGD). [2] Amounts shown based on the forecast of total Wastewater System ERCs as shown on Table 5 and historical trends in the amount of wastewater treated per ERC.

Based on the wastewater capacity requirements forecast for the Northwest Service Area as reflected above, it is anticipated that the approximately 66% of the Northwest Service Area capacity (27.70 MGD) will be utilized by the Fiscal Year 2015.

With respect to the South-Central Service Area and based on treatment capacity of the System for this specific service area, it is anticipated that the wastewater treatment capacity will be sufficient to meet the capacity / demands for the Forecast Period. This is summarized below.

Wastewater Treatment – South-Central Service Area Fiscal Year Annual Average Permitted Percent Ending Daily Flow Capacity Capacity September 30, (MGD) [1][2] (MGD) Utilized 2010 17.93 28.50 62.91% 2011 17.93 28.50 62.91% 2012 18.06 28.50 63.37% 2013 18.23 28.50 63.96% 2014 18.48 28.50 64.84% 2015 [3] 18.78 28.50 65.89% ______[1] Million of gallons per day (MGD) [2] Amounts shown based on the forecast of total Wastewater System ERCs as shown on Table 5 and historical trends in the amount of wastewater treated per ERC. [3] The County plans to initiate construction of the expansion of the South County AWWTP from 4.5 MGD to 12.0 MGD beginning in the Fiscal Year 2013. For the purposes of this Report, it is assumed that the additional capacity associated with this expansion will be available beyond the Forecast Period.

Based on the wastewater capacity requirements forecast for the South-Central Service Area as reflected above, it is anticipated that the approximately 65% of the South-Central Service Area capacity (28.50 MGD) will be utilized by the Fiscal Year 2015. It should be noted that the County is currently in the engineering design phase of an expansion of the South County Regional AWWTF from 4.5 MGD to 12.0 MGD. Based on the capital improvement plan of the County as shown on Table 8 at the end of this Report, it is anticipated by the County that

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construction may not begin until Fiscal Year 2013 consistent with the appropriation of funds for the project. For the purposes of this Report, it has been assumed that the availability of the expanded capacity at the South County Regional AWWTF will occur during Fiscal Year 2016 which is after the Forecast Period presented in this Report.

Based on recent historical trends in customer growth, discussions with members of the Department, and a review of information regarding the reservation of water capacity through the IFAU program, it has been assumed that wastewater customers will increase during the Forecast Period reflected in this Report at growth rates which are lower than that recently experienced by the Wastewater System based on historical information provided by the County. Based on reported development/service area information provided by the County, growth is expected to continue to be primarily residential in nature consistent with the land use requirements of the service area. The wastewater customer statistical projections shown on Table 5 served as the basis for the projection of revenues derived from monthly wastewater user charges for the Forecast Period reflected in the Report.

Customers Served As discussed above, the statistics shown for both the Water and Wastewater Systems was predicated on an ERC basis which is consistent with the billing parameters reflected in the Rate Resolution as defined hereinafter in this Report. In order to provide additional information regarding the number of customers served (bills rendered) by the System, a forecast of the customers served (bills rendered) was also prepared. The historical information for the total customers served (whether receiving water-only, wastewater-only, or combined water and wastewater service) is shown on Tables 1 and 2 at the end of this Report and the projection of customers served for the Forecast Period is shown on Tables 4 and 5 at the end of this Report. The trends in customers served for the Historical and Forecast Periods is summarized below:

Customers Served [1] Fiscal Year Ended Annual Average September 30, (Historical) Customers Served [2] 2004 [3] 137,569 2005 [3] 143,965 2006 150,438 2007 153,841 2008 153,775 2009 153,705 Average Annual Historical Growth Rate 2.24% ______Table continued on following page.

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Customers Served [1] (cont'd.) Fiscal Year Ending Annual Average September 30, (Projected) Customers Served [2] 2010 153,111 2011 153,111 2012 153,685 2013 154,358 2014 155,331 2015 156,453 Average Annual Projected Growth Rate [4] 0.30% ______[1] Amounts derived from Tables 1 and 2 for the Historical Period and Tables 4 and 5 for the Forecast Period at the end of this Report. [2] Reflects average annuals bills rendered, regardless of service type (water-only, wastewater-only, or combined water and wastewater service). [3] Average customer statistics include the incremental customer additions associated with the purchase of the Seaboard, Hershel Heights and Valrico Hills systems from Florida Water Services, Inc. (September 2003) and the Carrollwood System from the Florida Governmental Utility Authority (April 2004). [4] Reflects average annual compound growth rate from Fiscal Year 2009 through Fiscal Year 2015.

As can be seen above, the number of customers served (billed) has incurred a historical growth rate in the average number of bills rendered of approximately 2% per year since the Fiscal Year 2004, which is similar to the historical ERC growth rate recently experienced for the Water and Wastewater Systems. As previously mentioned regarding the growth in ERCs for both the Water and Wastewater Systems, the County purchased the Seaboard, Hershel Heights, and Valrico Hills utility systems from Florida Water Services, Inc. which accounted for an increase in of approximately 3,500 customers billed and also acquired the Florida Governmental Utility Authority Carrollwood System which accounted for a further increase of 1,190 customers billed. Overall and not including the incremental customer additions due to the County’s acquisition program, the increase in net customers served since the Fiscal Year 2004 has averaged approximately 2,300 new accounts billed per year. This growth is due to both the infill of existing developments where service was available as well as the continued addition of new development within the utility service area (the urban service area). The forecast of new customers served or billed was based on recent historical trends, the forecast of water and wastewater ERCs shown previously in this Report, and the assumption that growth will be slower in the initial part of the Forecast Period due to the current downturn in the economy. The billed customer projections were prepared separately for the Water and Wastewater Systems as shown on Tables 4 and 5 respectively to recognize that the System does provide water-only and wastewater-only service since the utility service areas are not quite uniform. The forecast of the customers billed served as the basis for the projection of revenues derived from monthly customer service charge revenues for the Forecast Period reflected in the Report.

Reclaimed Water System In addition to providing water and wastewater service, the County provides reclaimed or irrigation quality (IQ) water to several residential and commercial customers and large users for

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irrigation (e.g., golf courses) and industrial process (e.g., TECO) purposes. The County has been providing reclaimed water service for over 20 years as part of its overall utility service requirements. IQ water is now being considered as an alternative water resource by the SWFWMD and it is a beneficial use of such resources. The County currently provides service to three types of customers which include:

1. Single Family Residential – Generally reflects individually metered service to the premise unless such properties as part of a neighborhood received conditional approval for connection to the Reclaimed Water System prior to November 20, 2001 whereby such customers may enter into an agreement to receive only flat-rate service and obtain a 30- year exemption from receiving reclaimed water service on a "metered" basis within the neighborhood (referred to as Committed-Class connections in the Rate Resolution).

2. General Users Service – Reflects commercial and multi-family residential accounts which are not eligible for the Major Users subclass.

3. Major Users Service – Reflects commercial and multi-family residential accounts which have entered into a written agreement with the County which provides for a maximum daily quantity of reclaimed water deliverable by the County, the interruption of reclaimed water delivery for the remainder of any day in which the daily maximum quantity has been delivered, and/or the on-site storage of reclaimed water during wet-weather periods located at the customer’s premise or site.

The Reclaimed Water System has also experienced an increase in customers and billed metered reclaimed water use (sales) over the past several years due to the continued extension of service and corresponding development located within the service area. Table 3 at the end of this Report summarizes the historical accounts provided reclaimed water service, billed consumption (sales), and average account usage statistics for the Reclaimed Water System. Table 6 provides similar projected statistics for the Forecast Period. It should be noted that not all of the Reclaimed Water System customers receive metered reuse service. As previously mentioned and based on Board direction, several residential customers are considered as Committed-Class connections and do not receive metered reclaimed water service from the System; such customers are billed a flat monthly rate for service regardless of the amount of reclaimed water used by the property. The following is a summary of the customers and metered reclaimed water sales for the Historical and Forecast Periods for the Reclaimed Water System:

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Reclaimed Water System [1] Average Annual Accounts Fiscal Year Ended Committed Class Metered Metered Sales September 30 (Historical) Customers [2] Customers [3] (000s of Gallons) 2004 12,441 149 2,624,897.6 2005 12,854 216 2,375,503.5 2006 13,126 381 2,310,356.7 2007 13,538 1,049 2,941,889.9 2008 13,689 1,161 2,792,127.9 2009 13,721 1,394 3,071,389.3 Average Annual Historical Growth Rate 1.98% 45.16% 3.19%

Average Annual Accounts Fiscal Year Ending Committed Class Metered Metered Sales September 30 (Projected) Customers [2] Customers [3] (000s of Gallons) 2010 13,785 1,517 3,004,828.0 2011 13,795 1,773 3,292,171.9 2012 13,805 2,243 3,426,718.6 2013 13,815 2,787 3,494,649.4 2014 13,825 3,373 3,572,399.9 2015 13,835 4,014 3,655,616.1 Average Annual Projected Growth Rate [4] 0.14% 19.28% 2.94% ______[1] Amounts derived from Table 3 and Table 6 at the end of this Report for the Historical and Forecast Periods, respectively; amounts shown include all customer classes. [2] Committed-Class customers are all single family residential customers that receive a flat monthly bill and unmetered reclaimed water service. [3] Metered customers represent accounts which receive metered reclaimed water service; includes residential, general user and major user customer classes. [4] Reflects average annual compound growth rate from Fiscal Year 2009 through Fiscal Year 2015.

As can be seen above, it is anticipated by the County that the Committed-Class customers (which are all single-family residential customers) will not materially change during the Forecast Period; essentially all new customer growth will be metered reclaimed water service customers. The change in customers was based on: i) recent historical trends and average metered reclaimed water use characteristics; ii) detailed customer and reclaimed water demand information prepared by Department staff (by type of account and anticipated capacity or service requirements); and iii) year-end actual billing statistics for all classes of customers. As can be seen above, it is anticipated that the metered reclaimed water sales will increase at a lower growth rate than what occurred during the Historical Period. This is primarily due to the service area beginning to become more mature from a service standpoint which results in a lower growth rate when compared to previous periods as well as the availability of reclaimed water reducing (to serve new growth) due to the consumption of reclaimed wastewater customer (flow) growth. It is also assumed that Reclaimed Water System customer growth will include a higher proportionality of residential customers (which generally have lower per account usage characteristics) based on the discussions with the Department. The reclaimed water customer statistical projections shown on Table 6 served as the basis for the projection of revenues derived from monthly reclaimed water user charges for the Forecast Period reflected in the Report.

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Ten Largest Customers of the System In order to provide additional information regarding the County’s Water, Wastewater, and Reclaimed Water System customer base, a summary of certain statistical information of the ten largest customers on the basis of revenues billed has been presented based on information compiled by the Department. As can be seen below and based on information provided, the ten largest customers for the System were estimated to account for approximately 3.0% of the total System rate revenue and all accounts were considered as master-metered residential accounts.

Water and Wastewater Top Ten Utility Customers - Fiscal Year 2009 (Based on Sales Revenue) [1] Percent of Service Meter Total Rate Total System Account Class Size Type of Service Revenue Rate Revenues Federation of Kings Point C, Inc. Multi-Family[2] 8x2" Water & Sewer $1,719,350 1.03% Lake Carlton Arms Multi-Family[2] 8x2" Water & Sewer 834,022 0.50% Hunter Run Partners Ltd. Multi-Family[2] 8" Water & Sewer 319,710 0.19% Cypress Meadows Multi-Family[2] 6x1½" Water & Sewer 318,464 0.19% Camden Operating L P Multi-Family[2] 8" Water & Sewer 310,280 0.19% Strawberry Ridge Multi-Family[2] 4x1" Water & Sewer 301,601 0.18% Parkers Landing Venture II Multi-Family[2] 6x1½" Water & Sewer 269,848 0.16% Cornerstone Group Multi-Family[2] 8" Water & Sewer 268,133 0.16% Sheldon Road Associates Multi-Family[2] 10x2" Water & Sewer 245,178 0.15% ERP Operating Limited Partnership Multi-Family[2] 6x1½" Water & Sewer 222,816 0.13% Total $4,809,402 2.89% Total Water and Wastewater Rate Revenues [3] $166,434,000 ______[1] Based on information provided by the Department; reflects amounts for the twelve (12) months ended September 30, 2009 (the most recently completed fiscal year for the System). [2] Multi-family customers represent accounts which are served by a master meter which generally a large meter is serving a number of dwelling units. [3] Amount shown reflects revenues derived from monthly water and wastewater rates, including revenues derived from the application of the purchased water pass- through revenue and customer charges; amounts do not include any other operating revenue or income available to or earned by the System.

RATES, FEES, AND CHARGES

General The Bond Resolution authorizing the issuance of the Series 2010 Bonds contains a covenant under which the County will fix, establish, maintain and collect such fees, rates, rentals, and other charges for the use of the System and will revise the same from time to time whenever necessary, that will always provide:

1. Gross Revenues which, together with Pledged Available Capacity [Impact] Fees shall at least be equal to one hundred percent (100%) of the Required Deposits defined in the Bond Resolution (which includes the Operation and Maintenance Account [Operating Expenses], Debt Service Account, and Renewal and Replacement Account) (Referenced in this Report as "Test 1");

AND

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2. Net Revenues and Pledged Available Capacity [Impact] Fees shall be at least equal to one hundred twenty percent (120%) of the Bond Service Requirement under the Bond Resolution (Referenced in this Report as "Test 2");

AND

3. Net Revenues must fund at least equal to one hundred percent (100%) of the Bond Service Requirement in such Bond Year (Referenced in this Report as "Test 3").

The sales revenues derived from the monthly rates or user charges, Impact Fees, and other operating revenues, all as reflected on Table 10 at the end of this Report associated with the projected operating results for the System, were developed based on rates and charges that were placed into effect on October 1, 2009. Such rates and charges were approved by the Board pursuant to the adoption of Resolution No. R09-070 on May 20, 2009; the primary purpose of such resolution being to modify the application of the annual price index rate adjustment. Pursuant to the provisions of the price index rate adjustment delineated in Resolution No. R09- 070 (and as more fully discussed later in this section), the County uniformly increased the rates for monthly water and wastewater service (i.e., the "Monthly User Rates") by the index adjustment effective June 1, 2010. It should be noted that the structure of the Monthly User Rates that are currently in place were last adjusted by the Board on May 14, 2003 pursuant to the adoption of Resolution No. R03-091 and have been in effect for over 7 years. In 2003, the Water Usage Charges component of the Monthly User Rates were modified to promote a higher water conservation incentive to large users and to reward low-water users with a cost reduction; the rate adjustment being designed to be revenue-neutral (no additional System revenue was anticipated to be derived from the rate modification). On May 5, 2005, the Board adopted Resolution No. R05-106 which modified the application of the Purchased-Water Pass-Through Consumption Charge which provides as a pass-through the recovery of all purchased water costs (the pass-through adjustment provision was initially adopted by the Board during Fiscal Year 2001). For the purposes of this Report, Resolution No. R03-091, as amended by Resolution No. R05-106 (Purchased-Water Pass-Through Consumption Charge modification) and by Resolution No. R09-070 (Price Index modification) is referred to as the "Rate Resolution." With the exception of changes in rates for the pass-through of purchased water costs and the price indexing for the recovery of inflation on certain components of the Cost of Operation and Maintenance, the Monthly User Rates have not been modified to produce additional revenue since the Fiscal Year 2000 since the restructuring of the water conservation usage blocks in 2003 (a revenue neutral adjustment).

Water and Wastewater Rates The Water System Monthly User Rates which are currently in effect pursuant to the Rate Resolution include: i) a constant base facility (readiness-to-serve) charge which varies based on the number of ERCs that are assigned to the account (which is generally predicated on the capacity reserved by such account); ii) a customer service charge to recover a portion of the cost of billing, meter reading, and other customer service needs and, when combined with the constant base facility charge, serves as the monthly minimum bill; and iii) a volumetric or usage charge based on metered water consumption which increases as consumption increases in order to promote water conservation (applicable to all customer classes). The rates for the Wastewater

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System are similar in structure to that of the Water System and include: i) a constant base facility charge (readiness-to-serve charge) which varies based on the number of ERCs that are assigned to the account; ii) a customer service charge to recover a portion of the cost of billing, meter reading, and other customer service needs and, when combined with the constant service charge serves as the minimum bill; iii) a volumetric flow charge based on metered water consumption which serves as the basis for wastewater use; and vi) a maximum residential billing threshold of 8,000 gallons per month per single family residential unit and 5,600 gallons per month per master-metered residential unit for the billing of the volumetric flow charge for this class of customers. It should be noted that only one customer service charge is rendered per account for utility service provided (i.e., customers that receive water-only service, water and wastewater service, or wastewater-only service would each receive a customer service charge).

As part of the consumptive use permitting process, the SWFWMD does require water utilities located within the boundaries of the Water Management District to have a water conservation promoting rate structure. This requirement is part of the SWFWMD water conservation goals relative to the limitation of raw water withdrawals. The SWFWMD does not regulate the rates of the System regarding rate level but does encourage a conservation pricing strategy be in place. The County's Water System rates currently employ a water conservation rate structure consistent with the general water conservation program goals encouraged by SWFWMD.

The following is a summary of the current monthly Water System rates for service as delineated in the Rate Resolution:

Monthly User Current Monthly User Rates Effective Rates Effective October 1, 2009 [1] June 1, 2010 [4] Customer Service Charge (per bill rendered) $3.87 $3.88

Water Service Rates: Base Facility Charge (per ERC) $8.04 $8.07 Usage Charges (per 1,000 gallons) Block 1 – 0 to 5,000 Gallons $0.66 $0.66 Block 2 – 5,001 to 15,000 Gallons 1.83 1.84 Block 3 – 15,001 to 30,000 Gallons 3.06 3.07 Block 4 – Above 30,000 Gallons 4.58 4.60

Pass-Through Consumption Charge [2] $2.43 $2.43

Wastewater Service Rates: Base Facility Charge (per ERC) $12.97 $13.02 Usage Charges (per 1,000 gallons) [3] $4.17 $4.19 ______[1] Amounts derived from Rate Resolution; Monthly User Rates became effective October 1, 2009 with the application of a price index adjustment. [2] Reflects charge to pass-through all purchased-water costs (primarily Tampa Bay Water) based on formula contained in Rate Resolution; amount shown billed for all water consumption, regardless of consumption block (is added to the usage charges). Amount shown reflects the charge currently in effect for the Fiscal Year 2010 and is additional to all water usage charges. [3] Wastewater usage charge billed based on metered water use; individually metered single family residential service usage charge capped at 8,000 gallons per month and each living unit served within a master-metered residential complex is capped at 5,600 gallons per unit per month. [4] Effective June 1, 2010 Monthly User Rates were automatically indexed as provided in the Rate Resolution by the Price Index Adjustment factor of 0.37%.

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Annual Purchased-Water Pass-Through Consumption Charge As shown in the rate summary above, the County bills a Purchased-Water Pass-Through Consumption Charge to recover the cost of purchased water from its water suppliers (primarily Tampa Bay Water). This pass-through charge is reviewed annually by the Department and is a forward looking calculation (e.g., based primarily on the Tampa Bay Water budget for wholesale service). The Purchased-Water Pass-Through Consumption Charge was implemented during the Fiscal Year 2001 and allowed the Department to recover costs which are not controllable by the Department. It should be noted that during the Fiscal Year 2009, the purchased water costs accounted for approximately 30% of the total Cost of Operations and Maintenance. The initial Purchased-Water Pass-Through Consumption Charge implemented during the Fiscal Year 2001 was $1.20 per 1,000 gallons of metered water consumption; the current (Fiscal Year 2010) Purchased-Water Pass-Through Consumption Charge being billed by the Department is $2.43 per 1,000 gallons of metered (billed) water use. The Purchased-Water Pass-Through Consumption Charge is added to each usage charge with respect to the application of such charge and all metered water consumption is billed the charge.

Annual Price Index Adjustment The Rate Resolution provides that the Department have the ability to annually increase the Water and Wastewater Monthly User Rates (excluding the Purchased-Water Pass-Through Consumption Charge), Reclaimed Water User Charges, and any wholesale or Bulk-Service Charges (collectively, the "Applicable Rates") by applying a price index factor as defined in the Rate Resolution. All Applicable Rates so adjusted shall be implemented by the County annually not later than June 1st of the year in which the price index factor was established. It should be noted that the annual application of the price index will not preclude the County from adjusting the rates, fees, and charges in an amount greater than the price index factor. For the Fiscal Year 2010, the following price index adjustments have been enacted by the County and applied to the Applicable Rates in effect prior to such index application and is now being billed (see rate summary on table above): i) a price index factor of 1.72% was made effective October 1, 2009 and ii) a price index adjustment factor of 0.37% was made effective June 1, 2010. Based on price index formula contained in the Rate Resolution, the index is based on the financial results for the previous Fiscal Year as reported by the Department and the index factor annually published by the FPSC which is used by the Department to determine its index factor. Beginning with the Fiscal Year 2010, the subsequent year index factor is set to become effective June 1st prior to the beginning of such subsequent Fiscal Year.

It should be noted that the Rate Resolution does provide for the suspension of the application of the annual price index adjustment. Specifically, the rate indexing will be suspended if the amount of the Pledged Revenues as defined in the Bond Resolution for the prior Fiscal Year exceeds 135% of the amount of the Required Deposits (as such amount is defined in the rate covenant contained in the Bond Resolution). Based on the financial projections contained in this Report and discussions with the Department, it is not anticipated that the application of the price index adjustment will be suspended during the Forecast Period.

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Impact (Capacity) Fees and Accrued Guaranteed Revenue Fee In addition to the monthly rates for water and wastewater service, the County currently charges System Impact or Capacity Fees to new connections based upon an equitable and proportionate share of the cost for: i) water supply and transmission facilities owned by Tampa Bay Water; ii) County-owned water treatment and transmission facilities; and iii) County-owned wastewater transmission, treatment and effluent disposal capacity of the System. The purpose of the Impact Fees is for paying or reimbursing the equitable share of the capital costs relating to the construction, expansion, or equipping capacity of the System in order to serve new users. The obligation for the payment of these charges is from new customers or development. The current Impact Fees were adopted by the County pursuant to the Rate Resolution. In addition to the Impact Fees, the County charges new customers or developments an Accrued Guaranteed Revenue Fee (AGRF) which represents the sum of: i) the estimated interest (carry) cost associated with financing the expansion-related facilities and ii) the fixed cost of operating and maintaining the facilities allocable to growth, both of which are related to capacity in the County’s potable water and wastewater systems to serve new customers. The purpose of this fee is to recover the cost of holding and maintaining the capital investment until such time that an applicant requests and pays for capacity. The following table summarizes the Water System and Wastewater System Impact Fees and AGRF charges currently in effect.

Water Wastewater Capacity Fee – per ERC [1] $1,750 $1,800 AGRF – per ERC [1] 1,005 940 ______[1] Impact fees and AGRF charges are currently the same for the Northwest Service Area and the South- Central Service Areas.

Reclaimed Water Service In addition to providing water and wastewater service, the County provides reclaimed or irrigation quality (IQ) water to residential, multi-family, and commercial customers (users) for irrigation and industrial purposes. The County has been providing reclaimed water service for nearly 20 years as part of its overall utility program. During the Fiscal Year 2009, the County reused approximately 21.26 MGD of the reclaimed water produced at the wastewater treatment plants which approximates 60% of the total average daily flow of 35.36 MGD at such facilities during the Fiscal Year. The following table summarizes the Reclaimed Water System rates which became effective October 1, 2009 pursuant to Rate Resolution:

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Reclaimed Water Monthly User Rates [1] Single Family Residential Effective October 1, 2009 Effective June 1, 2010 [2] Unmetered – Unmetered – Committed Metered Committed Metered Base Facility Charge $9.00 $3.82 $9.00 $3.83 Usage Charge per 1,000 gallons: Block 1 0-5,000 gallons N/A $0.26 N/A $0.26 Block 2 5,001-15,000 gallons N/A 0.41 N/A 0.41 Block 3 Above 15,000 gallons N/A 0.56 N/A 0.56

Commercial & Multi-Family Effective October 1, 2009 Effective June 1, 2010 [2] Metered Metered Unmetered – General Unmetered – General Major Committed Users Major Users Committed Users Users Base Facility Charge $9.00 $3.82 $3.82 $9.00 $3.83 $3.83

Usage Charge per 1,000 gallons: [3] Block 1 0-5,000 gallons per ERC N/A $0.11 $0.08 N/A $0.11 0.08 Block 2 5,001-15,000 gallons per ERC N/A 0.21 0.08 N/A 0.21 0.08 Block 3 Above 15,000 gallons per ERC N/A 0.51 0.08 N/A 0.51 0.08 ______[1] Amounts derived from Rate Resolution; Monthly Reclaimed Water System Rates became effective October 1, 2009 with the application of a price index adjustment. [2] Effective June 1, 2010 rates were automatically indexed as provided in the Rate Resolution by the Price Index factor of 0.37%. [3] An ERC for the Reclaimed Water System is defined as the average annual daily flow of 500 gallons per day of use. ERCs are generally determined initially based on projected usage and are subject to adjustment annually based on the actual average annual daily usage for the prior 12-month period.

Miscellaneous Service Charges The County has also adopted a schedule of fees, charges, and deposits which are applicable to miscellaneous or customer requested services. The fees generally are imposed to recover the cost of specific service such as water and sewer taps and utility turn-on fees or a deposit to mitigate the risk for nonpayment of System services. The following is a summary of miscellaneous service fees, charges, and deposits which were adopted and are currently in effect for the System.

Customer Deposit and Billing Procedures The Department requests a deposit at the time of service application by a customer in order to defray the risk of non-payment for utility services. The deposit is estimated on an individual account basis and the amount of the deposit is based on the class or type of service being provided (e.g., individually metered residential). The following is a summary of the customer deposits as delineated in the Rate Resolution.

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Summary of Standard Customer Deposits [1] Class of Service / Meter Size Water Wastewater Combined Single-Family Residential Accounts 5/8-inch by 3/4-inch $55.00 $75.00 $120.00 1-inch 75.00 125.00 170.00 1 1/2-inch 150.00 225.00 375.00 2-inches or Larger Two times the current system-wide average monthly billing for comparable-size meters in this class Residential-Renter Accounts 5/8-inch by 3/4-inch $90.00 $145.00 $180.00 1-inch 125.00 225.00 265.00 1 1/2-inch 245.00 390.00 640.00 2-inches or Larger Two times the current system-wide average monthly billing for comparable-size meters in this class Commercial and Master-Metered Accounts All Meter Sizes – Water and Two times the current system-wide average monthly Wastewater Service billing for comparable accounts

Reclaimed Water Service 5/8-inch by 3/4-inch $150.00 ------1-inch 165.00 ------1 1/2-inch 175.00 ------2-inch 225.00 ------3-inch 350.00 ------4-inch 400.00 ------6-inch 485.00 ------8-inch 550.00 ------10-inch 650.00 ------______[1] Amounts shown derived from the Rate Resolution.

Based on the County's Rate Resolution, the deposit may be adjusted when the customer is considered to have an unsatisfactory payment history, as determined by the County. A refund of the deposit, including accrued interest, will be made if the account is determined by the County to have a good payment history. The County currently applies a three percent (3%) interest credit to the utility bill of the account when the account is closed or the cash deposit is returned due to good payment history.

Additionally, bills for utility service are rendered monthly by the Department. Pursuant to the covenant requirements of the Bond Resolution, the County does not render any free services of any nature by its System nor applies preferential rates for users of the same customer class. The County diligently enforces the collection of rates, fees and other charges for services of the System.

Water Meter Installation Charges The County has adopted a fee schedule for water meter connection or installation services and service lateral installation in order to recover its cost of physically connecting a water customer to the System. Specifically, the County has adopted the following schedule of fees for this specific service:

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Water Service [1] Meter Pre-Tapped Meter Reading Meter Size Installation [2] Connection [3] Device [4] 3/4-inch or less $200.00 $60.00 $120.00 1-inch 300.00 150.00 120.00 1-1/2-inch 500.00 250.00 120.00 2-inch 750.00 350.00 120.00 Above 3-inch [5] 250.00 N/A N/A ______[1] Fees derived from the Rate Resolution. [2] Except as provided in note 5 below, amounts include the cost of tapping the potable water line, installing the service line, and installing the meter and meter box. [3] Amounts represent the cost of installing the meter and meter box only. [4] In addition to the meter installation costs, automated meter reading devices, including a transmitter and an encoder, may be required, as determined by the Department. [5] For service connections greater than 2-inch, the customer shall be responsible for furnishing and installing service lines, the meter and meter box, back-flow prevention device, and an automated meter reading device (if required). The connection charge represents the County’s cost to tap the potable watermain and inspect the meter installation.

Line Extension Charges If an applicant for service is required to extend water distribution and/or wastewater collection facilities to the applicant’s property as a condition of receiving service, the applicant may request the Department to construct the extension at the applicant’s expense. If authorized, the Department shall design, permit, and construct the extension following receipt of a written request from the applicant requesting such construction and acknowledging the applicant’s responsibility to reimburse the actual costs incurred by the Department for constructing the requested extension plus an allowance for overheads.

Other Miscellaneous Service Charges In addition to the above referenced charges, the Department also has several other charges applicable to other miscellaneous or customer requested services. A summary of other miscellaneous charges imposed by the Department, which are common in the utility industry include the following:

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Miscellaneous Service Fees, Charges, and Deposits Charge/Fee Description Amount

Customer-Requested Services Bench-Test Meter [1]: 1" or Smaller $40 Larger than 1" Actual Cost Establish Account and Read/Turn-On for Initial Service $25 Estimate Line Extension Cost for Development [2] $250 Field-Test Meter Water Volume [1]: 5/8" Meter $25 Larger than 5/8" Meter Actual Cost Inspect Line for Damage/Blockage (Not County-Caused) $30; After Hours $45 Install Lateral Actual Cost Install Low Pressure Sewer System Effluent Pump $1,150 Install Wet Tap $250 Make Unsuccessful Visit to Service Address (Not County-Caused) $10 Research Account Payment that was Properly Processed $10 Perform Emergency Turn-Off/Turn-On $30; After Hours $45 Prepare Time-Payment Document: Capacity-Fee Affidavit $15 Delinquent-Account Agreement $30 Process Early Payoff of Assessment: Ad Valorem Units $25 Capacity-Fee Affidavit $15

Release of Liens $15 Re-Read Meter $20 Transfer of Capacity Reservation within Permitted Subdivision $45

Delinquent Accounts Attempt to Collect Delinquent Account at Service Address $10 Interrupt Service: Wastewater Actual Cost Water $15 Reinstall Meter: 1" or Smaller $50; After Hours $75 Larger than 1" Actual Cost Restore Wastewater Service, Next Working Day $30 Restore Water Service: Next Working Day $15 Same Day at Customer Request after Payment in Office $30; After Hours $45 Special Handling: Filing Liens or Actions for Judgment $30 Court Costs Per Court Order ______Table continued on following page.

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Miscellaneous Service Fees, Charges, and Deposits (cont'd.) Charge/Fee Description Amount

Enforcement or Corrective Actions Install or Replace Back-Flow Prevention Device: Double-Check $90 Residential Double-Check $60 Reduced Pressure Zone $350 Install Required Lateral Clean-Out at Point of Connection $250 Other [3] Actual Cost Replace Missing or Damaged Equipment: Padlock $20 Locking Device $20 Meter, any Other than Hydrant Pre-Tap Fee Plus Estimated Usage Meter Box $75 Hydrant Meter $500 Plus Estimated Usage Remove Illegal Connection $100 Plus Estimated Usage Re-Read Meter Due to Customer Obstruction $20 Special Handling: Update Records Due to Unauthorized Meter Relocation $30 Verify Illegal Consumption (Legal Connection) $25 Plus Usage

Reimbursable Fees Dishonored Checks [4]: Checks up to $50.00 $25 Checks $50.01 to $300.00 $30 Checks $300.01 to $800.00 $40

Checks $800.01 & Over 5% of Face Value Reversal of ACH Bank Draft Same as Dishonored Check Document Recording Actual Cost ______[1] Charges apply unless test indicates that the meter should be replaced. [2] Credited to account if line extension is constructed. [3] All other corrective or enforcement actions performed to protect the System as a result of the customer's failure to comply with local regulations. [4] Charge is based on Hillsborough County Ordinance 96-028, which authorizes a charge for collection of dishonored check and a fee schedule based on Section 832.08(5), of the Florida Statutes.

Fire Protection Charges The Department bills monthly fire protection charges to privately-owned fire-protection systems and equipment connected to the County’s Water System. The monthly charge is based on the size of the service line connecting the private system to the Water System. All usage that is documented to the Department by a local fire department or by a certified hydrant-testing agency shall be assessed at the established rate for the first consumption block of the water-conservation consumption charges and at the current purchased-water pass-through consumption charge. The following is a summary of the current monthly fire protection charges:

Monthly Fire Protection Charges Meter Size 2" & Smaller 3" 4" 6" 8" 10" 12" Monthly Charge $3.25 $3.40 $3.60 $8.70 $16.50 $27.50 $45.00

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Emergency Water Conservation Charges The County may impose emergency water conservation charges when deemed necessary. If conditions merit, the Board may call a public hearing to impose emergency water conservation charges via a public hearing and resolution. The Board may revoke such charges without a public hearing if conditions no longer merit such charges. The Board may also, at any time, reinstate emergency conservation charges without a public hearing upon finding that such charges are merited based on current conditions. Currently, there is no emergency water conservation charges being imposed by the Department at this time and it is not expected by the Department that such charges will be imposed in the future based on current operating conditions.

RATE COMPARISONS Tables 12 through 14 at the end of this Report provide a comparison of the monthly cost of providing water and wastewater service for a 5/8 by 3/4 inch water meter at various usage levels calculated under the recently adopted rates as reflected in the Rate Resolution. Also included on the comparison are bills calculated under the rates of other neighboring Florida utilities as of the billing month of June 2010. The monthly bills for the various Florida utilities used for the comparison are exclusive of local taxes. The 5/8 by 3/4 inch meter comparison was prepared since this represents the majority of the utility's water and wastewater residential customers and the majority of the customers for the other utilities reflected in the comparison. As can be seen in the comparison, the System rates produce bills for the County that is generally competitive but somewhat higher when compared to the other neighboring utilities. Some of the reasons for this comparative relationship include, but are not limited to, the regional nature of the water supply resources being used by the County (i.e., County purchases essentially all of its water supply needs from other providers), the high degree of wastewater treatment being used by the System to provide service (e.g., advanced wastewater treatment), near term costs associated with regionalization of the service area and elimination of wastewater package plants over time, and the status of the County’s capital program and corresponding asset age (new facilities being built to meet needs with no grant funds received to assist in construction which many utilities historically received).

The median individually-metered (single-family) residential customer uses approximately 6,000 gallons of monthly water service and the comparison of water and wastewater rates at this consumption level between the County and a number of the utilities surveyed is shown below:

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Residential Water and Wastewater Service Assuming 6,000 Gallons of Monthly Utility Service [1][2] Water Wastewater Total Hillsborough County Prior Rates [3] $31.62 $37.99 $69.61 Existing Rates [3][4] 31.67 38.16 69.83

Other Surveyed Utilities: Charlotte County [5] $49.79 $50.86 $100.65 City of Clearwater [5] 32.31 40.14 72.45 Collier County [5] 32.51 48.37 80.88 Lee County 27.64 44.16 71.80 Manatee County [5] 17.28 41.81 59.09 City of North Port [5] 36.40 53.85 90.25 Pasco County [5] 21.20 37.76 58.96 Pinellas County 30.96 33.03 63.99 Polk County [5] 17.64 58.79 76.43 Sarasota County [5] 31.35 58.94 90.29 City of St. Petersburg [5] 26.46 32.20 58.66 City of Tampa [5] 13.59 31.36 44.95

Other Utilities' Average $28.09 $44.27 $72.37 ______[1] Based on utility survey shown on Table 12 and Table 13. [2] Unless otherwise noted, amounts shown reflect residential rates in effect June 2010 and are exclusive of taxes or franchise fees, if any, and reflect rates charged for inside city service. All rates are as reported by the respective utility. This comparison is intended to show comparable charges for similar service for comparison purposes only and is not intended to be a complete listing of all rates and charges imposed by each listed utility. [3] Amounts shown include the current Purchased-Water Pass-Through Consumption Charge of $2.43 per 1,000 gallons for all billed water consumption. The Customer Service Charge is included in the water charges for the purposes of this comparison. [4] Existing rates include the imposition of the price index rate adjustment which became effective June 1, 2010; prior rates shown for comparative purposes since such rates were in effect during a portion of Fiscal Year 2010. [5] Utility is currently involved in a rate study, is planning to conduct a rate study, or plans to implement a rate revision or price index / pass through adjustment within the next twelve months following the comparison preparation date.

As previously mentioned and as a component of the disposal of highly treated effluent from its wastewater treatment plants, the County has been providing reclaimed water service to a number of residential and commercial customers for a number of years. Approximately 98% of the total reclaimed water system customers are considered as single-family residential customers which receive service either on a uniform or flat monthly rate basis or a metered water use basis (reference is made earlier in this Report regarding the discussion of the current reclaimed water rates). For those single family customers that receive metered reclaimed water service, the median customer uses approximately 15,000 gallons of monthly reclaimed water service. A comparison of the Department’s existing reclaimed water rates with the residential rates of other neighboring or Florida utilities as of January 2010 is summarized on Table 15 at the end of this Report and is summarized below:

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Residential Reclaimed Service Assuming 15,000 Gallons of Monthly Utility Service [1] [2] Typical Monthly Reclaimed Water Bills Hillsborough County Prior Rates – Metered $9.22 Existing Rates – Metered 9.23 Existing Rates – Unmetered 9.00

Other Surveyed Utilities Charlotte County $40.48 City of Clearwater 27.00 Collier County Water-Sewer District 17.55 Lee County Utilities 6.45 Manatee County 10.20 City of North Port 8.25 Pasco County 12.68 Pinellas County 13.69 Polk County 16.50 Sarasota County 11.60 City of St. Petersburg (Metered Service) 22.37 City of Tampa 24.06

Florida Utilities' Average $17.57 ______[1] Based on utility survey shown on Table 15. [2] Unless otherwise noted, amounts shown reflect residential rates in effect January 2010 and are exclusive of taxes or franchise fees, if any, and reflect rates charged for inside the city service. All rates are as reported by the respective utility. This comparison is intended to show comparable charges for similar service for comparison purposes only and is not intended to be a complete listing of all rates and charges offered by each listed utility.

As discussed previously, the County charges an Impact Fee to new customers requesting water and wastewater capacity from the System in an effort to fund the capital cost of such capacity and to equitably assign such costs to those users which are imposing the need for the capital facilities. This application of an Impact Fee is commonly used by Florida utilities to fund capital or plant requirements. Table 16 at the end of this Report provides a comparison of the Impact Fees for the System and those charged by neighboring utilities. The charges shown are based on an ERC basis. As previously discussed, an ERC is representative of the average daily capacity of a single-family residential unit and generally represents the lowest level and the most common level of use. As shown below and on Table 16, the County's currently effective Impact Fees are comparable to the utility average reflected on the comparison.

Impact Fees – Rate per ERC Water Wastewater Combined County Existing Charges [1] $1,750 $1,800 $3,550 Utility Average [2] 1,767 2,538 4,305 ______[1] Amounts shown do not include the AGRF fee which is also charged to a new applicant requesting water and wastewater capacity from the County recover the "carry cost" of holding capacity. [2] Based on utility survey shown on Table 16 at end of this Report.

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HISTORICAL OPERATING RESULTS General The historical operating results for the System for the fiscal years ended September 30, 2004 through 2009 (previously defined as the "Historical Period") are shown in detail on Table 7 at the end of this Report. The historical operating results were prepared based on financial information compiled by the Department and information included in the audited Annual Financial Reports for the Water and Wastewater System Enterprise Fund (the "Annual Financial Report") for the respective fiscal years. In general, the historical operating results have been prepared in a manner consistent with the flow of funds and rate covenant requirements of the Bond Resolution. Therefore, the amounts shown may reflect certain differences in the presentation of the financial results when compared to the Annual Financial Reports of the Department. Specifically, these major differences relate to: i) the determination of the Cost of Operation and Maintenance (i.e., depreciation and amortization expenses not recognized); ii) the development of interest income (i.e., does not include earnings on Impact Fee or Construction Account balances which are restricted to such accounts) or fair market adjustments as required by the reporting standards of Governmental Accounting Standards Board (in order to recognize realized income); and iii) recognition of total debt service (principal and interest requirements) on all outstanding revenue bond indebtedness of the System.

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Summary of Historical Operating Results The historical operating results for the System are shown on Table 7 at the end of this Report and are summarized below:

System Historical Operating Results and Estimated Bond Service Requirement Coverage ($ in 1,000s) [1] Fiscal Year Ended September 30, 2004 2005 2006 2007 2008 2009 Total Charges for Services (Monthly Rates) $143,386 $152,269 $169,256 $174,433 $172,160 $168,253 Other Operating Revenue and Income [2] 32,255 36,835 39,556 34,443 21,188 15,007

Gross Revenues 175,641 189,104 208,812 208,876 193,348 183,260

Less Total Cost of Operation and Maintenance 96,780 110,271 118,220 134,471 145,429 139,269

Net Revenues 78,861 78,833 90,592 74,405 47,919 43,991

Pledged Capacity Fees [3] 17,962 8,929 11,488 6,892 4,649 6,071

Pledged Revenues 96,823 87,762 102,080 81,297 52,568 50,062

Total Bond Service Payment [4] 27,760 27,868 27,456 27,466 27,443 21,094

Bond Service Requirement Coverage Compliance: [5]

Rate Covenant – Test 1[6] Required Deposits[7] 132,172 146,430 153,809 171,087 182,787 169,756 Test 1 Coverage: Coverage Ratio – Calculated 1.46 1.35 1.43 1.26 1.08 1.12 Coverage Ratio – Required 1.00 1.00 1.00 1.00 1.00 1.00

AND

Rate Covenant – Test 2 [6]: Bond Service Requirement [8] 27,309 27,556 26,506 26,455 26,912 20,820

Test 2 Coverage: Coverage Ratio – Calculated 3.55 3.18 3.85 3.07 1.95 2.40 Coverage Ratio – Required 1.20 1.20 1.20 1.20 1.20 1.20

AND

Rate Covenant – Test 3 [6] Bond Service Requirement [8] 27,309 27,556 26,506 26,455 26,912 20,820 Test 3 Coverage: Coverage Ratio – Calculated 2.89 2.86 3.42 2.81 1.78 2.11 Coverage Ratio – Required 1.00 1.00 1.00 1.00 1.00 1.00

Net Revenues After Payment of Bond Service Requirement 51,552 51,277 64,086 47,950 21,007 23,171 ______Table continued on following page.

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System Historical Operating Results and Estimated Bond Service Requirement Coverage ($in 1,000s) [1] (cont'd.) Fiscal Year Ended September 30, 2004 2005 2006 2007 2008 2009 Other Required Transfers [9]: Renewal and Replacement Account Requirement [10] 8,083 8,603 9,083 10,161 10,446 9,667 Debt Service Reserve Account [11] ------

Total Other Required Transfers [12] 8,083 8,603 9,083 10,161 10,446 9,667 Excess of Net Revenues above Required Transfers [13] $43,469 $42,674 $55,003 $37,789 $10,561 $13,504 ______[1] Amounts derived from Table 7 at end of this Report. Unless otherwise noted, amounts shown for each respective fiscal year were derived from: i) audited Annual Financial Reports for the Department; and ii) other financial information as provided by the Department and other County staff. [2] Amounts include other operating revenue and unrestricted investment income. [3] Amounts reflect Impact Fees and interest income earned on such funds adjusted by the estimated Expansion Percentage to recognize the amount of fees collected which are pledged to the total aggregate Bond Service Requirement attributable to Expansion Facilities; for the Historical Period, all Impact Fees received by the System were recognized as a component of Pledged Revenues (for the payment of the Debt Service Component of the Cost of Contracted water Supply or the payment of the Bond Service Requirement). [4] Amounts shown based on an accrual basis of reporting (when deposits are made to the Debt Service Account and not when the cash payment of the interest and principal payments may be made). Additionally, amounts shown do not include Debt Service Account interest income in the determination of the annual Bond Service Requirement. [5] The Bond Resolution requires that the utility maintain revenues and fees to generate sufficient: i) Gross Revenues, together with Pledged Capacity Fees (as defined in the Bond Resolution) at least equal to 100% of the Required Deposits; ii) Net Revenues (as defined in the Bond Resolution), together with Pledged Capacity Fees (as defined in the Bond Resolution) at least equal to 120% of the Bond Service Requirement; and iii) Net Revenues at least equal to 100% of the Bond Service Requirement. [6] The Rate Covenant as defined in section 11.02 of the Bond Resolution is as follows: Test 1: Gross Revenues plus Pledged Capacity Fees must be at least equal to 100% of Required Deposits; Test 2: Net Revenues plus Pledged Capacity Fees must be at least equal to 120% of Bond Service Requirement; and Test 3: Net Revenues must be at least equal to 100% of Bond Service Requirement. [7] Required deposits as defined in the Bond Resolution included transfers to the Operation and Maintenance Account, Debt Service Account, Reserve Account, and the Renewal and Replacement Account; amounts shown do not include transfers to the Subordinate Indebtedness or Other Indebtedness Accounts (if any) as provided in the Bond Resolution. [8] As defined in the Bond Resolution, the Bond Service Requirement is not to include any capitalized interest that has been deposited into the Debt Service Account, or any interest from the investment of funds on deposit in both into the Debt Service Account and the Reserve Account. [9] Reflects other required transfers which are recognized in the Bond Resolution, payments which are subordinate to the payment of the Bond Service requirements. [10] Amounts shown reflect deposit to the Renewal and Replacement Account equal to 5% of the previous year Gross Revenues as defined in the Bond Resolution; the Department may have deposited an amount greater than the Renewal and Replacement Account Requirement. [11] No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Historical Period by: i) proceeds from the issuance of the Bonds Outstanding; or ii) secured by a debt service reserve credit facility during such period. [12] As reported by the County, no other Subordinate or Other Indebtedness payable from the Pledged Revenues of the System were outstanding or required during the Historical Period. [13] Amounts shown do not include Pledged Capacity Fees which are deposited in a restricted account and used for the payment of the Debt Service Component of the Contracted Cost of Water Supply, expansion-related debt service payments or for expansion-related capital improvements for the System.

In the development of the historical operating results and compliance with the rated covenant as delineated in the Bond Resolution as shown above and in more detail on Table 7, several observations and information sources were recognized. The following is a summary of such observations and information sources.

1. Beginning with the Fiscal Year 2008 and continuing into Fiscal Year 2009, the Other Operating Revenues of the System declined significantly when compared to the amounts reported during the prior Fiscal Years. A significant component of the Other Operating Revenues is the collection of Accrued Guaranteed Revenue Fees (accounted for approximately 44% of the total Other Operating Revenues from Fiscal Years 2004 to 2007

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and averaged approximately $15.6 annually during such period). Beginning in Fiscal Year 2008, the amount of AGRF revenue began to decline due to the lack of new customer growth/construction which is considered by the Department to be a direct effect of the downturn in the current economic conditions. Specifically, the amount of AGRF revenue has declined by 64% since the Fiscal Year 2006. As previously discussed regarding the discussion of the System rates, the County charges new customers or developments an AGRF, which represents: i) the estimated interest cost associated with financing the of the expansion facilities and ii) the fixed cost of operating and maintaining the facilities allocable to growth, both of which are related to capacity in the County's potable water and wastewater systems to serve new customers. The purpose of this fee is to recover the cost of holding the capital investment until such time that an applicant requests and pays for capacity. AGRF revenue is directly linked to new customer growth experienced by the System and as a result of the downturn in construction and new customer growth, a corresponding reduction in the amount of AGRF revenue has also occurred.

2. Beginning in Fiscal Year 2008 and continuing in Fiscal Year 2009, the water revenues derived from Monthly User Rates declined when compared to the previous Fiscal Year. As previously mentioned, the SWFWMD had imposed water use restrictions that had a direct impact on the water consumption or usage revenues; additionally a corresponding yet not as significant reduction in wastewater sales or billed flow also occurred (wastewater flow charges are based on metered water consumption). The affects of the ongoing water use restrictions coupled with the economic decline which is believed to have an additional affect on water use with the recognition of the avoided water use is in the highest water consumption block, resulted in the following reduction in water sales revenues:

Water Sales Water Usage Revenues Fiscal Year 000s of Gallons Percent Change Amount [1] Percent Change 2007 18,113,216 $24,778,259 2008 16,997,650 (6.16%) 21,890,360 (11.65%) 2009 16,199,364 (4.70%) 20,011,675 (8.58%) ______[1] Amounts shown are estimated and do not include revenues associated with the Purchase-Water Pass-Through Consumption Charge; represents Monthly User Rate revenues only.

As can be seen above, the reduction in water use and corresponding rate revenues has been significant. The reason why the reduction in water use revenue is greater than the reduction in billed water sales (gallons) is due to the water use that is being avoided is the incremental flow of the customers which is priced at the highest water use block due to the application of the water conservation rate structure. Additionally, the reduction in water use also had an effect on the amount of wastewater sales or flow billed. Finally, the revenues derived from the Purchased Water Pass-Through Consumption Charge also declined due to a reduction in billed water flow (which also had an effect on the cost of purchased water as well).

3. During Fiscal Year 2007, the Cost of Operation and Maintenance recognized an increase in an amount greater than historical average changes. The primary reasons for the increase being generally higher when compared to other periods include the following:

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a. Beginning in Fiscal Year 2007, the County began diverting approximately 1.3 MGD of wastewater flow from its Falkenburg AWWTP to the City of Tampa in order to assist in the expansion of the plant. This temporary wastewater flow diversion resulted in an increase in the Cost of Operation and Maintenance (purchased wastewater costs) of approximately $1.29 million in Fiscal Year 2007 and $2.61 million in Fiscal Year 2008. By June 2009, the temporary wastewater flow diversion to the City of Tampa was no longer required and the cost of the additional purchased wastewater treatment expense associated with the flow diversion is now not being incurred.

b. The County purchased Utility Billing and Asset Management hardware and software which was an incremental (non-recurring) expense that was included as a Cost of Operation and Maintenance during the Fiscal Years 2007 through 2009. The net effect of recognizing these incremental operating expenses during this portion of the Historical Period is shown below.

Reported Expenses System Inventory Project Fiscal Year (Asset Management) Utility Billing System 2007 $2,638,450 $2,825,581 2008 8,922,992 2,182,419 2009 1,150,217 776,115

4. Included in the Cost of Operation and Maintenance is the purchase of water, primarily from Tampa Bay Water, which is a primary expense of the System. The purchases of water supply accounted for approximately 30% of the total reported Cost of Operation and Maintenance for the System for Fiscal Year 2009. The following table summarizes: i) the total water purchased during the respective portion of the Historical Period; ii) the governance rate as budgeted Tampa Bay Water (to illustrate the trend in water cost; Tampa Bay Water accounts for approximately 98% of the total water purchases by the County); and iii) the total purchased water cost. As one can see, the cost of water purchases as contributed to the overall increase in the Cost of Operations and Maintenance.

Average Unit Total Water Tampa Bay Water Cost per Water Fiscal Purchased (000s of Percent Governance Rate Total Purchased Purchased Year Gallons) [1] Change ($/kgal) [2] Water Costs [3] ($/kgal) 2007 19,529,118 $2.1575 $41,362,466 $2.1180 2008 18,400,968 (5.78%) 2.2156 43,360,948 2.3564 2009 17,555,448 (4.59%) 2.2578 42,670,338 2.4306 ______[1] Reflects total purchased water flow from all water providers and not just Tampa Bay Water. [2] Amounts shown based on the proposed budget as adopted by Tampa Bay Water for each Fiscal Year to illustrate general trends in cost from this primary water provider. [3] Reflects total purchased water cost from all water providers and not just Tampa Bay Water.

5. The debt service requirements shown for the Bonds Outstanding were derived from the actual debt service repayment schedules for each series of Bonds and have been reflected

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on an accrual basis (when the Debt Service Account was required to be funded as opposed to when the payments were made to Bondholders / investors). On June 16, 2009 the County cash defeased all of the outstanding Refunding Utility Revenue Bonds, Series 2003 (the "Series 2003 Bonds") and $10.0 million of the outstanding Junior Lien Refunding Utility Revenue Bonds, Series 2001 (the "Series 2001 Bonds") with available funds. Accordingly, the Bond Service Requirement for the Fiscal Year 2009 recognizes this defeasance which resulted in a Bond Service Requirement reduction of approximately $6.3 million in reduced interest expense and bond principal repayment for such fiscal year.

6. The County charges all new development a Water and Wastewater Impact Fees to recover the allocable capital cost of the water and wastewater capacity assigned to such new customer/property. Based on discussions with the County staff, a portion of the Water and Wastewater Impact Fees collected, if considered as being legally available, may be used by the County to pay the annual Bond Service Requirement on the Bonds Outstanding. The amount of Impact Fees collected for the Historical Period is shown on Table 7. The collected Water and Wastewater Impact Fees were compared to the sum of: i) expansion- related Bond Service on the Bonds Outstanding and ii) the estimated Water and Wastewater Capacity Fee Carryforward Amount to determine the amount of Pledged Water and Wastewater Impact Fees available to fund the Debt Service Component of the Cost of Contracted Water Supply and the Bond Service Requirement. The Water and Wastewater Expansion Project Percentage factor was estimated by determining the capital project costs funded by each Series of Bonds that were considered as being used for expansion-related purposes and it was determined that all of the Water and Wastewater Impact Fees received by the System during the Historical Period were considered as being Pledged Capacity Fees in accordance with the provisions of the Bond Resolution.

7. For financial reporting purposes, the County capitalizes a portion of the Cost of Operation and Maintenance (operating expenses) as shown in the Annual Financial Report to plant-in- service. For financial reporting purposes, the County presents the operating expenses on a "gross" basis (is not net of that portion of expenses that have been capitalized to plant in service). The recognition of the amount of capitalized operating expenses is classified by the County as non-operating revenue in order to determine the change in net assets on the financial statements. Therefore, the operating expenses as shown in this Report are different than the amount shown on the financial statements. No other non-operating revenues have been recognized by the County in the evaluation of compliance of the rate covenant as delineated in the Bond Resolution.

Issuance of Additional Bonds Since the County is issuing additional indebtedness on a parity basis with the Outstanding Bonds[2], the County must meet certain financial tests relative to the issuance of such parity bonds as defined in the Bond Resolution (the "Additional Bonds Test"). The Additional Bonds Test requirements as outlined in the Bond Resolution states that in each of the Applicable Bond Years i) the sum of the Adjusted Gross Revenues, Adjusted Pledged Capacity Fees and Qualified

[2] As previously defined and as of September 30, 2009, the Outstanding Bonds of the System include the Refunding Utility Revenue Bonds, Series 2001.

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Derivative Receipts, will be at least equal to one hundred percent (100%) of the estimated Required Deposits under the Bond Resolution, including the repayment of Policy Costs then due and owing, and ii) the sum of the Adjusted Net revenues, plus Adjusted Pledged Capacity Fees and Qualified Derivative Receipts, will be at least equal to one hundred twenty percent (120%) of the Bond Service Requirement. The "Applicable Bond Years" are defined in the Bond Resolution to include the Bond Year in which such Additional Parity Bonds are issued and in each successive Bond Year thereafter to and including the third successive Bond Year following the Bond Year in which such Project is estimated to be placed in operation.

The Bond Resolution does provide certain adjustments that can be made to the Gross Revenues, Cost of Operation and Maintenance, and Pledged Capacity Fees. For the purposes of the evaluation reflected in this Report, we have recognized the following as allowed by the Bond Resolution:

1. Gross Revenues can be adjusted to reflect any expected increase in new customers to be served by the System;

2. Gross Revenues can be adjusted to reflect any changes in the rate schedules for customers and users of the System which the Issuer has adopted by Resolution on or before the date of such certificate and which the Issuer has covenanted to put in effect during the Applicable Bond Years; and

3. Cost of Operations and Maintenance (taking into account the Cost of Operation and Maintenance of the 2010 Project), during the Applicable Bond Years.

The System financial projections for the Forecast Period presented on Table 10 at the end of this Report essentially recognizes the same time frame as the Applicable Bond Years (which may extend to the Fiscal Year 2016, depending on capital asset construction from the Series 2010 Bonds). As shown on Table 10 and recognizing the adjustments mentioned above, the Adjusted Gross Revenues, Adjusted Pledged Capacity Fees and Qualified Derivative Receipts (none projected), are projected to be sufficient to meet the Additional Bonds Test. This is summarized below:

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Additional Bonds Test – Coverage Estimate [1] Test 1 [2] Test 2 [3] Calculated Minimum Calculated Minimum Fiscal Year 2010 [4] 1.10 1.00 2.30 1.20 Fiscal Year 2011 1.09 1.00 2.32 1.20 Fiscal Year 2012 1.09 1.00 2.31 1.20 Fiscal Year 2013 [5] 1.08 1.00 2.47 1.20 Fiscal Year 2014 1.08 1.00 2.47 1.20 Fiscal Year 2015 [6] 1.08 1.00 2.66 1.20 ______[1] Amounts shown based on information derived from Table 10 at end of this Report; amounts shown do not recognize the issuance of additional future parity bonds in the Additional Bonds Test since the Bond Service Requirement for such additional bonds is anticipated to begin after the Forecast Period (interest expense funded from proceeds of the additional future parity bonds). [2] Test 1 reflects the Adjusted Gross Revenues and Adjusted Pledged Capacity Fees will be at least equal to one hundred percent (100%) of the estimated Required Deposits under the Bond Resolution; adjustments include recognition of estimated System growth in new customer, implementation of the annual price index adjustment, and increases in the Cost of Operations and Maintenance due to inflation, growth, and changes in operation. Such amounts [3] Test 2 reflects the Adjusted Gross Revenues and Adjusted Pledged Capacity Fees will be at least equal to one hundred twenty percent (120%) of the estimated Bond Service Requirement; adjustments as discussed in note 2 also apply to this calculation. [4] Represents Fiscal Year in which Series 2010 Bonds are issued and when 2010 Project implementation begins. [5] Represents Fiscal Year when 2010 Project is assumed to be completed for purposes of this Additional Bonds Test presentation. [6] Bond Resolution states that Applicable Bond Years is three years beyond project completion date; since County plans to amend Bond Resolution to change the requirements for the issue of additional parity bonds on a historical test basis and recognizing the financial forecast reflected in this Report was only through Fiscal Year 2015, only a two subsequent fiscal year analysis is presented. The County does not expect any material change in coverage ratios in the following Fiscal Year for then outstanding Bond Service Requirement on the Outstanding Bonds and the Series 2010 Bonds.

The County has recommended an amendment in the Additional Bonds Test to reflect a historical test instead of a prospective test. Anticipating this revision to the Bond Resolution and in order to provide additional information with respect to the Additional Bonds Test, a revised test based on historical reported financial information has been prepared (the "Historical Additional Bonds Test"). The computation period for the determination of the Historical Additional Bonds Test is the twelve months ended September 30, 2009 which is the most recently completed Fiscal Year (the "Computation Period"). The proposed amendments to the Bond Resolution associated with the issuance of Additional Parity Bonds does provide that adjustments to Net Revenues can be made to reflect i) revisions to the rates and charges of the System if such rate increases had been adopted or put into effect before the issuance of the Additional Bonds and ii) in the number of connections as of the first day of the month in which the proposed Additional Bonds are to be issued exceeds the average number of such connections during the twelve consecutive month period.

With respect to the calculation of the amended Additional Bonds Test and for the purposes of this Report, the calculation was developed based on: i) financial information provided by the County for the Computation Period; ii) customer billing statistics for the Computation Period that corresponded to the revenues derived from the application of monthly user charges; iii) estimates of changes in the cost of utility operations due to the increase in System revenues as a result of the implementation of rates that were made effective by the County on October 1,

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2009 associated with the price index adjustment; and iv) the estimated Maximum Bond Service Requirements for the County's Outstanding Bonds and the Series 2010 Bonds. As provided in the amended Bond Resolution, adjustments to the determination of the Net Revenues for the purposes of complying with the Additional Bonds Test can be recognized. Based on the provisions of the Bond Resolution, the following adjustments were made with respect to the determination of the Additional Bonds Test as reflected in this Report:

1. The Gross Revenues were increased to reflect the application of the most recently adopted and enacted rates by the County for an annualized period as contained in the Rate Resolution (as previously mentioned, the County adopted and implemented water and wastewater rates via a price index adjustment which became effective October 1, 2009) for the determination of the Net Revenues.

2. For the purposes of the Additional Bonds Test calculation, the Outstanding Bonds include only the Refunding Utility Revenue Bonds, Series 2001 which mature in the Fiscal Year 2015.

3. The annual debt service payments for the Outstanding Bonds were adjusted to recognize the estimated Maximum Bond Service Requirements on such Bonds, including the issuance of the Series 2010 Bonds which were based on assumptions as provided by the County's Financial Advisor. The Fiscal Year of the Maximum Bond Service Requirement for the System was estimated to occur during Fiscal Year 2011 (reflects only the Outstanding Bonds since the Bond Service Requirement payable from Pledged Revenues for the Series 2010 Bonds does not begin until Fiscal Year 2013 when the Bond Service Requirement on Outstanding Bonds begins to decrease in amount).

With respect to the Historical Additional Bonds Test, and based on: i) reported financial information as provided by the County for the Computation Period; ii) the maximum debt service requirements of the System for both the Outstanding Bonds and estimated for the Series 2010 Bonds as provided by the County's Financial Advisor; and iii) our understanding of the Additional Bonds Test requirements as defined in the amendments to the Bond Resolution, the Adjusted Net Revenues derived from System operations should be sufficient to meet the Additional Bonds Test requirements as shown below:

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Estimated Additional Bonds Test ($000s) Computation Period – Twelve Months Ended September 30, 2009 County Reported Actual Adjustments As Adjusted Total Charges for Services [1] $168,253 $2,627 $170,880 Other Operating Revenue 7,439 0 7,439 Investment Income [2] 7,568 0 7,568 Adjusted Gross Revenues 183,260 2,627 185,887

Adjusted Pledged Capacity Fees 6,071 0 6,071 Total Adjusted Gross Revenue and Adjusted Pledged Capacity Fees $189,331 $2,627 $191,957

Cost of Operation and Maintenance [3] 139,269 $13 139,282

Total Adjusted Net Revenue and Adjusted Pledged Capacity Fees $50,062 $2,613 $52,675

Rate Covenant Test 1: [4] Total Adjusted Gross Revenue and Adjusted Pledged Capacity Fees $189,331 $2,627 $191,957 Required Deposits: Cost of Operation and Maintenance 139,269 13 139,282 Renewal and Replacement Account Requirement 9,667 0 9,667 Bond Service Requirement [5] 21,094 0 21,094 Less: Interest Earnings – Debt Service and Reserve Accounts (74) 0 (274) Total Required Deposits $169,756 $13 $169,770 Coverage Ratio – Calculated 1.12 1.13 Coverage Ratio – Required 1.00 1.00

Rate Covenant Test 2: [4] Total Adjusted Net Revenue and Adjusted Pledged Capacity Fees $50,062 $2,613 $52,675 Bond Service Requirement [5] 21,094 0 21,094 Less: Interest Earnings – Debt Service and Reserve Accounts (274) 0 (274) Total Bond Service Requirement $20,820 $0 $20,820 Coverage Ratio – Calculated 2.40 2.53 Coverage Ratio – Required 1.20 1.20 ______[1] Sales revenues were only adjusted for the change in revenues for the Fiscal Year 2010 adopted rate increase; does not reflect change in rates that became effective on June 1, 2010. [2] Amounts shown include interest earnings on unrestricted funds as defined in the Bond Resolution, and do not include earnings on the Capacity Fees or the Construction Accounts since such earnings are restricted to such funds. Amounts shown do not include investment earnings on the Debt Service Account or Reserve Account since such earnings serve to reduce the amount of the Bond Service Requirement funded from Revenues of the System. [3] Amounts shown were adjusted for the increase in the anticipated bad debt expense correlated with the increase revenues. [4] The Historical Additional Bonds Test has the following two tests which are referenced as and include: Test 1 – Adjusted Gross Revenues, Adjusted Pledged Capacity Fees and Qualified Derivative Receipts (assumed to be none) for the Computation Period will be a least equal to one hundred percent (100%)of the Required Deposits; and Test 2 – Adjusted Net Revenues and Adjusted Pledged Capacity Fees for the Computation Period will be at least equal to one hundred twenty percent (120%) of the Maximum Bond Service Requirement for all Bonds then Outstanding pursuant to the Bond Resolution and the Additional Parity Bonds assumed to be issued (i.e., the Series 2010 Bonds). [5] Reflects estimated Maximum Bond Service requirement on the Outstanding bonds and the Series 2010 Bonds. The Maximum Bond Service Requirement is assumed to occur in Fiscal Year 2009 and is greater than the Maximum Bond Service Requirement shown in subsequent Fiscal Years (interest expense on Series 2010 Bonds net of Federal Tax Subsidy and net of capitalized interest). The Maximum Bond Service Requirement after the most recent historical Fiscal Year is in Fiscal Year 2011.

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With respect to the development of the Historical Additional Bonds Test as shown on the above table, the amended Bond Resolution does provide a test that has two components similar in calculation to the current Additional Bonds Test.

As can be seen above and based on the estimated Bond Service Requirement for the Outstanding Bonds and the Series 2010 Bonds as provided by the County’s Financial Advisor, it is estimated that the County would meet the Additional Bonds Test and the Historical Additional Bonds Test requirements as defined in both the existing and amended Bond Resolution from the Adjusted Net Revenues of the System.

PROJECTED OPERATING RESULTS

General We have prepared projections of the operating results of the System for the six fiscal years (October 1 through September 30) 2010 through 2015. Projections were based on: i) Fiscal Year 2009 actual operating results as contained within the Department's Annual Financial Report; ii) the adopted budget for the System for Fiscal Years 2010 and 2011 (County prepares a two-year budget); iii) discussions with County staff and its consulting engineers regarding current and future utility trends and capital improvements to the System; iv) information provided by other utilities, including information regarding the cost of purchased water; and v) other information provided by the County and its consultants associated with the System.

Presented on Table 10 at the end of this Report are financial projections for the System. The table includes annual projections of Gross Revenues, Cost of Operation and Maintenance, payment of the Bond Service Requirement, payment of subordinated debt (if any), and other required deposits to the various funds and accounts established by the Bond Resolution, including the Renewal and Replacement Account and the debt service Reserve Account, and balances available for capital outlay and other System purposes. Projected revenue includes those from sales (rate revenue), interest income on the available unrestricted funds as defined in the Bond Resolution, and other miscellaneous revenues derived from System operations. The projected sales revenue has been forecasted based on revenue anticipated to be derived from the existing and anticipated rates of the System. The projected debt service shown on Table 11 at the end of this Report is subject to change based upon the actual terms of the sale of the Series 2010 Bonds.

Projected sales revenue for the System is based on growth projections in customers and usage as illustrated on Tables 4 through 6 at the end of this Report. These forecasts were based on historical growth and usage trends coupled with data provided by the County relating to projected residential and commercial development within the utility service area. Interest income has been estimated on balances in certain funds created by the Bond Resolution including balances in the General Revenue and Operation and Maintenance Accounts (operating reserves); Debt Service Account, including the Reserve Account, as applicable; the Renewal and Replacement Account, and the General Purpose Account. The projected Cost of Operation and Maintenance is based on various factors such as projected expense increases due to inflation and projected changes in expenses associated with anticipated changes in operations. Funds received from the application of Impact Fees from the System have been assumed, for the purposes of the

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determination of rates, not to be available to pay the Cost of Operation or Maintenance but have been recognized in the determination of the Pledged Revenues and for rate covenant requirements under the terms of the Bond Resolution.

PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS REGARDING PROJECTED OPERATING RESULTS In the preparation of this Report and the conclusions that follow, we have made certain assumptions with respect to conditions, which may occur in the future. While we believe the assumptions are reasonable for the purpose of this Report, they are dependent upon future events and actual conditions may differ from those assumed. In addition, for our projections and estimates, we have used and relied upon certain information and assumptions provided to us or prepared by others, including: i) information and assumptions provided to us by the County such as data regarding historical financial information and historical customer and sales statistics; ii) information contained in the Annual Financial Reports prepared by management on behalf of the System; iii) information provided by the County's Financial Advisor with respect to assumptions regarding the issuance of the Series 2010 Bonds; and iv) information provided by the County and its consulting engineers with respect to the capital improvement program of the System, including incremental operating expenses associated with the implementation of such program. While we believe use thereof to be reasonable for the purpose of this Report, we offer no further assurances with respect thereto. To the extent that actual conditions differ from those assumed by us herein or from information or assumptions provided to us, or prepared by others, the actual results will vary from those estimated and projected herein.

In making the projections and estimates summarized in this Report, the principal considerations and assumptions made by us and the principal information and assumptions provided to us, or prepared by others, include the following:

1. The actual year-to-date 2009 operating results and the Fiscal Years 2010 and 2011 Budget (County prepares a two-year Budget) as provided by the Department served as the baseline for the expenditure projections and the underlying projections included therein by the County are reasonable and representative of anticipated operations. The Fiscal Year 2010 and 2011 Budget represents the most recent financial forecast of the System as approved by the Board and was based on historical operating results and trends and known or anticipated conditions. The Fiscal Years 2010 and 2011 Budget recognizes anticipated changes by Department management in operations and costs based on known events and current year-to-date financial results. Such amounts were considered reasonable and incorporated into the Fiscal Years 2010 and 2011 components of the financial forecast except for certain adjustments and assumptions as noted hereunder.

2. Projected Water and Wastewater System revenues from current rates and charges for the County's Water and Wastewater Systems have been based on: i) the schedule of rates and charges currently in effect as of October 1, 2009 which includes the application of a price index adjustment based on the rate policies that were approved by the Board pursuant to the adoption of the Rate Resolution; and ii) the forecast of water and wastewater customers and sales (water use and billed wastewater flow) for the respective utility systems as presented on Tables 4 and 5 for the Water and Wastewater Systems, respectively.

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Projected revenues from rates for the Forecast Period also recognize the continued application of the annual price index rate adjustment applied uniformly to rates (includes water, wastewater, and reclaimed water rates) assumed to be made effective each June 1st beginning with the Fiscal Year 2011 in accordance with the provisions of the Rate Resolution (for the purposes of this Report, it was assumed that the index would become effective on October 1st bills rendered). As provided in the Rate Resolution, the rates shall be annually based on the Price Index (or its equivalent) as published annually by the Florida Public Service Commission (referred to by the County as the "Effective Price Index") applied to the adjusted operating expenses based on the formula contained in the Rate Resolution. The application of the annual price index is in lieu of adopting a formal rate adjustment and provides an ongoing rate recovery mechanism for the annual effects of inflation on the cost of operations; the application of the index does not preclude the Board of adopting an additional rate adjustment to meet System expenditure requirements. It should be noted that for the last ten years ended 2009, the average Price Index as published by the Florida Public Service Commission was 2.20%.

A summary of projected sales revenues under existing rates, which includes the application of the annual price index adjustment, for monthly water and wastewater service for the Forecast Period is shown on Table 10 at the end of this Report. The following is a summary of the additional rate revenues associated with the additional rate adjustments associated with the implementation of the price index rate adjustments recognized during the Forecast Period subsequent to the Fiscal Year 2010 as reflected in this Report. No other rate adjustments, other than from the application of the annual price index rate adjustment have been assumed.

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Summary of Revenues from Annual Price Index Application Fiscal Year Ending September 30, (Dollars in 000s) [1] For the Prior Fiscal Year 2011 [2] 2012 2013 2014 2015 Operating Expenses $140,569 $146,518 $153,411 $158,486 $164,178 Adjustments to Operating Expenses [2] Purchased Water Costs (45,829) (46,753) (49,326) (50,405) (52,756) Purchased Wastewater Costs (1,792) (2,082) (2,166) (2,252) (2,341) Electricity Expenses (10,273) (10,892) (11,668) (12,516) (13,144)

Adjusted Operating Expenses $81,171 $86,792 $90,252 $93,313 $95,937 Assumed Annual Price Index – CPI [3] 0.56% 1.15% 1.25% 1.35% 1.55% Amount Recovered by Price Index $455 $998 $1,128 $1,260 $1,487

Annual Sales Revenue – Monthly User Rates $167,692 $173,308 $178,328 $181,068 $185,360 Less PW Pass-Through Consumption Charge[4] (37,798) (43,058) (46,395) (47,519) (49,604) Adjusted Sales Revenue $129,894 $130,250 $131,933 $133,548 $135,756

Annual Price Index Calculated [5] 0.37% 0.77% 0.86% 0.94% 1.10%

Total Additional Annual Rate Revenue [6] $455 $1,003 $1,135 $1,255 $1,493 ______[1] The Fiscal Year 2010 price index adjustment was implemented October 1, 2009 as part of adoption of the Rate Resolution; therefore, no index adjustment was presented for such Fiscal Year. Price Index formula based on Rate Resolution. [2] Adjustments to operating expenses to recognize expenses that are subject to a separate pass-through provision in the Rate Resolution. [3] Reflects inflationary rate assumed in the development of the Cost of Operation and Maintenance reflected in this Report. [4] Purchased-Water Pass-Through Consumption Charge revenue not same as purchased water costs due to application of credits against the cost for rate determination (e.g., Impact Fees allocable to payment of Debt Service Component of the Cost of Contracted of Water Supply). [5] Fiscal Year 2011 Annual Price Index reflects actual percent adjustment and was implemented effective June 1, 2010. [6] Amounts shown reflect additional annual rate revenue derived from the application of the price index rate adjustment (increase in revenues due to compounding of price index rate adjustment).

3. In addition to the application of the price index, the County also has implemented a Purchased-Water Pass-Through Consumption Charge, the purpose to recover the cost of purchased water since the County essentially secures all of its water from other water suppliers (i.e., primarily Tampa Bay Water). The County has annually billed a Purchased- Water Pass-Through Consumption Charge since Fiscal Year 2001. The estimate of the Purchased-Water Pass-Through Consumption Charge was based on the projected cost of purchased water (see Assumption Nos. 4 and 5 below) and was estimated as follows for the Forecast Period:

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Summary of Projected Purchased-Water Pass-Through Consumption Charge Fiscal Year Ending September 30, ($000s) 2010 2011 2012 2013 2014 2015 Purchased Water Costs Tampa Bay Water $44,768 $45,302 $47,816 $48,833 $51,122 $50,981 Other Municipal Entities [1] 1,243 1,451 1,510 1,572 1,634 1,700

Total Purchased Water Costs 46,011 46,753 49,326 50,405 52,756 52,681 Less Adjustments to Cost [2] (310) (652) ------Less Pledged Capacity Fees [3] (2,573) (2,544) (2,661) (2,763) (2,951) (3,054)

Net Purchased Water Costs $43,128 $43,557 $46,665 $47,642 $49,805 $49,627 Billed Water Sales (000s) 15,651,696 15,561,696 15,753,899 15,761,084 15,847,708 15,964,068 Recognized Pass-Through [4] $2.43 $2.78 $2.96 $3.02 $3.14 $3.11 ______[1] Amounts reflect purchases from the Cities of Tampa, Plant City, Temple Terrace, and Oldsmar. [2] Amounts reflect the application of the water quality credit from Tampa Bay Water ($183,000 in Fiscal Year 2010 which discontinues thereafter) and the application of prior period true-ups as billed by Tampa Bay Water (assumes no additional true-up adjustments for remainder of the Forecast Period). [3] Amounts reflect the use of Pledged Capacity Fees towards the payment of the Debt Service Component of the Cost of Contracted Water Supply as delineated in the Bond Resolution. [4] Amount shown represents the assumed Purchased-Water Pass-Through Adjustment that is added to the Monthly User Rates for the determination of the Water System consumption charges; amount shown for Fiscal Year 2010 is the actual charge currently being billed by the Department for this rate component.

4. The cost of Tampa Bay Water purchases was based on: i) the estimated Unitary Rate as projected by Tampa Bay Water which was identified in the Fiscal Year 2010 Budget provided to the Department by Tampa Bay Water dated May 21, 2009; ii) the estimated water purchase requirements based on the water sales forecast summarized on Table 4 and an unbilled or unaccounted for water allowance equal to 7.50% of purchased water requirements; and iii) recognition of Water Quality Credits applied to the total cost also as provided by Tampa Bay Water for the Fiscal Year 2010. The annual amortization of debt service credits associated with the purchase of County's water supply in 1999 by Tampa Bay Water as received by the County has been recognized as a deposit to the Renewal and Replacement Account in accordance with the provisions of the Bond Resolution regarding the deposit of funds associated with the sale of System assets. The following is a summary of the Tampa Bay Water Costs reflected in the Rate Study:

Estimated Rate for Annual Cost of Tampa Fiscal Year TBW($/1,000 Gallons) [1] Bay Water Purchases 2010 $2.70 $44,768,880 2011 2.73 45,301,977 2012 2.87 47,815,680 2013 2.93 48,832,917 2014 3.05 51,121,068 2015 3.02 50,981,704 ______[1] Includes annual water quality credit of $183,000 for the Fiscal Year 2010; no water quality credits were assumed for the remainder of the Forecast Period. It should be noted that the unitary rate as published by Tampa Bay Water is based on a water purchases forecast which has been modified in this Report based on the forecast of customers and sales as shown on Table 4 at the end of this Report which affected the allocation of costs to the County.

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It should be noted that the payments made to Tampa Bay Water include a Debt Service Component which is part of the Cost of Contracted Water Supply that is billed to the Department by Tampa Bay Water. The payments made by the Department to Tampa Bay Water, whether to reimburse Tampa Bay Water for the Debt Service Component or for the total Cost of Contracted Water Supply, are treated by the County pursuant to the Bond Resolution as a Cost of Operation and Maintenance. Accordingly, Revenues will be applied towards the payment of the Tampa Bay Water, including the Debt Service Component, before such Revenues become available for the payment of the Outstanding or additional parity bonds.

In addition to the cost of purchased water from Tampa Bay Water, the System also purchases water from other local governments (cities of Tampa, Plant City, Temple Terrace, and Oldsmar), primarily to serve: i) utilities that were acquired by the County and which are not or can be economically interconnected to the Water System; and ii) other small service areas that also are not economically practical to interconnect to the Water System (therefore not being served from Tampa Bay Water). For the Forecast Period, the projected cost of these purchases were based on the current rates in effect by the various water suppliers, discussions with the local governments with respect to anticipated rate adjustments, and projections of growth within the specific areas to which these supplemental water purchases are attributable. The following is a summary of the total estimated purchased water costs from those entities other than Tampa Bay Water for the Forecast Period.

Purchased Water From Water Suppliers other than Tampa Bay Water Estimated Water Purchases Expenditure Fiscal Year (000s of Gallons) Amount 2010 336,779 $1,243,277 2011 343,176 1,450,970 2012 349,700 1,510,365 2013 356,355 1,571,559 2014 363,142 1,634,596 2015 370,065 1,699,531

5. The Department also purchases wastewater service from the Cities of Tampa, Temple Terrace and Plant City primarily to serve: i) utilities that were acquired by the County and which are not or can be economically interconnected to the Wastewater System; and ii) other small service areas that also are not economically practical to interconnect to the Wastewater System. For the Forecast Period, the projected cost of these purchases were based on the current rates in effect by the various wastewater providers, discussions with the local governments with respect to anticipated rate adjustments, and projections of growth within the specific areas to which these supplemental wastewater purchases are attributable which were assumed to be consistent with water growth assumptions for these service areas (same service areas). The following is a summary of the total estimated purchased wastewater costs from these local governments for the Forecast Period.

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Purchased Wastewater From Other Local Governments Wastewater Estimated Purchases Expenditure Fiscal Year (000s of Gallons) Amount 2010 264,398 $1,791,757 2011 269,327 2,081,793 2012 274,355 2,165,615 2013 279,483 2,251,864 2014 284,714 2,340,801 2015 290,049 2,432,297

6. As previously mentioned, the County charges an Impact Fee to applicants that are requesting water and/or wastewater capacity to pay or reimburse the County for the applicant’s equitable share of the capital costs relating to the construction, expansion, or equipping capacity of the System in order to serve new users. Impact Fee revenues for the Forecast Period included: i) assumed upfront payments made by the applicant, including builder payments; and ii) installment payments based on the application of non-ad valorem assessments (Impact Fee Assessment Units or [IFAU)]) that are not dedicated to the payment of previously issued Capacity Assessment Special Assessment Bonds.

With respect to the upfront payments and the impact fee special assessments, the projection of Impact Fees was based on: i) the anticipated growth in ERCs for the Forecast Period; ii) historical trends in applicants electing to prepay the Impact Fees upfront as opposed to electing the installment based method of collection; iii) historical and year-to-date collections and relationships of customers connected and customers that may prepay; and iv) the provisions of the Rate Resolution relative to the fees charges based on the connection method assumed by the applicant. With respect to the installment based collections (non-ad valorem assessments), the County adopted in 1996 Ordinance No. 96-7 (referred to by the County as the Impact Fee Assessment Unit Ordinance or "IFAU Ordinance") to initiate the IFAU Special Assessment Program. The forecast of the IFAU collections was based on: i) the actual ERCs that have elected to use this method through September 30, 2009; ii) the issuance terms associated each series of assessments (i.e., interest rate, payment term, cost of billing the assessments and provisions for early payment discount allowed by the State of Florida for the early payment of taxes and fees included on the ad valorem tax bill); iii) the forecast of new customer growth during the Forecast Period; iv) an assumed uncollectible rate of the assessments of 0.5%; and v) the County not issuing any future Impact Fee Assessment Special Assessment Bonds during the Forecast Period which would essentially restrict the collection of the IFAU assessments to the payment of such bonds. Additionally, if an applicant requests to utilize the IFAU process for the payment of the Impact Fees, the applicant must pay a portion of the Impact Fee upfront. This component is included as a component of the Builder Payment as defined in the Rate Resolution.

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The following is a summary of the Water System Impact Fees, including interest earnings, assumed to be received during the Forecast Period:

Summary of Water System Impact Fees Received Upfront and Interest Fiscal Year Builder Payments Assessments [1] Earnings [2] Totals 2010 $709,232 $3,616,611 $3,000 $4,328,843 2011 601,300 3,674,381 4,386 4,280,067 2012 545,978 3,925,365 6,563 4,477,906 2013 536,960 4,104,073 7,647 4,648,680 2014 686,290 4,270,734 8,729 4,965,753 2015 722,626 4,407,082 9,808 5,139,516 ______[1] Amounts include the total estimated assessments which include both the principal and interest components. [2] Amounts reflect estimated investment income on Impact Fee fund (cash) balances; such amounts were allocated between the Water and Wastewater Systems; amounts do not include interest income associated with the non-ad valorem assessments (reference note 1).

The following is a summary of the Wastewater System Impact Fees, including interest earnings, assumed to be received during the Forecast Period:

Summary of Wastewater System Impact Fees Received Upfront and Fiscal Year Builder Payments Assessments [1] Interest [2] Totals 2010 $559,908 $4,227,193 $4,143 $4,791,244 2011 429,954 4,311,808 6,057 4,747,819 2012 507,250 4,561,502 9,063 5,077,815 2013 639,935 4,739,589 10,561 5,390,084 2014 881,214 4,905,963 12,054 5,799,231 2015 970,345 5,038,396 13,545 6,022,286 ______[1] Amounts include the total estimated assessments which include both the principal and interest components. [2] Amounts reflect estimated investment income on Impact Fee fund (cash) balances; such amounts were allocated between the Water and Wastewater Systems; amounts do not include interest income associated with the non-ad valorem assessments (reference note 1).

7. Included in the financial projections are other operating revenues associated with service initiation and discontinuance fees, meter testing fees, developer (engineering) review fees, return check charges, and other related customer requested services revenues. For the purposes of this Report, other operating revenues were based on: i) the Fiscal Year 2010 budget estimates of such revenues as prepared by the Department; ii) a review of historical amounts received from such charges; and iii) discussions with the Department staff. Based on a review of such sources, it was assumed that such revenues would either remain constant, increase as a result of inflation, or increase based on change in the number of customers annually served during the Forecast Period.

8. As discussed earlier in this Report, the County also provides reclaimed water service to certain customers which service is recognized as an alternative water resource for irrigation and other non-potable water use purposes. Specifically, the County provides this service to individually-metered residential and commercial (general service) customers primarily for

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irrigation purposes as well as major or large users such as golf courses and industry for irrigation and industrial purposes. Revenues from this service are anticipated to increase during the course of the Forecast Period based on: i) continued growth of the Reclaimed Water System due to the extension of service and continued development in areas already receiving service; ii) recent historical usage statistics for metered customers, including the amount of usage billed by reclaimed water consumption block; iii) the reclaimed water rates which became effective beginning October 1, 2009; and iv) the recognition of the annual price index adjustment which is applied to the Monthly User Rates, which includes the reclaimed water rates. Based on these assumptions, the projected revenues resulting from reclaimed water service assumed during the Forecast Period was estimated as follows:

Projection of Reclaimed Water Revenue for Forecast Period (Dollars in 000s) Fiscal Year Ending September 30, [1] 2010 2011 2012 2013 2014 2015 Individually Metered Residential Committed Class [2] $1,488.8 $1,489.9 $1,490.9 $1,492.0 $1,493.1 $1,494.2 Metered Class 188.8 222.5 274.5 332.9 398.0 470.6 Commercial General Users 135.6 139.3 141.0 142.5 144.6 146.7 Major Users 122.8 138.6 143.5 143.6 143.6 143.6

Projected Reclaimed Water Revenue $1,936.0 $1,990.3 $2,049.9 $2,111.0 $2,179.3 $2,255.1 ______[1] Revenues based on customer and sales forecast as shown on Table 6 at the end of this Report. [2] Reflects residential customers that have elected by agreement to receive service on a flat rate basis for a term of up to 30 years.

9. The projected Cost of Operation and Maintenance associated with operation and maintenance of the County's facilities have been escalated from the budgeted Fiscal Years 2010 and 2011 amounts based upon several assumptions and the nature of the expense. With respect to the Fiscal Year 2010, such budgeted amounts were compared to actual Fiscal Year 2009 results for reasonableness and were adjusted based on the prior results and discussions with the Department staff. A summary of the projected Cost of Operation and Maintenance for the Forecast Period is included on Table 9 at the end of this Report. These projected expenses, exclusive of the cost of purchased water and wastewater, which were discussed earlier in this section, were escalated for the Forecast Period as follows:

a. Materials and supplies expenses, other contractual services expenses, repair and maintenance expenses, and certain other operating expenses have been projected to increase in general from historical and current budgetary levels at an annual rate equal to inflation ranging from 1.0% to 5.0% based on the nature of the expenditure. These escalation factors were based, in part, on the Implicit GDP Deflator and the Consumer Price Index forecast prepared by the Congressional Budget Office as contained in the Economic and Budget Outlook dated January 2010. Additionally, these escalators were compared to: i) the gross national product implicit price deflator index which is used by many utilities as published by the Florida Public Service Commission for the establishment of price indices for operating costs as allowed pursuant to Section

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367.081(4)(a), Florida Statutes, in the regulation of private or investor-owned utilities; and ii) the consumer price index for recent historical periods. b. Based on discussions with the County, the escalation of wages and salaries subsequent to Fiscal Years 2010 and 2011 budgeted amounts was increased by approximately 2.0% annually to reflect increases due to inflation and allowances for salary adjustments such as merit increases and cost of living adjustments. Personnel benefits (i.e., contributions toward retirement, health insurance, FICA, etc.), with the exception of medical insurance, were projected to remain at the same percentage relationship to total salaries as was reflected in the Fiscal Year 2010 Budget based on discussions with the Department staff, the cost of medical insurance was increased by approximately 5.0% annually to reflect recent trends in the escalation of such costs being incurred by the County.

It should be noted for the preparation of the Fiscal Years 2010 and 2011 Budget, the Department recognized several efficiency and reduced cost adjustments in the Cost of Operations and Maintenance in order to lower costs coincident with the current economic conditions facing the utility (to reduce impacts on rates due to decreased customer growth, development and reduced water sales as previously discussed). The amount recognized by the County in Fiscal Year 2010 was approximately $5,469,000 and primarily reflected, among other things, reductions due to: i) securing alternative power at the Falkenburg Road Regional AWWTP facilities, reorganization of employees and shift costs, reductions in odor control due to changes in chemical feed systems, and a limited suspension of sewer line inspection and cleaning and general maintenance. Except as noted hereafter, the efficiencies and cost reductions identified by the Department and included in the Fiscal Year 2010 expense estimates were assumed by the Department to be permanent in nature and were continued for the Forecast Period. However, for the purposes of the financial forecast and to be conservative in the projections of the Cost of Operation and Maintenance, it was assumed that the expense efficiencies associated with the sewer line inspection and cleaning and general maintenance would only be realized during the Fiscal Years 2010 and 2011; the remainder of the Forecast Period did not reflect the cost reductions. Accordingly, the forecast recognizes an increase of approximately $450,000 associated with the add-back of these expenses during Fiscal Year 2012. c. As mentioned earlier regarding the additional expenses being incurred during the Fiscal Years 2007 through 2009, the Department has been installing an Asset Management System and populating the program with detailed inventory and condition assessment information. Based on discussions with the Department, the full installation of the program is now anticipated to be finalized during the Fiscal Year 2010, which was not included as an expense in such budget year (was fully funded in prior years, moneys had not been fully spent by the close of Fiscal Year 2009). Therefore, for the Fiscal Year 2010, an adjustment to increase the Cost of Operation and Maintenance in the amount of $1,494,955 to recognize the incremental expenses associated with the full installation of the Asset Management Program (after

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the Fiscal Year 2010, the cost of maintaining the program will be an ongoing expense and is part of the normal course of doing business by the Department). d. With respect to the projection of variable costs for water and wastewater operations which included the cost for purchased power and chemicals for the water and wastewater treatment and pumping facilities, such projections were determined utilizing the cost of the expense for water production and wastewater treatment to the County's customers as outlined in the Department's Fiscal Years 2010 and 2011 Budget and was escalated for the remainder of the Forecast Period based on an allowance for inflation, which is consistent with recent historical trends, and the projection of flow requirements as discussed earlier in this Report. For the Forecast Period, the following was assumed for the variable expenses:

i. Electrical expenses were escalated over the remainder of the Forecast Period at inflation factors ranging from 5% to 8% based on: recent reported cost increases and the continued assumed increase in energy prices plus an allowance for System flow growth. The composite annual compound growth rate in water production / wastewater treated after the Fiscal Year 2011 recognized in the financial forecast is approximately 1.0% per year. Based on these assumptions, the average increase in electrical expenses averaged approximately 8% annually after the Fiscal Year 2011.

ii. For the Fiscal Years 2010 and 2011, the budget fully recognized the incremental costs associated with the bringing on-line of the plant expansions and upgrades associated with the Falkenburg Road, Valrico, and Northwest AWWTPs and the Biosolids or pelletizer Facility (which essentially were completed in mid- to late Fiscal Year 2009), which is estimated to increase the Cost of Operation and Maintenance (includes all costs, with primary emphasis on electricity, effluent disposal, and chemicals) by approximately $3.1 million annually.

iii. Chemical expenses were escalated over the remainder of the Forecast Period based on the estimated growth in water and wastewater treatment plant flows plus an annual inflationary factor of 5.0% based on recent reported cost increases resulting in an overall cost adjustment ranging from 5% to 6% annually.

iv. Sludge removal expenses were escalated during the remainder of the Forecast Period based on the estimated growth in treated wastewater flows and an allowance for inflation of 5.0% annually resulting in an overall cost adjustment ranging from 5% to 6% annually. It was assumed that a reduction in sludge removal expenses is anticipated to occur during the Fiscal Year 2010 with the addition of the biosolids facility. This reduction has been reflected in the Department’s Fiscal Year 2010 budget with the full implementation of the Biosolids Facility in such Fiscal Year. e. A contingency allowance of one-half of one percent (0.50%) of total Cost of Operation and Maintenance was recognized in each Fiscal Year of the Forecast Period beginning

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with the Fiscal Year 2012 for the System. The allowance has been included in order to have additional funds to meet unknown or unplanned expenditures throughout the fiscal year and to recognize potential changes in the revenues which may occur due to weather, conservation, and other factors. For the Fiscal Years 2010 and 2011, no contingency was recognized since the Department prepared a detailed expenditure budget for the System, which has been considered as being reasonable. For the remainder of the Forecast Period, the recognition of this allowance increased the projected Cost of Operation and Maintenance of the System on average by approximately $800,519 annually.

f. Repair and Maintenance operating expenses were escalated subsequent to the budget period based upon an inflationary or cost factor ranging from 3.0% to 3.5% over the Forecast Period, reflecting the observed trend in increased construction materials costs used in the repair and maintenance of existing water and wastewater facilities.

g. Although considered a System operating expense for financial reporting purposes, depreciation and amortization expenses have not been recognized as a component of the Cost of Operation and Maintenance consistent with the provisions of the Bond Resolution since such amounts represent non-cash expenses.

10. The financial projections of the System Operating Expenses as reflected on Table 9 include the recognition of additional employees that are anticipated to be required to meet the increased service level needs/requirements of the System. The recognition of the additional employees was based on discussions with Department staff and is primarily due to providing increase service levels due to the imposition of a backflow prevention device program and to serve increased growth of the System service area over the long term (i.e., increases in the number of customers / services served which pose a greater demand on the existing employee availability and utilization) associated with field services and customer accounting. The following table summarizes the additional employees recognized in the financial forecast above the level of personnel assumed in the Fiscal Years 2010 and 2011 Budget:

Number of Fiscal Year Additional Annual Department Employees Recognized Personnel Services Cost [1] Field Operations 4 2013 $675,870 Customer Services Representative 1 2014 102,969 Total Employee Additions 5 ______[1] Reflects salary and benefits in year of addition; annual personnel costs expressed in future estimated costs; amounts shown include salaries, benefits, and an allowance for additional indirect cost allocation from the General Fund which is based on total salary cost.

11. Included as a Cost of Operation and Maintenance for the System is an allowance for administrative expenses or indirect costs which are expenses accounted for in the County's General Fund which are allocated pro rata to the Department (the "Administrative Expenses"). The projection of the Administrative Expense was based on: i) information contained in the adopted Fiscal Years 2010 and 2011 Budget and ii) the assumption that

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such costs would escalate above the budgeted amounts by the anticipated change in wages and salaries (which the administrative cost allocation from General Fund is based) for the remainder of the Forecast Period. The Administrative Expense allocation recognized during the Forecast Period reflected in this Report is as follows:

Fiscal Year Administrative Expense 2010 [1] $9,703,372 2011 [1] 9,739,594 2012 9,934,386 2013 [2] 10,133,074 2014 [2] 10,335,735 2015 [2] 10,542,450 ______[1] Amounts as reflected in the 2010 and 2011 Budget as provided by the County. [2] Amounts shown do not include the incremental (increase) Administrative Expenses associated with additional personnel which was included as a cost component for such additions (reference Note 10 above) for calculation purposes (the additional Administrative Expense recognized as a component of the increased personnel costs was approximately $84,000 annually).

12. The County currently has outstanding a portion of the previously issued the Junior Lien Refunding Utility Revenue Bonds, Series 2001 (the "Series 2001 Bonds" and also previously defined as the "Outstanding Bonds") in the principal amount $80,525,000 issued pursuant to the provisions of the Bond Resolution (refunded previously outstanding bonds issued to finance capital improvements for the water and wastewater systems). It should be noted that during the Fiscal Year 2009, the County cash defeased all of the then outstanding Refunding Utility Revenue Bonds, Series 2003 and a portion of the outstanding Series 2001 Bonds in the amount of $10,000,000. Such bonds are no longer a liability of the County and are not reflected in the Bond Service Requirement during the Forecast Period. The Bond Service Requirement included in this Report for the Series 2001 Bonds for each year of the Forecast Period was based on the revised debt service schedule for the issue and are presented on a "gross" basis (i.e., not net of interest earnings on any debt service related funds or accounts). Furthermore, the amounts shown are based on the monthly funding requirements of the Debt Service Account as required by the Bond Resolution which authorized the Bonds (essentially an accrual basis) as opposed to when the debt service requirements are actually paid.

It should be noted that pursuant to the Bond Resolution, any interest earnings that have been deposited into the Debt Service Account from the investment of funds in the Debt Service Account and the Reserve Account shall reduce the deposit requirements from Gross Revenues and Pledged Capacity Fees. For the purposes of determining compliance with the rate covenant, such estimated earnings on the Debt Service Account has been recognized as a reduction in the Bond Service Requirement that must be funded from the Gross Revenues and Pledged Capacity Fees of the System (and for determination of rate covenant compliance). For a summary of the estimated investment income on the Debt Service Account, please refer to Note 17 below.

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13. The County is currently anticipating the issuance of the Series 2010 Bonds for the primary purpose of funding the 2010 Project on behalf of the System as identified by the Department. Based on the financing plan as developed by the County, the County anticipates the issuance of the following series of bonds:

Principal Amount [ ] Description of Bonds 3 Utility Revenue Bonds, Series 2010A (Tax-Exempt) $19,385,000 Utility Revenue Bonds, Series 2010B (Federally Taxable-Build America Bonds-Direct Payment) 108,915,000 Utility Revenue Bonds, Series 2010C (Federally Taxable- Recovery Zone Economic Development Bonds-Direct Payment 21,700,000

Total Principal Amount of Bonds $150,000,000

With respect to the Series 2010A Bonds, which will be issued as tax-exempt bonds, the annual payments for the Bond Service Requirement were derived from the estimated debt service schedule as provided by Public Financial Management, Inc. (PFM), the County’s Financial Advisor. The assumptions used by PFM with respect to the annual Bond Service Requirement for the anticipated Series 2010A Bonds include: i) total principal amount of the bonds estimated at approximately $19,385,000 which provided a Construction Account deposit of $11,836,955; ii) assumed annual tax-exempt coupon interest s on the serial and term bonds that comprise the Series 2010A Bonds ranging from 3.00% to 4.00%; iii) a term of approximately nine (9) years with the first 22 months of interest expense being capitalized (funded) from Series 2010A Bonds proceeds and the remainder of the repayment term reflecting Bond Service Requirement being essentially level during the repayment term of the Series 2010A Bonds; iv) the cash funding the reserve account in an amount necessary to meet the Reserve Account Requirement for such bonds; and v) the payment of issuance expenses associated with the Series 2010A Bonds. It was further assumed that the Series 2010A Bonds would be dated and issued on or about October 1, 2010. After the capitalized interest period which is anticipated to occur approximately during the first 2 years of this issue, the average annual debt service payments on the Series 2010A Bonds was estimated to be level at approximately $3,380,000 annually.

With respect to the Series 2010B Bonds, such bonds will be issued as Build America Bonds and will be federally taxable bonds. The annual payments for the Bond Service Requirement for the Series 2010B Bonds were derived from the estimated debt service schedule as provided by PFM. The assumptions used by PFM with respect to the annual Bond Service Requirement for the anticipated Series 2010B Bonds include: i) total principal amount of the bonds estimated at approximately $108,915,000, which provided a Construction Account deposit of $99,567,847; ii) assumed annual taxable coupon interest rates on the serial and term bonds that comprise the Series 2010B Bonds ranging from 4.24% to 5.55%; iii) a term of approximately twenty-seven (27) years with a) a portion of the interest expense during the first 22 months of the amortization period being capitalized (funded) from available funds contributed by the County and from Series 2010A Bonds

[3] Preliminary; subject to change.

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proceeds; b) interest payments for approximately nine (9) years; and c) the remainder of the repayment term of the Series 2010B Bonds reflecting a Bond Service Requirement being essentially level; iv) the Federal Direct Payments to be received by the County was based on thirty-five percent (35%) of the interest expense for such bonds as provided by PFM which were assumed to be directly deposited into the Debt Service Account consistent with the provisions of the Bond Resolution; v) the cash funding the reserve account in an amount necessary to meet the Reserve Account Requirement for such bonds; and vi) the payment of issuance expenses associated with the Series 2010B Bonds. It was further assumed that the Series 2010B Bonds would be dated and issued on or about October 1, 2010. After the capitalized interest period which is anticipated to occur during the first 22 months of this issue, the interest-only payments are estimated to be $3,716,000 (net of the subsidy), and average annual debt service payments after the interest-only period for the remainder of the repayment period on the Series 2010B Bonds was estimated to be level at approximately $8,261,000 annually.

With respect to the Series 2010C Bonds, such bonds will be issued as Recovery Zone Economic Development Bonds and will be federally taxable bonds. The annual payments for the Bond Service Requirement for the Series 2010C Bonds were derived from the estimated debt service schedule as provided by PFM. The assumptions used by PFM with respect to the annual Bond Service Requirement for the anticipated Series 2010C Bonds include: i) total principal amount of the bonds estimated at approximately $21,700,000 which provided a Construction Account deposit of $19,637,502; ii) assumed annual taxable coupon interest rates on the serial and term bonds that comprise the Series 2010C Bonds ranging from 5.56% to 5.68%; iii) a term of approximately thirty (30) years with a) a portion of the interest expense during the first 22 months of the amortization period being capitalized (funded) from available funds contributed by the County and from Series 2010A Bonds proceeds; b) interest-payments for the next 27 years; and c) the remainder of the repayment term of the Series 2010B Bonds reflecting a Bond Service Requirement being essentially level; iv) the Federal Direct Payments to be received by the County was based on percent (45%) of the interest expense for such bonds as provided by PFM which were assumed to be directly deposited into the Debt Service Account consistent with the provisions of the Bond Resolution; v) the cash funding the reserve account in an amount necessary to meet the Reserve Account Requirement for such bonds; and vi) the payment of issuance expenses associated with the Series 2010C Bonds. It was further assumed that the Series 2010C Bonds would be dated on or about August 1, 2010 and would also be issued on or about September 1, 2010. After the capitalized interest period which is anticipated to occur during the first 22 months of this issue, the interest- only payments are estimated to be $669,000 (net of the subsidy) and the average annual debt service payments for the remainder of the repayment period for the Series 2010C Bonds was estimated to be level at approximately $7,673,000 annually.

Based on the above assumptions, the Bond Service Requirement for the Forecast Period for the Series 2010 Bonds, prior to the recognition of any investment earnings on the Debt Service Account and the Reserve Account (presented on a gross payment basis) was estimated as follows:

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Projection of Bond Service Requirement – Series 2010 Bonds Fiscal Year Ending September 30, [1] 2011 2012 2013 2014 2015 Series 2010A Bonds: Bond Service Payment $670,050 $1,090,050 $3,189,950 $3,188,975 $3,186,583 Less Capitalized Interest (670,050) (558,375) 0 0 0 Series 2010A Bond Service Requirement $0 $531,675 $3,189,950 $3,188,975 $3,186,583

Series 2010B Bonds: Bond Service Payment $5,717,557 $5,717,557 $5,717,557 $5,717,557 $5,717,557 Less Capitalized Interest (5,384,033) (3,097,010) 0 0 0 Less Federal Direct Payment (333,524) (2,001,145) (2,001,145) (2,001,145) (2,001,145) Series 2010B Bond Service Requirement $0 $619,402 $3,716,412 $3,716,412 $3,716,412

Series 2010C Bonds: Bond Service Payment $1,216,231 $1,216,231 $1,216,231 $1,216,231 $1,216,231 Less Capitalized Interest (1,125,014) (557,439) 0 0 0 Less Federal Direct Payment (91,217) (547,304) (547,304) (547,304) (547,304) Series 2010C Bond Service Requirement $0 $111,488 $668,927 $668,927 $668,927

Total Bond Service Requirement [2] $0 $1,262,565 $7,575,289 $7,574,314 $7,571,922 ______[1] Based on an accrual basis and reflects when the Debt Service Account is to be funded from Revenues and not when the payments of the Series 2010 Bonds are actually made by the County. Amounts are presented on a "gross" basis and are not net of any investment income from amounts on deposit in the Debt Service Account and the Reserve Account associated with such bonds. [2] Reflects Bond Service Requirement for the Series 2010 Bonds that are payable from Revenues and are recognized in the evaluation of the rate covenant pursuant to the Bond Resolution (reflects gross Bond Service Requirement; amounts not adjusted for any interest earnings anticipated to accrue on the Debt Service Account).

14. For the remainder of the Forecast Period, additional utility system revenue bonds issued on parity to the Outstanding Bonds and the anticipated Series 2010 Bonds has been assumed in order to provide funds to finance additional capital improvements for the System. It was assumed that the County would issue one series of Additional Parity Bonds during the Forecast Period as shown below:

Additional Issue Parity Bonds Utilities Revenue Bonds, Series 2012 (the "Series 2012 Bonds") $118,740,000 Total Principal Amount Issued – Additional Parity Bonds $118,740,000

With respect to the issuance of the Additional Parity Bonds, such bonds were assumed to be tax-exempt bonds. The assumptions recognized with respect to the estimate of the annual Bond Service Requirement for the anticipated Series 2012 Bonds include: i) total principal amount of tax-exempt bonds estimated at approximately $118,740,000, which provided a Construction Account deposit of approximately $ 86,000,000; ii) assumed average annual coupon interest rate on the serial and term bonds the comprise the Series 2012 Bonds of 6.00%; iii) a term of approximately thirty (30) years with the first three years interest expense being capitalized (funded) from Series 2012 Bonds proceeds and the remainder of the term reflecting Bond Service Requirement being essentially level during the repayment term of the Series 2012 Bonds; iv) the cash funding the reserve account in an amount necessary to meet the Reserve Account Requirement for such bonds;

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and v) the payment of issuance expenses associated with the Series 2012 Bonds. It was further assumed that the Series 2012 Bonds would be dated on or about October 1, 2012 (beginning of Fiscal Year 2013) and would be issued on or about October 1, 2012. After the capitalized interest period which is anticipated to occur during the first three years of the issue, the average annual debt service payments on the Series 2012 Bonds was estimated to be level at approximately $8,988,282 annually.

15. Based on the provisions of the Bond Resolution, the County is required to establish and maintain a Renewal and Replacement Account (the "R&R Account"). The purpose of the R&R Account is to provide moneys for the purpose of paying the cost of the replacement of capital assets or any unusual, unanticipated, or extraordinary maintenance or repairs of the System. As defined in the Bond Resolution, the County shall deposit into the R&R Account an amount equal to 5.0% of the Gross Revenues (as defined in the Bond Resolution) received by the System in the immediately preceding Fiscal Year. However, no deposit is required if the County maintains a balance in such fund equal to the R&R Account Requirement as defined in the Bond Resolution (five percent of the original cost of the assets and capitalized lease obligations and capacity entitlement programs of the System for the preceding Fiscal Year or an amount as may be certified to the County by the Qualified Independent Consultant as necessary and desirable to provide immediately available funds to pay renewal and replacement costs of the System [the "R&R Account Requirement"]). As of the date of this Report, the County has not had a Consulting Engineer certify a minimum amount different from what is currently recognized in the Bond Resolution. For the purposes of developing the financial forecast (capital funding analysis) and based on current Department policy, an annual deposit to the R&R Fund equal to the annual deposit requirement as identified in the Bond Resolution has been recognized.

As part of entering into the Amended and Restated Interlocal Agreement, which along with the Master Water Supply Contract are the primary agreements with the Member Governments which govern the activities of Tampa Bay Water, the water supply facilities were purchased from the County by Tampa Bay Water in 1998. The purchase of such facilities is being paid to the County by Tampa Bay Water based on a debt service equivalent computed on a 30-year amortization of the net purchase price, compounded semiannually at 4.865% which equated to a payment by Tampa Bay Water of $1,238,468 made annually (through Fiscal Year 2027). In addition to the annual deposit to the R&R Account from System operations as defined in the Bond Resolution and discussed above, the Department has deposited this annual payment received from the sale of the water supply facilities by the County to Tampa Bay Water in the R&R Account for future capital improvement funding.

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The following is a summary of the estimated transfers to the R&R Account recognized during the Forecast Period:

Annual R&R Account Deposit Deposit from Sale Total Recognized from System Gross of Water System Recognized Fiscal Year Revenues Assets Deposit 2010 $10,232,917 $1,238,468 $11,471,385 2011 10,471,528 1,238,468 11,709,996 2012 10,590,229 1,238,468 11,828,697 2013 10,711,264 1,238,468 11,949,732 2014 10,870,713 1,238,468 12,109,181 2015 11,030,162 1,238,468 12,268,630

16. Amounts shown for the deposit to the R&R Account are based on the funding provisions of the Bond Resolution which require a minimum transfer equal to 5.0% of the previous year’s Gross Revenues, the capital equipment expenditures for departmental fixtures, equipment, vehicles, and other related minor items (assets with short service lives) were recognized as an additional capital requirement which is funded annually from System revenues (rates). These expenditures were considered to be in addition to the R&R Account deposits described above (reference Note 15). These capital expenditures were based on recent expenditure trends and discussions with Department staff and are generally considered as a component of the operating budget. The ongoing capital outlay expenditures average approximately $871,000 annually during the Forecast Period as identified in the capital improvements shown on Table 8.

17. Investment income on funds and accounts created by the Bond Resolution or internally by the County has been estimated utilizing average annual interest rates ranging from 0.5% and 2.25% during the Forecast Period. The interest rates have been applied to estimated balances in funds and accounts created in conformance to the Bond Resolution, including: i) Debt Service Account; ii) the debt service Reserve Account, if any; iii) the Renewal and Replacement Account; iv) the General Purpose Account; and v) the General Revenue and Operation and Maintenance Accounts (referred to in this Report as the "Operating Account") and as internally created by the County, including customer deposits. It has also been assumed that any interest earnings on the Impact Fee Accounts and the project Construction Accounts associated with the issuance of Series 2010 Bonds and the anticipated Additional Parity Bonds will be deposited in the respective funds and not be available for the payment of the Cost of Operation and Maintenance or the annual Bond Service Requirement consistent with the provisions of the Bond Resolution. Table 11 provides a summary of the transfers in and out of each fund/account and corresponding ending cash balances for each fund/account maintained by the Department on behalf of the System. For the Forecast Period, the earnings by specific fund or account for the System as shown on Table 11 are summarized below:

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Interest Earnings by Fund During the Forecast Period – ($000s) Fiscal Year Ending September 30, [1] 2010 2011 2012 2013 2014 2015 Operating Account $1,599.5 $1,462.8 $1,057.4 $595.9 $364.2 $381.4 Renewal and Replacement Account 100.2 132.2 262.2 287.7 210.3 132.1 Debt Service Account [2] 49.4 119.1 83.9 193.3 314.8 175.6 Reserve Account [3] - 143.5 172.2 239.6 307.0 307.0 General Purpose Account [4] 560.1 782.9 1290.5 1689.2 2054.3 2111.1 Customer Deposits ------

Earnings Recognized $2,309.2 $2,640.6 $2,866.2 $3,005.8 $3,250.6 $3,107.2

Impact Fee Accounts [5] 7.1 10.4 15.6 18.2 20.8 23.4 Construction Account [6] ------

Total Earnings $2,316.36 $2,651.01 $2,881.78 $3,024.01 $3,271.41 $3,130.55 ______[1] Amounts shown derived from Table 11. [2] The Debt Service Account earnings reflect only those earnings on funds deposited on account for the next Interest Payment Date and the Principal Maturity Date associated with the Bond Service Requirement associated with the Outstanding and Additional Parity Bonds. [3] The debt service Reserve Account for all Outstanding Bonds is secured by a Reserve Account Credit Facility and therefore no cash deposit is maintained in this account for such bonds. With respect to the Additional Parity Bonds, the debt service Reserve Account will be secured by a cash deposit made from the proceeds of each respective series of bonds. [4] Reflects funds on deposit after payment of all required transfers and is generally used by the Department as an additional source for capital improvement funding and as additional working capital (see Note 18 below). [5] For purposes of this analysis, assumed earnings on the Impact Fee Accounts restricted to such accounts and are considered as a component of the Pledged Capacity Fee determination during the Forecast Period. [6] For the purposes of this presentation, all funds deposited to the Construction Account from Bond proceeds assumed to be retained in such account to provide an inflation contingency on capital costs; therefore, no interest earnings on such fund has been recognized.

18. The County has established and funded as a subaccount to the General Purpose Account a Rate Stabilization Fund. This balance was assumed to be a component of the overall working capital / reserves of the System and was not an account which the funds on deposit could be used in future periods as a component of Gross Revenues. For the financial forecast presented in this Report, it was assumed that the County would deposit additional funds into the Rate Stabilization Account (approximately $7,000,000 per year beginning Fiscal Year 2011 through Fiscal Year 2015) to obtain an unrestricted working capital balance of approximately $74 million for the overall benefit of the System.

19. The capital improvement program for the water and wastewater system as summarized on Table 8 was based on: i) the Fiscal Year 2010 Six-Year Capital Budget; and ii) information provided by the County regarding the status of current and anticipated projects. Included in the capital improvement program is the use of the R&R Account to finance recurring capital projects (i.e., essentially the betterment or replacement of assets) as well as the General Purpose Account to finance both recurring and expansion-related capital projects (such funds being accrued from Net Revenues after the payment of the Required Deposits and the use of Pledged Capacity Fees to pay a portion of the annual expansion-related Bond Service Requirement). The recognition of this capital improvement funding strategy is necessary in order to allow the County a funding mechanism to continue to provide high quality service (i.e., maintain same level of service) to its customers as the System reaches its average service lives and to maintain equity in the System.

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Table 8 at the end of this Report provides a detailed listing of the capital projects for the water and wastewater system for the Forecast Period. The Capital Improvement Program (CIP) as provided by County staff was reflected in today's (2010) dollar value. The timing, priority, and funding of such capital needs were developed with the guidance of County staff. The following is a summary of capital expenditures and the corresponding estimated funding sources assumed in the development of the financial forecast:

Fiscal Year Ending September 30 (Dollars in 000s) [1] 2010 2011 2012 2013 2014 2015 Total Total System Capital Projects $171,854.9 $52,079.2 $65,813.5 $90,482.5 $53,051.5 $50,391.0 $483,672.7

Funding Sources: Impact Fees $765.1 $--- $--- $--- $--- $--- $765.1 Renewal and Replacement Account 41,525.7 7,105.8 7,913.7 17,942.5 17,971.5 15,691.0 108,150.2 General Purpose Account 78,714.6 9,052.0 7,469.0 3,540.0 16,080.0 33,700.0 148,555.6 Series 2010 Bond Proceeds 45,973.5 35,638.0 49,430.8 ------131,042.3 Additional Bonds ------68,000.0 18,000.0 --- 86,000.0 Commercial Paper (RWIU funding) 232.2 ------232.2 Grants 3,700.0 ------3,700.0 Rate Revenue 944.0 283.3 1,000.0 1,000.0 1,000.0 1,000.0 5,227.3

Total Funding Sources $171,854.9 $52,079.2 $65,813.5 $90,482.5 $53,051.5 $50,391.0 $483,672.7 ______[1] Amounts derived from Table 8. Amounts shown reflect when funding projected to be required and may be different from when funds are actually expended through project completion. Project appropriations for Fiscal Year 2010 and Prior Years which have not been encumbered (liability for expenditure) will have prior funding realigned to be funded from proceeds Series 2010 Bonds.

20. As required in the Bond Resolution, all Capacity (Impact) Fees that are considered as being pledged shall be deposited in the following priority[4]:

a. Moneys shall first be deposited into the Operation and Maintenance Account in an amount equal to all payments due in such Bond Year representing the Debt Service Component, provided that such payments shall not exceed the lesser of (a) the Debt Service Component; or (b) the Contracted Water Supply Expansion Project Percentage of the Debt Service Component, plus the Contracted Water Supply Water Capacity Fee Carryforward Amount; and

b. Moneys shall second be applied and allocated to the Debt Service Account to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

With respect to the determination of the amount of Impact [Capacity] Fees to be reflected as a Pledged Revenue in the analysis of the rate covenant, such amounts were estimated based on the lesser of the (a) the Bond Service Requirement for all Bonds for such Bond Year multiplied by the respective Water and Wastewater Expansion Project Percentage plus (b) the respective Water and Wastewater Capacity Fee Carryforward Amount. This amount determined by multiplying the aggregate Bond Service Requirement for the Outstanding Bonds, the Series 2010 Bonds, and the

[4] Reference is made to Section 9.04 of the Bond Resolution, as amended and supplemented, for information regarding all requirements for use of the Pledged Capacity Fees.

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Additional Parity Bonds by the estimated Expansion Project Percentage as defined in the Bond Resolution for each utility system was compared to the estimated amount of Impact Fees projected to be collected (receipts) during the Forecast Period. The Expansion Project Percentage applied to the annual debt service for all Bonds issued pursuant to the Bond Resolution was based on: i) a review of the expansion factor developed by the County for the Outstanding Bonds; and ii) the estimated cost and purpose of the capital improvements assumed to be funded from the Series 2010 Bonds and the Additional Parity Bonds.

For the Forecast Period, the amount of Water System Impact Fees recognized as a Pledged Revenue was estimated as follows:

Determination of Pledged Water System Impact Fees for the Forecast Period (Dollars in 000s) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Water Impact Fees Received Paid Up-Front [1] $709.2 $601.3 $546.0 $537.0 $686.3 $722.6 Impact Fee Assessments [2] 3,616.6 3,674.4 3,925.4 4,104.1 4,270.7 4,407.1 Investment Earnings [3] 3.0 4.4 6.6 7.6 8.7 9.8

Total Impact Fees Received 4,328.8 4,280.1 4,477.9 4,648.7 4,965.8 5,139.5 Less Fees for Cost of Contracted Water Supply [4] (2,572.6) (2,543.6) (2,661.2) (2,762.7) (2,951.1) (3,054.4)

Net Water Impact Fees Received $1,756.2 $1,736.4 $1,816.7 $1,886.0 $2,014.6 $2,085.1

Beginning Balance – Carryforward [5] $9,975.2 $9,496.9 $9,038.7 $8,491.8 $7,834.2 $7,054.2

Existing Debt Bond Service Requirement 20,620.3 20,624.1 18,956.9 10,634.1 10,736.7 9,225.2 Percent Allocable to Water System 18.50% 18.50% 18.50% 18.50% 18.50% 18.50% Existing Debt Allocable to Water System 3,814.8 3,815.5 3,507.0 1,967.3 1,986.3 1,706.7

Existing Debt Water Expansion Project Percentage 33.50% 33.50% 33.50% 33.50% 33.50% 33.50% Existing Debt Bond Service Requirement with Percent Applied 1,277.9 1,278.2 1,174.9 659.0 665.4 571.7

Additional Debt Bond Service Requirement 0.0 0.0 1,262.6 7,575.3 7,574.37,571.9 Percent Allocable to Water System 0.00% 0.00% 20.49% 20.49% 20.49% 20.49% Additional Debt Allocable to Water System 0.0 0.0 258.7 1,552.2 1,552.01,551.5

Additional Debt Water Expansion Project Percentage 0.00% 0.00% 36.68% 36.68% 36.68% 36.68% Additional Debt Bond Service Requirement with Percent Applied 0.0 0.0 94.9 569.3 569.3 569.1

Total Bond Service Requirement with Percent Applied 1,277.9 1,278.2 1,269.7 1,228.4 1,234.7 1,140.8

Total Available for Pledge (with carryforward) $11,253.2 $10,775.1 $10,308.4 $9,720.1 $9,068.8 $8,195.1 ______Table continued on following page.

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Determination of Pledged Water System Impact Fees for the Forecast Period (Dollars in 000s) (cont'd.) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Water Capacity Fees Recognized as Pledged [6] 1,756.2 1,736.4 1,816.7 1,886.0 2,014.6 2,085.1

Ending Balance – Capacity Carryforward $9,496.9 $9,038.7 $8,491.8 $7,834.2 $7,054.2 $6,110.0 ______[1] Includes Water System Impact Fees paid up front at time of issuance of Certificate of Occupancy or the Builder Component payment required to enter the Impact Fee assessment (installment payment) program. [2] Includes principal and interest payments on Impact Fee Assessment Units that are not dedicated to the payment of Impact Fee Assessment Special Assessment Bonds issued by the County on behalf of the System. [3] Amounts reflect allocable interest earnings on available fund balances; earnings are relatively low since all Water System Impact Fees are considered pledged and used to fund the Debt Service Component of the Cost of Contracted Water Supply or for funding the Debt Service Account to pay the then Fiscal Year Bond Service Requirement. [4] A component of the current Water System Impact Fee includes the cost recovery of capital investment made by Tampa Bay Water on behalf of the System; amounts shown reflects Impact Fees received that are to reimburse the Cost of Operations and Maintenance associated with the payment of the Debt Service Component of the Cost of Contracted Water Supply. Reference is made to Note 21 for additional information. [5] Amount estimated by Department; reflects cumulative amount of Water System allocated expansion-related Bond Service Requirement payments that have not been recognized as being secured (funded by pledge) by Water System Impact Fees. [6] Reflects minimum of: i) Total Available for Pledge; or ii) the amount of allocated net Water System Impact Fees received for the respective Fiscal Year.

It should be noted that the County has approved a change to the Bond Resolution that is anticipated to become effective coincident with the issuance of the Series 2010 Bonds, which would: i) increase the Revenues of the System; and ii) reduce the amount of Pledged Capacity Fees that may be recognized towards the payment of the Bonds. As more fully discussed in Note 21 below, a portion of the Water Impact Fees is for the payment of the Debt Service Component for the Cost of Purchased Water Supply and will be segregated in terms of the determination of the Impact Fee pledge since such fees are considered not being available for expansion-related debt repayment (Section 9.04 of the Bond Resolution was modified to allow for the segregation of the Water Impact Fees to be used for their intended purposes).

For the Forecast Period, the amount of Wastewater System Impact Fees recognized as a Pledged Revenue was estimated as follows:

Determination of Pledged Wastewater System Impact Fees for the Forecast Period ($000s) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Wastewater Impact Fees Received Paid Up-Front [1] $559.9 $430.0 $507.3 $639.9 $881.2 $970.3 Impact Fee Assessments [2] 4,227.2 4,311.8 4,561.5 4,739.6 4,906.0 5,038.4 Investment Income [3] 4.1 6.1 9.1 10.6 12.1 13.5

Total Wastewater Impact Fees Received 4,791.2 4,747.8 5,077.8 5,390.1 5,799.2 6,022.3

Beginning Balance – Carryforward [4] $103,201.0 $109,299.7 $115,443.9 $120,377.6 $120,603.6 $120,474.6 ______Table continued on following page.

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Determination of Pledged Wastewater System Impact Fees for the Forecast Period ($000s) (cont'd.) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Existing Debt Bond Service Requirement 20,620.3 20,624.1 18,956.9 10,634.1 10,736.7 9,225.2 Percent Allocable to Wastewater System 81.50% 81.50% 81.50% 81.50% 81.50% 81.50% Existing Debt Allocable to Wastewater System 16,805.5 16,808.7 15,449.9 8,666.8 8,750.4 7,518.5

Existing Debt Wastewater Expansion Project Percentage 64.80% 64.80% 64.80% 64.80% 64.80% 64.80% Existing Debt Bond Service Requirement with Percent Applied 10,890.0 10,892.0 10,011.5 5,616.1 5,670.3 4,872.0

Additional Debt Bond Service Requirement 0.0 0.0 1,262.6 7,575.3 7,574.3 7,571.9 Percent Allocable to Wastewater System 0.00% 0.00% 79.51% 79.51% 79.51% 79.51% Additional Debt Allocable to Wastewater System 0.0 0.0 1,003.9 6,023.1 6,022.3 6,020.4

Additional Debt Wastewater Expansion Project Percentage 0.00% 0.00% 44.48% 44.48% 44.48% 44.48% Additional Debt Bond Service Requirement with Percent Applied 0.0 0.0 446.5 2,679.1 2,678.7 2,677.9

Total Bond Service Requirement with Percent Applied 10,890.0 10,892.0 10,458.0 8,295.2 8,349.0 7,549.9

Total Available for Pledge (with carryforward) $114,090.9 $120,191.7 $125,455.4 $125,993.7 $126,273.8 $125,346.6

Wastewater Capacity Fees Recognized as Pledged [6] 4,791.2 4,747.8 5,077.8 5,390.1 5,799.2 6,022.3

Ending Balance – Carry Forward $109,299.7 $115,443.9 $120,377.6 $120,603.6 $120,474.6 $119,324.3 ______[1] Includes Wastewater System Impact Fees paid up front at time of issuance of Certificate of Occupancy or the Builder Component payment required to enter the Impact Fee assessment (installment payment) program. [2] Includes principal and interest payments on Impact Fee Assessment Units that are not dedicated to the payment of Impact Fee Assessment Special Assessment Bonds issued by the County on behalf of the System. [3] Amounts reflect allocable interest earnings on available fund balances; earnings are relatively low since all Wastewater System Impact Fees are considered pledged and used to fund the Debt Service Account to pay the then Fiscal Year Bond Service Requirement. [4] Amount estimated by Department; reflects cumulative amount of Wastewater System allocated expansion-related Bond Service Requirement payments that have not been recognized as being secured (funded by pledge) by Wastewater System Impact Fees. [5] Reflects minimum of: i) Total Available for Pledge; or ii) the amount of Wastewater System Impact Fees received for the respective Fiscal Year.

21. A portion of the Water System Impact Fees that are currently being charged by the Department is for the recovery of capital costs associated with the Cost of Contracted Water Supply (specifically purchases from Tampa Bay Water). Included in the Cost of Contracted Water Supply, which is included as a component of the Cost of Operation and Maintenance, is the Debt Service Component of such Cost of Contracted Water Supply from Tampa Bay Water. Since the Water System Impact Fees charged by the County recognize a recovery of the capital costs associated with the water supply provided by Tampa Bay Water, the Department has applied a portion of the Impact Fees received towards the payment of the Debt Service Component. This is also a requirement of the Bond Resolution that all Water Impact Fees collected by the Department which are for the Debt Service Component should be deposited into the Operation and Maintenance Account

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to offset the Cost of Contracted Water Supply. Additionally and as discussed in Note 3 above regarding the development of the Purchased-Water Pass-through Consumption Charge, all Pledged Capacity Fees attributable to the Debt Service Component of the Cost of Contracted Water Supply are recognized as a credit (customer benefit) in the pass- through determination and the Operation and Maintenance Account is reimbursed for the amount of the credit.

Recognizing the application of the respective Water System Impact Fees towards the Debt Service Component of the Cost of Contracted Water Supply, the following is a summary of the amount of fees recognized as a credit in the determination of the Purchased-Water Pass- through Consumption Charge and as a credit (reduction) to the Cost of Operation and Maintenance for the Forecast Period:

Determination of Water System Impact Fees Applied to Debt Service Component for the Forecast Period (Dollars in 000s) Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Water Impact Fees Received [1] $4,328.8 $4,280.1 $4,477.9 $4,648.7 $4,965.8 $5,139.5 Percent of Impact Fee for Tampa Bay Water [2] 59.43% 59.43% 59.43% 59.43% 59.43% 59.43% Amount Available for Payment of Debt Service Component $2,572.6 $2,543.6 $2,661.2 $2,762.7 $2,951.1 $3,054.4

Beginning Balance – Capacity Carryforward [3] $9,142.5 $11,741.7 $14,868.0 $18,084.6 $21,211.4 $24,615.8

Estimated TBW Debt Service Component 18,788.5 20,482.7 21,229.1 21,186.4 22,813.3 22,085.4 Contracted Water Supply Expansion Project Percentage 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% Expansion-Related Debt Service Component $5,636.6 $6,144.8 $6,368.7 $6,355.9 $6,844.0 $6,625.6

Total Available for Pledge (With Carryforward) $14,779.0 $17,886.5 $21,236.8 $24,440.6 $28,055.4 $31,241.4 Pledged Capacity Fees Recognized [4] 2,572.6 2,543.6 2,661.2 2,762.7 2,951.1 3,054.4

Ending Balance – Capacity Carryforward $11,741.7 $14,868.0 $18,084.6 $21,211.4 $24,615.8 $27,745.1 ______[1] Reference table in Note 20 for the projection of the Water System Impact Fees anticipated to be received during the Forecast Period. [2] Percentage amount reflects the amount of the Water System Impact Fee that is attributable to Tampa Bay Water; it was assumed that the Water System Impact Fees and the amount attributable to Tampa Bay Water would not change during the Forecast Period. [3] Amount estimated by Department; reflects cumulative amount of the Debt Service Component of the Cost of Contracted Water Supply that have not been recognized as being secured (funded by pledge) by Water System Impact Fees. [4] Reflects minimum of: i) Total Available for Pledge; or ii) the amount of allocated Water System Impact Fees received for the respective Fiscal Year.

22. As previously mentioned earlier in this Report, the EPA has notified the State of Florida of the potential implementation of new wastewater treatment plant effluent limitations for total nitrogen and phosphorus that impact surface waters. In accordance to a proposed consent decree between the EPA and a coalition of environmental groups, the EPA plans to issue a proposed rule which will set numeric nutrient criteria for surface waters in the State of Florida, including the County. If the expected numeric nutrient criteria as proposed by EPA are implemented in the State’s water quality regulations, all Florida wastewater facilities that discharge effluent to marine waters will likely be required to meet new, very low limits on the discharge of total nitrogen and total phosphorus. With the exception of the Van Dyke WWTP, all of the County's six (6) regional wastewater treatment plants are permitted by the FDEP as advanced wastewater treatment (AWT) facilities which produce an effluent or reclaimed water that meets all regulatory standards as codified in Florida

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Statutes, Chapter 403.086(4) (as it relates to concentration limits for biochemical oxygen demand, total suspended solids, total nitrogen and total phosphorus) which is considered a high quality reclaimed water. The Van Dyke WWTP is permitted as a secondary wastewater facility and does not produce as high a quality of effluent as the AWT plants but such effluent is suitable and is used as a reclaimed water source. Approximately 60% of effluent generated by the County’s existing AWT facilities is disposed by reuse; the remainder is disposed by discharge to surface waters which is consistent with the wastewater operating permits issued by the FDEP to the County. As such, if the proposed numeric nutrient criteria are made effective by the EPA, the County will need to comply with the new discharge limits. Due to the uncertainty as to the timing of the rule, the period of compliance that may be granted to utilities to meet such rule, and the final nutrient compliance limits that may be adopted by the EPA and based on discussions with the Department, no additional capital expenditures or incremental operating costs associated with the nutrient criteria rules have been recognized in the financial forecast included on Table 10 at the end of this Report. The County plans to monitor the situation and has presented to the Board the estimated potential economic impact to the wastewater customers associated with this anticipated regulatory action by the EPA. To the extent that the rules are made effective and compliance required during the Forecast Period, the County will need to adjust the wastewater rates for service in order to meet this new regulatory mandate.

23. All contracts, agreements, statutes, rules, and regulations which have been relied upon by us in preparing this Report and the projected operating results contained herein will be fully enforceable and remain in effect in accordance with their terms and conditions, and such terms and conditions will be compiled with by the parties involved throughout the study period. We make no representations or warranties and provide no opinion concerning the enforceability or legal interpretation of such contractual and legal requirements.

Summary of Projected Operating Results As shown on Table 10 and summarized below, projections have been prepared of the operating results for the water and wastewater systems. Such projections were prepared in accordance with our understanding of the flow of funds prescribed by the Bond Resolution and the assumptions and considerations used in the projections as described earlier.

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System Projected Operating Results and Estimated Debt Coverage Analysis (Dollars in 000s) [1] Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Total Charges for Services $169,627 $175,298 $180,378 $183,179 $187,539 $190,338 Other Operating Revenue and Income [2] 9,290 9,503 9,606 9,315 9,674 9,521

Gross Revenues 178,918 184,801 189,984 192,494 197,214 199,860

Less Total Cost of Operation and Maintenance [3] 138,092 144,070 150,845 155,859 161,362 164,623

Net Revenues 40,826 40,731 39,139 36,635 35,852 35,237

Pledged Capacity Fees [4] 6,547 6,484 6,895 7,276 7,814 8,107

Total Pledged Revenues 47,373 47,215 46,033 43,911 43,665 43,344

Total Bond Service Requirement [5] 20,620 20,624 20,219 18,209 18,311 16,797

Bond Service Requirement Coverage Compliance [6]:

Rate Covenant – Test 1 [7]: Required Deposits [8] 168,896 174,903 181,399 184,347 189,922 191,968 Bond Service Coverage: Coverage Ratio – Calculated 1.10 1.09 1.09 1.08 1.08 1.08 Coverage Ratio – Required 1.00 1.00 1.00 1.00 1.00 1.00

AND

Rate Covenant – Test 2 [7]: Bond Service Requirement [9] $20,571 $20,362 $19,963 $17,776 $17,689 $16,315 Bond Service Coverage: Coverage Ratio – Calculated 2.30 2.32 2.31 2.47 2.47 2.66 Coverage Ratio – Required 1.20 1.20 1.20 1.20 1.20 1.20

AND

Rate Covenant – Test 3 [7]: Bond Service Requirement [9] $20,571 $20,362 $19,963 $17,776 $17,689 $16,315 Bond Service Coverage: Coverage Ratio – Calculated 1.98 2.00 1.96 2.06 2.03 2.16 Coverage Ratio – Required 1.00 1.00 1.00 1.00 1.00 1.00

Net Revenues After Payment of Bond Service Requirement 20,255 20,369 19,175 18,859 18,162 18,922

Other Required Transfers [10]: Renewal and Replacement Account Requirement 10,233 10,472 10,590 10,711 10,871 11,030 Debt Service Reserve Account [11] ------Subordinate Indebtedness Account [12] ------Other Indebtedness Account [12] ------

Total Other Required Transfers 10,233 10,472 10,590 10,711 10,871 11,030

Excess of Net Revenues above Required Transfers [13] $10,022 $9,898 $8,585 $8,148 $7,292 $7,892 ______Footnotes on following page.

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______Footnotes: [1] Amounts derived from Table 10 at end of this Report; differences due to rounding may exist. [2] Amounts include other operating revenue and unrestricted investment income. [3] Amounts shown for total cost of operation and maintenance reflect the following adjustments: i) addition of non-operating expenses classified as a component of the Cost of Operation and Maintenance (e.g., trustee fees); and ii) the recognition of pledged capacity fees applied to the cost of purchased water from Tampa Bay Water. [4] Amounts reflect Capacity Fees and interest income earned on such funds adjusted by the estimated Expansion Percentage to recognize the amount of fees collected which are pledged to the total aggregate Bond Service Requirement attributable to Expansion Facilities; for the Forecast Period, all Capacity Fees received by the System were assumed to be recognized as a component of Pledged Revenues. [5] Amounts shown based on an accrual basis of reporting (when deposits are made to the Debt Service Account and not when the cash payment of the interest and principal payments may be made). [6] The Bond Resolution requires that the utility maintain revenues and fees to generate sufficient: i) Gross Revenues, together with Pledged Capacity Fees (as defined in the Bond Resolution) at least equal to 100% of the Required Deposits; and ii) Net Revenues, together with Pledged Capacity Fees (as defined in the Bond Resolution) at least equal to 120% of the Bond Service Requirement. In addition, the utility must also generate Net Revenues (as defined in the Bond Resolution) at least equal to 100% of the Bond Service Requirement. [7] The Rate Covenant as defined in section 11.02 of the Bond Resolution is as follows:

Test 1: Gross Revenues plus Pledged Capacity Fees/Required deposits must be at least equal to 100%. Test 2: Net Revenues, plus Pledged Capacity/Bond Service Requirement must be at least equal to 120%. Test 3: Net Revenues/Bond Service Requirement must be at least equal to 100%.

[8] Required deposits as defined in the Bond Resolution included transfers to the Operation and Maintenance Account, Debt Service Account, Reserve Account, and the Renewal and Replacement Account; amounts shown do not include transfers to the Subordinate Indebtedness or Other Indebtedness Accounts (if any) as provided in the Bond Resolution. [9] As defined in the Bond Resolution, the Bond Service Requirement is not to include any capitalized investment earnings that have been deposited into the Debt Service Account, or any interest from the investment of funds deposited into the Debt Service Account and the Reserve Account. [10] Reflects other required transfers which are recognized in the Bond Resolution, payments which are subordinate to the payment of the Bond Service Requirement. [11] No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Forecast Period by: i) proceeds from the issuance of the Bonds Outstanding; or ii) secured by a debt service reserve credit facility during such period. [12] As reported by the County, no other Subordinate or Other Indebtedness payable from the Pledged Revenues of the System are currently outstanding and it was not assumed that any future Subordinate or Other Indebtedness would be issued by the County during the Forecast Period. [13] Amount shown does not include Pledged Capacity Fees which are deposited in a restricted account and used for the payment of the Debt Service Component of the Contracted Cost of Water Supply, expansion-related debt service payments or for expansion-related capital improvements for the System.

FINDINGS AND CONCLUSIONS Based upon the principal considerations and assumptions and the results of our studies and analyses, as summarized in this Report, which should be read in its entirety in conjunction with the following, we are of the opinion that:

1. Based upon the intended use of the System facilities, general field observations of the aboveground facilities, discussions with the Department staff, and a review of documents, permit data, and System reports filed with regulatory agencies, the existing facilities of the System appear to be in good to above-average condition. The System appears to be properly operated in accordance with prudent utility practice, and can reasonably be expected to provide sufficient and reliable service to meet the existing requirements of the utility.

2. The Department has historically provided for adequate operation by employing personnel capable of operating, maintaining, and expanding the water, wastewater and reclaimed

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water systems as necessary. Current management of the System appears to be well qualified for the positions for which they are responsible.

5. The System, taking into account expansion related improvements as discussed in this Report, will have sufficient capacity to meet the service area needs through September 30, 2015, the last year of the financial forecast included in this Report, based on the customer and sales forecast assumed for the purposes of this Report.

7. The projected growth in customers and usage of the System represent reasonable and attainable projections for the purposes of this Report.

8. The projected growth in Operating Expenses represents reasonable projections for the purposes of this Report.

9. The System revenues for the Fiscal Years ending September 30, 2010 through September 30, 2015 under the County approved rates contained in the County’s Rate Resolution as defined in the Report, which assumes the annual application of a price index (inflationary) rate adjustment as contained in the County's Index Resolution adopted by the Board on May 20, 2009 and the annual application of the Purchased-Water Pass-Through Consumption Charge, should be sufficient to pay the projected Cost of Operation and Maintenance, pay the estimated Bond Service Requirement on the Outstanding Bonds and anticipated Series 2010 Bonds coming due in such years, and make the projected deposits to the Renewal and Replacement Account which is available for paying the cost of the replacement of capital assets of the System or any unusual, unanticipated or extraordinary maintenance or repairs to the System.

10. Based on the assumptions identified in this Report, the Pledged Revenues of the System are projected to be in compliance with the rate covenant as contained in the Bond Resolution.

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11. The approved rates for water and wastewater service are considered comparable to charges for similar service provided by other publicly-owned utilities located in proximity to the County in the central and southwestern portions of Florida. Based on the assumptions presented in this Report, no additional rate increase above the annual price index (inflationary) allowance and the Purchased-Water Pass-Through Consumption Charge adjustment has been projected or assumed to meet the annual expenditure requirements of the System or meet the rate covenant requirements defined in the Bond Resolution. The anticipated price index and Purchased-Water Pass-Through Consumption Charge rate adjustments as represented in this Report are not expected by the Department to negatively affect the competitiveness of the County's monthly user rates over the Forecast Period.

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HILLSBOROUGH COUNTY, FLORIDA

CONSULTING ENGINEERS AND BOND FEASIBILITY REPORT

UTILITY REVENUE BONDS, SERIES 2010A, UTILITY REVENUE BONDS, SERIES 2010B, and UTILITY REVENUE BONDS, SERIES 2010C

LIST OF TABLES AND FIGURES

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Table 1

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Historical Customer Statistics and Sales - Water System

Line Fiscal Year Ended September 30, No. 2003 2004 [2] 2005 2006 2007 2008 2009

Individually Metered Residential [1] 1 Average Annual Accounts 110,705 120,552 126,696 132,847 135,782 136,009 136,204 2 Billed Potable Water Sales (000's) 9,007,036.3 10,741,790.1 10,917,140.6 12,971,937.6 13,011,089.8 11,977,719.4 11,348,687.3 3 Average Monthly Use per Account 6,780 7,425 7,181 8,137 7,985 7,339 6,943

Master Metered Residential [1] 4 Average Annual Accounts 679 756 778 803 823 834 838 5 Billed Potable Water Sales (000's) 2,100,609.5 2,280,292.6 2,456,578.2 2,561,886.9 2,675,510.4 2,721,960.6 2,730,666.8 6 Average Monthly Use per Account 257,807 251,355 263,130 265,866 270,910 271,978 271,546

Commercial [1] 7 Average Annual Accounts 3,634 3,871 4,097 4,285 4,429 4,527 4,573 8 Billed Potable Water Sales (000's) 2,051,480.6 2,204,519.4 2,259,885.0 2,437,472.5 2,426,615.4 2,297,970.3 2,120,010.3 9 Average Monthly Use per Account 47,044 47,458 45,966 47,403 45,658 42,301 38,633

Total System 10 Average Annual Accounts 115,018 125,179 131,571 137,935 141,034 141,370 141,615 11 Billed Potable Water Sales (000's) 13,159,126 15,226,602 15,633,604 17,971,297 18,113,216 16,997,650 16,199,364 12 Average Monthly Use per Account 9,534 10,137 9,902 10,857 10,703 10,020 9,533

13 Total Equivalent Residential Connections [3] 156,835 167,415 176,295 185,198 192,152 193,199 191,810 14 Average Monthly Use per ERC 6,992 7,579 7,390 8,087 7,855 7,332 7,038

Water Purchased 15 Tampa Bay Water 14,312,580 16,096,840 16,916,720 18,881,190 19,210,440 18,131,310 17,218,690 16 All Other Public Systems [4] 18,936 160,342 294,778 329,956 318,678 269,658 336,758

17 Total Water Purchased 14,331,516 16,257,182 17,211,498 19,211,146 19,529,118 18,400,968 17,555,448 18 Unbilled Water (000's) 1,172,390 1,030,580 1,577,894 1,239,849 1,415,902 1,403,318 1,356,084 19 Percent of Water Purchased 8.18% 6.34% 9.17% 6.45% 7.25% 7.63% 7.72% 20 Average Annual Water Purchased Per ERC 91,380 97,107 97,629 103,733 101,634 95,244 91,525

Average Water Accounts 21 Receiving Water and Wastewater Service 95,113 104,769 111,042 117,218 120,204 119,805 119,498 22 Water-only Service Accounts [5] 19,905 20,410 20,529 20,717 20,830 21,565 22,117

23 Total Average Water Accounts 115,018 125,179 131,571 137,935 141,034 141,370 141,615 ______[1] Amounts based on detailed customer statistical information as provided by Water Resource Services; commercial class does not include fire flow customers. The average fireline customers (which are not billed for any flow that may be metered for fire service) for each fiscal year is summarized below: 2009 394 (a) 2008 320 2007 321 2006 305 2005 277 2004 256 2003 234

(a) During Fiscal Year 2009, the City changed its billing systems which resulted in certain reclassification of accounts and billing policies; Fiscal Year 2009 statistics reflect these changes for that portion of the year that changes occurred.

[2] Average customer statistics and corresponding billed wastewater flow include the incremental customer additions associated with the purchase of the Seaboard, Hershel Heights, and Valrico Hills systems from Florida Water Services, Inc. (approximately 3,500 accounts and 4,000 ERCs in September 2003) and the Carrollwood System from the Florida Governmental Utility Authority (approximately 1,190 accounts and 1,400 ERCs in April 2004).

Footnotes Continued on Page 2 of 2.

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Table 1

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Historical Customer Statistics and Sales - Water System

[3] Reflects total equivalent residential connections served; information not available by customer class.

[4] Amounts show reflect water service provided by other public utilities for service to certain isolated portions of the County's water service area. Amounts summarized as follows: Fiscal Year Ended September 30 (000's of Gallons) 2003 2004 2005 2006 2007 2008 2009

City of Tampa 777 142,053 276,031 311,173 299,036 252,235 319,230 City of Plant City 16,526 16,882 17,129 17,378 17,415 15,501 15,164 City of Oldsmar - - - - 44 41 31 City of Temple Terrace 1,633 1,407 1,618 1,405 2,183 1,881 2,333

Total Purchases - Other Public Systems 18,936 160,342 294,778 329,956 318,678 269,658 336,758

[5] Amounts shown do not include Fire Service accounts (reference footnote 1 above for these water-only accounts).

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Table 2

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Historical Customer Statistics and Sales - Wastewater System

Line Fiscal Year Ended September 30, No. 2003 2004[2] 2005 2006 2007 2008 2009

Individually Metered Residential [1] 1 Average Annual Accounts 104,186 113,549 119,624 125,748 128,673 128,033 127,638 2 Billed Wastewater Flow (000's) 6,191,868.1 6,965,441.2 7,318,170.4 7,901,739.8 8,066,166.3 7,912,810.7 7,848,608.6 3 Average Monthly Billed Flow per Account 4,953 5,112 5,098 5,236 5,224 5,150 5,124

Master Metered Residential [1] 4 Average Annual Accounts 457 530 551 577 599 613 612 5 Billed Wastewater Flow (000's) 2,108,562.4 2,294,886.1 2,380,901.2 2,503,704.1 2,612,851.2 2,709,267.3 2,736,598.1 6 Average Monthly Billed Flow per Account 384,494 360,831 360,088 361,598 363,502 368,307 372,630

Commercial [1] 7 Average Annual Accounts 2,639 2,824 2,984 3,093 3,148 3,244 3,338 8 Billed Wastewater Flow (000's) 1,854,259.0 2,020,229.1 2,174,143.8 2,221,487.0 2,210,855.4 2,162,787.4 2,055,571.1 9 Average Monthly Billed Flow per Account 58,553 59,615 60,717 59,853 58,525 55,559 51,317

Bulk Wastewater Sales [2] [3] 10 Average Annual Accounts 1 1 n/a n/a n/a n/a n/a 11 Billed Wastewater Flow (000's) 89,868.0 39,694.0 n/a n/a n/a n/a n/a 12 Average Monthly Billed Flow per Account 7,489,000 7,938,800 n/a n/a n/a n/a n/a

Total System 13 Average Annual Accounts 107,282 116,903 123,159 129,418 132,420 131,890 131,588 14 Billed Wastewater Flow (000's) 10,244,557.6 11,320,250.4 11,873,215.4 12,626,930.9 12,889,873.0 12,784,865.4 12,640,777.8 15 BilledWastewaterFlowlessBulkService(000's) 10,154,689.6 11,280,556.4 11,873,215.4 12,626,930.9 12,889,873.0 12,784,865.4 12,640,777.8 16 Average Monthly Billed Flow per Retail Account 7,888 8,041 8,034 8,131 8,112 8,078 8,005

17 Total Equivalent Residential Connections [4] 164,046 174,212 183,785 193,319 202,338 204,815 205,121 18 Average Monthly Billed Flow per ERC 5,158 5,396 5,384 5,443 5,309 5,202 5,135

Wastewater Treated 19 County Facilities (000's of Gallons) 11,769,509 12,165,719 12,384,494 12,472,813 12,302,529 12,989,516 12,850,920 20 Purchased Wastewater Service (000's) [5] - - 248,745 207,182 533,156 716,183 468,456

21 Total Wastewater Treated 11,769,509 12,165,719 12,633,239 12,679,995 12,835,685 13,705,699 13,319,376 22 Average Annual Daily Flow 32.25 33.24 34.61 34.74 35.17 37.45 36.39 23 Annual Wastewater Treated Per ERC (gallons) 71,745 69,833 68,739 65,591 63,437 66,917 64,934

Average Retail Wastewater Accounts 24 Receiving Water and Wastewater Service 95,113 104,769 111,042 117,218 120,204 119,805 119,498 25 Wastewater-only Service Accounts 12,169 12,134 12,117 12,200 12,216 12,085 12,090

26 Total Average Retail Wastewater Accounts 107,282 116,903 123,159 129,418 132,420 131,890 131,588 ______[1] Amounts based on detailed customer statistical information as provided by Water Resource Division.

[2] Average customer statistics and corresponding billed wastewater flow include the incremental customer additions associated with the purchase of the Seaboard and Valrico Hills systems from Florida Water Services, Inc. (approximately 3,200 accounts and 3,300 ERCs in September 2003) and the Carrollwood System from the Florida Governmental Utility Authority (approximately 1,190 accounts and 1,400 ERCs in April 2004).

[3] Reflects bulk wastewater treatment service to the Florida Governmental Utility Authority for the Carrollwood System; such system was purchased by the County effective April, 2004 (purchases ended during February 2004).

[4] Reflects total equivalent residential connections served; information not available by customer class. Amounts do not include Bulk Wastewater Service.

[5] Amounts shown reflect wastewater service provided by certain service providers (local governments) for certain isolated portions of the County's wastewater For the Fiscal Years 2007 portion and 2008, additional wastewater treatment service was provided by the City of Tampa on an interim basis while the County expanded the Falkenburg Wastewater Treatment Plant (diversion of portion of wastewater flow); which was completed in June 2009. Amounts summarized as follows: summarized as follows: Fiscal Year Ended September 30 (000's of Gallons) 2003 2004 2005 2006 2007 2008 2009

City of Tampa - - 231,613 187,996 514,343 697,195 449,649 City of Plant City (a) - - 17,132 17,786 17,358 15,678 15,164 City of Temple Terrace (b) - - - 1,400 1,455 3,310 3,643

Total Purchases - Other Public Systems - - 248,745 207,182 533,156 716,183 468,456

(a) Reflects purchases for wastewater service to a remote County system referred to as Oak Utilities (approximately 200 residential accounts). (b) Reflects purchase for wastewater service near the perimeter of the respective City's service area where the County does not have sewer collection lines (incidental service).

`JNQO Table 3 Page 1 of 1

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Historical Customer Statistics and Sales - Reclaimed Water System [1]

Line Fiscal Year Ended September 30, No. Description 2004 2005 2006 2007 2008 2009

Residential Service 1 Average Committed-Class Connections [2] 12,441 12,854 13,126 13,538 13,689 13,721

2 Average Metered Connections [3] 9 48 208 849 944 1161 3 Billed Reclaimed Water Sales (000's) 4,564.7 29,283.1 73,631.2 238,763.5 241,893.7 270,777.1 4 Average Monthly Use per Account 42,266 50,839 29,500 23,436 21,354 19,436

Commercial - General Users [4] 5 Average Metered Connections [3] 127 154 160 188 202 217 6 Billed Reclaimed Water Sales (000's) 626,423.2 568,209.3 750,798.6 795,673.6 772,887.7 964,780.7 7 Average Monthly Use per Account 411,039 307,473 391,041 352,692 318,848 370,500

Commercial - Major Users [5] 8 Average Metered Connections [3] 13 14 13 12 15 16 9 Billed Reclaimed Water Sales (000's) 1,993,909.7 1,778,011.1 1,485,926.9 1,907,452.8 1,777,346.5 1,835,831.5 10 Average Monthly Use per Account 12,781,472 10,583,399 9,525,172 13,246,200 9,874,147 9,561,622

Total Reclaimed Water System 11 Total Connections 12,590 13,070 13,507 14,587 14,850 15,115 12 Total Connections Receiving Metered Service 149 216 381 1,049 1,161 1,394 13 Total Billed Reclaimed Water Sales (000's) 2,624,897.6 2,375,503.5 2,310,356.7 2,941,889.9 2,792,127.9 3,071,389.3 14 Average Monthly Use per Account 1,468,064 916,475 505,327 233,706 200,411 183,608

[1] Amounts based on detailed customer statistical information as provided by Water Resource Services.

[2] Reflects customers that have entered into an agreement with the County to receive an exemption from receiving service on a metered basis; all customers in this class are billed on a flat-rate basis. Except for minor development in the neighborhoods that elected this service class; all new development will receive metered service.

[3] Represents residential connections that receive reclaimed water service that is metered at the premise; all new connections receive this service.

[4] Represents commercial and multi-family customers that are not classified as Major Users pursuant to the Rate Resolution.

[5] Represents commercial and multi-family customers that are not classified as Major Users pursuant to the Rate Resolution; such customers have entered into an agreement with WRS which i) provides for a maximum daily quantity of service to be delivered; ii) provides for the interruption of service above the maximum daily quantity; and iii) may have on-site storage of reclaimed water during wet-weather periods located at the customer's premise or site.

`JNQP Page 1 of 2

Table 4

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Customer Statistics - Water System

Line Historical Fiscal Fiscal Year Ended September 30, No. Description Year2009(1) 2010 2011 2012 2013 2014 2015

Individually Metered Residential (2) 1 Average Annual Accounts 136,204 135,637 135,642 136,210 136,875 137,828 138,924 2 Billed Potable Water Sales (000's) 11,348,687 10,884,876 10,887,075 10,969,525 10,963,324 11,025,660 11,108,440 3 Average Monthly Use per Account 6,943 6,688 6,689 6,711 6,675 6,666 6,663

Master Metered Residential (2) 4 Average Annual Accounts 838 838 838 842 846 852 859 5 Billed Potable Water Sales (000's) 2,730,667 2,730,667 2,730,707 2,743,741 2,752,715 2,768,148 2,788,829 6 Average Monthly Use per Account 271,546 271,546 271,550 271,550 271,150 270,750 270,550

Commercial (2) 7 Average Annual Accounts 4,573 4,546 4,541 4,556 4,573 4,600 4,632 8 Billed Potable Water Sales (000's) 2,120,010 2,036,153 2,033,914 2,040,632 2,045,046 2,053,900 2,066,798 9 Average Monthly Use per Account 38,633 37,325 37,325 37,325 37,267 37,208 37,183

Total System 10 AverageAnnualAccounts 141,615 141,021 141,021 141,608 142,294 143,280 144,415 11 Billed Potable Water Sales (000's) 16,199,364 15,651,696 15,651,696 15,753,899 15,761,084 15,847,708 15,964,068 12 Average Monthly Use per Account 9,533 9,249 9,249 9,271 9,230 9,217 9,212

13 Total Equivalent Residential Connections (3) 191,810 191,810 191,810 192,535 193,435 194,785 196,360 14 Average Monthly Use per ERC 7,038 6,800 6,800 6,819 6,790 6,780 6,775

Water Purchased 15 TampaBayWater 17,218,690 16,583,973 16,577,576 16,681,542 16,682,655 16,769,515 16,888,387 16 All Other Public Systems (4) 336,758 336,779 343,176 349,700 356,355 363,142 370,065

17 TotalWaterPurchased 17,555,448 16,920,752 16,920,752 17,031,242 17,039,010 17,132,657 17,258,452 18 Unbilled Water (000's) 1,356,084 1,269,056 1,269,056 1,277,343 1,277,926 1,284,949 1,294,384 19 PercentofWaterPurchased 8.37% 8.11% 8.11% 8.11% 8.11% 8.11% 8.11% 20 Average AnnualWater Purchased Per ERC (5) 91,525 88,216 88,216 88,458 88,086 87,957 87,892

Average Water Accounts 21 ReceivingWater and Wastewater Service 119,498 118,904 118,904 119,430 120,019 120,894 121,917 22 Water-onlyAccounts(6) 22,117 22,117 22,117 22,178 22,275 22,386 22,498

23 Total Average Water Accounts 141,615 141,021 141,021 141,608 142,294 143,280 144,415

(1) Amounts shown derived from Table 1.

(2) Amounts reflect the customer forecast used in the development of projected rate revenues; commercial class does not include fire flow customers. The average projected fireline customers (which are not billed for any flow that may be metered for fire service) for each fiscal year is summarized below: 2009 394 2010 434 2011 435 2012 437 2013 439 2014 442 2015 445

Footnotes Continued on Page 2 of 2.

`JNQQ Page 2 of 2

Table 4

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Customer Statistics - Water System

(3) Reflects total equivalent residential connections served; information not available by customer class.

(4) Amounts show reflect water service provided by other public utilities for service to certain isolated portions of the County's water service area. Amounts summarized as follows: Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015

City of Tampa 319,230 325,615 332,127 338,770 345,545 352,456 City of Plant City 15,164 15,164 15,164 15,164 15,164 15,164 City of Oldsmar 40 40 40 40 40 40 City of Temple Terrace 2,345 2,357 2,369 2,381 2,393 2,405

Total Purchases - Other Public Systems 336,779 343,176 349,700 356,355 363,142 370,065

(5) Amounts shown do not include Fire Service accounts (reference footnote 1 above for these water-only accounts).

`JNQR Page 1 of 2

Table 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Customer Statistics - Wastewater System

Line Historical Fiscal Fiscal Year Ended September 30, No. Description Year2009(1) 2010 2011 2012 2013 2014 2015

Individually Metered Residential (2) 1 Average Annual Accounts 127,638 127,066 127,069 127,570 128,132 128,972 129,955 2 Billed Wastewater Flow (000's) 7,848,608.6 7,788,741 7,790,555 7,856,713 7,860,556 7,920,034 7,987,526 3 Average Monthly Billed Flow per Account 5,124 5,108 5,109 5,132 5,112 5,117 5,122

Master Metered Residential (2) 4 Average Annual Accounts 612 612 612 614 617 621 626 5 Billed Wastewater Flow (000's) 2,736,598.1 2,736,598 2,736,619 2,745,562 2,758,977 2,776,864 2,799,222 6 Average Monthly Billed Flow per Account 372,630 372,630 372,633 372,633 372,633 372,633 372,633

Commercial (2) 7 Average Annual Accounts 3,338 3,316 3,313 3,323 3,334 3,352 3,374 8 Billed Wastewater Flow (000's) 2,055,571.1 2,028,066 2,026,231 2,032,347 2,039,074 2,050,083 2,063,538 9 Average Monthly Billed Flow per Account 51,317 50,967 50,967 50,967 50,967 50,967 50,967

10 Bulk Wastewater Sales 11 Average Annual Accounts n/a n/a n/a n/a n/a n/a n/a 12 Billed Wastewater Flow (000's) n/a n/a n/a n/a n/a n/a n/a 13 Average Monthly Billed Flow per Account n/a n/a n/a n/a n/a n/a n/a

Total System 14 Average Annual Accounts 131,588 130,994 130,994 131,507 132,083 132,945 133,955 15 Billed Wastewater Flow (000's) 12,640,777.8 12,553,405 12,553,405 12,634,622 12,658,608 12,746,981 12,850,286 16 Billed Wastewater Flow less Bulk Service (000's) 12,640,777.8 12,553,405 12,553,405 12,634,622 12,658,608 12,746,981 12,850,286 17 Average Monthly Billed Flow per Retail Account 8,005 7,986 7,986 8,006 7,987 7,990 7,994

18 Total Equivalent Residential Connections (3) 205,121 205,121 205,121 205,884 206,840 208,284 209,972 19 Average Monthly Billed Flow per ERC 5,135 5,100 5,100 5,114 5,100 5,100 5,100

Wastewater Treated 20 County Facilities (000's of Gallons) 12,850,920 13,458,197 13,453,268 13,499,285 13,558,113 13,649,486 13,757,078 21 Purchased Wastewater Service (000's) (4) 264,398 264,398 269,327 274,355 279,483 284,714 290,049

22 Total Wastewater Treated 13,115,318 13,722,595 13,722,595 13,773,640 13,837,596 13,934,200 14,047,127 23 Average Annual Daily Flow 35.83 37.49 37.49 37.63 37.81 38.07 38.38 24 Annual Wastewater Treated Per ERC (5) 63,939 66,900 66,900 66,900 66,900 66,900 66,900

Average Retail Wastewater Accounts 25 Receiving Water and Wastewater Service 119,498 118,904 118,904 119,430 120,019 120,894 121,917 26 Wastewater-only Accounts 12,090 12,090 12,090 12,077 12,064 12,051 12,038

27 Total Average Retail Wastewater Accounts 131,588 130,994 130,994 131,507 132,083 132,945 133,955 ______(1) Amounts shown derived from Table 1.

(2) Amounts reflect the customer forecast used in the development of projected rate revenues.

(3) Reflects total equivalent residential connections served; information not available by customer class. Amounts do not include Bulk Wastewater Service (no service assumed to be provided during Forecast Period).

Footnotes Continued on Page 2 of 2.

`JNQS Page 2 of 2

Table 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Customer Statistics - Wastewater System

(4) Amounts shown reflect wastewater service provided by City of Tampa, Plant City, and Temple Terrace for certain isolated portions of the County's wastewater service area. Amounts summarized as follows:

Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015

City of Tampa (a) 245,573 250,484 255,494 260,604 265,816 271,132 City of Plant City (b) 15,164 15,164 15,164 15,164 15,164 15,164 City of Temple Terrace (c) 3,661 3,679 3,697 3,715 3,734 3,753

Total Purchases - Other Public Systems 264,398 269,327 274,355 279,483 284,714 290,049

(a) Reduction in Tampa purchases due to discontinuance of temporary treatment service required during construction of expansion of Falkenburg Road AWWTP. (b) Reflects purchases for wastewater service to a remote County system referred to as Oak Utilities (approximately 200 residential accounts). (c) Reflects purchase for wastewater service near the perimeter of the respective City's service area where the County does not have sewer collection lines (incidental service).

(5) Average amount treated per ERC based on a five fiscal year historical average; reference Table 2 for historical treatment relationships.

`JNQT Page 1 of 1

Table 6

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Customer Statistics - Reclaimed Water System

Line Historical Fiscal Fiscal Year Ending September 30, No. Description Year 2009 [1] 2010 2011 2012 2013 2014 2015

Residential Service 1 Average Committed-Class Connections [2] 13,721 13,785 13,795 13,805 13,815 13,825 13,835

2 Average Metered Connections [3] 1,161 1,269 1,506 1,967 2,507 3,088 3,723 3 Billed Reclaimed Water Sales (000's) 270,777.1 294,656.0 338,215.9 396,572.6 457,663.4 525,153.9 598,110.1 4 Average Monthly Use per Account 19,436 19,350 18,715 16,801 15,213 14,172 13,388

Commercial - General Users [4] 5 Average Metered Connections [3] 217 232 247 255 259 264 270 6 Billed Reclaimed Water Sales (000's) 964,780.7 966,132.0 986,652.0 993,492.0 1,000,332.0 1,010,592.0 1,020,852.0 7 Average Monthly Use per Account 370,500 347,030 332,879 324,671 321,857 319,000 315,078

Commercial - Major Users [5] 8 Average Metered Connections [3] 16 16 20 21 21 21 21 9 Billed Reclaimed Water Sales (000's) 1,835,831.5 1,744,040.0 1,967,304.0 2,036,654.0 2,036,654.0 2,036,654.0 2,036,654.0 10 Average Monthly Use per Account 9,561,622 9,083,542 8,197,100 8,081,960 8,081,960 8,081,960 8,081,960

Total Reclaimed Water System 11 Total Connections 15,115 15,302 15,568 16,048 16,602 17,198 17,849 12 Total Connections Receiving Metered Service 1,394 1,517 1,773 2,243 2,787 3,373 4,014 13 Total Billed Reclaimed Water Sales (000's) 3,071,389.3 3,004,828.0 3,292,171.9 3,426,718.6 3,494,649.4 3,572,399.9 3,655,616.1 14 Average Monthly Use per Account 183,608 165,064 154,736 127,312 104,493 88,260 75,893

[1] Amounts based on detailed customer statistical information as provided by Water Resource Services; reference Table 3.

[3] Represents residential connections that receive reclaimed water service that is metered at the premise; all new connections receive this service.

[4] Represents commercial and multi-family customers that are not classified as Major Users pursuant to the Rate Resolution.

[5] Represents commercial and multi-family customers that are not classified as Major Users pursuant to the Rate Resolution; such customer have entered into an agreement with WRS which i) provides for a maximum daily quantity of service to be delivered; ii) provides for the interruption of service above the maximum daily quantity; and iii) may have on-site storage of reclaimed water during wet-weather periods located at the customer's premise or site.

`JNQU Page 1 of 5

Table 7

Hillsborough County Water Resource Division

Water, Wastewater, and Reclaimed Water System

Summary of Historical Operating Results and Bond Service Coverage

Line Fiscal Year Ended September 30, [1] No. Description 2004 2005 2006 2007 2008 2009

Operating Revenues Charges for Services 1 WaterSales[2] $ 62,982,000 $ 67,638,000 $ 80,008,000 $ 82,788,000 $ 79,101,000 $ 76,203,000 2 Wastewater Sales 72,852,000 76,736,000 81,063,000 83,274,000 84,159,000 83,201,000 3 Customer Billing Charges 6,256,000 6,593,000 6,873,000 6,970,000 7,082,000 7,030,000 4 Reclaimed Water Sales 1,296,000 1,302,000 1,312,000 1,401,000 1,818,000 1,819,000

5 Total Charges for Services 143,386,000 152,269,000 169,256,000 174,433,000 172,160,000 168,253,000

Other Operating Revenues 6 AccruedGuaranteedRevenueFees[3] 17,579,000 17,841,000 16,056,000 11,063,000 5,841,000 5,030,000 7 MaintenanceServiceCharges 1,481,000 1,633,000 1,502,000 1,590,000 1,593,000 1,446,000 8 BulkWastewaterServices[4] 201,000 - - - - - 9 Installation Charges 591,000 669,000 494,000 284,000 150,000 128,000 10 Line Extension Fees 510,000 1,686,000 95,000 90,000 39,000 17,000 11 OtherOperatingRevenues 664,000 421,000 717,000 925,000 931,000 818,000

12 Total Operating Revenues 21,026,000 22,250,000 18,864,000 13,952,000 8,554,000 7,439,000

Total Charges for Service 164,412,000 174,519,000 188,120,000 188,385,000 180,714,000 175,692,000

13 Investment Income [5] 11,229,000 14,585,000 20,692,000 20,491,000 12,634,000 7,568,000

14 Gross Revenues 175,641,000 189,104,000 208,812,000 208,876,000 193,348,000 183,260,000

15 Pledged Capacity Fees [6] 17,961,946 8,928,797 11,487,759 6,892,265 4,649,419 6,070,764

16 Total Funds Available 193,602,946 198,032,797 220,299,759 215,768,265 197,997,419 189,330,764

Cost of Operation and Maintenance [7] 17 Personal Services 33,155,000 36,058,000 39,275,000 42,625,000 45,618,000 47,486,000 18 PurchasedWater 31,927,000 34,719,000 39,326,000 41,362,000 43,361,000 42,670,000 19 Contractual Services 16,593,000 20,536,000 19,111,000 26,701,000 30,289,000 25,650,000 20 Communication Services 941,000 1,058,000 1,178,000 1,287,000 1,393,000 1,350,000 21 Fleet Services 1,426,000 1,570,000 1,669,000 1,701,000 2,131,000 1,506,000 22 Repairs&Maintenance 6,882,000 6,640,000 6,373,000 6,801,000 7,903,000 7,692,000 23 Utilities 5,192,000 5,825,000 7,246,000 7,822,000 10,411,000 10,917,000 24 Rentals & Leases 494,000 515,000 - - - - 25 Supplies 1,792,000 3,534,000 2,804,000 5,012,000 3,840,000 1,196,000 26 OtherOperatingExpenses 1,761,000 2,590,000 2,338,000 2,429,000 2,774,000 2,306,000 27 Capitalized Operating Expenses [8] (3,383,000) (2,774,000) (1,100,000) (1,269,000) (2,291,000) (1,504,000)

28 Total Cost of Operation and Maintenance 96,780,000 110,271,000 118,220,000 134,471,000 145,429,000 139,269,000

29 Pledged Revenues[9] 96,822,946 87,761,797 102,079,759 81,297,265 52,568,419 50,061,764

Bond Service Payment: 30 Series2001Bonds 18,049,000 21,056,000 21,054,000 21,071,000 21,052,000 20,688,000 31 Series2003Bonds 9,711,000 6,812,000 6,402,000 6,395,000 6,391,000 406,417

32 Total Bond Service Payment 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417

Footnotes on Page 3 of 5.

`JNQV Page 2 of 5

Table 7

Hillsborough County Water Resource Division

Water, Wastewater, and Reclaimed Water System

Summary of Historical Operating Results and Bond Service Coverage

Line Fiscal Year Ended September 30, [1] No. Description 2004 2005 2006 2007 2008 2009

Bond Service Requirement Coverage Compliance:

Rate Covenant Test 1 [10]: 33 Gross Revenues and Pledged Capacity Fees $ 193,602,946 $ 198,032,797 $ 220,299,759 $ 215,768,265 $ 197,997,419 $ 189,330,764 Required Deposits 34 Cost of Operation and Maintenance 96,780,000 110,271,000 118,220,000 134,471,000 145,429,000 139,269,000 35 Renewaland Replacement Account Requirement 8,083,000 8,603,000 9,083,000 10,161,000 10,446,000 9,667,000 36 Bond Service Payment 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417 37 Less:InterestEarnings-DebtServiceAccount[11] (451,000) (312,000) (950,000) (1,011,000) (531,000) (274,000)

38 Total Required Deposits 132,172,000 146,430,000 153,809,000 171,087,000 182,787,000 169,756,417

39 Coverage Ratio - Calculated 1.46 1.35 1.43 1.26 1.08 1.12 40 Coverage Ratio - Required 1.00 1.00 1.00 1.00 1.00 1.00

AND

Rate Covenant Test 2 [10]: 41 Net Revenues plus Pledged Capacity Fees 96,822,946 87,761,797 102,079,759 81,297,265 52,568,419 50,061,764

42 Bond Service Payment 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417 43 Less: Interest Earnings [11] (451,000) (312,000) (950,000) (1,011,000) (531,000) (274,000)

44 Bond Service Requirement 27,309,000 27,556,000 26,506,000 26,455,000 26,912,000 20,820,417

45 Coverage Ratio - Calculated 3.55 3.18 3.85 3.07 1.95 2.40 46 Coverage Ratio - Required 1.20 1.20 1.20 1.20 1.20 1.20

AND

Rate Covenant Test 3 [10]: 47 NetRevenues 78,861,000 78,833,000 90,592,000 74,405,000 47,919,000 43,991,000

48 Bond Service Payment 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417 49 Less: Interest Earnings [11] (451,000) (312,000) (950,000) (1,011,000) (531,000) (274,000)

50 Bond Service Requirement 27,309,000 27,556,000 26,506,000 26,455,000 26,912,000 20,820,417

51 Coverage Ratio - Calculated 2.89 2.86 3.42 2.81 1.78 2.11 52 Coverage Ratio - Required 1.00 1.00 1.00 1.00 1.00 1.00

53 NetRevenuesafterPaymentofBondServiceRequirement 51,552,000 51,277,000 64,086,000 47,950,000 21,007,000 23,170,583

Other Required Transfers [12]: 54 Renewal & Replacement Account Requirement 8,083,000 8,603,000 9,083,000 10,161,000 10,446,000 9,667,000 55 Debt Service Reserve Account [13] ------

56 Total Other Required Transfers 8,083,000 8,603,000 9,083,000 10,161,000 10,446,000 9,667,000

Excess of Net Revenues above Required 57 Transfers [14] $ 43,469,000 $ 42,674,000 $ 55,003,000 $ 37,789,000 $ 10,561,000 $ 13,503,583

Footnotes on Page 3 of 5.

`JNRM Page 3 of 5

Table 7

Hillsborough County Water Resource Division

Water, Wastewater, and Reclaimed Water System

Summary of Historical Operating Results and Bond Service Coverage

[1] Unless otherwise noted, amounts shown for each respective fiscal year were derived from i) audited Annual Financial Reports; and ii) other financial information as provided by the County. Amounts have been rounded to the nearest thousand dollars.

[2] Amounts include additional revenues associated with the application of i) the annual Purchased Water Pass-through Consumption Charge associated with the annual pass-through of any increase or decrease in the cost of purchased water from Tampa Bay Water and other service providers and ii) price index rate adjustment to allow for increases in general inflation on certain components of the Cost of Operation and Maintenance associated with providing utility service (although allowed by the Rate Resolution, the County did not adjust the rates for a price index adjustment during the Historical Period).

[3] Amounts reflect revenues derived from fees charged to new development which represent the recovery of certain costs to carry and maintain plant investment on behalf of such customers prior to receiving service. Such revenues are considered as a Revenue of the System and are in addition to the collection of Impact Fees from new development.

[4] County historically provided bulk or wholesale wastewater service to the Florida Governmental Utility Authority which owned the Carrollwood Water and Wastewater System; such system was purchased by the County in April 2004.

[5] Amounts shown reflect investment earnings from funds and accounts established by the County that are considered unrestricted (earnings not required to be retained in such funds and accounts and are available as a component of Gross Revenues). Earnings from Impact [Capacity] Fees and the Construction Account (if any) established from previously issued Bond proceeds, are considered as being restricted to such accounts and not reflected as a component of the Gross Revenue of the System for this financial presentation. Pursuant to the Bond Resolution, all earnings on the Debt Service Account and Reserve Account were recognized as being an offset in the determination of the Bond Service Requirement and therefore are considered as being restricted for the purposes of the determination of Gross Revenues. Additionally, amounts shown do not include any provision for fair market value adjustments in order to recognize realized earnings. Amounts calculated as follows: Fiscal Year Ended September 30, 2004 2005 2006 2007 2008 2009 Income Reported Per Annual Financial Report $10,605,000 $13,636,000 $24,928,000 $28,297,000 $17,564,000 $12,091,000

Adjustments to Investment Income: Less Impact Fees and Equivalents (a) (755,000) (501,000) (1,954,000) (5,378,000) (5,726,000) (4,722,000) Less Construction Account Income 0 0 0 0 0 0 Less Interest on Debt Service and Reserve Accounts (451,000) (312,000) (950,000) (1,011,000) (531,000) (274,000) Less Other Restricted Income (b) (1,422,000) (71,000) (82,000) (43,000) (24,000) (19,000) Fair Market Value Adjustment 3,252,000 1,833,000 (1,250,000) (1,374,000) 1,351,000 492,000

Net Investment Income Recognized $11,229,000 $14,585,000 $20,692,000 $20,491,000 $12,634,000 $7,568,000

(a) Impact fee equivalents include interest received on impact fee assessment units (essentially an installment-based collection of impact fees that is assessed to property owners which is elected prior by the owner [developer]) as part of the overall development process. (b) Includes interest on reclaimed water assessment unit and infrastructure assessment unit programs which are generally secured for the payment of proceeds derived from a commercial paper program issued to finance the capital improvements.

Footnotes Continued on Page 4 of 5

`JNRN Page 4 of 5

Table 7

Hillsborough County Water Resource Division

Water, Wastewater, and Reclaimed Water System

Summary of Historical Operating Results and Bond Service Coverage

[6] Amounts shown based on information reported in the Annual Financial Reports and other financial information provided by the County. All Impact Fees received by the County were considered as a Pledged derived as follows: Fiscal Year Ended September 30, 2004 2005 2006 2007 2008 2009 Water System: Impact Fees Received Impact Fee Revenues $ 5,256,860 $ 3,004,068 $ 4,844,990 $ 3,723,350 $ 1,296,830 $ 842,209 Impact Fee Assessment Unit Revenues 2,574,176 3,364,440 4,155,068 1,093,508 2,232,445 3,173,940 Investment Earnings 141,312 111,302 47,407 40,170 32,370 1,603 Total Impact Fees Received 7,972,348 6,479,810 9,047,465 4,857,028 3,561,645 4,017,752 Less Amount Pledged to Payment of Debt Service Component of Cost of Contracted Water Supply by County (1,337,422) (6,255,663) (9,217,197) (4,954,587) (3,604,000) (6,211,000)

Total Water System Capacity Fees Available for Pledge$ 6,634,926 $ 224,147 -$ -$ -$ -$

Beginning Balance - Carry Forward $ 3,841,327 -$ $ 2,033,867 $ 4,234,471 $ 6,434,841 $ 8,633,369

Existing Debt Bond Service Requirement 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417 Percent Allocable to Water System 22.61% 21.39% 21.26% 21.25% 21.25% 18.77% Existing Debt Allocable to Water System 6,276,536 5,960,965 5,837,146 5,836,525 5,831,638 3,959,422

Existing Debt Water Expansion Project Percentage 39.43% 37.88% 37.70% 37.70% 37.70% 33.89% ExistingDebtServiceRequirementwithPercentApplied 2,474,838 2,258,014 2,200,604 2,200,370 2,198,528 1,341,848

Total Available for Pledge (with carryforward) $ 6,316,165 $ 2,258,014 $ 4,234,471 $ 6,434,841 $ 8,633,369 $ 9,975,217

WaterCapacityFeesRecognizedasPledgedRevenue 6,316,165 224,147 - - - -

Ending Balance - Carry Forward -$ $ 2,033,867 $ 4,234,471 $ 6,434,841 $ 8,633,369 $ 9,975,217

Wastewater System: Impact Fees Received Impact Fee Revenues $ 7,763,269 $ 3,986,392 $ 5,988,234 $ 5,452,943 $ 1,948,234 $ 2,310,307 Impact Fee Assessment Unit Revenues 3,813,716 4,653,746 5,427,516 1,417,002 2,661,546 3,723,059 Investment Earnings 68,796 64,512 72,009 22,320 39,639 37,398 Total Impact Fees Received 11,645,781 8,704,650 11,487,759 6,892,265 4,649,419 6,070,764

Beginning Balance - Carry Forward $ 75,336,827 $ 76,555,344 $ 81,303,804 $ 83,126,773 $ 89,553,939 $ 98,212,797

Existing Debt Bond Service Requirement 27,760,000 27,868,000 27,456,000 27,466,000 27,443,000 21,094,417 Percent Allocable to Wastewater System 77.39% 78.61% 78.74% 78.75% 78.75% 81.23% Existing Debt Allocable to Wastewater System 21,483,464 21,907,035 21,618,854 21,629,475 21,611,363 17,134,995

ExistingDebtWastewaterExpansionProjectPercentage 59.88% 61.41% 61.57% 61.58% 61.58% 64.54% ExistingDebtServiceRequirementwithPercentApplied 12,864,298 13,453,110 13,310,728 13,319,431 13,308,277 11,058,926

Total Available for Pledge (with carryforward) $ 88,201,125 $ 90,008,454 $ 94,614,532 $ 96,446,204 $ 102,862,216 $ 109,271,723

Wastewater Capacity Fees Recognized as Pledged 11,645,781 8,704,650 11,487,759 6,892,265 4,649,419 6,070,764

Ending Balance - Carry Forward $ 76,555,344 $ 81,303,804 $ 83,126,773 $ 89,553,939 $ 98,212,797 $ 103,200,959

Total System Pledged Capacity Fees $ 17,961,946 $ 8,928,797 $ 11,487,759 $ 6,892,265 $ 4,649,419 $ 6,070,764

[7] Amounts shown do not include depreciation or amortization expenses which are not considered a Cost of Operation and Maintenance of the System as defined in the Bond Resolution.

Footnotes Continued on Page 5 of 5

`JNRO Page 5 of 5

Table 7

Hillsborough County Water Resource Division

Water, Wastewater, and Reclaimed Water System

Summary of Historical Operating Results and Bond Service Coverage

[8] The County recognizes capitalized expenses as a Non-operating Revenue and reports the Operating Expenses in the Annual Financial Report on a "gross basis." The Bond Resolution requires any capitalized expenses be excluded from the Cost of Operation and Maintenance.

[9] As defined in the Bond Resolution, Pledged Revenues include Net Revenues and Pledged Capacity Fees.

[10] The Bond Resolution contains a Rate Covenant that requires that the County will maintain and collect Revenues that will always provide for the following: Test 1 - Gross Revenues, together with Pledged Capacity Fees at least equal to 100% of the Required Deposits; and Test 2 - Net Revenues, together with Pledged Capacity Fees at least equal to 120% of the Bond Service Requirement; and Test 3 - Net Revenues at least equal to 100% of the Bond Service Requirement.

[11] As defined in the Bond Resolution, the Bond Service Requirement does not include any capitalized interest from Bond Proceeds, if any, that have been deposited into the Debt Service Account, or any interest from the investment of funds into the Debt Service Account and the Reserve Account.

[12] Reflects other required transfers which are recognized in the Rate Covenant requirements of the Bond Resolution, payments which are subordinate to the payment of the Bond Service Requirement.

[13] No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Historical Period by i) proceeds from the issuance of the Bonds Outstanding or ii) secured by a debt service reserve credit facility during such period.

[14] Amount shown does not include Pledged Capacity Fees.

`JNRP Page 1 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

Equipment Purchases: 1 Departmental Capital Requirements - Replacement Equipment Purchases n/a Rev $ - $ 943,989 $ 283,326 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 5,227,315.00 2 Departmental Capital Requirements - Replacement Equipment Purchases n/a R&R - 1,187,459 1,235,824 1,485,003 1,492,493 1,041,523 1,041,000 7,483,302 3 Departmental Capital Requirements - Other n/a R&R ------

4 Total Equipment Purchases - 2,131,448 1,519,150 2,485,003 2,492,493 2,041,523 2,041,000 12,710,617

Capital Improvement Projects County CIP : 5 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R $ (1,136) $ - $ - $ - $ - $ - $ - $ (1,136) 6 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R - - - - - 3,000,000 3,000,000 6,000,000 7 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R - - - - 3,000,000 - - 3,000,000 8 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R 19,710 ------19,710 9 County-wide Major Wastewater Pump Stations Refurbishment 10138 Debt1SNe - 3,000,000 3,000,000 4,000,000 - - - 10,000,000 10 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R 1,530,885 ------1,530,885 11 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R 379,884 1,000,000 1,000,000 - 1,000,000 1,000,000 1,000,000 5,379,884 12 County-wide Major Wastewater Pump Stations Refurbishment 10138 R&R 1,929,343 ------1,929,343 13 County-wide Wastewater Pump Station Replacements 10140 R&R 50,000 ------50,000 14 County-wide Wastewater Pump Station Replacements 10140 R&R 50,000 50,000 50,000 50,000 50,000 50,000 50,000 350,000 15 County-wide Wastewater Pump Station Replacements 10140 R&R (4,349) ------(4,349) 16 County-wide Wastewater Pump Station Replacements 10140 R&R 831,356 500,000 - - 500,000 500,000 500,000 2,831,356 17 County-wide Wastewater Pump Station Replacements 10140 R&R 1,777,445 550,000 50,000 50,000 850,000 850,000 850,000 4,977,445 18 County-wide Wastewater Pump Station Replacements 10140 R&R (24,841) 108,000 100,000 100,000 100,000 100,000 100,000 583,159 19 County-wide Wastewater Pump Station Replacements 10140 R&R (165,842) ------(165,842) 20 County-wide Wastewater Pump Station Replacements 10140 Debt1SE - 1,300,000 1,300,000 1,300,000 - - - 3,900,000 21 County-wide Major Wastewater Treatment Plant Overhaul Projects - Fare Account 10141 Fund10 - 3,000,000 3,200,000 - - - - 6,200,000 22 South County Regional AWWTF Plant Expansion From 4.5 To 7.5 MGD 10143 Fund10 10,050,000 ------10,050,000 23 South County Regional AWWTF Plant Expansion From 4.5 To 7.5 MGD 10143 Fund10 1,871,167 ------1,871,167 24 South County Regional AWWTF Plant Expansion From 4.5 To 7.5 MGD 10143 Fund10 (1,953) ------(1,953) 25 South County Regional AWWTF Plant Expansion From 4.5 To 7.5 MGD 10143 Debt1SE - - - 15,000,000 - - - 15,000,000 26 South County Regional AWWTF Plant Expansion From 4.5 To 7.5 MGD 10143 Debt2SE - - - - 37,000,000 - - 37,000,000 27 South County Regional AWWTF Plant Expansion From 7.5 To 12.0 MGD 10143 Debt2SE - - - - 30,750,000 - - 30,750,000 28 South County Regional AWWTF Plant Expansion From 7.5 To 12.0 MGD 10143 Debt2SE - - - - 250,000 - - 250,000 29 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 148,333 ------148,333 30 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 65,575 ------65,575 31 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 525,512 ------525,512 32 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 883,111 ------883,111 33 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 1,599,481 ------1,599,481 34 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 3,025 ------3,025 35 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Fund10 3,000,000 ------3,000,000 36 CR 672 Force Main (Balm Riverview Road To US 301) 10144 Debt1SE 4,500,000 ------4,500,000 37 State Road 674 Force Main (Clubhouse Pump Station To US 301) 10145 Debt1SE 3,000,000 ------3,000,000 38 State Road 674 Force Main (Clubhouse Pump Station To US 301) 10145 Fund10 379,134 ------379,134 39 State Road 674 Force Main (Clubhouse Pump Station To US 301) 10145 Fund10 1,124,336 ------1,124,336 40 State Road 674 Force Main (Clubhouse Pump Station To US 301) 10145 Fund10 42,296 ------42,296 41 State Road 674 Force Main (Clubhouse PS To South County Regional AWTP) 10146 Fund10 749,730 ------749,730 42 State Road 674 Force Main (Clubhouse PS To South County Regional AWTP) 10146 Debt1SE - 2,851,000 - - - - - 2,851,000 43 State Road 674 Force Main (Clubhouse PS To South County Regional AWTP) 10146 Fund10 100,000 ------100,000 44 State Road 674 Force Main (Clubhouse PS To South County Regional AWTP) 10146 Fund10 250,000 ------250,000 45 NW Regional Residuals Recovery Barscreen Replacement 10147 Fund10 50,000 ------50,000

`JNRQ 46 NW Regional Residuals Recovery Barscreen Replacement 10147 Fund10 67,682 ------67,682 Page 2 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

47 NW Regional Residuals Recovery Barscreen Replacement 10147 SubR&R 1,856,814 ------1,856,814 48 NW Regional Residuals Recovery Barscreen Replacement 10147 Fund10 78,759 ------78,759 49 Falkenburg Rd. AWWTP Alternative Power Supply 10148 Fund10 24,049 ------24,049 50 Falkenburg Rd. AWWTP Alternative Power Supply 10148 Fund10 79,635 ------79,635 51 Falkenburg Rd. AWWTP Alternative Power Supply 10148 Fund10 22,500 ------22,500 52 Falkenburg Rd. AWWTP Alternative Power Supply 10148 Fund10 72,032 ------72,032 53 Big Bend Road Wastewater Pump Station 10149 Fund10 25,000 ------25,000 54 Big Bend Road Wastewater Pump Station 10149 Debt1SE 160,800 ------160,800 55 Big Bend Road Wastewater Pump Station 10149 Debt1SE 1,498,200 ------1,498,200 56 Big Bend Road Wastewater Pump Station 10149 Fund10 26,272 ------26,272 57 Big Bend Road Wastewater Pump Station 10149 Debt1SE 541,000 ------541,000 58 Big Bend Road Wastewater Pump Station 10149 Fund10 7,718 ------7,718 59 Symmes Road Wastewater Pump Station 10150 Fund10 248,214 ------248,214 60 Symmes Road Wastewater Pump Station 10150 Debt1SE 200,000 ------200,000 61 Symmes Road Wastewater Pump Station 10150 Debt1SE 400,000 ------400,000 62 US 301 Force Main (Valencia Lakes To SR 674) 10152 Fund10 10,000 ------10,000 63 US 301 Force Main (Valencia Lakes To SR 674) 10152 Fund10 1,429,807 ------1,429,807 64 US 301 Force Main (Valencia Lakes To SR 674) 10152 Debt1SE 1,500,000 ------1,500,000 65 US 301 Force Main (Valencia Lakes To SR 674) 10152 Fund10 13,105 ------13,105 66 Balm Riverview Force Main (Big Bend Road To CR 672) 10154 Fund10 50,000 ------50,000 67 Balm Riverview Force Main (Big Bend Road To CR 672) 10154 Fund10 319,880 ------319,880 68 Balm Riverview Force Main (Big Bend Road To CR 672) 10154 Fund10 1,953,507 ------1,953,507 69 Balm Riverview Force Main (Big Bend Road To CR 672) 10154 Fund10 20,341 ------20,341 70 US Highway 41 Force Main (J Taylor Project To Big Bend Road) 10157 Fund10 - - 22,000 - - - - 22,000 71 US Highway 41 Force Main (J Taylor Project To Big Bend Road) 10157 Debt1SE - - 100,000 - - - - 100,000 72 US Highway 41 Force Main (J Taylor Project To Big Bend Road) 10157 Debt1SE - - 300,000 - - - - 300,000 73 Nature's Way Wastewater Pump Station Upgrade 10158 SubR&R 292,274 ------292,274 74 Nature's Way Wastewater Pump Station Upgrade 10158 SubR&R 1,924,468 ------1,924,468 75 Nature's Way Wastewater Pump Station Upgrade 10158 SubR&R 150,912 ------150,912 76 Nature's Way Wastewater Pump Station Upgrade 10158 SubR&R 2,400,532 ------2,400,532 77 Gibsonton Road Force Main (Gibson Elementary To Old Gibsonton Dr) 10159 Fund10 - - 65,000 - - - - 65,000 78 Gibsonton Road Force Main (Gibson Elementary To Old Gibsonton Dr) 10159 Debt1SE - - 320,000 - - - - 320,000 79 Gibsonton Road Force Main (Gibson Elementary To Old Gibsonton Dr) 10159 Fund10 - - 15,000 - - - - 15,000 80 Crosby Road Reclaimed Water Transmission Main 10163 Fund10 1,509,685 ------1,509,685 81 Crosby Road Reclaimed Water Transmission Main 10163 Debt1RWE 2,250,000 ------2,250,000 82 Crosby Road Reclaimed Water Transmission Main 10163 Debt1RWNe 2,250,000 ------2,250,000 83 River Oaks Reclaimed Water Storage Tank 10164 Fund10 - - - - - 100,000 - 100,000 84 River Oaks Reclaimed Water Storage Tank 10164 Fund10 - - - - - 600,000 - 600,000 85 River Oaks Reclaimed Water Storage Tank 10164 Fund10 ------2,750,000 2,750,000 86 River Oaks Reclaimed Water Storage Tank 10164 Fund10 - - - - - 50,000 - 50,000 87 Armand Drive Gravity Sewer - Pump Station Replacement 10641 R&R 89,242 ------89,242 88 Armand Drive Gravity Sewer - Pump Station Replacement 10641 R&R 601,889 ------601,889 89 Armand Drive Gravity Sewer - Pump Station Replacement 10641 R&R 42,460 ------42,460 90 Large Diameter Force Main Valve Installations 10642 R&R 194,281 ------194,281 91 Large Diameter Force Main Valve Installations 10642 R&R 664,389 ------664,389 92 Large Diameter Force Main Valve Installations 10642 R&R 47,443 ------47,443 93 River Oaks AWWTP RAS Pump Replacement 10643 R&R 57,136 ------57,136 94 River Oaks AWWTP RAS Pump Replacement 10643 R&R 84,649 ------84,649 95 River Oaks AWWTP RAS Pump Replacement 10643 R&R 63,765 ------63,765

`JNRR 96 River Oaks AWWTP RAS Pump Replacement 10643 Fund10 619,561 ------619,561 Page 3 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

97 River Oaks AWWTP RAS Pump Replacement 10643 Fund10 45,673 ------45,673 98 Sydney/Dover Reclaimed Water Reservoir 10644 Fund10 ------25,000 25,000 99 Sydney/Dover Reclaimed Water Reservoir 10644 Fund10 ------4,725,000 4,725,000 100 Sydney/Dover Reclaimed Water Reservoir 10644 Fund10 ------250,000 250,000 101 Lumsden Trace Reclaimed Water Infrastructure Unit (RWIU) 10645 MiscCash 27,000 ------27,000 102 Lumsden Trace Reclaimed Water Infrastructure Unit (RWIU) 10645 MiscCash 14,420 ------14,420 103 Lumsden Trace Reclaimed Water Infrastructure Unit (RWIU) 10645 MiscCash 180,726 ------180,726 104 Lumsden Trace Reclaimed Water Infrastructure Unit (RWIU) 10645 MiscCash 10,044 ------10,044 105 Manhole Inspection & Rehabilitation Program 10744 R&R - - - - 800,000 - - 800,000 106 Manhole Inspection & Rehabilitation Program 10744 Debt1SNe 100,000 800,000 800,000 800,000 - - - 2,500,000 107 Manhole Inspection & Rehabilitation Program 10744 Fund10 900,000 ------900,000 108 Manhole Inspection & Rehabilitation Program 10744 Fund10 407,397 ------407,397 109 Manhole Inspection & Rehabilitation Program 10744 Fund10 409,847 ------409,847 110 Manhole Inspection & Rehabilitation Program 10744 Fund10 298,401 ------298,401 111 Regional Wastewater Treatment Plant R&R - Master Project 10745 Debt1SNe - 2,000,000 3,000,000 2,500,000 - - - 7,500,000 112 Regional Wastewater Treatment Plant R&R - Master Project 10745 R&R 316,686 ------316,686 113 Regional Wastewater Treatment Plant R&R - Master Project 10745 R&R 1,261,245 ------1,261,245 114 Regional Wastewater Treatment Plant R&R - Master Project 10745 R&R 85,648 ------85,648 115 Regional Wastewater Treatment Plant R&R - Master Project 10745 R&R - 1,000,000 - 500,000 3,000,000 3,000,000 3,000,000 10,500,000 116 Regional Wastewater Treatment Plant R&R - Master Project 10745 Fund10 15,084 ------15,084 117 Regional Wastewater Treatment Plant R&R - Master Project 10745 Fund10 1,497,262 ------1,497,262 118 Regional Wastewater Treatment Plant R&R - Master Project 10745 Fund10 185,843 ------185,843 119 Regional Wastewater Treatment Plant R&R - Master Project 10745 Fund10 450,000 ------450,000 120 Wastewater Slip Lining - Master Project 10750 R&R 572,147 970,000 1,800,000 1,800,000 1,800,000 - - 6,942,147 121 Wastewater Slip Lining - Master Project 10750 R&R 204,336 200,000 200,000 200,000 200,000 - - 1,004,336 122 Wastewater Slip Lining - Master Project 10750 Fund10 353,796 ------353,796 123 Wastewater Slip Lining - Master Project 10750 Fund10 195,036 ------195,036 124 Non-Urgent Facility R&R -Fare Account 10753 Fund10 - - - 500,000 - - - 500,000 125 Non-Urgent Facility R&R -Fare Account 10753 Fund10 - - 500,000 - - - - 500,000 126 NW Class A Sludge Processing Facility 10759 R&R 261,496 ------261,496 127 NW Class A Sludge Processing Facility 10759 R&R 1,269 ------1,269 128 NW Class A Sludge Processing Facility 10759 Fund10 116,906 ------116,906 129 NW Class A Sludge Processing Facility 10759 Fund10 87,616 ------87,616 130 Low Pressure Sewer System (LPSS) - Master Project 10768 Debt1SE - 650,000 750,000 269,065 - - - 1,669,065 131 Low Pressure Sewer System (LPSS) - Master Project 10768 R&R 657,125 140,000 - 50,000 650,000 650,000 650,000 2,797,125 132 Low Pressure Sewer System (LPSS) - Master Project 10768 R&R 72,401 100,000 - 100,000 100,000 100,000 100,000 572,401 133 Low Pressure Sewer System (LPSS) - Master Project 10768 Fund10 479,550 510,000 650,000 650,000 650,000 650,000 650,000 4,239,550 134 Low Pressure Sewer System (LPSS) - Master Project 10768 Fund10 294,946 100,000 100,000 100,000 100,000 100,000 100,000 894,946 135 Northwest Wastewater Regional WRF Plant Expansion 5 MGD to 10 MGD 10769 R&R (267) ------(267) 136 Northwest Wastewater Regional WRF Plant Expansion 5 MGD to 10 MGD 10769 Fund10 1,994,612 ------1,994,612 137 Northwest Wastewater Regional WRF Plant Expansion 5 MGD to 10 MGD 10769 WWCAP 318,831 ------318,831 138 Chelsea Pump Station Replacement 10771 R&R 396,083 ------396,083 139 Falkenburg Wastewater Treatment Plant Expansion 9 MGD to 12 MGD 10772 Fund10 559,637 ------559,637 140 River Oaks Wastewater Treatment Plant Switch Gear Replacement 10774 R&R 479,513 ------479,513 141 Valrico Wastewater Treatment Plant Ultra-Violet Disinfection 10778 Fund10 708,516 ------708,516 142 Carrollwood / Dale Mabry Reclaimed Water Pump Station Replacement 10782 Fund10 277,064 ------277,064 143 Valrico Reclaimed Water Pump Station Replacement 10783 Fund10 (18,183) ------(18,183) 144 Falkenburg Wastewater Treatment Plant Ultra-Violet Disinfection 10784 Fund10 251,944 ------251,944 145 Comanche Avenue Partial Force Main Replacement 10798 R&R 36,471 ------36,471

`JNRS 146 Comanche Avenue Partial Force Main Replacement 10798 R&R 250,341 ------250,341 Page 4 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

147 Comanche Avenue Partial Force Main Replacement 10798 R&R 6,598 ------6,598 148 Supervisory Control & Acquisition Of Data For Pump Stations Phase II 10794 Fund10 617,253 ------617,253 149 Supervisory Control & Acquisition Of Data For Pump Stations Phase II 10794 Fund10 - - - 1,619,000 - - - 1,619,000 150 Supervisory Control & Acquisition Of Data For Pump Stations Phase II 10794 Debt1SNe - - 868,000 11,132,000 - - - 12,000,000 151 Reclaimed Water Pump Station Refurbishment Master Project 10795 R&R 156,411 80,000 - - 80,000 80,000 80,000 476,411 152 Reclaimed Water Pump Station Refurbishment Master Project 10795 R&R 69,080 20,000 - - 20,000 20,000 20,000 149,080 153 Reclaimed Water Pump Station Refurbishment Master Project 10795 R&R 34,405 ------34,405 154 Reclaimed Water Pump Station Refurbishment Master Project 10795 Fund10 1,220 ------1,220 155 Reclaimed Water Pump Station Refurbishment Master Project 10795 Fund10 39,929 ------39,929 156 Reclaimed Water Pump Station Refurbishment Master Project 10795 Fund10 24,081 ------24,081 157 Reclaimed Water Pump Station Refurbishment Master Project 10795 Debt1RWNe - - 100,000 100,000 - - - 200,000 158 JPA Causeway Blvd Utility Relocation 10796 Fund10 2,449 ------2,449 159 JPA Causeway Blvd Utility Relocation 10796 Fund10 331,661 ------331,661 160 JPA Causeway Blvd Utility Relocation 10796 Fund10 29,653 ------29,653 161 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 R&R (4,038) ------(4,038) 162 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 R&R 87,067 ------87,067 163 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 R&R 831 ------831 164 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 Fund10 9,390 ------9,390 165 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 Fund10 3,000 3,000 3,000 3,000 3,000 3,000 3,000 21,000 166 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 Fund10 94,252 5,000 5,000 5,000 5,000 5,000 5,000 124,252 167 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 Fund10 229,682 169,000 169,000 169,000 169,000 169,000 169,000 1,243,682 168 RWTM Ext. To New Developments And RWIU'S-Master Project 19017 Fund10 47,330 23,000 23,000 23,000 23,000 23,000 23,000 185,330 169 County-wide Wastewater Pump Station Telemetry System 19125 Fund10 3,682,057 ------3,682,057 170 Reclaimed Water Main R&R - Fare Account 19656 Fund10 - 205,000 195,000 - - - - 400,000 171 Reclaimed Water Main R&R - Fare Account 19656 Fund10 - 65,000 65,000 - - - - 130,000 172 Reclaimed Water Pump Station R&R - Fare Account 19657 R&R - - 26,000 - - - - 26,000 173 Reclaimed Water Pump Station R&R - Fare Account 19657 R&R - - 48,000 - - - - 48,000 174 Reclaimed Water Pump Station R&R - Fare Account 19657 R&R - - 259,000 - - - - 259,000 175 Reclaimed Water Pump Station R&R - Fare Account 19657 R&R - - 37,000 - - - - 37,000 176 Reclaimed Water Pump Station R&R - Fare Account 19657 Fund10 - 26,000 - - - - - 26,000 177 Reclaimed Water Pump Station R&R - Fare Account 19657 Fund10 - 48,000 - - - - - 48,000 178 Reclaimed Water Pump Station R&R - Fare Account 19657 Fund10 - 259,000 - - - - - 259,000 179 Reclaimed Water Pump Station R&R - Fare Account 19657 Fund10 - 37,000 - - - - - 37,000 180 Water Treatment R&R -Master Project 30116 R&R - 77,000 - - 77,000 77,000 77,000 308,000 181 Water Treatment R&R -Master Project 30116 R&R 281,033 155,000 - - 155,000 155,000 155,000 901,033 182 Water Treatment R&R -Master Project 30116 R&R 2,369,136 127,000 - - 627,000 627,000 627,000 4,377,136 183 Water Treatment R&R -Master Project 30116 R&R 645,458 141,000 - - 141,000 141,000 141,000 1,209,458 184 Water Treatment R&R -Master Project 30116 Debt1WNe - 500,000 1,000,000 500,000 - - - 2,000,000 185 Linebaugh Avenue 12 Inch Water Transmission Main 31158 Fund10 51,202 ------51,202 186 Linebaugh Avenue 12 Inch Water Transmission Main 31158 Fund10 94,274 ------94,274 187 Linebaugh Avenue 12 Inch Water Transmission Main 31158 Fund10 200,860 ------200,860 188 Linebaugh Avenue 12 Inch Water Transmission Main 31158 Fund10 51,697 ------51,697 189 Utility Relocation - Master Project 31945 R&R 690,978 1,000,000 1,000,000 - - - - 2,690,978 190 Utility Relocation - Master Project 31945 R&R - - - - - 1,000,000 1,000,000 2,000,000 191 Utility Relocation - Master Project 31945 Fund10 5,966,729 ------5,966,729 192 Utility Relocation - Master Project 31945 Fund10 - - 3,000,000 1,000,000 - - - 4,000,000 193 Utility Relocation - Master Project 31945 Fund10 - - - - 1,000,000 - - 1,000,000 194 Central Hills Water Treatment Fare Account 31952 Fund10 291,480 ------291,480 195 Central Hills Water Treatment Fare Account 31952 Fund10 3,372,987 ------3,372,987

`JNRT 196 Central Hills Water Treatment Fare Account 31952 WCAP 446,224 ------446,224 Page 5 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

197 Fire Flow Deficiency Master Project 31957 Fund10 1,050,446 ------1,050,446 198 Fire Flow Deficiency Master Project 31957 Fund10 549,554 ------549,554 199 Fire Flow Deficiency Master Project 31957 Debt1WNe - 1,750,000 1,750,000 - - - - 3,500,000 200 Fire Flow Deficiency Master Project 31957 Fund10 1,337,071 300,000 300,000 - - - - 1,937,071 201 Fire Flow Deficiency Master Project 31957 Fund10 1,782,539 ------1,782,539 202 Fire Flow Deficiency Master Project 31957 Fund10 50,000 ------50,000 203 Causeway Blvd Joint Project Agreement With FDOT For Water/Sewer Line Extensions 31958 Fund10 772,897 ------772,897 204 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 R&R 754,419 ------754,419 205 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 Debt1WNe 2,400,000 ------2,400,000 206 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 R&R 362,929 ------362,929 207 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 Fund10 678,000 ------678,000 208 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 Debt1WE 800,000 ------800,000 209 Lithia Water Treatment Plant Auxiliary Power Improvements 31960 Fund10 49,851 ------49,851 210 Lake Park Water Treatment Plant Chemical Storage Roof Replacement 31961 R&R 253,694 ------253,694 211 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Fund10 50,000 ------50,000 212 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Fund10 846,000 ------846,000 213 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Fund10 62,038 ------62,038 214 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Fund10 47,425 2,000,000 - - - - - 2,047,425 215 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Debt1WNE - 50,000 - - - - - 50,000 216 Lithia Water Treatment Plant Hydrogen Sulfide Treatment Integration 31963 Debt1WNE - 950,000 - - - - - 950,000 217 South County Potable Water Repump Station 31964 Fund10 309,142 ------309,142 218 South County Potable Water Repump Station 31964 Debt1WE 41,709 ------41,709 219 South County Potable Water Repump Station 31964 Debt1WE 838,546 ------838,546 220 South County Potable Water Repump Station 31964 Debt1WE 69,745 ------69,745 221 South County Potable Water Repump Station 31964 Debt1WE 5,550,000 ------5,550,000 222 Falkenburg Rd. AWWTP Sludge Dewatering Upgrade 10167 Fund10 - 250,000 - - - - - 250,000 223 Falkenburg Rd. AWWTP Sludge Dewatering Upgrade 10167 Debt1SE - 900,000 - - - - - 900,000 224 Falkenburg Rd. AWWTP Sludge Dewatering Upgrade 10167 Debt1SNe - - 5,600,000 - - - - 5,600,000 225 Falkenburg Rd. AWWTP Sludge Dewatering Upgrade 10167 Fund10 - 250,000 - - - - - 250,000 226 Sun City Mobile Home Park Water Treatment Plant Rehabilitation 31965 SubR&R - 55,000 - - - - - 55,000 227 Sun City Mobile Home Park Water Treatment Plant Rehabilitation 31965 SubR&R - 165,000 - - - - - 165,000 228 Sun City Mobile Home Park Water Treatment Plant Rehabilitation 31965 SubR&R - 825,000 - - - - - 825,000 229 Sun City Mobile Home Park Water Treatment Plant Rehabilitation 31965 SubR&R - 55,000 - - - - - 55,000 230 Dale Mabry AWWTP Headworks Rehabilitation 10168 Fund10 - - 125,824 - - - - 125,824 231 Dale Mabry AWWTP Headworks Rehabilitation 10168 Fund10 - - 174,176 - - - - 174,176 232 Dale Mabry AWWTP Headworks Rehabilitation 10168 Debt1SNe - - 300,000 - - - - 300,000 233 Dale Mabry AWWTP Headworks Rehabilitation 10168 Debt1SNe - - - 1,700,000 - - - 1,700,000 234 Dale Mabry AWWTP Headworks Rehabilitation 10168 R&R - - - 700,000 - - - 700,000 235 4 Wheel Drive Water System Replacement 31966 SubR&R - 25,000 - - - - - 25,000 236 4 Wheel Drive Water System Replacement 31966 SubR&R - 75,000 - - - - - 75,000 237 4 Wheel Drive Water System Replacement 31966 SubR&R - 375,000 - - - - - 375,000 238 4 Wheel Drive Water System Replacement 31966 SubR&R - 25,000 - - - - - 25,000 239 Memorial Highway Force Main Replacement 10169 Fund10 - 242,000 - - - - - 242,000 240 Memorial Highway Force Main Replacement 10169 Fund10 - 727,000 - - - - - 727,000 241 Memorial Highway Force Main Replacement 10169 Fund10 - 2,881,000 - - - - - 2,881,000 242 Memorial Highway Force Main Replacement 10169 Fund10 - 1,000,000 - - - - - 1,000,000 243 Northwest Wastewater Treatment Plant Biosolids Gravity Belt Thickener Rehab. 10170 Fund10 - 40,000 - - - - - 40,000 244 Northwest Wastewater Treatment Plant Biosolids Gravity Belt Thickener Rehab. 10170 Fund10 - 120,000 - - - - - 120,000 245 Northwest Wastewater Treatment Plant Biosolids Gravity Belt Thickener Rehab. 10170 Debt1SNe - - 500,000 - - - - 500,000

`JNRU 246 Northwest Wastewater Treatment Plant Biosolids Gravity Belt Thickener Rehab. 10170 Fund10 - - 140,000 - - - - 140,000 Page 6 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

247 County-wide Wastewater Transmission Main / Force Main Renewals & Replacement 10171 Debt1SNe - - 1,000,000 - - - - 1,000,000 248 County-wide Wastewater Transmission Main / Force Main Renewals & Replacement 10171 R&R - 1,000,000 - 1,000,000 1,000,000 1,000,000 1,000,000 5,000,000 249 Countywide Fire Hydrant Replacement Project 31968 R&R - 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 6,000,000 250 Dale Mabry AWWTP Filter Feed Screw Pump Rehabilitation 10172 SubR&R - 50,000 - - - - - 50,000 251 Dale Mabry AWWTP Filter Feed Screw Pump Rehabilitation 10172 SubR&R - 150,000 - - - - - 150,000 252 Dale Mabry AWWTP Filter Feed Screw Pump Rehabilitation 10172 SubR&R - 750,000 - - - - - 750,000 253 Dale Mabry AWWTP Filter Feed Screw Pump Rehabilitation 10172 SubR&R - 50,000 - - - - - 50,000 254 Van Dyke WWTP Headworks Rehabilitation 10173 Fund10 - - 125,000 - - - - 125,000 255 Van Dyke WWTP Headworks Rehabilitation 10173 Fund10 - - 175,000 - - - - 175,000 256 Van Dyke WWTP Headworks Rehabilitation 10173 Debt1SNe - - 200,000 1,700,000 - - - 1,900,000 257 Van Dyke WWTP Headworks Rehabilitation 10173 Debt1SNe - - - 300,000 - - - 300,000 258 Sugarmill Wastewater Pump Station Replacement / Rehabilitation 10174 SubR&R - 29,000 - - - - - 29,000 259 Sugarmill Wastewater Pump Station Replacement / Rehabilitation 10174 SubR&R - 86,000 - - - - - 86,000 260 Sugarmill Wastewater Pump Station Replacement / Rehabilitation 10174 SubR&R - 431,000 - - - - - 431,000 261 Sugarmill Wastewater Pump Station Replacement / Rehabilitation 10174 SubR&R - 29,000 - - - - - 29,000 262 Dawn View Wastewater Pump Station Replacement / Rehabilitation 10175 SubR&R - 50,000 - - - - - 50,000 263 Dawn View Wastewater Pump Station Replacement / Rehabilitation 10175 SubR&R - 150,000 - - - - - 150,000 264 Dawn View Wastewater Pump Station Replacement / Rehabilitation 10175 SubR&R - 750,000 - - - - - 750,000 265 Dawn View Wastewater Pump Station Replacement / Rehabilitation 10175 SubR&R - 50,000 - - - - - 50,000 266 South County Water RPS Water Transmission Main To 19th Ave. 31969 Fund10 - - - - 143,000 - - 143,000 267 South County Water RPS Water Transmission Main To 19th Ave. 31969 Fund10 - - - - 427,000 - - 427,000 268 South County Water RPS Water Transmission Main To 19th Ave. 31969 R&R - - - - - 2,138,000 - 2,138,000 269 South County Water RPS Water Transmission Main To 19th Ave. 31969 R&R - - - - - 142,000 - 142,000 270 Comanche Wastewater Pump Station Replacement / Rehabilitation 10176 Debt1SNe - - - 30,000 - - - 30,000 271 Comanche Wastewater Pump Station Replacement / Rehabilitation 10176 Debt1SNe - - - 90,000 - - - 90,000 272 Comanche Wastewater Pump Station Replacement / Rehabilitation 10176 Debt1SNe - - - 130,000 - - - 130,000 273 Comanche Wastewater Pump Station Replacement / Rehabilitation 10176 Fund10 - - - 350,000 - - - 350,000 274 Boyette Road Force Main Phase III 10177 R&R - 300,000 - - - - - 300,000 275 Boyette Road Force Main Phase III 10177 Debt1SE - 900,000 - - - - - 900,000 276 Boyette Road Force Main Phase III 10177 Debt1SE - 3,022,459 - - - - - 3,022,459 277 Boyette Road Force Main Phase III 10177 Debt1SE - 300,000 - - - - - 300,000 278 Boyette Road Force Main Phase III 10177 Fund10 - - - 200,000 - - - 200,000 279 Boyette Road Force Main Phase III 10177 Debt1SE - - - 1,277,541 - - - 1,277,541 280 Valrico AWWTP Potable Well Replacement 31970 Fund10 - 13,000 - - - - - 13,000 281 Valrico AWWTP Potable Well Replacement 31970 Fund10 - 38,000 - - - - - 38,000 282 Valrico AWWTP Potable Well Replacement 31970 Fund10 - 188,000 - - - - - 188,000 283 Valrico AWWTP Potable Well Replacement 31970 Fund10 - 11,000 - - - - - 11,000 284 Valrico AWWTP Sprayfield Rehabilitation 10178 Fund10 - 55,000 - - - - - 55,000 285 Valrico AWWTP Sprayfield Rehabilitation 10178 Fund10 - 145,000 - - - - - 145,000 286 Valrico AWWTP Sprayfield Rehabilitation 10178 Debt1SNe - 845,000 - - - - - 845,000 287 Valrico AWWTP Sprayfield Rehabilitation 10178 Debt1SNe - 55,000 - - - - - 55,000 288 County-wide Wastewater Treatment Plant Security Project 10179 Fund10 - - - - - 500,000 500,000 1,000,000 289 County-wide Wastewater Treatment Plant Security Project 10179 Fund10 - - - 500,000 500,000 - - 1,000,000 290 Williams Road Water Transmission Main (US 92 To Bartotolotti Loop) 31971 Debt1WE - - - 65,000 - - - 65,000 291 Williams Road Water Transmission Main (US 92 To Bartotolotti Loop) 31971 Debt1WE - - - 195,000 - - - 195,000 292 Williams Road Water Transmission Main (US 92 To Bartotolotti Loop) 31971 Debt1WE - - - 975,000 - - - 975,000 293 Williams Road Water Transmission Main (US 92 To Bartotolotti Loop) 31971 Debt1WE - - - 65,000 - - - 65,000 294 Mitchell Master Wastewater Pump Station Rehabilitation 10180 Fund10 - - - - 90,000 - - 90,000 295 Mitchell Master Wastewater Pump Station Rehabilitation 10180 Fund10 - - - - 270,000 - - 270,000

`JNRV 296 Mitchell Master Wastewater Pump Station Rehabilitation 10180 Fund10 - - - - - 1,350,000 - 1,350,000 Page 7 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

297 Mitchell Master Wastewater Pump Station Rehabilitation 10180 Fund10 - - - - - 90,000 - 90,000 298 82nd Ave Master Wastewater Pump Station Rehabilitation 10181 Fund10 - - - - - 55,000 - 55,000 299 83rd Ave Master Wastewater Pump Station Rehabilitation 10181 Fund10 - - - - - 165,000 - 165,000 300 84th Ave Master Wastewater Pump Station Rehabilitation 10181 Fund10 - - - - - 825,000 - 825,000 301 85th Ave Master Wastewater Pump Station Rehabilitation 10181 Fund10 - - - - - 55,000 - 55,000 302 Stall Road Master Wastewater Pump Station Rehabilitation 10182 Fund10 - - - - 25,000 - - 25,000 303 Stall Road Master Wastewater Pump Station Rehabilitation 10182 Fund10 - - - - 15,000 - - 15,000 304 Stall Road Master Wastewater Pump Station Rehabilitation 10182 Fund10 - - - - 120,000 - - 120,000 305 Stall Road Master Wastewater Pump Station Rehabilitation 10182 Fund10 - - - - - 600,000 - 600,000 306 Stall Road Master Wastewater Pump Station Rehabilitation 10182 Fund10 - - - - - 40,000 - 40,000 307 Dale Mabry Wastewater Treatment Plant Clarifiers 1-5 Rebuild 10183 Fund10 - - - - - 250,000 - 250,000 308 Dale Mabry Wastewater Treatment Plant Clarifiers 1-5 Rebuild 10183 Fund10 - - - - - 750,000 - 750,000 309 Dale Mabry Wastewater Treatment Plant Clarifiers 1-5 Rebuild 10183 Fund10 - - - - - 3,750,000 - 3,750,000 310 Dale Mabry Wastewater Treatment Plant Clarifiers 1-5 Rebuild 10183 Fund10 - - - - - 250,000 - 250,000 311 Premiere Drive Bldg Rehab / Hardening 31972 SubR&R - 50,000 - - - - - 50,000 312 Premiere Drive Bldg Rehab / Hardening 31972 SubR&R - 150,000 - - - - - 150,000 313 Premiere Drive Bldg Rehab / Hardening 31972 SubR&R - 750,000 - - - - - 750,000 314 Premiere Drive Bldg Rehab / Hardening 31972 SubR&R - 50,000 - - - - - 50,000 315 South County Regional AWWTF Class A Biosolids Facility 10184 Fund10 - - - - - 2,000,000 - 2,000,000 316 South County Regional AWWTF Class A Biosolids Facility 10184 Fund10 - - - - - 500,000 - 500,000 317 South County Regional AWWTF Class A Biosolids Facility 10184 Debt2SE - - - - - 6,000,000 - 6,000,000 318 South County Regional AWWTF Class A Biosolids Facility 10184 Debt2SE - - - - - 7,500,000 - 7,500,000 319 South County Regional AWWTF Class A Biosolids Facility 10184 Fund10 ------24,000,000 24,000,000 320 Valrico AWWTP 5 MG RW Storage Tank Rehabilitation 10191 Fund10 - - - 100,000 - - - 100,000 321 Valrico AWWTP 5 MG RW Storage Tank Rehabilitation 10191 Debt1SNe - - - 100,000 - - - 100,000 322 Valrico AWWTP 5 MG RW Storage Tank Rehabilitation 10191 Debt1SNe - - - 750,000 - - - 750,000 323 Valrico AWWTP 5 MG RW Storage Tank Rehabilitation 10191 Debt1SNe - - - 50,000 - - - 50,000 324 State Road 60 Water Transmission Main (Miller Rd. To Valrico Rd.) 31973 Debt1WNe - - - 18,000 - - - 18,000 325 State Road 60 Water Transmission Main (Miller Rd. To Valrico Rd.) 31973 Debt1WNe - - - 53,000 - - - 53,000 326 State Road 60 Water Transmission Main (Miller Rd. To Valrico Rd.) 31973 Debt1WNe - - - 262,000 - - - 262,000 327 State Road 60 Water Transmission Main (Miller Rd. To Valrico Rd.) 31973 Debt1WNe - - - 17,000 - - - 17,000 328 Dale Mabry AWWTP Ultra-Violet Disinfection Conversion 10185 Fund10 ------350,000 350,000 329 Dale Mabry AWWTP Ultra-Violet Disinfection Conversion 10185 Fund10 ------150,000 150,000 330 Westchase HDPE Reclaimed Water Transmission Main Replacement 10192 Fund10 - - - - - 85,000 - 85,000 331 Westchase HDPE Reclaimed Water Transmission Main Replacement 10192 Fund10 - - - - - 255,000 - 255,000 332 Westchase HDPE Reclaimed Water Transmission Main Replacement 10192 Fund10 - - - - - 1,275,000 - 1,275,000 333 Westchase HDPE Reclaimed Water Transmission Main Replacement 10192 Fund10 - - - - - 85,000 - 85,000 334 Valrico AWWTP Centrifuge Additions 10186 Debt2SE - - - - - 225,000 - 225,000 335 Valrico AWWTP Centrifuge Additions 10186 Debt2SE - - - - - 675,000 - 675,000 336 Valrico AWWTP Centrifuge Additions 10186 Debt2SE - - - - - 3,375,000 - 3,375,000 337 Valrico AWWTP Centrifuge Additions 10186 Debt2SE - - - - - 225,000 - 225,000 338 Swindon Road Pump Station Phase II 10187 Fund10 - - - 50,000 - - - 50,000 339 Swindon Road Pump Station Phase II 10187 Fund10 - - - 141,000 - - - 141,000 340 Swindon Road Pump Station Phase II 10187 Fund10 - - - 712,000 - - - 712,000 341 Swindon Road Pump Station Phase II 10187 Fund10 - - - 47,000 - - - 47,000 342 Dale Mabry AWWTP Emergency Power Project 10188 Fund10 - - - - - 75,000 - 75,000 343 Dale Mabry AWWTP Emergency Power Project 10188 Fund10 - - - - - 225,000 - 225,000 344 Dale Mabry AWWTP Emergency Power Project 10188 Fund10 - - - - - 1,125,000 - 1,125,000 345 Dale Mabry AWWTP Emergency Power Project 10188 Fund10 - - - - - 75,000 - 75,000

`JNSM 346 Fawn Ridge Chemical Trim Project 31974 Fund10 - 75,000 - - - - - 75,000 Page 8 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

347 Fawn Ridge Chemical Trim Project 31974 Fund10 - 225,000 - - - - - 225,000 348 Fawn Ridge Chemical Trim Project 31974 Fund10 - 1,125,000 - - - - - 1,125,000 349 Fawn Ridge Chemical Trim Project 31974 Fund10 - 75,000 - - - - - 75,000 350 Van Dyke Wastewater Treatment Plant WWTP Clarifier & Aerator Rehabilitation 10193 Fund10 - 921,000 - - - - - 921,000 351 Van Dyke Wastewater Treatment Plant WWTP Clarifier & Aerator Rehabilitation 10193 Fund10 - 400,000 - - - - - 400,000 352 Van Dyke Wastewater Treatment Plant WWTP Clarifier & Aerator Rehabilitation 10193 Fund10 - 1,479,000 - - - - - 1,479,000 353 Van Dyke Wastewater Treatment Plant WWTP Clarifier & Aerator Rehabilitation 10193 Fund10 - 100,000 - - - - - 100,000 354 Clay Ave.Master Wastewater Pump Station Rehabilitation 10194 R&R - 158,000 - - - - - 158,000 355 Clay Ave.Master Wastewater Pump Station Rehabilitation 10194 R&R - 792,000 - - - - - 792,000 356 Clay Ave.Master Wastewater Pump Station Rehabilitation 10194 R&R - 50,000 - - - - - 50,000 357 Chemical Feed System Rehabilitation (Dale Mabry / Van Dyke) 10195 R&R - 500,000 - - - - - 500,000 358 Chemical Feed System Rehabilitation (Dale Mabry / Van Dyke) 10195 Fund10 - 100,000 - - - - - 100,000 359 Chemical Feed System Rehabilitation (Dale Mabry / Van Dyke) 10195 Fund10 - 1,075,000 - - - - - 1,075,000 360 Chemical Feed System Rehabilitation (Dale Mabry / Van Dyke) 10195 Fund10 - 25,000 - - - - - 25,000 361 Golf and SEA W.W. Pump Stations #1 and #2 (Conversion to Gravity Sewer) 10197 Debt1SNe - - 25,000 - - - - 25,000 362 Golf and SEA W.W. Pump Stations #1 and #2 (Conversion to Gravity Sewer) 10197 Debt1SNe - - 300,000 - - - - 300,000 363 Golf and SEA W.W. Pump Stations #1 and #2 (Conversion to Gravity Sewer) 10197 Debt1SNe - - 1,150,000 - - - - 1,150,000 364 Golf and SEA W.W. Pump Stations #1 and #2 (Conversion to Gravity Sewer) 10197 Debt1SNe - - 25,000 - - - - 25,000 365 South Hillsborough Aquifer Recharge Program (Sharp) 10198 Debt1RWE - - 1,750,000 - - - - 1,750,000 366 South Hillsborough Aquifer Recharge Program (Sharp) 10198 Debt1RWNe - - 1,750,000 - - - - 1,750,000 367 River Oaks AWWTP Headworks Rehabilitation 10199 Debt1SNe - - 25,000 - - - - 25,000 368 River Oaks AWWTP Headworks Rehabilitation 10199 Debt1SNe - - 400,000 - - - - 400,000 369 River Oaks AWWTP Headworks Rehabilitation 10199 Debt1SNe - - 2,000,000 - - - - 2,000,000 370 River Oaks AWWTP Headworks Rehabilitation 10199 Debt1SNe - - 75,000 - - - - 75,000 371 BSOC Command / Emergency Operations Center 31978 Debt1WNe - - 50,000 - - - - 50,000 372 BSOC Command / Emergency Operations Center 31978 Debt1WNe - - 600,000 - - - - 600,000 373 BSOC Command / Emergency Operations Center 31978 Debt1WNe - - 3,550,000 - - - - 3,550,000 374 BSOC Command / Emergency Operations Center 31978 Debt1WNe - - 50,000 - - - - 50,000 375 Valrico AWWTP RAS Pump Replacement 10200 Debt1SNe - - - 20,000 - - - 20,000 376 Valrico AWWTP RAS Pump Replacement 10200 Debt1SNe - - - 80,000 - - - 80,000 377 Valrico AWWTP RAS Pump Replacement 10200 Debt1SNe - - - 425,000 - - - 425,000 378 Valrico AWWTP RAS Pump Replacement 10200 Debt1SNe - - - 25,000 - - - 25,000 379 Brushy Creek Pump Station Rehabilitation 10202 Debt1SNe - - 50,000 - - - - 50,000 380 Brushy Creek Pump Station Rehabilitation 10202 Debt1SNe - - 300,000 - - - - 300,000 381 Brushy Creek Pump Station Rehabilitation 10202 Debt1SNe - - 1,600,000 - - - - 1,600,000 382 Brushy Creek Pump Station Rehabilitation 10202 Debt1SNe - - 50,000 - - - - 50,000 383 River Oaks AWWTP Chemical Feed System Rehabilitation 10203 Fund10 - - - 25,000 - - - 25,000 384 River Oaks AWWTP Chemical Feed System Rehabilitation 10203 Fund10 - - - 250,000 - - - 250,000 385 River Oaks AWWTP Chemical Feed System Rehabilitation 10203 Fund10 - - - 1,000,000 - - - 1,000,000 386 River Oaks AWWTP Chemical Feed System Rehabilitation 10203 Fund10 - - - 25,000 - - - 25,000 387 Del Webb South Pump Station Rehabilitation 10206 Debt1SNe - - - 25,000 - - - 25,000 388 Del Webb South Pump Station Rehabilitation 10206 Debt1SNe - - - 300,000 - - - 300,000 389 Del Webb South Pump Station Rehabilitation 10206 Debt1SNe - - - 1,400,000 - - - 1,400,000 390 Del Webb South Pump Station Rehabilitation 10206 Debt1SNe - - - 25,000 - - - 25,000 391 Manors of Crystal Lakes and Franchise Interconnection 31980 Debt1WNe - - - 1,250,000 - - - 1,250,000 392 Manors of Crystal Lakes and Franchise Interconnection 31980 Debt1WE - - - 1,250,000 - - - 1,250,000 393 Old Hillsborough Ave. Water Transmission Main Replacement 31976 Debt1WNe - - - 25,000 - - - 25,000 394 Old Hillsborough Ave. Water Transmission Main Replacement 31976 Debt1WNe - - - 75,000 - - - 75,000 395 Old Hillsborough Ave. Water Transmission Main Replacement 31976 Debt1WNe - - - 375,000 - - - 375,000

`JNSN 396 Old Hillsborough Ave. Water Transmission Main Replacement 31976 Debt1WNe - - - 25,000 - - - 25,000 Page 9 of 9

Table 8

Hillsborough County Water Resource Division

Projected Capital Improvement Program for the Forecast Period - Appropriations Basis

Line CIP Ref. Funding For the Fiscal Year Ending September 30, (Dollars) No. Description Number Source Prior Year 2010 2011 2012 2013 2014 2015 Totals

397 County-wide Non-urgent Facility R&R (Master Project) 31979 R&R - - 150,000 150,000 - - - 300,000 398 County-wide Non-urgent Facility R&R (Master Project) 31979 R&R - - 150,000 150,000 - - - 300,000 399 County-wide Non-urgent Facility R&R (Master Project) 31979 R&R - - - - 150,000 150,000 150,000 450,000 400 County-wide Non-urgent Facility R&R (Master Project) 31979 R&R - - - - 150,000 150,000 150,000 450,000 401 County-wide Transmission / Distribution Line Renewals and Replacements 31977 Debt1WNe - - 1,000,000 752,239 - - - 1,752,239 402 County-wide Transmission / Distribution Line Renewals and Replacements 31977 R&R - - - 247,761 1,000,000 1,000,000 1,000,000 3,247,761 403 Central Hillborough WTP Elect Power Supply - EECBG5 (not on CIP list, added) 31975 GrantR - 1,250,000 - - - - - 1,250,000 404 Central Hillborough WTP Elect Power Supply - EECBG5 (not on CIP list, added) 31975 Fund10 - 350,000 - - - - - 350,000 405 South Cty Regional AWWTF Sludge Process Conversion - EECBG5 (not on CIP list, added)10196 GrantR - 2,450,000 - - - - - 2,450,000 406 South Cty Regional AWWTF Sludge Process Conversion - EECBG5 (not on CIP list, added)10196 Fund10 - 400,000 - - - - - 400,000

407 Total Capital Improvement Projects $ 111,897,039 $ 57,826,459 $ 50,560,000 $ 63,328,541 $ 87,990,000 $ 51,010,000 $ 48,350,000 $ 470,962,039

408 Total Capital Expenditures $ 111,897,039 $ 59,957,907 $ 52,079,150 $ 65,813,544 $ 90,482,493 $ 53,051,523 $ 50,391,000 $ 483,672,656

Funding Sources: 409 Rate Revenues - Operating Reserves (Cash) Rev $ - $ 943,989 $ 283,326 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 5,227,315 410 Water Capacity / Impact Fees WCAP 446,224 ------446,224 411 Wastewater Capacity / Impact Fees WWCAP 318,831 ------318,831 412 General Purpose - Capital Expenditure Acct. Fund (Fund 10) Fund10 59,654,590 19,060,000 9,052,000 7,469,000 3,540,000 16,080,000 33,700,000 148,555,590 413 Outside Agency Grants - Replacement Projects GrantR - 3,700,000 - - - - - 3,700,000 414 Renewal and Replacement Account (Fund 007) R&R 18,520,204 11,205,459 7,105,824 7,913,699 17,942,493 17,971,523 15,691,000 96,350,202 415 Renewal and Replacement Account - Separate Subfund (Cone Ranch) (Fund 68) SubR&R 6,625,000 5,175,000 - - - - - 11,800,000 416 Miscellaneous Cash Balances MiscCash 232,190 ------232,190 417 Series 2010 Bonds - Expansion Projects - Water System Debt1WE 7,300,000 - - 2,550,000 - - - 9,850,000 418 Series 2010 Bonds - Expansion Projects - Wastewater System Debt1SE 11,800,000 9,923,459 2,770,000 17,846,606 - - - 42,340,065 419 Series 2010 Bonds - Expansion Projects - Reclaimed Water System Debt1RWE 2,250,000 - 1,750,000 - - - - 4,000,000 420 Series 2010 Bonds - Non-expansion Projects - Water System Debt1WNe 2,400,000 3,250,000 8,000,000 3,352,239 - - - 17,002,239 421 Series 2010 Bonds - Non-expansion Projects - Wastewater System Debt1SNe 100,000 6,700,000 21,268,000 25,582,000 - - - 53,650,000 422 Series 2010 Bonds - Non-expansion Projects - Reclaimed Water System Debt1RWNe 2,250,000 - 1,850,000 100,000 - - - 4,200,000 423 Series 2012 Bonds - Expansion Projects - Water System Debt2WE ------424 Series 2012 Bonds - Expansion Projects - Wastewater System Debt2SE - - - - 68,000,000 18,000,000 - 86,000,000 425 Series 2012 Bonds - Expansion Projects - Reclaimed Water System Debt2RWE ------426 Series 2012 Bonds - Non-expansion Projects - Water System Debt2WNe ------427 Series 2012 Bonds - Non-expansion Projects - Wastewater System Debt2SNe ------428 Series 2012 Bonds - Non-expansion Projects - Reclaimed Water System Debt2RWNe ------

429 Total Funding Sources $ 111,897,039 $ 59,957,907 $ 52,079,150 $ 65,813,544 $ 90,482,493 $ 53,051,523 $ 50,391,000 $ 483,672,656 `JNSO Page 1 of 2

Table 9

Hillsborough County Water Resource Division

Summary of Projected Expenses for the Forecast Period

Line 2010 2011 Escalation Fiscal Year Ending September 30, No. Description AsAdjusted AsAdjusted Reference 2012 2013 2014 2015

1 RegularPayExemptEmployees $ 905,679 $ 1,075,383 GeneralWages$ 1,096,891 $ 1,118,829 $ 1,141,206 $ 1,164,030 2 Regular Pay Classification Employees 22,281,390 30,262,933 GeneralWages 30,868,192 31,485,556 32,115,267 32,757,572 3 VacationPay 1,715,606 - General Wages - - - - 4 Sick Pay 1,022,379 - General Wages - - - - 5 Shift Pay 1,486,951 126,767 GeneralWages 129,302 131,888 134,526 137,217 6 Stand-By Pay 246,534 178,755 GeneralWages 182,330 185,977 189,697 193,491 7 Worker Comp Pay 241 - General Wages - - - - 8 Longevity Pay 70,800 72,200 GeneralWages 73,644 75,117 76,619 78,151 9 Employer Deferred Comp 240,331 277,429 GeneralWages 282,978 288,638 294,411 300,299 10 Cafeteria Plan 1,679,138 1,792,224 GeneralWages 1,828,068 1,864,629 1,901,922 1,939,960 11 Other Regular Pay 2,108,460 - OtherWages - - - - 12 Salaries Temporary Emp - - OtherWages - - - - 13 Overtime Pay 1,243,342 1,211,254 GeneralWages 1,235,479 1,260,189 1,285,393 1,311,101 14 Monthly Auto Allowance 7,080 7,080 Inf - CPI 7,200 7,315 7,447 7,611 15 OtherSpecialPay 7,438 - OtherWages - - - - 16 FICA/Medicare Taxes 2,343,753 2,664,847 GeneralWages 2,718,144 2,772,507 2,827,957 2,884,516 17 Florida Retirement 3,062,785 3,763,567 GeneralWages 3,838,838 3,915,615 3,993,927 4,073,806 18 Employee Medical Insurance 5,365,362 5,809,440 Insure 6,099,912 6,404,908 6,725,153 7,061,411 19 Employee Life Insurance 28,488 33,745 Inf - CPI 34,319 34,868 35,496 36,277 20 Disability Insurance 332,795 361,913 Insure 380,009 399,009 418,959 439,907 21 OPEBExpense - 212,400 GeneralWages 216,648 220,981 225,401 229,909 22 Worker's Compensation Assessments 944,728 944,728 GeneralWages 963,623 982,895 1,002,553 1,022,604 23 Unemployment Benefits 185,280 - General Wages - - - - 24 OPEBExpenses 185,280 - General Wages - - - - 25 Attrition - (2,259,543) General Wages (2,304,734) (2,350,829) (2,397,846) (2,445,803) 26 Furlough Days - - General Wages - - - - 27 Engineering Design 958,337 1,133,015 Inf-CPI 1,152,276 1,170,712 1,191,785 1,218,004 28 Medical Exam 10,020 3,651 Inf - CPI 3,713 3,772 3,840 3,924 29 Infectious Disease Program 3,832 10,373 Inf - CPI 10,549 10,718 10,911 11,151 30 Legal Services 24,070 8,000 Inf - CPI 8,136 8,266 8,415 8,600 31 Attorney Fees - 100,000 Inf - CPI 101,700 103,327 105,187 107,501 32 Data Processing Services - Information 1,170,754 1,451,119 Inf-CPI 1,475,788 1,499,401 1,526,390 1,559,971 33 Recording Expenses 21,510 25,700 Inf - CPI 26,137 26,555 27,033 27,628 34 Other Professional Services 773,546 624,350 Prof Serv 638,086 651,486 666,470 684,465 35 Other Professional Services - - Prof Serv - - - - 36 Accounting And Auditing 74,000 81,300 Prof Serv 83,089 84,834 86,785 89,128 37 Court Reporter Judicial - 2,200 Inf - CPI 2,237 2,273 2,314 2,365 38 Contractual - 5,635 Inf - CPI 5,731 5,823 5,928 6,058 39 Hazardous Waste Col/Disp 51,874 57,518 Prof Serv 58,783 60,017 61,397 63,055 40 Recycling 2,414 - Prof Serv - - - - 41 EffluentDisposal 1,511,910 984,904 WWChem 1,035,134 1,090,721 1,149,947 1,215,379 42 Building Demolition 150,000 375,000 Inf - CPI 381,375 387,477 394,452 403,130 43 Solid Waste Collection 161,190 219,084 Utilities 223,794 228,807 234,596 241,962 44 Outside Purchase Agreement 1,584 - Inf - CPI - - - - 45 Other Contractual Services 1,890,912 2,287,290 GeneralWages 2,333,036 2,379,697 2,427,291 2,475,837 46 Travel Reimbursement 7,418 22,725 Inf - CPI 23,111 23,481 23,904 24,430 47 Vicinity Auto Mileage Reimbursement 10,017 14,900 GeneralWages 15,198 15,502 15,812 16,128 48 Travel And Meals 20,878 43,045 Inf - CPI 43,777 44,477 45,278 46,274 49 FleetFuel&Oil 887,339 2,141,227 GeneralWages 2,184,052 2,227,733 2,272,288 2,317,734 50 Fleet Vehicle Rental 2,826 7,999 Inf - CPI 8,135 8,265 8,414 8,599 51 Telecommunications 695,591 721,045 GeneralWages 735,466 750,175 765,179 780,483 52 Postage & Freight Services - - General Wages - - - - 53 Other Commun/Transportation Costs 1,540 630 Inf - CPI 641 651 663 678 54 Postage & Freight Services 922,126 845,448 Inf - CPI 859,821 873,578 889,302 908,867 55 Other Freight Charges - - n/a 56 Electricity 9,571,482 10,100,483 Power 10,859,029 11,689,745 12,296,443 12,951,843 57 Utility Services 701,924 791,459 Utilities 808,475 826,585 847,498 874,109 58 Rental Office Space 208,785 230,537 Inf - CPI 234,456 238,207 242,495 247,830 59 OtherRentals&Leases 172,672 233,273 Inf - CPI 237,239 241,035 245,374 250,772 60 Commercial Insurance 934,549 1,028,004 Insure 1,079,404 1,133,374 1,190,043 1,249,545 61 Auto Liability Insurance 174,672 184,575 Insure 193,804 203,494 213,669 224,352 62 Auto Liability Insurance - - Insure - - - - 63 General Liability Insurance 180,199 185,605 Insure 194,885 204,629 214,860 225,603 64 Auto Liability Department Experience Adjuster 42,190 43,455 Insure 45,628 47,909 50,304 52,819 65 Auto Liability Department Experience Adjuster - - Insure - - - - 66 General LiabilityDepartment Experience Adjuster 99,854 102,850 Insure 107,993 113,393 119,063 125,016 67 Other Insurance & Bonds 81,445 81,445 Inf - CPI 82,830 84,155 85,670 87,555

`JNSP Page 2 of 2

Table 9

Hillsborough County Water Resource Division

Summary of Projected Expenses for the Forecast Period

Line 2010 2011 Escalation Fiscal Year Ending September 30, No. Description AsAdjusted AsAdjusted Reference 2012 2013 2014 2015

68 Maintenance Building/Facility 6,510,266 6,919,609 Repair 7,127,197 7,358,831 7,616,390 7,902,005 69 Maintenance Equipment 283,435 254,110 Repair 261,733 270,239 279,697 290,186 70 Maintenance Computer Equipment 6,274 87,394 Repair 90,016 92,942 96,195 99,802 71 Maintenance Grounds/Landscaping 464,819 570,128 Repair 587,232 606,317 627,538 651,071 72 Fleet Maintenance Services 885,059 628,026 Repair 646,867 667,890 691,266 717,188 73 Other Repairs 77,074 30,510 Repair 31,425 32,446 33,582 34,841 74 Printing & Binding 84,576 120,361 Inf - CPI 122,407 124,366 126,605 129,390 75 Public Awareness Program 3,515 11,475 Inf - GDP 11,630 11,810 12,028 12,263 76 Industry Promotion 571 1,081 Inf - GDP 1,096 1,113 1,134 1,156 77 Awards Program 280 850 Inf - GDP 861 874 890 907 78 Other Claim Payments - 25,000 Inf - CPI 25,425 25,832 26,297 26,876 79 Fines And Penalties 20,000 - Revenue - - - - 80 Bad Debt And Bad Check Write-Off 368,260 508,999 Revenue 515,209 523,710 533,870 540,063 81 Collection Expense 6,772 11,520 Revenue 11,661 11,853 12,083 12,223 82 Interest Expense Customer Deposits 35,000 97,000 Rev Growth 98,620 100,878 103,571 105,736 83 Legal Advertising 12,747 45,283 Inf - CPI 46,053 46,790 47,632 48,680 84 Non Ad-Valorem Assessment Special District 30,206 45,232 Inf - CPI 46,001 46,737 47,578 48,625 85 Professional Licenses And Certification 36,053 39,674 Inf - CPI 40,348 40,994 41,732 42,650 86 Cash Collections - Over/Short 27 - Revenue - - - - 87 Indirect Admin Cost 9,703,372 9,739,594 Indirect 9,934,386 10,133,074 10,335,735 10,542,450 88 Other Miscellaneous Expense 63,003 132,179 Constant 132,179 132,179 132,179 132,179 89 Office Supplies/Expense 119,712 306,157 Inf - CPI 311,362 316,344 322,038 329,123 90 Computer Software 47,390 69,064 Inf - CPI 70,238 71,362 72,647 74,245 91 DP Software - - Inf - CPI - - - - 92 General Operating Supplies 1,050,209 979,526 Inf - CPI 996,178 1,012,117 1,030,335 1,053,002 93 Unrecorded 4,044 - Margin - - - - 94 Uniforms & Safety Apparel 172,096 214,633 FieldPerson 218,926 225,494 230,568 235,179 95 Bulk Water Purchases 45,828,712 46,752,512 Calculated 49,326,337 50,405,027 52,756,462 52,680,505 96 Bulk Wastewater Purchases 1,791,757 2,081,793 Calculated 2,165,615 2,251,864 2,340,801 2,432,297 97 Chemicals 4,254,483 5,956,262 WWChem 6,260,031 6,596,195 6,954,368 7,350,072 98 Regular Purchase Vehicle Fuel 44,135 - Inf - CPI - - - - 99 Road Materials And Supplies 3,775 - Inf - CPI - - - - 100 MembershipsAnd Dues 33,913 43,250 Inf - CPI 43,985 44,689 45,493 46,494 101 Books & Subscriptions 12,697 21,177 Inf - CPI 21,537 21,882 22,276 22,766 102 Training/Educational Costs 1,494,954 - Inf - CPI - - - - 103 Training/Educational Costs 134,598 142,987 Person 145,847 149,581 152,782 155,838 104 Employee Tuition Reimbursement - - Inf - CPI - - - - 105 Additional Expenses 106 AdditionalWagesandSalaries(3) - - Calculated - 675,870 791,982 808,416 107 Adjustmentfor2010 BudgetAnalysis - - Eliminate - - - - 108 Add Back Suspended Maintenance Efficiency - - Inf - CPI 453,039 460,288 468,573 478,882 109 Inventory/Assess of Assets - One Time Cost - - Inf - CPI - - - - 110 Describe - - Inf - CPI - - - - 111 WW - Add. Treatment Nutrient Limitation Regulations - - Inf - CPI - - - - 112 Describe - - Inf - CPI - - - - 113 Contingency - - Calculated 763,239 788,490 816,807 833,540

114 Totals $ 140,569,084 $ 146,518,352 $ 153,411,031 $ 158,486,444 $ 164,178,222 $ 167,541,504

`JNSQ Table 9A Page 1 of 1

Hillsborough County Water Resource Division

Operating Expense Escalation References for the Forecast Period

Line Escalation Fiscal Year Ending September 30 - Subsequent to Initial Year of Forecast No. Description Reference 2011 2012 2013 2014 2015

1 Water and Wastewater Wages General Wages 1.0140 1.0200 1.0200 1.0200 1.0200 2 Other Wages Other Wages 1.0140 1.0200 1.0200 1.0200 1.0200 3 Inflation - GDP Price Index (CBO dated January 2010) + 25 bpts Inf - GDP 1.0115 1.0125 1.0135 1.0155 1.0185 4 Inflation - CPI (CBO dated January 2010)+50 bpts Inf - CPI 1.0180 1.0170 1.0170 1.0160 1.0180 5 Water - Chemicals W Chem 1.0500 1.0534 1.0503 1.0529 1.0538 6 Wastewater - Chemicals, Sludge WW Chem 1.0500 1.0534 1.0510 1.0537 1.0543 7 General Insurance Insure 1.0500 1.0500 1.0500 1.0500 1.0500 8 Net Change in Customers Added Cust Change 1.0000 5.7338 1.9259 2.1747 1.9947 9 Increase in ERC's with CPI Inflation ERCs 1.0180 1.0208 1.0218 1.0231 1.0262 10 Increase in Billed Water Flow with CPI Inflation WFlow 1.0180 1.0236 1.0175 1.0216 1.0254 11 Increase in Billed Wastewater Flow WWFlow 1.0180 1.0236 1.0189 1.0231 1.0262 12 Repair and Maintenance Repair 1.0250 1.0275 1.0300 1.0325 1.0350 13 Electricity and Natural Gas Power 1.0750 1.0767 1.0751 1.0765 1.0519 14 Utilities Utilities 1.0180 1.0208 1.0215 1.0224 1.0253 15 Professional Services / CPI plus 50 bpts Prof Serv 1.0230 1.0220 1.0220 1.0210 1.0230 16 Indirect cost Indirect 1.0000 1.0200 1.0200 1.0200 1.0200 17 No Increase - Constant Constant 1.0000 1.0000 1.0000 1.0000 1.0000 18 Rate Revenue Revenue 1.0027 1.0129 1.0122 1.0165 1.0194 19 Rate Revenue Adjusted for Customer Growth Rev Growth 1.0027 1.0166 1.0167 1.0229 1.0267 20 Change in Personnel with Labor Inflation Person 1.0140 1.0200 1.0200 1.0256 1.0214 21 Change in Field Personnel with Labor Inflation Field Person 1.0140 1.0200 1.0200 1.0300 1.0225 22 Eliminate Eliminate 0.0000 0.0000 0.0000 0.0000 0.0000 23 Marginal Margin 1.0100 1.0100 1.0100 1.0100 1.0100 24 Other Describe Other 1 1.0000 1.0000 1.0000 1.0000 1.0000 25 Other Describe Other 2 1.0000 1.0000 1.0000 1.0000 1.0000

`JNSR Table 10 Page 1 of 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Operating Results and Bond Service Coverage

Line Fiscal Year Ending September 30, No. Description 2010 2011 2012 2013 2014 2015

Operating Revenues Charges for Services [1] 1 Water Sales $ 76,282,837 $ 81,630,500 $ 85,483,615 $ 87,105,715 $ 89,862,112 $ 90,722,247 2 Wastewater Sales 84,271,912 84,522,159 85,606,567 86,637,002 88,052,061 89,786,127 3 Customer Charges 7,136,806 7,155,248 7,237,551 7,324,996 7,445,927 7,575,031 4 Reclaimed Water Sales 1,935,908 1,990,298 2,049,976 2,111,073 2,179,287 2,255,065

5 Total Charges for Services 169,627,463 175,298,205 180,377,708 183,178,786 187,539,387 190,338,470

Other Operating Revenues 6 Accrued Guaranteed Revenue Fees [2] 3,440,000 3,489,000 3,311,440 3,022,030 3,266,520 3,057,565 7 Maintenance Service Charges 1,618,114 1,623,600 1,631,000 1,638,100 1,648,400 1,660,300 8 Installation Charges 51,286 70,600 89,900 109,200 147,900 186,500 9 Line Extension Fees 60,200 60,200 60,200 60,200 60,200 60,200 10 Other Operating Revenues 1,860,663 1,881,245 1,903,539 1,913,057 1,922,622 1,932,235

11 Total Operating Revenues 7,030,263 7,124,645 6,996,079 6,742,587 7,045,642 6,896,800

12 Investment Income [3] 2,259,829 2,377,961 2,610,080 2,572,871 2,628,808 2,624,631

13 Gross Revenues 178,917,554 184,800,810 189,983,867 192,494,244 197,213,837 199,859,901

14 Pledged Capacity Fees [4] 6,547,455 6,484,242 6,894,502 7,276,054 7,813,838 8,107,388

15 Total Funds Available 185,465,009 191,285,052 196,878,369 199,770,298 205,027,674 207,967,289

Cost of Operation and Maintenance [5] 16 Personal Services 45,463,840 46,535,122 47,650,843 49,473,962 50,770,070 52,000,475 17 Purchased Water [6] 43,256,081 44,208,868 46,665,117 47,642,316 49,805,315 49,626,854 18 Contractual Services 22,146,532 24,365,310 25,092,852 25,866,496 26,684,041 27,568,168 19 Communication Services 697,131 721,675 736,107 750,826 765,842 781,161 20 Fleet Services 1,775,224 2,777,252 2,839,054 2,903,888 2,971,968 3,043,521 21 Repairs & Maintenance 7,341,868 7,861,751 8,097,603 8,360,775 8,653,402 8,977,905 22 Utilities 10,273,406 10,891,942 11,667,504 12,516,330 13,143,941 13,825,952 23 Supplies, Rentals & Leases 298,288 560,009 569,529 578,643 589,059 602,018 24 Other Operating Expenses 6,744,083 6,052,779 7,431,202 7,630,497 7,843,437 8,061,799 Other Non-Operating Expenses Classified as Cost of 25 Operation and Maintenance [7] 95,250 95,250 95,250 135,250 135,250 135,250

26 Total Cost of Operation and Maintenance 138,091,703 144,069,958 150,845,061 155,858,983 161,362,325 164,623,103

27 Pledged Revenues [8] 47,373,306 47,215,094 46,033,308 43,911,315 43,665,349 43,344,186

Bond Service Payment: 28 Series 2001 Bonds 20,620,272 20,624,113 18,956,900 10,634,079 10,736,687 9,225,200 29 Series 2010 Bonds - Tax Exempt - - 531,675 3,189,950 3,188,975 3,186,583 30 Series 2010 Bonds (Build America Bonds) - - 619,402 3,716,412 3,716,412 3,716,412 31 Series 2010 Bonds (Recovery Zone Economic Development) - - 111,488 668,927 668,927 668,927 32 Series 2012 Bonds [9] ------

33 Total Bond Service Payment 20,620,272 20,624,113 20,219,465 18,209,368 18,311,001 16,797,122

Footnotes on Page 3 of 5.

Revised - 9.20.2010 `JNSS Table 10 Page 2 of 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Operating Results and Bond Service Coverage

Line Fiscal Year Ending September 30, No. Description 2010 2011 2012 2013 2014 2015

Bond Service Requirement Coverage Compliance:

Rate Covenant Test 1 [10]: 34 Gross Revenues and Pledged Capacity Fees $ 185,465,009 $ 191,285,052 $ 196,878,369 $ 199,770,298 $ 205,027,674 $ 207,967,289 Required Deposits 35 Operation and Maintenance 138,091,703 144,069,958 150,845,061 155,858,983 161,362,325 164,623,103 36 Renewal and Replacement Account Requirement 10,232,917 10,471,528 10,590,229 10,711,264 10,870,713 11,030,162 37 Bond Service Payment 20,620,272 20,624,113 20,219,465 18,209,368 18,311,001 16,797,122 38 Less: Interest Earnings - Debt Service Account (49,387) (262,606) (256,077) (432,931) (621,821) (482,564)

39 Total Required Deposits 168,895,504 174,902,993 181,398,678 184,346,684 189,922,218 191,967,823

40 Coverage Ratio - Calculated 1.10 1.09 1.09 1.08 1.08 1.08 41 Coverage Ratio - Required 1.00 1.00 1.00 1.00 1.00 1.00

AND

Rate Covenant Test 2 [10]: 42 Pledged Revenues 47,373,306 47,215,094 46,033,308 43,911,315 43,665,349 43,344,186

43 Bond Service Payment 20,620,272 20,624,113 20,219,465 18,209,368 18,311,001 16,797,122 44 Less: Interest Earnings - Debt Service Account (49,387) (262,606) (256,077) (432,931) (621,821) (482,564)

45 Bond Service Requirement 20,570,884 20,361,507 19,963,388 17,776,437 17,689,180 16,314,558

46 Coverage Ratio - Calculated 2.30 2.32 2.31 2.47 2.47 2.66 47 Coverage Ratio - Required 1.20 1.20 1.20 1.20 1.20 1.20

AND

Rate Covenant Test 3 [10]: 48 Net Revenues 40,825,851 40,730,852 39,138,806 36,635,261 35,851,512 35,236,798

49 Bond Service Payment 20,620,272 20,624,113 20,219,465 18,209,368 18,311,001 16,797,122 50 Less: Interest Earnings - Debt Service Account (49,387) (262,606) (256,077) (432,931) (621,821) (482,564)

51 Bond Service Requirement 20,570,884 20,361,507 19,963,388 17,776,437 17,689,180 16,314,558

52 Coverage Ratio - Calculated 1.98 2.00 1.96 2.06 2.03 2.16 53 Coverage Ratio - Required 1.00 1.00 1.00 1.00 1.00 1.00

54 Net Revenues after Payment of Bond Service Requirement 20,254,967 20,369,346 19,175,418 18,858,824 18,162,332 18,922,240

Other Required Transfers [11]: 55 Renewal & Replacement Account Requirement 10,232,917 10,471,528 10,590,229 10,711,264 10,870,713 11,030,162 56 Debt Service Reserve Account [12] ------

57 Total Other Required Transfers 10,232,917 10,471,528 10,590,229 10,711,264 10,870,713 11,030,162

Excess of Net Revenues above Required 58 Transfers [13] $ 10,022,050 $ 9,897,818 $ 8,585,189 $ 8,147,560 $ 7,291,619 $ 7,892,078

Footnotes on Page 3 of 5.

Revised - 9.20.2010 `JNST Table 10 Page 3 of 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Operating Results and Bond Service Coverage

[1] Amounts shown include additional revenues associated with i) the application of an annually recurring automatic inflation based rate adjustment assumed to be effective October 1st of each Fiscal Year; and ii) any anticipated Purchased Water Pass-Through Consumption Charges associated with any increase or decrease in the cost of purchased water from Tampa Bay Water and other service providers. No additional rate adjustments other than the price index and pass-through adjustments have been assumed to be implemented by the County during the Forecast Period.

[2] Amounts reflect projected revenues derived from fees charged to new development which represent the recovery of certain costs to carry and maintain plant investments on behalf of such customers prior to receiving service. Such revenues are considered as a Revenue of the System and are in addition to the collection of Capacity Fees from new development.

[3] Amounts shown include interest earnings on unrestricted funds as defined in the Bond Resolution, and do not include earnings on the Capacity Fees or the Construction Accounts since such earnings are restricted to such funds. Amounts shown do not include investment earnings on the Debt Service Account or Reserve Account since such earnings serve to reduce the amount of the Bond Service Requirement funded from Revenues of the System. Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Total Interest Income $ 2,316,359 $ 2,651,010 $ 2,881,783 $ 3,024,011 $ 3,271,412 $ 3,130,548

Adjustments to Investment Income: Less Debt Service Account 49,387 262,606 256,077 432,931 621,821 482,564 Less Impact Fees and Equivalents (a) 7,143 10,444 15,626 18,208 20,784 23,353 Less Construction Account Income ------Less Other Restricted Income ------

Net Investment Income Recognized $ 2,259,829 $ 2,377,961 $ 2,610,080 $ 2,572,871 $ 2,628,808 $ 2,624,631

[4] Amounts shown based on information provided by the County, and the anticipated us of bond proceeds associated with the Series 2010 Bonds and additional parity bonds. All Capacity Fees received by the County were considered as a Pledged revenues and were calculated as follows: Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Water System Impact Fees Received Impact Fee Revenues $ 709,232 $ 601,300 $ 545,978 $ 536,960 $ 686,290 $ 722,626 Impact Fee Assessment Unit Revenues 3,616,611 3,674,381 3,925,365 4,104,073 4,270,734 4,407,082 Investment Earnings 3,000 4,386 6,563 7,647 8,729 9,808 Total Impact Fees Received 4,328,843 4,280,067 4,477,906 4,648,680 4,965,753 5,139,516 Less Amount Pledged to Payment of Debt Service Component of Cost of Contracted Water Supply by County (2,572,631) (2,543,644) (2,661,220) (2,762,711) (2,951,147) (3,054,414)

Total Water System Capacity Fees Available for Pledge 1,756,212 1,736,423 1,816,686 1,885,969 2,014,606 2,085,102

Beginning Balance - Carry Forward $ 9,975,217 $ 9,496,946 $ 9,038,703 $ 8,491,761 $ 7,834,178 $ 7,054,242

Existing Debt Bond Service Requirement 20,620,272 20,624,113 18,956,900 10,634,079 10,736,687 9,225,200 Percent Allocable to Water System 18.50% 18.50% 18.50% 18.50% 18.50% 18.50% Existing Debt Allocable to Water System 3,814,750 3,815,461 3,507,027 1,967,305 1,986,287 1,706,662

Existing Debt Water Expansion Project Percentage 33.50% 33.50% 33.50% 33.50% 33.50% 33.50% Existing Debt Service Requirement with Percent Applied 1,277,941 1,278,179 1,174,854 659,047 665,406 571,732

Additional Debt Bond Service Requirement - - 1,262,565 7,575,289 7,574,314 7,571,922 Percent Allocable to Water System 0.00% 0.00% 20.49% 20.49% 20.49% 20.49% Additional Debt Allocable to Water System - - 258,700 1,552,177 1,551,977 1,551,487

Additional Debt Water Expansion Project Percentage 0.00% 0.00% 36.68% 36.68% 36.68% 36.68% Additional Debt Service Requirement with Percent Applied - - 94,891 569,339 569,265 569,085

Total Bond Service Requirement with Percent Applied 1,277,941 1,278,179 1,269,745 1,228,386 1,234,671 1,140,817

Total Available for Pledge (with carryforward) $ 11,253,158 $ 10,775,125 $ 10,308,448 $ 9,720,147 $ 9,068,849 $ 8,195,059

Water Capacity Fees Recognized as Pledged Revenue 1,756,212 1,736,423 1,816,686 1,885,969 2,014,606 2,085,102

Ending Balance - Carry Forward $ 9,496,946 $ 9,038,703 $ 8,491,761 $ 7,834,178 $ 7,054,242 $ 6,109,957

Footnotes Continued on Page 4 of 5.

Revised - 9.20.2010 `JNSU Table 10 Page 4 of 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Operating Results and Bond Service Coverage

Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Wastewater System: Impact Fees Received Impact Fee Revenues $ 559,908 $ 429,954 $ 507,250 $ 639,935 $ 881,214 $ 970,345 Impact Fee Assessment Unit Revenues 4,227,193 4,311,808 4,561,502 4,739,589 4,905,963 5,038,396 Investment Earnings 4,143 6,057 9,063 10,561 12,054 13,545 Total Impact Fees Received 4,791,244 4,747,819 5,077,815 5,390,084 5,799,231 6,022,286

Beginning Balance - Carry Forward $ 103,200,959 $ 109,299,693 $ 115,443,880 $ 120,377,583 $ 120,603,569 $ 120,474,597

Existing Debt Bond Service Requirement 20,620,272 20,624,113 18,956,900 10,634,079 10,736,687 9,225,200 Percent Allocable to Wastewater System 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Existing Debt Allocable to Wastewater System 16,805,521 16,808,652 15,449,874 8,666,775 8,750,400 7,518,538

Existing Debt Wastewater Expansion Project Percentage 64.80% 64.80% 64.80% 64.80% 64.80% 64.80% Existing Debt Service Requirement with Percent Applied 10,889,978 10,892,006 10,011,518 5,616,070 5,670,259 4,872,013

Additional Debt Bond Service Requirement - - 1,262,565 7,575,289 7,574,314 7,571,922 Percent Allocable to Wastewater System 0.00% 0.00% 79.51% 79.51% 79.51% 79.51% Additional Debt Allocable to Wastewater System - - 1,003,865 6,023,112 6,022,337 6,020,435

Additional Debt Wastewater Expansion Project Percentage 0.00% 0.00% 44.48% 44.48% 44.48% 44.48% Additional Debt Service Requirement with Percent Applied - - 446,519 2,679,080 2,678,735 2,677,889

Total Bond Service Requirement with Percent Applied 10,889,978 10,892,006 10,458,037 8,295,150 8,348,994 7,549,902

Total Available for Pledge (with carryforward) $ 114,090,937 $ 120,191,699 $ 125,455,398 $ 125,993,653 $ 126,273,828 $ 125,346,610

Wastewater Capacity Fees Recognized as Pledged 4,791,244 4,747,819 5,077,815 5,390,084 5,799,231 6,022,286

Ending Balance - Carry Forward $ 109,299,693 $ 115,443,880 $ 120,377,583 $ 120,603,569 $ 120,474,597 $ 119,324,324

Total System Pledged Capacity Fees $ 6,547,455 $ 6,484,242 $ 6,894,502 $ 7,276,054 $ 7,813,838 $ 8,107,388

[5] Amounts shown do not include depreciation or amortization expenses which are not considered a Cost of Operation and Maintenance Expense of the System as defined in the Bond Resolution.

[6] Included as a component of the Water System Capacity Fees is the cost of expansion-related water production and conveyance facilities of Tampa Bay Water. Amounts shown reflect apportionment of such estimated amounts collected applied toward the payment of the Debt Service Component of the Cost of Contractual Water Supply which is considered as a Cost of Operational Maintenance. Reference is also made to footnote 4 identifying the Pledged Capacity Fee determination. Additionally, the use of the Capacity Fees applied to the payment of Debt Service Component of the Cost of Contractual Water Supply is reflected in the determination of the annual Purchased Water Pass-Through Consumption Charge. The determination of the net purchased water costs were estimated as follows:

Fiscal Year Ending September 30, 2010 2011 2012 2013 2014 2015 Total Cost of Purchased Water $ 45,828,712 $ 46,752,512 $ 49,326,337 $ 50,405,027 $ 52,756,462 $ 52,680,505 Less Pledged Capacity Fees toward Debt Service Component of Cost of Contractual Water (2,572,631) (2,543,644) (2,661,220) (2,762,711) (2,951,147) (3,054,414)

Net Cost of Purchased Water $ 43,256,081 $ 44,208,868 $ 46,665,117 $ 47,642,316 $ 49,805,315 $ 49,626,854

[7] Amounts shown do not include capitalized labor.

[8] As defined in the Bond Resolution, Pledged Revenues include Net Revenues and Pledged Capacity Fees.

[9] The Bond Service Requirement for the Fiscal Year 2015 represents interest only payments which are assumed to be capitalized (paid) from bond proceeds, therefore no Bond Service Requirement associated with the Series 2012 Bonds, paid from Pledged Revenues is recognized.

[10] The Bond Resolution contains a Rate Covenant that requires that the County will maintain and collect Revenues that will always provide for the following: Test 1 - Gross Revenues, together with Pledged Capacity Fees at least equal to 100% of the Required Deposits; and Test 2 - Net Revenues, together with Pledged Capacity Fees; at least equal to 120% of the Bond Service Requirement; and Test 3 - Net Revenues at least equal to 100% of the Bond Service Requirement.

Footnotes Continued on Page 5 of 5.

Revised - 9.20.2010 `JNSV Table 10 Page 5 of 5

Hillsborough County Water Resource Division

Water and Wastewater System

Summary of Projected Operating Results and Bond Service Coverage

[11] Reflects other required transfers which are recognized in the rate covenant requirements of the Bond Resolution, payments which are subordinate to the payment of the Bond Service Requirement.

[12] No deposit to the Reserve Account was recognized since the fund was considered fully funded during the Forecast Period by i) proceeds from the issuance of Outstanding and additional parity bonds or ii) secured by a debt service reserve credit facility during such period.

[13] Amount shown does not include Pledged Capacity Fees.

Revised - 9.20.2010 `JNTM Page 1 of 4

Table 11

Hillsborough County Water Resource Division

Water and Wastewater Systems

Development of Interest Earnings by Fund for the Fiscal Year Forecast Period Ending 2015

Line For the Fiscal Year Ending September 30, No. 2010 2011 2012 2013 2014 2015

1 Operating Reserves - Fund 001, 003 Primarily 1 Beginning Cash Balance $ 17,570,017 $ 21,818,204 $ 20,962,188 $ 20,333,082 $ 19,547,802 $ 17,236,252 2 DepositstoFund 3 From Operations Deposit/(Withdrawal) 2,762,874 3,758,857 3,949,015 3,170,153 672,836 2,544,244 4 Interest Earnings from Other Funds 710,991 1,177,729 1,808,748 2,409,872 2,886,430 2,725,772 5 Interest Earnings Adjustment to Match Historical Trends 1,500,000 1,250,000 750,000 250,000 - - 6 Deposit to Fund from Impact Fees - Fund 005, 011, 012 9,120,086 9,027,886 9,555,722 10,038,765 10,764,985 11,161,802 7 SubtotalofDeposits 14,093,951 15,214,472 16,063,485 15,868,789 14,324,251 16,431,818

Uses of Funds 8 Capital Expenditures 943,989 283,326 1,000,000 1,000,000 1,000,000 1,000,000 9 Transfer to Rate Stabilization Account - Fund 046 - 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 10 Transfer to General Revenue Capital Expenditure Account - Fund 010 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000 11 SubtotalofUses 9,943,989 16,283,326 17,000,000 17,000,000 17,000,000 17,000,000

12 Ending Balance Before Interest Earnings 21,719,979 20,749,351 20,025,674 19,201,872 16,872,053 16,668,070 13 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 14 Earnings on Average Balance $ 98,225 $ 212,838 $ 307,409 $ 345,931 $ 364,199 $ 381,424

15 Ending Cash Balance $ 21,818,204 $ 20,962,188 $ 20,333,082 $ 19,547,802 $ 17,236,252 $ 17,049,493

16 Minimum Operating Reserves (Days of Revenue Requirements/Amount) $ 14,285,189 $ 14,801,166 $ 15,351,727 $ 15,617,256 $ 16,113,328 $ 16,280,732 17 Minimum Reserve Achieved (30 Days Operating - Y or N) Y Y Y Y Y Y

2 Renewal and Replacement Account - Fund 007 18 Beginning Cash Balance $ 29,172,243 $ 10,917,965 $ 15,522,137 $ 19,437,135 $ 13,444,374 $ 7,582,032

Deposits to Fund 19 TBW Purchase Discounts (Sale of Water Supply Facilities) 1,238,468 1,238,468 1,238,468 1,238,468 1,238,468 1,238,468 20 Proceeds from Sale of Surplus Property 11,800,000 - - - - - 21 Deposits to Fund from Rates 10,232,917 10,471,528 10,590,229 10,711,264 10,870,713 11,030,162

22 TotalDepositstoFunds 23,271,385 11,709,996 11,828,697 11,949,732 12,109,181 12,268,630

Uses of Fund 23 Transfer to Rehabilitation Fund - Fund 068 11,800,000 - - - - - 24 Capital Expenditures 29,725,663 7,105,824 7,913,699 17,942,493 17,971,523 15,691,000

25 Total Uses Of Funds 41,525,663 7,105,824 7,913,699 17,942,493 17,971,523 15,691,000

26 Ending Balance 10,917,965 15,522,137 19,437,135 13,444,374 7,582,032 4,159,662 27 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 28 Earnings on Average Balance $ 100,226 $ 132,201 $ 262,195 $ 287,713 $ 210,264 $ 132,094

29 Interest Earnings Transferred to Operating Reserves $ 100,226 $ 132,201 $ 262,195 $ 287,713 $ 210,264 $ 132,094

30 Ending Cash Balance $ 10,917,965 $ 15,522,137 $ 19,437,135 $ 13,444,374 $ 7,582,032 $ 4,159,662

3 Renewal and Replacement Account (Rehabilitation Fund) - Fund 068 31 Beginning Cash Balance $ - $ - $ - $ - $ - $ -

Deposits to Fund 32 Deposits to Fund from Renewal & Replacement Account - Fund 007 11,800,000 - - - - - 33 Deposits to Fund from Operating Account - Fund 001, 003 ------

34 TotalDepositstoFunds 11,800,000 - - - - -

Uses of Fund 35 Capital Expenditures 11,800,000 - - - - -

36 Total Uses Of Funds 11,800,000 - - - - -

37 Ending Balance ------38 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 39 Earnings on Average Balance $ - $ - $ - $ - $ - $ -

40 Interest Earnings Transferred to Operating Reserves $ - $ - $ - $ - $ - $ -

41 Ending Cash Balance $ - $ - $ - $ - $ - $ -

`JNTN Page 2 of 4

Table 11

Hillsborough County Water Resource Division

Water and Wastewater Systems

Development of Interest Earnings by Fund for the Fiscal Year Forecast Period Ending 2015

Line For the Fiscal Year Ending September 30, No. 2010 2011 2012 2013 2014 2015

4 General Revenue Capital Expenditure Acct./General Purpose Account - Fund 010 42 Beginning Cash Balance $ 109,067,175 $ 34,384,664 $ 34,332,664 $ 35,863,664 $ 41,323,664 $ 34,243,664

Deposits to Fund 43 Deposits to Fund from Operating Account - Fund 001, 003 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000

44 TotalDepositstoFunds 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000 9,000,000

Uses of Fund (Capital Expenditures) 45 Capital Expenditures 78,714,590 9,052,000 7,469,000 3,540,000 16,080,000 33,700,000 46 Transfers to Debt Service Sinking Fund (Capitalize Interest) 4,967,921 - - - - -

47 Total Uses Of Funds 83,682,511 9,052,000 7,469,000 3,540,000 16,080,000 33,700,000

48 Ending Balance 34,384,664 34,332,664 35,863,664 41,323,664 34,243,664 9,543,664 49 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 50 Earnings on Average Balance $ 358,630 $ 343,587 $ 526,472 $ 675,389 $ 755,673 $ 492,607

51 Interest Earnings Transferred to Operating Reserves $ 358,630 $ 343,587 $ 526,472 $ 675,389 $ 755,673 $ 492,607

52 Ending Cash Balance $ 34,384,664 $ 34,332,664 $ 35,863,664 $ 41,323,664 $ 34,243,664 $ 9,543,664

5 Rate Stabilization Account / General Purpose Account - Fund 046 53 Beginning Cash Balance $ 38,912,856 $ 38,912,856 $ 45,912,856 $ 52,912,856 $ 59,912,856 $ 66,912,856 54 Deposits to Fund from Operating Account - Fund 001, 003 - 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000

Uses of Fund (Capital Expenditures) 55 Capital Expenditures ------56 Transfer to General Revenue Capital Expenditure Account - Fund 010 ------57 Transfers to Operating Reserves - Funds 001, 003 ------

58 Total Uses Of Funds ------

59 Ending Balance 38,912,856 45,912,856 52,912,856 59,912,856 66,912,856 73,912,856 60 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 61 Earnings on Average Balance $ 194,564 $ 424,129 $ 741,193 $ 987,225 $ 1,268,257 $ 1,584,289

62 Interest Earnings Transferred to Operating Reserves $ 194,564 $ 424,129 $ 741,193 $ 987,225 $ 1,268,257 $ 1,584,289

63 Ending Cash Balance $ 38,912,856 $ 45,912,856 $ 52,912,856 $ 59,912,856 $ 66,912,856 $ 73,912,856

6 Water/Wastewater Impact Fee Accounts (includes Non-bonded CAUs) - Funds 005, 011, 012, 52 64 Beginning Cash Balance $ 1,814,627 $ 1,049,572 $ 1,049,572 $ 1,049,572 $ 1,049,572 $ 1,049,572 Deposits to Fund 65 Deposits to Fund from Impact Fees 4,203,945 4,094,824 4,393,318 4,747,456 5,368,897 5,707,887 66 Interest Earnings from IFAU Assessments Received 4,908,999 4,922,618 5,146,778 5,273,101 5,375,304 5,430,562

67 TotalDepositstoFund 9,112,944 9,017,442 9,540,095 10,020,557 10,744,201 11,138,449

Uses of Fund 68 Dedication of Capacity Fees to TBW Charges (debt component) 2,572,631 2,543,644 2,661,220 2,762,711 2,951,147 3,054,414 69 Capital Expenditures - Water System 446,224 - - - - - 70 Capital Expenditures - Wastewater System 318,831 - - - - - 71 Pledged (Payments) to Debt Repayment (Transfer to Fund 001,003) 6,547,455 6,484,242 6,894,502 7,276,054 7,813,838 8,107,388

72 SubtotalUsesofFund 9,885,141 9,027,886 9,555,722 10,038,765 10,764,985 11,161,802

73 Ending Balance 1,042,429 1,039,128 1,033,946 1,031,364 1,028,788 1,026,219 74 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 75 Earnings on Average Balance $ 7,143 $ 10,444 $ 15,626 $ 18,208 $ 20,784 $ 23,353

76 Interest Earnings Transferred to Operating Reserves $ - $ - $ - $ - $ - $ -

77 Ending Cash Balance $ 1,049,572 $ 1,049,572 $ 1,049,572 $ 1,049,572 $ 1,049,572 $ 1,049,572

`JNTO Page 3 of 4

Table 11

Hillsborough County Water Resource Division

Water and Wastewater Systems

Development of Interest Earnings by Fund for the Fiscal Year Forecast Period Ending 2015

Line For the Fiscal Year Ending September 30, No. 2010 2011 2012 2013 2014 2015

7 Construction Account (Current and Future) - Fund 015, 022 78 Beginning Cash Balance $ - $ 85,068,845 $ 49,430,845 $ - $ 18,000,000 $ - Deposits to Fund 79 DepositstoFundfromFutureBondProceeds 131,042,304 - - 86,000,000 - - 80 Proceeds from Commercial Paper Program to Fund Capital ------

81 SubtotalOfDeposits 131,042,304 - - 86,000,000 - -

Uses of Fund (Capital Expenditures) 82 Capital Expenditures 45,973,459 35,638,000 49,430,845 68,000,000 18,000,000 -

83 Ending Balance 85,068,845 49,430,845 - 18,000,000 - - 84 Reinvestment Rate (Interest Earnings) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 85 Earnings on Average Balance $ - $ - $ - $ - $ - $ -

86 Interest Earnings Transferred to Operating Reserves $ - $ - $ - $ - $ - $ -

87 Ending Cash Balance $ 85,068,845 $ 49,430,845 $ - $ 18,000,000 $ - $ -

8 Debt Service Reserve Account (Existing and Future) - Fund 004, 017, 031, 032 88 Beginning Cash Balance $ - $ 11,478,788 $ 11,478,788 $ 11,478,788 $ 20,467,070 $ 20,467,070 Deposits to Fund 89 DepositstoFundfromFutureBondProceeds 11,478,788 - - 8,988,282 - -

90 TotalDepositstoFund 11,478,788 - - 8,988,282 - -

91 Uses of Funds (Bonds Paid off, transfer to Fund 001) ------

92 Ending Balance 11,478,788 11,478,788 11,478,788 20,467,070 20,467,070 20,467,070 93 Reinvestment Rate (Interest Earnings) 0.00% 1.25% 1.50% 1.50% 1.50% 1.50% 94 Earnings on Average Balance $ - $ 143,485 $ 172,182 $ 239,594 $ 307,006 $ 307,006

95 Interest Earnings Transferred to Operating Reserves $ - $ 143,485 $ 172,182 $ 239,594 $ 307,006 $ 307,006

96 Ending Cash Balance $ 11,478,788 $ 11,478,788 $ 11,478,788 $ 20,467,070 $ 20,467,070 $ 20,467,070

9 Debt Service Sinking Account (Existing and Future) - Fund 002 97 Beginning Cash Balance $ 4,253,152 $ 15,501,770 $ 8,322,431 $ 2,863,607 $ 19,232,086 $ 12,249,397 Deposits to Fund 98 Deposits to Fund from Rates - Existing Debt 20,620,272 20,624,113 18,956,900 10,634,079 10,736,687 9,225,200 99 DepositstoFundfromRates-FutureDebt - - 1,262,565 7,575,289 7,574,314 7,571,922 100 Deposit From Series 2010 Bond Proceeds 7,547,187 - - 21,373,200 - - 101 Deposit from General Purpose Account - Fund 010 4,967,921 - - - - -

102 Total Deposits to Fund 33,135,380 20,624,113 20,219,465 39,582,568 18,311,001 16,797,122

Uses of Funds (Payment of Debt) 103 Other Debt Service Costs ------104 Payment of Principal - Existing Debt 16,270,000 17,105,000 18,040,000 9,035,000 9,575,000 10,500,000 105 Payment of Interest - Existing Debt 4,349,455 3,519,355 2,582,900 1,591,900 1,094,976 570,240 106 Payment of Principal - Future Debt - - - 420,000 2,532,500 2,607,500 107 Payment of Interest - Future Debt 1,267,306 7,179,097 5,055,389 12,167,189 12,091,214 12,012,989

108 Total Uses of Fund 21,886,761 27,803,452 25,678,289 23,214,089 25,293,690 25,690,729

109 Ending Balance 15,501,770 8,322,431 2,863,607 19,232,086 12,249,397 3,355,790 110 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 111 Earnings on Average Balance $ 49,387 $ 119,121 $ 83,895 $ 193,337 $ 314,815 $ 175,558

112 Interest Earnings Transferred to Operating Reserves $ 49,387 $ 119,121 $ 83,895 $ 193,337 $ 314,815 $ 175,558

113 Ending Cash Balance $ 15,501,770 $ 8,322,431 $ 2,863,607 $ 19,232,086 $ 12,249,397 $ 3,355,790

`JNTP Page 4 of 4

Table 11

Hillsborough County Water Resource Division

Water and Wastewater Systems

Development of Interest Earnings by Fund for the Fiscal Year Forecast Period Ending 2015

Line For the Fiscal Year Ending September 30, No. 2010 2011 2012 2013 2014 2015

10 Impact Fee Assessment Unit (IFAU) Bonds, Subfund 047, 056 114 Beginning Cash Balance $ - $ - $ - $ - $ - $ - 115 Deposits to Fund from Operating Account - Fund 001, 003 ------116 Deposits to Fund from Capacity Fee Account - Fund 005, 011, 012 ------117 Deposits from Future IFAU Bond Issues ------

Uses of Fund (Capital Expenditures) 118 Capital Expenditures ------119 Transfer to Fund 10 (reimbursement of expansion expenditures) ------120 Transfer to Impact Fee Funds - Funds 005, 011, 012 ------

121 Ending Balance ------122 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 123 Earnings on Average Balance $ - $ - $ - $ - $ - $ -

124 Interest Earnings Transferred to Operating Reserves $ - $ - $ - $ - $ - $ -

125 Ending Cash Balance $ - $ - $ - $ - $ - $ -

11 Customer Deposits (No Subfund) 126 Beginning Cash Balance $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000 127 Deposits from New Customers ------128 Refunds/Bad Debt Payments from Fund ------

129 Ending Balance 9,972,000 9,972,000 9,972,000 9,972,000 9,972,000 9,972,000 130 Reinvestment Rate (Interest Earnings) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 131 Earnings on Average Balance $ - $ - $ - $ - $ - $ -

132 Interest Earnings Transferred to Operating Reserves $ - $ - $ - $ - $ - $ -

133 Ending Cash Balance $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000 $ 9,972,000

12 Other Miscellaneous Cash Accounts, Funds / General Purpose Account 041, 042, 050, 051, 054, 055 134 Beginning Cash Balance $ 1,752,930 $ 1,520,740 $ 1,520,740 $ 1,520,740 $ 1,520,740 $ 1,520,740 135 DepositstoFund ------136 Uses of Fund (Capital Expenditures) 232,190 - - - - -

137 Ending Balance 1,520,740 1,520,740 1,520,740 1,520,740 1,520,740 1,520,740 138 Reinvestment Rate (Interest Earnings) 0.50% 1.00% 1.50% 1.75% 2.00% 2.25% 139 Earnings on Average Balance $ 8,184 $ 15,207 $ 22,811 $ 26,613 $ 30,415 $ 34,217

140 Interest Earnings Transferred to Operating Reserves $ 8,184 $ 15,207 $ 22,811 $ 26,613 $ 30,415 $ 34,217

141 Ending Cash Balance $ 1,520,740 $ 1,520,740 $ 1,520,740 $ 1,520,740 $ 1,520,740 $ 1,520,740

142 Total Cash and Investments for Balance Sheet $ 230,625,405 $ 198,504,222 $ 155,431,445 $ 204,470,164 $ 171,233,583 $ 141,030,847 143 Unrestricted Cash and Investments $ 95,115,724 $ 55,294,852 $ 56,196,746 $ 60,871,466 $ 51,479,916 $ 26,593,157 144 Restricted Cash and Investments $ 135,509,680 $ 143,209,369 $ 99,234,698 $ 143,598,698 $ 119,753,667 $ 114,437,690

145 Total Interest Earnings for Income Statement $ 2,316,359 $ 2,651,010 $ 2,881,783 $ 3,024,011 $ 3,271,412 $ 3,130,548 146 Earnings on Cash and Investments-Transferred to Operating Account $ 2,309,216 $ 2,640,567 $ 2,866,157 $ 3,005,802 $ 3,250,629 $ 3,107,195 147 Earnings on Cash and Investments-Maintained within Fund $ 7,143 $ 10,444 $ 15,626 $ 18,208 $ 20,784 $ 23,353

`JNTQ Table 12 Page 1 of 1 Hillsborough County Water Resource Services

Comparison of Typical Monthly Residential Bills For Water Service [1]

Residential Service for a 5/8" or 3/4" Meter Line 0 2,000 4,000 6,000 8,000 10,000 15,000 20,000 No. Description Gallons Gallons Gallons Gallons [2] Gallons Gallons Gallons Gallons

Hillsborough County 1 Prior Rates Effective October 1, 2009 [3] $11.91 $18.09 $24.27 $31.62 $40.14 $48.66 $69.96 $97.41 2 Existing Rates Effective June 1, 2010 [3] 11.95 18.13 24.31 31.67 40.21 48.75 70.10 97.60

Other Florida Utilities:

3 Charlotte County [4] 21.77 31.11 40.45 49.79 60.53 71.27 103.72 141.29 4 City of Clearwater [4] 14.58 14.58 20.49 32.31 44.13 57.49 94.74 131.99 5 Collier County [4] 17.17 21.89 26.61 32.51 39.59 46.67 70.22 93.77 6 Lee County [4] 10.60 16.28 21.96 27.64 34.62 41.60 61.00 84.28 7 Manatee County [4] 7.14 10.52 13.90 17.28 21.50 25.72 36.27 61.37 8 City of North Port [4] 14.58 20.82 27.06 36.40 45.74 58.82 98.09 151.66 9 Pasco County 7.16 11.84 16.52 21.20 27.52 34.68 54.68 78.78 10 Pinellas County 3.24 12.48 21.72 30.96 40.20 49.44 72.54 95.64 11 Polk County 7.59 10.47 13.82 17.64 21.46 25.28 44.33 63.38 12 Sarasota County [4] 15.75 20.53 25.31 31.35 37.39 47.85 84.26 134.37 13 City of St. Petersburg [4] 8.22 14.20 20.18 26.46 33.92 44.04 69.34 102.89 14 City of Tampa [4] 1.50 4.28 8.64 13.59 18.54 23.95 44.74 66.29

15 Other Florida Utilities' Average $10.78 $15.75 $21.39 $28.09 $35.43 $43.90 $69.49 $100.48

Footnotes:

[1] Unless otherwise noted, amounts shown reflect residential rates in effect June 2010 and are exclusive of taxes or franchise fees, if any, and reflect rates charged for inside city service. All rates are as reported by the respective utility. This comparison is intended to show comparable charges for similar service for comparison purposes only and is not intended to be a complete listing of all rates and charges imposed by each listed utility.

[2] Represents the median use for the County Residential Class.

[3] Amounts shown include the current Purchased Water Pass-Through Consumption Charge of $2.43 per 1,000 gallons for all billed Water Consumption.

[4] Utility is currently involved in a rate study, is planning to conduct a rate study, or will implement a rate revision within the next twelve months.

`JNTR Table 13 Page 1 of 1 Hillsborough County Water Resource Division

Comparison of Typical Monthly Residential Bills For Wastewater Division [1]

Residential Service for a 5/8" or 3/4" Meter Line 0 2,000 4,000 6,000 8,000 10,000 15,000 20,000 No. Description Gallons Gallons Gallons Gallons [2] Gallons Gallons Gallons Gallons

Hillsborough County 1 Prior Rates Effective October 1, 2009 $12.97 $21.31 $29.65 $37.99 $46.33 $46.33 $46.33 $46.33 2 Existing Rates Effective June 1, 2010 13.02 21.40 29.78 38.16 46.54 46.54 46.54 46.54

Other Florida Utilities:

3 Charlotte County [3] $27.70 $35.42 $43.14 $50.86 $58.58 $66.30 $66.30 $66.30 4 City of Clearwater [3] 20.07 20.07 26.76 40.14 53.52 66.90 100.35 133.80 5 Collier County [3] 26.23 33.61 40.99 48.37 55.75 63.13 81.58 81.58 6 Lee County [3] 16.62 25.80 34.98 44.16 53.34 57.93 57.93 57.93 7 Manatee County [3] 17.33 25.49 33.65 41.81 49.97 58.13 66.29 66.29 8 City of North Port [3] 23.37 33.53 43.69 53.85 64.01 74.17 84.33 84.33 9 Pasco County 14.18 22.04 29.90 37.76 45.62 53.48 53.48 53.48 10 Pinellas County 10.35 17.91 25.47 33.03 40.59 40.59 40.59 40.59 11 Polk County 28.31 38.47 48.63 58.79 63.87 63.87 63.87 63.87 12 Sarasota County [3] 14.60 29.38 44.16 58.94 73.72 88.50 88.50 88.50 13 City of St. Petersburg [3] 9.76 17.24 24.72 32.20 39.68 47.16 65.86 84.56 14 City of Tampa [3] [4] 3.91 10.45 20.91 31.36 41.82 52.27 52.27 52.27

15 Other Florida Utilities' Average $17.70 $25.78 $34.75 $44.27 $53.37 $61.04 $68.45 $72.79

Footnotes:

[2] Represents the median use for the County Residential Class.

[3] Utility is currently involved in a rate study, is planning to conduct a rate study, or will implement a rate revision within the next twelve months.

[4] The City of Tampa has user specific wastewater billing caps, based on a recorded two months of average winter flow. For comparison purposes it was assumed that the wastewater flow would be capped at 10,000 gallons of flow.

`JNTS Table 14 Page 1 of 1 Hillsborough County Water Resource Division

Comparison of Typical Monthly Residential Bills For Combined Water and Wastewater Division [1]

Residential Service for a 5/8" or 3/4" Meter Line 0 2,000 4,000 6,000 8,000 10,000 15,000 20,000 No. Description Gallons Gallons Gallons Gallons [2] Gallons Gallons Gallons Gallons

Hillsborough County 1 Prior Rates Effective October 1, 2009 [3] $24.88 $39.40 $53.92 $69.61 $86.47 $94.99 $116.29 $143.74 2 Existing Rates Effective June 1, 2010 [3] 24.97 39.53 54.09 69.83 86.75 95.29 116.64 144.14

Other Florida Utilities:

3 Charlotte County [4] $49.47 $66.53 $83.59 $100.65 $119.11 $137.57 $170.02 $207.59 4 City of Clearwater [4] 34.65 34.65 47.25 72.45 97.65 124.39 195.09 265.79 5 Collier County [4] 43.40 55.50 67.60 80.88 95.34 109.80 151.80 175.35 6 Lee County [4] 27.22 42.08 56.94 71.80 87.96 99.53 118.93 142.21 7 Manatee County [4] 24.47 36.01 47.55 59.09 71.47 83.85 102.56 127.66 8 City of North Port [4] 37.95 54.35 70.75 90.25 109.75 132.99 182.42 235.99 9 Pasco County 21.34 33.88 46.42 58.96 73.14 88.16 108.16 132.26 10 Pinellas County 13.59 30.39 47.19 63.99 80.79 90.03 113.13 136.23 11 Polk County 35.90 48.94 62.45 76.43 85.33 89.15 108.20 127.25 12 Sarasota County [4] 30.35 49.91 69.47 90.29 111.11 136.35 172.76 222.87 13 City of St. Petersburg [4] 17.98 31.44 44.90 58.66 73.60 91.20 135.20 187.45 14 City of Tampa [4] [5] 5.41 14.73 29.55 44.95 60.35 76.22 97.01 118.56

15 Other Florida Utilities' Average $28.48 $41.53 $56.14 $72.37 $88.80 $104.94 $137.94 $173.27

Footnotes:

[2] Represents the median use for the County Residential Class.

[3] Amounts shown include the current Purchased Water Pass-Through Consumption Charge of $2.43 per 1,000 gallons for all billed Water Consumption.

[4] Utility is currently involved in a rate study, is planning to conduct a rate study, or will implement a rate revision within the next twelve months.

[5] The City of Tampa has user specific wastewater billing caps, based on a recorded two months of average winter flow. For comparison purposes it was assumed that the wastewater flow would be capped at 10,000 gallons of flow.

`JNTT Table 15 Page 1 of 1 Hillsborough County Water Resource Division

Comparison of Typical Monthly Residential Bills For Reclaimed Water Division [1]

Residential Service for a 5/8" or 3/4" Meter Line 0 5,000 10,000 15,000 20,000 30,000 40,000 50,000 No. Description Gallons Gallons Gallons Gallons Gallons Gallons Gallons Gallons

Hillsborough County Metered Service 1 Prior Rates Effective October 1, 2009 $3.82 $5.12 $7.17 $9.22 $12.02 $17.62 $23.22 $28.82 2 Existing Rates Effective June 1, 2010 3.83 5.13 7.18 9.23 12.03 17.63 23.23 28.83

Unmetered (Flat) Service 3 Existing Rates [2] $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00 $9.00

Other Florida Utilities:

4 Charlotte County $2.53 $15.18 $27.83 $40.48 $53.13 $78.43 $103.73 $129.03 5 City of Clearwater 18.30 21.20 24.10 27.00 29.90 35.70 41.50 47.30 6 Collier County Water-Sewer District 5.40 9.45 13.50 17.55 21.60 29.70 37.80 45.90 7 Lee County Utilities 0.00 2.15 4.30 6.45 8.60 12.90 17.20 21.50 8 Manatee County 2.70 5.20 7.70 10.20 12.70 17.70 22.70 27.70 9 City of North Port 0.00 2.75 5.50 8.25 11.00 16.50 22.00 27.50 10 Pasco County 7.28 9.08 10.88 12.68 14.48 18.08 21.68 25.28 11 Pinellas County 8.89 10.49 12.09 13.69 15.29 18.49 21.69 24.89 12 Polk County 0.00 5.50 11.00 16.50 22.00 55.10 99.20 165.40 13 Sarasota County 5.00 7.20 9.40 11.60 13.80 18.20 22.60 27.00 14 City of St. Petersburg (Metered Service) 15.62 17.87 20.12 22.37 24.62 29.12 33.62 38.12 15 City of Tampa 0.00 8.02 16.04 24.06 32.09 48.13 64.17 80.21

16 Other Florida Utilities' Average $5.48 $9.51 $13.54 $17.57 $21.60 $31.50 $42.32 $54.99

[1] Unless otherwise noted, amounts shown reflect residential rates in effect June 2010 and are exclusive of taxes or franchise fees, if any, and reflect rates charged for inside the city service. All rates are as reported by the respective utility. This comparison is intended to show comparable charges for similar service for comparison purposes only and is not intended to be a complete listing of all rates and charges offered by each listed utility.

[2] The rates for unmetered service have been grandfathered as to rate level by the Board of County Commissioners and therefore not subject to annual price index adjustments.

`JNTU Table 16 Page 1 of 1 Hillsborough County, Florida Water Resource Division

Comparison of Water and Wastewater Impact Fees - 5/8" Residential Division (1 ERC) [1]

Line Water Wastewater Combined No. Description Impact Fee Impact Fee Fee

Hillsborough County 1 Existing Rates [2] $1,750 $1,800 $3,550

Other Florida Utilities:

2 Charlotte County $2,020 $3,770 $5,790 3 City of Clearwater 480 900 1,380 4 Collier County 3,575 3,495 7,070 5 Lee County 2,440 2,660 5,100 6 Manatee County 1,970 2,315 4,285 7 City of North Port 1,735 2,388 4,123 8 Pasco County 1,561 2,730 4,291 9 Pinellas County 352 2,060 2,412 10 Polk County 2,580 3,805 6,385 11 Sarasota County 2,720 2,031 4,751 12 City of Tampa [3] 0 1,769 1,769

13 Other Florida Utilities' Average $1,767 $2,538 $4,305

Footnotes:

[2] Amounts shown do not include Accrued Guaranteed Revenue Fees charged to new development to recover the carrying costs of capacity built in advance of growth.

[3] The City of Tampa charges varying sewer impact fees to seven different geographic areas (districts). For purposes of this comparison and based on talks with City staff, the amount shown for the sewer impact fee reflects the Central Zone (District Code S27), which is anticipated to receive the majority of future growth within the City and generally is a lower sewer impact fee compared to the other districts within the City.

`JNTV (THIS PAGE INTENTIONALLY LEFT BLANK)

APPENDIX D

FORM OF THE RESOLUTION

(THIS PAGE INTENTIONALLY LEFT BLANK) /

RESOLUTION NO. R03- 112

AMENDED Al"JD RESTATED UTILITY SYSTEM BOND RESOLUTION

ORIGINALLY ADOPTED AS RESOLUTION NO. R98-154 BY THE BOARD OF COUNTY COMMISSIONERS OF HILLSBOROUGH COUNTY, FLORIDA ON AUGUST 5, 1998

HILLSBOROUGH COUNTY, FLORIDA

As Issuer

aJN HILLSBOROUGH COUNTY, FLORIDA

BOND RESOLUTION

Table of Contents (This table of contents is not part of the Bond Resolution and is only for convenience of reference.)

ARTICLE I AUTHORITY FOR THIS RESOLUTION 2

ARTICLE II DEFINITIONS 2 Section 2.01. Definitions 2 Section 2.02. Singular/Plural 16

ARTICLE III FINDINGS 16

ARTICLE IV COST OF PROJECTS 17 Section 4.01. Cost of Projects 17

ARTICLE V RESOLUTION TO CONSTITUTE CONTRACT 18

ARTICLE VI AUTHORIZATION, DESCRIPTION, FORM AND TERMS OF BONDS 18 Section 6.01. Authorization of Bonds 18 Section 6.02. Description of Bonds 18 Section 6.03. Execution of Bonds 19 Section 6.04. Authentication of Bonds 19 Section 6.05. Exchange of Bonds 20 Section 6.06. Negotiability, Registration and Transfer of Bonds 20 Section 6.07. Ownership of Bonds 20 Section 6.0B. Bonds Mutilated, Destroyed, Stolen 01' Lost 20 Section 6.09. Provisions for Redemption "" " 21 Section 6.10. Form of Bonds 22

ARTICLE VII APPLICATION OF BOND PROCEEDS "" 32

ARTICLE VIII SOURCE OF PAYMENT OF BONDS; SPECIAL OBLIGATIONS OF THE ISSUER 32 Section 8.01. Bonds Not to be Indebtedness ofthe Issuer 32 Section 8.02. Pledge of Revenues " 32

ARTICLE IX CREATION AND USE OF BOND FUND AND ACCOUNTS; DISPOSITION OF PLEDGED REVENUES 33 Section 9.01. Creation of Bond Fund and Accounts 33 Section 9.02. Disposition of Funds in the Construction Account 33 Section 9.03. Deposit of Gross Revenues into the General Revenue Account and Disposition Thereof .., ·.34

aJO Section 9.04. Deposit of Pledged Water Capacity Fees in the Pledged Water Capacity Fee Account and Disposition Thereof 38 Section 9.05. Deposit of Pledged Wastewater Capacity Fees in the Pledged Wastewater Capacity Fee Account and Disposition Thereof 38 Section 9.06. Disposition of Funds in Operation and Maintenance Account 39 Section 9.07. Disposition of Funds in the Debt Service Account 39 Section 9.08. Application of Funds in the Reserve Account .40 Section 9.09. Disposition of Funds in the Renewal and Replacement Account 40 Section 9.10. Disposition of Funds in the Subordinate Indebtedness Account.. 41 Section 9.11. Disposition of Funds in the Other Indebtedness Account 41 Section 9.12. Transfer of Funds to Paying Agents 41 Section 9.13. General Purpose Account 41

ARTICLE X DEPOSITARIES OF MONEYS, SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS 41 Section 10.01. Deposits Constitute Trustee Funds for Legal Purposes 41 Section 10.02. Investment of Moneys 42

ARTICLE XI GENERAL COVENANTS OF THE ISSUER 43 Section 11.01. Operation and Maintenance 43 Section 11.02. Rate Covenant 43 Section 11.03. Annual Rate Review 44 Section 11.04. Bi-Annual Long Range Business Plan .44 Section 11.03. Annual Rate Review 44 Section 11.05. Operating and Capital Budgets; Books and Records .44 Section 11.06. AnnualAudit ,, 44 Section 11.07. No Mortgage or Sale ofthe System 45 Section 11.08. Insurance and Condemnation Awards , 46 Section 11.09. No Free Service ,.., , , 46 Section 11.10. Mandatory Cut Off , 47 Section 11.11. Enforcement of Collections 47 Section 11.12. No Competing System " , 47 Section 11.13. Qualified Independent Consultants 47 Section 11.14. Issuance of Other Obligations 47 Section 11.15. Issuance of Additional Parity Bonds, , 48 Section 11.16. Commencement and Completion of Projects 51 Section 11.17. 'fax Covenants 51 Section 11.18. Rebate Account , 52 Section 11.19. Qualified Derivative Agreements 52 Section 11.20 No Further Issuance of Senior Lien Bonds 52

ARTICLE XII DEFEASANCE; NOTICE OF DEFEASANCE 53 Section 12.01. Defeasance ,', 53 Section 12.02. Publication of Notice of Defeasance 54

ARTICLE XIII EVENTS OF DEFAULT; REMEDIES 54 Section 13.01. Events of Default 54 Section 13.02. Enforcement of Remedies " 55 Section 13.03. Effect of Discontinuing Proceedings 56

aJP Section 13.04. Directions to Default Trustee as to Remedial Proceedings 56 Section 13.05. Restrictions on Actions by Individual Bondholders 56 Section 13.06. Pro Rata Application of Funds 57 Section 13.07 Rights of Municipal Bond Ineurers 58

ARTICLE XIV MISCELLANEOUS , 58 Section 14.01. Modification or Amendment 58 Section 14.02. Members ofthe County Not Liable 59 Section 14.03. No Third-Party Beneficiaries 60 Section 14.04. Severa bility and Invalid Provisions , ,." 60 Section 14.05. Sale of Bonds 60 Section 14.06. Repealing Clause 60 Section 14.07. Effective Date 60

111

aJQ RESOLUTION NO. R03-ll2

A RESOLUTION AMENDING AND RESTATING IN ITS ENTIRETY RESOLUTION NO. ROI-068 ENTITLED: "A RESOLUTION AMENDING AND RESTATING IN ITS ENTIRETY RESOLUTION NO. R98-154; AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $225,000,000 JUNIOR LIEN REFUNDING UTILITY REVENUE BONDS, SERIES 2001, OF HILLSBOROUGH COUNTY, FLORIDA, TO BE APPLIED TO REFUND OUTSTANDING UTILITY REVENUE BONDS OF THE COUNTY; PROVIDING FOR ISSUANCE OF ADDITIONAL PARITY BONDS; PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS; PROVIDING FOR THE PAYMENT THEREOF SOLELY FROM CERTAIN PLEDGED REVENUES; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF SUCH BONDS; AND PROVIDING FOR SEVERABILITY AND AN EFFECTIVE DATE"; REPEALING RESOLUTION NO. R85-0225, AS SUPPLEMENTED AND AMENDED, UPON THE EFFECTIVE DATE HEREOF; AND PROVIDING FOR SEVERABILITY AND AN EFFECTIVE DATE.

Upon motion by Commissioner Castor , --' seconded by Commissioner Frank , the following resolution was adopted by a vote of ~ to ~, with Commissioner(s) ______voting No; Commissioner(s) _~P;.l~a~t~t,-- ~ being absent.

WHEREAS, Hillsborough County, Florida (the "Issuer") previously adopted Resolution No. R98-154 on August 5, 1998 (the "Origina11998 Resolution"); and

WHEREAS, the Issuer previously adopted Resolution No. ROl-068 on April 4, 2001, amending and restating in its entirety the Original 1998 Resolution, and thereafter adopted Resolution No. ROl-084 on April 18, 2001 which amended and supplemented the same (collectively, the "Original 2001 Resolution"); and

WHEREAS, pursuant to the Original 2001 Resolution, on May 17, 2001, the Issuer issued its $186,105,000 in original aggregate principal amount of Hillsborough County, Florida Junior Lien Refunding Utility Revenue Bonds, Series 2001 (the "Series 2001 Bonds") to refund outstanding utility revenue bonds of the Issuer; and

WHEREAS, on February 4, 2002, the Issuer entered into a forward interest rate swaption agreement (the "Interest Rate Swap Agreement") relating to a future refunding of its $176,700,000 in original aggregate principal amount of Hillsborough County, Florida Refunding Utility Revenue Bonds, Series 1993 (the "Series 1993 Bonds"); and

aJR WHEREAS, the Original 2001 Resolution provides that the Issuer may modify and amend its terms and provisions upon satisfaction of the requirements of Section 14.01 thereof, and upon assignment or termination of all of the Issuer's rights, duties and obligations under the Interest Rate Swap Agreement; and

WHEREAS, the Issuer desires to compile, codify, amend and restate the Original 2001 Resolution in its entirety through the adoption of this Resolution;

BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF HILLSBOROUGH COUNTY, FLORIDA:

ARTICLE I

AUTHORITY FOR THIS RESOLUTION

This Resolution is adopted pursuant to the Constitution of the State of Florida, the Hillsborough County Charter, Chapter 125, Florida Statutes, Chapter 159, Part I, Florida Statutes, and other applicable provisions oflaw (collectively, the "Act").

ARTICLE II

DEFINITIONS

. Section 2.01. Definitions. The following terms shall have the following meanings herein, unless the text otherwise expressly requires:

"Accreted Value" means, as of any date of computation with respect to any Capital Appreciation Bond, an amount equal to the principal amount of such Capital Appreciation Bond (the principal amount at its initial offering) plus the interest accrued on such Capital Appreciation Bond, compounded periodically, to the date of calculation, determined by reference to the accretion tables contained in such Capital Appreciation Bond or contained01' referred to in the Subsequent Resolution providing for the issuance of such Capital Appreciation Bond, such interest to accrue at a rate not exceeding the legal rate as set forth in the Subsequent Resolution of the Issuer providing for the issuance of such Capital Appreciation Bond. The Accreted Value of such Capital Appreciation Bond as of any date not stated in such tables shall be calculated by adding to the Accreted Value for such Capital Appreciation Bond as of the last date stated in such tables immediately preceding the date of calculation, a portion of the difference between the Accreted Value as of such preceding date and the Accreted Value as of the date shown on the tables immediately succeeding the date of computation, calculated based on the assumption that Accreted Value accrues in equal daily amounts on the basis of a year of twelve 30·day months.

"Acquired Obligations'' means and includes any of the following securities,if and to the extent the same are at the time legal for investment of funds of the Issuer under the laws of the State of Florida:

aJS (1) any bonds 01' other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any Federal agency or corporation which has been01' may hereafter be created pursuant to an act of Congress as an agency or instrumentality of the United States of America to the extent unconditionally guaranteed by the United States of America or any other evidences of an ownership interest in obligations or in specified portions thereof (which may consist of specified portions of the interest thereon) of the character described in this clause (1), excluding Farm Credit Consolidated Systemwide Discount Notes, Federal Farm Credit Banks Systemwide Bonds and obligations of Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives;

(2) any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (a) which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described in clause (1) hereof which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (c) as to which the principal of and interest on the bonds and obligations of the character described in clause (1) hereof which have been deposited in such fund along with any cash on deposit in such fund is sufficient to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (2) on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (2), as appropriate; and

(3) stripped interest payments with respect to obligations issued by Resolution Funding Corporation.

"Act" has the meaning ascribed thereto in Article I hereof. "Additional Parity Bonds" means additional bonds issued in compliance with the terms, conditions and limitations contained in Section 11.15 hereof which have a lien on the Pledged Revenues, equal to that of all Bonds and rank equally in all respects with all Bonds issued hereunder.

"Ambac Assurance" means Ambac Assurance Corporation, to the extent it is a municipal bond insurer of any Bonds Outstanding hereunder.

"Amortization Installment" means the funds required to be deposited in the Debt Service Account in a given Bond Year for the payment at maturity 01' sinking fund redemption of a portion of a series of Term Bonds, as established by Subsequent Resolution of the Governing Body of the Issuer at or before the delivery of that series of Term Bonds.

"Authority" means Tampa Bay Water, formerly known as West Coast Regional Water Supply Authority, an interlocal governmental agency created and existing pursuant to

aJT Sections 373.1962 and 163.01, Florida Statutes, and any successor thereto or assignee thereof or substitute therefor.

"Authorized Depositary" means any bank, trust company, national banking association, savings and loan association, savings bank or other banking association selected by the Issuer as a depositary, which is authorized under Florida law to be a depositary of municipal funds and which has qualified with all applicable state and Federal requirements concerning the receipt of Issuer funds.

"Bond Counsel" means counsel experienced in matters relating to the validity of, and the tax exemption of interest on, obligations of states and their political subdivisions.

"Bond Fund" means the Utilities Bond Fund created and established pursuant to Section 9.01 of this Resolution.

"Bond Holder" or "Holder of Bonds" or any similar term shall mean any person who shall be the registered owner of any outstanding Bond or Bonds.

"Bond Obligation" means, as of the date of computation, the sum(i) of:the principal amount of all Current Interest Banda then outstanding and(ii) the Accreted Value of all Capital Appreciation Bonds then outstanding.

"Bond Service Requirement" means, for a given Bond Year, the remainder after subtracting (i) any capitalized investment earnings for that year that has been deposited into the Debt Service Account, (ii) any interest that has been deposited into the Debt Service Account from the investment of funds in the Debt Service Account, the Reserve Account and the Construction Account during that year, from the sum of:

(1) The amount required to pay the interest coming due on Bonds during that Bond Year,

(2) The amount required to pay the principal of Bonds maturing in that Bond Year that are not included in the Amortization Installments for such Bonds,

(3) The Amortization Installments for all Series of Bonds for that Bond Year, and

(4) The premium, if any, payable on all Bonds required to be redeemed in that Bond Year in satisfaction of the Amortization Installment.

For purpose of determining the Bond Service Requirement, unless the interest rate is fixed for the duration of the applicable Bond Year, in which case the actual interest rate shall be used, the interest rate on variable rate Bonds which are not issued in connection with a Qualified Derivative Agreement shall be calculated at an assumed rate equal to 110% of the higher of (i) the average interest rate over the preceding twelve (12) calendar months (or such shorter period as variable rate Bonds have been Outstanding) on all variable rate Bonds Outstanding on the date of calculation for which the interest rate is fixed for a period of one year or less, or (ii) the average rate of interest over the preceding calendar month on all

aJU variable rate Bonds Outstanding on the date of calculation for which the interest rate is fixed for a period of one year or less.

If a Series of variable rate Bonds is subject to purchase by the Issuer pursuant to a mandatory or optional tender by the holder, the "tender" date or dates shall be ignored and the stated maturity dates thereof shall be used for purposes of this calculation.

If the Issuer has entered into a Qualified Derivative Agreement with respect to certain variable rate Bonds Outstanding hereunder or to be issued hereunder, the interest coming due on such variable rate Bonds for purposes of this definition shall be deemed to be based upon the synthetic fixed interest rate under the Qualified Derivative Agreement, without giving any regards to fees and expenses incurred in connection with the purchase of a liquidity facility.

"Bond Year" means the Fiscal Year; provided that when such term is used to describe the period during which Required Deposits are to be made to amortize principal and interest on the Bonds maturing or becoming subject to redemption, interest due and principal maturing or becoming subject to redemption as an Amortization Installment on October 1of any year shall be deemed to mature or become subject to redemption on the last day of the preceding Bond Year.

"Bonds" means the initial Series of Bonds, herein authorized to be issued, together with any Additional Parity Bonds hereafter issued under the terms, conditions and limitations contained herein, to the extent that such Bonds remain Outstanding.

"Capacity Fees" means, collectively, the Water Capacity Fees and the Wastewater Capacity Fees.

"Capital Appreciation Bonds" means Bonds that bear interest that is payable only at maturity or upon redemption prior to maturity in amounts determined by reference to the Accreted Value.

"Chairman" means the Chairman or Vice Chairman of the Governing Body.

"Chief Financial Officer" means, for the purposes of §218.403, Florida Statutes, or any similar statute, the Clerk, or any other officer of the Issuer subsequently designated pursuant to law.

"Clerk" means the Clerk of the Circuit Court and Ex-Officio Clerk to the Board of County Commissioners, and custodian and auditor of all funds of the Issuer, or any deputy Clerk.

"Completion Bonds" shall have the meaning ascribed thereto in Section 11.15(7) hereof.

"Construction Account" means the Construction Account created and established pursuant to Section 9.01 of this Resolution.

"Contracted Water Supply" means the supply of water to the Issuer's Water System pursuant to the Master Water Supply Contract between the Issuer and the Authority dated May 1, 1998, as amended, supplemented or restated from time to time, together with any

aJV related contracts or interlocal agreements of a similar nature between the Issuer and the Authority which provides that the Authority is obligated to supply, and the Issuer is obligated to pay for, water.

"Contracted Water Supply Water Capacity Fee Carryforward Amount" means, as calculated once per year as of September 30th, (a) the amount of the Debt Service Component which legally could have been paid with Water Capacity Fees pursuant to resolution of the Issuer since October 1, 1986, less (b) the amount of the Debt Service Component which has actually been paid with Water Capacity Fees since October 1, 1986.

"Contracted Water Supply Expansion Project Percentage" means the percentage determined by the fraction, the numerator of which is the total original principal amount of debt obligations serviced by the Debt Service Component of the Cost of Contracted Water Supply (including all debt obligations hereafter issued by the Authority to refund such obligations and all additional debt obligations issued by the Authority which are hereafter allocable to such Debt Service Component) that have been allocated to Contracted Water Supply Expansion Projects by certificate of the Qualified Independent Consultant, and the denominator of which is the original principal amount of all debt obligations serviced by the Debt Service Component of the Cost of Contracted Water Supply. The Contracted Water Supply Expansion Project Percentage shall be redetermined by the Qualified Independent Consultant, utilizing the fraction set forth above, at least annually.

"Contracted Water Supply Expansion Projects" means capital improvement projects or portions thereof for the oversizing, expanding or construction of new additions to the Authority's water collection, treatment and distribution system that are designed to expand its capacity and, to the extent they will provide capacity for future customers of the Issuer as of the date of issuance of the Bonds, similar projects 01' portions thereof, whether completed or under construction, which have been or are to be funded01' financed, directly or indirectly, as from the proceeds of debt obligations serviced by the Debt Service Component of the Cost of Contracted Water Supply.

"Cost of Contracted Water Supply" means all costs (net of credits and refunds) which the Issuer is required to pay to the Authority for Contracted Water Supply, including but not limited to amounts which are attributable to indebtedness of the Authority.

"Cost of Operation and Maintenance" of the System means the current expenses, paid 01' accrued, of operations, maintenance and repair of the Issuer's System, as calculated in accordance with generally accepted accounting principles for public utilities. The Cost of Operation and Maintenance shall include the Cost of Contracted Water Supply, but shall not include (i) any reserve for renewals and replacements (except to the extent contemplated under the Federal Clean Water Act, 33 u.S.nA 1251 et seq., and the regulations promulgated thereunder, with respect to certain equipment replacement), extraordinary repairs01' any allowance for depreciation or amortization,(ii) the payment of any principal of, interest, and premium, if any, on the Bonds and all other notes, bonds and similar obligations of the Issuer, (iii) any expense resulting from a recharacterization from capital expenditure to expense of moneys expended from the Construction Account for any Project01' portion thereof which is abandoned pursuant to Section 9.02 hereof, or (iv) any cost or expense funded or reimbursed from the Renewal and Replacement Account01' funded or reimbursed from a grant from a governmental body other than the Issuer.

aJNM "Current Interest Bonds" means Bonds that bear interest which is payable annually, semiannually or monthly, 01' such more frequent interval as the Issuer may determine.

"Debt Service Account" means the Debt Service Account established pursuant to Section 9.01 of this Resolution.

"Debt Service Component" means that portion of the Issuer's payment to the Authority for Contracted Water Supply which the Qualified Independent Consultant determines in writing to be allocable to the cost of providing water capacity available or to be available to serve the Issuer's customers.

"Department" means the Water Department of the Issuer.

"Director of the Water Department" means the person from time to time serving as the

Director of the Water Department of the Issuer,01' such other office which may at any time hereafter perform the same function.

"Federal Securities" means non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America.

"Fiscal Year" means the Issuer's fiscal year being the period commencing on October 1 of each year and ending on the succeeding September 30, or any other Fiscal Year as established by law01' resolution.

"Fitch" means Fitch Ratings, its successors and their assigns, and,if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

"General Purpose Account" means the General Purpose Account established by Section 9.01 ofthis Resolution.

"General Revenue Account" means the General Revenue Account created and established pursuant to Section 9.01 of this Resolution.

"Governing Body" means the Board of County Commissioners of the Issuer.

"Gross Revenues" or "Revenues" means all fees, revenues, charges, income or earnings, including any income from the investment of funds unless otherwise provided herein, derived by the Issuer from the operation of the System, including, but not limited to, accrued guaranteed revenue fees and Installation Charges, provided, however, that Gross Revenues01' Revenues shall not include: (1) proceeds from the sale of any Bonds, (2) proceeds from insurance 01' the disposition of property to the extent otherwise provided by this Resolution, (3) grants from the Issuer or other governmental agencies and interest earned on such grants, (4) any capacity or impact fees whether or not pledged hereunder, (5) unrealized losses or gains from investments, (6) any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Capacity Fees, or (7) the proceeds of bonds or other

aJNN "Current Interest Bonds" means Bonds that bear interest which is payable annually, semiannually or monthly, or such more frequent interval as the Issuer may determine.

"Debt Service Account" means the Debt Service Account established pursuant to Section 9.01 of this Resolution.

"Department" means the Water Department of the Issuer.

"Director ofthe Water Department" means the person from time to time serving as the Director of the Water Department of the Issuer, or such other office which may at any time hereafter perform the same function.

"Federal Securities" means non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America.

"Fitch" means Fitch Ratings, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

"General Purpose Account" means the General Purpose Account established by Section 9.01 of this Resolution.

"General Revenue Account" means the General Revenue Account created and established pursuant to Section 9.01 of this Resolution.

"Governing Body" means the Board of County Commissioners of the Issuer.

"Gross Revenues" or "Revenues" means all fees, revenues, charges, income or earnings, including any income from the investment of funds unless otherwise provided herein, derived by the Issuer from the operation of the System, including, but not limited to, accrued guaranteed revenue fees and Installation Charges, provided, however, that Gross Revenues or Revenues shall not include: (1) proceeds from the sale of any Bonds, (2) proceeds from insurance or the disposition of property to the extent otherwise provided by this Resolution, (3) grants from the Issuer or other governmental agencies and interest earned on such grants, (4) any capacity or impact fees whether or not pledged hereunder, (5) unrealized losses or gains from investments, (6) any non- ad valorem special assessments which are levied and imposed to provide installment financing of any Capacity Fees, or (7) the proceeds of bonds or other

aJNO indebtedness which is secured by non-ad valorem special assessments levied or imposed by the Issuer in lieu oflevying or imposing Capacity Fees.

"Installation Charges" means the Issuer's charges for the connection of a user to the System; including. but not limited to, meter installation charges, sewer tap-in charges, and water service and sewer lateral installation fees, all as described in the Ordinance; provided, however, that "Installation Charges" does not include capacity or impact fees whether or not pledged hereunder.

"Investment Obligations" means, to the extent permitted by law and the Issuer's investment policy:

1. Cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in paragraph (2) below),

2. Federal Securities.

3. Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance.

4. Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including:

-- Export-Import Bank -- Farm Credit System Financial Assistance Corporation -- Rural Economic Community Development Administration (formerly the Farmers Home Administration) -- General Services Administration -- U.S. Maritime Administration .- Small Business Administration .- Government National Mortgage Association (GNMA) -- u.s. Department of Housing & Urban Development (PHA's) -- Federal Housing Administration -- Federal Financing Bank.

5. Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America:

-- Senior debt obligations rated "Aaa" by Moody's and"MA" by S&P issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC) -- Obligations of the Resolution Funding Corporation (REFCORP) -- Senior debt obligations of the Federal Home Loan Bank System -- Senior debt obligations of other Government Sponsored Agencies approved by Ambac Assurance.

6. U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "P-l" by Moody's and "A-I" or "A-H" by

aJNP S&P and maturing no more than 360 calendar days after the date of purchase (ratings on holding companies are not considered as the rating of the bank).

7. Commercial paper which is rated at the time of purchase in the single highest classification, "P-l" by Moody's and "A-H" by S&P and which matures not more than 270 calendar days after the date of purchase.

8. Investments in a money market fund rated "AAAro" or IlAAAro-G" or better by S&P.

9. Pre-refunded Municipal Obligations defined as follows: Any Obligations or other obligations of any state of the United States of America or of any agency, instrumentality or local government unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and

A. which are rated, based on irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or any successors thereto; or

B. (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (2) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such Obligations or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certificated public accountant, to pay principal of and interest and redemption premium, if any, on the Obligations or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate.

10. Municipal obligations rated "AaaJAAN or general obligations of States with a rating of at least "A2lA" or higher by both Moody's and S&P.

11. Investment agreements approved in writing by Ambac Assurance.

12. Other forms of investments (including repurchase agreements) approved in writing by Ambac Assurance.

13. Units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Chapter 218, PartN, Florida Statutes, or any similar common trust fund which is established pursuant to the laws of the State of Florida as a legal depository of public moneys and for which the Florida State Board of Administration acts as custodian, and shares of the Florida Counties Investment Trust ("FCIT") Government Fund or any other FelT Investment Fund (the assets of which are restricted to investment instruments authorized by Section 125.31, Florida Statutes or by ordinance of the Issuer) established pursuant to Section 218.415(17)(a), Florida Statutes.

The value of the above investments shall be determined as follows:

aJNQ A. For securities:

(i) the closing bid price quoted by Interactive Data Systems, Inc.;

(ii) a valuation performed by a nationally recognized and accepted pricing service acceptable to Ambac Assurance whose valuation method consists of the composite average of various bid price quotes on the valuation date; or

(iii) the lower of two dealer bids on the valuation date (the dealers or their parent holding companies must be rated at least investment grade by Moody's and S&P and must be market makers in the securities being valued).

B. As to certificates of deposit and bankers' acceptances: the face amount thereof, plus accrued interest; and

C, As to any investment not specified above: the value thereof established by prior agreement between the Issuer and Ambac Assurance.

"Issuer" means Hillsborough County, Florida, a political subdivision of the State of Florida.

"Long Range Business Plan" means a lO-year plan governing the financing and operations of the System.

"Long Range Capital Improvements Plan" means a 5-year (or more) capital improvements plan governing the expansion, improvement, replacement and repair of the System to properly meet the needs of the Issuer and adequately serve the service area and customers of the System.

"Maximum Bond Service Requirement" means, as of any particular date of calculation, the largest Bond Service Requirement for any remaining Bond Year, except that (i) with respect to any Bonds for which Amortization Installments have been established, the amount of principal coming due on the final maturity date with respect to such Bonds shall be reduced by the aggregate principal amount of such Bonds to be redeemed from Amortization Installments to be made in prior Bond Years.

"Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and,if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

"Net Revenues" of the System means the Revenues01' Gross Revenues after deduction of the Cost of Operation and Maintenance.

"Operation and Maintenance Account" means the Operation and Maintenance Account created and established pursuant to Section 9.01 hereof.

aJNR "Ordinance" means Ordinance No. 85-28 as enacted by the Governing body of the Issuer on September 10, 1985, as from time to time amended, revised or restated.

"Other Indebtednesa" means obligations of the Issuer, payable from Pledged Revenues which by their terms are junior and subordinate in all respects to the Bonds authorized hereunder and the Subordinate Bonds which may be issued from time to time, including, without limitation, obligations of the Issuer under Qualified Derivative Agreements which do not constitute Qualified Derivative Payments.

"Other Indebtedness Account" means the Other Indebtedness Account created and established pursuant to Section 9.01 hereof.

"Outstanding" or "Bonds Outstanding" means all Bonds which have been issued pursuant to this Resolution, except:

(1) Bonds cancelled after purchase in the open market or because of payment at or redemption prior to maturity;

(2) Bonds for the payment or redemption of which cash funds or Acquired Obligations 01' any combination thereof shall have been theretofore irrevocably set aside in a special account with an escrow agent (whether upon or prior to the maturity or redemption date of any such Bonds) in an amount which, together with earnings on such Acquired Obligations, will be sufficient to pay the principal of and interest and redemption premiums, if any, on such Bonds at maturity or upon their earlier redemption; provided that, if such Bonds are to be redeemed before the maturity thereof, notice of such redemption shall have been given according to the requirements of this Resolution or irrevocable instructions directing the timely publication of such notice and directing the payment of the principal of and interest on all such Bonds at such redemption dates shall have been given to such escrow agent; and

(3) Bonds which are deemed paid pursuant to this Resolution or in lieu of which other Bonds have been issued under Sections 6.05,6.06 and 6.08.

"Paying Agent" means the Clerk; provided, however, that the Issuer may designate any authorized depositary or depositaries hereafter designated by Subsequent Resolution to replace the Clerk as Paying Agent or to act in the capacity of Paying Agent with respect to a specific Series of Bonds. All Paying Agents appointed hereunder, if other than the Clerk, shall have a combined capital, surplus and undivided profits of at least $50,000,000.

"Pledged Capacity Fees" means, collectively, the Pledged Water Capacity Fees and the Pledged Wastewater Capacity Fees.

"Pledged Wastewater Capacity Fee Account" means the Pledged Wastewater Capacity Fee Account created and established pursuant to Section 9.01 of this Resolution.

"Pledged Wastewater Capacity Fees" means the Wastewater Capacity Fees including any income from the investment of funds deposited into the Pledged Wastewater Capacity Fee Account; provided, however, that that "Pledged Wastewater Capacity Fees" in each year shall not exceed (a) the Bond Service Requirement for all Bonds for such Bond Year multiplied by

aJNS the Wastewater Expansion Project Percentage, plus (b) the Wastewater Capacity Fee Carryforward Amount.

"Pledged Water Capacity Fee Account" means the Pledged Water Capacity Fee Account created and established pursuant to Section 9.01 of this Resolution.

"Pledged Water Capacity Fees" means the Water Capacity Fees including any income from the investment of funds deposited into the Pledged Water Capacity Fee Account; provided, however, that that "Pledged Water Capacity Fees" in each year shall not exceed (a) the Bond Service Requirement for all Bonds for such Bond Year multiplied by the Water Expansion Project Percentage, plus (b) the Water Capacity Fee Carryforward Amount.

"Pledged Revenues" means, collectively, Net Revenues, Pledged Capacity Fees, proceeds from the sale or condemnation of property of the System and proceeds from property and casualty insurance insuring the System's property, and any Qualified Derivative Receipts.

"Projects" means the construction or acquisition of additions, extensions and improvements to the System which are funded with proceeds from the sale of Additional Parity Bonds, to the extent authorized by Subsequent Resolution, of the Governing Body, all in accordance with plans and specifications as amended from time to time, filed with and approved by the Director of the Water Department.

"Qualified Derivative Agreement" means an agreement, such as an interest rate swap, collar, cap, or other functionally similar agreement, between the Issuer and a counterparty whose long-term unsecured debt at the time of entering into such Agreement is rated at least "AA-" by S&P and "Aa3" by Moody's, which is entered into by the Issuer as a debt management tool with respect to the Bonds or a portion thereof issued hereunder, provided that the payments to be made by the counterparty thereunder have been pledged to the payment of the Bonds.

"Qualified Derivative Payments" means the payment obligations of the Issuer arising under a Qualified Derivative Agreement, which are calculated on the basis of interest on a notional amount which may correspond with the principal amount of certain Bonds issued hereunder, or a particular series or maturity thereof, based upon a fixed or a variable rate index or formula, provided that the payments by such counterparty under such Agreement are used in the calculation of the Bond Service Requirement. Qualified Derivative Payments include only regularly scheduled payments under a Qualified Derivative Agreement determined by reference to interest on a notional amount and shall not include any other payments under such Agreement (for example any termination fee, indemnification obligations 01' other fees payable to the counterparty).

"Qualified Derivative Receipts" means the payment obligations of the counterparty to the Issuer arising under a Qualified Derivative Agreement, which are calculated on the basis of interest on a notional amount which may correspond with the principal amount of certain Bonds issued hereunder, or a particular series or maturity thereof, based upon a fixed or a variable rate index or formula. Qualified Derivative Receipts include only regularly scheduled payments under a Qualified Derivative Agreement determined by reference to interest on a notional amount and shall not include any other payments under such Agreement (for

aJNT example any termination fee, indemnification obligations or other fees payable by the counterparty).

"Qualified Independent Consultant" means anyone or more qualified and recognized independent consultants, having favorable repute, skill and experience with respect to the acts and duties required of a Qualified Independent Consultant by a particular section or one or more sections hereof, as shall from time to time be retained by the Issuer for the purposes hereof.

"Rebate Account" means the Rebate Account established pursuant to Section 9.01 of this Resolution.

"Rebate Amount" means the excess of the future value, as of the computation date, of all receipts on all nonpurpose investments (as defined in Section 1.148-1(b) of the Income Tax Regulations) over the future value, as of that date, of all payments on nonpurpose investments, all as provided by the Income Tax Regulations under the Code implementing Section 148 thereof.

"Rebate Year" means, with respect to a particular Series of Bonds issued hereunder, a one-year period (or shorter period from the date of issue) that ends at the close of business on the day in the calendar year selected by the Issuer as the last day of a Rebate Year. The final Rebate Year with respect to a particular Series of Bonds issued hereunder, however, shall end on the date affinal maturity of that Series of Bonds.

"Registrar" means, as to any Series of Bonds, the Paying Agent for such Series of Bonds.

"Renewal and Replacement Account" means the Renewal and Replacement Account created and established pursuant to Section 9.01 of this Resolution.

"Renewal and Replacement Account Requirement" means, on the date of calculation, an amount of money equal to (1) five percent of the original cost of the assets and capitalized lease obligations and capacity entitlement programs of the System for the preceding Fiscal Year (as shown on the audited financial statements of the System), or (2) such greater or lesser amount as may be certified to the Issuer by the Qualified Independent Consultant as an amount appropriate for the purposes of this Resolution.

"Required Deposits" means all of the periodic deposits required to be made to the various accounts established pursuant to Section 9.01, but excluding deposits required to be made into the Subordinate Indebtedness Account or the Other Indebtedness Account.

"Reserve Account" means the Reserve Account created and established pursuant to Section 9.01 of this Resolution.

"Reserve Requirement" means, as of any date of calculation, an amount equal to the least of the following; (i) the Maximum Bond Service Requirement; (ii) 125% of the average annual Bond Service Requirement; or (iii) 10% of the aggregate stated original principal amount of the Bonds (except that, in determining the aggregate stated original principal amount of any Series of Bonds for purposes(iii), of (a) the issue price of that Series of Bonds

aJNU (net of pre-issuance accrued interest) shall be substituted for the original stated principal amount if that Series of Bonds is sold at either a net original issue discount or premium exceeding two percent (2%) of its stated redemption price at maturity, and (b) to the extent that no Bonds of a particular Series are Outstanding any longer, the aggregated stated original principal amount for such Series shall be deemed to equal zero).

"Resolution" means this Amended and Restated Utility System Bond Resolution as adopted by the Issuer.

"Serial Bonds" means all Bonds of a Series other than Term Bonds.

"Series" means any portion of the Bonds of an issue authenticated and delivered in a single transaction, payable from an identical sourceof revenue and identified pursuant to the Subsequent Resolution authorizing such Bonds as a separate Series of Bonds, regardless of variations in maturity, interest rate, Amortization Installments or other provisions, and any Bonds thereafter authenticated and delivered in lieu of or in substitutiona Series of of Bonds issued pursuant to this Resolution.

"Series 2001 Bonds" shall have the meaning ascribed thereto in Section 6.01(B) of this Resolution, and in the whereas clauses above.

"Series 1993 Bonds" has the meaning ascribed thereto in the whereas clauses above.

"S&P" means Standard & Poor's Credit Market Services, a corporation organized and existing under the laws of the State of New York, its successors and assigns,if and,such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer.

"Subordinate Indebtedness" means any bonds, notes or other evidences of indebtedness which are by their terms junior and subordinatein all respect to the Bonds authorized to be issued under this Resolution in accordance with Section 11.14 hereof.

"Subordinate Indebtedness Account" means the Subordinate Indebtedness Account created and established pursuant to Section 9.01 of this Resolution.

"Subsequent Resolution" means a resolution of the Issuer adopted subsequent to the date of this Resolution.

"Swap Obligations Account" means the Swap Obligations Account created and established pursuant to Section 9.01 of this Resolution.

"System" means the complete utility properties (including the Water System and the Wastewater System) supplying, distributing and treating water and wastewater services (including reclaimed water services) now or hereafter, operated and maintained by the Issuer, whether owned by or leased by the Issuer, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired and other related or similar services the Governing Body directs to be operated and maintained by the Department as part of the System.

aJNV "Taxable Bonds" shall mean Bonds, the interest on which is not excludable from gross income for purposes of federal income tax purposes.

"Term Bonds" means Bonds of a Series all of which shall be stated to mature on the same date and for which Amortization Installments are established, and such other Bonds of a Series so designated by Subsequent Resolution of the Governing Body of the Issuer adopted on or before the date of delivery of such Bonds.

"Wastewater Capacity Fee Carryforward Amount" means, as calculated once per year as of September 30th, (a) the amount of debt service on the Bonds or any indebtedness refinanced thereby which legally could have been paid with Wastewater Capacity Fees pursuant to resolution of the Issuer since October 1, 1986, less (b) the amount of debt service on the Bonds or any indebtedness refinanced thereby which has actually been paid with Wastewater Capacity Fees since October 1, 1986.

"Wastewater Capacity Fees" means the wastewater capacity fees described in the Ordinance and all other nonrefundable (except at the option of the Issuer) impact fees, capital expansion fees, system improvement fees or other similar fees and charges separately imposed by the Issuer against benefitted properties as a capacity, connection or impact fee or charge for the proportionate share of the capital cost associated with providing, expanding, oversizing01' constructing new additions to the Wastewater System acquired to serve such properties, including without limitation any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Wastewater Capacity Fees to the extent not pledged to secure other special assessment obligations of the Issuer; provided, however, the term "Wastewater Capacity Fees" does not include(i) accrued guaranteed revenue fees, (ii) the proceeds of bonds or other indebtedness which is secured by non-ad valorem special assessments levied or imposed by the Issuer in lieu of imposing Wastewater Capacity Fees, or (iii) any non-ad valorem special assessments which are pledged to secure other special assessment obligations of the Issuer, and which were levied and imposed to provide installment financing of any Wastewater Capacity Fees.

"Wastewater System" means the complete utility properties supplying wastewater services now or hereafter operated and maintained by the Issuer, whether owned or leased by the Issuer, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired.

aJOM "Water Capacity Fee Carryforward Amount" means, as calculated once per year as of September 30th, (a) the amount of debt service on the Bonds or any indebtedness refinanced thereby which legally could have been paid with Water Capacity Fees pursuant to resolution of the Issuer since October 1, 1986, less (b) the amount of debt service on the Bonds or any indebtedness refinanced thereby which has actually been paid with Water Capacity Fees since October 1, 1986.

"Water Capacity Fees" means the water capacity fees described in the Ordinance and all other nonrefundable (except at the option of the Issuer) impact fees, capital expansion fees, system improvement fees or other similar fees and charges separately imposed by the Issuer against benefitted properties as a capacity, connection or impact fee or charge for the proportionate share of the capital cost associated with providing, expanding, oversizing01' constructing new additions to the Water System acquired to serve such properties, including without limitation any non-ad valorem special assessments which are levied and imposed to provide installment financing of any Water Capacity Fees to the extent not pledged to secure other special assessment obligations of the Issuer; provided, however, the term "Water Capacity Fees" does not include (i) accrued guaranteed revenue fees,(ii) the proceeds of bonds 01' other indebtedness which is secured by non-ad valorem special assessments levied or imposed by the Issuer in lieu of imposing Water Capacity Fees, or (iii) any non-ad valorem special assessments which are pledged to secure other special assessment obligations of the Issuer, and which were levied and imposed to provide installment financing of any Water Capacity Fees.

"Water Expansion Project Percentage" means that number, expressed as a percentage, which represents that portion of the total cost of any Project or Projects financed or refinanced from the proceeds of the Bonds which is attributable to any improvements, extensions and additions to the Water System, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment andall property real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the Water System, whether actual or anticipated, created by new users connecting to the Water System, as shall be determined by the Qualified Independent Consultant and set forth in a certificate each time a Series of Bonds is issued hereunder.

"Water System 11 means the complete utility properties supplying water services (including reclaimed water services) now01' hereafter operated and maintained by the Issuer, whether owned or leased by the Issuer, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired.

Section 2.02. SingulaxlPlural. Words importing singular number shall include the plural number in each case and vice versa, and words importing persons shall include firms and corporations.

ARTICLE III

FINDINGS

It is hereby ascertained, determined and declared that:

aJON (1) The Issuer now owns, operates and maintains the System and derives Revenues and Pledged Capacity Fees relating thereto.

(2) From time to time, the Issuer deems it necessary, beneficial and in its best interest to refund certain utility revenue bonds of the Issuer and to fund the cost of acquisition, construction and equipping of future additions, extensions and improvements to the Systemfrom time to time and to issue Bonds for such purposes.

(3) It is necessary and desirable, to acquire and construct Projects from time to time in order to preserve and protect the public health, safety and welfare of the inhabitants of the Issuer.

(4) As of the effective date of this Resolution, except for the Series2001 Bonds, the Pledged Revenues are not pledged or encumbered in any manner.

(5) The estimated Pledged Revenues will be sufficient to pay all of the principal of and interest and redemption premium,if any, on the Bonds to be issued hereunder, as the same become due, and to make all other Required Deposits.

(6) The principal of, and interest and redemption premium,if any, on the Bonds and all other Required Deposits shall be payable solely from the Pledged Revenues, but only to the extent available as herein described. The Issuer shall never be required to levy ad valorem taxes on any property therein to make Required Deposits and the Bonds shall not constitute a lien upon any real or personal property of the Issuer, or any part thereof.

(1) The costs associated with the issuance of each Series of the Bonds shall be deemed to include all legal expenses, financial advisory expenses, underwriting expenses, engineering and consulting expenses, fiscal expenses, expenses for estimates of costs and of revenues, accounting expenses, accrued interest, provisions for reserves, if any, and such other expenses, in each case, as may be necessary or incidental for the financings herein authorized.

ARTICLE IV

COST OF PROJECTS

Section 4.01. Cost of Projects. The cost of the Projects, in addition to the items set forth in the plans and specifications for the Projects, may include, but need not be limited to, the repayment of any advances made by the Issuer for the purposes of the Projects, the acquisition of any lands or interest therein or any other properties deemed necessary or convenient therefor; engineering expenses, legal and financing expenses, including fees and expenses relating to the issuance of the Bonds and the issuance of any municipal bond insurance, liquidity provisions or other forms of credit enhancement; expenses for estimates of costs and of revenues; expenses for plans, specifications and surveys; fees of fiscal agents, financial advisors, engineers or consultants; administrative expenses relating solely to the construction and acquisition of the Projects; the capitalization of interest for a reasonable

J.7

aJOO period after the issuance of the Bonds; the creation and establishment of reasonable reserves for debt service; the discount on the sale of the Bonds,if applicable; and such other costs and expenses as may be necessary or incidental to the financing herein authorized and the construction, acquisition and engineering of the Projects and the placing of the same in operation.

ARTICLE V

RESOLUTION TO CONS'l'ITUTE CONTRACT

In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Issuer and such Holders. The covenants and agreements herein set forth to be performed by the Issuer shall be for the equal benefit, protection and security of the legal Holders of any and all of such Bonds all of which shall, notwithstanding the use of the words "Junior Lien" in the name of the Series 2001 Bonds, be of equal rank and without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided therein and herein.

ARTICLE VI

AUTHORIZATION, DESCRIPTION, FORM AND TERMS OF BONDS

Section 6.01. Authorization of Bonds.

(A) Subject and pursuant to the provisions hereof, each Series of Bonds shall be issued pursuant to Subsequent Resolution of the Governing Body of the Issuer prior01' toat the time of sale of such Series of Bonds. Additional Parity Bonds meeting the requirements of Section 11.15 hereof may be issued from time to time pursuant to the terms hereoffollowing the issuance of the initial Series of Bonds hereunder.

(B) Subject and pursuant to the provisions hereof, obligations of the Issuer to be known as "Hillsborough County, Florida Junior Lien Refunding Utility Revenue Bonds, Series 2001" (the "Series 2001 Bonds) will be the initial Series of Bonds issued hereunder and are hereby authorized to be issued in an amount not to exceed $225,000,000 for the purpose of currently refunding all outstanding Hillsborough County, Florida Refunding Utility Revenue Bonds, Series 1991A, those Hillsborough County, Florida Refunding Utility Revenue Bonds, Series 1991B which mature on August 1, 2016 and certain of the Hillsborough County, Florida Refunding Utility Revenue Bonds, Series .1993, as more particularly described in a Subsequent Resolution to be adopted at or prior to the sale of the Series 2001 Bonds.

Section 6.02. Description of Bonds. The Bonds, including the Series 2001 Bonds but excluding Taxable Bonds, shall be issued in fully registered form; shall be dated; shall be numbered consecutively from one upward; shall be in the denomination of $5,000 each or integral multiples thereof in the case of Current Interest Bonds and shall be in the denomination of $5,000 maturity value01' any integral multiple thereof in the case of Capital Appreciation Bonds; shall be Current Interest Bonds and/or Capital Appreciation Bonds and

aJOP Term Bonds and/or Serial Bonds of one or more Series; shall bear interest at such rate or rates, not exceeding the maximum rate allowed by Florida law, each to be determined by Subsequent Resolution of the Governing Body of the Issuer prior to or upon the sale of the Bonds, such interest rates to be payable at such times as are fixed by such Resolution; may include variable, adjustable, convertible01' other rates, original issue discounts or premiums and zero interest rate bonds; and shall mature on such date or dates in such years and amounts as shall be fixed by Subsequent Resolution of the Governing Body of the Issuer prior to or upon the sale of the Bonds.

The principal of and the interest and redemption premium, if any, on the Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The interest on the Bonds (computed on a basis of a 360-day year consisting of twelve 30-day months) shall be payable by the Paying Agent on each interest payment date to the person appearing on the registration books of the Issuer hereinafter provided for as the registered Holder thereof as of the relevant record date set forth in the Bond forms, by check mailed to such registered Holder at his address as it appears on such registration books. Payment of the principal of all Bonds shall be made upon the presentation and surrender of such Bonds as the same shall become due and payable.

Notwithstanding any other provisions of this section, the Issuer may, at its option, prior to the date of issuance of any Series of Bonds, elect to use an immobilization system or book-entry system with respect to issuance of such Series of Bonds, provided adequate records will be kept with respect to the ownership of such Series of Bonds issued in book-entry form or the beneficial ownership of Bonds issued in the name of a nominee. As long as any Bonds are outstanding in book-entry form, the provisions of this Resolution inconsistent with such system of book-entry registration shall not be applicable to such Bonds. The details of any alternative system of issuance, as described in this paragraph, shall be set forth in a Subsequent Resolution of the Issuer duly adopted at 01' prior to the sale of such Series of Bonds. Section 6.03. Execution of Bonds. The Bonds shall be executed in the name of the Issuer by the Chairman and countersigned and attested by the Clerk and the Issuer's official seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The facsimile signatures of the Chairman and/or the Clerk may be imprinted 01' reproduced on the Bonds. In case any officer whose signature shall appear on any of the Bonds shall cease to be such officer before the delivery of such Bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. The Bonds may be signed and sealed on behalf of the Issuer by such person who at the actual time of the execution of such Bonds shall hold the propel' office with the Issuer, although at the date of such Bonds such person may not have held such office or may not have been so authorized.

Section 6.04. Authentication of Bonds. Only such of the Bonds as shall have endorsed thereon a certificate of authentication substantially in the form hereinbelow set forth, duly executed by the Registrar, as authenticating agent, shall be entitled to any benefit or security under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the manual signature of an authorized officer of the Registrar, and such certificate of the Registrar upon any such Bond

aJOQ shall be conclusive evidence that such Bond has been duly authenticated and delivered under this Resolution. The Registrar's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Registrar, but it shall not be necessary that the same officer sign the certificate of authentication of all of the Bonds that may be issued hereunder at anyone time.

Section 6.05, Exchange of Bonds. Any Bonds, upon surrender thereof at the principal office of the Registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form as shall be satisfactory to the Registrar, may, at the option of the Bondholder, be exchanged for an aggregate principal amount of Bonds equal to the principal amount of the Bond or Bonds so surrendered.

The Registrar shall make provision for the exchange of Bonds at the principal office of the Registrar,

Section 6.06. Negotiability, Registration and Transfer of Bonds. The Registrar shall keep books for the registration of and for the registration of transfers of Bonds as provided in this Resolution. The transfer of any Bonds may be registered only upon such books and only upon surrender thereof to the Registrar together with an assignment duly executed by the Bondholder or his attorney 01' legal representative in such form as shall be satisfactory to the Registrar. Upon any such registration or transfer, the Issuer shall execute and an authorized officer of the Registrar shall authenticate and deliver in exchange for such Bond, a new Bond or Bonds registered in the name of the transferee, and in an aggregate principal amount equal to the principal amount of such Bond or Bonds so surrendered.

In all cases in which Bonds shall be exchanged, the Issuer shall execute and an authorized officer of the Registrar shall authenticate and deliver, at the earliest practicable time, a new Bond or Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchange or registration of transfer shall forthwith be cancelled by the Registrar. The Issuer or the Registrar may make a charge for every such exchange or registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to any Bondholder for the privilege of exchanging or registering the transfer of Bonds under the provisions of this Resolution, Neither the Issuer nor the Registrar shall be required to make any such exchange or registration of transfer of Bonds during the fifteen (15) days immediately preceding any interest payment date.

Section 6.07. Ownership of Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or redemption price of any such Bonds, and the interest on any such Bonds shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond including the premium, if any, and interest thereon to the extent of the sum 01' sums so paid.

Section 6.08. Bonds Mutilated, Destroyed. Stolen or Lost. In case any Bond shall become mutilated, or be destroyed, stolen or lost, the Issuer may in its discretion cause to be executed, and an authorized officer of the Registrar shall authenticate and deliver, a new Bond of like date and tenor as the Bond so mutilated, destroyed, stolen or lost in exchange and

aJOR substitution for such mutilated Bond upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, and upon the Holder furnishing the Issuer and the Registrar proof of his ownership thereof and satisfactory indemnity and complying with such other reasonable regulations and conditions as the Issuer and the Registrar may prescribe and paying such expenses as the Issuer and the Registrar may incur. All Bonds80 surrendered shall be cancelled by the Issuer. If any of the Bonds shall have matured or be about to mature, instead of issuing a substitute Bond, the Issuer may pay the same, upon being indemnified as aforesaid, and if such Bond he lost, stolen or destroyed, without surrender thereof.

Any such duplicate Bonds issued pursuant to this Section 6.08 shall constitute original, additional contractual obligations on the part of the Issuer whether or not the lost, stolen or destroyed Bonds be at any time found by anyone, and such duplicate Bonds shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other Bonds issued hereunder.

Section 6.09. Provisions for Redemption. Each Series of Bonds may be subject to redemption prior to maturity at such times and in such manner as shall be established by Subsequent Resolution of the Issuer adopted with respect to any Series of Bonds on or before the time of delivery of those Bonds. Unless otherwise provided by Subsequent Resolution with respect to a Series of Bonds, notice of redemption shall be given by the deposit in the U. S. mails of a copy of said redemption notice, postage prepaid, at least thirty days before the redemption date to all registered owners of the Bonds 01' portions of Bonds to be redeemed at their addresses as they appear fifteen days prior to the date such notice is mailed on the registration books to be maintained in accordance with provisions hereof. Failure to mail any such notice to a registered owner of a Bond,01' any defect therein, shall not affect the validity of the proceedings for redemption of any Bond or portion thereof with respect to which no failure 01' defect occurred.

Each notice shall set forth the date fixed for redemption of the Bond being redeemed, the redemption price to be paid, the original issue date of such Bonds, the maturity date and rate of interest borne by each Bond being redeemed, the name, address and telephone number of the person designated by the Registrar to be responsible for such redemption and, if less than all of the redeemable Bonds than Outstanding shall be called for redemption, the distinctive numbers and letters, including CUSIP Numbers,if any, of such Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall also state that on or after the redemption date, upon surrender of such Bond, new Bond or Bonds in a principal amount equal to the unredeemed portion of such Bond will be issued.

Any notice mailed as provided in this section shall be conclusively presumed to have been duly given, whether or not the owner of such Bond receives such notice.

The Issuer may provide that a notice of redemption may be contingent upon the occurrence of certain condition(s) and thatif such condition(s) do not occur, the notice will be rescinded; provided notice of rescission shall be mailed in the manner described above to all affected Bondholders not later than three business days prior to the date of redemption.

aJOS In addition to the mailing of the notice described above, each notice of redemption and payment of the redemption price shall meet the requirements of this paragraph; provided however, that failure of such notice or payment to comply with the terms of this paragraph shall not in any manner defeat the effectiveness of a call for redemptionif notice thereof is given as prescribed above in this Section 3.01.

(a) Each notice of redemption shall be sent at least thirty-five (35) days before the redemption date by registered or certified mail or overnight delivery service01' telecopy to all registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds (such depositories now being The Depository Trust Company, New York, New York, Midwest Securities Trust Company, Chicago, Illinois and Philadelphia Depository Trust Company, Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds.

(b) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

Except with respect to mandatory redemption of Term Bonds from Amortization Installments or redemption of Bonds that are the subject of an advance refunding, notice of redemption of Bonds shall only be givenif amounts sufficient to pay the redemption price of such Bonds shall be on deposit in the Debt Service Account.

Section 6.lD. Form of Bonds. The text of the Bonds shall be in substantially the following form, with such omissions, insertions and variations as may be necessary and desirable and authorized and permitted by this Resolution or the issuance by any Subsequent Resolution adopted prior to the issuance thereof:

[Remainder of page intentionally left blank]

aJOT (CURRENT INTEREST BOND)

REGISTERED REGISTERED No. R-· _

UNITED STATES OF AMERICA STATE OF FLORIDA HILLSBOROUGH COUNTY [REFUNDING] UTILITY REVENUE BOND, SERIES ~_

Maturity Date: _ Original Issue Date: _ Interest Rate: % CUSIP NO: _ Registered Holder: _ Principal Amount: $, _

[1] Hillsborough County, Florida (hereinafter called the "Issuer"), for value received, hereby promises to pay to the Registered Holder identified above, or his legal representatives or registered assigns, on the Maturity Date identified above (or earlier as hereinafter provided), but solely from the Pledged Revenues hereinafter mentioned, the Principal Amount identified above upon presentation and surrender hereof at the principal office of the Clerk of the Circuit Court, Hillsborough County, Florida, or its successors, as Paying Agent (the "Paying Agent"), and to pay, from Pledged Revenues, as hereinafter defined, interest on the Principal Amount from the original issue date, or from the most recent interest payment date to which interest has been paid, at the Interest Rate per annum set forth above until payment of the principal sum, or until provision for the payment thereof has been duly provided for, such interest being payable semiannually on the first day of _ and the £irst day of of each year, commencing on 1, __ ' Interest will be paid by check or draft mailed to the Registered Holder hereof at his address as it appears on the registration books of the Issuer maintained by the Clerk of the Circuit Court, Hillsborough County, Florida, or its successor as Registrar (the "Registrar") at the close of business on the 15th day (whether or not a business day) of the month next preceding the interest payment date (the "Record Date"), irrespective of any transfer or exchange of such Bond subsequent to such Record Date and prior to such interest payment date, unless the Issuer shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name such Bond is registered at the close of business on a special record date for the payment of such defaulted interest as established by notice by deposit in the U. S. mails, postage prepaid, by the Issuer to the Registered Holder of Bonds not less than fifteen days preceding such special record date. Such notice shall be mailed to the person in whose name the Bonds are registered at the close of business on the fifth (5th) day (whether 01' not a business day) preceding the date of mailing,

[2J This Bond and the interest hereon is payable solely from and secured by a lien upon and pledge of certain revenues derived by the Issuer from the operation of water and wastewater system, and certain other funds and investment earnings thereon after payment of all amounts and the making of all required deposits 'pursuant to Resolution No. R_------> adopted by the Issuer on , 2003 (as amended and supplemented, the "Resolution") (collectively, the "Pledged Revenues"), all in the manner and to the extent provided in the Resolution and as more particularly described below. Reference is hereby made to the

aJOU Resolution for the provisions, among others, relating to the terms of, lien on and security for the Bonds, the custody and application of the proceeds of the Bonds. the rights and remedies of the holders of the Bonds and the extent of and limitations on the Issuer's rights, duties and obligations, and the provisions permitting the issuance of additional parity indebtedness, to all of whieh provisions the owner hereof assents by acceptance of this Bond.

[3] This Bond shall not be deemed to constitute a debt or a pledge of the faith and credit of the Issuer, the State of Florida or any political subdivision thereof within the meaning of any constitutional. legislative or charter provision or limitation, and it is expressly agreed by the registered owner of this Bond that such registered owner shall never have the right. directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the Issuer or any other political subdivision of the State of Florida or taxation in any form on any real or personal property for the payment of the principal of and interest on this Bond or for the payment of any other amounts provided for in the Resolution.

[4] It is further agreed between the Issuer and the registered owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon any real or personal property of the Issuer, or any part thereof. or any other tangible personal property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues all in the manner and to the extent provided in the Resolution. Neither the members of the governing body of the Issuer nor any person executing the Bonds shall be liable personally on the Bonds by reason of their issuance.

[5] REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE.

[6] IN WITNESS WHEREOF, Hillsborough County, Florida, has issued this Bond and has caused the same to be signed by its Chairman and attested to and countersigned by its Clerk, either manually or with their facsimile signatures, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted. lithographed or reproduced hereon, all as ofthe __ day of , __ .

HILLSBOROUGH COUNTY. FLORIDA

(SEAL) By: _ Chairman, Board of County Commissioners of Hillsborough County, Florida A'ITESTED AND COUNTERSIGNED:

By: _ Clerk of the Circuit Court and Ex-OfficioClerk to the Board of County Commissioners

aJOV CERTIFICATE OF AUTHENTICATION

This Bond is one of the Series of Bonds designated in and executed under the provisions of the within mentioned Resolution.

(Name of Authenticating Agent)

By:. _ Authorized Officer

fro be printed on the reverse side of the Bonds)

FURTHER BOND PROVISIONS

[7] This Bond is one of an authorized issue of bonds in the aggregate principal amount of $ , of like date, tenor and effect, except as to number, maturity (unless all Bonds mature on the same date) and interest rate, issued to provide funds for

______pursuant to the authority of and in full compliance with the Constitution and laws of the State of Florida, including particularly the Hillsborough County Charter, the Resolution, Chapter 125, Florida Statutes, and other applicable provisions of law. This Bond is subject to all the terms and conditions of the Resolution,

[8] The Bonds of this issue are subject to redemption prior to their maturity (Insert Term Bond amortization provisions). The Bonds of this issue shall be further subject to redemption prior to their maturity at the option of the Issuer (Insert optional redemption provisions, with appropriate accretion tables for original issue discount).

[9] Notice of such redemption shall be given in the manner required by the Resolution.

[10] The registration of this Bond may be transferred upon the registration books upon delivery to the principal office of the Registrar designated by the Issuer, accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and (unless uncertificated registration system shall be requested and the Issuer has a registration system that will accommodate uncertificated registration) shall deliver in the name of the new transferee 01' transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same aggregate principal amount and payable from the same sources of funds. The Issuer and the Registrar may charge the owner of such Bond for the registration of every such transfer of a

aJPM Bond sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the Issuer) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered.

(11] If the date for payment of the principal of, premium, if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which the Paying Agent is authorized by law or executive order to be closed, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as made on the nominal date of payment.

[12] It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and Constitution of the State of Florida applicable hereto, and that the issuance of the Bonds of this series does not violate any constitutional, statutory or charter limitation or provision.

[Remainder of page intentionally left blank]

aJPN (CAPITAL APPRECIATION BOND)

REGISTERED MATURITY AMOUNT No. CABR- _ $,----

UNITED STATES OF AMERICA STATE OF FLORIDA HILLSBOROUGH COUNTY [REFUNDING] UTILITY REVENUE BOND, SERIES _

Maturity Date: _ CUSIP NO: _ Original Issue Date: _ Interest Rate: __ % (approximate due to rounding) Registered Holder: _ Value at Maturity: $ DOLLARS

[2] This Bond including the Accreted Value hereon is payable solely from and secured by certain revenues derived by the Issuer from the operation of its water and wastewater system and certain other funds and investment earnings thereon after payment of all amounts and the making of all required deposits pursuant to Resolution No. R_-----J adopted by the Issuer on , 2003 (as amended and supplemented, the "Resolution") (collectively, the "Pledged Revenues"), all in the manner and to the extent provided in the Resolution and as more particularly described below. Reference is hereby made to the Resolution for the provisions, among others, relating to the terms of, lien on and security for the Bonds, the custody and application of the proceeds of the Bonds, the rights and remedies of the holders of the Bonds and the extent of and limitations on the Issuer's rights, duties and obligations, and the provisions permitting the issuance of additional parity indebtedness, to all of which provisions the owner hereof assents by acceptance of this Bond.

[3] This Bond shall not be deemed to constitute a debt or a pledge of the faith and credit of the Issuer, the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation, and it is expressly agreed by the registered owner of this Bond that such registered owner shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the Issuer or any other political subdivision of the State of Florida or taxation in any form on

aJPO any real or personal property for the payment of the principal of and interest on this Bond or for the payment of any other amounts provided for in the Resolution.

[4] It is further agreed between the Issuer and the registered owner of this Bond that this Bond and the indebtedness evidenced hereby shall not constitute a lien upon any real or personal property of the Issuer, 01' any part thereof, or any other tangible personal property of or in the Issuer, but shall constitute a lien only on the Pledged Revenues all in the manner and to the extent provided in the Resolution. Neither the members of the governing body of the Issuer nor any person executing the Bonds shall be liable personally on the Bonds by reason of their issuance.

[5] REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES fIAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THIS PLACE.

[6] IN WITNESS WHEREOF, Hillsborough County, Florida, has issued this Bond and has caused the same to be signed by its Chairman and attested to and countersigned by its Clerk, either manually or with their facsimile signatures, and its corporate seal or a facsimile thereof to be affixed, impressed, imprinted, lithographed or reproduced hereon, all as of the __ day of , --'

HILLSBOROUGH COUNTY, FLORIDA

(SEAL) By:. _ Chairman, Board of County Commissioners of Hillsborough County, Florida

ATI'ESTED AND COUNTERSIGNED:

By:. _ Clerk of the Circuit Court and Ex-OfficioClerk to the Board of County Commissioners

aJPP ASSIGNMENT

OR VALUE RECEIVED, the undersigned, _ (the "Transferor"), hereby sells, assigns and transfers unto ______(the "Transferee").

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints _ as attorney to register the transfer of the within Bond on the books kept for registration and registration of transfer thereof, with full power of substitution in the premises.

Da~: _

Signature Guaranteed:

NOTICE: Signature(s) must NOTICE: No transfer will be re be guaranteed by an registered and no new Bond will eligible guarantor be issued in the name of the institution which is a Transferee, unless the signaturets) member of a recognized to this assignment correspond(s) signature guarantee with the name as it appears upon program, i.e., Securities the face of the within Bond in Transfer Agents Medallion every particular, without alteration Program (STAMP), Stock or enlargement or any change Exchange Medallion whatever and the Social Program (SEMP) or New York Security or Federal Employer Stock Exchange Medallion Identification Number of the Signature Program (MSP). Transferee is supplied.

(END OF BOND FORMS)

aJPQ aJPR CERTIFICATE OF AUTHENTICATION

This Bond is one of the Series of Bonds designated in and executed under the provisions of the within mentioned Resolution.

(Name of Authenticating Agent)

By: _ Authorized Officer

[To be printed on the reverse side of the Bonds]

FURTHER BOND PROVISIONS

[7] This Bond is one of an authorized issue of bonds in the aggregate principal amount of$ , of like date, tenor and effect, except as to number, maturity (unless all Bonds mature on the same date) and interest rate, issued to provide funds for

[INSERT TABLE OF ACCRETED VALUE]

[9] Notice of such redemption shall be given in the manner required by the Resolution.

[10] The registration of this Bond may be transferred upon the registration books upon delivery to the principal office of the Registrar designated by the Issuer, accompanied by a written instrument or instruments of transfer in form and with guaranty of signature satisfactory to the Registrar, duly executed by the owner of this Bond or by his attorney-in-fact or legal representative, containing written instructions as to the details of transfer of this Bond, along with the social security number or federal employer identification number of such transferee. In all cases of a transfer of a Bond, the Registrar shall at the earliest practical time in accordance with the provisions of the Resolution enter the transfer of ownership in the registration books and (unless uncertificated registration system shall be requested and the Issuer has a registration system that will accommodate uncertificated registration) shall deliver in the name of the new transferee or transferees a new fully registered Bond or Bonds of the same maturity and of authorized denomination or denominations, for the same

aJPS aggregate, principal amount and payable from the same sources of funds. The Issuer and the Registrar may charge the owner of such Bond for the registration of every such transfer of a Bond sufficient to reimburse them for any tax, fee or any other governmental charge required (other than by the Issuer) to be paid with respect to the registration of such transfer, and may require that such amounts be paid before any such new Bond shall be delivered.

[11] If the date for payment of the principal of, premium,if any, or interest on this Bond shall be a Saturday, Sunday, legal holiday or a day on which the Paying Agent is authorized by law or executive order to be closed, then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized to close, and payment on such day shall have the same force and effect as if made on the nominal date of payment.

aJPT ASSIGNMENT

OR VALUE RECEIVED, the undersigned, . (the "Transferor"), hereby sells, assigns and transfers unto ______(the "Transferee").

Daw: _

Signature Guaranteed:

NOTICE: Signature(s) must NOTICE: No transfer will be re be guaranteed by an registered and no new Bond will eligible guarantor be issued in the name of the institution which is a Transferee, unless the signature(s) member of a recognized to this assignment correspond(s) signature guarantee with the name as it appears upon program, i.e., Securities the face of the within Bond in Transfer Agents Medallion every particular, without alteration Program (STAMP), Stock or enlargement or any change Exchange Medallion whatever and the Social Program (SEMP) or New York Security or Federal Employer Stock Exchange Medallion Identification Number of the Signature Program (MSP). Transferee is supplied.

(END OF BOND FORMS)

aJPU ARTICLE VII

APPLICATION OF BOND PROCEEDS

Section 7.01. Disposition of Proceeds. The proceeds, including accrued interest and premium, if any, received from the sale of any or all of the Bonds shall be applied by the Issuer as set forth in this Resolution and a Subsequent Resolution adopted by the Issuer prior to or simultaneously with the delivery of such Bonds.

ARTICLE VIII

SOURCE OF PAYMENT OF BONDS; SPECIAL OBLIGATIONS OF THE ISSUER

Section 8.01. Bonds Not to be Indebtedness of the Issuer. The Bonds shall not be or constitute general obligations or indebtedness of the Issuer within the meaning of the Constitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the Pledged Revenues and the funds and the earnings thereon pledged to the payment of the Bonds, in the manner and to the extent herein provided. No Bondholder shall ever have the right to compel the exercise of the ad valorem taxing power of the Issuer or taxation in any form on any real or personal property to pay such Bonds or the interest thereon, nor shall any Bondholder be entitled to payment of such principal and interest from any other funds of the Issuer other than the Pledged Revenues and the funds and the earnings thereon pledged to payment of the Bonds, all in the manner and to the extent herein provided.

Section 8.02. Pledge of Revenues. The payment of the principal of, interest, and premium, if any, on the Bonds shall be secured forthwith equally and ratably by an irrevocable lien on the Pledged Revenues and moneys deposited into the funds and accounts created by this Resolution, and all earnings thereon, all in the manner and to the extent provided herein, prior and superior to all other liens or encumbrances on the Pledged Revenues (except as provided in the next sentence) and, as provided herein, the Issuer does hereby irrevocably pledge the Pledged Revenues without any further physical delivery therefore any further act, the moneys deposited into the funds and accounts created by this Resolution, and all earnings thereon, all to the payment of Required Deposits and to the optional purchase or redemption of Bonds as provided herein.

Under Section 679.1091 (4)(n), Florida Statutes, transfers by a government or a governmental unit are exempt from the perfection and priority requirements of Chapter 679, Florida Statutes (Uniform Commercial Code· Secured Transactions - Article 9), and therefore, the filing of financing statements is not necessary in order to perfect the security interest of the Bondholders.

aJPV ARTICLE IX

CREATION AND USE OF BOND FUND AND ACCOUNTS; DISPOSITION OF PLEDGED REVENUES

Section 9.01. Creation of Bond Fund and Accounts. There is hereby created and established the "Utilities Bond Fund" and the following accounts therein to be known as: the "Construction Account," the "General Revenue Account," the "Operation and Maintenance Account," the "Debt Service Account," the "Reserve Account," the "Renewal and Replacement Account," the "Swap Obligations Account," the "Subordinate Indebtedness Account," the "Other Indebtedness Account," the "Rebate Account," the "General Purpose Account," the "Pledged Water Capacity Fee Account" and the "Pledged Wastewater CapacityAccount," Fee The Bond Fund and all accounts therein (except the Rebate Account) shall constitute trust funds for legal purposes for the purposes herein provided, shall be delivered to and held by the Chief Financial Officer (or an Authorized Depositary designated by the Chief Financial Officer), in each case who shall act as trustee for legal purposes of such funds for the purposes hereof, shall be subject to a lien and charge in favor of the Bondholders, and shall at all times be kept separate and distinct from all other funds of the Issuer (except to the extent that pooled investments are specifically authorized in Section 10.01 hereof) and used only as provided in this Resolution.

Section 9.02. Disposition of Funds in the Construction Account. From time to time, there shall be paid into the Construction Account sufficient funds to pay that portion of the cost ofthe Projects to be funded from the proceeds of Bonds hereunder. All such funds shall be and constitute trust funds for legal purposes for such purposes, and shall be delivered to and held by the Chief Financial Officer (or his designated Authorized Depositary) who shall act as trustee for legal purposes of such funds for the purposes of this Resolution. There is hereby created a lien upon such funds in favor of the Bondholders until applied as herein provided. Any funds on deposit in the Construction Account that, in the opinion of the Issuer, are not immediately necessary for expenditure, as hereinabove provided, shall be held and may be invested, in the manner provided by law, in Investment Obligations. Earnings on such Investment Obligations shall be deposited in the Construction Account unless the Director of the Water Department certifies that such earnings are not required to complete the Projects, in which event they shall be used first to cure any deficiencies in the Reserve Account, and then all such remaining earnings shall be, in the Issuer's discretion, either deposited into the General Revenue Account and utilized as provided in Section 9.03 hereof or transferred to the General Purpose Account and utilized as provided in Section 9.13 hereof. Any liquidated damages or settlement payments received by the Issuer as a result of the breach by any contractor, subcontractor or supplier working or supplying goods for the Projects, of any representation, warranty or performance guaranty, and all insurance and condemnation proceeds received with respect to damages to or the taking of the Projects during construction shall be deposited into the Construction Account to insure completion of the Projects or shall otherwise be used as described in Section 11.08 below.

If applicable, the Issuer covenants to commence the acquisition, construction and equipping of the Projects promptly upon the delivery of the Bonds and to thereafter work with due diligence to complete the Projects. The Issuer may, however, abandon any portion of the Projects if it first obtains the written opinion of the Qualified Independent Consultant that

aJQM such abandonment (and the use of the remaining proceeds set aside for the acquisition, construction, and equipping of such portion of the Projects to redeem Bonds according to the following paragraph) will have a more favorable effect on the Issuer's ability to meet its rate covenant set forth in Section 11.02 hereof and other obligations hereunder than if such portion were completed. To the extent the cost of the Projects is to be paid in part from revenues of the Issuer (for example, from the Renewal and Replacement Account), such funds shall be transferred to and deposited into the Construction Account and used in accordance with the provisions of this Section. If funds for the Projects are to corne from other sources (for example, from self funding or state or federal grants or loans), the Issuer shall take all legally available actions to ensure the receipt of such funds and shall cause such funds to be deposited into the Construction Account or otherwise set aside in a separate fund or account and used for the purposes herein provided.

Upon completion of the Projects, or upon abandonment of a portion thereof pursuant to the foregoing, any amounts allocated to such portion then remaining in the Construction Account and not reserved by the Issuer for the payment of any remaining part of the cost of construction, acquisition, and equipping of the Projects, shall be, in the Issuer's discretion, either (i) transferred to the Debt Service Account and used to pay the principal and/or interest of Bonds or to purchase or redeem Bonds, or (ii) transferred to the General Purpose Account and be utilized as provided in Section 9.13 hereof. The Qualified Independent Consultant shall adjust the Water and Wastewater Expansion Project Percentages to take into consideration proceeds expected to be utilized for Project purposes which in fact were not utilized for Project purposes.

Section 9.03. Deposit of Gross Revenues into the General Revenue Account and Disposition Thereof. Commencing on the day following the delivery of the first Bonds issued hereunder, except as otherwise provided herein, all Gross Revenues, shall be deposited by the Issuer into the General Revenue Account immediately upon receipt. Funds in the General Revenue Account shall be disposed of on or before the 15th day of each month, commencing with the month immediately following the delivery of the first Bonds issued hereunder, only in the following order and priority:

(1) Opel'ation and Maintenance Account Deposits. First, by deposit into the Operation and Maintenance Account an amount which, together with amounts deposited therein from the Pledged Water Capacity Fee Account pursuant to Section 9.04(1) below to pay the Debt Service Component of the Cost of Contracted Water Supply and all other funds then on deposit in the Operation and Maintenance Account, will equal the amount required to pay the Cost of Operation and Maintenance for the month following the date of such deposit. All monthly deposits into the Operation and Maintenance Account from the Pledged Water Capacity Fee Account shall be made before the amount of the required monthly deposit into the Operation and Maintenance Account from the General Revenue Account is calculated.

To the extent that monthly deposits into the Operation and Maintenance Account from the Pledged Water Capacity Fee Account exceed the Contracted Water Supply Expansion Project Percentage of the Debt Service Component, such excess deposits shall be held in the Operation and Maintenance Account, shall be credited against such monthly Debt Service Component requirements only up to the Contracted Water

aJQN Supply Expansion Project Percentage of the Debt Service Component, and shall be used to reduce the deposits from Gross Revenues required in the next month or months up to the Contracted Water Supply Expansion Project Percentage of the Debt Service Component for each such month.

(2) Debt Service Account and Swap Obligations Account Deposits. Then, by deposit on a parity basis, into the Debt Service Account and the Swap Obligations Account,

(A) into the Debt Service Account, an amount which, together with amounts deposited therein from the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account pursuant to Sections 9.04(2) and 9.05(1) below, Qualified Derivative Receipts, if any, and other deposits made into the Debt Service Account pursuant to the provisions of this Resolution, will equal one-sixth(1/6th) of the interest payable on the Bonds on the next interest payment date, one-twelfth (1112th) of all principal maturing during the current Bond Year on the various series of Serial Bonds that mature annually, one-sixth (l/6th) of all principal maturing on the next maturity date in such Bond Year on the various series of Serial Bonds that mature semiannually, one-twelfth (1/12th) of the Amortization Installments of Term Bonds coming due during the current Bond Year with respect to the Bonds, and one-sixth (1/6th) of the Amortization Installments of Term Bonds which come due semi-annually and which come due on the next redemption date in such Bond Year, until there are sufficient funds then on deposit equal to the sum of the interest, principal and Amortization Installments due on the Bonds on the next interest, principal and redemption dates in such Bond Year. All monthly deposits into the Debt Service Account from the Pledged Water Capacity Fee Account or Pledged Wastewater Capacity Fee Account shall be made before the amount of the required monthly deposit into the Debt Service Account from the General Revenue Account is calculated; and

(B) Into the Swap Obligations Account, a pro rata estimated amount necessary to build up over time the amount of any Qualified Derivative Payment which will next be due and payable or reasonably expected to be due and payable under any Qualified Derivative Agreement on the next payment date thereunder; provided, however, that the monthly amount to be so deposited may be adjusted, as appropriate, to reflect the frequency of payment dates thereunder (e.g., if Qualified Derivative Payments are required to be made semi-annually, the Issuer shall be required to monthly deposit an amount which is estimated to equal one-sixth (1I6 th) of the next Qualified Derivative Payment).

(C) Deposits shall be increased or decreased to the extent required to pay principal, interest and Qualified Derivative Payments coming due, after making allowance for any accrued and capitalized interest. Additionally, if variable rate Bonds are outstanding on the 15th day of such month, the Issuer shall deposit into the Debt Service Account in lieu of the one-sixth (1/6th) interest deposit described above, the interest actually accruing on such Bonds for such month, assuming the interest rate thereon on the 15th day of such month will continue through the end of such month, plus any deficiencies in interest deposits for the preceding month.

(D) Monthly deposits into the Debt Service Account shall be increased as necessary to pay fees and costs billed by the Registrar and the Paying Agent, if any.

aJQO (3) Reserve Account Deposits. Then, by deposit into the Reserve Account an amount which, together with funds concurrently deposited therein from the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account pursuant to Sections 9.04(3) and 9.05(2) below and other funds then on deposit therein, will be sufficient to make the amounts on deposit therein equal to the Reserve Requirement. No further deposits shall be required to be made into the Reserve Account when there is on deposit therein a sum equal to the Reserve Requirement as determined by valuation of the deposited Investment Obligations at market value as required by Section 10.02 hereof.

The Issuer shall be required to fully fund the Reserve Account with Bond proceeds or other legally available moneys at the time of issuance of any Series of Bonds hereunder, or unless it provides on the date of issuance of the Bonds, in lieu of such funds, or following the issuance of the Bonds, it substitutes in lieu of such funds, (x) bond insurance or a surety bond or bonds issued by a reputable and recognized municipal bond insurer, or(y) an irrevocable letter of credit issued by a qualified national bank, in an amount equal to the difference between the Reserve Requirement and the sums then on deposit in the Reserve Account plus the amounts, if any, to be deposited therein pursuant to clause(i) above, which shall be payable on any interest or principal payment date (provided adequate notice is given) on which a deficiency exists which cannot be cured by funds ill any other account held pursuant to this Resolution and available for such purpose, and which shall name the Chief Financial Officer in his capacity as the trustee for legal purposes of the Reserve Account as the beneficiary thereof, The municipal bond insurer described in clause (x) above, shall be one whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues results in such issues being rated in the highest rating category by Standard& Poor's Corporation and Moody's Investor's Service, Inc. or their successors. The qualified national bank described in clause(y) above, shall be one having a capital and surplus or net capital of not less than $100,000,000. The Issuer's repayment of any draws under any surety bond on deposit in the Reserve Account and related reasonable expenses incurred by the provider of such surety bond (together with interest thereon at a rate equal to the lower(i) ofthe prime rate of Morgan Guaranty Trust Company of New York in effect from time to time plus 2% per annum and (ii) the highest rate permitted by law) shall enjoy the same priority as the obligation to maintain and refill the Reserve Account, Repayment of draws, expenses and accrued interest (collectively, "Policy Costs") shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to1112th of the aggregate of Policy Costs related to such draw, If and to the extent that cash has also been deposited in the Reserve Account, all such cash shall be used (or investments purchased with such cash shall be liquidated and the proceeds applied as required) prior to any drawing under the surety bond, and repayment of any Policy Costs shall be made prior to replenishment of any such cash amounts. If, in addition to the surety bond, any other reserve fund substitute instrument ("Additional Reserve Policy") is provided, drawings under the surety bond and any such Additional Reserve Policy, and repayment of Policy Costs and reimbursement of amounts due under the Additional Reserve Policy, shall be made on a pro rata basis (calculated by reference to the maximum amounts available

aJQP thereunder) after applying all available cash in the Reserve Account and prior to replenishment of any such cash draws, respectively.

If the Issuer shall fail to repay any Policy Costs as described above, the provider(s) of the surety bond or Additional Reserve Policy shall be entitled to exercise any and all remedies available at law or under this Resolution other than remedies which would adversely affect Bondholders.

This Resolution shall not be discharged until all Policy Costs owing to the provider(s) of the surety bond or bonds shall have been paid in full.

As security for the Issuer's repayment obligations with respect to the surety bond or bonds, the provider(s) thereof are hereby granted a lien on and source and security for payment from Pledged Revenues which is junior and subordinate in all respects and to that of the Bondholders.

The Paying Agent is required to ascertain the necessity for a claim upon any surety bond and to provide notice to the provider(s) thereof in accordance with its terms at least two business days prior to each interest payment date.

(4) E~l]eww.._~I!d_~~emeo.LA.c..C.Qun..t Deposits. Then, by deposit into the Renewal and Replacement Account an amount equal to one-twelfth (1/12th) of five percent (5%) of the Gross Revenues for the preceding Fiscal Year, or such greater or lesser amount as determined by the Qualified Independent Consultant, plus an amount equal to any unrestored withdrawal made to cure deficiencies in the Debt Service Account under Section 9.09 below, until the amounts on deposit therein are equal to the Renewal and Replacement Account Requirement; provided, however, that (a) such Renewal and Replacement Account Requirement may be increased or decreased as the Qualified Independent Consultant shall certify to the Issuer is necessary for the purposes of the Renewal and Replacement Account, and (b) in the event that the Qualified Independent Consultant shall certify that the Renewal and Replacement Account Requirement is excessive for the purposes of the Renewal and Replacement Account such excess amount as may be On deposit therein may be used by the Issuer for any lawful purpose relating to the System.

(5) Subordinate Indebtedness Account Deposits. Then, by deposit into the Subordinate Indebtedness Account, an amount sufficient to pay debt service, reserve, rebate, credit enhancement and other required payments and deposits with respect to any Subordinate Indebtedness then outstanding, including any payment obligations under a Qualified Derivative Agreement to the extent such costs do not constitute Qualified Derivative Payments.

(6) Other Indebtedness Account Depo.!!iJs. Then, by deposit into the Other Indebtedness Account, an amount sufficient to pay debt service, reserve, rebate, credit enhancement and other required payments and deposits with respect to any Other Indebtedness then outstanding.

(7) Balance Deposited to General P1U])OSeAccount. The balance of any moneys remaining in the General Revenue Account after the above required payments have

aJQQ been made may be deposited by the Issuer in the General Purpose Account and paid to the Issuer for the open market purchase and/or redemption of the Bonds or may be used for any lawful purpose relating to the System; provided, however, that none of said money shall be used for any purposes other than those specified in subsections (1) through (4) above, unless all current payments, including any deficiencies for prior payments, have been made in full and unless the Issuer shall have complied fully with all the covenants and provisions of this Resolution.

(8) When Payments May Cease. The Issuer shall not be required to make any further Required Deposits when the aggregate amount of funds in the Debt Service Account and the Reserve Account are at least equal to the aggregate principal amount of Bonds issued pursuant to this Resolution and then outstanding, plus the amount of interest then due or thereafter to become due on said Bonds then outstanding and all Qualified Derivative Payments have been paid in full, or if all Bonds then outstanding have otherwise been defeased pursuant to Article XlI below.

Section 9.04. Deposit of Pledged Water Capacity Fees in the Pledged Water Capacity Fee Account and Disposition Thereof. All Pledged Water Capacity Fees shall be deposited into the Pledged Water Capacity Fee Account. All moneys remaining on deposit in such Account shall be utilized as follows:

(1) Such moneys shall first be deposited into the Operation and Maintenance Account, in an amount equal to all payments due in such Bond Year representing the Debt Service Component, provided that such payments shall not exceed the lesser of (a) the Debt Service Component, and (b) the Contracted Water Supply Expansion Project Percentage of the Debt Service Component, plus the Contracted Water Supply Water Capacity Fee Carryforward Amount.

(2) Such moneys shall, in the case of a deficiency in the Debt Service Account and/or the Swap Obligations Account, second be applied and allocated to the respective Accounts, pro rata if applicable, to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(3) Such moneys shall, in the case of a deficiency in the Reserve Account, third be applied and allacated to the Reserve Accaunt to supplement ather Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(4) At least once per year, all remaining moneys in the Pledged Water Capacity Fee Accaunt shall be deposited into the General Purpose Account and may be applied by the Issuer for any use allowed by law relating to the provision of water capacity or

expansion,

Section 9.05. Deposit .ofPledged Wastewater Capacity Fees in the Pledged Wastewater Capacity Fee Account and Disposition There of All Pledged Wastewater Capacity Fees shall be deposited into the Pledged Wastewater Capacity Fee Account. All moneys remaining on deposit in such Account shall be utilized as follows:

aJQR (1) Such moneys shall, in the case of a deficiency in the Debt Service Account and/or the Swap Obligations Account, first be applied and allocated to the respective Accounts, pro rata if applicable, to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(2) Such moneys shall, in the case of a deficiency in the Reserve Account, second be applied and allocated to the Reserve Account to supplement other Pledged Revenues to be deposited therein or in substitution of other Pledged Revenues to be deposited therein.

(3) At least once per year, all remaining moneys in the Pledged Wastewater Capacity Fee Account shall be deposited into the General Purpose Account and may be applied by the Issuer for any use allowed by law relating to the provision of wastewater capacity or expansion.

Section 9.06. Disposition of Funds in Operation and Maintenance Account. Funds on deposit in the Operation and Maintenance Account shall be used to pay the Cost of Operation and Maintenance.

Section 9.07. Disposition of Funds in the Debt Service Account.

(1) Funds on deposit in the Debt Service Account shall be used solely for the payment at maturity or redemption of principal or Amortization Installments of, interest on and any redemption premiums required with respect to the Bonds and to pay the fees and costs of the Paying Agent and the Registrar, if any.

(2) At the maturity date of each Bond and at the due date of each Amortization Installment and installment of interest on each Bond, the Issuer shall transfer from the Debt Service Account to the Paying Agent for such Bonds sufficient moneys to pay all principal of or Amortization Installments, premium, if any, and interest then due and payable with respect to such Bonds. Interest accruing with respect to any fully registered Bond shall be paid by check or draft of the Paying Agent to the registered owner thereof.

(3) Funds deposited in the Debt Service Account for the redemption of Bonds and the payment of Amortization Installments shall be maintained in a special redemption sub-account and applied with reasonable diligence to the retirement of Bonds issued under the provisions of this Resolution and then outstanding in the following order:

(a) The Issuer shall first endeavor to purchase outstanding Term Bonds of each Series redeemable from Amortization Installments, and pro rata (based on the principal amount of the Amortization Installments due in such Bond Year for each such Series of Term Bonds) among all such Bonds if more than one Series of such Term Bonds are outstanding, or if no such Term Bonds are outstanding, Serial Bonds, whether or not such Bonds shall then be subject to redemption, but only to the extent moneys are available therefor, at the most advantageous price obtainable, such price not to exceed the principal of such Bonds plus accrued interest, but no such purchase shall be made by the Issuer within a period of thirty days next preceding any interest

aJQS payment date on which such Bonds are subject to call for redemption under the provisions of this Resolution;

(b) Then. to the extent moneys remain on deposit in the Debt Service Account that are held for the redemption of Bonds. the Issuer shall call for redemption on each interest payment date on which Bonds are subject to redemption, with or without premium, from such moneys, such amount of Term Bonds subject to the Amortization Installments for such Bond Year that have not been purchased pursuant to clause (a) above; and

(c) Then, to the extent moneys remain on deposit in the Debt Service Account that were deposited therein pursuant to this Resolution for the purpose of redeeming Bonds, the Issuer shall call any Bonds then subject to redemption, in such order and by such selection method as the Issuer, in its discretion, may determine, from such funds as will exhaust the money then held for the redemption of such Bonds as nearly as may be possible.

If Term Bonds are purchased or redeemed pursuant to this section in excess of the Amortization Installments for such Bond Year, such excess principal amount of such Term Bonds so purchased or redeemed shall be credited against subsequent Amortization Installments for Bonds in such Series in such Bond Year or Years as the Issuer may determine and as may be reflected in the Issuer's permanent accounting records. Such election shall be included in the annual audited reports of Issuer referred to in Section 11.06 below.

Section 9.08, Application of Funds in the Reserve Account, Funds on deposit in the Reserve Account may be used only for the purpose of curing deficiencies in the Debt Service Account and the Swap Obligations Account and for no other purpose. If funds on deposit in the Reserve Account exceed, in the aggregate, the Reserve Requirement for the Bonds, that portion of such excess funds which were originally transferred into the Reserve Account from the Pledged Water Capacity Fee Account or the Pledged Wastewater Capacity Fee Account shall be returned to the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account, respectively, and the balance shall be paid into the General Purpose Account. Any proceeds received from bond insurance (other than bond insurance contemplated in Section 9.03(3) hereof and on deposit in the Reserve Account) shall be applied immediately to cure deficiencies in the Debt Service Account and the Swap Obligations Account and for no other purpose.

Section 9.09. Disposition of Funds in the Renewal and Replacement Account. Funds on deposit in the Renewal and Replacement Account shall be used only (i) at any time for the purpose of curing deficiencies in the Debt Service Account or the Swap Obligations Account (after the application of funds from the Reserve Account) or for curing deficiencies in the Reserve Account, or both or (ii) when no such deficiencies exist, as needed for the purpose of paying the cost of the replacement of capital assets of the System, including land, or any unusual, unanticipated or extraordinary maintenance or repairs which the Director of the Water Department of the Issuer shall certify are necessary for the System and are consistent with the Qualified Independent Consultant's annual recommendations for renewals and replacements or (ill) to redeem Bonds in the manner described below. If the funds on deposit in the Renewal and Replacement Account exceed the Renewal and Replacement Account Requirement and the Issuer obtains a certificate from the Qualified Independent Consultant

aJQT that funds or a portion thereof in excess of that amount are not needed for the purposes described in clause (ii) above, and so long as no deficiencies described in clause(i) above exist, such excess funds may be used for any lawful purpose relating to the System.

Section 9.10, Disposition of Funds in the Subordinate Indebtedness Account. Funds on deposit in the Subordinate Indebtedness Account may be used for the payment of principal of, interest on and any redemption premiums with respect to Subordinated Indebtedness, and all reserve, rebate, credit enhancement and other required payments, deposits, with respect to such Subordinated Indebtedness.

Section 9,11. Disposition of Funds in the Other Indebtedness Account. Funds on deposit in the Other Indebtedness Account may be used for the payment of principal of, interest on and any redemption premiums with respect to Other Indebtedness, and all reserve, rebate, credit enhancement and other required payments with respect to such Other Indebtedness.

Section 9.12. Transfer of Funds to Paying Agents. The Issuer shall transfer immediately available funds, from the various funds and accounts established in this Article IX, to one or more Paying Agent or Paying Agents, on the date of each interest, principal or Amortization Installment and redemption date, an amount sufficient to pay when due the principal of or Amortization Installment, interest on and redemption premium, if any, with respect to the Bonds.

Section 9.13. General Purpose Account. The General Purpose Account shall constitute a trust fund for legal purposes for the purposes herein provided, shall be delivered to and held by the Chief Financial Officer (or an Authorized Depositary designated by the Chief Financial Officer), in each case who shall act as trustee for legal purposes of such funds for the purposes hereof, and shall at all times be kept separate and apart from all other funds of the Issuer (except to the extent that pooled investments are specifically authorized in Section 10.01 hereof) and used only as provided in this Resolution.

Funds on deposit in the General Purpose Account shall be used from time to time by the Issuer in its discretion for any lawful System purpose,

Moneys held for the credit of the General Purpose Account shall be invested and reinvested by the Issuer in Investment Obligations.

ARTICLE X

DEPOSITARIES OF MONEYS, SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS

Section 10.01. Deposits Constitute Trustee Funds for Legal Purposes. All funds or other property which at any time may be owned or held in the possession of or deposited with the Issuer in the Bond Fund under the provisions of this Resolution shall be held as trustee for legal purposes by the Chief Financial Officer and applied only in accordance with the provisions of this Resolution, and shall not be subject to lien or attachment by any creditor of the Issuer.

aJQU All funds or other property which at any time may be owned or held in the possession of or deposited with the Issuer pursuant to this Resolution shall be continuously secured, for the benefit of the Issuer and the Bondholders, either (a) by lodging with an Authorized Depositary, as trustee, with collateral security consisting of obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) in such other manner as permitted hereunder and as may then be required or permitted by applicable state or Federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of funds, including, without limitation, the provisions of Chapter 280, Florida Statutes, as from time to time amended.

Notwithstanding anything in this Resolution to the contrary, the cash required to be accounted for in each of the funds and accounts described in this Resolution may be deposited in a single bank account, provided that adequate accounting records are maintained to reflect and control the restricted allocation of the cash on deposit therein for the various purposes of such funds and accounts as hereinprovided, The designation and establishment of the various funds and accounts in and by this Resolution shall not be construed to require the establishment of any completely independent, self-balancing funds as such term is commonly defined and used in governmental accounting, but rather is intended solely to constitute an earmarking of certain revenues and assets of the System for certain purposes and to establish certain priorities for application of such revenues and assets as herein provided.

Section 10.02. Investment of Moneys. Moneys held for the credit of all funds and accounts created hereby shall be invested and reinvested by the Issuer in Investment Obligations. Such investments or reinvestments shall mature not later than the respective dates, as estimated by the Issuer, that the moneys held for the credit of said funds or accounts will be needed for the purposes of such funds or accounts.

Obligations so purchased as an investment of moneys in any such fund or account shall be deemed at all times to be a part of such fund or account, and shall at all times, for the purposes of this Resolution, be valued annually October 1 of each year at market value, or as otherwise provided by law. If, because of a decline in the market value of any such investments, a deficiency exists in any funds or account, the next monthly deposit shall be increased to cure such deficiency over a twelve month period of time assuming approximately level monthly payments over such period of time.

Except as otherwise provided herein, all income and profits derived from the investment of money in the Construction Account, the Pledged Water Capacity Fee Account and the Pledged Wastewater Capacity Fee Account shall be retained in such accounts and used for the purposes specified for such accounts. All income and profits derived from the investment of moneys in the Reserve Account shall be deposited upon receipt into the Construction Account until the Director of the Water Department certifies that the Projects have been completed or that the funds on deposit in the Construction Account are sufficient to fully pay the cost thereof; thereafter, such income and profits shall be used first to cure deficiencies in the Reserve Account, and then all remaining income and profits derived from such investments shall be transferred upon receipt into the General Revenue Account.

aJQV All income and profits derived from the investment of moneys in all other accounts created hereby shall be deposited upon receipt in the General Revenue Account.

ARTICLE XI

GENERAL COVENANTS OF THE ISSUER

Section 11.01. Operation and Maintenance. The Issuer will maintain the System and all parts thereof in good condition, according to accepted public utility standards, and will operate the same in an efficient and economical manner, making such expenditures on such equipment, maintenance and repairs for renewals and replacements thereof as may be proper for its economical operation and maintenance.

Beginning in the first Fiscal Year following the effective date of this Resolution, at least once every two years, the Director of the Water Department shall propose a Long Range Capital Improvements Plan and submit it together with a report on the current condition of the System to a Qualified Independent Consultant who shall review it and report thereon with such comments and recommendations as it considers appropriate to the Director of the Water Department and the Governing Body. The Director of the Water Department shall submit the above described report to the Qualified Independent Consultant, and the Qualified Independent Consultant shall respond, prior to presentation of such reports to the Governing Body. The Governing Body shall adopt the Long Range Capital Improvements Plan with such changes therein as it considers necessary and appropriate and shall provide in such budget for the implementation of the Long Range Capital Improvements Plan as so adopted. A copy of the Long Range Capital Improvements Plan shall be available for inspection at the offices of the Issuer.

If the Qualified Independent Consultant determines that the System is not in good condition, the Issuer shall immediately make or cause to be made such repairs as shall be necessary to place them in good condition. If the Qualified Independent Consultant determines that the operations are not in conformity with the provisions hereof, the Issuer shall immediately take such reasonable steps as are necessary to comply with such provision.

Section 11.02. Rate Covenant. Commencing on the date of delivery of the Bonds, the Issuer will adopt (unless the existing rate resolution is sufficient for the purposes hereof) and cause to be in effect a rate resolution, and the Issuer covenants with the Bondholders to fix, establish, revise from time to time whenever necessary, maintain and collect fees, rates, rentals and other charges for the use of the System that will always provide (i) Gross Revenues which, together with Pledged Capacity Fees and Qualified Derivative Receipts available to pay debt service on the Bonds, shall be at least equal to one hundred percent (100%) of the Required Deposits under this Resolution, including the payment of Policy Costs then due and owing, and (ii) Net Revenues which, together with Pledged Capacity Fees available to pay debt service on the Bonds, shall be at least equal to one hundred twenty percent (120%) of the Bond Service Requirement under this Resolution. In addition, the Issuer shall fix, establish, maintain and collect fees, rates, rentals and other charges for use of the System that will provide in each Bond Year, Net Revenues which shall be at least equal to one hundred percent (100%)ofthe Bond Service Requirement in such Bond Year.

aJRM In determining compliance by the Issuer with the rate covenant set forth in this Section 11.02, the Issuer shall reduce the Bond Service Requirement by an amount equal to the amount of Pledged Revenues transferred from the General Purpose Account and deposited into the Bond Fund to pay any portion of the Bond Service Requirement in such Bond Year.

Section 11.03. Annual Rate Review. At least annually the Issuer will retain a Qualified Independent Consultant to review and make written recommendations to the Director of the Water Department with respect to changes in the System's rate structure which such consultant deems necessary or appropriate to ensure continuing compliance with the rate covenant set forth in Section 11.02 of this Resolution.

Section 11.04. Bi-Annual Long Range Business Plan. Beginning in the second Fiscal Year following the effective date of this Resolution, at least once every two years, the Director of the Water Department shall propose a Long Range Business Plan and submit it together with a report to a Qualified Independent Consultant who shall review it and report thereon with such comments and recommendations as it considers appropriate to the Director of the Water Department. A copy of the Long Range Business Plan and the Qualified Independent Consultant's comments and recommendations related thereto shall be available for inspection at the offices ofthe Issuer.

Section 11.05. Operating and Capital Budgets: Books and Records. Prior to the end of every other Fiscal Year, the Governing Body shall in the normal budget process for the System prepare, approve, and adopt by resolution, a detailed budget of the Gross Revenues, Costs of Operation and Maintenance, Net Revenues, Pledged Water Capacity Fees and Pledged Wastewater Capacity Fees, Bond Service Requirement and other Required Deposits for the next succeeding two Fiscal Years, and a capital budget consistent with the then current Long Range Plan and the rate covenant set forth in Section 11.02 above. Copies of all budgets, plans and amendments, thereto shall be available for inspection at the offices of the Issuer and shall be mailed to any Bondholder requesting the same. The Issuer shall also keep books and records of the Gross and Net Revenues of the System and Pledged Water Capacity Fees and Pledged Wastewater Capacity Fees, which books and records shall be kept separate and apart from all other books, records and accounts of the Issuer and the Holders of not less than ten per centum (10%) of the Bond Obligation shall have the right at all reasonable times to inspect all records, accounts and data of the Issuer relating thereto.

Section 11.06. Annual Audit.

(1) The Issuer shall, immediately within 180 days after the close of each Fiscal Year, cause the financial statements of the Issuer to be properly audited by a recognized independent certified public accountant or recognized independent fum of certified public accountants, and shall require such accountants to complete their report on the annual financial statements in accordance with applicable law. Such annual financial statements shall contain, but not be limited to, a balance sheet, a statement of revenues, expenses and changes in net assets, and any other statements as required by law or accounting convention, a report by such accountants disclosing any material default on the part of the Issuer of any covenant or agreement herein which is disclosed by the audit of the financial statements, and an opinion on the financial statements of the System. The annual financial statements shall be prepared in conformity with generally accepted accounting principles.

aJRN (2) As soon as practicable after the end of each quarter, the Director of the Water Department shall certify to the Governing Body that the System is in compliance with the then applicable covenants of this Resolution (other than the rate covenant) during the quarter just ended.

(3) A copy of each audit and report shall be available for inspection at the offices of the Issuer and shall be promptly mailed to any Bondholder requesting the same.

Section 11.07. No Mortgage or Sale of the System.

(1) The Issuer will not mortgage, pledge or otherwise encumber the System. The Issuer will not sell or otherwise dispose of any property of the System if the fair market value of the property in question as determined by the Qualified Independent Consultant:

(a) does not exceed $500,000, unless the Director of the Water Department first finds in writing that such property is no longer necessary, useful or profitable in the operations of the Issuer;

(b) exceeds $500,000, unless (i) the Director of the Water Department first finds in writing that such property is no longer necessary, useful or profitable in the operations of the System, (ii) next the Qualified Independent Consultant finds in writing that it is in the best interest of the Issuer that such property be sold of disposed of, and(iii) then the Governing Body, by resolution, concurs in the findings of the Director of the Water Department and of the Qualified Independent Consultant, and authorizes the sale or other disposition of such property.

(2)(a) if any sale proceeds received from the disposition of the property in question are less than ten percent (10%) of the fair market value of the fixed assets of the System as determined from the most recent audit report, the proceeds shall be placed in the Renewal and Replacement Account.

(b) If any sale proceeds received from the disposition of the property in question are ten percent (10%) or more of the fair market value of the fixed assets of the System from the most recent audit report, the proceeds shall be placed in the Debt Service Account to be used to redeem Bonds as provided in Section 9.07(3).

(3) Notwithstanding anything in the foregoing paragraphs (1) and (2) of this Section 11.07 to the contrary, the Issuer shall have and hereby expressly reserves the right to sell, lease, donate or otherwise dispose of any of the property comprising a part of the System which shall have become unserviceable, inadequate, obsolete, worn out, or unfit to be used in the operation of the System or is no longer necessary, useful or profitable in such operation if (i) such finding is made in writing by the Director of the Water Department, and (ii) if the property is real property totaling more than 15,000 square feet, the fair market value as determined by a Qualified Independent Consultant of the real property in question is not more than $100,000.

aJRO Section 11.08. Insurance and Condemnation Awards. The Issuer will carry adequate fire, windstorm and explosion insurance on the components of the System that are subject to loss through fire, windstorm or explosion; adequate public liability insurance; other insurance of the kinds and amounts normally carried in the operation of similar facilities and properties in Florida; and in time of war, such insurance as may be available at reasonable cost against loss or damage by the risks and hazards of war in an amount or amounts equal to the fair market value of the System as determined by the Qualified Independent Consultant. The Issuer may, upon appropriate authorization by its Governing Body and consultation with a Qualified Independent Consultant, self-insure against such risks on a sound actuarial basis. Any such insurance shall be carried for the benefit of the Issuer and, to the extent herein provided, the Bondholders. All proceeds received from property damage or destruction insurance and all proceeds received from the condemnation of the System or any part thereof are hereby pledged by the Issue!' as security for the Bonds, andif available for such purpose shall be deposited at the option of the Issuer but subject to the limitations hereinafter described either (i) into the Renewal and Replacement Account, in which case such proceeds shall be held in the Renewal and Replacement Account and used to remedy the loss, damage or taking for which such proceeds are received, either by repairing the damaged property or replacing the destroyed or taken property, as soon as practicable after the receipt of such proceeds, or(ii) into the redemption sub-account of the Debt Service Account for the purpose of purchasing or redeeming Bonds according to the provisions set forth in Section9.07(3) above, or (iii) into the Construction Account to be used as described in Section9.02 above.

The Issuer shall not be entitled to deposit insurance proceeds or condemnation awards into the Renewal and Replacement Account pursuant to clause(i) above (and such proceeds and awards shall be deposited directly into the Debt Service Account pursuant to clause(ii) above) unless there shall have been filed with the Governing Body of the Issuer within a reasonable time(i) a certificate from the Qualified Independent Consultant that the proceeds of insurance or condemnation awards deposited into the Renewal and Replacement Account, together with other funds in the Renewal and Replacement Account available for such purposes, will be sufficient to repair, rebuild, replace or restore such property to substantially the same condition as it was in prior to condemnation or destruction (taking into consideration any changes, alterations and modifications that the Issuer may desire),(ii) an opinion from the Qualified Independent Consultant that the System can be repaired, rebuilt, replaced or restored within two (2) years following the destruction or condemnation thereof and (iii) an opinion of the Qualified Independent Consultant that, in each of the three (3) Bond Years following completion of such repair, rebuilding, replacement or restoration, the Issuer will reasonably expected to be in compliance with its obligations hereunder, including, without limitation, its obligations under Section 11.02 of this Resolution. If the certificate described in clause (i) above is not rendered because such proceeds or awards, together with funds on deposit in the Renewal and Replacement Account are insufficient for such purposes, the Issuer may offset such deficiency with the deposit of other available funds in the Renewal and Replacement Account, or may alternatively deposit proceeds of Additional Parity Bonds or Completion Bonds in the Construction Account, in an amount required to enable the Qualified Independent Consultant to render its certificate. Proceeds received from such insurance proceeds and condemnation awards shall not be deemed Gross Revenues for purposes of the rate covenant of the Issuer.

Section 11.09, No Free Service. So long as any Bonds are outstanding, the Issuer will not render or cause to be rendered any free services of any nature by the System, nor will any

aJRP preferential rates be established for users of the same class without reasonable justification, except with respect to rates in connection with non-potable water produced by sources other than the wastewater treatment plans owned by the Issuer. Utility services rendered to the Issuer shall be billed and paid by the Issuer from its general funds into the General Revenue Account.

Section 11.10. Mandatory Cut Off. The Issuer may disconnect any user whose account is delinquent and shall expeditiously disconnect any user whose account is more than sixty days delinquent and shall not reconnect any user until the account is paid in full, including any charges for disconnection and reconnection to the System, unless the Governing Body (1) finds that absent the service the health of the user would be threatened; (2) finds there is clear and present showing of the financial inability of the user to pay the delinquency; and (3) authorizes payment to the General Revenue Account from the Issuer's general funds.

Section 11.11. Enforcement of Collections. The Issuer will diligently enforce and collect the Gross Revenues; will take all steps, actions and proceedings for the enforcement and collection of such Gross Revenues that shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such Gross Revenues shall, as collected, be held by the Chief Financial Officer as trustee for legal purposes to be applied as herein provided and not otherwise.

Section 11.12, No Competing System. To the full extent permitted by law and as practicable, the Issuer will take all lawful steps to prevent any person or entity other than the Issuer from furnishing water or wastewater services to customers located within the boundaries of the unincorporated area of the Issuer; provided, however, the Issuer shall never be precluded from contracting with the Authority for Contracted Water Supply or from granting franchises to provide water or wastewater services where deemed necessary or appropriate in the public interest.

Section 11.13. Qualified Independent Consultants. The Issuer will retain a Qualified Independent Consultant having a favorable reputation for skill and experience for the design, construction and operation of facilities of comparable size and character as the System, for the purpose of complying with the requirements of this Resolution, providing the Issuer competent engineering and rate feasibility services affecting the economical and efficient operation of the System and in connection with the making of capital improvements and renewals and replacements of the System. The Issuer may, however, employ additional engineers and consultants at any time with respect to specific engineering and operation problems relating to the System. The Qualified Independent Consultant shall annually recommend the amount of the Renewal and Replacement Account Requirement.

Section 11.14. Issuance of Other Obligations. The Issuer will not issue any bonds or other obligations, except under the conditions and in the manner provided herein, payable from or enjoying a lien on the Pledged Revenues, nor voluntarily create or cause to be created any debt,lien, pledge, assignment, encumbrance or other charge having priority01' tobeing on a parity with the lien of the Bonds and the interest thereon, upon said Pledged Revenues. Any other obligations issued by the Issuer in addition to the Bonds herein authorized or Additional Parity Bonds provided for in Section11.15 below, payable from such Pledged Revenues, shall contain an express statement that such obligations are junior and subordinate in all respects

aJRQ to the Bonds herein authorized, as to lien on and source and security for payment from such Pledged Revenues.

Section 11.15. Issuance of Additional Parity Bonds. No Additional Parity Bonds may be issued under this Resolution unless the Issuer shall have first complied with the requirements of this Section.

(1) Certificate of Independent Certified Public Accountant. There shall have been obtained and filed with the Governing Body a certificate of an independent certified public accountant of suitable experience and responsibility, stating the following;

(a) That he has audited the books and records of the Issuer relating to the collection and receipt of Gross Revenues and Pledged Capacity Fees available to make Required Deposits for the last Fiscal Year which has been audited and which precedes the date of sale of the proposed Additional Parity Bonds with respect to which such certificate is made; .

(b) Setting forth the amount of such Gross Revenues and Pledged Capacity Fees available to make Required Deposits; and

(2) Certificate of Qualified Independent Consultant. There shall have been obtained and filed with the Governing Body a certificate signed by one or more Qualified Independent Consultants, pursuant to which they shall state and certify the following:

(b) The anticipated cost of such proposed Project, itemizing separately the expected financing costs of such Additional Parity Bonds issued to pay the cost thereof, the required deposits, if any, into the Reserve Account and any capitalized interest to be funded from the proceeds of the Additional Parity Bonds;

(c) The anticipated annual Cost of Operation and Maintenance of the System (taking into account the Cost of Operation and Maintenance of such Project), in the Bond Year in which such Additional Parity Bonds are issued and in each successive Bond Year thereafter, to and including the third successive Bond Year following the Bond Year in which such Project is estimated to be placed in operation (the "Applicable Bond Years");

(d) The Gross Revenues expected to be received by the Issuer in each of the Applicable Bond Years, taking into account (i) the expected increase in new customers of the System, whether as a result of the proposed Project or otherwise including but

aJRR not limited to the acquisition of an existing utility system with customers(ii) andany changes in the rate schedules for customers and users of the System which the Issuer has adopted by Resolution on or before the date of such certificate and which the Issuer has covenanted to put in effect during the Applicable Bond Years, or any of them and (iii) any contract having been entered into on or before the date of such certificate, which contract shall be for a duration of not less than the final maturity date of the Additional Parity Bonds, with any public body, whereby the Issuer shall have agreed to furnish services for the collection, treatment or disposal of sewage or agreed to furnish services in connection with any water system (such Gross Revenues as adjusted pursuant to this subsection being herein referred to as the "Adjusted Gross Revenues");

(e) The Net Revenues anticipated to be available in each of the Applicable Bond Years after deducting from Adjusted Gross Revenues the anticipated Cost of Operation and Maintenance of the System in each of the Applicable Bond Years (such anticipated Net Revenues being herein referred to as the "Adjusted Net Revenues");

(f) The Pledged Capacity Fees expected to be deposited into the Pledged Water Capacity Fee Account or Pledged Wastewater Capacity Fee Account in each of the Applicable Bond Years, taking into account additional Pledged Capacity Fees that are expected to be received in each of such Bond Years (such Pledged Capacity Fees, including those attributable to the Project to be financed with such Additional Parity Bonds, being herein referred to as the "Adjusted Pledged Capacity Fees");

(g) The amount of the Bond Service Requirement for each of the Applicable Bond Years on account of all Bonds then Outstanding or to be Outstanding under this Resolution and the Additional Parity Bonds proposed to be issued hereunder;

(h) The amount of annual deposits, if any, to be made to the Renewal and Replacement Account and the Reserve Account created hereunder in each of the Applicable Bond Years;

(i) Based upon the foregoing, it is such Qualified Independent Consultant's opinion that in each of the Applicable Bond Years(i) the sum of Adjusted Gross Revenues, Adjusted Pledged Capacity Fees and Qualified Derivative Receipts, will be at least equal to one hundred percent (100%) of the estimated Required Deposits under this Resolution, including the repayment of Policy Costs then due and owing,(ii) andthe sum of Adjusted Net Revenues, plus Adjusted Pledged Capacity Fees and Qualified Derivative Receipts, will be at least equal to one hundred twenty percent (120%) of the Bond Service Requirement referred to in subsection (g) above.

(3) No Default. The Chief Financial Officer of the Issuer shall certify that the Issuer is not in default in the performance of any of the covenants and obligations assumed by it hereunder, and that all Required Deposits herein required to have been made into the funds and accounts provided herein shall have been made in full to the extent required.

(4) Due Authorization. The County Attorney or an Assistant County Attorney of the Issuer shall submit an opinion to the Governing Body of the Issuer to the effect that the issuance of such Additional Parity Bonds has been duly authorized and that

aJRS all conditions precedent to the delivery of such Additional Parity Bonds have been fulfilled.

(5) Existing Covenants Applicable. Each resolution, ordinance or enabling instrument authorizing the issuance of such Additional Parity Bonds will recite that all of the covenants herein contained will be fully applicable to such Additional Parity Bonds as if originally issued hereunder,

(6) Refunding Bonds. The Issuer need not comply with the provisions of paragraphs (1) and (2) of this Section 11.15if and to the extent the Additional Parity Bonds to be issued are for purposes of refunding the Series 1993 Bonds or Bonds previously issued, if the Issuer shall cause to be delivered a certificate of the Chief Financial Officer of the Issuer setting forth the total Bond Service Requirement(i) for the Series 1993 Bonds, if "Outstanding" under the resolution which authorized the issuance thereof, plus the Bonds then Outstanding and (ii) for all Series of Bonds to be immediately Outstanding thereafter and stating that the total Bond Service Requirement pursuant to (ii) above is not greater than that set forth pursuant(i) to above.

(7) Completion Bonds. The Issuer need not comply with the provisions of paragraphs (1) and (2) of this Section 11.15if and to the extent the Additional Parity Bonds to be issued aI'e for the purpose of providing any necessary additional funds required for completion of any improvements to the System ("Completion Bonds") if originally financed with the proceeds of Bonds; provided that such Completion Bonds for which the Issuer need not comply with the provision of such paragraphs (1) and (2) of this Section 11.15 may not exceed 10% of the total principal amount of Bonds estimated to be required for such improvements to the System at the time of issuance of the initial Series of Bonds to finance such improvements.

(8) Opinion of Bond Counsel. An opinion of Bond Counsel shall be delivered to the Governing Body of the Issuer to the effect that the issuance of such Additional Parity Bonds will not impair the exemption from federal income tax of interest paid on any Bonds issued hereunder and then outstanding.

(9) Payment Dates. All Additional Parity Bonds shall bear interest payable on the date or dates and shall mature on the date or dates as may be provided by Subsequent Resolution.

(10) Reserve Account. Any Additional Parity Bonds may be secured on parity and equal status with all other Bonds issued hereunder by the Reserve Account. Any deposits necessitated by the issuance of Additional Parity Bonds shall either be fully funded from the proceeds of such obligations or funded in any manner authorized in Section 9.03(3) of this Resolution. No Additional Parity Bonds may be issued without the prior written consent of the provider(s) of a surety bond or bonds on deposit in the Reserve Account if any Policy Costs are past due and owing to such provider(s).

(11) Parity. Additional Parity Bonds issued pursuant to the terms and conditions of this Article shall be deemed on a parity with all Bonds then outstanding, and all of the covenants and other provisions of this Resolution shall be for the equal benefit,

aJRT protection and security of the holders of any Bonds originally authorized and issued pursuant to this Resolution and the holders of any Additional Parity Bonds evidencing additional obligations subsequently created within the limitations of and in compliance with this Article.

Section 11.16. Commencement and Completion of Projects. The Issuer will commence and complete the Projects in an economical and efficient manner and with all practicable dispatch. The date of completion of the Projects shall be determined by the Qualified Independent Consultant, who will certify such facts in writing to the Director of the Water Department and the Governing Body of the Issuer.

Section 11.17. Tax Covenants. It is the intention of the Issuer and all parties under its control that the interest on the Bonds issued hereunder that are not Taxable Bonds be and remain excluded from gross income for federal income tax purposes and to this end the Issuer hereby represents to and covenants with each of the holders of the Bonds issued hereunder that are not Taxable Bonds that it will comply with the requirements applicable to it contained in Section 103 and Part IV of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended (the "Code") to the extent necessary to preserve the exclusion of interest on the Bonds issued hereunder that are not Taxable Bonds from gross income for federal income tax purposes. Specifically, without intending to limit in any the generality of the foregoing, the Issuer covenants and agrees:

(1) to make or cause to be made all necessary determinations and calculations of the Rebate Amount and required payments of the Rebate Amount;

(2) to set aside sufficient moneys in the Rebate Account or elsewhere, from the Pledged Revenue or other legally available funds of the Issuer, to timely pay the Rebate Amount to the United States of America;

(3) to pay the Rebate Amount to the United States of America from the Pledged Funds or from any other legally available funds, at the times and to the extent required pursuant to Section 148({) of the Code;

(4) to maintain and retain all records pertaining to the Rebate Amount with respect to the Bonds issued hereunder that are not Taxable Bonds and required payments of the Rebate Amount with respect to the Bonds that are not Taxable Bonds for at least six years after the final maturity of the Bonds that are not Taxable Bonds or such other period as shall be necessary to comply with the Code;

(5) to refrain from taking any action that would cause any Bonds issued hereunder that are not Taxable Bonds and are not issued with the intent that such Bonds shall be private activity bonds (within the meaning of Section 141(a) of the Code), to be classified as private activity bonds under Section 141(a) of the Code; and

(6) to refrain from taking any action that would cause the Bonds issued hereunder that are not Taxable Bonds to become arbitrage bonds under Section 148 of the Code.

aJRU The Issuer understands that the foregoing covenants impose continuing obligations on the Issuer that will exist as long as the requirements of Section 103 and Part IV of Subchapter B of Chapter 1 of Subtitle A of the Code are applicable to the Bonds.

Notwithstanding any other provision of this Resolution, including, in particular Section 12.01 hereof, the obligation of the Issuer to pay the Rebate Amount to the United States of America and to comply with the other requirements of this Section 11.17 and the following Section 11.18 shall survive the defeasance or payment in full of the Bonds that are not Taxable Bonds.

Section 11.18. Rebate Account. The Issuer shall deposit into the Rebate Account, from investment earnings on moneys deposited in the other funds and accounts created hereunder, or from any other legally available funds of the Issuer, an amount equal to the Rebate Amount for such Rebate Year. The Issuer shall use such moneys deposited in the Rebate Account only for the payment of the Rebate Amount to the United States as required by this Section 11.18. In complying with the foregoing, the Issuer may rely upon any instructions or opinions from Bond Counsel,

If any amount shall remain in the Rebate Account after payment in full of all Bonds issued hereunder that are not Taxable Bonds and after payment in full of the Rebate Amount to the United States in accordance with the terms hereof, such amounts shall be available to the Issuer for any lawful System purpose.

The Rebate Account shall be held separate and apart from all other funds and accounts of the Issuer, shall not be impressed with a lien in favor of the Bondholders and the moneys therein shall be available for use only as herein provided.

Section 11.19. Qualified Derivative Agreements. The Issuer may enter into one or more Qualified Derivative Agreements with respect to one or more Series of Bonds (or portions thereof); provided, however, that if such Qualified Derivative Agreement is not entered into at the time of initial issuance of the Series of Bonds to which it relates, the requirements of Section 11.15 above must be met, applying the same as if $1.00 in principal amount of Additional Bonds is being issued as of the effective date of such Qualified Derivative Agreement. Qualified Derivative Payments payable by the Issuer under any such agreement shall be payable from the Swap Obligations Account on a parity with principal, interest and Amortization Installment payments with respect to Bonds issued and Outstanding hereunder.

Prior to entering into any Qualified Derivative Agreement with respect to any Bonds issued and Outstanding hereunder, the Issuer shall notify Fitch, Moody's and S&P, to the extent they shall maintain a rating on Outstanding Bonds, of the Issuer's intent to enter into such Agreement.

Section 11.20 No Further Issuance of Senior Lien Bonds. So long as any Bonds authorized hereunder are Outstanding, the Issuer shall not issue bonds or other obligations which have a lien on Pledged Revenues which is senior to that of the holders of the Bonds.

aJRV ARTICLE XII

DEFEASANCE; NOTICE OF DEFEASANCE

Section 12.01. Defeasance. If (a) the Issuer shall payor cause to be paid to the Holders of the Bonds then outstanding the principal of, and the interest to become due thereon and redemption premiums, if any, at the times and in the manner stipulated therein and herein, and (b) the Issuer shall keep, perform and observe all of its agreements with respect to the Bonds herein expressed which are to be kept, performed and observed by it or on its part, then these presents and the rights hereby granted shall cease, terminate and be void.

Any Bond for the payment or redemption of which sufficient moneys or Acquired Obligations shall have been deposited with a trust company or bank with trust powers, as escrow agent (whether upon or prior to the stated maturity or the redemption date of such Bonds), shall be deemed to be paid within the meaning hereof and shall no longer be Outstanding hereunder; provided, however, that if such Bonds are to be redeemed prior to their stated maturities, notice of such redemption shall have been duly given as provided in Section 6.09 hereof or irrevocable arrangements satisfactory to the Paying Agent shall have been made for the giving thereof. The aforesaid Acquired Obligations will be considered sufficient if said obligations, with interest, mature and bear interest in such amounts and at such times as will assure sufficient cash moneys to pay currently maturing principal of, premiums, if any, and interest on the Bonds then due. Such Acquired Obligations may not contain provisions making them subject to redemption prior to their stated maturities other than at the option of the holder thereof.

If the Issuer shall determine that it is desirable to terminate the rights and liens hereunder of the Holders of any Bonds (pursuant to a refunding or otherwise) and shall deposit irrevocably in trust sums which when invested in Acquired Obligations will be sufficient: (a) to pay the principal of, and the interest on said Bonds as the same mature or until called for redemption; and (b) to pay the principal of and interest due on all Bonds called on said call date together with any redemption premium due thereon, and shall make adequate provision for the publication at the proper time of any required notice of redemption, such Bonds shall thereafter have no right or lien under this Resolution other than the right to receive payment from said special fund and the same shall not be considered to be Outstanding hereunder for any purpose.

For purposes of determining whether variable rate Bonds shall be deemed to have been paid prior to the maturity or redemption date thereof, as the case may be, by the deposit of moneys, or Acquired Obligations and moneys, if any, in accordance with the requirements of this Section, the interest to come due on such variable rate Bonds on or prior to the maturity date or redemption date thereof, as the case may be, shall be calculated at the maximum rate permitted by the terms thereof; provided, however, that if on any date, as a result of such variable rate Bonds having borne interest at less than such maximum rate for any period, the total amount of moneys and Acquired Obligations on deposit with the escrow agent for the payment of interest on such variable rate Bonds is in excess of the total amount which would have been required to be deposited with the escrow agent on such date in respect of such variable rate Bonds in order to satisfy the requirements of this Section, the escrow agent shall, if requested by the Issuer, pay the amount of such excess to the Issuer free and clear of any

aJSM trust, lien, pledge or assignment securing the Bonds or otherwise existing under this Resolution.

Section 12.02. Publication of Notice of Defeasance. Within thirty (30) days after the defeasance of the Bonds or any Series thereof, the Issuer shall cause to be published one time in a newspaper published and of general circulation in Hillsborough County, Florida, or a financial journal published in the City and State of New York, a notice of the advance refunding of such Bonds.

ARTICLE XIII

EVENTS OF DEFAULT; REMEDIES

Section 13.01. Events of Default. Each of the following events is hereby declared an "event of default," that is to say if:

(1) Payment of principal of any Bond shall not be made when the same shall become due and payable either at maturity or on required payment dates by proceedings for redemption or otherwise;

(2) Payment of any installment of interest shall not be made when the same shall become due and payable;

(3) The Issuer shall for any reason be rendered incapable of fulfilling its obligations under this Resolution to the extent that the payment of or security for the Bonds would be materially adversely affected, and such conditions shall continue unremedied for a period of 30 days after the Issuer becomes aware of such conditions;

(4) An order or decree shall be entered, with the consent or acquiescence of the Issuer, appointing a receiver or receivers of the Issuer, the Pledged Revenues, or any part thereof or the filing of a petition by the Issuer, for the relief under federal bankruptcy laws or any other applicable law or statute of the United States of America or the State of Florida, which shall not be dismissed, vacated or discharged within 30 days after the filing thereof;

(5) Any proceedings shall be instituted, with the consent or acquiescence of the Issuer, for the purpose of effecting a composition between the Issuer and its creditors or for the purpose of adjusting the claims of such creditors, pursuant to any federal or state statutes now or hereafter enacted, if the claims of such creditors are under any circumstances payable from the Gross Revenues;

(6) The entry of a final judgment or judgments for the payment of money against the Issuer, as a result of the ownership, operation or control of the System which subjects any of the funds pledged under this Resolution to a lien for the payment thereof in contravention of the provisions of this Resolution for which there does not exist adequate insurance, reserves or appropriate bonds for the timely payment thereof, and any such judgment shall not be discharged within 90 days from the entry thereof or an appeal shall not be taken therefrom or from the order, decree or process

aJSN upon which or pursuant to which such judgment shall have been granted or entered, in such manner as to stay the execution of or levy under such judgment, order, decree or process or the enforcement thereof; or

(7) The Issuer shall default in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds, in this Resolution, on the part of the Issuer, to be performed, and such default shall continue for 30 days after written notice specifying such default and requiring the same to be remedied shall have been given to the Issuer by the registered owners of not less than 10% of the Bond Obligation.

Notwithstanding the foregoing, the occurrence of any default under a Qualified Derivative Agreement, including without limitation failure on the part of the Issuer to make Qualified Derivative Payments 01' to pay a termination fee thereunder, shall not be construed as or deemed to constitute an "event of default" hereunder; rather; such occurrence shall be remedied pursuant to such Qualified Derivative Agreement and applicable legal and equitable principles taking into account the parity status as to lien on Pledged Revenues which the counterparty to such Qualified Derivative Agreement enjoys as to Qualified Derivative Payments only, relative to that of the Bondholders and their rights to payments hereunder.

Notwithstanding the foregoing, with respect to the events described in clauses (3) and (7) above, the Issuer shall not be deemed in default hereunder if such default can be cured within a reasonable period of time and if the Issuer in good faith institutes appropriate curative action and diligently pursues such action until the default has been corrected.

In determining whether an Event of Default has occurred under 13.01(1) or (2) above or whether a payment on the Bonds has been made under this Resolution, no effect shall be given to payments made pursuant to a municipal bond insurance policy.

Section 13.02. Enforcement of Remedies. Upon the happening and continuance of any event of default specified in Section 13.01 of this Article, then and in every such case the owners of not less than twenty-five percent (25%) of the Bond Obligation may appoint any state bank, national bank, trust company or national banking association qualified to transact business in Florida to serve as trustee for the benefit of the holders of all Bonds then outstanding (the "Default Trustee"). Notice of such appointment, together with evidence of the requisite signatures of the holders of twenty-five percent (25%) of the Bond Obligation and the trust instrument under which the Default Trustee shall have agreed to serve shall be filed with the Issuer and the Default Trustee and notice of such appointment shall be published in THE BOND BUYER or a financial journal of general circulation in the City of New York, New York and mailed to the registered holders of the Bonds. After the appointment of the first Default Trustee hereunder, no further Default Trustees may be appointed; however, the holders of a majority of the Bond Obligation may remove the Default Trustee initially appointed and appoint a successor and subsequent successors at any time. If the default for which the Default Trustee was appointed is cured or waived pursuant to this Article, the appointment of the Default Trustee shall terminate with respect to such default.

After a Default Trustee has been appointed pursuant to the foregoing, the Default Trustee may proceed, and upon the written request of owners of twenty-five percent (25%) of the Bond Obligation shall proceed, subject to the provisions of Section 13.03 of this Resolution,

aJSO to protect and enforce the rights of the Bondholders under the laws of the State of Florida, including the Act, and under this Resolution, by such suits, actions or special proceedings in equity 01' at law, or by proceedings in the office of any board, body or officer having jurisdiction, either for the specific performance of any covenant or agreement contained herein or in aid of execution of any power herein granted to for the enforcement of any proper legal or equitable remedy, all as the Default Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy against the Issuer under this Resolution, the Default Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Issuer for principal, interest or otherwise under any provisions of this Resolution or of such Bonds and unpaid, with interest on overdue payments of principal and, to the extent permitted by law, on interest at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Default Trustee or of the Bondholders, and to recover and enforce any judgment or decree against the Issuer, but solely as provided herein and in such Bonds, for any portion of such amounts remaining unpaid and interest, costs and expenses as above provided, and to collect (but solely from moneys in the Debt Service Account, the Reserve Account and any funds or accounts pledged hereunder) in any manner provided by law, the moneys adjudged or decreed to be payable.

Section 13.03. Effect of Discontinuing Proceedings. In case any proceeding taken by the Default Trustee or any Bondholder on account of any default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Default Trustee, such Bondholder, then and in every such case the Issuer, the Default Trustee, and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Default Trustee shall continue as though no such proceeding had been taken.

Section 13.04. Directions to Default Trustee as to Remedial Proceedings. Anything in this Resolution to the contrary notwithstanding, the holders of a majority of the Bond Obligation shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Default Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Default Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Default Trustee shall have the right to decline to follow any such direction which in the opinion of the Default Trustee would be unjustly prejudicial to Bondholders not parties to such direction.

Section 13.05. Restrictions on Actions by Individual Bondholders. No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for the execution of any trust hereunder or for any other remedy hereunder unless such Bondholder previously shall have given to the Default Trustee written notice of the event of default on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than twenty-five percent (25%) of the Bond Obligation shall have made written request of the Default Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Default Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such action, suit or

aJSP proceeding in its or their name, and unless, also, there shall have been offered to the Default Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, including the reasonable fees of its attorneys (including fees on appeal), and the Default Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Default Trustee, to be conditions precedent to the execution of the powers and trusts of this Resolution or for any other remedy hereunder. It is understood and intended that no one or more owners ofthe Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb, or prejudice the security of this Resolution, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein or therein provided and for the benefit of all Bondholders, and that any individual rights of action or any other right given to one or more of such owners by law are restricted by this Resolution to the rights and remedies herein provided.

Nothing contained herein, however, shall affect or impair the right of any Bondholder, individually, to enforce the payment of the principal of and interest on his Bond or Bonds at and after the maturity thereof, at the time, place, from the source and in the manner provided in this Resolution.

Section 13.06. Pro Rata Application of Funds. Anything in this Resolution to the contrary notwithstanding, in the case of an Event of Default under Section 13.01(1)01' (2) hereof, to the extent there are no other available Pledged Revenues or funds and accounts held under this Resolution, the Default Trustee shall use the remaining funds in the Construction Account to pay principal of and interest of the Bonds, andif at any time the Pledged Revenues and the moneys in the funds and accounts provided for herein shall not be sufficient to pay the principal of or the interest on the Bonds, as the case may be, as the same become due and payable, such moneys, together with any moneys then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in this Article or otherwise, shall be applied as follows:

(a) Unless the principal of aU the Bonds shall have become due and payable, all such funds shall be applied (1) first, to the payment of all installments of interest then due, in the order of the maturity of the installments of such interest, to the persons entitled thereto, ratably, without any discrimination or preference, and (2) then, to the deposit of all installments of principal required to be made, in the order of the requirement for the deposit of such installments, or ratably if in the same order of payment, without discrimination or preference.

(b) If the principal of all the Bonds shall have become due and payable, all such funds shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds without preference 01· priority of one such category over another, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due, respectively, for principal and interest (including Accreted Value), to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds.

aJSQ Whenever funds are to be applied pursuant to the provisions of this Section 13.06, such funds shall be applied at such times, and from time to time, as the Issuer or the Default Trustee, as the case may be, in its sole discretion shall determine, having due regard to the amount of such funds available for application and the likelihood of additional funds becoming available for such application in the future; the setting aside of such funds, in trust for the propel' purpose, shall constitute proper application of such funds. Whenever such discretion in applying such funds shall be exercised, the date (which shall be an interest payment date unless another date more suitable shall be fixed) upon which such application is to be made shall be fixed by the Issuer or the Default Trustee and upon such date interest on the amounts or principal to be paid on such date shall cease to accrue, Such notice as shall be deemed to be appropriate of the fixing of any such date shall be given. No payment to the owner of any Bond shall be required unless such Bond shall be presented to the Default Trustee or to the Issuer, as the case may be, for appropriate endorsement or for cancellation if fully paid.

Section 13.07 Rights of Municipal Bond Insurers. Notwithstanding any other provision hereof, if a municipal bond insurer of a particular Series of Bonds is not then in default in the performance of its obligations under the related municipal bond insurance policy: (i) except the giving of notice of an Event of Default to Bondholders, such municipal bond insurer shall be considered the Holder of all Bonds of such Series and shall be entitled to direct and control the enforcement of all rights and remedies with respect to such Series of Bonds, (ii) such municipal bond insurer shall receive immediate notice of any Event of Default pursuant to Section 13.01(1) or (2) hereof and notice of any other Event of Default known to the Paying Agent or the Issuer within 30 days of the Paying Agent's or the Issuer's knowledge thereof; and (iii) such municipal bond insurer shall be included as a party in interest and as a party entitled to (a) notify the Issuer01' any applicable receiver of the occurrence of an Event of Default and (b) request the receiver to intervene in judicial proceedings that affect the Bonds or the security therefor (the receiver shall be required to accept notice of default from such municipal bond insurer).

ARTICLE XIV

MISCELLANEOUS

Section 14.01. Modification or Amendment. Prior to the issuance of the initial series of Bonds hereunder, this Resolution may be amended from time to time at the Issuer's sole discretion. Thereafter, the Issuer, from time to time and at any time and without the consent or concurrence of any Holder of any Bonds, may adopt a Subsequent Resolution amendatory hereof or supplemental hereto, if the provisions of such Subsequent Resolution shall not materially adversely affect the rights of the Holders of the Bonds then Outstanding, for any one or more of the following purposes:

(A) To make any changes or corrections in this Resolution as to which the Issuer shall have been advised by counsel that are required for the purpose of curing or

correcting any ambiguity or defective or inconsistent provisions01' omission or mistake or manifest error contained in this Resolution, or to insert in this Resolution such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable.

aJSR (B) To add additional covenants and agreements of the Issuer for the purpose of further securing the payments of the Bonds;

CD) To confirm as further assurance any lien, pledge or charge01' the subjection to any lien, pledge or charge, created orto be created by the provisions of this Resolution;

(E) To grant to or confer upon the Holders any additional right, remedies,powers, authority or security that lawfully may be granted to or conferred upon them;

(F) To assure compliance with federal "arbitrage" provisions in effect from time to time;

(G) To issue Additional Parity Bonds pursuant to Section11.15 hereof 01' to provide such changes as may be necessary in order to adjust the terms hereof soto asfacilitate the issuance of variable rate bonds or to enter into a Qualified Derivative Agreement; and

(II) To modify any of the provisions of this Resolution in any other aspects provided that such modifications shall not be effective until after the Bonds Outstanding at the time such Subsequent Resolution is adopted shall cease to be Outstanding, or until the Holders thereof consent thereto as required in the next paragraph hereof, and any Bonds issued subsequent to any such modification shall contain a specific reference to the modifications contained in such Subsequent Resolution.

Unless expressly permitted by the preceding paragraph, no material modification or amendment of this Resolution or of any Subsequent Resolution amendatory hereof may be made without the consent in writing of the Holders of not less than a majority of the Bond Obligation then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the Issuer to pay the principal of and interest on the Bonds as the same shall become due from the Pledged Revenues or reduce the percentage of the Holders of the Bonds required to consent to any material modification or amendment hereof without the consent of the Holder or Holders of all such Bonds.

Notwithstanding any provision herein to the contrary,if a municipal bond insurer of a particular Series of Bonds is not then in default in the performance of any of its obligations under the related municipal insurance policy, such municipal bond insurer shall be considered the Holder of all Bonds of such Series and shall be entitled to give its written consent to amendments in lieu of the Bondholder consent requirement above relating to such Series of Bonds.

Section 14.02. Members of the County Not Liable. No covenant, stipulation, obligation or agreement contained in this Resolution shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, agent or employee of the County in his individual capacity, and neither the members of the County nor any official executing the

aJSS Bonds shall be liable personally on the Bonds or this Resolution or shall be subject to any personal liability or accountability by reason of the issuance or the execution by the County or such members thereof.

Section 14.03. No Third-Party Beneficiaries. Except as otherwise expressly provided in this Resolution, nothing herein expressed or impliedis intended or shall be construed to confer upon any person,firm or corporation other than the parties hereto and the Owners and Holders of the Bonds issued under and secured by this Resolution and the municipal bond insurers of such Bonds, any right, remedy or claim, legal or the sale and exclusive benefit of the parties thereto and the Owners and Holders from time to time of the Bonds issued hereunder and the municipal bond insurers of such Bonds.

Section 14.04. Severability and Invalid Provisions. If anyone or more of the covenants, agreements or provisions herein contained shall be held contrary to any express provision of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Bonds issued hereunder.

Section 14.05. Sale of Bonds. The Bonds may be issued and sold by negotiated sale in such manner and at such price or prices consistent with the Act, all at one time or in installments from time to time, as shall be hereafter determined by Subsequent Resolution of the Governing Body of the Issuer.

Section 14.06. Repealing Clause. All resolutions or parts thereof of the Issuer in conflict with the provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. ResolutionNo. R85·0225 adopted by the Issuer on November 26, 1985, as supplemented and amended, is hereby repealed at such time as this Resolution becomes effective pursuant to Section 14.07 hereof.

Section 14.07. Effective Date. This Resolution shall take effect immediately upon the occurrence of the happening of all of the following events, which events may not necessarily occur simultaneously: (a) its adoption by the Issuer;(b) at such time as the Series 1993 Bonds are no longer "Outstanding" under Resolution No. R85-0225 adopted by the Issuer on November 26, 1985, as supplemented and amended;(c) the Issuer having obtained the written consent of Ambac Assurance Corporation, as the municipal bond insurer of the Series 2001 Bonds, to the amendments being madeto the Original 2001 Resolution; and (d) at such time as all of the Issuer's rights, duties and obligations under the Interest Rate Swap Agreement have been assigned or terminated. Priorto such time, the Original 2001 Resolution remains in full force and effect.

[Remainder of page intentionally left blank]

aJST STATE OF FLORIDA

COUNTY OF HILLSBOROUGH

1, Richard Ake, Clerk of the Circuit Court and Ex-Officio Clerk of the Board of County Commissioners, do hereby certify that the above and foregoing resolution is a true and correct copy of a resolution adopted by the Board of County Commissioners of Hillsborough County, Florida, in its public meeting of June 4 , 2003, as the same appears on record in Minute Book ~ of the Public Records of Hillsborough County, Florida.

WITNESS my hand and official seal this 5th day of June, 2003.

RICHARD ARE, CLERK

BY;~&>u1) cK. ~F--'--rr----=---_ Deputy Clerk

Approved as to form and legal sufficiency BY~A@2J3) ounty Attorney

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APPENDIX E

FORMS OF APPROVING OPINION OF BOND COUNSEL

(THIS PAGE INTENTIONALLY LEFT BLANK) APPENDIX E-1

On the date of issuance of the Series 2010A Bonds in definitive form, Edwards Angell Palmer & Dodge LLP proposes to render its approving opinion in substantially the following form.

Boardf o County Commissioners ______, 2010 of Hillsborough County Tampa, Florida

Re: $18,035,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010A (Tax-Exempt)

Ladies and Gentlemen:

We have examined certified copies of the proceedings of the Board of County Commissioners (the “Board”) of Hillsborough County, Florida (the “Issuer”) relative to the issuance and sale of $18,035,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010A (Tax-Exempt) (the "Series 2010A Bonds").

We have examined the Constitution and laws of the State of Florida (the “State”), including Chapter 159, ,Part I Florida Statutes, Chapter 125, Florida Statutes, the Hillsborough County Charter, and other applicable provisions of law (collectively, the “Act”), Resolution No. R03-112 adoptedn o June 4, 2003, as amended and supplemented, including, particularly by Resolution No. R10-151 adopted on October 6, 2010 (collectively, the “Resolution”) and other proofs submitted relative to the issuance of the Series 2010A Bonds. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Resolution, as the case may be.

In rendering this opinion, we have examined and relied upon the opinion of even date herewithf o the County Attorney or an Assistant County Attorney, as to the due creation and valid existence of the Issuer and the due adoption of the Resolution.

Basedn o the foregoing, we are of the opinion that:

1. The SeriesA 2010 Bonds are legal, valid, binding and enforceable obligations of the Issuer payable on a parity with the Issuer’s Junior Lien Refunding Utility Revenue Bonds, Series 2001, Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment), Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment), and any Additional Bonds hereafter issued under the Resolution, from the Pledged Revenues, which consist of (i) the Net Revenues, (ii) Pledged Capacity Fees, (iii ) proceeds from the sale or condemnation of property of the System and proceeds from property and casualty insurance insuring the System’s property, (iv) any Qualified Derivative Payments, and (v) Federal Direct Payments received by the Issuer. The Series 2010A Bonds shall not be deemed to constitute a general debt or a pledge of the faith and

APPENDIX E-1

credit of the Issuer, or a debt or a pledge of the faith and credit of the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provisionr o limitation, and the holders thereof shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing power of the Issuer or any other political subdivision of the State of Florida or taxation in any form on any real or personal property for the payment of the principal of and interest on the SeriesA 2010 Bonds.

2. The Resolution constitutes the legal, valid, binding and enforceable obligation of the Issuer in accordance with its terms.

3. Interest on the Series 2010A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). In addition, interest on the Series 2010A Bonds is not a specific preference item for purposesf o the federal individual or corporate alternative minimum taxes and is not included in adjusted current earnings when calculating corporate alternative minimum taxable income. In rendering the opinions set forth in this paragraph, we have assumed compliance by the County with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2010A Bonds in order that interest thereon be, and continue to be, excluded from gross income fore f deral income tax purposes. The County has covenanted to comply with all such requirements. Failure by the County to comply with certain of such requirements may cause interestn o the Series 2010A Bonds to become included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2010A Bonds. We express no opinion regarding any other federal tax consequences arising with respect to the Series 2010A Bonds.

4. The Series 2010A Bonds and the interest thereon are exempt from taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein.

This opinion is expresssed a of the date hereof, and we neither assume nor undertake any oobligation t update, revise, supplement or restate this opinion to reflect any action taken or romitted, o any facts or circumstances or changes in law or in the interpretation thereof, th at may hereafter arise or occur, or for any other reason.

The opinions expressed in the foregoing paragraphs regarding enforceability may be subject to bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally or by such principles of equity as the court having jurisdiction may impose with respect to certain remedies which require or may require enforcement by a court of equity.

Respectfully submitted,

2 APPENDIX E-2

On the date of issuance of the Series 2010B Bonds in definitive form, Edwards Angell Palmer & Dodge LLP proposes to render its approving opinion in substantially the following form.

Boardf o County Commissioners ______, 2010 of Hillsborough County Tampa, Florida

Re: $110,265,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010B ( Federally Taxable – Build America Bonds – Direct Payment)

Ladies and Gentlemen:

We have examined certified copies of the proceedings of the Board of County Commissioners (the “Board”) of Hillsborough County, Florida (the “Issuer”) relative to the issuance and sale of $110,265,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment) (the "Series 2010B Bonds").

We have examined the Constitution and laws of the State of Florida (the “State”), including Chapter 159, ,Part I Florida Statutes, Chapter 125, Florida Statutes, the Hillsborough County Charter, and other applicable provisions of law (collectively, the “Act”), Resolution No. R03-112 adoptedn o June 4, 2003, as amended and supplemented, including, particularly by Resolution No. R10-151 adopted on October 6, 2010 (collectively, the “Resolution”) and other proofs submitted relative to the issuance of the Series 2010B Bonds. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Resolution, as the case may be.

In r endering this opinion, we have examined and relied upon the opinion of even date herewithf o the County Attorney or an Assistant County Attorney, as to the due creation and valid existence of the Issuer and the due adoption of the Resolution.

Basedn o the foregoing, we are of the opinion that:

1. The Series 2010B Bonds are legal, valid, binding and enforceable obligations of the Issuer payable on a parity with the Issuer’s Junior Lien Refunding Utility Revenue Bonds, Series, 2001 Utility Revenue Bonds, Series 2010A (Tax-Exempt), Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment), and any Additional Bonds hereafter issued under the Resolution , from the Pledged Revenues, which consist of h(i) t e Net Revenues, (ii) Pledged Capacity Fees, (iii) proceeds from the sale or condemnation of property of the System and proceeds from property and casualty insurance insuring the System’s property, (iv ) any Qualified Derivative Payments, and (v) Federal Direct Payments received by the Issuer. The Series 2010B Bonds shall not be deemed to constitute a

APPENDIX E-2

general debt or a pledge of the faith and credit of the Issuer, or a debt or a pledge of the faith and creditf o the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provision or limitation, and the holders thereof shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing powerf o the Issuer or any other political subdivision of the State of Florida or taxation in any formn o any real or personal property for the payment of the principal of and interest on the Series 2010B Bonds.

2. The Resolution constitutes the legal, valid, binding and enforceable obligation of the Issuer in accordance with its terms.

3. nInterest o the Series 2010B Bonds is included in the gross income of the owners of the Series 2010B Bonds for federal income tax purposes. We express no opinion regarding any other federal tax consequences arising with respect to the Series 2010B Bonds.

4. The Series 2010B Bonds and the interest thereon are exempt from taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Flo rida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein.

This opinion is expressed as of the date hereof, and we neither assume nor undertake any oobligation t update, revise, supplement or restate this oopinion t reflect any action taken or romitted, o any facts or circumstances or changes in law or in the interpretation thereof, that may hereafter arise or occur, or for any other reason.

Respectfully submitted,

2 APPENDIX E-3

On the date of issuance of the Series 2010C Bonds in definitive form, Edwards Angell Palmer & Dodge LLP proposes to render its approving opinion in substantially the following form.

Boardf o County Commissioners ______, 2010 of Hillsborough County Tampa, Florida

Re: $21,700,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment)

Ladies and Gentlemen:

We have examined certified copies of the proceedings of the Board of County Commissioners (the “Board”) of Hillsborough County, Florida (the “Issuer”) relative to the issuance and sale of $21,700,000 aggregate principal amount Hillsborough County, Florida Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment) (the "Series 2010C Bonds").

We have examined the Constitution and laws of the State of Florida (the “State”), including Chapter 159, ,Part I Florida Statutes, Chapter 125, Florida Statutes, the Hillsborough County Charter, and other applicable provisions of law (collectively, the “Act”), Resolution No. R03-112 adoptedn o June 4, 2003, as amended and supplemented, including, particularly by Resolution No. R10-151 adopted on October 6, 2010 (collectively, the “Resolution”) and other proofs submitted relative to the issuance of the Series 2010C Bonds. All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Resolution, as the case may be.

Basedn o the foregoing, we are of the opinion that:

1. The Series 2010C Bonds are legal, valid, binding and enforceable obligations of the Issuer payable on a parity with the Issuer’s Junior Lien Refunding Utility Revenue Bonds, ,Series 2001 Utility Revenue Bonds, Series 2010A (Tax-Exempt), Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment), and any Additional Bonds hereafter issued under the Resolution , from the Pledged Revenues, whic h consist of (i) the Net Revenues, (ii) Pledged Capacity Fees, (iii) proceeds from the sale or condemnation of property of the System and proceeds from property and casualty insurance insuring the System’s property, (iv) any Qualified Derivative Payments, and (v) Federal Direct Payments received by the Issuer.

APPENDIX E-3

The Series 2010C Bonds shall not be deemed to constitute a general debt or a pledge of the faith and credit of the Issuer, or a debt or a pledge of the faith and credit of the State of Florida or any political subdivision thereof within the meaning of any constitutional, legislative or charter provisionr o limitation, and the holders thereof shall never have the right, directly or indirectly, to require or compel the exercise of the ad valorem taxing powerf o the Issuer or any other political subdivision of the State of Florida or taxation in any form on any real or personal property for the payment of the principal of and interest on the Series 2010C Bonds.

2. The Resolution constitutes the legal, valid, binding and enforceable obligation of the Issuer in accordance with its terms.

3. nInterest o the Series 2010C Bonds is included in the gross income of the owners of the Series 2010C Bonds for federal income tax purposes. We express no opinion regarding any other federal tax consequences arising with respect to the Series 2010C Bonds.

4. The Series 2010C Bonds and the interest thereon are exempt from taxation under existing laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein.

This opinion is expressed as of the date hereof, and we neither assume nor undertake any oobligation t update, revise, supplementr o restate this opinion to reflect any action taken or romitted, o any facts or circumstances or changes in law or in the interpretation thereof, that may hereafter arise or occur, or for any other reason.

The opinions expressed in the foregoing para graphs regarding enforceability may be subject to bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally or by such principles of equity as the court having jurisdiction may impose with respect to certain remedies which require or may require enforcement by a court of equity.

Respectfully submitted,

APPENDIX F

FORM OF CONTINUING DISCLOSURE CERTIFICATE

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FORM OF CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by Hillsborough County, Florida (the "Issuer") in connection with the issuance of its $18,035,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010A (Tax- Exempt) (the "Series 2010A Bonds"), $110,265,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010B (Federally Taxable – Build America Bonds – Direct Payment) (the "Series 2010B Bonds") and $21,700,000 aggregate principal amount of its Utility Revenue Bonds, Series 2010C (Federally Taxable – Recovery Zone Economic Development Bonds – Direct Payment) (the "Series 2010C Bonds" and collectively with the Series 2010A Bonds and the Series 2010B Bonds, the "Series 2010 Bonds"). The Series 2010 Bonds are being issued pursuant to the Amended and Restated Utility System Bond Resolution No. R03-112 adopted by the Board of County Commissioners of the Issuer (the "Board") on June 4, 2003, as amended and supplemented by Resolution No. R03-116 adopted by the Board on June 4, 2003 and Resolution No. R10-151 adopted by the Board on October 6, 2010, as amended and supplemented from time to time (collectively, the "Resolution"). Capitalized terms used but not otherwise defined herein shall have the same meaning as when used in the Resolution unless the context would clearly indicate otherwise. The Issuer covenants and agrees as follows:

SECTION 1. PURPOSE OF DISCLOSURE CERTIFICATE. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Series 2010 Bondholders and in order to assist the Underwriter of the Series 2010 Bonds in complying with the continuing disclosure requirements of Rule l5c2-l2 promulgated by the Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 (the "Rule").

SECTION 2. NATURE OF UNDERTAKING. The Issuer, in accordance with the Rule, hereby covenants to provide or cause to be provided:

(a) to the Electronic Municipal Market Access system ("EMMA") as described in SEC Release No. 34-59062 and maintained by the Municipal Securities Rulemaking Board for purposes of the Rule and any other entity authorized and approved by the SEC from time to time to act as a repository for purposes of complying with the Rule, (i) annual financial information and operating data of the type described as "Annual Information" in Section 3(a) hereof for each Fiscal Year ending on or after September 30, 2009, not later than the following April 30, and (ii) when and if available, audited financial statements of the Issuer for each such Fiscal Year; and

(b) to EMMA and any other entity authorized and approved by the SEC from time to time to act as a repository for purposes of complying with the Rule in a timely manner after the occurrence of any Specified Event described in Section 3(b) hereof (a "Specified Event"), if material, notice of (i) any Specified Event described in Section 3(b) hereof, if material, (ii) the Issuer's failure to provide the Annual Information on or prior to the date specified above, and (iii) any change in the accounting principles applied in the preparation of its

F-1 annual financial statements, any change in its Fiscal Year, and the termination of the Issuer's continuing disclosure obligations.

The Issuer expects that audited annual financial statements will be prepared and will be available together with the Annual Information identified below. The accounting principles to be applied in the preparation of those financial statements will be generally accepted accounting principles, as modified by applicable State of Florida requirements and the governmental accounting standards promulgated by the Governmental Accounting Standards Board. In the event that the audited annual financial statements are not available by the date on which the Annual Information will be provided, the Issuer will provide unaudited financial statements by the date specified and audited financial statements when available.

SECTION 3. ANNUAL INFORMATION AND SPECIFIED EVENTS.

(a) Annual information to be provided by the Issuer for the immediately completed Fiscal Year shall consist of information contained in the table entitled "Historical Operating Results" and presented in a manner consistent with the presentation in the Official Statement prepared for the Series 2010 Bonds.

Such information shall be presented in a manner consistent with the presentation of such information in the Official Statement prepared for the Series 2010 Bonds.

(b) Specified Events shall include the occurrence of the following events, within the meaning of the Rule, with respect to the Series 2010 Bonds:

(1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on the credit enhancement reflecting financial difficulties; (5) substitution of the credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax status of the Series 2010 Bonds; (7) modifications to rights of the holders of the Series 2010 Bonds; (8) any Series 2010 Bond calls (other than scheduled mandatory redemption of any acceleration of the maturity thereof); (9) defeasances in whole or in part of the Series 2010 Bonds; (10) release, substitution, or sale of property securing repayment of the Series 2010 Bonds; and (11) any changes in the ratings assigned to the Series 2010 Bonds.

F-2 The Issuer may, from time to time, in its sole discretion, choose to provide notice of the occurrence of certain other events if, in the judgment of the Issuer, such other events are material with respect to the Series 2010 Bonds, but the Issuer does not specifically undertake to commit to provide any such additional notice of the occurrence of any material event except those events listed above. Any voluntary inclusion by the Issuer of supplemental information that is not required hereunder shall not expand the obligations of the Issuer hereunder and the Issuer shall have no obligation to update such supplemental information or include it in any subsequent report.

SECTION 4. REMEDIES; NO EVENT OF DEFAULT. The Issuer agrees that its undertaking pursuant to the Rule set forth above is intended to be for the benefit of the holders and beneficial owners of the Series 2010 Bonds and shall be enforceable by any such holder or beneficial owner; provided that the right to enforce the provisions of this undertaking shall be limited to a right to obtain specific performance of the Issuer's obligations hereunder and any failure by the Issuer to comply with the provisions of this undertaking shall not be an event of default with respect to the Series 2010 Bonds under the Resolution.

SECTION 5. SEPARATE BOND REPORT NOT REQUIRED; INCORPORATION BY REFERENCE. The requirements of this Disclosure Certificate do not necessitate the preparation of any separate annual report addressing only the Series 2010 Bonds. These requirements may be met by the filing of a combined bond report or the Issuer's Comprehensive Annual Financial Report; provided, such report includes all of the required information and is available by April 30. Additionally, the Issuer may incorporate any information provided in any prior filing with EMMA or one of the Nationally Recognized Municipal Securities Information Repositories recognized by the SEC for purposes of the Rule or other information filed with the SEC or included in any final official statement of the Issuer; provided, such final official statement is filed with the MSRB.

SECTION 6. DISSEMINATION AGENTS. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent.

SECTION 7. TERMINATION. The Issuer's obligations under this Disclosure Certificate shall cease (a) upon the legal defeasance, prior redemption, payment in full of all of the Series 2010 Bonds, or (b) when the Issuer no longer remains an Obligated Person with respect to the Series 2010 Bonds within the meaning of the Rule, or (c) upon the termination of the continuing disclosure requirements of the Rule by legislative, judicial or administrative action.

SECTION 8. AMENDMENTS. The Issuer reserves the right to amend the provisions of this Disclosure Certificate as may be necessary or appropriate to achieve its compliance with any applicable federal securities law or rule, to cure any ambiguity, inconsistency or formal defect or omission, and to address any change in circumstances arising from a change in legal requirements, change in law, or change in the identity, nature, or status of the Issuer, or type of business conducted by the Issuer. Any such amendment shall be made only in a manner consistent with the Rule and any amendments and interpretations thereof by the SEC.

F-3 Additionally, compliance with any provision of this Disclosure Certificate may be waived. Any such amendment or waiver will not be effective unless this Disclosure Certificate (as amended or taking into account such waiver) would have complied with the requirements of the Rule at the time of the primary offering of the Series 2010 Bonds, after taking into account any applicable amendments to or official interpretations of the Rule, as well as any change in circumstances, and until the Issuer shall have received either (a) a written opinion of bond or other qualified independent special counsel selected by the Issuer that the amendment or waiver would not materially impair the interests of holders or beneficial owners of the Series 2010 Bonds, or (b) the written consent to the amendment or waiver of the holders of at least a majority of the principal amount of the Series 2010 Bonds then outstanding. Annual Information containing any amended operating data or financial information shall explain, in narrative form, the reasons for any such amendment and the impact of the change on the type of operating data or financial information being provided. Additionally, in the year in which any change in accounting principles is made, the Issuer shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 9. OBLIGATED PERSONS. If any person other than the Issuer becomes an Obligated Person (as defined in the Rule) relating to the Series 2010 Bonds, the Issuer shall use its best efforts to require such Obligated Person to comply with all provisions of the Rule applicable to such Obligated Person.

Dated: November 16, 2010 HILLSBOROUGH COUNTY, FLORIDA

By: Chair, Board of County Commissioners

ATTEST: Pat Frank Clerk Circuit Court

By: Deputy Clerk

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